I Can’t Believe How Cheap These MegaCap Stocks Are Right Now!

Right now, some of the biggest companies in the world appear to be on sale and nobody is paying any attention. I'm talking about stocks that are down 20, 30, even 50% this year alone while the overall market is up almost double digits. And these are names that you know, these are names that you use. And by the end of this video, I'm going to show you how we figure out which ones the market is actually mispricing and which ones deserve to be down. So guys, here's the year-to- date on the S&P. Look at some of these huge numbers here. How many companies here? The top 17 companies are up over 100% year to date. And there's some big names in here. You've got Dell, you've got Micron, you've got Intel, uh, Marll. I mean, you see a lot of consistency here. Heler Packard Enterprise. A lot of stuff here. Now, scroll down. Up 50% or more is 46 companies. Now, guys, what number goes to break even? So, the top 323 companies are in the positive right now on the S&P. That's a huge number, guys. And then you go all the way to the bottom. Who are the biggest losers this year? Well, let's check that out. All of these big ones right here. Up 30% up, down 30% or more. Now, overall, the market is up big this year. You hear it on the news. Market's doing great. But nobody's telling you what happened to some of the best companies in the US. Like I showed you right now, halfway through 2026, there's about 177 stocks in the S&P 500 that are negative on the year. That's over one out of every three companies in the index in the red as we speak. And guys, as I showed you here, these are companies you've heard of, names that you know, and some that you actually use every single day. In fact, the the second to last worst one here is into it. QuickBooks. I use that thing literally every single day. Some others, Tesla's down 12%. Lowe's 13%, Disney 15%, PayPal 18, Microsoft down 19, Netflix down 21, Palanteer down 26%, Service Now 27%, Nike is down 31%, Oracle 32%, Adobe 34%, Lululemon down 42%, and like I just said, into it down 58% as we speak. Nike, a company that every single person watching this video has probably bought something from, is down almost 33% just this year alone. Now, most people see that and they do one of two things. They either panic and say, "I'm staying away from all of it." Or they can get excited and start buying stuff without thinking. Both of those are wrong. So, what I want you to do is ask some simple questions. And this is what I do when I buy from my own process. Do I think this company will be around for the next 10, 20, 30 years? If the answer to that is yes, I ask the next question. Do I think their revenue and profit will be higher over the next 10, 20, 30 years from now than today? If the answer to that question is also yes, it leads to my third and most important question. Can I pay a reasonable price for those companies today to give me an adequate return on my capital? Because when the price drops, but the business is still strong, that's not something to be scared of. that is a gift to us as investors. So, let's look at five of these right now. I'm going to show you exactly how we figure out if the market is handing us an opportunity or a trap. So, let's start with the big one into it. It down 58% this year. More than half of its value gone. Now, if you don't know the name, you definitely know their products. Turboax, QuickBooks, Mailchimp. Millions of people and businesses use these things every single day. So the question is, did something actually break in the business or did the market just crush the price and hand us a gift? Okay, so before we run the numbers on into it, let me break down both sides of this because every stock has a story for why it's great and a story for why it's in trouble. Now, the bull case for in it, the reason someone would want to buy this right now, in it makes more money from software that people pay for every single month. Turboax, QuickBooks, these aren't things that people cancel when times get tough. They're very reasonable priced. You still got to do your taxes and you still got to run your business. Now, yes, they do lose customers, about 1 to two million of them. But here's that here's what's interesting. The customers who stayed, they're going to spend more. The average revenue per customer went up 10%. So, into it basically traded a bunch of people who were paying very little or nothing at all for fewer customers who are paying more. On top of that, they're building AI right now into their products and charging more for it. And after that 56% drop in the stock price, you can buy this company at around 17 times what they're expected to earn. For a business this profitable, that's cheap. Historically cheap. That number used to be a lot higher. Now, here's the bare case. The reason the stock has got crushed. Let's talk about those customers that they lost. In it intentionally dropped about a million free users from Turboax. And on top of that, their overall market share shrank by about 1%. Now, 1% might not sound like a lot. That's roughly 2 million tax filings that they lost to competitors. That's real. And here's where it gets worse. There's a group of about 7 million remaining users on the lower end who are price sensitive, meaning they could leave next. Cheaper options are coming for them. The company also just cut about 17% of its entire workforce. That isn't a little trim. That's a big deal. And then there's a lawsuit. Investors are suing into it right now, claiming that management knew they were losing these customers to cheaper competition and instead of being straight up about it, they talked up AI to cover it up. We don't know how it ends, but it's hanging over the stock. So, you've got both sides. A company that still makes a massive amount of money is getting more out of every customer and looks cheap on paper, but is also shrinking its user base, cutting staff, and fighting a fraud lawsuit. That's exactly why we need to dig into the actual numbers and not just pick a side based on our feelings. So, let's do that right now. So, guys, what is the price of Intel? Well, instead of looking at the stock price, I want you to be a better investor. I want you to look at the market cap. That is the price of the stock. 78.31 billion. Next, I look at enterprise value, $88.5 billion. What's the difference? The difference here is $10 billion. That is essentially their net debt. Now, that sounds like a lot of money, but this company generates $7.76 billion last year in free cash flow. And their average over the last 5 years was 5.5 billion. So, they can easily afford this debt. Imagine you after all your expenses, after everything, you're still able to save $100,000 a year and all of your debt combined is is less than $200,000. 150,000. That's the equivalent there. you would be in a great position financially. Next, I look at returns on capital getting better 10 and a quarter percent for the last five years, 12 and a half percent. This is a quality metric for the most part. This says the company does a good job of managing the money that flows through its business. We want this kind of metric because we want to also pay premium. If you go back 10 years, this number is actually over 30%. Okay, a couple other things. profit margin staying about the same and consistent over the last 10 years, which is great. What's confusing to me is they have such a high gross margin. Every extra unit they sell is almost 80% profit before overhead and taxes. So, the fact that it's so high, but profit margin isn't moving up a ton. It is almost 22%. But it's not like it's We see some companies where it's 30 to 33 to 36%. What this tells me is as time goes on, they keep their overhead high. Whatever reason that may be, it's there. Next guys, it's selling for 10 times free cash flow. This is where I get a little confused. It's selling for 17 times earnings, but the free cash flow is greater than the earnings, which is not a common thing, but we tend to see it in these software as a service businesses, the SAS businesses. Most other investors out there are going to focus on net income. We focus on free cash flow. And I look at this going, okay, maybe people are missing this right now. This is a company that is selling for a cheap 10% yield on its cash flow. The typical company is going to sell for a typical good company with high returns on capital, 20 times free cash flow. So, this might be a major discount. That's what we're here to see. Okay. Next, we go to our eight pillars. Now, guys, we talked about the free cash flow being greater than their earnings. That is why their 5year PE is an X. So, I just ignore this because I'm really care most about this one. Everything else is a check mark. Um, now, am I blown away by some of these numbers? Not necessarily. I'm actually confused by this. If I had a company that I believed in that was selling for 10 times free cash flow and I thought it was cheap, I'd be spending every dollar I could buying back shares. One thing I would stop is the stupid dividend. Now, a lot of people watching might go, "Why would you stop the dividend?" because you're tax inefficiently giving money back to investors. The better way to reward investors is buy back cheap shares. Give them more ownership of the business. So, as an example, for those of you who are new, if a company has 10 shares outstanding and you own one, you own 10% of the business. If they buy back two shares, you now still own one out of eight shares. You've gone from 10% of the business to 12 a.5% of the business just by sitting back and letting the company operate. That's what I like about this. We talked about low debt. Great metric here. Cash flow is up over the last 5 years. Net income is up. Revenue is up, guys. A lot of great metrics here. But again, what we're buying is the future, not the past. So, if this is a declining business or a business that's going to get wiped out because of AI, yeah, you wouldn't want to own it necessarily. However, I don't think that's necessarily the case all the time. Now, I threw a lot of data at you. There's a lot of data on the screen. If you feel overwhelmed, I get it. Every single person who's ever been a successful investor has felt overwhelmed. What I'm asking you do to do is charge through that wall and get better. And it's not as hard as you may think. And to make it even easier, I created an absolutely free key metric PDF. Click the link below or in our first pin comment. Download the PDF right now. Absolutely free. We'll be speaking the same language. you'll get a lot more knowledgeable and you'll be able to understand much more about companies in a very short period of time. So, let's go check out what the analysts think about into it. All right. Well, analysts aren't as negative as the rest of the market. $23 per share this year in profit, growing to almost $40 over the next four years. Guys, double-digit growth every single year. That to me tells me it's a premium business. They could be wrong, though. What about revenue? Well, 21.66 billion growing to 45.6 over the next seven years. That is over 10% growth every single year. That's incredible. Doesn't sound like a dying business to me. But again, analysts were also the people during the dot phase saying that every business that had a do attached to it is worth a ton of money. So, I do want to remind you of that. So, we have a little bit of story, a little bit of numbers. We're going to put them together to sit there and see, is this company worth more investigation. How do we do that? Well, we use our stock analyzer tool. This is the tool that we use to make assumptions about the future of a company because that's what we're paying for. And it'll tell us based on our assumptions what's the right price to pay for the company, not including the balance sheet. But we've already confirmed that in its balance sheet is pretty solid just based on cash flow and debt. So, here are my 10-year assumptions on into it. I did four, seven, and 10% revenue growth. I did profit and free cash flow margin. Remember, profit margin is a lot lower historically, so I'm just going to ignore this. I'll still put it up here, but I put in 28, 30, and 32% free cash flow. But guys, my highest number was what they did in the last 10 years. So, this could be very, very low. This could be me being conservative and just saying,"Well, let's say the business is a little bit hit by AI and they have to lower their margins a bit." I went really conservative here. Next, what PE and price of free cash flow would I assign to the company 10 years from now? Well, remember the average in the market overall is 15 or 16 over long periods of time. But you need to pay a premium for quality businesses. Is in it a quality business? Well, high returns on capital. And if you ask a 100 accountants what's the number one software that their clients use for operating their businesses, I'm willing to bet they're going to say QuickBooks. So I look at that saying that's probably a strangle hold in that market that's very solid. So I put an 18, 21, and 24. And then finally guys, what I do for the videos is a 9% return. This is no margin of safety. It's an intrinsic value return. But for you and I, if we're going to buy an individual stock, you need a higher return than the market return. I do this here just to find out what's the intrinsic value. And the other thing is your desired return and my desired return are going to be very different based on our personal situations and our comfort and understanding of an individual company. So I have these assumptions in I hit the analyze button. The stock is currently at 283. This is why I'm intrigued. I have a low price of 400, high price of 8.66, middle price of 5.83. If I pay today's price of 283, and all of my middle assumptions occur, I can expect a 19.5% return on my money, assuming everything else, the balance sheet stays the same and stays very good. So, am I right on into it? I don't know. But I will tell you that if I have 20 or 30 companies like this, I'm probably going to do well over a 10-year period of time. Okay, next up, stock number two, Adobe. This is a company I own. Never buy a company because I or anybody on the internet has it. We are here to teach a process not to give stock tips. I cannot reiterate that enough. It is down 34% this year. And this is one of those companies that's basically everywhere and you might not even realize it. They have Photoshop. They have Acrobat. If you've ever owned a opened a PDF, that's probably Adobe. They have their hands in everything creative and business related. So, a 34% drop on top of the drop from their all-time high. That's a huge move for a company like this. Let's look at both sides. The bullcase. Why would someone want to buy this? You hear a lot of people say that AI is going to kill Adobe. Companies like Canva and Midjourney and OpenAI are going to eat their lunch. But here's what's funny. Adobe's own AI product is actually growing like crazy. They built something called Firefly and it's bringing in close to $300 million a year right now. That number is growing about 50% every single quarter. On the business side, it's growing even faster, four times bigger than it was a year ago. So, the company everyone says is going to get disrupted by AI is actually making a ton of money from AI. I want to remind people Adobe has actually partnered with Anthropic and and Open AI to be into claude and chat GPT. That's really important to remember. When they say these companies going to replace a Adobe, those companies just partner with Adobe to make Adobe part of their system. The rest of the business still a machine. Last quarter, Adobe brought in $6.6 billion in revenue. That is up 13% from a year ago. They beat what Wall Street expected again. That's five quarters in a row they've done that. And they're buying back their own stock aggressively, 8.5 million shares. And when a company buys back that much of its own stock, they're telling you what they think that they think the price is low. And after this 34% drop, the stock is trading at a historically cheap multiple. Compared to other companies, other software companies, Adobe looks like a bargain right now, at least on paper. Now, the bare case, and this one's got a few layers. First, the people running the company are leaving. The CEO who built Adobe into what it is today is stepping back. He's moving into a board chair role. and the CFO just left the company out of nowhere in the middle of June. When the top two leaders of a company both exit around the same time, that makes people nervous. And on top of that, insiders have been selling the stock. That is not a good look. Second, Adobe is giving their product away for free to a lot of new users. They basically double their user base from 50 million to 90 million. Sounds great, right? But here's the catch. Those us new users aren't paying full price. Adobe is doing this to compete with cheaper AI tools and they've already told investors this means they cannot raise prices right now. So, they're growing users but slowing down the money those users bring in. That is a trade-off and it might take a while to pay itself off. And third, underneath all those strong headline numbers, there's some stuff that doesn't look as good. Last quarter, they took a $70 million write down on an old part of the business. They also set aside 30 million for a legal issue. And the growth in their core subscription business, the thing that actually drives the company is slowing down. That's what the market's reacting to. But remember, the growth is slowing. And those two 70 and $30 million charges, they're 100 million bucks. The company generated over $10 billion in free cash for last year. So, you've got a company that's making more money than ever, growing its AI business fast, and trading at a cheap price, but losing leadership, giving product away for free, and seeing its core business growth slow down. That's why we don't just look at the surface. Let's dig into the numbers and see what's really there. So, guys, like I said, the stock price is $89 billion. Ready for this? $102 billion enterprise value. That's a $13 billion difference essentially of debt. Look at this free cash flow. 10.3 billion last year, 8 billion a year for the last 5 years. It's even better than into it. Even better. Next up, return on invested capital. Better than into it. 36% last year, 26% a year for the last five years. It's selling for 8.7 times free cash flow. So, it's basically being sold right now at a multiple that's basically banking on this company probably a decline being a declining business. If a company's declining, you need to get a very low multiple to get your return. You've got to get your return that way. Now, look at this consistent profit margin 28% give or take with an even higher gross margin than into it 89%. And look at this revenue growth. 11% a year in the last three years, guys. In the last three years, the AI world took over and they're still growing 11% per year. 11% per year, even with the AI world starting to take over. Do I think it might be an overreaction? I kind of do think that. Okay, let's go to our And by the way, our our community members have it as a buy right now, but that's our community members, and they don't always agree on things that we talk about. Eight pillars. I'm not shocked here. This is an eight pillar thriller. Everything is a check mark. And I love the fact that they're buying back a lot of shares. Let's see how much they're buying back quarter to quarter. Let's pull up our nice little chart that's exclusive to our software. Look at that. As the stock has fallen, because remember the stock was, let me pull this up. The stock was $700 in 2021 and it keeps on declining. So, let's go pull up these share counts. Look at this. Just declining and declining. and they're just using their money to buy back cheap shares and they're not paying a dividend. So, they're taking that cash and doing a great thing. I would love it if the stock stayed this low for the next seven or eight years and they just bought back a ton of shares. So, guys, consider they bought back 25% of their shares if since 2016. But here's what I love. They weren't buying back a lot when the stock was high. They started buying back when the stock fell. That's the sign to me of a company that understands if we're cheap, we buy back our shares. I actually just got tingles from that one because that's a very rare thing. I swear to God I did. So, let's look at analyst estimates here. Well, for a company that a lot of people think is going to zero again, here's what the analysts think. $24 per share in profit this year going to $45 over the next seven years. And then revenue growing from 26 billion to 46 billion over the next seven years as well. So not quite the the uh the 10% growth level of into it but still pretty solid. So again let's do our stock analyzer tool. So guys increasing returns on capital 3 6 and 9% revenue growth free cash flow 3740 and 43. What PE and price of free cash flow 10 years from now I I did the same thing 1821 and 24 and again my 9% desired return. The stock is at $222 per share. I have a low price of 400, high price of $8.90, middle price of 600 for a potential return of 24% based on my middle assumptions. Again, guys, that sounds exciting, but remember that assumes that the market assigns the same PE 10 years from now. It's really important that you understand that when you buy a good company in the long run, it will pay off if your assumptions are reasonably close and you have ample margin of safety. For me personally, I find this to be enough margin of safety. But I want to remind everybody when I buy a stock, I expect to fall even further. That's why we're teaching the process so you are comfortable because it takes a certain kind of stomach and understanding to be able to buy a stock as it falls. All right, guys. Now, this one's interesting. It is Netflix. Netflix down 21%. And I know what you're thinking. Wait, isn't Netflix doing great? Everyone I know has Netflix, and you're right. So, then why is a stock down over 20%. That's exactly the kind of question we need to be asking you. So, let's share both sides of the story. First, the bullcase. Netflix is turning into a cash machine, and I don't mean that loosely. The company expects to bring in around 12.5 billion dollars in free cash flow this year. That is real money left over after they pay for all their capbacks, all their expenses, and it shows the technology, all of it. That's a big deal. Now, here's the part people don't know about it. Netflix has an adup supported plan right now, the cheaper one that you've probably seen, and it's taking off. Over 60% of new signups in their biggest markets are choosing that plan. They are on track to double their ad revenue this year at about $3 billion. So Netflix isn't just a subscription company anymore. They're becoming an advertising company as well. And that's a whole new stream of money that did not exist a couple of years ago. On top of that, they keep raising prices and people keep on paying. They've rolled out price increases in multiple countries and the subscribers are not leaving. When a company can charge you more and you don't cancel, that tells you something about how strong the product is. Revenue this year is expected to come in upwards of $52 billion. That is huge. So from a business standpoint, Netflix is running really well right now. Now for the bare case, and it's worth hearing out. The first issue is what people are actually watching, or more specifically, what they are not watching. Netflix hasn't had a huge breakout hit in a while. The kind of show that everybody's talking about at work the next day. And that matters because when people aren't watching as much, they start thinking about whether they really need to keep paying. Viewership per user is slipping, their share of total TV time is going down. And the big question with those cheaper ad tier subscribers is, do they stick around as long as the people paying full price? We have no idea yet. It's too new. Second, the competition is not slowing down. Disney, Apple, Amazon, they are all spending billions on their own streaming platforms. And that forces Netflix to keep spending more and more just to stay ahead. That content bill doesn't go down. It goes up every single year. And third, Netflix now has over 300 million subscribers worldwide. That's incredible. But when you're already that big, where does the next wave of growth come from? Some people look at the number and say the easy growth is over. And if growth slows down, it gets really hard to justify paying a premium price for the stock. And I could not agree with more. So, you've got a company printing cash, building a new brand new ad business, and raising prices without losing people, but also struggling to make hit content, spending more to compete, and running out of easy room to grow. So, let's get in the numbers and see which side of this the data supports. $316 billion price tag, $333 billion enterprise value, $17 billion difference with 12 billion in free cash flow last year. So, another company with reasonable levels of debt. I like this about so many companies nowadays. They have much more reasonable levels of debt. Now, look at how much higher their free cash flow is last year than the last 5-year average, over double, which is great. Now, their net income is actually higher than their free cash flow. This has been the case for a while. At one point, their net income was 10 times higher than their free cash flow. And that's when I was like, listen, I don't understand that. I'm not willing to go spend time to learn it. And it's closed the gap there. So, I like that about Netflix. All right, great returns on capital getting better. Almost 20% last year. And look at this. Their gross profit is only 49% which is lower than the other companies. But look at their profit. 17% a year for the last 10 years. 20% a year for the last five, 28% last year alone. Increasing profit. Very little in acquisitions. And look at this growth rate for revenue. 13% for the last three years, 12% for the last five, 21% for the last 10. Guys, I personally believe that me Netflix is the number one streaming service. That is my opinion. Our community members have it as a hold currently. But let's see what the eight pillars tell us. So guys, we have an expensive PE and price of free cash flow, but I want to remind you their profit and free cash flow in the last one year is up a lot versus their 5year average. So this is kind of a skewed number. So even though it matters, I'm not as worried about this. The question is, can they continue to grow their profit? Well, let's see what analysts think about it. Analysts think their profit's going to basically double over the next 7 years from 366 to 720. That's about 10% growth per year. And then revenue growing from 52 billion to 96 billion. Not quite double, but again over the next seven years. So there's still a lot of runway for them in my opinion. So let's go put it in stock analyzer and do this. Now guys, I want to remind everybody I don't make a buy decision based on stock analyzer. I use stock analyzer to determine should I go spend more time or not on it? And the first three the first two companies we did told me, hey, if I don't own the stock, if I didn't know more, go do more research because it's worth the time. So I did a 10-year analysis. I put six, eight, and 10% revenue growth. Actually, it's higher than analysts are expecting. So, if you feel more comfortable going a little bit lower, let's start with four, seven, and 10. We'll do it that way. Next, profit margin and free cash flow. I did 20, 23, and 26. But keep in mind, last year, they did higher than my middle assumptions. In fact, the profit margin was higher than my highest assumption. I could be too conservative here. If they keep growing that profit and get it to 30%. Maybe that works out well for them. Next, what PE do I assign 10 years from now? Streaming is a relatively new business. I'm going to give them the benefit that they'll be the leading streaming company 10 years from now. So, I'm putting 2023 and 26, especially because their returns on capital keep getting better, higher quality business. And finally, my 9% desired return. The stock is currently at $73 a share. I hit the analyze button. I have a low price of 43, high price of 108, middle price of 68. It means based on my middle assumptions, at the current price, I'm expecting an 8% return. So to me, even though this is red, it's close enough where I go, hey, I want to be able to pull the trigger at some point. So what did I do? I added to my watch list of 55. When it hits 55, then I will get notified by our software. I will get notified via email and on my app to say, "Paul, go take a look at this company." That's going to save me time in the meantime. There's no reason to fall in love with something that's not close to your price. That's really, really important to understand. Okay, let's look at Disney. Down 15% year to date, and Disney is one of those companies where everybody has an opinion. People either love it or hate it. So, let's go over the bull and bear cases. First off, the bull case, the obvious. Nobody on the planet has characters and stories like Disney does. Nobody. And it's not just the classic characters. They have Marvel. They have Star Wars, Pixar, Frozen. And this isn't just about movies. Every time Disney releases a big film, they make money on the movie, then they make money on the toys, then it goes on Disney Plus, and then it shows up at theme parks. One franchise feeds everything, and it just keeps on working. Toy Story 5 had a massive global opening in June. That machine ain't broken. Now, here's the part that surprised a lot of people. Disney's streaming business is actually making money. Now, for years, it was losing billions. That was the big knock on Disney that they were burning cash trying to compete with Netflix. But they've turned that around. They've turned the corner. They raised prices. They added a cheaper plan with ads. And they got subscriber numbers up. It is profitable. That is a big deal. And the company is putting its money where its mouth is. Disney is planning to buy back at least $8 billion of its own stock this year. They're expecting double-digit earnings growth and after this 15% drop, the stock is cheaper than it normally is. So on paper, this looks pretty good. Now for the bare case, and it's a real debate. First, one of the biggest banks on Wall Street, Wells Fargo, came and said something wild. They said Disney stock could go up 40% if the company just got out of streaming entirely. Just quit. stop trying to compete with Netflix and YouTube and just go back to licensing their content to their platform. Their argument is that Disney can't win a volume war against Netflix, which has 300 million subscribers, or YouTube, which basically everyone has. That is a bold statement, and it tells you that not everyone believes the streaming turnaround is going to last. Second, Disney is spending a massive amount of money right now, about $60 billion, on theme parks and cruise ships. That sounds exciting, but here's a concern. The return they get on that money might not be as good as that they get from their movies and TV shows. You're locking up $60 billion in physical stuff, buildings, ships, rides, and hoping that people keep showing up. That is a big bet. And third, this is the one that could sneak up on everybody. Disney's parks and cruises are not things people need. They're things people want and they're expensive. So when money gets tight, when groceries go up, when rent goes up, if there's a recession, a family trip to Disney World is one of the first thing that gets cut. So if that economy does slow down, Disney feels it more than most companies because their biggest business depends on people having extra money to spend. So let's get in the numbers and see what the data says. So guys, well, Disney company is a $170 billion business with a $250 billion enterprise value. That's a lot of debt. That is 85 billion. And right now, their free cash flow is building back up, but that's a lot of debt for a company like this. In their defense, they've got a lot of great assets. They've got these these theme parks that are very valuable pieces of real estate. They've got their library of characters and movies, very valuable. Do I still like that debt? Not necessarily. But recently, they probably take on more debt than they'd like. Now, their earnings are a lot higher than their free cash flow. Their returns on capital are low. Their revenue growth is low. Their profit margin is making a comeback here. Making a comeback since COVID. So, they're at 11.5% now. Their 10-year average was 8.45, which includes their 5-year average of 6.44. This is about a 10 or 12% profit margin business based on history in my opinion. So, let's go to the eight pillars. This is going to be ugly. All right, not as bad as I thought. They bought back a few shares. Net income is up. Revenue is up. Cash flow is up. Everything else is an X. Like I said, the uh the debt levels are an X. Returns on capital are cheap are low. I mean, which I don't like very much. So, let's go to analyst estimates. Now, analysts see a lot of growth here in the earnings per share, but is it enough here? It's going from $7 to 1138 over the next seven years. Let's look at it this way. If you assign a 20 PE to Disney, it makes it a $230 company roughly. Now, remember, I'm an owner of Disney. Don't buy it because I have it. Now, let's take a look at revenue growth here from 102 billion to 128 billion. Not a lot of growth. Low single digits, guys. You got to pay a good price for this company. Now I think people are being a little pessimistic. I put in three, five, and 7% revenue growth. For profit margin and free cash flow, I did 8, 10, and 12, which is still that 10 number is still below their pre-COVID average. Next guys, this is a moat business. If I gave you $200 billion today and said compete with Disney, you would have a hard time. I don't think you'd be able to replace Disney. That's where I look at it saying this deserves a premium. I put in 20 23 and 26 and I could understand a higher PE and I could also understand a lower PE but finally my 9% desired return. This is very important that we focus on that intrinsic value. Now you've seen me run the stock analyzer a few times. That's not something I just use for YouTube. This is the actual tool that I and our community members use every single day to figure out what a stock is worth before they buy it. A lot less guessing. No more buying something because someone on the internet told you to and you see the stock price go up. You make your own assumptions. You plug it in. You see what it's worth and then you decide. This puts the power into your hands. But here's the part that surprises people. It's not just me in there. There's a whole community of thousands of people doing this together and they catch stuff early. Let me give you a real example. One of our analysts, Dalton, flagged Micron inside of our community when it was trading under $90 a share. He broke down the numbers. He showed the value before anyone else was talking about it. The stock ran to over $1,000 per share. Guys, this is what happens when you actually do the work instead of chasing headlines cuz Micron was not the hype hot stock it was when Dalton was talking about it. And you're not sitting in the community alone figuring stuff out by yourself. We do things together. We go live. You can ask questions in real time. Every single day, there are people in there learning and getting better at this right alongside you. Now, one more thing. We've got a brand new AI analysis tool about to drop. And our members get it first before anyone else gets to touch it. So, if you want that in your hands the second it's ready, you want to be inside the community right now. And guys, if I asked you what that was worth to you, what was it? Would it be worth to you to have the tools and the community you need to get better every single day, every single month, every single year in investing? If I asked you for a dollar today and said, "I'll give you access to that for the day." Would you do it? Of course you would. And that's what it costs. $7 for 7 days to try it out. That's less than even going to McDonald's to get coffee. You get the stock analyzer, you get the community, you get exclusive content, you get all the live streams, you get everything. So, click the link in the description below or in the first pinned comment and come try it. I will see you in the community. So guys, we hit the analyze button. The stock is at 95. I have a low price of 80, high price of 200, middle price of 130. Guys, it's showing a 13% return based on my middle assumptions. Now, I want to remind everybody Disney stock goes up and down. It was as high as 180 after COVID. That that makes it a very different proposition than being at 85 or 80. The same company, but different potential returns. and whether it's an investment or not. Don't attach yourself to the story only. The fifth and most important tenant of our principal driven investing is a great story becomes a bad investment if you pay the wrong price. All right, let's look at Lowe's. Down 13%. Now, compared to the others we just looked at, 13% might not sound like a lot, but here's the thing. Lowe's is a very different kind of business than the tech names we just went through. This is a company that makes money when people fix up their homes. So the question is a little different here. Is the price drop telling us something about the economy or is this just a solid business having a rough year? So the full case here's what Lowe's has been doing that most people don't see. They've been buying up companies that serve professional contractors. Not the weekend DIY person fixing a leaky faucet. I'm talking about the contractors who show up to your house with a crew, spend tens of thousands of dollars on materials. That is a much bigger customer. and Lowe's has been quietly positioning itself to grab more of that business. That is a very smart long-term move. Here's the big one. The housing market is basically frozen right now. Mortgage rates are high. People aren't moving. And when people don't move, they don't renovate. But that demand doesn't disappear. It just gets pushed back further. The second rates start to come down. There's going to be a wave of people buying homes, fixing up homes, and spending money in places like Lowe's. And Lowe's will be sitting there waiting. And guys, we don't even need rates to go down. We just need people to be accustomed to the rates. And even while business is slow, Lowe's is still printing cash. They're using that cash to buy back their own stock and pay a dividend. And this is not something new. Lowe's has been raising its dividend for decades. It's what they call a dividend king. You're getting paid about 2 and a.5% a year just to hold on to it. Now, here's the bare case, and it all comes down to one word, timing. The entire bull case depends on the housing market thawing out. And right now it has not. Mortgage rates are still high. People aren't accustomed to that yet. People aren't buying or selling homes like they used to. And until that changes, lows may be stuck in a slow lane. If rates stay this high through 2027, this stock could stay flat or go lower for long term just based on those fundamentals. That is real. You have to be honest about that. Second, these contractor companies that Lowe's bought, they cost money to bring into the business and right now that's eating into their profit margins. It is not a permanent problem, but in the short term, their numbers look worse because of it. When you see the margins dip, that's exactly why. And third, this is the same problem we talked about with Disney. When people's budgets get tight, a kitchen remodel is not on top of the list, groceries come first, mortgage comes first, car payment comes first, and Lowe's has already felt this. Their big Memorial Day sale this year was softer than expected. People just aren't spending on the big stuff right now. But here's what's interesting about this bare case. Even with all of that, flat sales, frozen housing market, tighter consumer wallets, Lowe's still grew its earnings per share by almost 5% a year. They did that by buying back stock and running the business efficiently. So, the headlines said that the business is struggling, but underneath it all, they're still finding ways to grow what matters for shareholders. That's what makes this one tricky and interesting for the long run. So, let's get into the actual numbers and see where Lowe's lands. $117 billion market cap, $180 billion enterprise value, a lot of debt, but they have a lot of leases that can contribute to that, guys. 7.65 billion in free cash flow last year, 7.3 for the last 5 years. One thing I like, it's slightly above the net income, which is great. Look at this, guys. Look at these returns on capital. Very high. This is important especially for a company that's opening more stores as time goes on. Very little in acquisitions and actually look at this decline in their revenue growth. Why is that? Well, is this part of the softening of the economy we talk about? I don't know. Home home sales have started to decline in terms of total number of sales. People aren't buying like they used to. When people buy homes, they put money into them. That kind of stuff affects things. The good news is profit margin has stayed pretty solid. So, it's still hovering around the 7 to 8% range and it's currently selling for 15 times free cash flow as they pay a 2 and a4% dividend that eats up $2.5 billion of their free cash flow. So, threw a lot at you here, but Lowe's is a great company. I actually prefer going to Lowe's versus Home Depot. That is my opinion. Now, let's go to the eight pillars. A lot of X's here, guys. Revenue is down, net income's down, cash flow is down. Those are the biggest ones that we go that doesn't sound very good, but it's there. Now, could it be short-term? Let's go look at their revenue in the past. Look at this. During the great recession, revenue was stagnant for several years. Skyrocketed right after COVID. Why? What happened to home? What happened to um interest rates? They plummeted. What did people do? They bought more homes. Then what do they do? Put it in there. So, if you look, take that out. All right. This is a short-term big jump, but the revenue is starting to build itself back up. That's what I want you focusing on. That's what makes these charts so useful. You can look at these charts and see what's going on over and over. And guys, they're buying back 15% of their shares in the last 5 years. Let's see that. Let's see how it's going here. So, it seems like it slowed down quite a bit. Huh. That's interesting because the stock is down. Let's see. This is 2023, so three years ago. Let's see how the stock has done the last three years. The last five years. Okay. So, the stock is about even. So, I get maybe it surged a little bit. They didn't do that. I understand that. All right. Let's go to analyst estimates here. Well, analysts are optimistic. Doubling their profit from 12 to 24 over the next seven years. That's 10% growth in earnings for the next seven years. And revenue only growing from 87 to 120 billion over the next eight years. That's not a lot of growth. That's low to mid single digits. So you got to factor that in in our stock analyzer. So guys, here's our stock analyzer 10-year assumptions. I think inflation will definitely help a company like this because as inflation's higher, real estate prices are higher, they can charge more and the fluctuation of different commodity prices. So two and a half, four, five and a half% revenue growth for the next 10 years. Profit margin, guys. I think I'm conservative here. 6 and 1/2, 7 and 1/2, 8 and a half. PE, I also think I'm conservative here. 16, 19, and 22. These are really high returns on capital. This is a strong business. I I I believe this actually, you know what? I'm going to go higher on this one. I'd be willing to pay more for this one. It's not going to affect it that much, but I'm still going to do it. And then finally, my 9% no margin of safety return. I hit the analyze button. The stock's currently at 209. I have a low price of 160, high price of 325, middle price of 233 with a 10.5% potential return. So guys, for me, as you can tell, I have in my watch list at 140 to take a deeper look at it. So guys, that's five stocks. Some of them look like real opportunities, some of them not so much. And that's the whole point. You don't need to chase everything. You don't just need to buy something because the price dropped. Just like you don't buy because the price is up. You do the work. Now, if you want to keep going, I just put out a video breaking down the exact stocks that I'm buying right now and how I'm finding value in this market. It is the perfect next step after what we just did together. So, click it. It's on your screen. I'll see you in there. Thank you for your time.