Every call, kept

Booking Holdings Inc

Long. Strong profitability and financial health at a slightly undervalued valuation. Peter Lynch and median PS value indicate undervaluation: a historic opportunity.

$170.52 → $150.14Return −12.0%vs SPX −13.1 pp

Incyte Corp

Long. Strong financials, profitability, and momentum at a fair price.

$116.00 → $116.60Return +0.5%vs SPX −2.7 pp

Micron Technology Inc

Long. Excellent underlying financials, profitability, and growth in a lucrative industry.

$920.58 → $928.76Return +0.9%vs SPX −2.3 pp

Pinterest: two accounting distortions, one direction

Pinterest's 2024 net income exceeded its EBITDA, possible only with a positive tax line, in this case a $1.6bn deferred tax asset valuation allowance release. Stock-based compensation, which exceeds free cash flow in most years, flatters the cash flow statement separately. Both of the metrics investors would value PINS on are overstated, and ROIC still fails to clear WACC.

Fortinet: the market is pricing nine quarters of deceleration as a trend, not a transition

Fortinet has earned ROIC above WACC every year since 2017, by more than ten points since 2019, with top-decile margins and ten straight profitable years. The shares have de-rated since 2024 on decelerating service growth. The reverse DCF implies 19.61%, which the business has consistently exceeded.

Applovin: an excellent business priced for a rate no ad-tech firm has sustained

AppLovin earns an 80% ROIC against a 20% cost of capital, and at $692 the market is capitalizing that as permanent. A reverse DCF implies 34.17% sustained growth, above even the sell-side's bull case and above anything ad-tech has held through a cycle. Avoid it on price, not on quality.