I Just Bought $15,000 of a New Stock. Here's Why I Sold 3 Others

Hey everyone and welcome back to another portfolio update for you today. Over the past week, the Cotch investing portfolio went up by 3, can't believe this, 67%. Whereas the S&P went up by 1.27%. Whoever came up with this stupid trend really ruined numbers for us. But in today's video, we do have a lot to talk about. I did some selling and I did some buying. We'll talk about the upcoming earnings week. As you can see, there is a big one here on Wednesday, Micron. And then for those still interested in Nike, Nike reports Thursday after the close. We'll look at what the market expects Micron to report. And as always, we'll look at the usual names here on a TA basis. I'll first start off with Micron. And Micron is is going to be a very big one because yes, it is at the very end of the earning season or at the very start of the next earning season, but it does give us maybe a bit more information about the current state of the AI semiconductor memory market. Micron is a 1.2 trillion company, a trading P of 24.5 times, a forward 7.4 times, price to free cash flow 10.4 times. If we look at what the market is expecting from Micron, we look here at the quarterly numbers and we can actually have a look at what or by how much they beat over the past couple of quarters. You can clearly see that the beats got bigger and bigger and bigger. Now for the upcoming quarter, we are expecting to see 359% growth followed by another 344% growth the quarter after that and then the quarter after that which is going to be the first of 2027 211% followed by 82.8% the quarter after that and then basically a year from now 34.1% growth. Now how does that translate to in free cash flow? Well, for free cash flow for this quarter, the market is looking at $23.8 billion. That's $2,139% growth, which is insane because when we go and have a look at the financials, not on a quarterly basis, but on a yearly, look at this. We look first at revenue growth and then at free cash flow. So, if we look at revenue, we are basically right now looking at $90 billion, $90.2 2 billion in revenue generated over the last 12 months. That's expected to go up by it's probably going to be $200 billion. It says here $282 billion, but I do think that they'll beat the analyst expectations for this fiscal year in the next one. So, we should be reaching $290 billion in fiscal 28. So this company is expected to add 200 approximately $200 billion over the next two and a half fiscal years. If we then have a look at free cash flow and of course as you know all of this is available to you on fiscal.ai. There's a link in the description and in the pin comment. You'll get 15% off if you use it. And if you're a new user you can get the first two weeks of fiscal pro for free. I appreciate everyone that has been trying it out. Hopefully it does make your investing journey much much easier. Now, I'm showing you here free cash flow because this is the crazy part. We go from $26.1 billion of free cash flow generated over the last 12 months, that's expected to grow all the way to 168.1 billion in fiscal 28. So, in just one fiscal year, they're expecting to generate $168.1 billion. If we look at what this company did over the past 16 years or so, okay, because why why do I show this huge picture? It's because yes, it is a cyclical business. We're going to have to look at margins and you'll see it quite clearly. Memory was a cyclical and still is a cyclical industry. But nowhere in history did we see this type of free cash flow generation for Micron. So, as I've said time and time again, yes, at this time it is different. Now, as promised, let's look at margin, operating free cash flow, gross profit margin, net profit margin, and Ebida margin over the past 10 years. What can we see? Down cycle, upcycle, down cycle, upcycle, huge down cycle, now upcycle. Same thing every single time, right? Clearly, you clearly you can see the cycles here. So why do I say that this time it's different? Well, purely because of the scale and the size of this business. Nowhere in the last 10 years was a micron generating so much revenue, so much free cash flow, not even close. Of course, they're also investing quite a lot, right? If we look at capex for example, yeah, capex previously peaked at $2.7 billion or so, but right now that's expected to increase significantly every single quarter to over $10 billion. But again, for a company that's expected to generate over $160 billion in free cash flow in fiscal 28, this is not that much. This is not that much at all. So yes, it is different. Now does that mean that the market will suddenly say oh actually you know what okay we also believe it's different that's why suddenly P is going to jump from 7.4 times all the way to 20 times I don't know but at one point something will have to change also until I think the start of December this is a company that is not allowed to buy back shares. I am willing to bet a hundred bucks that the moment that they're allowed to buy back shares, they are going to announce a huge share buyback program. Makes sense. You generate so much free cash flow. Yes, you are still investing, but you're going to generate so much free cash flow that yes, you are going to buy back an insane amount of shares. What will happen with earnings per share? Just continues to go up and up unless we do have a rerating here. What am I expecting of the upcoming earnings report? Beats across the board. Let me know what you think down in the comment section below with regards to Micron's upcoming earnings. Moving on to some TA here. We have a Google Alphabet still around the same area as last week. Main support floor is at $334. The current price $343. The overhead ceiling, the resistance sits at 350. bargain floor. Apparently, deep value sits at around 318 326. So, the right now we are basically in the buy zone. As for Rocket Lab, also quite close to the previous resistance point. The bargain floor was basically where we were trading over the past couple of weeks. I would say low 60s, closed out the week close to $74 in my opinion. No issues with this name staying around that area for quite a while until we get actual or quite closer to a potential neutron launch. As for SoFi, resistance seems to be sitting right now at around $17.37. Support floor $15.81. So the main buying zone is going to be between $15.8 to $16.8. Right now we are at 16.5. back under $17 per share. As for Amazon, seems to be sitting right at the support area, right under it. But let's hold it right at the support area. The resistance point is currently sitting at around $256. Amazon is yes, it's one of those, let's say, boring businesses to buy because we all know it's a tremendous business. It's going to do very well. Total addressable market keeps growing. It's an amazing business in this AI space as well. AWS, their own chips, you name it. Bedrock. But I guess people would like to chase this name once it reaches $300. As for Meta, Meta, of course, has seen the stock finally go up in a speedy fashion. I would say the target buy zone is of course a bit lower than where we're at right now. We finished the week at $751. Buy zone would be 680710. Support area would be a bit lower than that at 634. And honestly, despite me thinking it is still undervalued right now, I understand people that would like to wait for this name to maybe chill out a little bit. But then again, if you're a long-term investor, still undervalued. Moving on to new holdings, which by the way, there were some reports saying that new is in talks to acquire Monzo, the UKbased uh fintech company for around, I believe it's 8 to10 billion. Could be a very very big move by them. Could still put the stock under pressure because it is a big acquisition. But right now, those are just reports. We'll see what happens. So, yeah, new definitely making moves. New Global moving into the United States potentially buying quite a popular and big UK based fintech company called Monzo for 10 billion or so. So big moves there. Resistance sits above $14. Support area sits basically where we're at right now. So yes, I do think that for long-term investors, we are sitting in a buy zone. Netflix doesn't move. So support floor, we are basically there as of right now. Resistance sits at around $77, quite closer to 80 bucks or so, but Netflix at the moment doesn't move. And as I said last week, might sell it. And I did do some selling. Didn't close out the whole position just yet. I'll explain why. Nebus, this one continues to do well. Why is that? Because it is a bestincclass support area sits at around 315. So buying zone 215. So buy zone 215 230. Although I would say we could potentially see it even go as low as 200 as we've seen time and time again. It's a very volatile name as you know. We could be at 300 before we know it. We could also be just under 200. That's how volatile a name like Nebuse is. Moving on to Reddit. This is also a name that doesn't really move that much. We are in the buy zone. The resistance sits a bit higher at $166 right now in a buy zone. Although I am still waiting for that that catalyst to see what happens with the AI licensing deals. I do know that we've got some semi-positive news with the legal issues with Entropic which maybe could push towards seeing some data licensing deals. Axon Axon continues to be under pressure right now from a valuation standpoint. Stock price as well, we are in the buy zone at the moment. Resistance sits now at $56. the deep value bargain floor just under or around $400. We closed out the week at $430. Marcado Libre also trying to get back into that big buy zone. We are we are actually between $1,720 $1,760. Resistance seem to be now at $1838. The real, let's say, bargain prices would be closer to 1,700 or a bit under it. Although for long-term shareholders, I highly doubt that that makes a big difference right now. Moving on to the last one, and that's also one that is under pressure that doesn't really move much, and that's Uber. Support area sits just under the price that we're in right now. Resistance sits closer to $75 per share. And yes, we are sitting in the main buying zone. Of course, the buying zones and all of that, those move over time, but as of right now, between 67.5 to $70.5 is a buy zone for Uber, for a business that generated $10 billion in free cash flow the last 12 months. It is, yes, quite cheap. Moving on to the portfolio itself, we now have a new entrance in the portfolio, but let's start off with the top five positions. still Nebus then we have SoFi AMD Google Meta is number five Rocket Lab Oscar Health DLO Micron Robin Hood Palenteer cash position Rubric and new holdings Uber and the new position is Broadcom 2.4% 4% of the portfolio. Then we have Reddit, Axon, a bit of Netflix and couple of shares of Nvidia. But I did do some selling. So I did cut my Netflix position by close to 50%. Keeping half for now purely because of valuation, it's better than sitting in cash. Although if the stock drops more, I guess cash is better. And I did say that I'll probably buy Nvidia next with the 6K that I've raised from selling 50% of that position. As of right now, I did not add to the Nvidia position. What I did do is I purchased 43 shares of Broadcom at $352 as I I explained this in another video. I'll keep it short in this one to explain why I did it. But first, yes, I did also trim my AMD position and my rubric position again. So, AMD cut it by 23.5% at $61. Yes, it went $30 or $29 higher, but but that's why you still have a position to benefit from that purely valuation wise and the fact that yes, we could go much higher. But I do think that a lot of the expected growth and maybe some extra growth is started to be baked into the price. So that's why I did it. feel a bit more comfortable like this and I will explain the move towards a broadcast to me it makes sense rubric I did also cut that position by 18.18% at around $114 for 67% again same reason as the previous trim as much as I like the company it is getting very very expensive at these prices and again with trimming yes of course if we continue to go up more and more dollar amount wise I'm making less. But if we suddenly crash, then I crash less. So I rather just crash less than make less when we go up. Although with AMD, it still is 8.2% of my portfolio. So I highly doubt I I will complain. Now with regards to Broadcom and potentially adding more to Nvidia, why add more? Why not concentrate into the other names here? Well, good questions. First up, let me answer this by looking at Broadcom. Although if you've seen a Friday's video, that could explain it more. But here with Broadcom One, this is a name that has done absolutely nothing year to date. It's only up 1.6% and over the past 12 months, it's up 5.6%. Makes no sense to me for a company that is growing at this rate. And I'll show valuation wise, 45 times trading PE, but 20.4 times forward. a PEG ratio of 0.5 price to free cash flow 22.4 times. So doesn't make that much sense to me. Let's let's look at the expected growth shall we? So the expected growth for the total revenue, right? Not the expected growth for only AI revenue because for only AI revenue, the CEO already told us what he expects to happen. He expects to double AI revenue to reach $115 billion next fiscal year. and he expects that to double again to reach $230 billion in the fiscal year afterwards. So this part right here, $230 billion of only AI revenue. Okay, this is a business that is still expected to grow well above 50% well above 50% for this fiscal year, the next one, and the one after that. And I do think that this is the floor. Looking at free cash flow, we're also expected to see an explosion in free cash flow. So again, I'm looking at the growth rates. I'm looking, yes, at the size of the company. It is a big company, 1.6, let's call it $1.6 trillion. You look at the growth rates, you look at the valuation, especially if you want to compare it to an AMD, which is worth close to a trillion dollars. By the way, Broadcom worth 70% or so more than AMD despite generating double the revenue of AMD and also expected to grow currently currently expected to grow faster than AMD. So, so that's why I've made the move. With regards to Nvidia, same thing as I explained during Friday's video. The only reason why I actually went first with a Broadcom over an Nvidia is because of the size. Because Nvidia, yes, it is in my opinion a no-brainer for the future. But the size of it, how do you move a $5.4 trillion company? But then you can go back and say, "Yeah, but how do you move a $3 trillion company? How do you move a $4 trillion company?" Guess the same way here, right? But valuation wise for Nvidia is also very attractive for the growth rates that this huge business represents. 18.7 times forward PE.5 PEG ratio 20.8 times price to free cash flow. If if you look and we we've seen these numbers time and time again. If you look at the expected revenue for fiscal 29 and it's probably going to be higher than that. It's currently sitting I need to remove myself because it's so high. It's probably going to be $900 billion if not more in their fiscal 29. If we have a look at free cash flow, free cash flow as well, if we look at that number, it's probably going to be higher than that. We could reach free cash flow for just one year. One year of free cash flow in fiscal 29 of $450 billion. It's probably that that's going to be the number. Now, what do you do with all of that money? You pay dividend. You increase your dividends. You buy back more shares. You buy other companies. You invest in other companies. You expand the ecosystem. But it's it's a very luxurious position to be in and and if we are if we are going to go into a world of yes full AI automations, autonomous vehicles, robotics, etc., etc. I know I'm still looking for potential multibaggers for some players that the vast majority of people don't know about, etc. But if you're looking for a a buy and hold forever, a name where you know that they will be at the forefront of everything, Nvidia is the name. The valuation is there. The growth is there. It's just that the size of the company might scare you. And it makes sense. It's $5.4 trillion. It's DJ, as we say in French. So I will add it purely because this might just be like an Apple position for many. Apple is one where trades at 30p. It's not a super high growth company, but you can use it as a cash position, buy backs a lot of shares, pays a little dividend, you're chilling. If you bought Apple 10 years ago, if you're going to hold Apple from here on out, you're chilling. Of course, with Nvidia, you're getting way more aggressive growth. But I'm not expecting suddenly Nvidia to double. Although certain analysts do have a price target close to $400, which yeah, is going to be quite close to $10 trillion in market cap. But even the average analyst price target right now sits at $327. So yeah, around $100 higher than where we're at right now. So yes, a lot of changes in my portfolio. And I know some people might not agree with the trimming AMD. Okay, then you don't trim. That's the beauty of it. It's my portfolio. I do what's best for me. And to those that say, "Yeah, but you have quite a lot of positions." I agree. I do have quite a lot of positions. But if you look at the exposure, the top five, top six, right? They they make up over 50% or so, close to 50% of my portfolio. And look, 20 positions, whether it's well, 20, it's not really 20 cuz Netflix and Nvidia aren't really worth that much. Although Nvidia will be worth a bit more. So let's call it 19 real positions or 18 real positions if you in exclude a cash. Despite all that, despite all that, I think I've done quite well, right? This is not a one trick pony where you choose one AI name that went up 200% and that's your performance. No, I'm up 264%. Since the start of 2024, I'm up 44.5% year to date. despite me having so many names in my portfolio, could I have been up more? Yes, of course I could have. But if you start to think about, oh, I could have done this, I could have done that, then you will probably be very close to losing money. I think from an investor standpoint being or having these types of results while also having in this case over 10 over 15 positions. Okay, again the top five make up 50% or so of the portfolio. Gives me confidence that okay once this whole AI maybe growth super growth cycle is over or slowing down. I still think I can be quite a good investor because yes I do have some companies here like an Oscar local right SoFi Reddit new etc. Axon, Uber, these are companies that doesn't really matter. Super cycle, not super cycle. I think they'll do well for the future. And that that's the whole thing. I'm investing for the long run, not for oh, this year we need to look at this bottleneck or that bottleneck. And so I'm only choosing one or two names so I can show that my performance is 200% year to date. Yeah. Okay. You have a portfolio of one name. Let's see you do it multiple times over the next 5 to 10 years. I highly doubt they can replicate that success. But hey, I'm not here to hate. Investing is a individual sport. Let's say if you're making money, if you're beating the market, I think everybody should be happy. That's about it for me in today's video. See you all in the next one. Bye-bye.