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Monday, August 31, 2026

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@BrokenMoats

Broken Moats on X

$DVA not sure exactly whats behind the over 100% gain in shares this year, But at current levels near $230 a share the stock is almost 27x next years numbers (including net debt/per share basis). CMS initial rate for next year came in well below expectations at 1.1% (and while it can be moved higher that I still a considerable headwind). DVA still sits as one of the most negatively exposed to GLP1s and that should be a structural headwind that eats at volumes incrementally each year into the future Valuation and performance spread against their other public peer $FMS opened up significantly again (diverged at key points in recent years) -- FMS traded off 6% (after being weak for months) on the CMS announcement last week. DVA maybe because of the Buffett influence on float (high 40s% ownership) has traded very odd in recent years, but tends to ignore all news then violently reprice on earnings.
@ActAccordingly

PAA Research on X

How strong is the momentum factor? Maybe more than you think. This post was prompted by a data point referenced by Sebastian Page at @TRowePrice this AM on @BloombergTV. Sebastian pointed out that if you simply bought the TEN best performing stocks from the previous 12-months at the start of each month and repeated that process every month, you would have outperformed the market by 40% ANNUALLY for the past 3-years. That's stunning. Here's a visual that underscores the point. Since September 2023, the @InvescoUS S&P 500 momentum ETF ($SPMO) has outperformed the S&P 500 by 100%! That has NEVER happened before. The $SPMO is only recalibrated TWICE a year and has 100 positions, but it still has captured the momentum factor driving price action in this market. Today the $SPMO is up 3%+ in large part because of its 11% weighting in $MU. One thing is clear: these "alligator jaws" in the chart below WILL close. For now as @todd_harrison says, you don't get to trade the market you want, just the one you have....
@BrokenMoats 1 click

Broken Moats on X

Sector action is bizarre today --- travel/discretionary (ex amazon (who posted very lousy prime sales) are surging), housing and adjacent like furniture ($w $wsm), biotech adjacent bid ($rgen, $medp) and waste stocks ($wcn). You want to derrick micron, I get it. And I get gas prices lower, market expects to fade out rate cuts that were priced moving forward as Warsh moves to trim mean/new data versus actually being hawkish, and some impact on a name like $hd off the housing bill. But all of these things are at the margin and known leading up to today --- so why target, kbh (on relatively inline to disappointing numbers yesterday) Expedia today versus yesterday? Market moves in very funny ways recently

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