Welcome to another edition of Giles Capital Weekly. As this covers the final week of 2024, company reports have been naturally lighter during this holiday period. Nevertheless, several fascinating narratives emerge from the ongoing debate around skilled immigration in the US tech sector to quantum computing stocks surging despite uncertain commercial prospects. This week's articles provide particularly rich end of year perspectives - from Peter Krauth's commodity outlook to Value Degen's examination of metallurgical coal consolidation, offering valuable insights as we look toward 2025.
My top picks this week highlight two companies with thorough, data-driven analysis from recent coverage. From Rijnberk InvestInsights, Nike presents a compelling turnaround story under new CEO Elliott Hill, who brings decades of company experience. The analysis thoroughly breaks down their strategic pivot back to wholesale partnerships, brand repositioning, and innovation pipeline, with clear margin recovery targets and realistic growth projections pointing to a 10-12% annual return potential. From Long-term Investing by Sanjiv, Infosys emerges as a standout in IT services through a rigorous comparative analysis versus Accenture, demonstrating superior operational metrics with 31.4% ROE and stronger margins, while their efficient organic growth model and minimal reliance on acquisitions suggests more sustainable returns than peers.
Before diving into this week's newsletter, I want to thank all readers for their continued support throughout 2024. Looking ahead to 2025, I'm excited to enhance our weekly coverage to include fund letters and also introduce new analytical frameworks to uncover well researched opportunities. These improvements will be part of the newsletter revamp announced earlier this year. I look forward to sharing more details with you soon.
Americas
Rijnberk InvestInsights on Nike (🇺🇸NKE US - $117 billion) New CEO Elliott Hill's turnaround strategy focuses on revitalizing wholesale partnerships and returning to sports-centric marketing, with expected EPS growth of 24% in FY26 and shares trading at 30x FY26 earnings.
Special Situation Investing on Texas Pacific Land & Landbridge (🇺🇸TPL US - $15.5 billion | 🇺🇸LB US - $2.8 billion) Though this is a portfolio update, it provides insightful analysis of TPL's $286M royalty acreage acquisition and Landbridge's potential data center developments, with both companies benefiting from strategic Permian Basin positions.
Value Degen on Peabody Energy (🇺🇸BTU US - $2.4 billion) The coal producer's recent $1.7 billion Australian acquisition expands metallurgical coal production by 11.3 million short tons at an attractive 3.1x EBITDA multiple, positioning the company for a stronger metallurgical coal focus.
Just A Value Investor on Galaxy Gaming (🇺🇸GLXZ - US$85 million) Casino table games provider with pending acquisition by Evolution at $3.20 per share, representing 17% upside. Strong recurring revenues and 90% gross margins provide downside protection.
Long-term Investing on Accenture and Infosys (🇺🇸ACN US - US$243 billion | 🇮🇳INFY IN - US$94 billion) Deep comparative analysis highlighting Infosys's superior margins (17.2% net vs 11.4%) and operational efficiency vs Accenture. While Accenture trades at 25.8x forward P/E with 8% revenue growth, Infosys offers similar forward P/E with higher ROE (31.4% vs 26.3%) and significant cost advantages from its India-based operations.
Europe, Middle East & Africa
Emerging Value on Odyssée Technologies (🇫🇷ALODY FP - €24 million) Recently IPO'd precision machining company targeting 50% growth by 2028 with 15% EBITDA margin, though high working capital requirements and capital-intensive nature pose risks. Currently trading at €14.5 with €18 million revenue run rate.
Asia-Pacific
Dungeon Investing on Square Enix (🇯🇵SQNXF - US$5.2 billion) Final part in series examining the Japanese gaming company trading at 4.5x 2025 EBITDA. Strong non-gaming segments provide stability while gaming division shows turnaround potential.
Noahpinion - Indian immigration is great for America Data-driven analysis of the economic benefits of skilled immigration, particularly from India. Compelling arguments about innovation and economic competitiveness with important implications for tech sector growth. (20 min)
The Great Wall Street - Postcard from Shanghai Fascinating ground-level observations of consumer behavior and retail trends in China's largest city. The contrast between packed M&M stores and empty luxury boutiques tells quite a story. (10 min)
Noahpinion - Five possible reasons China's productivity slowed down Essential reading for understanding China's economic challenges, from demographic headwinds to misallocation of R&D resources. (15 min)
Jingshu's Substack - The Industrial Cycle is Our Bet for 2025 Compelling analysis of the global industrial sector opportunity, focusing on inventory destocking and potential recovery catalysts across markets. (15 min)
Panda Perspectives - Panda Travels: Developed Asia Comprehensive analysis of economic outlook for Japan, South Korea and Taiwan, with detailed examination of monetary policy and growth drivers. (30 min read)
Long-term Investing - The Indian Stockmarket Insightful analysis of India's domestic investment boom through SIPs and its implications for market valuations. Clear explanation of structural changes in Indian retail investing. (15 min)
Made in Japan - Useful tools for Researching Japan Comprehensive guide to researching Japanese equities, including detailed resources for financial data and market statistics. Invaluable for investors interested in the Japanese market. (15 min)
Dungeon Investing - Dungeon Investing: Annual Report 2024 Insightful review of gaming and entertainment investments throughout 2024, with detailed performance analysis of key holdings like PlayWay and Games Workshop. (25 min read)
Quipus Capital - IT Sector Overview Excellent deep dive into IT industry structure, competitive dynamics and valuation metrics across different sub-sectors. (35 min read)
Quality Investing with René Sellmann - Playing Devil's Advocate: What Could Derail Meta's Growth? Thoughtful analysis of six key risks facing Meta, from TikTok competition to AI commoditization. Worth reading for the balanced perspective. (12 min read)
Stock Picker's Corner - Forecast 2025: The ABCs — Apple, Bitcoin and Crypto Fascinating interview with early Bitcoin miner David Zeiler on crypto market outlook and Apple's AI strategy. (20 min read)
Market Moves by GBC - AfterHours Tales: The Ferrero Family's Nutella Chronicles Engaging business history piece examining Ferrero's growth from post-war Italy to global confectionery giant. Illustrates the power of family-owned businesses and long-term thinking. (20 min read)
Jimmy's Journal - How to Define the Total Addressable Market (TAM): Uber's Case Study Excellent analysis of TAM calculation methodology using Uber as a case study. Valuable insights for evaluating growth companies. (15 min read)
Stock Picker's Corner - Forecast 2025: Two Stocks and a $40 Bullseye Compelling interview with Peter Krauth on silver's outlook, featuring Wheaton Precious Metals ($26B market cap streaming company) and Aya Gold & Silver ($2B mid-tier miner). (20 min read)
The Coal Trader - BREAKING: Fire at Canada's Westshore Terminal to Impact Coal Exports Timely analysis of how fire damage at a major coal export terminal could impact global coal prices and supply chains. (5 min read)
Quality Stocks - My 12 Top Stock Picks for 2025 Detailed analysis of potential winners for 2025 including Adobe, Adyen, and TransMedics with specific growth and valuation metrics. (15 min read)
Meb Faber Show - Felix Zulauf: The Next Market Reversal Could Be Ugly! Macro expert Felix Zulauf warns of potential market turbulence in 2025 as liquidity dries up. He highlights unprecedented market concentration, with 73% of global equity market cap in US stocks and concerns about private credit markets. (Listening time: 50 minutes)
Behind the Balance Sheet - #42 The Credit Expert Greg Peters, co-CIO of PGM ($700B AUM), discusses the evolution of credit markets and risks in the current environment. Key insights include deteriorating covenant quality, rising private credit risks, and concerns about the sustainability of sovereign debt levels. Peters emphasizes the importance of scenario-based analysis over single-point forecasts and warns about potential market dislocations as rates normalize. (Listening time: 75 minutes)
Barron's Streetwise - The Box Episode Deep dive into International Paper's turnaround story and Nike's challenges in maintaining market share and brand heat. Stocks discussed: IP (62% gain since March, turnaround case), NKE (market share concerns, shares down from $175 peak to $77) (Listening time: 26 minutes)
In Good Company with Nicolai Tangen - Bonus: Peter Burling Olympic sailor Peter Burling discusses leadership, team dynamics, and decision-making under pressure. Offers insights on managing risk, maintaining focus during volatility, and the importance of clear communication. (Listening time: 37 minutes)
Currently, I’m only featuring free content. If you're a writer producing free, insightful investment analysis and would like to be considered for inclusion, feel free to reach out. What would you like to see in future editions? Let me know in the comments.
Disclaimer: This newsletter is for informational purposes only and does not constitute investment advice. All opinions expressed are those of the quoted authors and do not necessarily reflect the views of the newsletter creator. Always do your own research before making investment decisions.
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