Trump Just Sold META — and Bought These 3 Stocks

Donald Trump's newly published financial disclosure reveals more than 1,000 securities traded in June and buried inside were three purchases worth between 1 and $5 million each. Now the accounts they in fact bought Berkshire Hathaway, Visa and Mastercard, but on the same day they sold between 1 and5 million of Meta. Now at a first glance selling Meta suddenly looks well timed. The stock is down roughly 17% this year and its biggest legal threat, well, it may only just be beginning because in fact 29 states are taking Mediterr seeking approximately $200 billion and potentially fundamental changes to both Instagram and Facebook. However, after valuing all four companies, I found something much more controversial. One purchase, well, is barely undervalued. another actually gives us the cleanest opportunity and the stock that was sold well it may offer more than 50% upside and that's in my base case. Now there is an essential caveat here and that is in fact that the White House said that these were independently managed accounts using computer-based model portfolios. So, it's not real evidence that Trump personally selected each company, but the comparison's extremely revealing. And by the end, I'm going to rank every stock from worst to best. And the disclosure, it contains over 1,000 purchase and sales across stocks, bonds, and exchange traded funds. It looks less like a concentrated investor building five positions, and more like a broad portfolio reshuffle because the form reports ranges rather than exact values. The total activity it was somewhere between 78 million and $263 million. It's an enormous range. So precision here is going to be misleading. And the largest single transaction, well, it wasn't in fact a stock purchase. It was the sale of between 5 and $25 million from a Vanguard dividend exchange traded fund. And we can see the date June 22nd. And we can note on June the 18th the accounts recorded $1 to5 million purchase of Cintas Visa and Moscard Burj Hathaway it appears in the same value range elsewhere in the filing and among the significant purchase were there were a few others in fact we saw Home Depot Moody's T-Mobile and a few other companies they matter for context but they're not the most useful companies that we're going to analyze in depth today and I do also want to point out as we can note here Palanteer demonstrates why we can't treat every line as a high conviction call. The accounts bought it, sold it, and then bought it again in several different transaction ranges. And we can also notice something similar with Burkshire Hathaway here. In fact, Burkshire Hathaway, it was partly sold again later in June, while smaller meta purchase followed the larger meta sale. Therefore, bought and sold, it doesn't necessarily mean a completely new position or a complete exit. And remember the White House, they do say neither Trump nor his family directs the individual decisions or their timing. These portfolios, they're intended to replicate indexes and are run independently by investment managers. So today's episode is not going to be about blindly copying Donald Trump. It's about comparing the companies that receive the largest allocations with the most important company that was sold. And honestly, the timing is fascinating because the market is already questioning whether capital should remain concentrated in expensive technology or rotate towards established cash generating businesses. And you can see here the headline indexes, they don't reveal the stress building underneath them. On the latest readings shown here, 173 New York Stock Exchange stocks reached new 52- week lows. Compare that to only 57 which are reaching new highs. And at the same time, it's not simply a market collapse. The equal story here's rotation. The S&P 493 had gained 17.6% while the Magnificent 7 is only returned around 9.2. And this can be seen even clearly when we look at the weekly heat map. In fact, semiconductors, they're starting to weaken. Parts of healthcare, energy, payments, and defensive consumer business. Well, at least in the more recent period, they're starting to hold up considerably better. And then if I zoom out, look at the draw down map where you can see how much damage has already been accumulated beneath the index. Several former market leaders remain 20, 30, or even 40% below their peaks. And this pressure is coming partly from interest rates. The 30-year Treasury yield, it recently reached 5.31%, only five basis points below the 2007 closing peak. And that's important because the S&P 500, it still trades around 20 times Ford earnings. Between 2008 and 2019, it didn't finish a single month of that valuation. And then if we go one step further on the sickly adjusted earnings measure, the market's also close to levels that were last seen around the dotcom peak. So expensive stocks, they've got less room for disappointment when bond yields remain elevated. And then also remember that this week brings three potential clearing events. Nvidia's results. We can see that after the market close on Wednesday, the PC inflation report and Kevin Walsh's major Jackson Hole speech. So before we value the four companies, listen carefully to Jeremy Sevil. He identifies the two events that could decide whether this market rotation accelerates or reverses this week. inflation and Kevin Walsh's message at Jackson Hole >> important to you and I do think that's the right function of the Fed to reveal to the market and if Worsh does that I think we could get a big rally there on Friday I think for instance Wednesday we get the uh PCE report and I think that's going to be good one uh uh actually I think it's going to come in at or even below expectations >> that matters because software inflation and a clearer Fed framework. It could relieve pressure from long-term yields. Until that happens, investors will keep demanding stronger cash flow and more reasonable valuations. The exact test that we're about to apply. So ultimately, the market could rally if inflation cooperates and wash provides clarity. But the bigger point is that this portfolio reshuffle occurred before a market increasingly rewarding cash flow diversification and lower dependence on the AI trade. And it brings us to the first major purchase and perhaps the most recognizable defensive compounder in the world. And the accounts bought in fact between one and $5 million of Bergkshire Hathaway on June 18th before selling a much much smaller amount several days later. Now Bergkshire Hathaway it trades around $500. It is slightly negative for the year and it's also around 8% below 52- week highs sitting around $538 and also trading at a forward P around 22 where we notice I'd probably say a more weaker buy rating from both Seek Alpha as well as Wall Street. And bear in mind buying Berkshire is not simply buying one operating company. investors receive its insurance operations, railroad, energy assets, industrial subsidiaries, and a roughly $300 billion public equity portfolio. And you can see Apple, American Express, CocaCola, Google, Bank of America, Chevron, Moody's, these are all among the largest position. It creates diversification, but it also makes Berkshire much harder to value using just one conventional multiple. And when we look at the DCF, well, the most important line, it may actually be the cash position. The model includes around $366 billion of cash and equivalents against roughly $129 billion of debt. And unlike during the zero rate era, that liquidity now earns a meaningful return. It also gives Berkshire enormous optionality if high yields or a market accent finally produces a genuine bargain. The difficult question though is whether Berkshire itself is currently one of those bargains today. And this clip matters because it gives us Bergkshire's own standard for deploying capital. A Jane says most opportunities should be rejected. The rare exception should be so compelling that it's screaming money. >> Um you know insurance much like investing is a game that requires patience and it is very difficult to get people to sit back and do nothing. When I recruit people, my modus operendi, I tell them right up front, I said I tell them your job is to say no. You will get bombarded with deals day in and day out, but your base case is just say no. I said every now and then you will come across a deal that will hit you with a 2x4 and it'll be screaming money. That's when you come to me. So that is the question at around $500. Is Berkshire Hathaway screaming money or simply a superb company trading close to fair value? My DCF gives a clear answer and that is the perfect standard to apply here at around $495. Is Berkshire currently screaming money? And my answer well is actually no. Bergkshire Hathaway produced around $25 billion of free cash flow in 2025, but the figure has been extremely volatile, falling 61% in 2024 before rising 116% last year. And over the last 5 years, reported free cash flows actually declined slightly. Its 10-year compound growth rate, well, it's only 3% while forward revenue growth is currently estimated near 3%. My base model nevertheless assumes free cash flow grows 10% annually from around 28 billion in 2026 to around 65 billion in 2035. And ultimately the range here actually matters more than the headline value. Using an 8% growth rate and a 3% terminal growth we get a bare case of around $465. The base case comes in at $526 and then in a growth rate of 12% we get 596. Now, Wall Street's average target is similar around $548, implying around 9% upside today. However, a conventional DCF is imperfect for an insurance le conglomerate, insurance float, investment activity, acquisitions, and movements in working capital. It makes Berkshire's reported free cash flow far less stable than the likes of Visa or Mastercard. But ultimately, a sum of the past analysis could produce a different answer. But the available evidence that we have still doesn't show a large enough margin of safety at today's price. So my verdict would be a hold or cautious accumulation, not an aggressive buy. Below around $465, the expected return would become much more attractive. And the next two purchases offer less diversification, but much clearer economics and considerably stronger underlining growth. Now, Visa was purchased on June the 18th in the same 1 to5 million range. Unlike a bank, Visa does not primarily lend consumers money and accept their credit risk. In fact, it operates the network connecting card holders, banks, and merchants, collecting a small fee as payment volume moves through that infrastructure is effectively a toll road for global commerce. Now, the stock itself is up 8% year to date. Over the last 12 months, up a fairly similar amount. And today is pretty much trading around 52- week highs, $380, where we notice a strong buy from Wall Street, but a very weak buy from Seek Alpha. And their latest quarter demonstrates why their model is so powerful. Net revenue increase 14% to 11.6 billion. Payment volume that increase 10% year-over-year. Process transactions a fairly similar amount. Crossber volume 13%. And Visa converted that revenue into $6.9 billion of operating profit at a 59% margin followed by around $5.6 billion of net profit. And you can also see with the company transactions processed per minute have risen from roughly $287,000 in late 2019 to 544,000 in June 26. It represents a compounded growth rate of more than 10% and annual revenues increased from around 18 billion in 2017 to more than 44 billion on a trailing basis. Also compounding at an approximate 10% rate. Operating profit also pretty much following a very similar pattern. Compounded annual growth rate 10% going from 12 billion trailing 12 month 27 billion and only expected to continue over the next few years. And honestly, few large businesses can match the economics of Visa, a 51% net margin, 46% levered free cash flow margin, and roughly 30 31% return on total capital. And the growth is not finished. Revenue forward EBIT are the same thing to be said about earnings per share. Whether you look on a forward basis or over in fact the next 3 to 5 years, we can see all of these broadly sitting between 12 and 14% while free cash flow share that's expected to grow at a fairly similar level. The biggest question though is whether stable coin and alternative rails eventually bypass Visa. Yet we can see here Visa's dominating track crypto card spending linked to monitored onchain card programs. Now, obviously, it doesn't represent every crypto payment and should not be interpreted as total market share, but it supports an important point. New money can still move across Visa's network rather than replacing it completely. And tokenization can also make online payments more secure and improve approval rates. Visa's opportunity is to monetize the security, identity, and data surrounding a transaction regardless of the asset funding it. But there is also real cost to protecting the network. Trading client incentives have climbed from around $6.7 billion in 2020 to more than $17 billion. Now those payments help Visa win and retain issuing partners if banks and merchants demand more of the economics. Gross payment growth will not translate as efficiently into shareholder returns and regulatory intervention, merchant litigation, pricing pressure, and competing payment rails. They remain the primary risk. The business Visa, it is exceptional, but it's definitely not something I'd say is invulnerable. Now, Visa's responded by returning enormous amounts of capital. The latest quarterly buyback has reached around $7.9 billion and accelerating per share growth beyond the growth of the underlying network. And then around today's price where we can see Visa trades around 26 times on a forward basis compared with the 5 years sitting slightly higher around 27. It's reasonable, but I wouldn't call this obviously cheap. And if we were to look at the blue tunnel from Simply Safe Dividends, which highlights in fact fair value, intrinsic price, it sits around the midpoint. So you could argue reasonable signal. If we look back, Visa is one of those very, very rare to see it in a severely undervalued level. And the shares, as we said, they're pretty much sitting at 52 week high. So Visa is not a beaten down turnaround purchase after indiscriminate panicking. Now, my DCF does start, as you'd expect, with the most recent free cash flow, which came in just under 22 billion, and then it assumes growth rate of 10% moving forwards. Now, it produces a base value here $416 around 12% above the current price today, where Wall Street's average price target almost identical, 417, implying 10% upside. But if we do toggle to 8% growth, well, the fair value falls to $354 at 12% growth rises to $487 around 31% upside today. And the balance sheet is also extremely comfortable with net debt below 1/3 of EBIT DAR. The resilience matters if consumer spending or in fact crossber travel slows. So my verdict for Visa, I'd say a buy but not a heavy buy at any price. Visa offers dependable compounding and modest undervaluation rather than enormous margin of safety. Now, Mastercard looks nearly identical at a first glance, but several differences make it the stronger of the two opportunities today. It trades around $597, also very very close to 52- week highs. We also notice strong buy from Wall Street, respectable buy from Seek Alpha, and it's positive year to date around 2% over the last 12 months, pretty much flat in fact. And the forward P while well it is slightly higher than Visas but its growth is also been stronger. In the latest quarter revenue grew 14% to 9.3 billion. Net income increased 18% to 4.4 billion producing extraordinary 47% net margin today. And payment network itself well that revenue grew around 10% to 5.5 billion with value added services growing twice as quick rising 20% to $3.8 billion. And those services now represent 41% of Mastercard's revenue, up from 35% in 2020. They include cyber security, fraud prevention, analytics, consulting, and identity related products. The diversification, it does really matter because Mascar's future does not depend solely on charging another basis point whenever a plastic card is tapped. It increasingly earns money from everything surrounding the payment. And Mastercard's annual revenues compounded around 12.2% 2% since 2017, reaching more than $35 billion on a trailing basis. Visa's comparable growth, well, that was closer to 10%. Now, Visa also does remain the larger network of the two, but Mascar's transaction volume grew at roughly 8.6% compared to Visa for the period at 7.8. And current expectations continue that advantage. Forward revenue projected around 14% forward EBIT DAR sitting above 15 and diluted earnings per share on a forward basis sitting at 16.4 and Moscard is also produced a long record of meeting or exceeding quarterly expectations. The consistency helps explain why investors have historically accepted a premium valuation and the profitability also elite. We can see 46% net income margin, 48.4% 4% on a free cash flow basis and returning around 46% on total capital. Yes, Visa wins on absolute operating and net margins, but Mascar wins on returns, growth, and the increasing contribution from high growth services. And similar to Visa, Biomax add another layer. Mascar's trading repurchase, they've risen sharply above $15 billion, reducing the share count and increasing each remaining shareholders claim on future cash flow. But what I'll say is aggressive capital returns. They've weakened one balance sheet measure. Net debt capitals risen to roughly 0.7 considerably above Visa's 0.7 considerably above Visa's 0.22. Partly reflects buybacks reducing book equity rather than dangerous operating leverage. Net debt remains only around 0.59.52. So debt servicing's not currently a serious concern. But valuation is where Mascar becomes especially interesting. Its enterprise EBIT multiples fallen to around 21.75 almost matching the lowest point since 2018 and its forward P well it sits around 27 times well below the 5year 31. So Mascard is not optically cheap that I will say but it is cheap relative to its own quality and its own history where we do get a slight undervaluation signal when we look at the blue tunnel last five last 10 years again like Visa is a premium company that very rarely shows itself in a severely undervalued level. Now my DCF starting at $16 billion assuming pretty much the same thing that we saw for Visa. 10% annual growth despite 5year sitting much higher at 17 and the 10ear sitting at 16% gives a value of $657 and we can note that implies around 13% upside. Now compare that assumption with what the market price requires. In fact, the market today is implying around 8.5% future free cash flow growth. It looks achievable if revenue and earnings continue expanding in the mid- teens for Mastercard. So the base case $657 offers around 12% in terms of a margin of safety where Wall Street sees $667 implying around 12% upside. So Visa offers a slightly lower multiple, higher margins and the stronger balance sheet. Mastercard well it offers faster growth, greater historical valuation compression and a slightly better bear to bull range. My verdict is that both are buys, but Mascard is the better purchase today. The difference not enormous, but I say Mascard wins on the head-to-head comparison. And Visa and Mastercard are not new ideas for me. I was already buying both and actually recently published a full breakdown of their modes regulatory risk, the stable coin thread, and which one I rank first. Now, I'll leave this article below where in fact members can see the complete valuation work, the buy prices. But now we need to examine the stock that was sold because this is where the disclosure becomes much more controversial. And on June the 18th, well, the account in fact sold Meta. We're talking between 1 and $5 million. Smaller purchase followed later. So this wasn't necessarily a full and complete exit. And since then, Meta's risk has become even more polarized. The shares they trade around $550. And they're down in fact 17% year to date. And we're talking more than 30% from 52-W week highs at $791 where we notice a strong buy from Wall Street, a four out of five from C Alpha. So more on the weaker end. And the newest thread, well, it comes from a landmark trial in California. Lawyers for 29 states describe Meta's alleged strategy using four words: hook, hold, harvest, and hide. and they alleged that Meta intentionally designed addictive products, collected children's data, and failed to address harms experienced by young users. Now, these remain allegations and Meta completely denies them. But the states, well, they reportly seeking around $200 billion, an amount comparable with Meta's annual revenue. Now, the number serious, but the potential product change that could matter even more. Meta in fact could be forced to remove or redesign features such as infinite scrolling and if the platforms become less engaging, user may spend less time viewing advertisements directly challenging the economics of the core business. Now the trial, it is in fact expected to last several weeks. The jury's conclusion is advisory with the judge making the final decision on liability, potential damages, and remedies. But meta overall, they say the proposed pal is outlandish. They argue this introduced safety tools and says it does not allow children under 13 to register for accounts and we must also avoid inventing causation. The large meta sale occurred in June while this trial began in August. So the filing doesn't tell us that the trial motivated the transaction. But what we can evaluate is the price now being offered for that uncertainty made a trades around 17 times Ford earnings well below its 5year average of 22 and below Bergkshire Hathaway, Visa and Mastercard. And you shouldn't be surprised to see the undervaluation signal on the blue tunnel. Again, worth highlighting. Meta has been sitting there for quite some time in just the last 10 years. And if we switch to another basis, well, on forward operating cash flow, the multiples only around 9.6. That is unusually low valuation for a dominant advertising platform with billions of users. And Wall Street's average price target, $754, implies around 37% upside. Even the lowest target here that sits at 580 and the discount exists for more than one reason. Alongside litigation, Meta is spending extraordinary amounts on artificial intelligent infrastructure and that is crushing near-term free cash flow. Now, my scenario assumes free cash flow falls from around $44 billion in 2025 to around $2 billion in 26. The real valuation questions how quickly that cash flow subsequently recovers because in my bare case free cash flow recovers to 17 billion in 27 35 billion in 28 50 billion 2965 billion by 2030 and it produces a value of 568 that represents around 4% upside from today's price in other words a weak recovery leaves almost no margin of safety in the base case while the free cash reaches 20 billion in 27 50 and 28 75 5 by 29 and 95 billion by 2030. It produced an intrinsic value of $832 implying 52% upside. Whether ball case assumes Meta converts his AI investment to a much faster recovery, 23 billion in 2762 and 28, 100 by 29, and 135 billion by 2030. It reduces a value approaching $1,200. More than double, in fact, the current share price today. Now, all three scenarios, they do in fact use an 8% discount rate and 3% terminal growth. Therefore, my bare case is operationally bearish, but it's not an absolute worst case valuation. And a more severe legal outcome, permanently weaker engagement, or AI spending that stays elevated for longer that could push their value below $568. But the uncertainty is exactly why the stock trades at 17 times earnings rather than 25 to 30 times, which we see attached to payment networks. invest in fact are being paid through a much lower entry multiple to accept a substantially wider range of outcomes. My verdict is a buy not a sell but I position it more carefully than visa or mascarn because the legal tail risk cannot be modeled precisely but I wouldn't abandon Meta at around $550. So the portfolio bought three excellent companies yet based on today's prices it may have sold the company offering the greatest potential return. In terms of rankings, well, fourth place I've had Burkshire Hathaway. No surprises, exceptional defensive business, but 6% base case upside does not compensate investors with a large margin of safety. Third, I'd have Visa. I rate it as a buy because of its network margins and balance sheet, but the shares are close to a record high and offer around 11% in terms of an MOS. In second place, I had Mascard. I'd say it's the best of the three disclosed purchases. faster growth, expanding value added services, and a valuation well below its own historical norm. And first place, Meta for potential upside with the highest uncertainty. It is the least predictable company here, but it's also considerably cheaper and offers the strongest return if cash flow recovers as expected. So, the lesson is not to copy every transaction. These were model managed accounts. The disclosure range are wide and several companies were bought and then sold within days. The useful lesson is that even elite companies must be compared at the price available today. Quality determines what deserves research. Valuation determines what deserves capital. So yes, Meta has the largest upside and the most dangerous unresolved risk. Mascard offers the cleanest balance between quality growth and predictability. And Burkshire offers the greatest defense, but the weakest valuation case. Let me know in the comments which of these four you'd buy today. If you want the complete Visa versus Mascard research and my ongoing valuation, well, you can sign up by clicking below. You can read all of these straight away. We drop a weekly copy identifying severely undervalued stocks as well as an update to the overall market. More importantly though, have a great day. I'll see you all on the next