Stocks I'm Buying December 2024

Summary

In this video, the speaker shares recent stock purchases, including Evolution Gaming, Gambling.com, Celsius, and DLocal, all seen as undervalued or poised for recovery. They explain their decisions to buy these stocks, citing strong growth potential and favorable financials. On the flip side, they also discuss their recent sales of stocks like Hims & Hers, PayPal, and SoFi, where they locked in profits after significant price movements. With a healthy cash balance, the speaker is considering diversifying into investment properties and remains cautious about current market valuations, looking for the right opportunities in 2024.

Takeaways

• 😀 The investor sees significant upside in Evolution, expecting a 100% increase due to undervaluation at 10x earnings compared to a fair valuation of 20x earnings.
• 😀 Gambling.com has strong growth potential as a global customer acquirer for betting companies, despite its stagnation post-IPO.
• 😀 Celsius' stock is down due to Pepsi's excess inventory orders, but growth is expected to return once the inventory issue is resolved.
• 😀 Despite the short-term dip, Celsius has a strong balance sheet with nearly $1 billion in cash and no debt, signaling potential for future growth.
• 😀 DLocal’s stock dropped due to FX impacts and investments hurting short-term profits, but the CEO’s background and improving financials are reasons to remain optimistic.
• 😀 DLocal helps companies manage FX risk and fraud, particularly in markets like Mexico, and has a healthy balance sheet with cash reserves and stock buybacks.
• 😀 The investor sold some stocks after significant short-term gains, including Hims & Hers, Walt Disney, DraftKings, PayPal, Shopify, and Sofi.
• 😀 The investor locked in profits from Hims & Hers after a 50% rally and sold a portion of the DraftKings position after a solid return of over 50%.
• 😀 PayPal and Shopify were trimmed due to concerns over slower revenue growth and the recent earnings reports, even though they are not considered overvalued.
• 😀 Sofi saw a 133% stock price increase, prompting the investor to take profits, though they still hold a substantial position due to long-term potential.
• 😀 The investor has a significant cash balance and is considering diversifying into investment properties, given current market valuations and opportunities.

Q & A

Why does the speaker believe Evolution's stock has a nearly 100% upside potential?

The speaker believes Evolution's stock should be valued at 20 times earnings, which would represent a nearly 100% upside based on current valuation. The company is growing at nearly 20% annually and its profitability is increasing at a similar rate, positioning it as a premium business deserving of a higher multiple.

What is the business model of Gambling.com, and why is it appealing to the speaker?

Gambling.com operates as an affiliate marketing business, directing customers to betting platforms like DraftKings and FanDuel. It earns a commission for bringing in new users. The speaker is attracted to the company's global reach and strong earnings growth, especially in light of its recent financial performance and profitability.

What caused the decline in Celsius's stock, and what does the speaker expect in the future?

Celsius's stock declined due to inventory issues with Pepsi, who had over-ordered stock, leading to a temporary drop in sales. However, the speaker expects this to be a short-term problem, as once Pepsi clears the excess inventory, sales and growth will return to normal. The company’s strong growth potential and solid financial health are key reasons for the speaker’s renewed interest.

Why did the speaker buy back into DLocal despite its challenges?

The speaker bought back into DLocal due to confidence in its CEO, Pedro, and its role as a provider of FX and fraud management services for businesses expanding into new markets. Despite challenges like FX volatility and reduced profits from client renegotiations, the speaker believes in the company’s long-term growth potential and positive future earnings outlook.

What was the reasoning behind selling Hims & Hers stock?

The speaker sold Hims & Hers stock after it experienced a rapid 50% rally within a week, locking in a 60% profit. The speaker views the stock’s volatility as an opportunity to take profits when the price spikes, planning to reinvest if the stock becomes undervalued again.

Why did the speaker trim their Walt Disney position?

The speaker trimmed their Walt Disney position because the stock had experienced a major rally, increasing the position size. The speaker felt that taking some profit off the table was a prudent decision, especially considering the relatively slow revenue growth outlook for the company.

What was the reason behind selling part of the DraftKings position?

The speaker sold part of their DraftKings position due to underperformance in 2023 compared to other companies in the gambling space. Although DraftKings still has potential, the speaker prefers to focus on companies like Evolution and Gambling.com, which are executing better in the market.

What factors led the speaker to reduce their PayPal position?

The speaker reduced their PayPal position after being disappointed with the company's slow revenue growth and less-than-optimistic guidance from recent earnings reports. Despite PayPal's solid financials, the speaker felt the stock's growth potential was limited in the near term.

Why did the speaker sell a portion of their Shopify position?

The speaker sold part of their Shopify position after the stock saw a significant jump following earnings results. While the valuation wasn’t overly expensive, the stock had risen too much too quickly, prompting the speaker to lock in profits and reduce exposure.

Why did the speaker sell some of their SoFi stock, and how much profit did they make?

The speaker sold some of their SoFi stock after its 133% rally, locking in over 100% profit. While the stock is not necessarily overvalued, the significant price increase made it a good opportunity to take some profit off the table while maintaining a long-term position in the company.

What is the speaker’s investment strategy for the near future?

The speaker plans to maintain a sizable cash balance due to the current market’s extended valuation. They are cautious and will deploy cash slowly, looking for investment opportunities. The speaker is also considering diversifying into real estate, with plans to make decisions within the next few months.