This Stock Could Become My #1 Holding

Summary

In this video, the host discusses various financial topics including new inflation data showing a positive downtrend, InMode's share buyback announcement, Gaming Realms' impressive earnings report, and Google's potential as a new top stock pick. The host highlights Google's attractive valuation after a recent 20% drop, strong balance sheet, and growth drivers like Google Cloud and YouTube, considering increasing his position significantly.

Takeaways

• 📈 The speaker discusses the new inflation data, noting it came in at 2.5%, slightly lower than expectations, continuing a positive downtrend.
• 📉 The speaker is surprised by the market's lack of positive reaction to the inflation data and speculates it might be due to the previous night's presidential debate.
• 🏠 The inflation data shows a significant drop in certain areas like apparel and energy, indicating a slowing economy, with 'shelter' being a notable outlier still inflating prices.
• 📱 The speaker talks about a share buyback announcement by InMode, a company they own, which plans to buy back about 10% of its shares, a positive sign for shareholders.
• 🎲 After reporting strong earnings, Gaming Realms' stock price dropped, confusing the speaker, who highlights the company's impressive financial growth.
• 🔍 The speaker considers Google as a potential new number one stock in their portfolio, appreciating its current valuation and past performance.
• 📊 Google's stock has fallen over 20%, which the speaker sees as an opportunity for investment, considering it one of the top companies in the world.
• 💹 The speaker believes Google's current P/E ratio is attractive compared to its historical average and the S&P market average.
• 🌐 Discussing potential risks, the speaker mentions regulatory concerns and fines that Google faces but doesn't view them as deal-breakers.
• 💰 The speaker admires Google's strong balance sheet, profitability, and cash reserves, seeing them as indicators of a robust business.

Q & A

What was the new inflation data discussed in the video?

The new inflation data was 2.5%, which was below the expectations of 2.6% and the Trading Economic forecast of 2.7%. This continues a positive downtrend from previous months.

What was the reaction to the inflation data in the market?

The market did not react positively to the inflation data, possibly due to the influence of the presidential debate outcome, where Trump may not have performed as strongly as expected.

What is the Federal Reserve's target for inflation?

The Federal Reserve's target for inflation is 2%. The speaker mentioned that the current rate is very close to this target at 2.5%.

Why did the speaker find the market's reaction to the inflation data surprising?

The speaker found the market's lack of positive reaction surprising because not only was the inflation data good, but it also continued a downtrend, which historically would be seen as a positive sign for the market.

What was the speaker's opinion on the current state of the economy based on the inflation data?

The speaker thought that the economy was slowing down, as indicated by negative numbers in the inflation report and sectors like apparel and energy showing significant drops.

What did the speaker say about the company 'in mode' and their share buyback?

The speaker mentioned that 'in mode' announced a share buyback of about 7.68 million shares, which is less than 10% of the current market cap, and this is seen as a positive move for the company.

What was the speaker's view on the gaming Realms' earnings report and stock price reaction?

The speaker was surprised that Gaming Realms' stock price dropped despite reporting strong earnings, with significant increases in revenue, adjusted EBITDA, and profit before tax.

What was the speaker's potential new number one stock position in the portfolio?

The potential new number one stock position in the portfolio was Google, which the speaker was considering increasing their position in significantly.

Why did the speaker believe Google's stock was at an attractive valuation?

Google's stock was considered attractively valued at 21 times earnings, especially when compared to its historical average and the S&P market average of 29 times earnings.

What was the speaker's opinion on the potential breakup of Alphabet by the DOJ?

The speaker did not view the potential breakup of Alphabet by the DOJ as a negative. They suggested that if Alphabet's businesses were separated, they might individually be worth more than together.