Hi all 👋
Sorry this one is a bit later than intended. Hectic weekend and hectic morning so couldn’t get it out when I wanted, but I made the changes based on moves today in the market.
The first 3 will be open to all and the last 2 will be for paid subscribers.
DLocal | DLO
DLO continues to be one of my biggest positions ~3.5% of the portfolio. It’s way smaller than the likes of LMND, but I have no intention of making DLO smaller. It’ll only get bigger over time with adds, and value increase.
Here’s my very quick DLO investment thesis:
Emerging markets will account for ~66% of the worlds GDP by 2035.
Digital payments revenue in LatAm alone should 3x by 2027.
This is supported by fintech innovation, digitalization, and financial inclusion.
The ultimate TAM by 2030 for emerging markets in digital payments is estimated ~$4.2T of which DLO is aiming to capture a huge part of.
DLO are currently growing revenues at +35%, EBITDA at +45%, and EPS at 36% and yet they trade for ~18x 2026 EPS estimates which seems far too cheap for the growth numbers we can expect.
My assumptions through to 2030 have $2.5B in revenue, $750M in FCF, and a $11.25B valuation (~$40 share price) assuming a modest 15x FCF multiple. This means DLO could quite easily be a 3x opportunity still today.
Allegro Microsystems | ALGM
I’ve not spoke about ALGM before so here’s a quick introduction to ALGM.
ALGM are a semiconductor company focused on sensor and power IC’s for the automotive, industrial, and robotics niches. They came up in my big Excel as an attractive buy based on revenue growth and EBITDA growth.
You can see my spreadsheet here. It’s $16 a month 👇
If you look at estimated EBITDA growth for ALGM through to 2027, I think they’re trading far too cheaply now relative to peers. They’re expected to hit $180M in EBITDA in FY26 and $344M in FY28 meaning they’re growing at a CAGR of 38%.
They’re currently trading at 33x 2026 EBITDA so it’s relatively attractive from an EBITDA growth perspective.
Relative to peers like MELE, TXN, and IFX, ALGM trade slightly higher from a sales multiple though they’re also growing revenues by ~2-3x the rate of other competitors.
Technically, they’re at a nice level too above all MA’s and sitting above a nice support level. I see ALGM in the $50s over the next few years as they ride the electrification, and robotics tailwinds.
Joby Aviation | JOBY
I’ve spoken about JOBY a lot for my paid subs and have stuck with this level (purple box) as my ideal buying zone, hence why JOBY is still not a position despite being very bullish on the name.
They’re the clear eVTOL leader over ACHR so far and if execution continues at the rate they have done so far, I think JOBY is an excellent long-term hold.
I may initiate a small position in JOBY soon just to make sure I am in. But the bulk of my position will definitely be ~$13 and below.
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