I Might Sell This Underperforming Stock This Week

Hey everyone and welcome back to another portfolio update for you today. Over the past week, the Couch Investing portfolio went up by 1.39% whereas the S&P was down.34% which means year to date I'm up 39.44% whereas the S&P is up 11.7%. And so in today's video we don't really have that much to talk about. So let's first start off with the technical analysis part of all of it. We'll start off here with a Google Alphabet. A successful bounce from the well close to a support area trying to make its way back to over $350 in my opinion. Still one of the biggest winners out there. Gets a little bit disrespected, but I do think that once Gemini 4 comes out, we're going to see again some momentum with the name. Moving on to one that well doesn't really have that much momentum as of right now. It's not just a problem for that specific name which is Rocket Lab. I think it's a sector issue at the moment. The sector, the space sector is a bit under pressure, which makes sense because well, all of these names have gone up substantially over the past year. Yes, they're all experiencing a big correction right now, but they're also all I wouldn't say undervalued, right? I think they're all quite expensive still, but as I've said over the past couple of weeks, I wouldn't mind seeing Rocket Lab create a solid base around $60, $65 or so, which is exactly what we're seeing happen. As for SoFi, yes, I do think this is again a buy under $17. Definitely definitely not the last time you can buy it under $17, but here you would like to see it go back above $17. try to make it back close to $18 as soon as possible. The recent highs were around $18.90. Yes, maybe intraday we went a bit above it, but right now, yes, it does seem like macro is putting this stock again down for the year and definitely more recently. But as I keep saying time and time again, as long as the business continues to perform well, that's the most important part. Another name here that is again forming a solid base around the support area which is Amazon $253 per share. The theme for me has been over the past couple of weeks big names are definitely the go-to for the future if you feel uncertain about this whole AI wave because these businesses have of course their core business. They're investing a lot in AI, but it does support in this case, in Amazon's case, the cloud business AWS and then some. I think Amazon is one of the biggest winners out there along with a Google, of course. Can't have a video without me talking about Meta. Meta continues to have a lot of momentum. Still undervalued in my opinion. Muse is just the start. I'll talk about Muse more in depth in a bit, but Meta is undervalued. Yes, it's up from the lows. What is it? Around 540, 545 or so. But if you're looking for maybe an entry point because it didn't want to open a position previously, look for maybe a little pull back around 620, 635. But even at today's prices, I view this as an undervalued name. Yes, over the next 12 months or so could go and tackle that $1,000 price tag. As for another name that's a bit under pressure right now, and that's new holding back under $14. You would like this price right here to be the support area and then go back above $14 as soon as possible. But as I've said on X in a post, this is an undervalued name. It's priced as if it's not going to grow a lot. It's not profitable today. Guess what? It's still going to grow a lot and it is already profitable today. Another misunderstood name could be that here as well because it's fintech because there is expansion it is being put under pressure because of some possible short-term issues. The upcoming one which is one I do want to cover in this video a bit more and that's Netflix. Netflix has been again under pressure for quite a while but more recently I think on Friday or so stock was down 5% because of one analyst note they did reduce the price target. The reason is maybe maybe there is less attention that's been paid to Netflix when you look at entertainment time spent that could hurt uh the business. We'll talk more about that in a bit. Nebuse still around the same price as last week. So holding at those levels at 220 223 or so a pullback closer towards 200 as we've seen time and time again does get a bought back up. As for Reddit, as long as Reddit stays above $150, I think the base forming here is fine as well. The name despite seeing mixed messages on the one side, some analysts, some market data suggests that the platform is experiencing momentum or poor growth is going to be there. On the other side, fears of no new AI data licensing deals could hurt the business. And as I've said, one of the big catalyst is getting a renewed AI data licensing deal starting off with Google and then maybe with others as well. If you don't get any deals at all, I do think that's sort of a red flag. Moving on to Axon. Axon keeps going lower and lower, which is why I did buy more shares at the start of the week. I'll show you in a bit. Closed the week at $447, still above a previous support area. if we can see a bounce there back above $500. I think that could bring back the momentum in the stock. But I'm quite happy I got the chance to add a little bit more. Moving on to Marcado Libre. Seemed like this one got a lot of momentum. Tried to go above $2,000 per share. Didn't happen. And then for the last two weeks, it went a bit lower and lower and lower. Right now, we're still sitting above a previous floor. If it can hold this level and then bounce back, we will get back into momentum mode for Marcado Libre. But then again, if you're long-term investors, you should be looking at opportunities to buy the dip on these quality businesses. Uber Uber is one where here as well, I do think that the market is misunderstanding this name. I know there is the camp of the Uber Tesla bulls, pun intended and Whimo and they are going to take the whole market which is why Uber's company is going to go out of business. I don't see that happening anytime soon or even in the future unless those two companies take 90 plus% of the delivery and mobility market around the world. But as of right now, stock is clearly forming a base at around $70 per share. Every other day we have new announcement around the world. AV partnerships being formed, AVs being launched as well in multiple countries and in various cities. Now as for the portfolio itself, we did have some little change here in the rankings. Nebus is still number one, but AMD AMD is now number two close to 10% of the portfolio because the stock kept going up. It's now at $560 per share. So quite the performance there in AMD. So is now number three and despite the underperformance by SoFi year to date, I'm still up 41% on that one. Google is number four. Then we have Meta here at number five and that one is climbing. Wouldn't be surprised and wouldn't be surprised to see this in the top three. We have Rocket Lab at six. Then we have Oscar. Oscar had their investor day. I did talk about Oscar in Friday's video. They did give us new midterm targets for 2029. They think they could reach above $4 in EPS by 2029. You do you do the quick calculation for a forward multiple. Yes, I do think this one is still undervalued. Then we have the local. Yes, the local just like new. Every time you look at it, it's around $14. Micron. Micron is back above $8,000 per share. Rubric back above 100. Palanteer, Uber, New Reddit, Axon, Netflix, Cash, and some shares of Nvidia. And I did buy four extra shares here of Axon at around $442. That was the day after they announced a $1 billion convertible at 0%. I think if you can do this at 0%, why not? Stock was down close to 10%. I said, "Thank you very much." And I've increased here my position. Now, I don't know what the title of this video will be, but I am thinking of replacing a name. And that name, yes, is Netflix. Now, Netflix is the position where I'm down 16% as of right now. That's a loss of $2,430. It's a 2% position for the portfolio. Now, why do I want to replace Netflix? Is it purely because I don't like the underperformance of the name, or is there something else? And what will I replace it by? That's the thing. I'm not looking to sell Netflix to do nothing with the money. I'm looking to sell maybe Netflix because I want to replace it with something else. And that something else is Broadcom. Over the past couple of days, actually over the past week, I've been thinking about Broadcom more and more. That name I've also covered in Friday's video, but I'll cover it again in this video to explain the thinking behind a possible move. Now, Netflix as of right now, the the reason why it's a so-called difficult decision is because on paper, forget about the the underperformance of the stock. That doesn't matter at all. On paper, Netflix, if I didn't have a position, I would look at it and say, "Actually, it's it's it's quite attractive, which is the reason why I actually opened the position in the first place." Trading P 22.6 times, forward 20.7, peg ratio of one. Margin wise quite good. I would say it's still a growing company, but as you can see, as of right now, revenue growth is expected to slow down. It's expected to be 13.3% in fiscal 26, 11.2% fiscal 27, and then 10.1% in fiscal 2028. Now, if we look at free cash flow, we can see the following thing. And of course, all of this is available to you on fiscal.ai, proud partner of the channel. If you want to try it out, there's a link down in the description and in the pin comment. You'll get a 15% off if you use it and new users will get Fiscal Pro for free for the first two weeks. Now, if you look at free cash flow, free cash flow over the next couple of years is expected to outgrow revenue growth. Okay, 36% but that's purely because over the last 12 months, you can see there was an impact on that, which is why we're seeing a big jump for fiscal 26. But then it's 10% fiscal 27. But an acceleration is expected in fiscal 28 17.4%. Looking at pricing PE over the past three years definitely under the average 22.6 times forward PE 20.7 also lower than the average. And then price to free cash flow 23.8 times also quite good. Looking at revenue per employee over the past couple of years and this is quarterly you can see that there wasn't that much growth. It has grown a toon allo growth rate of 2.7%. I would have assumed that this would be a bit more efficient but as of right now that's not the case. Moving on to margins and this is again why it's a more difficult decision because over the past couple of years you can clearly see this over the last 12 months operating margin up and to the right increasingly close to 30%. Free cash flow margin 23% but over the past couple of years has been improving. Gross profit margin also closing in on 50% has been improving. Net profit margin same story here. And then cash from operating activities it's again trending in the right direction going up and to the right. But but when we then compare this with a broadcast. Now I know Broadcom is another name in this whole AI story which of course if the eye story blows up slow down whatever this is another name that could drag down the portfolio and Netflix not so much. But then if we look at the margin profile of a Broadcom, we can see this as well up and to the right. And of course, operating margin as of right now much better 48%. Free cash flow margin also better 44.2%. Gross profit margin 68.8%. Net profit margin 42.9% cash operating activities up and to the right and acceleration in growth $40.6 billion. Now what about pricing? PE ratio is higher. Trading PE 45.7 times compared to close to 64. That's the average. But then again, we had some jumps here. Forward PE, surprisingly enough, it's exactly the same, 20.7 times. Of course, the median here over the past couple of years is a bit a bit higher. 24.8 times. Price to free cash flow also not bad, 22.7 times. And here revenue per employee over the past couple of years has grown by 74% or a compound annual growth rate of 13.9%. But more recently you are seeing this acceleration right you can clearly see this right here and that makes sense. If we look at revenue growth for this fiscal year 65.8% then 63.6% and then 57.2% 2% in fiscal 28 to reach $272 billion. Clearly, clearly a better growth story. What about free cash flow? Same thing. 82% in fiscal 26, 74.3% growth in fiscal 27, then 58.3% growth in fiscal 28 to reach 135.5 billion. And as I've shown you on Friday with the DCF, it is extremely undervalued right now. The company itself, right, the company itself gave us some midterm guidance. And for those that are new here, the DCFS are available to all of you for free. There's a Google Drive in the description and in the pin comment. Based on my assumptions, the probability weighted implied share price today should be $638. 83.3% upside from the price we're at right now. Now yes, my assumptions are for the first two years what management has told us they're expect to double AI semiconductor revenue the first year and then double it again in the second year to reach $230 billion dollar and then yes then the growth rates are coming down which is reflected here in the total revenue growth. Now, the thing with a Broadcom, unlike a Netflix, and by the way, Netflix, yes, is technically also undervalued, should be at around $85 per share. But a Broadcom is clearly a growth story, right? The theme of the portfolio is yes to be focused on growth, to be also focused on mispriced, undervalued names. Like I said, Netflix in my opinion is cheap. It is slightly undervalued. The reason why, and I've said it before, the reason why they went out and looked to buy a studio, a huge portfolio, is because they wanted to have something to reacelerate growth. Yes, you can increase the prices of your subscription, but at one point you would be reaching a price that okay, that's the top, which is why we have the ad supported tiers, which is why we have an advertising business that is growing quite rapidly. Live shows are growing. That's very good for the business. It is still growing, but as of right now, seems like growth might be slowing down. And what's very important in an investing journey is looking at companies where revenue growth is high and can continue to be quite high or well above average for a long time. Because if you're looking at solid growth across the board for a stock, but definitely for a business, revenue growth is extremely important. With Broadcom, we are of course getting an explosion in growth this year, next year, and in two years. That's in my opinion not really baked in, but that's what we know today. Of course, what happens afterwards? I don't think the growth story goes to zero or anywhere close to where Netflix is today or where Netflix could be two years down the line. Which is why yes, I am looking at the portfolio and just because some companies in my portfolio doesn't mean it will never get out of it. Yes, I'm down 16%. But so what? If I believe that Broadcom should be 83% higher than where we're at right now, then who cares if I lost 16% on Netflix? If I can make 83% on Broadcom. Now maybe maybe the market doesn't agree with me. Maybe the market has pulled Broadcom down, right? It's experiencing a draw down of around 25.8% right now. Maybe they're saying, you know what, yes, okay, they're expected to grow quite a lot, but we don't know if that's durable. We don't know if their business can continue to see all of that strength. Remember, big customers of them, OpenAI, Antropic, and of course some hyperscalers. But here, yes, you need to understand what if an OpenAI and entropic, well, they they don't see the growth that they've been expecting. But what what happens with all of their investments? What happens with the commitments to Broadcom? That's a problem. But luckily for Broadcom, there are some other very solid companies that are definitely going to stay customers of that company for the foreseeable future. So I still hold Netflix at the time of recording this video, but maybe by the end of next week might have replaced it with a Broadcom. And yes, you should all maybe thank Tanner for convincing or slightly convincing me to look into Broadcom more. Quickly switching to Meta before ending this video. Meta of course with the launch of Muse which is now available I believe in India, the US and Canada has released what I think is one of the best products out there in this whole AI space. It's a product. I haven't used it, but I've seen plenty of videos and tutorials and things like that to understand how it looks and how it works. It's very easy to use. User interface very, very good. And the most important thing here, you don't need to be a AI genius, coding genius, you name it, to use these types of products. It is meant to be, of course, distributed as fast as possible to their three plus billion users worldwide. Guess what? Free. You don't need a subscription. You can pay, but you don't need for the average Joe out there, the free version, you don't need a subscription will be just fine. And then they're now opening it up, right? Okay. If you want to build a product and connect it to Muse, now is your chance. And honestly, if you are building something, if you already built something, you should do this as fast as possible. Why is that? This is an opportunity for you. They just said this right here. Grow your business with Muse. Reach new customers and give existing ones more ways to use your product. A connector brings what you've built into the everyday task people ask Muse to help with. And we've partnered with Stripe to make accepting payments easy with link. So if you are building something or if you just built something, this is your opportunity to shine and get a lot a lot of traction. And guess what? We even have the CEO of Shopify say this 10 days ago. You should try Meta's Muse app. It's pretty amazing. And then yesterday or two days ago, depending on when you're watching this video, the app just launched in Canada. Now, Shopify CEO Toby is one of the reasons why Shopify is going to stay at the top of the best companies out there because he is at the forefront of all of this AI development. The fact that he is so excited about Muse here, you can definitely see Shopify build a connector or maybe it's already built right now with Muse, Agentic Shopping, Agentic Payments. They want to be there. They want to make sure that Shopify stores are going to appear every time someone asks their agent a question about a product, about something. They want to make sure that Shopify stores are the first ones on that list. And so, yes, if you ask me, Meta's growth story is going to look amazing over the next couple of years. subscriptions are going to grow for Muse for Metawan subscriptions. But then you have the huge impact of savings. They don't need to pay billions of dollars for entropics model. They can use their in-house models. Then with Muse, the take rate every time there is a transaction happening inside that ecosystem, Meta is going to take a small percentage of that. None of it in my opinion is baked into the price of the stock that you're paying today. It's quite interesting that a couple of months ago, Meta was really out of this AI race. According to, of course, Wall Street, we've been talking about Meta quite a lot. This year, just like we've been talking about Google last year, quite a lot. Slowly but surely, we are getting rewarded. All in all, that's about it for me in today's video. See you all in the next one. [music] Bye-bye. >> [music] [music]