3 Stocks to Buy Near 52-week Low?

Summary

The video discusses a series of stocks trading near their 52-week lows, analyzing whether they are buying opportunities or value traps. The speaker covers SoFi, Estee Lauder, and Monster Beverage. For SoFi, the analysis is mixed due to uncertainty in interest rates, with a cautious recommendation for speculative investors. Estee Lauder is considered overvalued at 30 times earnings, while Monster Beverage, though a strong performer, is seen as expensive at 26 times earnings. The overall advice leans towards caution and selective buying, with an emphasis on risk tolerance.

Takeaways

• 📉 Sofi has dropped 39% over the last 5 years, currently trading at $6.32, down from a high of $25.
• 💼 Sofi's strength lies in its large customer base (8.1 million members) and the potential to cross-sell various financial products.
• 📊 Interest rates pose uncertainty for Sofi; lower rates could increase origination fees but reduce net interest income.
• 📈 Sofi's tangible book value per share is $3.87, but the company is considered speculative due to its uncertain future.
• 🔍 The speaker advises that Sofi might be a good speculative buy, suggesting putting only 1-2% of one's portfolio into it.
• 💰 The speaker personally sold January 2025 $4.50 puts on Sofi, aiming for a 7% return if assigned.
• 💄 Estee Lauder is currently trading at $113 per share, with a price-to-earnings ratio of 30, which the speaker finds expensive.
• 🚫 The speaker believes Estee Lauder is not a good buy at current levels due to its high valuation and uncertain growth prospects.
• 🥤 Monster Beverages, down 16% year-to-date, is considered a strong company, but the speaker finds its current valuation (26x earnings) too high.
• 🤔 In summary, Sofi is a speculative buy, Estee Lauder is overpriced, and Monster is a good company but not worth the current premium.

Q & A

What is the main focus of the video series 'Three or Four Stocks to Buy Near 52 Week Low'?

The main focus of the series is to analyze stocks that are trading near their 52-week low to determine if they present amazing buying opportunities or if they are value traps that should be ignored.

What is the current performance of Sofi stock discussed in the video?

Sofi's stock has seen a significant decline, being down 39% over the last 5 years, and has traded as high as $25 but is now trading at around $6.32.

What are the network effects that Sofi can leverage according to the video?

Sofi can leverage network effects by cross-selling a variety of financial products to its over 8.1 million members, as they have already spent on marketing to acquire these customers.

What is the main uncertainty surrounding Sofi's stock performance as per the video?

The main uncertainty surrounding Sofi's stock performance is the impact of interest rates. While some investors are bullish due to potential increases in origination fees when rates drop, others are skeptical as Sofi may earn less net interest income.

What is the current net interest income for Sofi, and how does it compare year over year?

Sofi's current net interest income is $266 million, which is up 33% year over year.

Why is the book value per share not a reliable indicator for Sofi's stock valuation according to the video?

The book value per share includes intangible assets like goodwill and brand value, which are subjective and can be inflated, making it an unreliable indicator for Sofi's stock valuation.

What is the video creator's personal investment strategy regarding Sofi?

The video creator is not in a rush to buy Sofi stock outright but is selling put options to benefit from potential downside, aiming to get assigned at a lower price while collecting a premium.

What are the current challenges and improvements seen with Estee Lauder as discussed in the video?

Estee Lauder is facing challenges but has shown improvements with earnings growth and inventory control. However, the stock is still trading at a high multiple of 30 times earnings, which the video creator finds expensive.

Why does the video creator believe Estee Lauder's stock is not a buy at its current price?

The video creator believes Estee Lauder's stock is not a buy at its current price because it is trading at 30 times earnings, which is expensive considering the company's historical performance and current market conditions.

What is the video creator's opinion on Monster Beverages' stock and why?

The video creator does not view Monster Beverages as a buy at its current price of 26 times earnings, as they find better opportunities in companies with similar growth prospects but trading at lower multiples.

What is the video creator's overall investment advice regarding the stocks discussed?

The video creator advises a cautious approach, considering the speculative nature of the stocks and recommending smaller positions or options strategies for those interested, while emphasizing that their opinions are not financial advice.