Research from Value Investing, Value Investing

Value Investing

Research from Value Investing

I am a value investor. "Value", as defined in Value Investing, is simply the act of buying something for less than its worth. I treat my equity investment as a loan to the business - where the priority is to get back my principal in full, rather than achieving maximum yield. I consider my equity investment as a slightly higher risk loan extended to the business with slightly more accommodative loan covenants - hence justifying a slightly higher yield. While I identify as a value investor and cover all stocks and macro topics indiscriminately, most of my research will have an ASEAN bent as that’s where I’m geographically located.

Thematic (Sector/Industry)

<ul><li>The red &amp; blue arrows highlight the apples-to-apples comparisons to be made between the respective bars (more details below)</li><li>Around this time last year , I did a portfolio performance review based on all the stocks I had written about in 2022.</li><li>This article is a repeat of that for all the stocks I had written about in 2023.</li></ul>

The red &amp; blue arrows highlight the apples-to-apples comparisons to be made between the respective bars (more details below)Around this time last year , I did a portfolio performance review based on all the stocks I had written about in 2022.This article is a repeat of that for all the stocks I had written about in 2023.

Value Investing Substack Portfolio Review | Annual Letter 2023

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Capital Markets

<ul>
<li>Waystar Holding will be valued like other unprofitable healthcare IT unicorns on a multiple of forward revenue. I used EV/Revenue valuation methodology and FY23 EV/Revenue multiples to value the Waystar. </li>
<li>In 2019, CPPIB and EQT acquired a majority stake in Waystar, valuing the company at $2.7B, which implies an EV/FY23E revenue multiple of ~ 6x, including a debt of ~$2.3B. </li>
<li>My ~$3.6B IPO valuation contemplates a ~5x EV/Revenue on my FY23E revenue of $795M and is supported by my analysis of healthcare IT comps. </li>
</ul>


Waystar Holding will be valued like other unprofitable healthcare IT unicorns on a multiple of forward revenue. I used EV/Revenue valuation methodology and FY23 EV/Revenue multiples to value the Waystar. 
In 2019, CPPIB and EQT acquired a majority stake in Waystar, valuing the company at $2.7B, which implies an EV/FY23E revenue multiple of ~ 6x, including a debt of ~$2.3B. 
My ~$3.6B IPO valuation contemplates a ~5x EV/Revenue on my FY23E revenue of $795M and is supported by my analysis of healthcare IT comps. 


Waystar IPO Valuation Analysis: Lack of Bullish Catalysts and Weak Post-Listing Performance

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>As discussed in last week's Compass (9/26/23), we continue to believe the odds of a deeper pullback to SPX 4165-4200/the 200-day MA have increased </li>
<li>Our reasoning continues to be due to the major breakouts in the U.S. dollar (DXY) and Treasury yields (10- and 30-year), coupled with a handful of Sectors/indexes breaking below supports.</li>
<li>We are also monitoring 1-year uptrends on the S&amp;P 500 and Russell 2000 (IWM), currently at 4240 and $173. Flirting with breakdowns below these levels today. Buys in retail/energy shippers</li>
</ul>


As discussed in last week's Compass (9/26/23), we continue to believe the odds of a deeper pullback to SPX 4165-4200/the 200-day MA have increased 
Our reasoning continues to be due to the major breakouts in the U.S. dollar (DXY) and Treasury yields (10- and 30-year), coupled with a handful of Sectors/indexes breaking below supports.
We are also monitoring 1-year uptrends on the S&amp;P 500 and Russell 2000 (IWM), currently at 4240 and $173. Flirting with breakdowns below these levels today. Buys in retail/energy shippers


S&P 500 and Russell 2000 Testing 1-Year Uptrends; "Magnificent Seven" Supports to Watch

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>The CMA provisionally found that the acquisition of <a href="https://www.smartkarma.com/entities/emis-group-plc" target="_blank" data-smartkarma-citation="entities:21918:1" rel="noopener">EMIS Group PLC (EMIS LN)</a> may not result in a substantial lessening of competition. Final decision to be published on 5 October.</li>
<li>The Court sanctioning could take place on 16 October. The scheme would become effective on 17 October. Assuming settlement by 31 October, spread is 0.99%/4.81% (gross/annualised).</li>
<li>Assuming a break of 1,292p, the market is pricing a 97% probability of deal completion (vs. 6% by 15 June).</li>
</ul>


The CMA provisionally found that the acquisition of EMIS Group PLC (EMIS LN) may not result in a substantial lessening of competition. Final decision to be published on 5 October.
The Court sanctioning could take place on 16 October. The scheme would become effective on 17 October. Assuming settlement by 31 October, spread is 0.99%/4.81% (gross/annualised).
Assuming a break of 1,292p, the market is pricing a 97% probability of deal completion (vs. 6% by 15 June).


UnitedHealth/​​EMIS: Provisional Clearance, Estimated Timeline

Research Firm with a Qualitative Overlay, Pearl Gray Equity and Research

Pearl Gray Equity and Research

Research Firm with a Qualitative Overlay

Quantitative fund & research firm with a qualitative overlay. 

Our coverage: General U.S. with a skew towards the primary sector. 

Methods: Smart Beta/Factor Pricing, Neural Networks, Street Gossip, and Common Sense.

Equity Bottom-Up

<ul>
<li>UnitedHealth Group Incorporated is set to release its second-quarter results on Friday, the 14th.</li>
<li>However, its Q2 report is tough to call, we warn investors that volatility will likely surface within the coming days.</li>
<li>UnitedHealth is a surreal earnings beater, but it's a surreal beater.</li>
</ul>


UnitedHealth Group Incorporated is set to release its second-quarter results on Friday, the 14th.
However, its Q2 report is tough to call, we warn investors that volatility will likely surface within the coming days.
UnitedHealth is a surreal earnings beater, but it's a surreal beater.


UnitedHealth Q2 Earnings Preview: Volatility En Route

United States

UnitedHealth Group Incorporated owns and manages organized health systems. The Company provides employers products and resources to plan and administer employee benefit programs. UnitedHealth serves customers worldwide.

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

UnitedHealth Group (UNH UN)

Value Investing Substack Portfolio Review | Annual Letter 2023

Around this time last year , I did a portfolio performance review based on all the stocks I had written about in 2022. This article is a repeat of...

Value Investing

Waystar IPO Valuation Analysis: Lack of Bullish Catalysts and Weak Post-Listing Performance

In my insight, I will focus on the IPO valuation of Waystar Holding, a healthcare IT unicorn and provider of mission-critical cloud software to...

Andrei Zakharov

S&P 500 and Russell 2000 Testing 1-Year Uptrends; "Magnificent Seven" Supports to Watch

As discussed last week, we continue to believe the odds of a deeper pullback to $SPX 4165-4200/the 200-day MA have increased following major...

Vermilion Research

UnitedHealth/EMIS: Provisional Clearance, Estimated Timeline

The CMA provisionally found that the acquisition of EMIS Group PLC (EMIS LN) may not result in a substantial lessening of competition. Final...

Jesus Rodriguez Aguilar

UnitedHealth Q2 Earnings Preview: Volatility En Route

UnitedHealth Group Incorporated is set to release its second-quarter results on Friday, the 14th. However, its Q2 report is tough to call, we warn...

Pearl Gray Equity and Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Value Investing Substack Portfolio Review | Annual Letter 2023

Around this time last year , I did a portfolio performance review based on all the stocks I had written about in 2022. This article is a repeat of...

Value Investing

Waystar IPO Valuation Analysis: Lack of Bullish Catalysts and Weak Post-Listing Performance

In my insight, I will focus on the IPO valuation of Waystar Holding, a healthcare IT unicorn and provider of mission-critical cloud software to...

Andrei Zakharov

S&P 500 and Russell 2000 Testing 1-Year Uptrends; "Magnificent Seven" Supports to Watch

As discussed last week, we continue to believe the odds of a deeper pullback to $SPX 4165-4200/the 200-day MA have increased following major...

Vermilion Research

UnitedHealth/​​EMIS: Provisional Clearance, Estimated Timeline

The CMA provisionally found that the acquisition of EMIS Group PLC (EMIS LN) may not result in a substantial lessening of competition. Final...

Jesus Rodriguez Aguilar

UnitedHealth Q2 Earnings Preview: Volatility En Route

UnitedHealth Group Incorporated is set to release its second-quarter results on Friday, the 14th. However, its Q2 report is tough to call, we warn...

Pearl Gray Equity and Research

UnitedHealth/EMIS: Provisional Clearance, Estimated Timeline