Latest news with #bullishThesis
Yahoo
25-06-2025
- Business
- Yahoo
Compass Minerals International, Inc. (CMP): A Bull Case Theory
We came across a bullish thesis on Compass Minerals International, Inc. on The Lion's Roar - Outside the Box Investments' Substack by Dominick D'Angelo. In this article, we will summarize the bull's thesis on CMP. Compass Minerals International, Inc.'s share was trading at $19.67 as of June 24th. CMP's forward P/E was 23.70 according to Yahoo Finance. Tim Roberts Photography/ Compass Minerals (CMP) presented a compelling opportunity after an ~85% share price collapse, which led to severely depressed sentiment and set the stage for a high-conviction turnaround bet. The team's deep research—highlighted by distributor interviews, FOIL requests, and competitor site checks—helped form a differentiated and bullish view. Estimates going into the quarter were well above consensus, and the company exceeded even those elevated expectations. Salt revenue came in at $433 million, up 39% year-over-year, driven by colder-than-average weather that boosted highway deicing and C&I demand. A $147 million inventory reduction helped generate ~$170 million in free cash flow, with further working capital benefits expected in Q3. EPS estimates were revised materially upward across 2025–2027 on better pricing and volumes. Despite elevated production costs in Q2, likely due to lower Goderich output, capacity utilization is nearing 100%, and depots are empty ahead of the winter season, implying a robust bidding cycle. Contracts locked in during the inventory glut of mid-2024 saw a 5.2% pricing decline, but with inventories now depleted and producers unable to meet demand, Compass is positioned to capture higher-margin emergency orders. Market checks show prices spiking as high as $82/ton in some counties versus the $71/ton average reported in Q2. As volumes normalize, Compass should see margin improvement and operating leverage kick in. Meanwhile, the plant business posted improved volumes and its first y/y price increase since Q2 2023, aided by cost-cutting at Utah. With valuable assets, falling leverage, and a favorable market backdrop, CMP remains deeply undervalued despite its recent rally. Previously, we covered a s on Compass Minerals International, Inc. (CMP) by Dominick D'Angelo in March 2025, which highlighted its salt dominance, cost cuts, and early winter tailwinds. The company's stock has appreciated ~105% since our coverage, as the thesis played out. Dominick D'Angelo shares a similar view but emphasizes deeper research and operational momentum in the latest thesis. Compass Minerals International, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held CMP at the end of the first quarter, which was 31 in the previous quarter. While we acknowledge the risk and potential of CMP 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.
Yahoo
25-06-2025
- Business
- Yahoo
ServiceNow, Inc. (NOW): A Bull Case Theory
We came across a bullish thesis on ServiceNow, Inc. on Business Invest's Substack by Francesco Ferrari. In this article, we will summarize the bull's thesis on NOW. ServiceNow, Inc.'s share was trading at $996.32 as of June 24th. NOW's trailing and forward P/E ratios were 135.19 and 60.24, respectively, according to Yahoo Finance. Highlighting the company's sector and industry, a technician working on a complex SaaS in a technology lab. ServiceNow (NOW), with a market cap of $209.4 billion, continues to demonstrate robust fundamentals and long-term compounding potential despite seemingly rich valuation metrics. Over the past three years, the company has delivered a 19.0% sales CAGR and an impressive 27.3% GAAP EPS CAGR, highlighting consistent top-line expansion paired with strong operational leverage. These figures are underpinned by a proven ability to generate free cash flow (FCF) consistently above 30%, reinforcing the quality and sustainability of its earnings. Even under a conservative modeling approach using generous end multiple scenarios—30x, 40x, and 50x EPS—the implied net profit margin of 16.4% suggests that while current expectations may appear stretched, they remain anchored in a business with high-margin scalability. This places ServiceNow alongside other durable compounders like Duolingo, where the market often overlooks short-term valuation discomfort in favor of long-term FCF and margin trajectory. Investors are thus likely focusing not just on headline multiples but on the company's ability to maintain high retention rates, upsell across its growing enterprise base, and expand into adjacent verticals within digital workflows. While valuation can seem daunting at first glance, ServiceNow's continued execution, operational efficiency, and strategic entrenchment across Fortune 500 clients position it as a structural winner. For long-duration investors, the market is implicitly pricing in sustained FCF strength and margin durability, not just near-term earnings growth. The company offers a compelling case where premium valuation is justified by premium fundamentals, making it a core holding in high-quality growth portfolios. Previously, we covered a bullish thesis on ServiceNow, Inc. by Compounding Your Wealth in April 2025, which highlighted the company's leadership in digital workflows and strong enterprise integration. The stock has appreciated ~27% since the thesis played out. Francesco Ferrari shares a similar view but emphasizes long-term FCF strength and margin scalability despite premium valuations. ServiceNow, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 106 hedge fund portfolios held NOW at the end of the first quarter, which was 110 in the previous quarter. While we acknowledge the risk and potential of NOW 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. Disclosure: None. 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
25-06-2025
- Business
- Yahoo
e.l.f. Beauty, Inc. (ELF): A Bull Case Theory
We came across a bullish thesis on e.l.f. Beauty, Inc. on Business Invest's Substack by Francesco Ferrari. In this article, we will summarize the bull's thesis on ELF. e.l.f. Beauty, Inc.'s share was trading at $121.87 as of June 24th. ELF's trailing and forward P/E ratios were 63.47 and 32.36, respectively, according to Yahoo Finance. A smiling woman applying a product from the company's skin care line. e.l.f. Beauty (ELF) has delivered impressive growth metrics over the past three years, with a 15.1% sales CAGR and a striking 33.9% GAAP EPS CAGR, suggesting accelerating operating leverage. With a market cap of $6.6 billion, the stock is being evaluated against EPS-based end multiples ranging from 15x to 35x. However, the market appears to be pricing in record-level EPS levels the company has yet to reach, implying investor expectations around improved scalability and operational efficiency. Intriguingly, while EPS projections drive most valuation models, the company's free cash flow per share significantly exceeds reported GAAP earnings, suggesting GAAP numbers may understate true economic performance. This discrepancy likely arises from the accounting treatment of intangibles-heavy investments, which depress near-term EPS but may fuel long-term value. Historical context shows that ELF shares may have bottomed recently, offering a potentially compelling entry point, especially given the relatively low sentiment and expectations already embedded in the stock price. This stands in contrast to other high-growth names that often trade at premium valuations. The core argument here is that while traditional EPS-based valuation may suggest ELF is priced for perfection, its robust free cash flow profile paints a different, more bullish picture. Over time, EPS is likely to converge upward with free cash flow as the benefits of past intangible investments materialize. This dynamic makes ELF a possible hidden gem for forward-looking investors who prioritize cash-based valuation metrics over conventional earnings, especially in an economy increasingly driven by intangible capital and innovation. Previously, we covered a on e.l.f. Beauty, Inc. by Fierce__beast in November 2024, which highlighted the company's strong fundamentals, strategic acquisitions, and expanding e-commerce and international presence. The company's stock price has depreciated by approximately 0.64% since our coverage. The thesis still stands as long-term drivers remain intact. Francesco Ferrari shares a similar view but emphasizes free cash flow over GAAP EPS. E.l.f. Beauty, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held ELF at the end of the first quarter, which was 35 in the previous quarter. While we acknowledge the risk and potential of ELF 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. Disclosure: None. 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
25-06-2025
- Business
- Yahoo
CVS Health Corporation (CVS): A Bull Case Theory
We came across a bullish thesis on CVS Health Corporation on Microcapexpert's Substack. In this article, we will summarize the bull's thesis on CVS. CVS Health Corporation's share was trading at $67.58 as of June 24th. CVS's trailing and forward P/E ratios were 16.13 and 11.49, respectively, according to Yahoo Finance. A healthcare professional in a meeting with a patient discussing care options using digital technology. The UK's Competition and Markets Authority (CMA) has published its initial findings on the veterinary services market, and the proposed remedies appear relatively mild for CVS Group. While the CMA highlights the need for improved price transparency, there are no indications of harsh regulatory actions that could threaten CVS's profitability or operational structure. This early outcome validates previous expectations that the regulatory scrutiny would result in limited disruption. Although these are not yet the CMA's final conclusions—with a full report expected in the coming months—the working paper offers a reliable preview of the ultimate resolution. With the regulatory overhang easing, investor sentiment has improved significantly. CVS's share price jumped 12% on the news and has now surged 50% since the start of the year. Despite this rebound, the stock still trades below the 2,000 pence level it held prior to the launch of the CMA investigation, suggesting more upside may lie ahead as the market fully digests the benign regulatory outcome. The stock's momentum is likely to continue as clarity returns and investors reprice the reduced risk profile. In the absence of severe restrictions, CVS can continue leveraging its scale and efficiencies in the UK veterinary market, and with regulatory uncertainty fading, valuation multiples may expand. For investors who were cautious due to regulatory concerns, this working paper signals a potential green light to reenter. Overall, CVS stands to benefit as regulatory fears dissipate and the market acknowledges the limited impact of the CMA's review. Previously, we covered a on CVS Health Corporation by Hidden Market Gems in April 2025, which highlighted its U.S.-centric revenues, essential offerings, and strong cash flow. The company's stock has depreciated ~4% since our coverage, as macro pressures persisted. The thesis still stands. Microcapexpert shares a similar view but emphasizes the regulatory clarity as a new catalyst. CVS Health Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 73 hedge fund portfolios held CVS at the end of the first quarter, which was 74 in the previous quarter. While we acknowledge the risk and potential of CVS 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. Disclosure: None. 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
08-06-2025
- Business
- Yahoo
VeriSign, Inc. (VRSN): A Bull Case Theory
We came across a bullish thesis on VeriSign, Inc. (VRSN) on Incremental Returns' Substack. In this article, we will summarize the bulls' thesis on VRSN. VeriSign, Inc. (VRSN)'s share was trading at $275.56 as of 2nd June. VRSN's trailing and forward P/E were 33.69 and 31.25 respectively according to Yahoo Finance. Copyright: ralwel / 123RF Stock Photo Verisign (VRSN) exemplifies a business fortified by regulatory structure, technical prowess, and systemic inertia, forming one of the most defensible competitive moats in modern infrastructure. At the heart of its advantage is an exclusive contractual relationship with ICANN and the U.S. Department of Commerce, which effectively ensures its ongoing control over the .com and .net domain registries. The inclusion of a presumptive right of renewal clause in these contracts gives Verisign a near-perpetual license, assuming compliance, creating a regulatory fortress that would be nearly impossible for any competitor to penetrate. Complementing this legal insulation is Verisign's unmatched technical track record, having provided 26 consecutive years of uninterrupted DNS service. This operational excellence not only underpins its credibility but also raises the bar prohibitively high for any aspiring challengers who would need to match Verisign's reliability and security to even be considered viable alternatives. Further reinforcing its position are the immense systemic switching costs. The risks associated with transitioning the core registry functions for .com and .net domains create powerful disincentives for any change, as even minor disruptions could jeopardize global internet stability. While Verisign lacks consumer-facing brand recognition, the ubiquity and credibility of .com and .net domains—holding a combined 46% market share among top-level domains—cement its position in the digital landscape. This brand association with legitimacy and trust creates a self-perpetuating advantage. In totality, Verisign's combination of regulatory entrenchment, technical supremacy, switching frictions, and domain dominance forms a long-lasting competitive shield, suggesting its strategic position is likely secure for decades to come. VeriSign, Inc. (VRSN) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held VRSN at the end of the first quarter which was 41 in the previous quarter. While we acknowledge the potential of VRSN 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. Disclosure: None. This article was originally published at Insider Monkey. Sign in to access your portfolio
