Best 2 stocks to Buy Right Now!

Summary

The video discusses the current market downturn as a buying opportunity, particularly for the 'Magnificent Seven' stocks once favored but now unpopular. The speaker highlights Amazon and PayPal as top picks, citing Amazon's strong earnings and PayPal's impressive Q2 results, despite recent stock price declines. They argue that both companies are undervalued, with Amazon showing significant free cash flow growth and PayPal raising guidance and buyback plans, suggesting a potential for substantial returns if market sentiment improves.

Takeaways

• 💼 The speaker identifies a buying opportunity in the market due to recession fears and a sell-off in the 'Magnificent Seven' tech stocks.
• 📉 The 'Magnificent Seven' stocks, which were previously highly valued, have seen a significant decline in sentiment and stock prices.
• 📈 The speaker's strategy is to buy stocks when they are disliked by the market and sell them when they are loved, viewing the current market sentiment as a buying opportunity.
• 📊 The speaker highlights Amazon as a top buying opportunity, citing its strong earnings report with significant growth in net income and free cash flow.
• 📉 Despite Amazon's strong fundamentals, the stock has experienced a significant pullback, which the speaker believes is an overreaction.
• 🔍 Amazon's free cash flow has been increasing steadily, and the company is projected to generate substantial free cash flow in the coming years.
• 💰 The speaker emphasizes that Amazon's current valuation is attractive, trading at a multiple that reflects less than one time its free cash flow growth.
• 📈 The speaker also identifies PayPal as another strong buying opportunity, noting its solid earnings performance and raised guidance for free cash flow and stock buybacks.
• 💳 PayPal's active accounts have fluctuated but the company continues to see strong payment volume growth and revenue increases.
• 💡 The speaker concludes that both Amazon and PayPal are presenting good buying opportunities based on their current valuations and growth prospects.

Q & A

What is the current sentiment towards the 'Magnificent Seven' stocks mentioned in the script?

The sentiment towards the 'Magnificent Seven' stocks has changed very quickly from being loved to being hated due to recession fears and market sell-offs.

What is the speaker's investment strategy in the market?

The speaker's investment strategy is to buy things that people hate and sell them when they are loved, repeating this cycle.

Why does the speaker believe Amazon presents a good buying opportunity?

The speaker believes Amazon presents a good buying opportunity due to its significant earnings beat, massive increase in net income, and the stock trading at the same price as in 2020 despite strong fundamentals.

What was Amazon's performance in terms of earnings per share (EPS) and net income?

Amazon had an amazing beat on EPS and a 100% year-on-year increase in net income.

How has Amazon's free cash flow changed over time according to the script?

Amazon's free cash flow has been steadily increasing every quarter, with projections of significant growth up to $134 billion by 2028, according to some analysts.

What does the speaker think about the market's reaction to Amazon's earnings report?

The speaker considers the market's reaction to Amazon's earnings report as a massive overreaction, with the stock price dropping significantly despite good earnings.

What is the speaker's view on PayPal's recent performance and potential?

The speaker views PayPal as a very hated stock with stunning earnings, massive beats, and raised guidance, indicating a good buying opportunity despite the stock's recent decline.

What were some of the key financial metrics that PayPal beat in their recent earnings report?

PayPal beat on revenue with an 8% increase, net income with a 9% increase, and EPS with a 177% increase.

How does the speaker evaluate the decrease in active accounts for PayPal?

The speaker acknowledges the decrease in active accounts as a concern but notes that the number has been fluctuating within a certain range and does not believe it's as problematic as others claim.

What is the speaker's outlook for PayPal's future growth and stock performance?

The speaker is optimistic about PayPal's future growth and stock performance, expecting a 7-8% revenue growth and a fair valuation with a 7% free cash flow yield.

What is the speaker's final recommendation regarding Amazon and PayPal as investment opportunities?

The speaker recommends both Amazon and PayPal as good buying opportunities based on their strong fundamentals and potential for growth, despite the market's current negative sentiment.