Garrett Arms

$SYF Quick pitch: bank that trades at 1.25x tangible book, has de minimis deposit flight risk, & targets (earns) a 28% return on tangible equity. While perennially discounted in relation to business quality, SYF is now exceptionally cheap (less than 5x earnings).

@stock_logging Exploring it. cfo.

@ArmsGarrett Great elevator pitch! I've been long here for quite some time and was the first to pitch the stock on X. Where did you get the information about the planned dual listing in Hong Kong?

$YB @ $16.70 an interesting setup. Digital broker that trades at <1x growing earnings ex-cash. Strip away AI narrative & it’s a performance marketing co—buys ads on Chinese social media, funnels users to comparison platform, & earns commission on (mostly health) insurance policy sales. High churn, industry w/ well-known complaint issues, but a legitimate biz growing at 30% w/75% of market cap in net cash. Should make $200M+ this year vs $180M EV today. Credible team w/real backers. CEO founded NetEase ecommerce division & built Kaola platform that was acquired for $2B. IPO’d on Nasdaq last year—process started before latest wave of concerns around US-listed Chinese cos. Now exploring dual HK listing—CFO thinks this will unlock value, as comparable HK insurtechs trade 100% higher. Buybacks are the answer, but mgmt cites tight float w/legacy VC backers still holding shares. Acknowledge that cash position materially exceeds needs—claim to be offering cap. allocation framework later this year w/shareholder return plan—we will see.

@FelixSchreibe13 The cash position should almost be viewed as a risk, at this point. No company should be generating significant profits, sitting on net cash equal to 60% of EV, and still fail to articulate a basic cash strategy or capital allocation framework.

$TIGR delivered an outstanding FY2025: revenue $612M (+56% YoY), net income $171M (+181%), 28% margin. Cash doubled to $793M. At ~4.3x EV/Owner FCF, the market prices in zero growt, clear mispricing imo. But there are risks too.. ir.itigerup.com/news-releases/…

@stockgutter QFIN returned $880M to shareholders in 2025 vs $1.8B current market cap. Actually retired 10%+ shares (most of FINV's repo just neutralized dilution from convertible notes--S/O up YoY) & paid 10% divvy--not too shabby.

@ArmsGarrett Agree, and $LX going into Thurs.

China's Finvolution $FINV not only delivered strong results, but bought back more than 10% of shares in 2025, and pays a 5% dividend. I'm long. Look at this history of shareholder return 💪

@arapaimacap The one on the far end of graph runs at 20%. 1295 running much lower NIM, so efficiency only flows through to a normalized ROE of ~13%. Trading above book. Can find that a lot of places.

@ArmsGarrett look at malaysia $1295.kl. 30% eff, COR is so miniscule it is likely lowest in the world.

Nu is a beast. $HSBK

@arapaimacap Figures you are referring to from Kaspi slides are deliquency numbers. Not the same as NPLs.

@ArmsGarrett Owned it since 2024 as well. 1 question: Kaspi has been having 2% NPL while doing BNPL? How can they be so good? Or how do cross-check they are really that safe. I gt comfort with Halyk just bec it been thru crisis before.

$HSBK a net beneficiary of higher oil. Macro component of 2026 30% ROE guide set assuming $64 brent—expect 5th straight year of 30%+ROE. Kazakhstan one of the most oil-leveraged economies in the world. Oil & gas related revs account for 35% of Kazakh GDP & 75% of exports. Non-Hormuz producer — routes oil thru the CPC & out Black Sea. Gets price windfall without supply disruption. Higher oil floods govt's National Fund & state budget. Spending flows directly into construction, infrastructure, SME lending, & consumer credit —Halyk's bread & butter. Oil booms (historically) compress non-performing loans. Kazakh tenge also trades in close correlation w/ oil, potential for strengthening. HSBK at 115% book & 3.7x EPS.

@_WallStreetWire Ran a 32% ROE in 2022 while tenge was flat vs the dollar. Simplest way to think about it is that, over the long run, you should probably assume 400-500bps of annual currency drag--so adjust ROE down accordingly. What other dominant banks can you buy for 1.1x w/ 25%+ real ROEs?

@ArmsGarrett What if it is accompanied with similar inflation pressures like in 2022?

@siyul Yea, high. 90% unsecured lending so efficiency ratio should prob be judged against credit card cos. Not sure Nu even provides a detailed NIM schedule, but cost of funding is 90% of blended interbank rate (CDI ~14%) & blended NIM is ~17% & even higher in Brazil.

@ArmsGarrett I never dived deep into $NU, but it is a ~$30Bn loan/credit portfolio that generates 2.7Bn 'credit income' each quarter? wow, I would love to visit their client base.

@TidefallCapital @ACIPartnerhship Will work out eventually—it’s a high IRR (before operating expenses) biz.

@ACIPartnerhship Once I see these guys start putting in their own money into the stock I'll have a second look.

Mentioned earlier, but looks like the coin-flip came up tails for $BUR.

We know ROE is what’s important, but I would say efficiency ratio is generally a driver. Asset turnover across traditional banks is similar (loans earning spreads) & regs constrain leverage, so efficiency matters more in banking than other industries. If leverage is capped & asset yields cluster across industry, then efficiency & credit discipline become ROE drivers. Can’t run 2% margins, have suppliers finance biz, & run high ROIC like Amzn. At same time, fee-based fins often run high efficiency & high ROE b/c require far few assets. NU still a better biz. But HSBK is printing 30% ROEs (w/low leverage)& trading at 3x.

@ArmsGarrett Is efficiency ratio (or net margin for grocery stores) that important? I would rather say it is ROE with acceptable risk limits with ROE = net margin x asset turnover x leverage...

@ragingbullcap Nice.

As a few of you know, I launched an investment partnership early last year. My annual 2025 letter is available to accredited investors in the link below. I spend most of it highlighting the Zegona thesis and the potential path ahead $ZEG.L

$BGEO 10 bags in 4 yrs & still cheap. 32% core ROE w/ 19% loan growth in emerging is the new developed economy w/7% real GDP growth, 3% inflation & debt to GDP declining, 40% deposit share, 6.1% NIM(same or higher in 26), Armenia continuing to scale. Still 6x forward EPS.

@Nick_Lamparelli @fallacyalarm Of course. Scaling whether or not you exclude them--that wasnt the point.

@fallacyalarm @ArmsGarrett There is no reason to exclude distribution costs. That is literally the challenge in insurance. You must force demand. No one is lining up to buy the product, so distribution expenses can make or break a program.

Lemonade's RoE was -18% annualized in 4Q25, perfectly in line with my expectations that their book value washes away at a rate of 15-20% annually. Terminal value is zero. Could cover it in an article. But why bother tbh...

Improved margin profile 1,100bps YoY (exc. loss ratio &mkting spend), so appear to be scaling at least. My problem w/the TBV short is co can still bridge funding gap w/equity issuance at 10x book as long as the fanatics stick around. Then can throttle adv. spend to 900bps down the road, assuming 85% retention sticks. Downside still high, tho.

Net losses are moving closer to zero, but I think that mainly because book value is falling, leaving less capital to burn. RoE has been stable for years. But let's say you are right and they will eventually earn industry average margins. That's perhaps worth 2x book. What will the BVPS be by then? Perhaps $4. That puts the company's TV at $8 with a PV today probably <$5. 90% downside.

@RagweedCapital @Fairlight_Cap Mgmt dilutes the living shit out of shareholders then gets props for buying back in smaller size.

@Fairlight_Cap That's an interesting take on what happened.

Public Equity Compounding Platform. A Portfolio of Operating Businesses Priced at ~2.5x Earnings.

Buy global #1 in high-ROIC reclaimed wafers + free option on China's wafer localization boom at massive discount. Worth ~7,000 (2x current price) & doubling in intrinsic value every 3-5yrs (IRR= 20% growth + multiple expansion (20% op profit growth past 5yrs)).

Valuation: Trades at 9x EPS ($600M mkt cap) w/ secular growth from capacity ramps (& investment phase of 12 inch prime currently reducing EPS). $1B JV stake included free. Peers at much higher multiples despite RS's superior ROE, growth, & B/S (net cash 23% of mkt cap).

RS Technologies $3445.T is a long @ 3,450. Hidden gem in semi supply chain. Mkt cap ~¥92B ($600M). Overcapitalized Japanese compounder at 6x EV/EBIT w/embedded growth options earning 15% ROE BEFORE excluding cash + plus JV stake worth 2x its current EV. 1/n