Mostly Borrowed Ideas Deep Dives, MBI Deep Dives

MBI Deep Dives

Mostly Borrowed Ideas Deep Dives

MBI is the abbreviation for “Mostly Borrowed Ideas”. Why “Mostly Borrowed Ideas?” As a generalist, I do not have a background in any particular sector. I enjoy navigating across industries, businesses, and countries to learn, understand, and connect the dots. In any case, most ideas and innovations are incremental in nature. Very few of us are smart enough to come up with truly original or groundbreaking ideas. I am Abdullah Al-Rezwan. I was born and brought up in Bangladesh. I went to University of Dhaka for my undergrad and majored in Finance. After working three and half years in Equity Research (Sell-side) covering Financial Sector in Bangladesh, I left Bangladesh to pursue my MBA in the US. I graduated within top 10% of the class from Cornell University's two-year MBA program and worked on the buy-side following my graduation. During my time at Cornell, I won two stock pitch competitions and also became finalists in four other competitions. I thoroughly enjoyed my stint as a generalist in the US large cap team at Madison Investments and covered a wide range of companies from UnitedHealth to Amazon and Boeing before US immigration reality paused my career in investment management. As my work authorization expired, I moved to Canada in January, 2021. Then in early 2022, I was able to return to the US.

Equity Bottom-Up

<ul><li>Alphabet maintained their low double digit revenue growth. For the 10th consecutive quarters, Google network’s revenue went down.</li><li>Cloud revenue growth decelerated from 35.0% YoY in 3Q’24 to 30.1% in 4Q’24.</li><li>I will note, however, that Google usually discloses every quarter that GCP grew at higher rate than overall Cloud, but in this call, they mentioned “GCP grew at a rate that was much higher than cloud overall”. </li></ul>

Alphabet maintained their low double digit revenue growth. For the 10th consecutive quarters, Google network’s revenue went down.Cloud revenue growth decelerated from 35.0% YoY in 3Q’24 to 30.1% in 4Q’24.I will note, however, that Google usually discloses every quarter that GCP grew at higher rate than overall Cloud, but in this call, they mentioned “GCP grew at a rate that was much higher than cloud overall”. 

Thematic (Sector/Industry)

<ul><li>Almost one and half years ago, I wrote about “The Curious Case of Big Tech”, in which I highlighted that much of the big tech was actually “deep value” investments back in 2013.</li><li>In fact, I also mentioned “Meta, and Amazon are currently trading at lower OCF multiple than they were trading back in 2013”.</li><li>Both Meta and Amazon have comfortably outperformed both S&amp;P 500 and Nasdaq 100 since then (not claiming any causal relationship, of course).</li></ul>

Almost one and half years ago, I wrote about “The Curious Case of Big Tech”, in which I highlighted that much of the big tech was actually “deep value” investments back in 2013.In fact, I also mentioned “Meta, and Amazon are currently trading at lower OCF multiple than they were trading back in 2013”.Both Meta and Amazon have comfortably outperformed both S&amp;P 500 and Nasdaq 100 since then (not claiming any causal relationship, of course).

Big Tech's Deteriorating Earnings Quality

<ul><li>Except 1P, every segment of the business is growing at double digit rate. Both AWS and advertising grew at 19% YoY.</li><li>I’ll discuss more about AWS later, but let’s talk more about Amazon ex-AWS first.</li><li>North America and international sales grew +9% and +12% respectively.</li></ul>

Except 1P, every segment of the business is growing at double digit rate. Both AWS and advertising grew at 19% YoY.I’ll discuss more about AWS later, but let’s talk more about Amazon ex-AWS first.North America and international sales grew +9% and +12% respectively.

<ul><li>After Dollar General’s (DG) disastrous earnings couple of weeks ago, I was quite concerned about their prospects in the near-term.</li><li>However, a week later after digesting through Dollar Tree (DLTR) as well as DG management’s explanation in the Goldman Sachs Retailing Conference, I have updated some of my thoughts about DG…in the positive direction.</li><li>Nonetheless, I have decided to abide by my decision not to inject more capital to DG, but to increase my notional exposure to DG via long-dated call options. </li></ul>

After Dollar General’s (DG) disastrous earnings couple of weeks ago, I was quite concerned about their prospects in the near-term.However, a week later after digesting through Dollar Tree (DLTR) as well as DG management’s explanation in the Goldman Sachs Retailing Conference, I have updated some of my thoughts about DG…in the positive direction.Nonetheless, I have decided to abide by my decision not to inject more capital to DG, but to increase my notional exposure to DG via long-dated call options. 

External reports (aggregated public sources), Value Investors Club

Value Investors Club (VIC)

External reports (aggregated public sources)

Value Investors Club

<ul><li>Amazon purchases data center asset from Talen Energy Corp with fixed price over 10 years</li><li>Microsoft announces $100 billion initiative for data centers</li><li>U.S. power prices expected to rise due to increasing demand from data centers, EVs, and more, with Goldman Sachs predicting 15% annual growth in power consumption driven by data centers</li></ul>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Amazon purchases data center asset from Talen Energy Corp with fixed price over 10 yearsMicrosoft announces $100 billion initiative for data centersU.S. power prices expected to rise due to increasing demand from data centers, EVs, and more, with Goldman Sachs predicting 15% annual growth in power consumption driven by data centersThis content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Hallador Energy Co (HNRG) - Friday, May 31, 2024

United States

Amazon.com, Inc. is an online retailer that offers a wide range of products. The Company's products include books, music, videotapes, computers, electronics, home and garden, and numerous other products.  Amazon offers personalized shopping services, Web-based credit card payment, and direct shipping to customers.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Amazon (AMZN US)

Alphabet 4Q'24 Update

Alphabet maintained their low double digit revenue growth. For the 10th consecutive quarters, Google network’s revenue went down.

MBI Deep Dives

Big Tech's Deteriorating Earnings Quality

Almost one and half years ago, I wrote about “The Curious Case of Big Tech”, in which I highlighted that much of the big tech was actually “deep...

MBI Deep Dives

Amazon 3Q'24 Update

Except 1P, every segment of the business is growing at double digit rate. Both AWS and advertising grew at 19% YoY.I’ll discuss more about AWS...

MBI Deep Dives

Some More Thoughts on Dollar General

After Dollar General’s (DG) disastrous earnings couple of weeks ago, I was quite concerned about their prospects in the near-term.

MBI Deep Dives

Hallador Energy Co (HNRG) - Friday, May 31, 2024

Amazon purchases data center asset from Talen Energy Corp with fixed price over 10 years. Microsoft announces $100 billion initiative for data centers

Value Investors Club (VIC)

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)