#07. The Value Investor's Toolbox
🎮Is Nintendo a good investment? 🏘️ US existing home sales fell by 2.4%, 📚Lessons from Howard Marks
⚑ What you will Find & Learn?
→🗞️ Value Investor’s news
→📖 My readings of the week
→📚 Summarize of Something of Value - Howard Marks
→⚾Value stocks Idea
→⚫Latest publications
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⏱ Reading time : 2 minutes
Hey Value Investors!
I hope you are doing well!
This week, I have been focusing primarily on improving my writing skills. I read the book Writing That Works - Kenneth Roman, which helped me concentrate on the essentials. It's a comprehensive guide that teaches you how to write various types of documents, such as decks, reports, emails, and speeches, all of which are useful in a professional setting.
I also devoured all of Nicolas Cole's videos, which helped me create frameworks for my tweets and newsletters. If you're looking to create content, I highly recommend her videos.
This edition will be shorter because I want the format to be as concise as possible.
Your time is precious, and I don't see the point in creating a daily newsletter that lasts 10 minutes.
The format will be straightforward:
🗞️ News I find essential, with the objective of providing macro indicators to guide your research. For instance, while researching the company 🌲Boise Cascade Company, I discovered that the number of houses being built in the USA and Canada is decreasing. As a result, the sector's business volume is dwindling, making growth difficult. I consider this an uncertain event.
📖 My resources, offer suggestions for articles, podcasts, and books to expand your circle of competence and become a better investor.
⚾ Value stock idea: A potentially undervalued company that warrants further investigation.
My goal is to provide you with the tools to make better investment decisions daily and ultimately make more money as an individual investor (which is the whole point of this).
Now that the purpose is clear, let's get to the news!
🗞️ Value Investor’s news
🏭Bank of America reported Q1 2023 earnings on Tuesday, exceeding expectations for both revenue and profit. Notably, the bank's net interest income increased by 25% year-over-year. That’s why Berkshire Hathaway holding its position. This indicates that the US economy is not doing so badly.
🍏Apple's longer-term goal is to produce 40% to 45% of its iPhones in India.
☁️Datadog is buying Codiga a software company born to expedite developer coding.
🏘️ US existing home sales fell by 2.4% in March, more than expected.
The number of permits issued for building houses went down by 8.8% compared to the previous month. This was a bigger decrease than what experts were expecting, and it followed a significant increase of 15.8% in February.
📖 My readings & listenings of the week
I share here the articles or videos that I found interesting this week. The goal is to provide you with stuff to become a better value investor step by step and expand your circle of competence.
📖Lessons from Silicon Valley Bank (Howard Marks)
📖Something of Value (Howard Marks) (sum-up below)
🦜Buffett's genius in investing in the Unknown and Unknowable
📚Summarize of Something of Value - Howard Marks
This memo talks about the evolution of value investing in our time — and the "Value" Vs "Growth" investing vision.
Lessons :
We must not be focused on ratio but only on the performance of the company to generate cash for years.
Be open-mind, to understand the new business to come
Search for a moat at a low price
Wins are rare, so squeeze until there's more juice.
Everything is a DCF model
"The value investor of today should dig in with an open mind and a desire to deeply understand things, knowing that in the world we live in, there’s likely more to the story than what appears on the Bloomberg screen.
⚾Value stocks Idea
Here are 2 stocks that pass the first stage of my screen. However, this does not mean that I will or should invest in them. The next step is to do more research on the company and its business model. For example, how they deploy their capital to generate revenue and how to estimate their future cash flows.
For those interested in my checklist for identifying a potential value investment, you can download it here.
I. Nintendo Co., Ltd. (NTDOY)
To read: Thesis on Value Investor Club.
Nintendo, a prominent multinational corporation from Japan, with a enterprise value of $37 billion, specializes in developing and publishing video games and consoles.
Its video game segment generates revenues of around $10 billion, and comprises of several immensely successful franchises that have maintained their popularity for several decades.
These franchises include iconic titles such as Mario, Pokémon, The Legend of Zelda, Animal Crossing, Kirby, and Splatoon.
$47.68B market cap
Trading at P/E = 13.94
EV/EBITDA = 0.06
P/Book value = 2.92
Total Cash = $12.8B
ROE = 24.2%
ROA = 17.92%
ROIC = 43.21%
Current ratio = 3.78
25.5% Growth revenues 5 Years
/!\ Disclaimer : The Art of Invests makes use of information sources that are considered reliable, but the accuracy of such information cannot be assured. The contents of this publication are not meant to provide personalized investment advice and do not take into account your particular financial situation.
The viewpoints expressed by the publisher in these publications may change at any time without notice. It is recommended that you consult with your financial advisors to determine the investment options that are appropriate for you and to assess whether any investment is suitable for your specific needs. Occasionally, the publisher may hold positions in the securities that are covered in the articles on this website.
Do Your Own Research.
⚫Latest publications
That's it for this edition,
See you next week ❄️
The Art of Invests ⚑
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