3 Stocks to BUY NOW After Earnings Crash!

Hey, welcome back subscribers to my world of stocks. Hey, we've got another fresh episode today of three stocks that fell on earnings this very week. And yeah, to make things a little more interesting here, I actually chose um specifically uh this is a bit of a new thing here that I'm doing for for this uh earnings uh series that we're doing, I chose three stocks really because of all the AI craziness going on out there. I chose three businesses that I feel cannot at all, and I mean at all, be disrupted by artificial intelligence. That's right. All three of these, in my opinion, are about as AI proof as you can get out there. Now, I will say that um obviously there's going to be some level of risk involved here because the market just punished these stocks after reporting their Q2 earnings. But in my opinion, each of these looks like a pretty decent pickup here on the dip and maybe worth adding to your own watch list, too. So, if you do want me to um continue making these specific episodes every week during earnings season, uh then please just let me know. Do do me a quick favor and hit those like and buttons down below. That lets me know that you're enjoying the series and that you want me to keep making more episodes all throughout earning season. Uh, but with that said, before we jump into our official list of three stocks, um, I do just have one quick honorable mention in Meta, ticker symbol META, who obviously is an AI stock itself, so it wouldn't have fit into this episode of, you know, specifically choosing AI proof stocks. But just so you know, I did actually make a separate video breaking down their earnings results, too, which you can check out on the channel if you want to learn more about it. And I just want to say that really of all the companies that fell on earnings this week, Meta was far and away the best buy out of all of them, uh, dropping about 20% this week on some earnings that I actually thought were fantastic when you dig a little deeper into the numbers rather than just reading the negative headlines that kind of buried all of the bullish details that I outlined in that other video. So, if you want to check it out, you can. And, uh, with the stock down as much as it is, I've actually been scooping up shares of Meta Stock myself, too. Um yeah, with that said though, for now, um let's just jump into these other three stocks that again are AI proof and that fell this week too after reporting earnings. So, first up here, we actually had one of my absolute favorite REITs in the entire market dip on earnings, and that was in Extra Space Storage, ticker symbol EXR, who um if we pull up the stock chart here, we can see that the stock tumbled over 3% the day after reporting, which you know, this used to really be one of the best performing stocks out there up until more recently. But right now, it's currently down around 40% from the very top. And yeah, I just think that's way too attractive to ignore. In fact, it's mostly to do with just broader economic concerns over inflation and interest rates that tend to hurt RES by so much. But in terms of their underlying business performance, EXR is still doing, I would say, very well, which this latest earnings report showed much of that too, as they delivered a solid beat on both the top and bottom lines with 874 million in sales versus analyst estimates of 864. So, a clean like $10 million beat there. And for their funds from operations, which is the main profit metric you look at for RES, it too beat easily at 215 per share versus 206 expected. So, why did the stock slide? Again, I wouldn't really overthink this one. I feel like it mostly boils down to just short-term trading behaviors that we've been seeing lately, especially with EXR, who was actually running up a bit prior to earnings. And so with inflation still, you know, stubbornly high and the Fed being divided on what to do about it, I just think that all of that uncertainty is spilling over into REIT still at the moment, even if they are performing well like EXR happens to be. And just this week, in fact, the Fed voted to keep rates steady with even three of the members voting to actually raise them even higher, too. And when that happens, it makes all of the um debt when when interest rates are high and they climb even more, it makes all the debt that REITs rely on for expansion, it makes it much more expensive for them. Um while also making competing bonds more attractive, too. But again, EXR looks to be in fantastic shape regardless. This is the market leader of one of the most resilient markets in the country in self- storage that people will always rely on. It can't be disrupted by AI or some type of software apocalypse. It doesn't take any damage from the rise in e-commerce or even the work from home movement that is hurting so many other traditional reads out there. In fact, I would argue that those trends actually benefit um a company like EXR if you know people and businesses are moving or downsizing and need to store a bunch of stuff away. And overall, the company actually has some of the best lease contracts that you would ever want as an owner, too. operating on a monthto-month basis actually allows them to adjust rent prices as frequently as they need to to keep up with the market and it can also help them keep up with inflation and interest rates and so on which they're executing great on that strategy. This latest quarter in fact showed that average rents and same store net operating income both grew higher year-over-year. And their real secret weapon is actually something that people don't talk about often when they rarely even talk about EXR is their third-party management platform. Uh this is where they currently manage over $1,800 properties for other owners and it allows them to collect over $220 million in fees per year with almost zero upfront investment. And even better, if those independent owners ever decide to sell, well, EXR already knows the property's financials inside and out because they handle the platform, and that gives them an insider advantage to buy the properties with even lower risk and just kind of helps them expand even further and get even stronger. Again, the the result is great financials allowing them to also pay a big dividend, too, that is currently sitting at one of its highest um yield levels after the drop, closing in on 4.5%. Now, to me, getting one of the best operators in real estate at a 40% discount from its highs with a rockolid growing dividend is a pretty good setup, I would say, for the long term. So, I really like this one. Okay, now moving on to stock number two. Um, we actually have another big favorite of mine, which operates in a multibillion dollar industry that 1,000% can never um ever even think about being taken away. It's the industry that can never go under. Um, and that is the water technologies leader Zylm, ticker symbol XY L, who when looking at the charts, we can see um that this one has dropped over 4% in a single day after releasing their latest earnings. Now granted, that's not the largest dip out there, but if we zoom out a bit, just like EXR, um you'll find that this is generally a great performing stock with a strong uptrend, but more recently, it's been heavily suppressed, even falling negative over the past 5 years, which I think is just another amazing entry point for another stock here that also cannot at all be disrupted um by artificial intelligence. Water is essential to pretty much everything in the world, to life itself. And this company excels at cleaning, measuring, transporting, and everything else related to it around the world. And in fact, when it comes to AI, they actually stand to benefit greatly from it, too, the more that that grows, which I'll touch on here in just a second. But when looking at this week's drop specifically that came from them just um barely missing on the top line while also trimming their fullear guidance down to 9.2 2 billion and that was from the previous range of 9.2 to 9.3. So yeah, it's pretty much kind of the same guidance, but even that tiny amount of a difference was enough to cause the market to sell. And and the tiny difference, by the way, um in that guidance, it it's mostly just coming from ongoing weakness in China as well as some project timing delays in their electric metering business. But a big chunk of that low lower revenue was actually intentional by design, too. See, management is running an 8020 portfolio simplification program. Know it's a mouthful, but basically they're trying to transition away from their lower margin contracts to focus more strictly on higher quality, higher margin projects. And if you look at the bottom line, that strategy is actually working because even though revenue missed, their actual profits easily beat expectations while their profit margins expanded by 150 basis points. And their total orders even jumped by 42% to over $3 billion. That's leaving them now with a huge order backlog of more than 5 billion, which is again, it's going to be higher margin the more that they transition over the business. And so going back to um AI here for a second too. Well, that's actually going to be another growth driver for this company longer term. So all these giant AI data centers being built around the world will require incredible amounts of water and cooling systems to function properly, which is exactly the type of infrastructure that XYLM provides and maintains. In fact, management noted that their data center orders alone just skyrocketed by over 300% year-over-year. In other words, the business is not at all in decline. It is in transition and over the longer term, it'll likely be on fire because I think it's going to really take off. And because Zyllem is such a high quality business, it usually trades for a steep premium, too. But because of the recent dips and suppression, their valuation is actually trading at about the same levels as the sector, which to me is almost at kind of screaming by levels, I would say. Plus, while the transitions take shape, I even get to collect a very safe growing dividend, too. That, you know, while it only yields about one and a half percent, it at least does carry an absurdly cheap payout ratio of less than 15% with also 14 years of consecutive growth. Um, so that dividend is very safe. It's going to continue to grow. It's going to continue to grow larger over time. And, um, yeah, it's just a nice little extra bonus on top of the main reason why I'm investing in the company, which is the business. So again, just to summarize, getting a global leader in water tech right as data center demand is going to be exploding even higher and at a cheap valuation too. I just think that's one of the clearest buys on this dip. All right. Now, lastly, at uh stock number three, well, we have a company that operates in uh well, let's just say that it's not a glamorous or glitzy industry out there. Uh it's actually the complete opposite of that, but it is a cash printing one that can never be disrupted by AI, and that is the undisputed king of trash collection, Waste Management, ticker symbol WM. Now, right off the bat, um I have to admit that this stock will very likely never give you any kind of skyrocketing overnight returns like all all of those exciting tech stocks out there. But what it lacks in pure hype, um, it definitely makes up for by being one of the most reliable and dependable stocks to own for the long term. In fact, this is a stock that rarely ever dips. So when it does, it's usually an opportunity that, you know, you might might want to be taking advantage of, which you can see on this long-term chart here, too. But if we zoom in a bit here, we can also see that they actually dipped today by over 4% when I'm recording this following their latest earnings report. Now, why did it fall? Well, Wall Street focused on softer volumes with their sales of 6.68 68 billion, slightly missing analyst projections of 6.71 billion, which was due to their overall collection and disposal volumes declining by less than 2% in the quarter, which management attributed to losing some national commercial accounts as well as a tough comparison uh comparison period against all of the extra wildfire cleanup volume that they had in the previous year. During the same time because of the softer volume though they also had to slightly lower their fullear guidance. However, if you look past the topline revenue the underlying profitability is still as strong as ever. See like Zyllem a waste management is also prioritizing margin expansion and cost optimizations which actually help them beat expectations on the bottom line. And looking further out, uh, WM has actually made some pretty nice moves that I think will help them expand further in the future. For example, they recently bought a giant medical waste company called Sterycle for the disposing of biohazard materials, needles, and medical waste from hospitals. And that new division is already seeing their profit margins rise, which by bundling these new medical waste services with their already existing like regular trash routes, they even added over $30 million in new earnings. So, there's actually a lot of synergies going on there, too, that's going to um really benefit them on their margins, on their bottom line. And on top of that, their sustainability investments, they're very interesting. They're actually starting to pay off, too. Um they actually built three new facilities that capture gas from landfills and and they converted into usable natural gas. How crazy is that? And they also have a giant automated recycling plant in Denver. And when you put all that together, it actually pushed their combined recycling and green energy earnings um up by around 33% year-over-year, which is very strong growth. Still, the biggest reason to own this stock is simply the cash flow. Uh they generated over 2 billion of it, free cash flow, in just the first 6 months alone. And Waste Management uses all of that cash to heavily buy back their own stock and pay out dividends, which admittedly is a pretty low yielding dividend, but it's got an extremely safe payout ratio of just 21% and it's also got over two decades of consecutive growth. So, it's at least reliable and and you can kind of count on it. Again, it's not the most exciting stock out there, but they hold the largest disposal network and collection fleet in all of North America. And that's a very strong moat that, you know, AI simply cannot disrupt. But hey, there you have it, guys. Three stocks to consider on the earnings dip that I also think are AI proof kind of businesses. Let me know if you agree with me um about that or if you disagree. I'd love to hear your thoughts down below. Feel free to share anything else that I might have missed you. Maybe there's other stocks that fell on earnings. Let me know what those are. If you'd like me to make videos about them, I actually have more videos coming for you soon. And if you'd like me to um continue this series, then uh yeah, just let me know. Hit that like button. Let me know down in the comments. Make sure you subscribe cuz I will make more videos like this in the future. But hey, either way, I hope you're uh all doing well. I hope you enjoyed the video and I will catch you in the next one. All right, take care, my friends. Bye-bye.