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.

Outlines

00:00

💼 Stock Analysis: PayPal's Potential in 2024

The speaker discusses their interest in purchasing PayPal stock in July 2024 if it reaches a specific price point. They emphasize the importance of evaluating a stock's value through the 'eight pillars' and highlight PayPal's positive financial indicators, such as a lower PE ratio relative to free cash flow and consistent profit margins. Despite concerns about the number of active accounts decreasing, the speaker is optimistic about PayPal's growth potential, trust factor, and the Venmo aspect. They also mention the importance of buying back shares when stocks are cheap and provide a detailed analysis using a stock analyzer tool, suggesting a potential buy-in range for PayPal.

05:01

🛍️ Ulta Beauty's Significant Drop and Analysis

The speaker examines Ulta Beauty's stock, noting a substantial drop from its all-time high and discussing its potential as a retail investment. They analyze the company's financial health through its free cash flow, net income, and market cap, and appreciate the company's buyback of shares at lower prices. The speaker also considers Ulta's niche market appeal to women and its strategic partnerships, such as opening stores within Target. Analyst projections for EPS growth and revenue are considered, along with the speaker's own stock analysis tool results, to determine a fair price range for investment.

10:03

☕ Starbucks: Awaiting a Strategic Buyback Opportunity

The speaker talks about Starbucks, focusing on its dividend payout and its impact on free cash flow. They express concerns about the discrepancy between the company's five-year free cash flow and net income but acknowledge Starbucks' global presence and potential for growth in emerging markets. The eight-pillar analysis reveals strong brand value and high return on invested capital. The speaker suggests that if Starbucks' stock price drops significantly, it could present an opportunity for the company to buy back shares, improving shareholder value.

15:05

💼 Paycom Software: Navigating Recession Risks

The speaker discusses Paycom, a payroll software company, and its potential challenges during a recession. They scrutinize the company's financials, noting a significant difference between one-year free cash flow and net income, and a high valuation based on free cash flow. Despite these concerns, the company's strong gross margin, revenue growth potential, and low debt levels are highlighted. The speaker also considers analyst projections for earnings per share and revenue growth, and uses a stock analyzer tool to determine an investment strategy, including selling puts at lower prices.

🎬 Disney's Profit Margin Recovery Play

The speaker outlines a potential investment strategy for Disney based on its historical profit margins, which have been lower in recent years than their historical averages. They review Disney's financial performance over the past few years and express optimism that the company can return to its former profit levels, especially with the growth of Disney Plus. Analyst expectations for EPS and revenue growth are shared, along with the speaker's own stock analysis, suggesting a middle value for Disney that indicates a current market discount.

Keywords

💡PayPal

PayPal is a popular online payment system that allows users to transfer money and make payments securely. In the video, PayPal is highlighted as a valuable stock investment, with detailed analysis of its financial performance and future potential. The speaker emphasizes its trust factor and growing transaction amounts despite a decrease in active accounts.

💡Eight Pillars

The Eight Pillars is a framework used to evaluate the strength and potential of a stock based on key financial metrics. In the video, the speaker uses this framework to analyze stocks like PayPal and Ulta Beauty, focusing on metrics such as price-to-earnings ratio, free cash flow, and profit margins.

💡Free Cash Flow

Free Cash Flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. It is a crucial indicator of a company's financial health. The video highlights PayPal's strong FCF as a positive factor for investment, indicating its ability to generate cash efficiently.

💡Profit Margin

Profit Margin is a measure of profitability, calculated as net income divided by revenue. It indicates how much profit a company makes for every dollar of sales. The video discusses the profit margins of PayPal and other companies, noting that consistent and high-profit margins are a positive sign for investors.

💡PE Ratio

The Price-to-Earnings (PE) Ratio is a valuation metric that compares a company's current share price to its per-share earnings. A lower PE ratio can indicate a more attractive investment. In the video, the speaker evaluates stocks like PayPal and Starbucks using their PE ratios to assess their value.

💡Revenue Growth

Revenue Growth refers to the increase in a company's sales over time. It is a key indicator of business expansion and market demand. The video examines the revenue growth of various companies, such as PayPal and Ulta Beauty, to determine their potential for future profitability and market performance.

💡Stock Analyzer Tool

The Stock Analyzer Tool is a software tool used to predict future stock performance based on various financial inputs and assumptions. In the video, the speaker demonstrates using this tool to analyze companies like PayPal and Starbucks, adjusting parameters to estimate their future value and potential investment returns.

💡Market Cap

Market Capitalization (Market Cap) is the total market value of a company's outstanding shares of stock. It is used to determine a company's size and investment potential. The video references the market cap of companies like Ulta Beauty to provide context on their scale and investment appeal.

💡Intrinsic Value

Intrinsic Value is the perceived or calculated true value of a company or asset, based on fundamental analysis. The video emphasizes the importance of buying stocks at or below their intrinsic value to ensure a margin of safety and potential for returns, as demonstrated in the analysis of PayPal and other stocks.

💡Dividend

A Dividend is a portion of a company's earnings distributed to shareholders, typically in the form of cash or additional stock. The video mentions the dividend payouts of companies like Starbucks, discussing how dividends impact free cash flow and overall investment attractiveness.

Highlights

PayPal is becoming a popular stock among value investors and is currently down in price, making it more attractive.

The importance of not buying a stock just because someone else owns it, but to understand the process and apply it to your own strategy.

PayPal's price-to-earnings ratio is higher than its price of free cash flow, indicating more free cash flow than earnings, which is a positive sign.

PayPal's consistent profit margin around 14% and share buyback strategy at 12 times free cash flow.

Analysts predict steady growth for PayPal's earnings per share and revenue, despite claims of the company's decline.

The number of active PayPal accounts has decreased, but transaction amounts and average transaction per user are growing.

Stock analyzer tool shows PayPal's one-year ROIC at 12.4%, indicating a healthy return on investment.

Ulta Beauty's stock has dropped significantly, presenting a potential buying opportunity.

Same-store sales growth for Ulta Beauty indicates strength in retail locations.

Ulta Beauty's return on invested capital is 23%, showcasing its efficiency in utilizing capital for growth.

Starbucks' stock has fallen but has potential for growth, especially in international markets like China, India, and Africa.

Starbucks' high return on invested capital suggests a strong market position, despite concerns about its dividend policy.

Analysts expect significant growth in Starbucks' earnings per share and revenue, with a focus on new locations and same-store sales.

Paycom software's stock has experienced volatility, but its high gross margin and revenue growth potential are attractive.

Concerns about Paycom's discrepancy between earnings and free cash flow, and its sensitivity to economic recessions.

Disney's stock is being considered for its potential to return to historical profit margins, indicating a recovery play.

Analysts project growth in Disney's earnings per share and revenue, suggesting the company's financials may improve.

The speaker emphasizes the importance of buying good companies at good prices and adding more as the stock falls to lower the cost basis.

A special offer for EM software is mentioned, with a warning that the full offer will be changing soon, suggesting users sign up before changes are implemented.

Transcripts

guys there are five stocks that I will

be buying in July of 2024 if the price

hits the value I need it to hit and

that's the big key stock number one

let's take a look at PayPal now I own

PayPal it's becoming a very popular

stock amongst value investors I have no

idea where it's going to go but remember

don't buy a stock just because I or

someone else in the internet owns it

this channel is about teaching a process

and take pieces of it that work for you

to apply now PayPal is down a $8 a share

it's getting kind of attractive here

even more attractive than it was before

now if you remember look at this chart

all-time high of 310 back on July 26

2021 great place to look for value is

when stocks are falling considerably but

just because something is less priced on

the stock does not necessarily mean it

is a good buy let's go check out the

eight pillars first because remember

eight pillars tell a story and the story

I want to see here is all eight check

marks okay now you might be thinking oh

it's eight check marks that's not the

purpose of the eight pillars the eight

pillars will sit here and tell that

story so one thing I do notice the PE is

a lot higher than the price of free cash

flow that's a good thing I like that's a

lower ratio that means there's more free

cash flow than earnings and you'll see

right here on the fiveyear number 4.78

billion in free cash flow uh 3.5 billion

in net income we like this this is a

positive thing

okay profit margin around 14% pretty

consistently now r i isn't that great

but I think it is getting better they

are buying back shares I like that

they're buying back shares at 12 times

free cash flow that to me makes a lot of

sense when stocks are cheap you need to

buy back shares of the company okay now

let's go see what analysts are saying

because I like looking at what analysts

have to say not necessarily going to

agree with them but it's a good starting

point look at this growth you have to Dr

this year 15% in earnings per share but

growing pretty steadily to over $8 here

in the next three or four years

according to analys and the revenue

growth for this dying company 8% 8% 7

and a half 7 and a half 10 and a half

per. I keep hearing people say PayPal's

dead guys the number of active accounts

they have have decreased but the total

transaction amounts and the average

transaction per user is much higher in

growing that's the big key do I like the

fact that number of counts is decreased

absolutely not I don't like that but the

other two metrics and the fact they're

not just growing by a few percentage

Point make me feel very good so why do I

like this company before we get in the

stock analyzer trustworthy I always ask

people why do you use PayPal I trust

them whenever I buy something that I

need a little bit more like something

high pric or something International I

always use PayPal because I know they're

going to have my back if something were

to happen so stock analyzer tool let's

pull up Paypal the last last time I did

it was April 8th now I did a 10-year

analysis look at this oneye roic 12.4%

very nice Revenue growth I did four

seven and 10% profit margin 12 and a

half 15 and a half 18 and a half the

reason I went higher here is as their

revenue goes up and up and up their

gross their gross margin will really add

more to the bottom line so I do think

they can get that but I'm actually gonna

go a little bit lower here I'm actually

g go to 14 and a half just to be

conservative and 16 and a half free cash

flow as you can tell is much higher so I

did 16 20 and 24 PE I did 13

169 I think I'm going to change this to

14 17 and 20 and the reason being is I

think that whole trust factor is very

important I think the venmo aspect is

very important and I think that if you

want to have more margin of safety like

usual put it in your desired annual

return I'm putting 9% in here because 9

or 10% is the market and this is for

intrinsic value I've not added my margin

of safety yet but it's important to do

that because future is unknown we're

humans we make mistakes andal valuation

is an art it is not a science if you're

a science You' just put the numbers in

be done but you have to analyze how is

this company going to grow I hit the

analyze button Stock's currently at 58 I

have a low price of 56 to 70 high price

of 145 to 215 a middle price of 90 to

126 I like these odds so as the stock

Falls I will buy more of it now I want

everybody remember we're in what I

consider to be a frothy Market all the

stocks I'm going to mention here if we

have a bad bare Market are going to

probably go down with the stock market

but it's about differentiating between

the stock market dragging a stock down

versus fundamentals dragging a stock

down that's the big key here you could

end up loving PayPal do your own

research love it buy it but the whole

key here is to be able to buy it when

the stock is falling stock number two

Ulta beauty one I just recently bought

all-time high of 575 just back in March

it is now already at

387 quite a big drop $200 on a $580

stock that is almost 40% what is that

that is 35% or something like that

that's a lot it just shows you how fast

things can fall three months ago just in

three months it's Fallen that much okay

another reason I like it they've still

had same store sales for a retail

location love that aspect now one thing

I'm not a huge fan of

if you look at their one-year free cash

flow it's 915 million versus one-year

net income of 1.25 billion but 5year

free cash flow of 885 fiveyear net

income of 905 this is 2% apart I'm okay

with this that's why we look at the

whole story not just focusing on one

year gross margin almost 40% bottom line

pretty consistent between 10 and 11% no

dividend um you know what else I love

$8.8 billion market cap 20 half billion

Enterprise Value that difference of $2.8

billion is essentially the debt and this

is retail so they have a lot of leases

there that count as debt all right let's

go see the eight pillar story here

another eight pillar Thriller and like

you said look at these things buying

back shares love that at lower prices

net income has grown 820 million versus

cash flow of

377 okay not the best and not the best

that Revenue has grown 4.47 billion but

free up only up 377 so it's about

understanding that but look at this

return on invested Capital

23% now do I think retail has a lot of

issues absolutely there are issues but

Ulta has done a good job of really

they're also opening in Target stores

which I think is great so they're doing

some Partnerships to get out there they

love appealing to women women love to

spend money on these things so this is

why I like the company I do think

they're a very Niche company that as

long as they don't over outgrow

themselves because it's possibility of

out growing yourself I feel pretty

comfortable and I like to buy more as

time goes on I do have puts at lower

prices let's see what analysts are

saying analysts think the stock EPS is

going from 26 to $43 a share in the next

five years pretty much double digit

growth every year except for one look at

this Revenue growth guys I'm actually

surprised by this five six six seven six

so it's going to be a combination of

same store sales and a combination of

opening stores okay not bad so what's

our stock analyzer tool probably going

to adjust this one a little bit pull up

Al Ulta from

523 no I did three five and 7% Revenue

growth over the next 10 years N9 and a

half 10 and a quarter 11 same thing for

free cash flow PE I did 15 18 and 21

mainly because of its increasing roic

the last year's roic was 29% that's

pretty impressive and again my no margin

of safety 9% return hit the analyze

button I've got a low price of 340 a

high price of 660 a middle price of 476

at that 476 price today based on today's

price that discounted cash flow offers

me almost 12% return on that so yeah I'm

going to be writing more puts I think I

have some puts out there at 365 and 350

but I'll be writing more puts on this

company as time goes on stock number

three Starbucks Starbucks alltime High

126 it's down to 79 so it's not that big

of a fall but

35% and the the the all-time high was

back in July of 2021 but guys July of

2021 that was that was three years ago

next month two years and 11 months ago

it hit its all-time high of 126 it pays

a dividend about 2.8% that eats up two

and a half billion of its four billion

free cash flow last year and pretty much

all of its fiveyear average free cash

flow not a fan of that not a fan of that

I'm also not a fan of the fact that the

fiveyear free cash flow is significantly

lower than the fiveyear average net

income but it's Starbucks there's 30

some 35,000 Plus stores worldwide

they're starting to condense some stores

like close some off so I really like

that idea about Starbucks and remember

I'd ask you how many Starbucks there in

China India Africa there's probably

still a lot of growth potential there

for Starbucks so what's the eight pillar

story telling us all right so we have

x's on the valuation first one Starbucks

is a great brand so I do think it

justifies a higher valuation look at

this High return on invested Capital

that screams Mo status right there and

we have a high debt level again lots of

locations and they're premium locations

so they cost a lot of money so that

doesn't worry me so much okay cash flow

growth $3 billion do growth versus net

income of 768 that's solid and that3

billion do cash flow growth came off

of10 billion in increased Revenue

now what I'd love for them to do is if

the price gets cheaper cheaper cancel

the stupid dividend and buy back shares

$25 billion dollar in dividends could

buy back two and a half% of the company

3% of the company today let's focus on

that guys was if the stock gets cheaper

if it becomes nose bleed cheap you got

to sit there and focus on that as the

company so what are the analysts saying

about star Bizzle 367 a share and

earnings per share going to 644 in the

next three or four years that's pretty

good growth double digit every year and

revenue growth all right right mid to

high single digits 2 and 1/2 7 and 1/2 8

and 1/2 10 1/2 8% pretty solid growth

again new locations as well as same

store sales let's go to stock analyzer

pull up Starbucks star Bizzle so um

Revenue growth I did five seven and a

half and 10% and by the way look at this

royc just increasing just increasing I

did profit margin 10 and a half 12 13

and a half I did a slightly lower free

cash flow margin of 10 12 and 14 now PE

and price of free cash flow this is a

premium product is this reasonable 17

and2 20 22 and A2 guys you tell me what

do you think comment below what you

think the right multiple for Starbucks

is because obviously it shouldn't be a

15p company because it's a premium it's

a moat all these extra things it has I

just don't believe it that it's a 15p

company or lower is it

30 I don't know I don't think so I stuck

with 17 and a half 20 22 and a half let

me know what you think and then for

desire return again no margin of safety

9% hit the analyze button boom a low

price of 62 to 66 high price of 150

middle price of 100 so it's selling a

20% discount to my middle value now

guys I'm sure you've noticed we have a

weit list for em software the reason for

that is because a software as it exists

today includes everything we have to

offer for stocks retirement and real

estate and all these tools okay okay now

we are making some changes behind the

scenes so in a short period of time that

full offer including everything will

absolutely be going away as we've been

getting feedback from our customers

people prefer us to focus for them they

don't want to have the Cheesecake

Factory of options where they when

they're using everything money software

now remember two and a half years ago I

built the software I built it for me and

I built it completely selfishly but then

users started saying Hey how do I get

access to that how do I get access

that's when we open it up but at now as

we've grown it's becoming less and less

about me and more about how I can serve

you much better this is why we're going

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exactly what you need now the good news

is we have not made those changes yet so

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the best decision you have made all year

long now stock number four paycom

software this is an interesting one I

bought paycom after it fell one day

dramatically from 200 down to 150 145 I

bought it then it skyrocketed back up

and now it's coming back down again it's

at 141 now my concerns about paycom are

very simple it's payroll and if we hit a

recession my guess is Paycom will suffer

hard okay couple other issues I have

with pay paycom here the one-year free

cash flow is significant different from

the one-year net income and I'm

wondering how much it's affecting the

one-year free C fiveyear free cashow

versus fiveyear Net Income okay it is

selling for a high 28 times free cash

flow in the last year only 17 times

earnings all right but great gross

margin 83% that means for every dollar

they bring in it's 83 cents the bottom

line all right great Revenue growth

potential this is a company with a good

return on invested Capital great Revenue

growth potential selling for 4 and a

half time sales even with such a high

gross margin this is pretty solid stuff

here dividend pays is 86 million poop on

that but look at this let's go look at

the eight pillar story here that's what

we

love the story is telling us is it

valuation I do not like this discrepancy

between earnings and free cash flow but

growing and they're growing fast that

could be a big part of it Revenue growth

almost a billion dollars net income is

up 20 27% of that free cash flows up 16%

of that very little debt 1.75 times

their five-year free cash flow that's it

they have very little long-term debt out

shares outstanding down 3% okay so guys

there are a lot of issues with this

company going forward and I don't want

to I mean by the way look at this

alltime high

560 back on November 2nd but remember on

2021 remember it's not just about where

the stock has fallen it's about where

it's going the short run stock store

voting machine people obviously loved

this company back in 2021 why no idea no

clue you never know usually it's because

something starts to go up and up and up

more people pay attention they start to

get on the bandwagon it keeps going

keeps going and then boom maybe a

precipitous fall but remember this is a

company I'm going to look at from a

long-term perspective let's see what

analysts are saying for this company's

earnings per share about 50% 60% growth

in the next five four or five years 13

12 19 5

133% okay so pretty solid earnings per

share growth Revenue growth double

digits 11 11 and a half 12 12 and a half

11 so very solid Revenue growth numbers

as well with 83% gross margin as they

really drive this up I'm actually

surprised they don't have earnings per

share growth to be much higher I do

think that as we become as we're more

and more stay at home to work things

like that the software for for HR and

payroll will be very very important

paycom seems to have a very good balance

on that one as well as access to it so

let's pull up the last time I did payom

just a few weeks ago I actually did a

20y year analysis here guys 20 year so

I'm not looking at this from just a

short-term period of 10 years but I did

6 8 and 10% Revenue growth okay the last

10 years I did 31% 23% 18% in the last

year profit margin I did 20 23 and 26

free cash flows lower I did 1821 and 24

PE 1720 and 23 same with the price of

free cash flow again the 9% desired

return hit the analyze button got a low

price of 135 to 150 high price of 350 to

380 middle price of 240 to 220 so this

company seems to have some good margin

of safety and I'll be selling puts at

much lower prices this is a company that

I think will have a lot of volatility

like if we have a recession that hits

hard where does the stock go 50 60 70 I

don't know and you might sit there and

say well Paul if you think that why are

you buying it well because I don't know

what's going to happen I've made those

mistakes of sitting there saying I wait

for a pullback what I'm trying to do is

buy a good company at a good price and

then if it goes lower and the

fundamentals are still the same or the

story is still the same I buy more of it

my guess is if we hit a recession the

fundamentals were not be good but once

that we get out of the recession it'll

pop right back up and that's the big key

so I do expect that this company all the

companies I buy to fall and I can keep

on adding them as they fall so my cost

basis decreases stock number five Disney

very simple on Disney guys my play is

purely a profit margin play according to

this the last five years profit margin

is 2.4 last year was 2% let's go to

their net income let's go to their

income statement and see what history

shown so before Co they did $70 billion

in Revenue in 2019 followed with 11

billion in profit so 11 out of 70 what's

that what's that percentage about 15%

15% margin okay remember last year they

did 2% okay the year before that they

did $60 billion in revenue and they did

12.6 billion doll in profit what is that

that's over 20%

and it goes on and on and on their

margin is not a 2% business this is a

company that I think has a lot of

potential once they get back into their

profit margin level that this company

could do very well but what's

interesting to me

is that they haven't been selling for

dirt cheap prices based on that profit

margin here what analysts expect 478

this year which is a 30% increase look

at these growth rates for EPS going to

767 in three or four years I think it

could be higher and the revenue growth

made single digits about what you expect

for a company like Disney it's huge how

are you going to grow 10 15% you can't

and hopefully they're able to make more

money off Disney plus and really it's a

high margin business but it's been hard

to make money I'm making this play

purely based on profit margin so let's

go pull up our Good Old Stock analyzer

and I did three five and 7% Revenue

growth I did profit margin of 912 and 15

and I did PE of 1821 and 24 guys I could

see this being higher it's your I mean I

just did paycom at 17 20 and 23 so I

think for Disney does it justify a

higher PE than this probably 9% return

scroll down below low price is 75 high

price of 200 middle price of 128 so guys

if you want to see the 33 stocks that I

want to own watch this next video thank

you very much for your time