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đź—ž 5 Most Impressive Charts From Earnings Season Week 2

5 insane charts and a peek at one of the fastest growing economies in the world.

Written by: Ryan Henderson & Braden Dennis

Happy Sunday!

Here’s what’s on the docket for this week’s newsletter:

  • đź“Š 5 Most Impressive Charts From Earnings Season Week 2

  • 🇲🇽 The Decade of Mexico? One Stock Poised to Benefit

Let’s dive in!

Earnings Season Week 2:

Charts of the Week

Earnings season began heating up this week with several of the world’s largest companies reporting their numbers.

Here are a few of the Charts/KPIs that really stood out:

Meta Platforms, the parent company behind some the world’s largest social media brands, reported better than expected earnings this week.

One number in particular that stood out was the profitability within its “Family of Apps” (FOA) segment. FOA, which includes Facebook, Instagram, WhatsApp, and other digital properties, delivered 60% operating margins for the quarter, its highest quarterly profit margin ever.

Performance since earnings: +3%

Microsoft’s “Cloud Revenue” came in slightly below analysts expectations, but it’s still hard to not marvel at the sheer size and growth of this business.

Microsoft’s cloud business (which includes more than just Azure) is now on an annual revenue run rate of $163 billion for its cloud business, yet it still continues to put up growth rates above 20%.

Performance since earnings: -6%

After T-Mobile’s 2020 merger with Sprint, the telecommunications giant has amassed what it claims to be the largest 5G network in America. And that advantage is helping T-Mobile quickly steal market share from its biggest rivals.

In fact, over the last 12 months T-Mobile has added 6.1 million new postpaid subscribers. That’s 2.5 million more customers than AT&T and Verizon added combined!

Performance since earnings: +5%

The world’s largest company by market cap continues to return all its cash flow (and then some) to shareholders.

Over the last 5 years, Apple has returned $550 billion to shareholders through buybacks and dividends, more than any company in the world. Notably, over that same timeframe, Apple has generated $511 billion in free cash flow.

Performance since earnings: +0%

A decade ago, BlackStone was the largest alternative asset manager in the world. Today, that’s still the case.

Somehow, BlackStone’s astounding size hasn’t prevented them from continuing to grow assets under management at an impressive rate. The company has increased its total AUM more than 5-fold since 2012, driven by growth across all asset classes.

Performance since earnings: -6%

Partner Spotlight: Chit Chat Stocks

The Decade of Mexico? One Stock Poised to Benefit

The Mexican economy is set to boom.

The country of 130 million has a wonderful demographic pyramid, is seeing its GDP soar, and should benefit from the re-shoring of manufacturing away from East Asia to North America.

But wait, isn't US President Donald Trump going to kill its economy with tariffs?

Despite what you may read out there, the Mexican economy is doing just fine and is now the largest trading partner with the United States, dethroning China. Mexican workers are seeing their wages increase rapidly, which is helping the country escape the "middle income trap" that plagues many Latin American countries.

What will these citizens do when they start accumulating more wealth? Save and spend it on discretionary items including... travel.

Introducing OMAB

In 1998 the Mexican government opened up its airports for private investment and we investors should be ever grateful. We have the opportunity to invest in a government-sanctioned monopoly that looks like it is well on its way to 100 bagging (it is already a 15 bagger since going public in 2006).

One of the companies born out of this privatization was Grupo Aeropuertario del Centro Norte, or OMAB for short.

OMAB operates 13 airports that we can separate into categories:

  • Major hub: Monterrey (half of traffic)

  • Tourist hubs (Zihuatanejo, Acapulco, Mazatlan)

  • Seven smaller cities in the north of the country

  • Two border towns (Juarez and Reynosa)

Since 2006, OMAB has focused on growing its volumes, commercial sales, and any sort of profits it can make from adjacencies to airports.

OMAB makes money in 3 ways:

  1. Aeronautical Revenue: OMAB charges slotting fees to airlines every time they use an airport’s facilities. This is typically baked into the cost of every passenger’s airline ticket.

  2. Commercial Revenue: Generates rental income from commercial operators (restaurants and retailers mostly) conducting business at their airports.

  3. Adjacent Businesses: Parking facilities, cargo holding businesses, and hotels.

So ultimately, the key driver of all these revenue lines is the total number of passengers that visit their facilities each year. And so far, that’s trending in the right direction.

I believe this growth of air traffic to the country of Mexico should persist thanks to continued tourism and economic growth in the country.

International travel to Mexico will likely grow unabated in the years to come. It is centrally located to the United States (as well as other countries) and has a ton of capacity for tourism across many different regions.

My bet is also that the rising Mexican middle class will accelerate domestic passenger growth for OMAB over the next 5 - 10 years, making it more important to the thesis.

For a business trading at a current Enterprise Value to EBIT multiple of just 11x, shareholders should benefit significantly if the assumptions above prove to be right.

Meme of the week

This week, the world of AI as we know it changed drastically after the launch of DeepSeek v3.

To save people time here, a team of engineers in China built a model that many say is comparable to the leading models of today (such as GPT-4, LLaMA, and others) at a fraction of the cost.

Prior to DeepSeek v3, the consensus was that a company had to spend billions on Nvidia H800 GPUs in order to train a leading edge model. Instead, DeepSeek got their through a process known in the tech-world as “distillation”, which means they extracted understanding from another model.

So… copying.

This single event shaved off more than $500 billion in Nvidia’s market cap.

For those familiar with the parody sitcom Silicon Valley, OpenAI may have been Jin Yang’d.