The Latticework Monday Morning Briefing is our weekly “Guide to the Markets” for long term-oriented investors. It is sent on a separate mailing list (complimentary to members). If you do not wish to receive it, opt out here.
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Ideas from our Weekly Inspiration newsletter
We highlight a few stock write-ups from the latest Weekly Inspiration:
Boston Scientific (BSX) derated after its two growth engines, Farapulse and Watchman, together roughly a quarter of revenue, stalled on competition and physician hesitancy. Aurelion Research reads the company’s 2027 guidance as embedding something close to a worst case, which sets a low bar rather than a high one. Three things argue against the pessimism: the CEO bought $9 million of stock in the open market, the board authorized a $2 billion buyback, its first since 2020, and a launch cadence runs through 2027 and 2028. At ~15x EV/EBITDA and a 4.9% free cash flow yield, the risk and reward on a durable 7-8% organic grower look asymmetric.
LENSAR (LNSR) kept compounding after FTC opposition scuttled Alcon’s $430 million takeover, lifting US procedure share on its ALLY robotic systems from 14% to 23.4% with recurring revenue annualizing near $55 million. Christian Schmidt is candid that the headline 4.8x trailing P/E overstates how cheap this is, because warrant dilution is heavy; on a fully diluted basis the shares trade near 2.9x EV/revenue, still well below the 8x Alcon had agreed to pay for the business. The two risks he names are concrete rather than rhetorical: international placements stalled when the deal broke and distributors have to be re-engaged, and North Run holds concentrated voting control.
JW Lifescience (Korea: 234080) makes the intravenous fluids and parenteral nutrition South Korean hospitals cannot operate without, holding close to half the domestic market behind regulatory and logistical barriers that are genuinely hard to cross. It trades near 4.8x EV/EBITDA and 0.8x book despite compounding net income at ~22% a year over five years. Tangible Bruce argues that the three overhangs which compressed the multiple, the absorption of JW Bioscience, the doctors’ strikes and a frozen dividend, have now all resolved. Exports through the Baxter partnership are compounding above 20%, margins are inflecting, and deleveraging is taking the balance sheet toward net cash. A formal commitment to pay out at least 25% of earnings and normalizing surgical volumes carry the re-rating case.
MegaChips (Japan: 6875) owns a ~10% stake in SiTime whose after-tax value, added to net current assets, comes to roughly ¥19,842 per share against a ¥11,100 share price. That arithmetic ascribes nothing to the fabless ASIC business, which has supplied Nintendo since 1994. Altay Capital notes that management is selling SiTime shares to fund buybacks, cutting the share count from 17 million to 14 million since May 2025, and yet the stock sits at 0.9x book. The risk is the other side of the trade: SiTime’s own valuation is rich, so the gap can close from the wrong end.
As always, the above theses reflect the linked authors’ views (available here), not Latticework recommendations.
Articles worth your time
Nvidia’s Risky Business, by Ben Thompson, sets the AI buildout’s turn toward debt against Jay Cooke’s railroad bonds and the Panic of 1873. Oracle, Meta, Alphabet and Amazon raised $194 billion by early July this year after raising $108 billion in all of 2025; 86% of this year’s issuance already trades above its issue yield, and cover on recent deals has fallen from 5x in February to under 2x. Microsoft is the outlier, still generating $19.6 billion of quarterly FCF without debt-funded capex, while Google has moved on to equity, raising $85 billion, including $10 billion from Berkshire. A critical point concerns Nvidia’s new financing platforms with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR, intended to mobilize over $500 billion of third-party capital, with Nvidia backstopping up to 25% of residual value. Equity dilutes the upside without adding company risk; this structure instead creates risk for pension and insurance capital.
AI’s Bar Mitzvah Moment? From Hope & Hype to Hard Business Questions!, by Aswath Damodaran of NYU Stern, insists that AI now be judged as a business rather than as a phenomenon. The Mag Seven accounted for 45% of the increase in market capitalization across all US stocks between 2022 and 2025 and carry an aggregate value of $23.7 trillion, while AI investment contributed roughly 1% of the 2.5% real GDP growth in 2024 and 2025. His complaint is that both camps cherry-pick the evidence: optimists cite usage statistics, skeptics cite capital spending and the absence of profits, and neither side asks whether these businesses can build moats. Large addressable markets, he points out, do not reliably become large businesses, and heavy capital spending does not by itself condemn a company to destroying value. The questions that decide it are the prosaic ones about products, unit costs and barriers to entry.
S&P500 Net Margins Soar (16.9%); Or Do They?, by James Emanuel, argues that the index’s record profit margin is an accounting artifact of the AI capital-spending cycle rather than a durable improvement in economics. S&P 500 net margins averaged 5.6% in the 1990s, 6.3% in the 2000s and 8.8% in the 2010s; FactSet now shows 16.9%, a 370 basis point jump in a single quarter from an already elevated base. His explanation is a timing mismatch. The ~$800 billion the hyperscalers will spend this year is recognized immediately as revenue by Nvidia, Micron and hundreds of other suppliers, while the buyers capitalize the same spending and depreciate it over many years. Free cash flow yields, which oscillated near 5% for years, began falling sharply in 2023 as capex accelerated, telling the opposite story. The mechanism runs in reverse when the buildout slows, because revenue drops while the depreciation keeps flowing through, and he thinks the average margin over the next five or six years may well print a single digit.
The Radio, the Submarine and the Tariffs, by Ed Conway, corrects the standard telling of the 1987 Toshiba boombox smashing and draws a lesson for anyone underwriting a policy-driven thesis. Congressmen took a sledgehammer to that radio the day after the Senate voted to sanction Toshiba, and the reason was not Japanese consumer electronics. Toshiba had sold a nine-axis milling machine to the Soviets when the export rules permitted three, letting them grind quieter submarine propellers. The false customs declarations went undetected for years and surfaced only because a disaffected colleague reported them. Conway sets this beside the White House’s recent transshipment paper, which concedes that Chinese goods still reach America by way of third countries, and reads the paper as an admission that nobody, including the government imposing the barriers, can reliably say where a product was made. Barriers rarely stop trade; they lengthen and obscure the route it takes.
The deck
The 116-page Monday Morning Briefing is available to members. It spans our weekly scoreboard, idea-generation screens, market valuation and positioning, macro and fixed income, and equity valuation screens across international markets (Canada, the UK, Germany, Australia, Japan, Korea, India and Sweden, alongside a cross-country P/E table and European REIT discounts to net tangible assets). We welcome your feedback.
Feedback on the Briefing
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A few words on the format
The Briefing is designed to answer a deceptively simple question. If you were sitting down before the weekly market open, as an investor rather than a trader, what would you want in front of you?
Each week, the Briefing walks through five parts.
Weekly Review & Outlook covers equity performance, sector moves, the earnings just reported, and the earnings coming up, alongside curated editorial highlights from our Weekly Inspiration newsletter.
Idea Generation surfaces candidates from screens we run: biggest decliners, names near 52-week lows, low multiples, high FCF yields, spinoffs, activist situations, buybacks, short interest, and more.
Market Valuation & Positioning steps back to the index level: the Buffett Indicator, aggregate multiples versus history, S&P 500 concentration, equal-weight versus cap-weight, and long-run factor returns.
Macro & Fixed Income rounds out the picture with rates, credit spreads, the Fed balance sheet, the dollar, labor, regional PMIs, and housing.
International Markets closes with equity valuation screens country by country, alongside cross-country valuation comparisons.
Table of contents
Note: Slides showing data that is updated on a monthly or quarterly basis may not be included in every issue of the Monday Morning Briefing.
Part 1 — Weekly Review & Outlook
Global equity index performance across regions
GICS sector total returns
Weekly commodity price changes
Quarterly earnings: biggest beats and misses, market cap above $500M
Selected insights from the week’s notable earnings calls
Top reporters by market cap, week ahead
Takeaways from featured Weekly Inspiration articles
What’s new in AI for investment managers
Curated video and audio from Weekly Inspiration
Key takeaways from each featured video and podcast
Part 2 — Idea Generation
S&P 500 stocks with the largest weekly declines
Largest weekly declines among US stocks
Cheapest stocks trading within 10% of their 52-week low
Key takeaways from curated analytical articles
Notable activist campaigns and acquisition proposals
Featured spin-off opportunities
Holdings two or more tracked value managers added last quarter, now below their quarter-end price
Open-market purchases by officers, directors, 10+% owners
US-listed equities $300M+ market cap, insiders own 20% or more, lowest EV/EBIT
S&P 500 share repurchase activity, trailing twelve months
S&P 500, largest quarter-over-quarter decline in shares outstanding, buyback-verified (new this week)
Largest quarter-over-quarter decline in shares outstanding for US stocks $300+mn ex-S&P 500, buyback-verified (new this week)
FINRA consolidated short interest
Ranked by short interest as a percent of float
S&P 500 highest FCF yield (ex-financials)
S&P 500 ex-financials and ex-REITs: stock-based compensation vs. reported free cash flow
Three-year ann. FCF yield for US stocks $300+mn (ex-fin.)
S&P 500 highest trailing earnings yield (all sectors)
Three-year ann. earnings yield for US stocks $300+mn
S&P 500 cheapest by EV/EBITDA (ex-financials)
EV / three-year ann. EBITDA for US stocks $300+mn
S&P 500 cheapest by price / tangible book value
Cheapest by price / tangible book for stocks $300+mn
Enterprise value per dollar of real estate at original cost, before depreciation
S&P 500 highest 5-year average ROIC
Highest 5-year ROIC for stocks ex-S&P 500
Valuation in historical context for selected companies
Indicated dividend yield for US stocks $300+mn, net debt at or below 25% of market cap
US micro-caps, P/S < 1.0, ranked by 52-week price change
Part 3 — Market Valuation & Positioning
Equity market value / GDP
S&P 500 deflated by M2 money supply
After-tax corporate profits / GDP
S&P 500 trailing P/E
S&P 500 earnings yield vs. 10-year Treasury
Trailing P/E by GICS sector
Top 10 holdings by index weight
RSP / SPY relative performance, trailing one year
Russell 2000 / S&P 500 relative performance, five years
S&P 500 breadth indicators
Money market fund assets and ETF category returns
CBOE VIX implied volatility term structure
FINRA net margin debt — customer securities margin accounts
S&P 500 calendar-year price returns and largest intra-year drawdowns
Fama/French factor returns, annualized and compounded
Fama/French value spread — book-to-market gap between cheap and expensive stocks
Fama/French HML factor — cumulative return spread by decade
Growth of $1 invested in Fama/French size-value style portfolios since 1926
Part 4 — Macro & Fixed Income
U.S. Treasury yield curve
10-year Treasury yield minus year-over-year CPI
U.S. high yield credit spreads
Federal Reserve total assets and composition
M2 money stock, year-over-year change
Total public debt as a percent of GDP
Trade-weighted U.S. dollar index
Unemployment rate and initial jobless claims
Regional Fed manufacturing diffusion indices
30-year mortgage rate and housing starts, trailing ten years
Part 5 — International Markets
World equity market cap / world GDP
Ranked by discount to each market’s own 10-year average P/E
Ranked by discount of share price to the company’s own disclosed EPRA NTA per share
Canada equity valuation screens
UK equity valuation screens
Germany equity valuation screens
Australia equity valuation screens
Japan equity valuation screens
Korea equity valuation screens
India equity valuation screens
Sweden equity valuation screens
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