Latest news with #ValueDon'tLie
Yahoo
23-06-2025
- Business
- Yahoo
Everus Construction Group, Inc. (ECG): A Bull Case Theory
We came across a bullish thesis on Everus Construction Group, Inc. on Value Don't Lie's Substack. In this article, we will summarize the bull's thesis on ECG. Everus Construction Group, Inc.'s share was trading at $59.79 as of 19th June. ECG's trailing and forward P/E ratios were 20.08 and 24.10, respectively, according to Yahoo Finance. A worker on a ladder, repairing the electrical power transmission lines. MDU Resources (MDU) is nearing the completion of a multi-year restructuring, having spun off its aggregates business, Knife River, and now preparing to separate Everus Construction Group (ECG), leaving behind a pure-play regulated utility and pipeline company. Everus, the SpinCo, offers construction services across two segments: Electrical & Mechanical (74% of 2023 revenue) and Transmission & Distribution (26%). With annual revenue and EBITDA growth of 9–10% from 2019 to mid-2024, the business has demonstrated steady performance, though with limited margin expansion due to its variable cost structure. Looking forward, tailwinds from federal initiatives like the CHIPS Act, Inflation Reduction Act, grid modernization, and AI/data center buildouts create a strong demand backdrop. Management expects 5–7% organic revenue growth and 7–9% EBITDA growth, while maintaining low leverage (1.3x at spin) and modest capex (2–2.5%). Given peer valuations in the 12–14x EBITDA range, Everus could command $9–13 per share ($36–52 post-spin), even accounting for $28M in standalone dis-synergies. Meanwhile, RemainCo MDU, operating regulated utility and pipeline businesses across the northern U.S., serves over 1 million natural gas and 145,000 electric customers, with a diversified generation mix and over 3,800 miles of gas infrastructure. Having exited non-regulated pipeline assets, the company now mirrors a traditional utility and may trade at a discount despite steady growth and lower-than-peer leverage. With ~$2.1B in post-spin net debt and $170–180M in estimated 2024 net income, MDU looks attractively valued at sub-utility multiples. The restructuring unlocks distinct investment theses in both entities, with Everus positioned for growth and MDU offering stability and potential capital allocation upside. Previously, we covered a bullish thesis on Everus Construction Group, Inc. by Unemployed Value Degen in April 2025, which highlighted undervaluation, strong backlogs, and insider buying. The company's stock price has appreciated approximately 61% since our coverage. This is because the thesis played out with improving sentiment. The thesis still stands as valuations remain below peers. Value Don't Lie shares an identical view but emphasizes macro-driven growth drivers. Everus Construction Group, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held ECG at the end of the first quarter, which was 39 in the previous quarter. While we acknowledge the risk and potential of ECG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23-06-2025
- Business
- Yahoo
Lamb Weston Holdings, Inc. (LW): A Bull Case Theory
We came across a bullish thesis on Lamb Weston Holdings, Inc. on Value Dont's Lie's Substack. In this article, we will summarize the bull's thesis on LW. Lamb Weston Holdings, Inc.'s share was trading at $53.22 as of 19th June. LW's trailing and forward P/E were 20.87 and 14.71, respectively, according to Yahoo Finance. Photo by Nathan Dumlao on Unsplash Lamb Weston (LW), the leading frozen potato producer in North America and second globally behind McCain Foods, experienced a steep 30% share price decline in July 2024—from $80 to $53—following weak Q4 FY24 results. Originating as a 2016 spin-off from Conagra to separate the commercial potato business, LW derives the bulk of its revenue from restaurant and foodservice sales, with McDonald's alone contributing 14% in FY24. The Q4 miss, marked by a 5% sales decline and a 40% drop in adjusted EPS, stemmed from falling global restaurant traffic and softening frozen potato demand. This supply-demand imbalance, exacerbated by industry-wide and company-specific capacity expansions, is expected to persist through FY25. LW's capex surged from $290 million to $930 million over the past three years, with an additional $850 million planned for FY25, further crowding out capital allocation flexibility. However, aside from the pandemic dip, LW has demonstrated stable and growing cash flows. With capex expected to normalize in FY26, the company could generate around $400 million in annual free cash flow ($2.78/share), implying a current FCF multiple of ~23x. Though not deeply undervalued, every $100 million drop in capex could add $0.70/share in FCF. While restaurant sales trends are weak, aggressive promotions might help traffic recover, indirectly benefiting LW. Still, questions remain about whether FY25 guidance reflects the worst or if further downside is possible. Peers trade at 10–11x EBITDA, implying fair value near $78/share. For now, the market seems to have priced in the current risks, but FY26 could be a turning point. Previously, we covered on Lamb Weston (LW) by Quick Value in Sept 2024, highlighting its strong market position and upside from post-FY25 capex normalization. The stock has depreciated by approximately 15.55% since then due to weak Q4 results. Value Don't Lie shares an identical view but emphasizes current market expectations. Lamb Weston Holdings, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held LW at the end of the first quarter, which was 47 in the previous quarter. While we acknowledge the risk and potential of LW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
07-05-2025
- Business
- Yahoo
Markel Group Inc. (MKL): A Bull Case Theory
We came across a bullish thesis on Markel Group Inc. (MKL) on Substack by Value Don't Lie. In this article, we will summarize the bulls' thesis on MKL. Markel Group Inc. (MKL)'s share was trading at $1813.28 as of April 28th. MKL's trailing and forward P/E were 9.10 and 12.71 respectively according to Yahoo Finance. Is Progressive Corporation (PGR) the Best Low Volatility Stock to Buy Now? A team of accountants in a boardroom, discussing strategic moves of an insurance company. Markel Corporation, often dubbed a 'mini-Berkshire,' is a diversified insurance holding company with three main segments: specialty insurance, public and private investments, and a collection of non-insurance operating businesses called Markel Ventures. Its core insurance business focuses on long-tail excess and surplus lines, consistently generating underwriting profits in 8 of the last 9 years, though it has lagged peers in recent profitability improvements—especially in reinsurance. Markel Ventures, a $5.1 billion revenue operation with a 12.5% EBITDA margin, spans industries from construction services to consumer products and now contributes 40–50% of consolidated earnings. Despite the segment's strong performance, limited financial disclosures raise concerns among investors. On the investment side, Markel's public equity portfolio, managed by CEO Tom Gayner, grew to $11.8 billion by 2024 and includes high-quality names like Berkshire Hathaway. However, it has underperformed broader market indices by 100–150 basis points over 5–10 years. With $13.1 billion in net cash and investments—or $1,025 per share—this sum makes up over half of Markel's market cap, although not all of it is excess capital due to regulatory requirements. The stock's underperformance has caught the attention of activist investors, including JANA Partners, who have urged a separation of the insurance and Ventures businesses to unlock value. Markel's management has acknowledged areas needing improvement, particularly insurance, stating that improved results here are essential for the company's long-term potential. Capital allocation has shifted significantly in recent years. After spending $4.2 billion on acquisitions between 2015–2021, Markel deployed $8.8 billion into its investment portfolio since 2021. Share buybacks have also increased meaningfully, reaching $573 million in 2024—though still modest relative to its $23 billion market cap. Valuation remains a core topic. Markel uses a two-part intrinsic value estimate based on operating earnings and net asset value, applying a conservative 12x multiple to normalized earnings. As of year-end 2024, this approach yielded an intrinsic value of $2,610 per share, up 18% CAGR over five years, versus just a 9% CAGR in stock price. Alternatively, with $1.94 billion in earnings and $13.1 billion in net investments, the stock trades at an implied 5.1x multiple, suggesting meaningful undervaluation. With operational tailwinds in Ventures, strategic pressure to unlock asset value, and visible capital deployment into buybacks, Markel presents a compelling investment opportunity with multiple levers for upside if execution improves—especially in insurance.
Yahoo
03-04-2025
- Business
- Yahoo
Kelly Services, Inc. (KELYA): A Bull Case Theory
We came across a bullish thesis on Kelly Services, Inc. (KELYA) on Substack by Unemployed Value Degen and Value Don't Lie. In this article, we will summarize the bulls' thesis on KELYA. Kelly Services, Inc. (KELYA)'s share was trading at $13.28 as of April 2nd. KELYA's trailing and forward P/E were 16.36 and 6.08 respectively according to Yahoo Finance. A group of smiling job seekers shaking hands with employers at a job fair. Kelly Services (KELYA) represents a compelling investment opportunity, benefiting from a business transformation that has significantly improved profitability. Historically known as a leading temp agency, Kelly has evolved beyond its traditional model by divesting unprofitable divisions and shifting its focus toward contract employment, which offers higher margins and greater stability. This strategic pivot has led to a notable expansion in adjusted EBITDA margins, rising from 2.3% in 2023 to 3.3% in 2024. While revenues have declined from a peak of $5.0 billion in 2022 to $4.3 billion in 2024, this 14% drop is manageable compared to the broader downturn in the staffing industry. Moreover, key segments within Kelly's business are thriving, with science, engineering, and technology revenues increasing from 23% to 33% of total sales over the last five years, while education has grown from 5% to 16%. These areas provide resilience in a labor market where white-collar hiring remains sluggish. Despite improving fundamentals, KELYA remains deeply undervalued. The stock trades at just 0.11x price-to-sales, down from a historical peak of 0.19x. If market sentiment shifts and the company is rerated to past peak multiples, the stock could double in value. However, given Kelly's fundamental improvements and stronger business mix, there's a case to be made that its valuation could exceed prior peaks, offering even greater upside. With an aggressive recent selloff in small caps, KELYA presents a rare opportunity for a relatively conservative, high-reward investment. Investors willing to wait for market multiples to catch up to the company's strengthened fundamentals could see a double in their investment within two years, making KELYA an attractive "base hit" strategy in a volatile market. While some investors may be drawn to riskier, high-upside plays in the staffing sector, KELYA offers a clear path to strong returns with minimal downside. The company has already completed its transformation, meaning the primary risk lies in market recognition of its improved business model. Unlike competitors struggling with uncertain recoveries, Kelly is positioned for stable, profitable growth. With an entry price of $13.24, a price target of $26 by the end of 2026 appears well within reach. Kelly Services, Inc. (KELYA) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held KELYA at the end of the fourth quarter which was 11 in the previous quarter. While we acknowledge the risk and potential of KELYA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than KELYA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
03-04-2025
- Business
- Yahoo
ZipRecruiter, Inc. (ZIP): A Bull Case Theory
We came across a bullish thesis on ZipRecruiter, Inc. (ZIP) on Substack by Unemployed Value Degen and Value Don't Lie. In this article, we will summarize the bulls' thesis on ZIP. ZipRecruiter, Inc. (ZIP)'s share was trading at $6.27 as of April 2nd. ZIP's trailing and forward P/E were 34.29 and 31.15 respectively according to Yahoo Finance. kurhan/ ZipRecruiter (ZIP) has undergone a dramatic transformation, experiencing a steep decline in revenue from its 2022 peak of $905 million to $474 million in 2024. This 48% drop is a direct result of the ongoing white-collar hiring slowdown, exacerbated by the tech industry's efficiency-driven cost-cutting and the uncertain impact of AI on employment. Despite this downturn, ZIP remains a key player in the online job marketplace, leveraging its AI-powered job board to create value for both job seekers and employers. While overall hiring demand has slowed, ZIP has strategically focused on deepening its relationships with employers, leading to a significant increase in average spending per customer. Employers who started using ZIP in 2023 are already paying nearly double compared to their 2017 counterparts, showcasing the company's ability to extract more value from its existing user base even amid macroeconomic headwinds. The core challenge for ZIP is determining whether its revenue decline is a temporary cyclical setback or a more permanent loss of market share. Rough estimates suggest ZIP's market share in the online recruitment space peaked at 10% in 2022 but has since reverted to around 5% in 2024. This leaves open the critical question of whether the decline is primarily due to reduced hiring in ZIP's core industries or whether it is losing ground to competitors like Indeed and LinkedIn. The encouraging sign is that ZIP's most engaged employers continue to spend more, reflecting a sticky customer base that sees value in the platform. If white-collar hiring rebounds and ZIP can regain lost market share, its revenue could easily double from current levels. However, if the slowdown is structural rather than cyclical, ZIP may struggle to return to its previous highs. Despite the uncertainty, the valuation setup is compelling. ZIP is currently trading at just 1.22x price-to-sales, down from its peak multiple of over 3.0x. A simple return to historical multiples would more than double the stock price, but if revenues also recover, the potential upside becomes far more dramatic. A full return to peak revenue and valuation levels would imply a nearly 4.7x return. In a more aggressive scenario, where ZIP regains its lost employer base and scales further, the upside could reach 11x. The 48% decline in revenue understates the 66% decline in employers using the ZIP platform, and whether ZIP can reclaim this lost ground remains uncertain. However, with a sticky customer base and a strong value proposition, the company is positioned for significant upside if hiring conditions improve. Given the current price of $6.19, the price target for ZIP is between $25 and $64 at some point between 2026 and 2028. ZipRecruiter, Inc. (ZIP) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 18 hedge fund portfolios held ZIP at the end of the fourth quarter which was 14 in the previous quarter. While we acknowledge the risk and potential of ZIP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ZIP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
