I Ranked 10 Stocks Near 52-Week Lows — 3 I’d Buy Before They Rebound

The stock market might not look like it's crashing, but underneath the surface, some of the world's strongest and most recognizable companies have already suffered enormous declines. We've got companies like Salesforce nearly 40% below its highs. Netflix, well, that's fallen more than 40% and Microsoft's lost around 30%. And even companies traditionally viewed as defensive are trading close to their lowest levels in just the last year. But here is what makes the current setup so unusual. Overall market sentiment has already recovered from fear back to neutral. This is not an environment where every company is collapsing together. Instead, the market is becoming increasingly selective about what it's willing to own and what it's willing to punish. I mean, we can see the S&P 500 itself, it's become cheaper, falling from approximately 22 times forward earnings at the beginning of the year to sitting at just above 20 today. And in fact, 20 times earnings still is not obviously cheap. And a lower share price does not automatically mean that a stock has now become undervalued. And we can see the difference between the surface. Well, in fact, it's enormous. We've got Costco that still trades 40 times forward earnings. Microsoft, well, that trades around 20 times. And you've got Netflix that trades below 20. Salesforce close to 10. and Adobe. Well, that's fallen to a valuation that would have sounded almost impossible only a few years ago. That is why simply buying every stock near a 52- week low, can be extremely dangerous. This is especially important today because investors are trying to determine whether years of aggressive investment, particularly in artificial intelligence, will create enough future cash flow to justify the money that's being spent. And this brings us directly to the question behind every valuation model that we're going to discuss in today's episode. >> Let's first agree that AI is making a huge difference on all our lives. So it will be a revolutionary technology. It continues to have a dramatic impact. But the key issue from a stock market perspective any stock price is essentially the net present value of the future cash flows. So the discounted net present value of future cash flows then suddenly becomes important what is the slope of those cash flows that are coming in the future. And the question now of course is what are the assumptions in market pricing today about how quickly revenues will come to the hyperscalers on the back of the investments that they have made. So it's really this simple observation that a lot of investments are being made and are markets now pricing in that revenues are coming too slowly too quickly at the right pace. This is essentially the discussion that we're having in markets and the debate namely will the revenues come quick enough >> and that is the real question not whether these companies have fallen not whether they were once worth more but whether the future cash flows justify the price being offered today and with retail buying now at its lowest level since the pandemic there are fewer marginal buyers rushing in simply because the chart just looks cheap. In fact, investors are demanding evidence, they want earnings, guidance, and cash flow, not simply a compelling story. And when a company fails to meet those expectations, well, the reaction can be brutal. They're gravitate gravitating towards the companies that will deliver earnings. And I agree with everything Steve said about the setup because it's not just about whether or not companies beat, whether they beat by a penny, whether they beat the whisper number. I think everything comes down to guidance, what the expectations are, and if you don't deliver, we saw this with Samsung already this week, you're going to get slammed. So, it'll be interesting to see which of the Mag 7 embrace the earnings reports and flourish and which ones suffer. >> And the test begins almost immediately. Netflix reports earnings on Thursday, meaning one of the most controversial valuations in today's ranking could be tested within days. But Netflix is only one of 10 companies that we need to examine. So what I've done is taken 10 major companies trading close to their 52- week lows and tested each one across recent business performance, expected growth, historical valuation, analyst expectations, and my own intrinsic value model. And some now look significantly undervalued. Some offer attractive income. Others carry much greater risk than the headline valuation suggests. and one remains far too expensive even after decline. And let's begin at number 10. And at number 10, we've got Posco. Now, it's one of the best retailers in the world. Its membership model is enormously powerful. Customer loyalty is exceptional, and the company continues to produce excellent operating results. The problem's not the company, the problem's the price. Now, the underlying business is still performing extremely well. Costco's latest quarter produced doubledigit sales growth while their net income continued to increase and you can see here all of their numbers we're talking revenue ebit their EBIT even their earnings per share also looking at it from a 3 to 5year angle all anticipated to grow at respectable rates so Costco is not a deteriorating business being disguised by an attractive valuation is almost the opposite Costco remains a great business whose valuation still demands nearperfect execution ution and even after their decline, their forward multiple remains close to its 5-year average and that is ultimately the key problem. The share price has fallen but the valuation has not compressed enough to offer a meaningful margin of safety. I mean a company trading at more than 40 times earnings must continue to deliver exceptional growth for many years merely just to justify today's price. Now if we were to take a look at the blue tunnel which is from simply safe dividends we can see here that it's trading right in the middle. This blue tunnel signifies fair value intrinsic price. So solely on this we would get a reasonable signal over the last 5 years over the last 10. No surprises to many people who have been following Costco. This is one that for many many years on end does seem to be trading at a premium valuation and investors have been more than happy to pay the price. And then we can see Wall Street. While they remain optimistic, their average price target is above $1,000. But analyst targets, they're not sufficient on their own. They often assume a premium business will continue receiving a premium multiple. So instead, I want to know what the cash flows themselves are worth. And you can see that my medium discounted cash flow model produces a value of $729 per share. That's around 20% less than the market price. I mean, the low case goes to $574. And if we were to assume the higher case of 16% annual free cash flow growth, well, it produces a price of 925, which is barely above today's price. The reverse DCF as well, very important, says Costco needs to grow cash flow by almost 16% annually to justify what investors are paying today. And that is far too demanding for a company whose expected revenue growth is closer to the higher single digits. Now, recent sales, they did remain strong, but the June growth rate moderated from the previous month. So, when a stock trades at such a premium, even modest deceleration can cause investors to reconsider how much they're willing to pay. And you can see based on this number, it looks like investors today are paying around a 25% premium. So, my conclusion is simple. Costco is not a value trap as a business. It remains one of the highest quality retailers available, but around the $900 mark today. The riskreward do not work. I personally need a meaningfully lower entry price closer to the mid700s before the valuation became compelling again. So, in my opinion, I'd avoid this at the current price. And number nine that we're getting into now offers a clearer historical discount, but also a much messier earnings picture. Now, before we get into that, I want to let you know that I release one weekly article where we uncover severely undervalued stocks as well as what's going on in the market over the last few days. You can click below, sign up, and read all of these straight away. At number nine, we've got Hershey, and it's trading much closer to its 52- week low. And unlike Costco, the stock now shows a clear discount relative to its own historical valuation. But honestly, there's a good reason investors have become cautious. If we were to look at the dividend yield, well, it's risen to 3.3% well above its 5-year norm. The forward PE that's compressed to around 19.5 below the 5year average of 25. So on the surface, it looks like a classic opportunity to buy high quality consumer brand during a temporary setback. And that's also the indication from when we look at the blue tunnel. There's a disconnect on the bottom end. So undervaluation does look like what we're seeing today. While the underlining metrics do seem to be moving in the right direction, but the earnings picture here, it is complicated. Revenues benefited from price increases. Yet, recent EBITRA operating income and earnings have been hit by significantly higher cocoa costs. So, Hershey, they've been forced to raise prices to protect profitability, and that's created a difficult balance between preserving margins and maintaining consumer demand. Coco costs have eased from their extreme peak, but the higher cost inventory continues to work through the company's accounts today. And with Wall Street, while they see potential upside to around $214 price target, their first quarter results were better than the damaged share price might suggest their net sales were up more than 10%, EPS up more than 12. However, the market is looking beyond one quarter and asking what sustainable earnings look like once pricing, volumes, and commodity costs normalize. And you can see just looking at the standalone DCF, well, it produces a value of around $194, the reverse DCF suggesting the market is pricing in 4.6% long-term cash flow growth does look particularly demanding. It does provide some protection, but not enough to remove the operational uncertainty. And across the three methods, we get to $193 from today's price. While that indicates around a 10% margin of safety for a company facing substantial commodity and pricing risk, I would personally prefer a wider MOS. Now, Hershey itself, you could argue, is getting interesting. When we look at over the last year, in fact, this one traded not that long ago as high as 236. I wouldn't call it irresistible. below around $160. The combination of historical valuation, yield, and potential cocoa cost recovery would become much more attractive. Today's price, I place Hershey on the watch list rather than make it a high conviction purchase. So, a watch, but wait for a wider MOS. At number eight, we've got PepsiCo. Now, it's not suffered the same spectacular collapse as some of the software companies in the ranking, but the stock has steadily moved towards the bottom end of the 52- week range, as we can see here. For long-term dividend investors, the current setup does deserve attention because I mean the yield driven above 4.3% compared to their 5-year closer to three forward earnings multiple compressed from an average 21 to now sitting below 16 is a meaningful historical discount for a company with Pepsi Gatorade Lays Doritos Quaker and a large international operation where the blue tunnel as we can see is highlighting the potential undervaluation signal. But also note, we've been sitting in this region for over the last year. Now, the reason that we're getting the discount on the company is in fact growth. Their forward revenue growth, well, we can see here, is only expected to be in the low single digits, while earnings growth is also expected to be modest. We're talking 5% over the longer term. And just their latest quarter, it really highlighted the challenge. Their revenue was up by more than 6%, organic revenue up only 2.4, for North American organic revenue declined with ongoing weakness in domestic food and beverage volumes where the average analyst target implies $156 14% upside is on a stock where the investment case depends upon explosive expansion. Instead, the return comes from the starting yield, gradual earnings growth, dividend increases, and some recovery in the valuation multiple. And the standalone DCF, well, that comes to $146, only modestly above the current price. The model assumes 6% annual free cash flow growth, while the reverse DCF approximately 5.2 is suggested standalone cash flow case is fair rather than spectacular. However, Pepsi's historical multiple and dividend models produce much higher values. Blending all three together, we get 175, implying a margin of safety of around 22%. Now, I wouldn't assume the stock immediately returns to its old 21 times multiple, but the current 16 times valuation leaves room for normalization if operating performance improves. So, I'd say for income focused investors, Pepsi is becoming more attractive. 4.3% yield provides a substantial portion of the expected return from day one, and the dividend appears supported by a durable collection of consumer brands. But sluggish North American demand means I'd accumulate gradually rather than build a full position immediately. So I would say this is a cautious income buy. And at number seven, we have Vichy Properties. Now Vichi owns major experential real estate including casino and hospitality properties and collects long-term contractual rent from its tenants. At around $26, the stock offers the highest dividend yield in the entire ranking. I mean the yield itself is now close to 7% significantly above its 5year average of 5.3. Meanwhile the forward price to airfl multiple has fallen to approximately 10.5 times compared with a historical average around 14. This is a clear valuation discount. Now the business itself is not standing still. We can see AFO looking very strong expecting to grow operating cash flow around 5.8%. The dividends also increased at a very attractive rate. We're talking around 4% on a training 12-month basis, just shy of 5% over the last 3 years, 6.4 over the last 5 is attractive for a REIT. And then add on top of that the very high yield. And they also raised their full year 26 AFO guidance to between 244 and 247 per share, strengthening the near-term cash flow outlook. And if we were to look at Vichi through the lens of the blue tunnel, well, we can see whilst not massive improvement to the underlying fundamentals, the stock does appear to be disconnected from the bottom end of the fair value. Now, investors can't treat 7% yield as free money. The dividend safety score is only sitting at 50, placing it in the borderline safe category. The credit rating is tripleB minus. Now, these are manageable risks, but they have to be acknowledged. Now, the payout ratio itself isn't immediately alarming. We can see it sits around 73 to 74 while the next 12 months expected to be in a similar region. It does give Vichy room to maintain the dividend provided its tenants continue meeting their obligations and financing costs remain manageable with leverage being the more significant concern. Net debt to Ebit is above five times. Although the forward figure is expected to fall below, higher for longer interest rates may make heavily financed real estate less attractive and they increase the return investors can earn from lower risk alternatives. It is one reason why Vich's yield has moved higher. Now the three valuation methods do produce a wide range. We can see the multiples coming at $31, DCF 37, DDM coming at 44. Blended value coming to 37 implying around a 31% margin of safety. And the intrinsic value is in fact around 40% upside before accounting for the dividends. And Wall Street we can see they are more conservative. Average price target $3346. Now that implies around 29% upside. It is respectable potential return when you combine that with the near 7% yield. So for investors primarily seeking income, Vichy may be one of the more compelling names in the ranking, but leverage and slower growth stops it from reaching the top tier. So I would argue you could buy it for income, but size the position carefully. Now at number six, we've got S&P Global. It owns some of the most valuable financial data, ratings, index, and analytic assets in the world. His revenue, well, it's often recurring. Its customer relationships are deeply embedded and many of his products are extremely difficult to replace. Now, you can see here the valuation is compressed substantially. It trades at 23 times Ford earnings, 5-year average closer to 30 for a high quality data and ratings franchise. That historical discount deserves attention and no surprises to see that undervaluation signal. Although we would say the fundamentals over the last 12 months have been pretty flat. Most recently, a slight dip's been noted. Over the last 5 and 10 years, though, one thing is for certain, it has continued to move in the right direction when we do zoom out. But overall, while the market is concerned about slower near-term growth, weaker expectations in parts of market intelligence, and the possibility that AI could disrupt traditional financial data products. However, most recent quarter was solid. revenue up 10%, EPS up 14% and the DCF while it looks very attractive, middle value $561 around 30% upside. However, it is worth noting that S&P Global completed the separation of their mobility division on July the 1st. So, the historical cash flows that we have used, they're not as accurate. So, something to bear in mind as the old cash flow history and the current post spin market capitalization are not directly comparable. Now, if we were to look solely at Wall Street, their average price target $514 does imply around 20% upside. And with the historical valuation, it did indicate that investors are paying a much lower multiple than usual. But uncertainty around the post spin earnings space means this can't be one of the higher conviction buys today. I still like S&P as a long-term business. The ratings, index, and data asset remains exceptional, and the discount is potentially compelling, but valuation discipline. It also means admitting when a model no longer reflects the company being valued. So, I would say it's an attractive watch list candidate pending the post spin DCF rebuild that we will take a look at later on. At number five, we've got NU holdings, the parent company of NU Bank. NU is building one of the largest digital financial platforms in Latin America, serving customers across Brazil, Mexico, and Colombia. Unlike the mature dividend names in the ranking, NU's investment case is centered on rapid customer revenue and earnings growth. And we can see their expected growth is exceptional. Forward revenue estimated to climb 33%. Earnings per share will expect to increase 39% long-term 36. These numbers are substantially higher as well when we compare them to the sector. We're talking triple digits. And despite that growth, NU only trades around 17 times projected 2026 earnings, but that falls based on current estimates as 13 times in 2027 and in fact sitting around 9.3 based on 2029. And you've even got the trading PG coming in at 0.45, indicating that the multiple looks modest relative to the current earnings growth. But this is not automatically a low-risk bargain. end-user financial institution. Credit quality, funding, capital requirements, and local economic conditions matter more than they would for a traditional software company. Rapid loan growth can produce excellent earnings until credit losses begin rising faster than expected. And their last quarter remained extremely strong. They surpassed 135 million customers. Revenue exceeded 5 billion for the first time. Net income reached 871 million and return on equity was 29%. The company's scaling while remaining highly profitable. And the average analyst target price comes in just below $18, implying 30% upside is more conservative than my valuation work and perhaps makes a more realistic near-term expectation. You can see here that the Graham and relative multiples valuation produces values closer to around $27. But unlike most of the companies in today's episode, there is no traditional free cash flow model supporting the figure. Banks have to be valued differently, and NU's relatively short public track record makes its normalized multiple hard to establish. So, I'm not going to present $27 as a guaranteed fair value. I would say that NU offers one of the best combinations of growth in headline valuation in the ranking, but the risk profile is higher than others we're going to get on to. I treat it as a smaller, more spective position rather than a core holding spective buy with excellent growth, but higher country and credit risk. At number four, we've got Netflix. And it's fallen sharply despite continuing to produce strong revenue, earnings, and cash flow growth. The market is no longer questioning whether Netflix can become profitable. It's questioning how long the company can sustain its current growth and whether engagement will remain strong enough to justify future expectations. Now, all of these questions will face an immediate test when Netflix reports earnings on Thursday. It makes the stock particularly interesting but also introduces significant short-term risk for anyone buying directly before the results. And the current operating performance remains excellent. Forward revenue growth expected 14%. EBIT and operating income are expected to rise more than 20% and we can see forward earnings per share coming in at 25. This is not the growth profile of a broken company and it trades around 20 times forward earnings around 43% in fact lower than their own 5-year average. So yes, the stock remains more expensive than the medium coms company. But Netflix is also growing much faster and in fact carries a forward PG that now sits below one. And if current estimates are broadly correct, Netflix multiple continues falling over the next several years. We can see in fact based on 2028 numbers is sitting around 16 times. It becomes attractive if the company can preserve its margins, expand advertising and maintain engagement. And Wall Street's average price target $112 implies more than 50% upside. But Netflix previously sold off after delivering a more muted forecast and announcing that co-founder Reed Hastings would leave the board. investors while they're also monitoring engagement as Netflix competes with YouTube, traditional streaming services, and free adup supported platforms. And my DCF produces one of the widest valuation ranges in the video. At 10% annual cash flow growth, Netflix is worth around $87. We're talking 19% above current price. At 15%, while growth rises to $118, at 20, it reaches $160. And the medium rate, well, we can see here is saying a 38% margin of safety. I mean, their latest quarter produced 16% revenue growth and an 18% increase in their operating income. So, I would say Netflix is a buy based on long-term valuation, but I wouldn't ignore the earnings catalyst. A cautious investor could open a partial position before the report and retain capital in case guidance disappoints. A more conservative investor could wait until the markets process the results. So, I'd say attractive bite, but expect substantial earnings volatility. At number three, we've got Microsoft, which has fallen more than 20% this year as investors are questioning the scale of its AI spending, the pressure on free cash flow, and how quickly the investment will generate returns. But the underlying business continues to deliver exceptional results. We can see forward revenue expect climb 16%, forward ebitar sitting at 22% and projected EPS sitting at 18.3. These numbers extraordinary for a company already approaching a $3 trillion market cap. The weak point, however, is free cash flow. Massive data center and infrastructure spending has temporarily caused free cash flow growth to lack the company's earnings growth. It explains much of the market's concerns. Investors are not questioning whether demand exists. They're questioning how much capital Microsoft must invest to serve it. And we can note that valuation reset is substantial. Trading 21 times forward earnings 5-year above 30 yield above historical norm is one of the cheapest valuation Microsoft had received in many many years. And the latest operating results don't indicate that their competitive position is deteriorating. Revenue up 18% operating income up 20 up 40. And the AI business surpassed a 37 billion annual revenue run rate. That's at 123% yearonear. Now, my DCF is more restrained than the historical multiple suggest. An 8% cash flow growth while the value falls to $337 at 13% in line with their 10year 423 at 16484. The medium case, well, it only offers 10% upside while the low case potentially we can note downside. And Wall Street, they are much more optimistic. Average price target $560. We're talking around 45% upside. So the gap between my 423 base value and Wall Street's target, it highlights the central debate. How much of Microsoft's current AI investment will translate into durable high margin cash flow. Now I don't believe Microsoft is the deepest bargain in the ranking, but it may offer the best combination of quality growth, balance sheet strength, and valuation. The company doesn't need to return to a 30 times multiple for shareholders to earn a respectable return. It simply needs its cash flows to catch up with its operating earnings. So at around 21 times Ford earnings, I'm comfortable accumulating Microsoft gradually. I would reserve additional capital in case AI Capex remains elevated for longer or the stock revisits the mid300s. Highquality buy with the strongest risk adjusted business in the entire group. At number two, we've got Salesforce and it's been one of the most heavily punished large cap software companies in the market. The shares, they're down near 40% year-to- date. Forward valuations collapse to a level normally associated with a low growth or structurally declining business. And it trades below 12 times Ford earnings compared to their 5year that sits 2728. The company now pays a dividend, repurchases shares, and generates substantial free cash flow. Yet, the market is valuing as though the competitive position is rapidly deteriorating. And we also notice the undervaluation signal, probably the largest disconnect that we've seen in the entire episode. Now, the growth has undoubtedly slowed. We can see forward revenue is close to around 10% materially believe their historical rate, which was around 14% on a 5-year average. But operating income and earnings, well, there is still expected to grow at a double-digit rate, 15% forward-looking, 16.3 over the next 3 to 5 years. So, it's a mature software company, not necessarily a shrinking one. Now, Wall Street's average price target $246 implies 50% upside, but the stock remains under pressure because their latest forward revenue guidance fell slightly short of expectations. Investors, while they also fear that AI agents may weaken the traditional per seat software pricing or allow newer competitors to automate tasks previously handled inside Salesforce. But this is where the valuation becomes very very interesting. My low case here assumes Salesforce free cash flow. Well, it declines by 2% annually for the next 10 years. Even under that scenario, the stock is worth around $200, 25% above the current price. Medium Case assumes no growth and produces a value of $240. In other words, investors do not need Salesforce to return to its historical growth rate for the valuation to work. They don't even need free cash flow to grow. The current share price appears to assume a persistent decline in cash generation reflected by reverse DCF of negative -4.5. The risk ultimately is the market is correctly anticipating a major major disruption to the software business model. But Salesforce needs to demonstrate that agent force data cloud and its broader AI product suite can create incremental revenue not simply protecting its existing customer base. That for now does remain unproven. But around today's value, $163, I do believe the market is demanding too much evidence and pricing in too much long-term damage. Salesforce honestly has room to disappoint and still offer upside. That is exactly what I want from a beaten down stock. A valuation that doesn't require a perfect recovery. High conviction buy only if you accept the AI disruption risk. Now, at number one is Adobe and it's been treated as though generative AI will permanently destroy its competitive advantage. weaken Creative Cloud and turn professional creative software into a commodity. The share price now reflects an extraordinary level of pessim. I mean, it trades at just over 9 times forward earnings. The 5year average sits around 27. And even if you use GAP earnings, what we can see here trades around 12.4 is not priced like a premium software compounder, it's priced like a business entering structural decline. And you can note on current consensus estimates the multiple falls around eight times on 2027 numbers seven times based on 2028 and the forward PG is around 66. It creates a substantial valuation cushion provided the earnings estimates are not about to collapse. Now to be fair the market's concerns are not entirely irrational. Their revenue growth has started to moderate. We can see forward revenue projections 10% and in fact the operating growth measure trails the broader software sector but Adobe is still expected to grow both earnings as we can see here and in fact their free cash flow. So we're talking about two very important numbers at doubledigit rates. So it's not a shrinking business at least today. And the latest quarter directly challenged the most bearish narrative. Their revenue 6.6 to 6 billion that was up 13% and AI first annual recurring revenue more than tripled and exceeded 500 million management while they also raised fullear revenue and non-GAAP earnings target and you can see Wall Street's average price target $272 implying 22% upside so target suggests here analysts aren't assuming Adobe quickly returns to its historical valuation and my cash flow model shows that a return to the old model well it's not required in fact in the Low case the model assumes Adobe's free cash flow decline 4% every year for an entire decade even under the exceptionally pessimistic assumption the stock is worth $36 37% above today's value at zero growth $393 at only 4% growth $55 and the reverse DCF is even more striking current price the market appears to be discounting around 9% annual free cash flow growth is an extremely low hurdle for a business currently producing double-digit revenue, earnings, and cash flow growth. So, the risk is clear. If new generative tools weaken Adobe's pricing power encourages customers to leave Creative Cloud or make professional workflows easier to replicate, today's earnings estimate could prove far too optimistic. They also need to prove that strong AI usage becomes meaningful revenue rather than merely higher product cost. So at around $223, I personally be comfortable starting or considering adding a position gradually. I would definitely retain additional capital because sentiment towards software remains extremely weak and the stock could definitely revisit it recent low at $190. But based on a combination of business quality, valuation, super low expectations, Adobe offers the best risk reward setup in the entire group. So bringing it all together at number 10, Costco. exceptional company, but still far too expensive. Even the high DCF scenario offers almost no upside, while the medium K suggests material downside. The stocks fallen, the valuation's not fallen enough. At number nine, Hershey's offers well a historical valuation discount and a higher than normal dividend yield, but the potential upside is not yet sufficient to compensate for continued uncertainty around cocoa cost, pricing, and consumer demand. It belongs on the watch list. At number eight, Pepsi offers an attractive 4.3% yield. Meaningful historical discount is a reasonable income accumulation, but weak North American demand and modest cash flow growth limits the near-term upside. At number seven, Vichy offers the best income opportunity with a yield close to 7% and considerable valuation upside, but leverage, interest rate exposure, and a borderline dividend safety score means the position should be sized carefully. At number six, S&P Global. While it may eventually move much higher, but its mobility separation means the DCF that we were using, it can't really be used against today's post spin share price. I want to rebuild the model before making a high conviction decision. At number five, we've got NU, which offers exceptional growth at a reasonable headline multiple, but banking, credit, currency, and emerging market risks make it a much smaller spect position, not a core holding. At number four, Netflix. It offers strong growth and attractive valuation upside. Even the low DCFKs produce a positive return, but Thursday's earnings report could create considerable volatility. So, I'd avoid committing all available capital before the results. At number three, we've got Microsoft. And it offers less theoretical upside, but the best combination of quality growth and financial strength. His AI spending is suppressing free cash flow today. Yet, Azour and the broader cloud business continue to grow at exceptional rates. At number two, well, we've got Salesforce. It looks deeply undervalued, even if cash flow never grows again. The market may be right that AI will disrupt traditional software pricing, but today's valuation already assumes a severe and persistent deterioration. At number one, we've got Adobe, which provides the strongest mismatch between market expectations and current business performance. The valuation assumes a long-term cash flow collapse while the company's still delivering record revenue, double-digit growth, and accelerating AI adoption. So, the main lesson is that a 52-E low tells us where a stock has traded. It doesn't tell us what the business is worth. Costco's declined, but remains expensive. Adobe and sales had declined and now appear to price in extremely pessimistic futures. The difference isn't the chart. The difference is the cash flow. And that is why valuation becomes especially powerful in a market like this. Investors no longer rewarding every company equally. Some stocks still trade at premium valuations. Others have been compressed to levels that imply little or no future growth. The dispersion creates opportunity but only for investors willing to separate the price from the value. As always, let me know your thoughts in the comments below. Whether you agree, disagree, or perhaps other stocks that you want us to include in the next ranking. Don't forget as well to sign up to the weekly newsletter. You can read all of these straight away. More importantly, have a great day. I'll see you all on the next one.