Nope, we're not going to do it today.
We're not going to talk about drum pal.
We're not going to talk about the federal funds rate.
We're not going to talk about inflation whether or not it's
going to go up or down. We're not going to talk about
commodity prices and mortgage rates, and the housing bubble
and car prices and so on and so forth.
I want to talk about something a bit different today, I want to
talk about investing in particular, stock picking.
And in this video, we're going to go over three stocks that
actually think are Great Value right now.
These are companies that That I own a share of, I have a little
bit of them and I'm going to be adding more to them.
The companies are Microsoft Google and Adobe, and we're
going to be looking at the fundamentals of each of these
three companies. Now, before we jump into that,
specifically, I just want to highlight something here.
If we look at this map of the market, this is the S&P 500, you
can see clearly that it's red. In fact, this is vibrant red.
We have companies down 15 16 percent just over the past 30
days. This is a Off many people were
asking for sell-offs a year ago. They were saying everything's
too expensive. I wish prices would come down a
little bit. That's what a lot of us were
saying a year ago that stocks were up too high and we like to
get them at a discount but now we have the discount.
Now we have stocks trading down like crazy now.
Ironically when stocks are the best time to be buying them,
they're the best price in the valuations have come down
dramatically. Now, nobody wants to talk about
individual stocks. All the content that we're
seeing on YouTube, on Twitter, on Tick-Tock is all about the
FED. All about inflation, all about
macroeconomics. Well, I want to change Pace in
this video, I want to turn and focus on actually investing and
investing in individual companies.
And we all know the phrase, we should become more greedy.
We should become more aggressive when others become more fearful,
and, anyway, you slice and dice this any objective measurement.
We look at, we see investors, Not only fearful but extremely
fearful. That's the measurements.
Now, other investors are becoming extremely fearful, and
now may be a good time to start increasing our byes and looking
at the best potential deals. So in the spirit of
stock-picking in the spirit of actually making Investments,
that might make us money over the next while I want to focus
on three different companies that are ones in my portfolio
that I plan on buying over the upcoming months.
And these are ones that I'm invested in, but the price has
gotten so low for them. That I think it's worth
revisiting. Before we get into those
specific companies, I have to do a portfolio update.
For those of you new. I track my performance with
transparency, my net returns every single video all the time.
So any time you check in, you'll be able to see this performance.
Now, the story fund is my tech growth portfolio.
It's not the only one I have but this is this is my main Tech
portfolio. This is the only one that I have
that's focused purely on growth, which if we look at this on a
total return basis right now, we're down around 25%.
The S&P 500 is down 7% so we're underperforming spy, you can see
my portfolio and blue. The S&P 500 in red were
underperforming right now but we've actually been slightly
closing the Gap over the past couple of months.
Unfortunately, both the market and my portfolio have taken a
nosedive over the past week. So this is what the performance
looks like, right now, the markets down.
But again, we look at this as an opportunity, not as something to
be concerned about When I look over my Holdings out of all, the
companies that I've invested in and even outside of those
companies, one of them I think is the best risk-reward
currently speaking the best one. I think it's Microsoft.
I think it beats out Google, I think it beats out a dhobi.
I think it beats out meta the much cheaper, big tech
companies. I think Microsoft has the best
risk reward, and I want explain why we could look at other
examples. If you're looking for just
inexpensive lowest multiple, then I think meta is probably
the top one. It's at a 12 for PE ratio.
That is very cheap. We even have Google hair.
Google's another cheap company. That I frankly think is a great
buy right now. It's at a 16 PE ratio, but even
outside of that, the one that I think's a better buy than either
of those is Microsoft and it trades at a higher multiple, a
24 forward, P/E ratio. The reason why is because many
people looking at buying Google and meta need to take into
account that they run their businesses off of AD revenue,
and AD revenue is susceptible to economic Ebbs and flows.
The economy's doing really well and all of these startup
companies are wanting To promote their products at any expense
necessary then ad revenues going to go up in Google and met.
It's going to be a lot of money, the economy really shrinks and
it slows down ad revenue is going to go down CPM rates, the
RPM rates, the different ways of tracking the amount of Revenue,
you earn per thousand views, that's going to go down and that
will affect Google and meta much more than it will affect
Microsoft. Microsoft owns LinkedIn.
So they do have some exposure to ad Revenue, but far less than
Google or meta. Microsoft is far more
Diversified, they have huge revenues, through gaming.
Through subscription gaming, they have another deal right now
through Activision Blizzard where they're buying this
company, that's a purely gaming company that has a huge amount
of free cash flow. So they have a pending deal
going on right now that I think will be great for Microsoft.
They have 80% plus of their revenue as subscription.
So it's far more reliable than a dress.
Vanunu that you get from something like Google or meta.
So I look at the PE Ratio. I realize it's more expensive
than a company like meta it's more expensive than Google, but
I just think that the earnings are far more, they're far more
reliable than Google or meta or any other AD company.
That's part of the reason. I also think in terms of moat
when you look at competitors to Microsoft consider, the fact
that right now Tick Tock is, they're presenting themselves as
a threat to both metaphor. Sure they're a threat to
Medicare stealing engagement from the That's the, the target
audience that met is now focusing on met is going after
them with Instagram but they're having this battle this back and
forth, Tick Tock is a real present threat to meta and
anyone working at that company meta will tell you that they'll
say, we are concerned and focused about focused on
Tick-Tock the same thing with Google.
Google's going after tick talk with their short form video, you
can see them pushing those a lot.
They're always in your feed when you're scrolling, that's because
they consider them to be a threat to the Video format
Tick-Tock could expand to longer form videos and even put
pressure on YouTube. What's Microsoft's.
What is, what is their competitors doing who's
competing against Microsoft that their scurrying about very
concerned about Apple. Not really, not really affecting
their business and corporate software, sales force to some
extent, but the metrics show that Microsoft holding up just
fine. Microsoft is taking market share
from Amazon with Azure their Cloud business.
Doing amazing. I don't see any real competitive
threats to Microsoft. They are the most insulated a
big Tech. My opinion.
Probably the biggest moment of all of them.
So when I compare them, again, either in terms of earnings
predictability or the mo of the business and competitive
threats, I think that Microsoft is topped hair.
I think they're the highest quality of the highest quality.
I put them right there in the category with apple.
And I put them with having the same moat sizes, Amazon these
SLI wide moat businesses that have very difficult to replicate
modes. So Microsoft is top tier of
topped hair, Quality Companies. Now let's go ahead and talk
about the actual numbers here. The valuation and the
fundamentals, we know that Microsoft again is buying a
company called Activision Blizzard.
This is supposed to close June of next year.
If you want to do an Arbitrage play, you can by Activision
Blizzard right now and if the deal closes, you'll get $95 per
share. Share, which is around a 28
percent returns so that's something to consider their the
deal falls through. You still own a great company
Activision Blizzard's a great company.
In my opinion this Arbitrage has a lot more risk or lot more
reward than risk. I think it's a really good play
but if the deal falls through you stand to lose maybe 15 20 %
and you just hold the company at that point so they're buying
Activision Blizzard which is a company.
Not a lot of people like some people hate the games but it
makes a lot of money and that's It really counts.
They have the Modern Warfare franchise, which is massive.
It's like Disney with Pixar and Star Wars.
That's kind of how gaming is what modern warfare massive
franchise. They've announced that they're
coming out with Diablo for and 2023 and it seems like they're
really trying to make a community let game.
I think they'll be a success, they own so many other games,
you could go through, look at the list, but this is a massive
company that has high amounts of free cash flow that has a ton of
intellectual property. We'll add to the franchise of
Microsoft, if this deal goes through.
So, the Activision Blizzard deal, I think, is a huge
Catalyst for Microsoft. I think it's going to make the
company much stronger. They'll have more gaming
franchise to add to their huge. I think big dominant leading
gaming, the only company that they're smaller than in gaming
is tencent. Microsoft will be in second
place after this deal closes, if it closes.
So, as a Microsoft shareholder, I'm hopeful that the deal goes
through. I think it's a great property
for them to pick up now. Now the price has come down for
this company. Microsoft is down, twenty nine
percent year-to-date and that's about from its all-time high.
So it's down 29% from its all time high it trades.
At the 24 PE ratio which is just too cheap for this company
trades at a free cash flow. Yield of 3.7%.
Again my opinion, just too cheap for this company.
If we look at some of the actual metrics here, we have the growth
of the company, it's growing in the last five years.
Seventeen percent annualized, Seventeen percent compound
annual growth rate in the past five years, right now, with
their growth, because of the macro economic situation,
because of, especially foreign exchange ratios with the dollar
being so expensive. Right now, their revenue outside
of the u.s. is actually worth less than it used to be.
And that's hurting their profitability.
So they are getting a lot of growth, but the foreign exchange
issue is a problem that Microsoft currently dealing with
that. They're trying to Get over.
Then we can look at the other growth rates at the company we
have the ibadah growth at a five-year compound, annual
growth rate of 24 percent. See this explosive growth,
what's amazing to me is the past five years, Microsoft has grown
much faster than the past 10 years.
Meaning that over time, the law of large numbers says, as the
company gets bigger growth should slow down.
That's what people always say. Company gets bigger and bigger.
It's harder to grow. So the growth should slow down.
Now. Not what Microsoft has done.
You look at the actual growth rates of the company and it was
10% 14 percent during this time period in the past five years
with Azure, with all their business developments growth is
actually accelerating in the past one year.
It was again, 17% pretty incredible growth, the free cash
flow looks very similar, the past two years.
It's been ten percent per year or 20 percent per year.
Sorry, the past five years, it's average of 15 percent compound,
annual growth Great just incredible growth and
profitability ibadah and overall Revenue.
We see the same things in their their net income, massive
growth, we see the same things in their earnings per share.
All these profitability metrics are showing a very fast-growing
company, the EPS grew at 28.9% compound annual growth rate for
the past five years. Even if you zoom out to the past
ten years, it's 17 percent. So, add a 24 forward P/E ratio
with an unassailable. Why?
Note that Microsoft has and the above average growth rate given
the rest of the market. I don't think it's expensive at
all. In fact, I continually believe
this company is undervalued. My fair value estimate.
For Microsoft currently is 350 dollars over a hundred dollars
above what it currently trades at.
So, we are so far apart of where, this company actually
trades today. And where, I think the fair
value is over $100 difference, and it looks like it might even
get further every day. It's just trading downwards, I
don't think. I think this is because the
fundamentals of the company are deteriorating.
Microsoft has incredible fundamentals.
That get better every single year, the acquisition of
Activision Blizzard, was an expensive one, they're paying a
lot of cash for the company about 70 billion dollars for it.
So it's inexpensive company. It'll take a big hit on the
balance sheet but Microsoft can afford it.
And basically one year, but they're one year of operating
free cash flow. They can pick up a company like
Activision Blizzard without using Any debt.
So they're not putting the shareholder in a situation where
they're buying a company but they're leveraging taking a lot
of risk and taking on a lot of debt at questionable interest
rates know, Microsoft doesn't do that, they buy the company using
cash on hand, their cash to debt.
Will likely be pretty neutral, they're not going to be
leveraged at all and any cache hit that they get again, they'll
likely be able to make up in one year's time and meanwhile,
they're buying Activision Blizzard which is a Cash Cow of
a company. A itself adding billions of
dollars of free cash flow per year.
So this is something again, beneficial to the shareholder.
The dividend growth is another strong point of Microsoft eleven
point, six five percent compound annual growth rate of the
dividend over the past. Decade they grow at 10 percent
last year, the shares outstanding we can see this
going in the reverse, which is what we want to see.
So we want to see the shares outstanding going down as
they're giving us more equity in the company.
Buying back, shares it over the past decade.
It's been about one percent per year, they reduced the shares
outstanding. So you see the share is going
down a little bit every single year.
That's exactly what we want to see the ratios of the company.
If you're a follower of Terry Smith and you're looking for
high quality companies, you'll know that one of the ways to
judge a high quality company is What's called the return on
Capital employed are oce. It's basically a measurement for
how much the company spends in its business and reinvestment
and how much money It makes back from those reinvestments.
Microsoft's Roc e is incredibly and consistently high.
Now, this chart doesn't look consistent because it starts at
10 percent but a baseline of 10% is great.
That means the lowest it's ever gone since 1987 is down to 12%
in. This is really good, that's
actually very high. Some companies don't even get up
to 12%. So this are oce from Microsoft
is phenomenal, the history of it shows that heh.
Flo's. Some periods like 2008 was 52%,
it went down to 13%. But now it's starting to Trend
back upwards with Azure and these other Investments, making
huge returns. We're trending back up to 30%,
plus huge amounts of our oce. Good Returns on the Investments
they make, when they get money out there in their business,
they get better Returns on it, gross margins, very consistently
high. If you can't see right here, the
Baseline 60%. So this shows that changes over
time but they're Ready. Dramatized here overall the
gross margins sticks somewhere around 65 to 70% Microsoft is
dead set on having their gross margins right around 70 percent.
They'll always make that their target.
So if you look at this chart look at the 70 percent Mark,
that's right. Where Microsoft wants to keep it
operating. Margin is always incredibly
good. It's up to 42% right now profit.
Margins also incredibly good right now, it's at 37 percent.
High profits, High margins. High return on Capital employed,
fast growing business. Peccable balance sheet wide
moat, I think it faces virtually.
No real significant threat in the marketplace right now and
its trading out of 24 PE ratio. My opinion is worth over $100
more. So the thing that we look at
here when I'm looking at buying, these companies just a reminder,
there's two basic risks that you look at buying a company like
Microsoft or apple or Tesla, or any of them to basic risks.
One of them is fundamental risk. Uuuuuugh fundamental risk is
when the company fundamentally performs really poorly, they
have deterioration, they have competitors, take their business
or their mode, you have some companies that fundamentally
face a lot of issues and that's one risk that you want to
minimize. Now, the way that you minimize
fundamental risk is by investing in high quality companies
companies with the qualities that Microsoft has minimizes
that fundamental risk. The other risk that you have
investing in a company like this is valuation risk evaluation.
Risk means you just buy a great company too expensive and it
trades down to fair value. That's the valuation risk, the
way that you minimize your chances of having valuation risk
is buying the company when others are very fearful about
it, when others don't want to own individual stocks, when
they're selling out of the stock market.
So, you can minimize the chances of valuation Risk by buying on
significant drops and price, significant discounts.
So, with buying a company like Microsoft, or right, now, I'm
minimizing Rising to risks. I'm minimizing the fundamental
Risk by buying a company that has incredibly strong
fundamentals. And I minimizing the valuation
Risk by buying it, when it's traded.
Well below its historical average, and a huge dip, that
doesn't mean that the risks are entirely gone.
You can't completely erase all risk, but these are ways to
minimize them and I think I'm doing both of them in this case
with Microsoft. Currently, now, having said
that, let's go ahead and move on to the next one, which is
Google. I've highlighted this one as one
of the Best Buys in the market right now.
It's one of Larger Holdings in my portfolio.
I've invested 15 thousand dollars into it.
And like most of these companies, it's recently sold
off I'm down around 1,900 dollars now, let's go ahead and
look at Google here for a minute.
When I bring this one up and look at it.
The first thing that I'm drawn to is the PE ratio of the
company its traded at a 16 .39, forward, P/E ratio, which is
basically in line with the S&P 500.
Meaning investors are looking at this as the same valuation as
the average of the S&P 500. And I think the reasons why
files to nail it down to one thing.
I don't really think it's Tick-Tock, I don't really think
it's the ad apocalypse. I think those type of things
play a little bit of a role, but I think the reason why is
because Google's expected this year to actually have an
earnings decline, I think that's why the stock is trading down.
For example, we have the analyst estimates here and for 2022, the
year of your earnings growth is expected to decline by around
seven percent. So we see, am I Decline an EPS
because of the very tough comparables last year and then
they are expected to re-accelerate growth but the one
your expectations, a lot more predictable than two or three or
four years out. The further you get out the more
unpredictable, the earnings are. So investors are looking at this
and they're saying, sheesh, Google's a great company, but
they did. So great in 2021 that they
simply can't compete with that year.
It was an unreal year where everybody was stuck home.
Everybody was looking at Those all day, Google made a fortune
through lots of one-time benefits like for example,
everybody let me highlight this this will make sense for example
in 2020, everybody was locked in home so they were stuck at home
and then in 2021 everybody went on vacation.
Well guess what? Company makes a lot of money
from ads on vacation websites and different different travel
websites. Google does.
There are huge beneficiary of that.
So with the Economy reopening while people are watching videos
the vacation boom and the ad boom from that was massive for
Google. So those are one-time benefits
that aren't going to last long term for the company and now you
can see the earnings starting to decline again because they did
so good last year and I think this is the reason the stock
price is in the gutter. Right now, the reason it's
starting to Trend back down but if we look at the actual company
itself, we can look at some of the fundamentals and then we can
go through whether or not I think that this full of cash
flow revenue and earnings is ultimately sustainable.
Let's go ahead and look at some of this.
We have a free cash flow, yield of 5% above 5% for Google, I
think that is it's too high. I think the company should have
a lower free cash flow yield meaning that the stock price
should go up. I think it's just under value
based on a free cash flow yield. I think it's undervalued based
on the PE Ratio either way you look at the valuation which
those are, the two biggest ones. I look at I think it's
undervalued if you use price to sales as well, 4.6 arguably
undervalued for a company that has the margins of Google.
Microsoft trades more at a 9 or 10.
But again, Google probably should trade at least a 7 here.
I don't use price to sales quite as much.
I like looking at profitability metrics like PE and free cash
flow. But again overall any way you
look at this company, any metric you use, I think it's
undervalued. We look at the growth rate of
it. Over the past decade Google has
been one of the faster growing companies faster growing than
all of the big tech companies except for Amazon.
Amazon has beat Google but it's be all the rest of big Tech
Google has grown its tenure Revenue.
The tenure compound annual growth rate is twenty one
percent and then last year, from 2022 2021, they grew by 41
percent. And that's the tough one to
beat. So as they had this amazing year
from 2020 2021 Now, they're going from 2021 to 2022 which is
expected to slow down a lot. If I switch this to quarterly,
we can see that here to see how we see the big jump up from here
to here and then it starts to slow down.
It's just tough comparables. There's nothing they can do
about that, but overall this might be a window of opportunity
for us, the ibadah shows, the same thing, they're highly
profitable. Growing their ibadah 21 percent,
compound annual growth rate for the last decade, the free cash
flow shows. The same thing over the past
five years. The Cash flow growth has a
kegger of 21%. That is incredible.
When you look at this on a free cash flow per share basis, it's
the exact same because even though Google does some
stock-based compensation, they buy back their shares
continually so they're actually growing their free cash flow per
share, 21 percent over the past five years.
Incredible growth on their free cash flow.
Incredible growth with their net income five-year keggers 31% the
earnings per share. Show the same thing, but again,
We switch this over to quarterly and we look at 2022.
These are starting to revert a little bit.
The ad revenues going down for many channels on my channel.
For example, I have two channels and the ad Revenue per thousand
views has gone down a little bit over the past six months, which
just means that less companies are advertising.
There's a little bit less demand, so that softness in
demand is impacting Google's earnings than this is.
Where investors are becoming nervous looking at the balance
sheet. Don't know if many companies
maybe two or three that might have equally as good or better,
balance, sheets and Google. But this has to be one of the
top ones in the entire Market, they have a hundred and twenty
five billion dollars of cash Cold Hard Cash and then they
have actual debt long-term debt of ten point five billion in.
Then the rest of their debt is what's called Capital leases
which is basically rental agreements with different things
they have for warehouses for probably servers and different
things that they do. So that's it.
In total they have a massive amount of cash over a hundred
billion dollars of excess cash. They are very cash rich company.
The shares outstanding you're going down over time since 2019
over the past five years, they've declined around the same
amount as Microsoft, which is about one percent annualized.
And then we look at the ratios here.
Let me switch this over to annually.
When I look at the high quality companies, again you can look at
the different things that Terry Smith, references with great
companies, return on Capital employed is one of the main ones
that he looks at the x-axis here starts at twelve percent.
So you see very consistently High return on Capital employed
it's gone down to 15% which is a little low for a company like
Google but then in 2021 it spiked to 27 percent overall
good enough it's good enough return on Capital employed gross
margins are very high. 57%, operating margins very high, 31
percent. Google is a highly profitable
company 30% profit. Margins, not as good as
Microsoft. The fundamentals here are not as
good as Microsoft, in my opinion.
The only thing that I think is better is the growth rate has
been a little bit better over a longer time period and the cash
balance is better but I think Microsoft has better ratios
outside of that. So again when I look at Google
over all right now trading at less than $100 per share, a 16
forward, P/E ratio, and a 5%. Free cash flow yield even with a
little bit of softening in the fundamentals of the business and
the growth going down a little bit of their earnings per share.
I think that's a temporary phenomenon.
They grew a ton last year, it's going to decline a little bit
this year and then it will start to re-accelerate.
And I think this time period of the sell-off, I think people
will be looking back two or three years from now and just
kicking themselves for not buying this company.
My opinion is undervalued right now.
You'll probably have to hold it for a year or so before you see
any uptick in it, I think it's worth the buy in my opinion.
Now, the next one that we'll look at is Adobe a company that
I've gone over with their figma agreement but I want to revisit
this one. Now if we look at a Dobby,
there's two valuation metrics that.
I look at most closely and both of them show in my opinion.
This company is undervalued buying Adobe at a 20 or below
forward P/E ratio. I think.
Right there is arguably going to be a good.
Bye. And then we look at the free
cash flow yield, which is my favorite valuation metric.
And this is at a five point four, eight percent that it is a
high free cash flow yield much higher, the most tech companies
in the market. The the problem with Adobe is
one that I've gone over in recent videos, where they're
buying this startup company or rather, not a startup company.
But a smaller company called figma a fast-growing design
oriented company and they're buying it for 20 billion
dollars. So investors said no way I don't
like this purchase. It's too much money for the
small company and they're selling out of adobe and the
stock price cratered like 15% now the What's going down 51
percent. Year-to-date can be looked at as
a problem. If you own the company or an
opportunity, I look at this as an opportunity because I think
Adobe did the right thing buying figma, figma completes the Adobe
moat and makes it so that they have their foot in the door of
literally every tech company that does any amount of design
figma with Adobe. I think will be an incredible
incredible boost to this company and they could not have
recreated figma. They could.
Not have competed with them that wasn't an option.
So I think buying them was the right thing to do.
Now, even outside of the figma deal, if we just look at a
Dobies fundamentals, then numbers are pretty staggering
over the past five years, the compound annual growth rate of
the revenue is 22% 22% and it's accelerating over time.
Like many of these companies that we see the ibadah is 29%.
They're growing their ibadah kegger at 30% over the past five
years, the free cash flow. Only 8% I don't know of any
other big tech company that's growing its free cash flow.
This rapidly five-year compound annual growth rate of 28 percent
even on a free cash flow per share basis.
It's actually gone up, more 29 percent because they're doing
share BuyBacks incredibly profitable growth from this
company. The net income shows the same
thing. Five years is 32%, the EPS
growth is five-year 34%. Incredibly good numbers.
Now, the balance sheet right now, looks really good.
It has no Leverage Reg. Meaning they have more cash than
debt or their Capital leases, which is good right now.
But remember, they're paying for the figma deal with half half
stock, so they're going to do a little bit of dilution and half
cash. They're going to be paying 10
billion dollars of it using debt.
So this debt will go up from 3.5 billion to thirteen point five
billion which will make it. So they have around six or seven
billion dollars of excess dead, so they will become a leveraged
company. Again, that puts them in a
little bit worse of a position with their balance.
Eat. But what the amount of free cash
flow, this company can generate six to seven billion dollars per
year. They should be able to bring
those debt levels. Back to a nun leverage position
within one year easily back to a nun, leveraged position and then
they should be able to pay for the whole thing within two
years. If they really want to, they
don't currently pay dividend right now.
The shares outstanding, however, are going down and over the past
five years, they've gone down a little bit under 1% per year.
So they're just doing enough to Barely lower the share count but
it's not an aggressive buyback schedule.
If we look at the Returns on Capital employed of the company
over the past five years it's been a little bit lower than
we'd like to see. But now it's starting to Trend
much higher up to 29% to give this some context.
A company like Costco has around 16%.
A lot of airlines have like six or seven percent, which is
awful. So, having a 30% are oce, is
really good. That means that they're getting
a lot of money back for the money.
Putting in their company, the gross margins for Adobe are
very, very good 88%. Better than Microsoft's.
The operating margins are 37 percent.
Also very good, those are the margins of topped are tech
companies. The profit margin is also
incredibly good at 31% little bit below apple and Microsoft,
but good nonetheless. So look, I look at a company
like Adobe. And again we have those two
different, those two different risks that we want to minimize
the first one being fundamental risk.
Uuuuuugh Adobe is fundamentally a very strong company.
So we minimize fundamental Risk by buying a very strong company,
a high quality company, they're becoming even more high quality
with their acquisition of figma, because Sigma is a, would be be
a competitor for Adobe, but now they own them.
Making them have one less big competitor and have a more
well-rounded product Suite. So there are high quality
company. That reduces the risk of
fundamental risk, and their company is trading at a very
reasonable valuation. 1840. Ratio 5.4 free cash flow yield.
That reduces the valuation risk because right now, Adobe trades
at $270 per share. Just last year, the company was
creating at six hundred and eighty seven dollars per share.
The PE Ratio is into the 40s. So as the price comes down, the
valuation risk, minimizes if the qualities of the company
maintained or stay the same or even get better, then the
fundamental risk is lower as well.
Overall, I think Adobe is Another by right now, these are
three of the companies that I personally think are great deals
right now, but they're not the only ones out there.
There's lots of stocks at Great Deals.
Keep that in mind, when you're going about your day, listening
to different content, most content will be centered around
the economy. That's what gets the clicks.
That's what gets the fiery thumbnails and lots of people's
attention. What the FED is doing what
inflation is doing. That draws a lot of attention
but where you'll actually make the money is buying great
companies at discounted prices, And I foresee two or three years
down the road, I'm going to make a prediction that there's a me,
a lot of people that were distracted during this time.
Period, that look back right now and say, I wish I would have
bought one prices were so cheap on all these obviously, great
companies. I see a lot of that happening in
the future. So that's my thoughts overall.
I hope you enjoyed the video, I'll see you next time.