Time to CASH OUT! 4 Stocks to SELL Before Earnings!

Everyone and welcome back to another video for today. Late night video. Well, depending on when you're watching this, of course. Two-part series as always. One part was already released talking about maybe names worth picking up before they report the quarterly figures. In this video, we'll talk about names where maybe it's time to wait. Even if it's cheap, maybe it's time to wait or maybe even offload them before they report their quarterly figures. Now, I'll use a couple of examples. Not everything here will be spoonfed, right? Oh, this name is a bad name to have. No, I use a couple of examples as always, just a way of understanding maybe how I'm dealing with things. Maybe things that could help you out, especially in an earning season or even without an earning season, right? Because at the end of the day, we all have a portfolio. Hopefully, most of our names are up, but statistically speaking, we will always have a couple of losers here and there. Earning season in my opinion is always a period where we can start to think about okay maybe we can reallocate some funds right maybe this position is not one for us I'll give some examples from my own portfolio so at least you will understand things from my side and I'll use some examples like Apple like crowd strike and I'll even give let's say Uber although I do own it Uber right now maybe that's the perfect example to start because Uber was of course in the headline on Friday, right? We had the headline that Whimo explores a split with Uber as robo taxi tensions uh deepen and everybody was freaking out. Oh, Uber to zero. Of course, all of the Tesla fanboys, of course, we knew this, right? Although we're talking about Whimo here, which is interesting because in my opinion, Whimo is a way bigger threat and competitor to Uber than Tesla is, but I guess that's not something they want to admit just yet. Also, what I found quite interesting is the only way their thesis works out is if Uber goes down. Well, that's not really a thesis, is it? And so this was the headline which of course sounds very dramatic but when you actually read you will see that it's not something for tomorrow or next week or next month because they write here way has already notified Uber that it plans to enter the market that they're in right now together Austin and Atlanta independently in January 2028 when their contract allows the right healing group said in a statement right right They have an agreement. They have a partnership. So they are going to work together until 2028. And guess what? Maybe right now there are some tensions between well tensions. Every time you hear tensions, that probably means that both of these companies are negotiating, right? Maybe we will continue, maybe we will not continue. What are the things that worked well for us? What are the things that didn't work well for us? Right? They've been blaming each other for poor service and safety issues in the market where they work together. And look, I've said it time and time again. First of all, Uber itself over the past 12 months is down 27.3% now experiencing a draw down of 33.7%. Year-to-day draw down is around 24.2%. Uber and Whimo, by the way, are worth the same. Uber is public, $134 billion. Whimo is private. Apparently, it's also a valuation of close to $130 billion. Now, Whimo does not generate $53 billion in revenue. Whimo does not generate billions of dollars in free cash flow either. Yet, they're valued as the same. Now, people will say, "Yeah, but one is valued for the future, right? Autonomous vehicles, the future." No problem. Is Whimo doing millions of trips a day? Is it doing billions of trips a year? No, it is not. It is not even close. And so whenever I hear this story about, oh, autonomous vehicles this and that will destroy Uber. You will need to replace billions of trips. Billions of trips. When is that going to happen? In 5 years time. Guess what? Uber is expecting to facilitate AV trips in as many as 15 cities globally by the end of 2026. They've built out a pretty big ecosystem hardware platform Lucid, Mercedes-Benz, Rivian Nissan Volkswagen Stellantis. Then you have here self-driving technology partners Avrite BU may mobility neuro Rivian Nvidia Pony AI zuks still way more we write wave fleet management companies right it's not like oh way might leave Uber in 2028 and so the thesis is completely broken no there are many other partners and we're talking about 2028 by 2028 I'm expecting most of these names to have fleets available on the Uber network. Now, with all that said, why am I putting Uber here as an example in the video? Well, because I do own Uber. Uber is cheap and yet I'm saying maybe it is worth waiting. I own a position. You might not own a position, but you might say it's extremely cheap. The report is probably going to be a very good one, very profitable company. Yes, they did announce an acquisition right of delivery hero. But here I'm saying right now price is cheap but sentiment isn't there. Zero momentum with the stock and so it is worth waiting for the earnings report for the earnings call to get more information. Maybe that information might cost you 5 10% or so of upside. But I do think that sometimes it is worth it. It is worth waiting getting the information what you need confirmation and yes you pay for it with the percent that the stock will move on the upside. But look if it's cheap at 65 $66 if it goes up to 7072 $73 it will still be cheap but at least you'll have the information that you want it and then you can make your decision. I'll give another example of a name that I own that right now I've put in so-called a penalty box. It's just a wait andsee story. That's a Netflix also cheap on paper. Good company. I own a position. I'm not willing to add right now because I feel like there's no point in me adding right now because I know that the market is going to wait a quarter or two to get confirmation from the company that things are moving in the right direction. And so for me or the best use of my money it is better to wait. I again I use my own example so you can understand why I'm doing the things that I am doing right now. great companies, very profitable valuation wise, attractive, but but I don't think for me it's time to pile my money into these names, right? because I can buy it. But if it stays at 70 bucks for the next 6 months, then yeah, maybe I should have just parked my money with okay, I don't know which names will go up. But companies with momentum, with growth, with less questions from the market have a higher likelihood of not staying flat for the next 6 months than a company that the market is questioning right now. I hope this makes sense. If not, let me know in the comment section. And that's just the way of uh thinking for me right now. I did the same thing here with shift 4 for example. Shift 4 also a cheap company a cheap company a small company as well. But as you can see year to date it's down close to 22% was down even more went up a bit but here as well it's a company you can clearly see that it is very cheap very very cheap but the market is still waiting for confirmation the global blue acquisition the integration maybe guidance they're looking for confirmation that guidance could be better acceleration of growth the market is asking those questions it's waiting for confirmation And so for me, I could say, okay, maybe I'll use the cash to buy more shares of this cheap company. But as you know, cheap can be cheaper, low can go lower. And so for me, I am of course evolving every single year as an investor. So I'm like, you know what, these names I am putting on the side. I'm saying I have time. We'll see if we get confirmation. If yes, great. Momentum is back with the stock. I'll buy more shares. And if not, then yes, time to cash out. Why not? Who cares? I'm not married to Shift 4. I'm not married to Netflix. I'm not married to Uber either. I'm currently dating them. Friends with benefits, although I I'm I'm yet to see the benefit of it, but we'll have to wait and see. Moving on to another example, a more I guess extreme example. Someone asked me about Apple in the previous video. And by the way, if you enjoy this type of videos, you know what to do. Hit all the buttons. We really appreciate that. If you want to support me even further, do check out the link down in the description and in the pin comment with the top 10 best stocks to buy now or go to full.com/cosinvestor. Muchas gracias. Now, Apple is in a very, very interesting situation here because as you can see over the past year, it's up 56%. Year to date, it's up 23.1% very close to all-time highs, which you would say doesn't make any sense, right? It doesn't make any sense. It's again close to being the most valuable company on the planet again. But you look at the multiples here and you're like this doesn't make any sense. Trading PE 40.3 times, forward PE 36.5 times. But then then we go and have a look at the average. So we can see from a PE perspective, this was trading at an average of 30.5 times. forward be an average here of 27.7 times. So we are much higher right now. Price to free cash flow price to free cash flow forward 34.3 times average 26.5 times. Price to sales we're at 10.8 average 7.6 forward price to sales close to 10 average 7.2. EV2 sales is also approximately the same. And so with an Apple, you're asking yourself, okay, it is close to all-time highs. Yes, I understand free cash flow wise, no issues because capex, I mean capex for this company. If we go and look at the expectations for Apple with regards to capex, by the way, all of this, of course, is available to you on fiscal.ai, there's a link down in the description and in the pin comment. If you use my link, you'll get 15% off. amazing platform especially during the earning season everything gets uploaded to the platform extremely extremely quickly. Now if you look at capex expectations $3.3 billion for the quarter then 3.3 again 3.7 or so. So you can see that Apple the reason why it's up so much is because there is no stress about oh are they overbuilding or or not. No, Apple isn't building data centers. They probably have some data centers, but Apple doesn't have $190 billion in capex, $200 billion in capex or anything like it. And that's why the market is giving this company a premium right now because, you know, free cash flow is going to be there. You know, they're going to buy back an insane amount of shares. You know, they're going to continue to pay a dividend. But if I'm an investor, I'm asking at what price? Because if I'm looking here at revenue growth, yes, for this year market is saying 15% growth, but then the expectations are for growth to be under 10% for the next two consecutive years. Is this worth paying 40 times training PE forward 36 times or so? I'm not sure. If we look at maybe let's have a look here at EPS or so 10% 16% growth. Let's say an average of 12% for the next coming fiscal years. Is that worth it? It will grow with the market. Basically will grow as fast as the market. Is this worth the high premium? According to the market right now, it is free cash flow wise. Look at this huge jump for this year, but the year before it was negative and then it only grows eight and 9%. So again, with Apple feels like you're just buying a sort of a an ETF, but the stock has been outperforming, but in this case, I think it's crazy to say, but a lot is priced in. I believe they don't show good growth across the board. China, iPhone sales, you name it. Yes, this thing does come back down because it is trading at such a premium, right? Why should Apple be trading at this premium? Why we do have a Microsoft, an Nvidia, a Meta, a Google that is growing much faster than Apple? Of course, they're all spending a lot of money, but still the core business is growing and very profitable. And yet, they're all trading at a lower multiple than an Apple. You could say, okay, maybe an Amazon, right? Maybe an Amazon, although an Amazon may be on a forward PE, I think it's going to be quite close. Actually, no, under 27.8 times. So yeah, sometimes the market rewards certain companies and not others for various reasons. With Apple, it has always been the same. It is just free cash flow, stability, predictability as well. I give another example, a name where again every time they report I'm like this this doesn't make any sense. It's a super high quality name, Crowdstrike. And you know what I say every time when we go and look at cyber security names? All of them are expensive. Rubric, which I own, is also expensive. Although it's a much smaller company, I do think that they can grow in valuation. But a Crowd Strike, right? Everybody thinks Crowd Strike is very profitable. Yeah, they generate a lot of free cash flow. Free cash flow margin is 29.5%. But Crowdstrike operating margin over the last 12 months is negative 4.3%. Net is still ne let's call it it's zero%. So a PE trading PE which is super negative a forwards PE 140 times. This is not a cheap name. And by the way, you might be shocked. Oh, Crowd Strike is back to 183. They had a stock split. So that's why stock is back under $200. Just a stock split. Market cap is still $186 billion. But yeah, a crowd strike as well is every time they go into the earnings report, I I'm like, can they do it? Can they do it? Sometimes yes. Sometimes I'm like okay the the growth is is amazing and all but still am I willing to pay the price? Am I willing to pay such a premium? It is a super high quality business right still growing over 20%. But that's the thing it needs to grow above 20% for many years to come in order to justify today's valuation. Maybe they can, maybe they can't, but as of right now it seems like they can. And if we have a look at the upcoming earnings week, of course, we see a PayPal here, right? A PayPal. I'd be lying if I say, "Oh, you should buy the stock before they report earnings." No, it it makes no sense to buy a name like PayPal right now before they report their quarterly figures. We had the acquisition rumors and now we have an earnings report. There's no reason to chase that name because if there is good news, stock goes up, great. less stress, more information. It's worth it's worth paying the price. If there is no good news, stock drops and you'll be like, "Oh, thank God I didn't buy it." Right? As for the others here, we have Applied Digital, we have Navitas, right? We have a lot of the AI names right now. Bloom Energy, you have ARM. ARM as always I think is extremely expensive. There is the growth just does not justify the price that you're paying for this business. Amazing business. they're not growing fast enough to justify the valuation right now. Maybe we're finally going to get one of those quarters where really they start to accelerate, but we haven't seen it yet. And in a market where you can get a Microsoft, you can get a Meta at the current valuation. I I just do don't see why you should be very excited about an ARM. Now, ARM is up 126% year to date. It's experiencing a draw down of 40.9% right now. But it's a $276 billion business generating just under $5 billion in revenue over the last 12 months. And so even if you look at the forward EV2 sales in this case 45 times PE 120 times price to free cash flow 149 times margin wise excellent business again no problems with that even with the growth no problems with that but the problem here is when you look at growth and you look at the price that you're paying for it right 22% 21% then we see an acceleration 35% % 31%. But is it enough? Right? Is it enough that only by fiscal 29 are they going to generate $10.6 billion? That still means 26 times sales. But two fiscal years out quite a lot to pay for it, right? Unless they can suddenly continue to grow 50% 50 60% or so. But there are not many companies that can do that. We know one company that does it which is Palanteer and we know the premium that we have to pay for that business but at least they're showing the acceleration in growth and so yes every time we go and have an earnings season I think it's worth paying attention to the names that we own that we don't own try to see okay going to the earnings report am I going to be shocked if the name that I own is going to go down despite a good report because it happens we've seen it time and time again prime example example is this name right here ASOI good report stock goes down we've seen that before we've seen that with plenty of other names as well am I prepared for this if not right if you own some of the high-flying names like a Navitas for example a Navitas you're purely buying for what might happen a couple of years down the line because right now you see it's a business that shouldn't be worth a lot right now it's a business worth $2.5 billion but it's only generating $40.5 million. Of course, losing quite a lot of money. It is experiencing a draw down of 65% from the highs of not that long ago, the end of May is down 65%. Now, with the Navitas, should it have been so high to start with, right? Should it have been a $31 stock? Probably not. Probably not because again, the revenue isn't there. is just about what might happen with the business in the future. Now yes, it is expected to grow quite a lot in fiscal 27 only. But even then, what is this? This is nothing. $124 million. Seriously. Now, even if the market is wrong and and it's going to double, it's still not enough to justify. And that's the problem also right now with a lot of these names. the names that everyone is trying to catch, right? The names in this whole ecosystem. Oh, there is a bottleneck. So, I have to go look at the name like Navitas or Lumenum or some other photonics names or or or optics. You you don't you can if you understand those names, but I sure hope you also understand that paying billions of dollars for a business that doesn't even generate $und00 million in revenue for a full year, it doesn't make much sense. Unless, of course, you know, or you suspect that they're going to get a huge deal that could be worth hundreds of millions of dollars, maybe billions of dollars in the future. Because if that's not the case, then this is just pure gambling. This is purely taking darts, throwing it at the board, and see what sticks. Maybe one of these companies is going to be super successful, right? Maybe one of these companies can be Boom Energy, right? Where there is real traction with the business. Maybe, maybe not. Every earning season, these are the companies that will get hit the most. It's the companies that have gone up substantially without any earnings impact or whatever. Maybe some of them have had some announcements, partnerships here and there, but every time we go and get the earnings report, the guidance, we realize, hm, they're not really making money. H they're not really profitable. Maybe they'll be raising a lot of money. Maybe they'll dilute us again and again and again. That's the time where you're like, "Ah, I thought this was a name that only went up." I guess I was wrong. Now, of course, I'm not trying to sound smart here. That's why I started with names that I do own. An Uber, a Netflix, a Shift 4. These are conversation that you have to have with yourself with very good names, very profitable companies, right? like a Uber, like a Netflix, like a shift for growth companies, profitable companies. But you should definitely have a look at those high growth companies that don't make that much money that have only gone up because of the momentum in the space. I actually wanted to include a Micron and SK Hindings in this video, but the stocks went down. It makes sense. I still think they'll have a ton a ton of momentum left for a couple of quarters. They could go back to all-time highs, maybe go even higher as well. But at one point, you will see the headlines. Oh, these players are now optimizing for memory to reduce reliance on ordering too much or a lot more from Micron, from SK Hindings, from Samsung, etc., etc. Which doesn't mean that Micron or SK Hindings or Samsung's revenue cannot continue to go up. It might continue to go up, but there is less of that revenue that would flow to the bottom lines because they cannot charge as much as they're charging right now. When will it happen exactly? I don't know. But as we've seen, it is pretty clear that every big player is tired or paying so much with regards to memory. And so all in all, that's about it for me in today's video. Hope you enjoy it. Do share your experience down in the comment section below. See each other in the next one.