Thin Float

Narrow moat, revenue decelerating fast: : Q1’25 +9.2%, Q2’25 -0.7%, Q3’25 +8.3%, Q4’25 +4.0%. Balance sheet is a fortress because the business needs it. Management carries that massive cash cushion specifically to survive the revenue troughs that have historically hit 40–50% peak-to-trough. Revenue durability under stress won’t hold up well compared to $HUBB for example. $POWL is project based cyclical revenue. I would be interested in them at the right price but as of now I can deploy that cash elsewhere with more upside / different exposure. Just not too keen on the business model doesn’t fit my portfolio style. Fortress cash, defensive with moat / monopoly.

@ThinFloat What red flag specifically?

While $BKNG is the most widely followed stock split today, there's also $POWL. Powell Industries is a small cap that makes custom-engineered electrical systems. Large cap peers would be Eaton Corporation $ETN (own), Siemens $SIEGY, ABB $ABBNY, GE Vernova $GE, Schneider Electric $SBGSY $SBGSF. Hubbell $HUBB I still classify as midcap, despite now being $26B market cap. Own it. As with most of these stocks, $POWL looks cheap/reasonable on PE and similar but you don't have to dig deep to realize they have unusually high profit margins right now. Attached from Gurufocus. If data center buildout turns into bust, these names could get hit quite hard, with a small cap like $POWL especially getting pummeled. I have one buy of 15 shares, now 45 after the 3 for 1 split, which is effective today.

@SayNoToTrading Summer 2025

@ThinFloat When did you enter them? $ETN and $HUBB my two favorite in this space. Not saying at today's share prices I just mean the companies.

@DimitryNakhla Numbers look great. But literally zero governance. The real question is are these numbers real?

$DLO is quietly putting up some impressive numbers that Mr Market hasn’t fully appreciated. Incremental operating margins over the last 4 quarters tell a compelling story: Q1 2024 → Q1 2025: 171% Q2 2024 → Q2 2025: 112% Q3 2024 → Q3 2025: 57% Q4 2024 → Q4 2025: 181% $DLO is a business with significant operating leverage revealing itself as revenues scale. Revenues have accelerated in each of the last 4 quarters. All of this at: • 14x NTM EPS • 5.8% FCF Yield • Impressive ROCE $DLO has planted the toll booth across some of the most underpenetrated and complex payment markets in the world — LATAM, APAC, and Africa. The hard work of building the infrastructure is done. What you’re seeing in these margins is the business beginning to harvest what it planted. At this valuation, the market is pricing in significant skepticism. The fundamentals are telling a different story.

Everyone’s talking about the “Magnificent 7” while the most dominant tech company you’ve never benchmarked against just posted 45% revenue growth. $MELI is not an e-commerce company. It’s a financial system being built across an entire continent. The flywheel: - Marketplace: 94M+ unique buyers, $65B GMV - Payments: Mercado Pago largest fintech acquirer in LatAm by TPV ($278B) - Credit: loan book nearly doubled to $12.5B with 4.4% NPLs - Logistics: 94% of items shipped through its own network - Ads: Mercado Ads grew 67% YoY, commerce take-rate hit 25% LatAm e-commerce penetration is 13% vs 29% in the UK. This market is still being created. And $MELI isn’t just riding it. It IS the infrastructure. Banks can’t compete because they don’t have the commerce data. Amazon can’t compete because it doesn’t have the fintech integration or localized logistics. Shopee and Temu can’t compete because they don’t have the physical network. FY2025: $28.9B revenue. +39% YoY. 27 consecutive quarters above 30% growth. The stock is down 34% from highs. Weekly RSI at 31. Sitting right on the 200-week SMA. The last time $MELI touched its 200W SMA and bounced? It returned over 100% in 12 months. This is the kind of name that punishes you for waiting.

Wall Street is pricing insurance brokers like they have permanent moats. They don’t. Here’s what nobody on FinTwit is talking about: AI is about to compress the entire insurance advisory layer. The broker’s edge has always been information asymmetry. They know the carriers, the appetite tables, the pricing tiers. You don’t. So you pay them commission to navigate complexity. But AI flattens that overnight. When any MGA can spin up an underwriting model in weeks instead of years, when $LMND is growing revenue 40% YoY ($738M in FY2025, still burning $165M), when an AI agent can parse every carrier’s appetite in seconds… what exactly is the broker selling? The biggest names in the space: $AON (18.7x P/E, $69B) $MMC (22.0x P/E, $90B) $AJG (37.4x P/E, $56B) $WTW (17.0x P/E, $27B) $BRO (21.3x P/E, $22B) Combined market cap: $264B. Built on a model where complexity = margin. AI destroys complexity. The bull case is “relationships matter.” Sure. But relationships don’t survive a 40% price difference when the client’s CFO can see it on a screen. Nobody is modeling this. Not the sell side. Not management teams. Not the analysts on earnings calls. That silence is the signal.

Alphabet turned $3.9B into $180B. Both positions IPO this year. Nobody is pricing it in. $GOOGL trades at 12x earnings. The cheapest mega-cap in tech. The “AI kills Google” crowd accidentally gave you the cheapest entry into the two biggest IPOs of the decade. You don’t need an allocation. You just need to buy $GOOGL.

$RNR is the name everyone knows in reinsurance. $ACGL is the one that actually compounds harder. +144% vs +81% over 5 years. ACGL has never posted a loss year. Not during Irma. Not during Ida. Not during Ian. 0.11x debt-to-equity. $24B in equity. Zero drama. RNR had 3 loss years in the same window. Quality shows up in the chart.

$WM is everyone’s favorite waste stock. Here’s what nobody wants to talk about. They spent $7.7 billion acquiring Stericycle in 2024. Financed almost entirely with debt. The balance sheet before the deal: $16B total debt. After: $23B. Interest expense went from $500M to $912M in two years. Cash on hand? $201 million. Against $23 billion in debt. That’s a 0.9% cash-to-debt ratio. On the “safest sector in the market.” Goodwill jumped $4.6 billion overnight. $13.9B now sits on the balance sheet. That’s management telling you they paid $4.6 billion more than the assets were worth. Gross margin? 29.1%. Lowest among its peers. Waste Connections runs a 39% gross margin on a smaller, more disciplined operation. Everyone loves WM because it’s big. $25B in revenue. Most institutional ownership. Most analyst coverage. Most name recognition. But big is not the same as good. The Stericycle deal loaded up the balance sheet with debt and goodwill in exchange for a medical waste business that was already dealing with EPA compliance issues before the ink dried. $RSG runs tighter margins. $WCN runs better pricing. $CLH owns permits nobody can replicate. All three have cleaner balance sheets. Sometimes the most popular name in a sector is the worst place to park your capital.

$CLH - Clean Harbors nobody talks about this stock. That’s the point. They own the largest network of hazardous waste incinerators in North America. The EPA stopped issuing new incineration permits decades ago. NIMBY guarantees that never changes. Chemical plant needs to dispose of toxic waste? They call CLH. There is no second option. The permits are the business. It’s a toll road for poison. Record $6B in revenue last year. $509M in free cash flow. 19.7% compounded annually over the last decade vs 12.3% for the S&P. No dividend. Every dollar goes into buybacks and bolt-ons. Their Safety-Kleen subsidiary collects used oil from 100K+ auto shops, re-refines it into base oil, then sells it back to the same customers. They were doing circular economy before anyone had a name for it. Same moat structure as ISRG, WST, HEI. A regulator built the wall. Recurring revenue stacks on top. Nobody can replicate it. $15B market cap. 40x earnings. Not cheap. But there is no second Clean Harbors. When this pulls back 30%+ you buy it and forget about it.

@TheProfInvestor I can see us going lower. Generational wealth was at $70

$META Generational wealth plan If it drops to 490- I will add If it drops to 350- I will triple down These are Generational dips and easiest multi baggers come when you buy Strong companies at deep discounts. Remember the plan Save this post.

@Liathetrader I see wave B higher, only slightly though

$SPX the longer the war goes on, the higher the probability of this playing out with a Wave C and a lower low. The market does not like uncertainty.. Support at $6486 and $6380.

@SayNoToTrading @HolySmokas Honestly I don’t feel like the R/R is there for Nike

Depends if you want to stay in $NKE or not. If not, tax loss but I personally wouldn’t be in rush to take it. Maybe just do partial tax loss, perhaps 10-15% sold each month for a few months. If staying in, could double down and sell original in 31 days and still get tax loss. Though, risk further downside. Might be $36 when you sell original + you have new shares at $43 so now even more losses. Personally I am undecided on Nike and am in no rush to decide.

What should I do?

@SayNoToTrading When looking at CAGR how are you looking at it over 10 years? Pre and post Covid? Doesn’t the post Covid boom skew it?

I forgot which hedge fund it was, maybe Shaughnessy, but there is a long-format hour-long interview which brings up $ENSG that tipped me over the line to finally buy a couple years ago. But it's not much. $VTR $WELL not peers and when people talk about their 30 years CAGRs, it all comes from years 1-20. 2015 onward have been disasters.

@SayNoToTrading you own $ENSG and peers?

@SayNoToTrading Correct somewhat of a monopoly. Business model reminds me of $HEI

@ThinFloat I don’t believe $ENSG has any true public peers.

@FalkTG Doesn’t Germany 🇩🇪 have a very high tax rate?

Average salary: - 🇺🇸 NYC 80.000€ - 🇩🇪 Frankfurt 60.000€ - 🇬🇧 London 52.000€ - 🇫🇷 Paris 51.000€ Average rent: - 🇺🇸 NYC 42.000€ - 🇩🇪 Frankfurt 14.400€ - 🇬🇧 London 38.000€ - 🇫🇷 Paris 21.600€ Net: - 🇺🇸 NYC 38.000€ 🥈 - 🇩🇪 Frankfurt 45.600€ 🥇 - 🇬🇧 London 14.000€ 🏚️ - 🇫🇷 Paris 29.000€ Yeah SoHo is funny. But every investmentbanker who is smart moves to Frankfurt.