✍️ Maverick Equities Charts of the Week #40: Magnificent 7 Special + Google mini case study
Maverick Charts that say 10,000 words
Dear all,
12 cherry picked Maverick Charts of the week say 10,000 words or more = the ‘How’!
Table of contents = the ‘What’:
📊 Maverick Charts: Magnificent 7 Special + Google mini case study
📊 Bonus: Valuation - U.S. and the World via forward P/E relative to last 20 years
✍️ Incoming Maverick-esque research: +200,000 views for a key Maverick tweet
Objective: both data-driven insights + valuable food for thought = the ‘Why’!
📊 Maverick Charts 📊
MAG 7 (U.S. big tech Magnificent 7) 2024 combined Free Cash Flow (FCF):
👉 $407 billion in 2024 alone for another record - let that one sink in!
👉 Apple $109B Microsoft $74B, Google 73B, Meta/Facebook $54B, Nvidia $61B, Amazon $33B, Tesla $4B
👉 with so much Free Cash Flow (FCF), there is a lot of operational flexibility: buyback stock, invest in new projects with positive NPV outlooks etc
MAG 7 combined Total Revenue:
👉 $2,095 trillion for another record - let that one sink in!
👉 Apple $400B, Microsoft $270B, Google $360B, Meta/Facebook $170B, Nvidia $149B, Amazon $650B, Tesla $96B
Bonus, spicy facts:
👉 Mag 7 have a $18.2 trillion market cap & account for 34.4% of the S&P 500 Index
Mag 7 Earnings Yield:
👉 Google/Alphabet has the highest earnings yield at 4.96% - in other words, the search giant generates the highest percentage of its market cap in earnings each year
👉 Tesla with the lowest at 0.56%
4, 5, 6 & 7. Google (GOOGL) for a mini case study:
👉 = most profitable company in the world!
👉 surpassed Microsoft and Apple in net income over the last 6 months
👉 Total Revenues, up and to the right strongly!
👉 yet despite that, they are only the 5th largest company by market cap
👉 from the big tech co’s, Alphabet commands the lowest EV/EBIT multiple by far - a key question is that Google Search might lose its mighty touch …
👉 “Search” accounts for 56% of Alphabet’s overall revenue - investors debate that consumers are turning to LLMs instead of the traditional search (which we all do/did)
8 & 9. Amazon (AMZN) is very ‘Amazonian’ when it comes to subscription revenue - it generates more than any other consumer business in the world:
👉 Amazon: $45.4B
👉 Netflix: $40.2B, Spotify: $16.9B, Walmart: $6.5B, Costco: $5.1B
👉 so scalable that it is also generating its highest operating margin ever at 11%
👉on top, its two fastest growing divisions are AWS & Advertising which are also two of their most profitable segments
Tesla (TSLA) quarterly deliveries:
👉 384k this quarter, down 13.5% YoY
👉 analysts were expecting 387k deliveries, hence inline with expectations
📊 Bonus: Valuation - U.S. and the World via forward P/E relative to last 20 years 📊
World Valuation (MSCI regions)
👉 U.S. is quite off the charts with a current 22.9x forward P/E - way above the median, interquartile range and 10th-90th percentile
👉 Europe, AC World ex. US, Emerging Markets and the U.S. on the cheaper side
Maverick’s outlook:
I will do this chart showing also Switzerland given I will cover stocks from there
Value is to be found in the Swiss Alps … especially relative to pricey U.S. markets
Inside the U.S.:
👉 S&P 500 22x forward P/E, Nasdaq-100 28x, and Russell 2000 28x on the pricey side
👉 S&P 500 equal weight 17x, and Midcaps 16x on the cheaper side
Maverick’s outlook:
I will cover single stocks from the U.S. with a focus on the mid and small caps
Value is to be found via the mantra: ‘Go Small and Mid or Go Home’
✍️ Incoming Maverick-esque research: +195,000 views for a key Maverick tweet ✍️
What is coming next through the independent investment & economic research here? What’s next for you? Many drafts are work in progress - the next one is a key one!
✍️ Why Independent Investment and Economic Research = Paramount Nowadays!
common sense is not so common, conflicts of interest are too common, hence independent investment and economic research for the win!
+200,000 views for this Maverick tweet which was quoted/commented also by the legendary Nassim Taleb … so great from his side and I thank him a lot!
'If something is nonsense, you say it and say it loud. You will be harmed a little but will be antifragile — in the long run people who need to trust you will trust you.'
Nassim Nicholas Taleb: Commencement Address, American University in Beirut
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Just sharing this around with like-minded people, and hitting the 🔄 & ❤️ buttons! That’ll definitely support bringing in more & more independent investment research: from a single individual … not a corporate, bank, fund, click-baity media or so … !
Like this, the big positive externalities become the name of the game!
Have a great day! And never forget, keep compounding: family, friends, hobbies, community, work, independence, capital, knowledge, research and mindset!
With respect,
Mav 👋 🤝
Pretty cool to get retweeted by Nassin!
Amazing! Thank you and keep up the great service! Greatly appreciated