2/24/25 - $cdns - Just too expensive, still2/24/25 :: VROCKSTAR :: NASDAQ:CDNS
Just too expensive, still
- looking at the design/ prototyping names pretty early in the AM to get a start on the week
- mainly interested in the ANSS/SNPS merger where i think all-else-equal (big statement given what's going on in this tape) it could be something to play
- my bias is to simply stay uninvolved mainly bc multiples and growth are so high, not that they aren't justified, but i can spot a number of other opportunities where growth is higher w visibility and multiples r lower
- software as a category seemed to get a second wind after everyone applied the "AI will actually improve margins" logic a few months ago.
- well.
- 1/ yes that's true
- 2/ that's probably not immediately true
- 3/ and not necessarily true of everyone
- 4/ multiples were expensive and remain expensive
- so i'd probably be more interested in these names in the mid 20s PEs or sub 10x sales. that takes cash yield (ignoring SBC) closer to mid 3's. it's still not "cheap" there, but look, you pay for quality.
- but to start necking out in this tape into non mega caps growing low DD at best at these rates/ multiples (which if earnings season has taught us anything so far... it's that the capital seems "stuck and unwilling to move until they're forced to dump the stock"...), no thanks at the moment, i have enough challenge owning stuff that i really like and think has much more limited downside and more obvious upside.
- so while i won't necessarily write on TSXV:ADK , NASDAQ:ANSS , NASDAQ:SNPS , even NASDAQ:BSY etc. just now, i just don't find the necking out compelling on an opportunity-cost basis in this tape.
- have set a look again at slightly over $200 if/when. but realistically, if got there b/c of mkt-related beta, i'd probably not buy it either.
- remains a square pass for me unless i do some deep work on inflecting growth or immediate AI benefits, perhaps someone can enlighten me in the comments to get me off the airchair view.
V
