5 Stocks I Will Buy In July 2024

Summary

In this video script, the speaker discusses five stocks they plan to buy in July 2024 if they reach desired price points. They emphasize the importance of not buying blindly and focus on PayPal, Ulta Beauty, Starbucks, Paycom, and Disney, analyzing their financials, market potential, and growth prospects. The speaker uses various metrics such as PE ratio, free cash flow, and profit margins to evaluate the stocks, highlighting trust in PayPal, growth in Ulta Beauty, Starbucks' global presence, Paycom's software potential, and Disney's profit margin recovery.

Takeaways

• 😀 The speaker plans to buy five stocks in July 2024 if they reach the desired price points, emphasizing the importance of buying at the right price.
• 💰 Discussing PayPal, the speaker notes its attractiveness at a lower price and its popularity among value investors, while cautioning against buying just because others do.
• 📈 The speaker evaluates PayPal using the 'eight pillars' framework, highlighting a lower PE ratio relative to price of free cash flow, consistent profit margins, and share buyback activities.
• 🔍 The importance of analyzing a company's fundamentals is stressed, rather than just looking at the stock price, using the example of PayPal's active account numbers versus transaction values.
• 📊 The speaker uses a stock analyzer tool to project future performance and valuations, providing a detailed example with PayPal's projected growth and desired return.
• 🛍️ Ulta Beauty is highlighted for its significant drop in stock price and the speaker's recent purchase, noting the company's strong same-store sales and niche market appeal.
• ☕ Starbucks is mentioned as a stock with potential for growth, despite its dividend payout, and the speaker speculates on its international expansion opportunities.
• 💼 Paycom is discussed with concerns about its performance in a recession and discrepancies between earnings and free cash flow, yet acknowledging its strong gross margin and growth potential.
• 🏰 The speaker's strategy for investing in Disney is based on its historical profit margins, suggesting that a return to previous levels could signal a strong investment opportunity.
• 📉 The speaker acknowledges the potential for the mentioned stocks to fall further in a bear market but emphasizes buying quality companies at lower prices and adding to positions as they decline.
• 🔗 A final note on the speaker's software offering, indicating upcoming changes to focus on user preferences and a limited-time offer for lifetime access to all features.

Q & A

What are the key factors to consider when evaluating a stock for potential purchase according to the speaker?

The speaker emphasizes considering the stock's price relative to its value, the company's eight pillars, PE ratio, free cash flow, profit margin, ROIC, and the company's growth potential as key factors in evaluating a stock for purchase.

Why does the speaker find PayPal attractive despite its fluctuating stock price?

The speaker finds PayPal attractive due to its lower PE ratio compared to its price of free cash flow, consistent profit margin, share buyback activities, and positive analyst growth projections.

What does the speaker like about Ulta Beauty's financial performance?

The speaker likes Ulta Beauty's consistent same-store sales, high gross margin, and the company's ability to buy back shares at lower prices, which indicates a good use of capital.

Why is the speaker cautious about Paycom's potential performance in a recession?

The speaker is cautious about Paycom's performance in a recession because it is a payroll company, and during economic downturns, payroll services might be negatively impacted.

What is the speaker's view on Starbucks' current situation and its potential for growth?

The speaker acknowledges that Starbucks has seen a significant drop in stock price but believes it has growth potential, especially in international markets like China, India, and Africa, and appreciates its efforts to condense some stores.

What is the speaker's strategy for buying stocks that he believes in?

The speaker's strategy is to buy stocks of companies he believes in at a good price and then continue to buy more if the stock price falls further, as long as the fundamentals or the story of the company remains the same.

How does the speaker evaluate the trustworthiness of a company like PayPal?

The speaker evaluates trustworthiness by considering personal experiences and asking others about their reasons for using the company's services, as well as using tools like the stock analyzer for a more objective assessment.

What does the speaker mean by 'eight pillars' when discussing stock evaluation?

The 'eight pillars' refer to a framework or set of criteria that the speaker uses to assess a company's financial health and potential for growth, although the specific criteria are not detailed in the script.

Why is the speaker interested in Disney's stock based on the provided script?

The speaker is interested in Disney's stock due to its historical profit margins, which have been significantly higher than the recent 2%, indicating potential for recovery and growth once the company returns to its previous profit margin levels.

What is the speaker's approach to incorporating analyst projections into his stock evaluation process?

The speaker uses analyst projections as a starting point but does not necessarily agree with them. He considers the growth rates and revenue projections to understand the market's expectations and combines this with his own analysis of the company's fundamentals.

How does the speaker plan to handle potential market downturns mentioned in the script?

The speaker plans to differentiate between a stock market downturn dragging a stock down versus a company's fundamentals causing the decline. He intends to continue buying stocks of good companies at lower prices during market downturns to decrease his average cost basis.