The “Second Nvidia” Is About to Soar
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The artificial intelligence (AI) boom just created one of the biggest companies in the world. I'm talking about Nvidia. The firm is worth more than $1 trillion thanks to this explosion. However, most people don't realize Nvidia just got lucky! Because for most of its history, Nvidia has been focused on an entirely different industry – video games. You see, Nvidia's chips have been designed to serve just one purpose… To create ultrarealistic graphics in games such as Call of Duty and Counter-Strike. In other words… This technology was never meant to power AI. And that's also the reason why Nvidia could soon crash and burn… Because there's a new player in town – one that owns a patent-protected chip specifically designed to run AI on. This makes it much more powerful than Nvidia's gaming tech. I'm talking about a 100x performance boost. The U.S. Air Force, Cisco, and Raytheon are just some of this firm's early elite clients. But soon this chip will be available to the mainstream… And if you position yourself before it reaches the mass market, you could turn every $1 into $120… Just like early Nvidia investors did. Keith just published an urgent presentation on this unique opportunity. Inside, he explains all the details and how you can position yourself today. Get the full story here while there's still time.
In 1991, a book was published that some view as the holy grail of the investment world. Yet it never came close to being a New York Times bestseller.
Printed in a modest batch of 5,000 copies, the book was a sales dud. And it was never reprinted after its initial publication.
However, over 30 years later, an unsigned copy may fetch upward of $2,500 – a hundredfold increase over its original $25 price tag.
What makes this rare book worth more than a troy ounce of gold, you ask?
It’s not its cover design or its dry title. Rather, it’s the investing philosophy laid out by its author, one of the most successful fund managers alive.
Billionaire fund manager Seth Klarman’s Margin of Safety breaks down the value investing principles used by the most successful and wealthiest investors in the world, including Warren Buffett, the late Charlie Munger and Joel Greenblatt.
And with his hedge fund, The Baupost Group, having notched returns of about 20% annually since 1982, Klarman’s own track record speaks for itself.
He writes on Page 107 of his book:
“The entire strategy can be concisely described as ‘buy a bargain and wait.’ Investors must learn to assess value in order to know a bargain when they see one. Then they must exhibit the patience and discipline to wait until a bargain emerges from their searches and buy it, regardless of the prevailing direction of the market or their own views about the economy at large.”
In practice, this tends to mean that value investors take the long way around to market outperformance, resisting the allure of popular short-term trends in the market in favor of lower-risk – yet, arguably, higher-reward – alternatives.
In today’s Value Meter, I want to assess one such opportunity: a stock that’s in Klarman’s own portfolio.
Clarivate (NYSE: CLVT) is hardly a household name. It’s an information services company that focuses on providing insights and data analytics tools to businesses and professionals.
Most investors would take one look at the stock’s price trend and be immediately turned off. It’s been badly bruised and battered over the past few years.
But the fact that this stock is trading for a mere $9 isn’t enough to make this a value play. Nor is it the sole reason Klarman’s Baupost Group owns over 25 million shares of the stock.
Let’s dig deeper.
For starters, the company has seen some sizable revenue growth in recent years.
From 2017 to 2022, which is the last year for which we have data, revenue rose by an annual clip of 24%. And EBITDA (earnings before interest, taxes, depreciation and amortization) largely followed suit, growing by nearly 53% a year.
But a more important measure to consider is operating cash flow. It tells us very plainly how much cash a business is generating from its core operations, and it’s harder to manipulate using accounting gimmicks.
On that note, Clarivate is a rarity in today’s market. Not only is it cash flow positive, but its cash flows have grown very strongly.
In the same five-year period, operating cash flow has risen at a staggering annual pace of 138%. And the company is likely to report clearing $700 million in 2023.
In short, this business isn’t nearly as dead in the water as its stock chart might suggest. Despite some earnings setbacks, business is moving in the right direction.
Clarivate currently sports a price-to-book (P/B) ratio of about 1.1, which means it is trading at a better value than 70% of publicly traded stocks.
Its price-to-cash flow (P/CF) ratio sits at around 8.9, which puts it in the 55th percentile among publicly traded stocks.
As we’ve seen with Klarman’s book, the intrinsic value of things – investments included – is rarely obvious. Oftentimes, the ugly, unpopular or obscure opportunities hold the most long-term potential.
For value investors willing to tune out the noise and bide their time, Clarivate hits all the right notes.
In short, falling out of favor has a silver lining. This is the kind of opportunity that would make even Seth Klarman take notice.
The Value Meter rates shares of Clarivate as being “Slightly Undervalued.”
27 militaries in a frenzy over one material; Here's one tech expert's take…
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So, here's the latest buzz: apparently, there's this new “miracle material” on the block, and people are going bananas about it. It's supposed to be the holy grail, making headlines for its mind-blowing potential. They're saying this stuff is stronger than steel but lighter than paper. I'm talking about making bulletproof vests out of nearly weightless cloth! It's like straight out of a comic book, Captain America-style. But that's not all this miracle material can do… They're even claiming it healed a severed rat's spine in less than two weeks. Sounds pretty wild, right? Now, they're saying it could spark the largest military transformation ever seen. Picture this: soldiers wearing nearly weightless bulletproof clothing, and if they do get injured, they'll be able to make miraculous recoveries from injuries… all thanks to this one miracle material. It's not hard to see why 27 major militaries worldwide are in an all-out scramble to snag as much of this stuff as possible. They're saying the market for what this stuff can do could be $11 trillion, or more. Early investors could be eyeing this as the next big score. If you want to dive into this frenzy and see what all the fuss is about? Click below to check it out. Click here to Explore the Hype!
