Rebound Capital

UnitedHealth Group is downgraded to a 'Hold' rating. The recommendation is to avoid new positions due to regulatory uncertainty from CMS's flat payment proposals for 2027, which, combined with rising medical costs, are squeezing margins. The company is guiding for a revenue drop and membership contraction in 2026 as it exits unprofitable segments. Despite these headwinds, the stock has strong valuation support with a ~4.5% FCF yield.

PDD Holdings, a Chinese e-commerce company, is analyzed due to a recent 30% stock price drawdown and a significant investment by Li Lu of Himalaya Capital. The company's success is attributed to its disruptive 'social commerce' model, which combines group buying with a gamified experience, and its 'Customer to Manufacturer' (C2M) model that eliminates middlemen to offer lower prices. PDD operates Pinduoduo in China, its cash cow, and Temu in international markets. While the domestic market is becoming saturated, Temu is expanding rapidly, fueled by aggressive marketing and a low-price strategy. The article also provides an estimated revenue breakdown between the Chinese and international businesses.

In this deep dive, the author performs a "sum of parts" valuation for Alphabet, arguing it's a more accurate method than a single DCF for a complex company. The analysis projects each business segment's revenue and EBIT to 2030, applies EV/EBIT multiples, and discounts the values back to 2025. The author conservatively estimates Google Search's growth at 5% annually due to competition, while the Google Network is projected to decline. YouTube's ad revenue is highlighted as a key growth driver, expected to grow from $36B in 2024 to $61B in 2030.

PEP (quick overview): Down 24% vs KO +103% over 2yrs due to price hikes amid inflation, missed sales, reduced growth projections, Quaker recall (now resolved), and tariffs. Rebound potential: Poppi acquisition ($1.95B), double-digit growth in zero-sugar/functional beverages, strong Q1 Quaker recovery, smaller packaging strategy, and easing inflation.