I'm QUIETLY Buying These 3 Stocks Right Now

There are three stocks that I'm looking to buy before May ends. And today I'm going to show you exactly what they are. First up, Adobe. Guys, if you've ever edited a photo, signed a PDF on your computer, or watched a professionally edited video, there's a very high chance that Adobe software is involved. Let me give you the three main products so you can picture it. Photoshop is a software people use to edit and retouch photos. It has been the industry standard for decades. Premiere Pro is how professional video editors cut and put together videos. If you watch a movie, a commercial, or even a YouTube video that looks polished and professional, it was probably made in Premiere. And then there's Acrobat. This is how people create, share, and sign PDF documents. So, here's what makes the business model so powerful. Adobe does not sell you the software once. They charge a monthly subscription through Creative Cloud every single month. Millions of creative professionals around the world pay Adobe to keep using those tools. And once your entire workflow is built around Adobe, your files, your team, your habits, switching to something else is a massive headache. Most people are just going to keep on paying. But not only because it's a hard move away, this stuff is really good. And this is what investors call a sticky business. Now, the stock is down massively, well over 50% from its highs because the market is afraid that artificial intelligence will replace creative software. But Adobe has built their own AI tool called Firefly directly into Photoshop using AI to make their products more powerful, not obsolete. The free cash flow keeps on growing. The revenue keeps on growing. The business has not broken. The stock price has. That gap is exactly what I'm looking for. So guys, let's pull up Adobe. Now, I want everybody to know every stock that we're talking about in this video, I currently own, but never buy a company because I or somebody else on the internet or even Warren Buffett owns it. We are here to teach a process. Okay, so Adobe is now $104 billion market cap business. That's the actual price of the company, not the share price. This is if you bought every share outstanding. Now, enterprise value is 115 billion. So this 11 billion difference between market cap and enterprise value is essentially their debt. Okay guys, they did 10.3 billion in free cash flow last year. In the last five years, they've done eight billion a year. Guys, they can pay off pretty much all their debt in a little over a year of their operating business. And guys, for a company that's dying, $8 billion a year in free cash flow for the last five years is still growing to 10.3. Where's the death there? They're talking about 10 or 11% revenue growth year-over-year. Where's the death there? Is it as good as it once was? Maybe not. But remember, software as a service does so well because now in the past you had to buy a CD. You install the CD, you get no other updates. So if you want a new version, you got to go buy another CD. Buy another version. With software as a service doing the monthly subscription, you now get constant updates in the software. You don't have to worry about what's new out there. It automatically comes to you. That's the reason the premium is worth it. Okay guys, couple things. Look at this. 10 times free cash flow. 10. If this thing goes any further, it's gonna be in singledigit free cash flow multiple. That's incredible. You're buying a growing business. You're buying a high moat business with eight with 90% margins. You're buying it at 9 or 10 times earnings. That's incredible. Absolutely incredible. Um price to sales ratio is 4.25. This is a great metric to look at to compare to other companies. Company like Microsofts and Google are like 8 to 10 times sales. Now again, what's the story behind Adobe right now? Well, the business is bad. AI is gonna replace it maybe. But I look at this going, damn, you know, it reminds me a lot of Microsoft back in 2012 when people were telling me it was a dead company. I'm like, then why does their revenue keep going up if they're so dead? Now, guys, I knew I threw a lot at you guys. It might feel overwhelming, especially if you're new to this channel. Don't worry, it's overwhelming for everyone at some point, myself, Warren Buffett, whoever exists in this world. The question is, do you want to get better? If the answer is that that is yes, keep watching. I'm here to simplify all this. And on top of that, I have an absolutely free PDF. This will allow you to be able to understand all of these metrics. Follow along in the video. That way, we're speaking the same language. It'll explain all of it to you, the equations, everything absolutely free. Click the link in the description below or in our very first pinned comment. Download it. It'll be in your inbox in a matter of seconds. allow you to enjoy every video and to get smarter so you can be the smartest person in your group chat when it comes to investing. Guys, I teach on YouTube for the exact reason I saw so much misinformation out there about people attaching themselves to story and hype and I said, "Nope, there's got to be a way I can teach people the right way to invest." In a couple minutes, guys, I'm going to show you the price I'm going to pay that I'm willing to pay for Adobe. Let's look at our eight pillars here. What is the story on the eight pillars? All eight check marks. Now, doesn't mean you go buy it because it's all eight green check marks. But it's proof. It's here to prove that things are pretty good here. And the thing I love the most, their free cash flow is significantly higher than their net income. That's something very rare because most people focus on net income because that's what determines the PE ratio of 14 and a half or 18 for the last 5 years. But you're now the person who goes, "But free cash flow is everything." So, people aren't giving this company the value it deserves in my opinion. So, now let's go see what analysts think. Now remember, analysts are constantly like the market's against Adobe right now, but analysts think that earnings are going to grow 12 and a half, 13, 9 and 1 half, 5 and a half, and 8% a year for the next four or five years. What about revenue? That dying company, 10%, 9%, 8%, 6%, 7%. Yes, it is slowing down its growth, but it's also a really large company. You shouldn't expect it to grow leaps and bounds all the time. Guys, the way I like to look at things sometimes, the way I look at any investment is, let me go to extremes. Would I pay a dollar for Adobe? Not a dollar per share, a dollar total. Well, of course I would. It makes10 billion dollars. I have to wait 0.00001 seconds to make my money back. Okay. Would I pay a hundred trillion dollars? Well, no. That'd be stupid. Somewhere in the middle, it becomes a really good investment no matter what the story is. And that's what I'm trying to do when I teach on YouTube is to get people to realize that there is a right price to pay for everything. What is the right price? Well, that's why we have stock analyzer tool. We're here to put the story and the numbers together. That is the whole point of this. You make your assumptions about the future and it spits out the price based on your own assumptions on what to do. Now, how do you make good assumptions? Well, that's the art of investing. It's not making anything egregious. That's why I have low, middle, and high assumptions. I want to sit there and make low, middle, and high assumptions about the future. So, the first thing we do is we pick the number of years. I usually pick 10 years of analysis. You can do one to 20. Revenue growth, three, six, and nine%. Guys, I think that's conservative, but I'm happy to do it. Profit margin and free cash flow. Remember, profit margin is low. Free cash flow is higher. I'm going to focus on free cash flow here. Their history is 40, 40, and 42% over the last 1,5 and 10 years. I put 37, 40, and 43. Next, what's the PE I'd put 10 years from now? The price to free cash flow. Well, guys, the market average is 15 to 16. But this is not an average business in my opinion. This is a better business. How do I know that? Look at these returns on capital. Growing 20% a year for the last 10 years, 27% for the last five, 38% for the last one year. This tells me this is a good business that deserves a premium. I has high gross margin. So, I'm not going to do 15 or 16. I'm going to do 18, 21, and 24. And then finally, my desired return of 9% per year. This is no margin of safety. This is not the price I want to pay for it. It's Paul, what is the intrinsic value of this business? What is this business worth? So, I'm sitting here. I hit the analyze button and based on my assumptions, guys, I have a low price of 375 based on free cash flow, a high price of8.44, middle price of 565. What this means based on free cash flow, if my middle assumptions occur, I have a 20% potential discounted cash flow return. That's pretty awesome. Now, does that mean it's for sure? No. The future's unknown. We make mistakes because we're humans. But my thesis for myself is if I can find 30 or 40 companies like this that have these kind of returns, I'm probably going to do pretty well, especially if they're large companies like Adobe. I think Adobe will be around for decades to come. That's why I feel comfortable with this. But remember, don't do anything because I do it. Stock number two, Sprouts Farmers Market. Guys, this is a grocery store chain, but not your typical one. They focus entirely on natural, organic, and health focused food. My biggest problem with them is they don't sell Coke Zero. They have fresh produce. They have vitamins, natural snacks, and organic meats. Think of this as the grocery store for people who read ingredient labels. And here's the key difference from a regular grocery store like Kroger or Albertson's or Publix. Sprouts has smaller, more focused selection built specifically for the healthconscious shoppers. Smaller store footprint means lower costs and their customers tend to be extremely loyal. Once someone finds a store that matches their values, they keep coming back. And what makes Sprouts even more exciting from an investing standpoint is the growth and the margins. Most grocery stores grow extremely slowly, a couple percentage points a year if they're lucky. Sprouts has been delivering some of the best growth numbers in all of retail. Revenue keeps climbing, more stores are opening, and even better, margins are increasing, and they're very strong for the sector. But the trend driving their business, which is people caring more and more about what they eat, is not a fad. It keeps getting stronger. Guys, I have a personal history of this stock that I think is worth sharing. I bought Sprouts when it was trading in the low to mid30s. The stock ran all the way to 170. Now, I had a I did a thing called covered calls. I had shares taken away from me at 165. At the time, I was like, "Ah, crap." Why? Because it drove even higher. It went to as high as 182. And I thought, "Oh my gosh, did I miss out, but I'm like, no, the stock is not worth anywhere close to that." And guys, I got lucky. Since then, the stock has pulled back significantly. But the business has not fallen apart. It keeps posting industry-leading results. The price moved. The business got better. That is a very good situation for companies to be looking at. So, for a principal driven investor, that is a setup that you have to pay attention to and have to sit there and dig deeper on. So, let's go look at some of these key metrics, guys. Here's what I love. Look at these margins. 10-year profit margin is 4.2. 5 years is 4.78. One year is 5.7. The margins keep getting better. And they're putting more Sprouts branded stuff in there. Their current gross profit means every extra unit they sell, how much is profit before text and overhead is 39%. But on their Sprouts brands, it's like 60 to 70%. And as they grow that more and more, guys, I think there's a world in which the profit margin here can be 6 to 8% pretty easily. That's a huge number for a grocery store. What I also love, look at this growth rate. 9% a year for the last 10 years, 7% a year for the last five, 11% for the last three. They have 400 to 500 stores. Their goal is to get to 12 to,400. That's a a lot of potential for the company. And they have great returns on capital. This means as they open more and more of those stores, they are getting a good return on those stores. I think they spend an average of $3.8 million to open a store, I think is the number I remember reading. So, our community members have it as a buy right now. Let's go see what the eight pillars look like. So, the 5year price to free cash flow is a little high. Debt is a little high, but they have they have retail space, which that those leases are are debt. So, I understand why this is. I'm not worried about this so much. And this is pretty close. If this thing falls one more percent, not even one more percent, it's going to be in a check mark here. So, I'm not looking at this going, "Oh my god, this is terrible." This is what I love. Also, the stock has fallen and they're starting to buy back shares. Is this the right price to buy shares back at? We will take a look shortly. Remember, you only want to buy back shares at good price, at low prices, low valuations, not the other way around. So, let's see what analysts think about this company, guys. 583 in profit, growing to $9. That's 9 12 1/2 13 11 9 and 13% earnings per share growth for the next four years. And revenue growth, guys, look at this. 10, 9 and 1/2, 9 and 1/2, 9 and 1/2, 6 and 1/2% revenue growth for a grocery chain. So, let me sit here, go right to stock analyzer tool. Let's pull out Sprouts farmers market. My last time I did assumptions here. So like I said, increasing returns on capital, which I love. Revenue growth, I did 5, seven, and 9% a year for the next 10 years. Profit margin did 5 1/2, 6 and 1/2, and 7 and a half. So guys, if you look at this, I did much higher than they've done before because I think the company can do it. But let's be a little more conservative. Let's go five, six, and 7%. PE, what PE would I sign this business? I put 16, 19, and 22. And honestly guys, I could see better because it's got a lot of potential here, but it's for 10 years down the road. We're going to stick with 16, 19, and 22 and then my 9% desired return. Now, almost 30 years ago, I was chasing hot stocks like everybody else. I was following tips. I was hoping something would stick. And I didn't realize that when I bought a stock, I was buying a piece of business. I was not investing. I was gambling. And I was leaving real money on the table. Money that could have been compounding, growing, and working for me around the clock. buying companies like Sprouts in their early infancy. That's exactly why I built Everything Money. When you coin join Everything Money, you get the software, you get the stock analyzer tool, you get the courses, you get a community of people who are actually building wealth, not guessing at it. This is the moment where casual investors stay broke and serious investors pull ahead. But I'm going to be straight with you. This isn't for everyone. If you're not ready to follow a process, if you want instant gratification, if you don't realize that when you buy a stock, you're buying a piece of a business, don't sign up. If you realize these things make sense and you're sick of not having a process to sit there and help you feel warm and fuzzy at night as you sit there and pick stocks, we're the place for you. If that's for you, start your 7-day trial today. Click the link in the description or in the first pinned comment above. Spots are limited every day, and we don't know how long we're keeping the trial open, so go check it out. But for right here, I hit the analyze button. The stock's currently at 79. Guys, I have a low price of 86, high price of 202, middle price of 135. So, this tells me there's a lot of meat left in this bone with 16.5% potential returns. And I'm glad they're buying back shares at these prices because to me, this is good capital allocation. Now, guys, our third stock today is Builder First Source. The ticker is BLDR. Very different from the first two companies. Builder's First Source supplies the materials that go into building homes. Lumber, windows, doors, wall frames, all that stuff. When a construction company builds a new house, builder's first source is often the company providing all of it. I remember when I first heard about this company and I'd pass houses being built, I'd see the builder's first source like logos on like, you know, inside the garage and all these things. I was like, "Oh, I never even noticed that before." Not only do they do this, they also pre-cut and preassemble parts of the home before they arrive on the job site, which saves builders time and money. That service makes them far more valuable and harder to replace. They offer value ad products as well as lumber and lumber sheet goods. Builders is at an 8.2 billion market cap, trades at roughly three and a half to four times normalized free cash flow. Builders has made two acquisitions, two major ones, after the great financial crisis. first with ProBuild in 2015 who was the number one player at the time and then BMC in 2021 who was the combination of the three four largest players in the space. Guys, builders now is the combination of the largest homebuilder distribution network and is ch has fundamentally changed from relying on the ups and downs volatility of lumber prices and copper prices to a higher margin more predictable business with a huge runway ahead of it. What I mean by that is there's a lot of growth potential here. There's a huge runway for it to grow. Management is incredibly high quality and compensation plans for those managers align with shareholders targeting performance based on profitability and returns on capital with management even denying themselves their bonus last year after missing profitable targets only slightly. Guys, they could have easily fudged the numbers just a little bit to hit their bonus. Paul Levy has been involved in the business since 1993 and is the chairman of the company today and added to his personal position by 43% last year at $111 per share. Plus, management also announced a $500 million buyback in its most recent earnings and has bought back over 40% of the stock since 2021. Guys, here's why the opportunity exists. United States has a housing shortage of roughly four million homes. Especially with rates being so high and people sitting there stuck in their houses, that gap is going to take time to close. Which means the companies supplying materials to build those homes have a very long runway of demand. There's a lot of pent up demand there that could explode at some point or gradually come out as people become more and more used to having higher rates. Builder First Source is the market leader in this space with the scale, the customer relationships and the operational expertise that smaller competitors cannot match. The stock has pulled back as higher interest rates have slowed construction activity, but the fundamental story has not changed. 4 million homes still need to be built. Builder First Source is sitting right in the middle of that wave. So, let's go through this company here. $ 8.3 billion market cap, generated $860 million in free cash flow, which is a lot lower than its five-year average. But remember what I said earlier, normalized free cash flow. In companies like this where we see a lot of pent-up demand and business has fallen, you can't really punish them saying, "Okay, well that's that that's the new business." I sit there and say it's probably some combination of these two. Net income last year was only 290 million even though they showed 860 million in free cash flow. Guys, its current price is selling for nine and a half times free cash flow. Four and a half times its fiveyear free cash flow. This thing is you got to be patient on the stock though. If you're going to look in this stock further, just realize you're not buying a one-year. You should never buy a one-year company. You sit there and buy this company saying I'm okay owning this for 10 or 20 years. That's very hard to do. I've been very fortunate to be that's the only way in which I think about companies. Let's go look at the eight pillars here. Let's see what kind of garbage this shows. Oh, I'm actually surprised by this. I thought it'd be a lot worse, but we saw net income was down a lot. So, cash flow is up, net income's down. Whatever. Not worried about this at all. Let's see what analysts think. Wow. 611 per share growing to 1025, 30% a year growth. And revenue growth, not much. 15.5 billion growing to 17.5 billion. So, he's going to get a lot of a lot of good um efficiencies and really be able to drive up as they also buy back a ton of shares. when they buy back shares that are cheap. They're sitting there and boosting their per per share profit. And guys, those shares look pretty cheap based on price of free cash flow based on the last 12 months of numbers. So, let's sit here and let's go pull up the last time I did builder first source. Okay, I did revenue growth of 3, six, and 9% for the next 10 years because I think the demand will start to come up a little bit there. I did profit margin of 7, eight, and 9%. And look at the free cash flow. They had years they had five years of 10% a year, 10 years of 7.7. So I think I'm okay here. Now returns on capital in the last one year have been bad. Free cash flow is down a lot, but in the five and 10 years really high, 25 and 30%. So I gave this 15, 18, and 21 times earnings and a 9% desired return. So I hit the analyze button. The stock's currently at 75. Guys, look at this. I have a low price of 145, a high price of 365, a middle price of 230. Guys, I don't know where this thing is going. But again, if I had 30 or 40 companies that looked like this, this is going to be a lot of volatility, though. Like a lot of things, we have to sit there and wait for that pent-up demand to actually come out because people are sitting on their homes for a while. Now guys, if you enjoyed today's video and you want to see a detailed breakdown of seven companies that I picked to beat the Real Magnificent 7 for the next decade to come, we have the perfect video just for you. It has been over a year now, and I can't lie, the results will be a bit shocking. So follow the video on your screen right now to check it out. Thank you for your time.