The Only Mag 7 Stock Worth Buying Right Now

The Magnificent Sevens had one of the most dramatic bouncebacks in stock market history. I ran every single one of them through our Everything Money process. Six of them either match the market or trail it at current prices. One of them and just one still looks like it could potentially be an actual opportunity. And today, I'm going to show you the ranking and do a full analysis so you can decide for yourself. So, let me set the stage rather quickly. The Magnificent 7 which is Meta, Google, Amazon Microsoft Nvidia Apple and Tesla have been the engine for the entire stock market for the last two years. These seven stocks alone have driven the majority of the S&P 500 gains. When AI became the biggest story investing, money poured into all seven almost indiscriminately. The assumption was that if you owned all of them, you owned the future. But here's what that kind of buying does to valuation. It doesn't care about price. It doesn't care about what the business is actually worth, the intrinsic value. It just pushes prices higher and higher until the gap between what you're paying and what the business is worth becomes dangerous. Then we saw most of these names take a hit as the NASDAQ entered correction territory earlier this year. Money shifted out of the Magnificent 7 and towards many of the consumer, defensive, and energy names. But of course, they recently saw a jump with some soaring to all-time highs in just a few short weeks. Now, I want to be very clear about how I approach this. A great business at the wrong price is a bad investment. A great business at the right price with an adequate margin of safety. That is where you're going to build wealth. So, today I'm going to rank all seven from worst to best on valuation using our stock analyzer tool. Now, just a reminder, don't ever take our titles literally for two reasons. One, I don't even know what the title of this video is. And two, it'll probably change eight times between the time it's launched and the time it's actually a set video that's gotten tens of thousands of views. So, let's get into it right now. I ranked all seven from worst to best on valuation using Stock Analyzer. And I'm not going to lie to you, some of these results surprise me. So, let's start at the bottom. The worst one. This is the stock that I believe is the biggest problem right now. The one that based on my analysis could actually lose you money if you bought it today. And I want to be clear about something before we look at the numbers. Tesla is currently a car company. Perhaps in the future the majority of the business will be something else. Either FSD, robotics, or something else we don't even know. But for right now, over 90% of the revenue comes from selling cars. It's a car company. despite the ambitious goals of a brilliant man like Elon. So guys, this is our stock analyzer tool. This is where I put the numbers to the story. They both matter. The question is, which one are you putting more credence into? What I see a lot of people in the markets doing is they attach themselves to a story. I recently had a friend say to me, "That's a great story. Take my money." And that what that tells me is no matter what the price is, they want to buy. That's a good way to lose money. So for Tesla, I did a 10-year analysis. I did first line of revenue growth. I did six, nine and 12% revenue growth a year for the next 10 years. Profit margin and free cash flow margin guys I did 8 11 and 14. Keep in mind basically the majority of this is a has never ever occurred. The majority of these assumptions so I look at the saying I am putting a lot of value into the parts of the company that are not car related. So when I look at this, at the very end of this, when I show you how bad the returns are, I am giving value to parts of the business that aren't even generating money right now or any profit. Keep that in mind. Next, what's the PE and the price of free cash flow that I would assign to Tesla 10 years from now? Well, here's the way I look at it. The market average historically is 15 or 16, 17 times earnings or free cash flow. I want to assign a higher value if it's a great company, a lower value if it's a bad company. How do we know if it's a good company? Returns on capital is one thing to look at. Do they have a moat? Guys, I don't think Tesla's that great of a moat business. It's like, yeah, it it makes a nice car, but there's a lot of EVs out there. In fact, I have an electric vehicle hybrid. I have a hybrid that's vehicle. I love that far more than electric vehicles I ever had. It's the combination of best of both worlds. I still assign this 18, 20, and 22, but I'm giving more credence to Tesla and Elon Musk for that valuation versus what I really think it is. Guys, the car business is a tough business. So, I want to make sure that you guys understand like this is not something you should give a big premium to if they still stay a car business. And then finally, my 9% no margin of safety desired return. This is basically what is the company worth? The stock is currently at 403 per share. I hit the analyze button. I have a low price of 47, high price of 150, middle price of 88. Which means if my middle assumptions occur, you're looking at a negative 8% discounted cash flow return per year for the next 10 years. Sounds unreasonable, guys. Just go back to other times in history when companies were massively overpriced. Even if the business got better, the stock would go nowhere or be down. Don't fall for that same trap. Now guys, the other thing is don't just buy or sell because there's green and red. This is a 500 foot view to sit there and say, should I spend more time? Your time is valuable and there's tens of thousands of companies out there to research. I always start with stock analyzer because if I see a lot of red like this and it's far off, why would I spend any more time? I don't want you to be those idiots out there like the other YouTubers who fall in love the story and force the numbers to happen. Your time is valuable. Stick to what you believe in. that will be worth your time. Now, the next stock, this is where it gets really interesting. This is the stock that most of you probably thought would be the either the biggest opportunity or most overvalued of the Mag 7. Nvidia has actually been the lagard of most of the semiconductor companies year to date. Personally, I like that for a growing company to be trailing its peers, the longer price remains stagnant, the value can then catch up to it. If price is going like this and value is going like this, that gap is a lot smaller as time goes on. So here are my assumptions. 10, 15, and 25% revenue growth. Guys, even I have a hard time still doing these numbers, but if this AI thing is real and it's not just some bubble right now on capback spend, I'm not saying that AI is going away, but the capback spend has been insane. If that just slows down, but still stays at 10, 15, and 25%. Boom. Profit margin. And I did 30, 37 1.5, and 45 much lower than where they are right now because guys, I believe that over time as other people enter the market, margins will compress a little bit. And I'm being a little conservative. So factor that in when you're looking at my final results. PE and price of free cash flow, I did 20, 24, and 28. And my 9% desired return. The stock is currently at 212. I hit the analyze button. I have a low price of 83, high price of 515, middle price of 175. Guys, it is all over the place here. But that's the thing, the we don't know what the the the growth has been so amazing, it's hard to sit there and fathom a world in which Nvidia only grows its revenue 10 or 15% a year for the next 10 years. So that's we have to really remember though. Nvidia is a phenomenal company. Great balance sheet, great margins, leader in the industry. You just got to pay a good price for it. Could it be a reasonable price today? Guys, we're not far off. It's not like I'm looking at going, "Oh my god, this is like Tesla negative 8%." This is just okay. Like, I don't know. It's not as overvalued as it used to be. Why? Because the fundamentals got a lot better. Guys, the next one on the list is Apple. Now, even though Apple looks like a stretch at this current price, Apple is an extraordinary business that's seen growth and its free cash flow, even though it's freaking huge. the iPhone ecosystem that serve the services revenue, the buybacks. This is all an amazing company. They saw revenue growth accelerate in the most recent quarter along with news that CEO Tim Cook is retiring and John Turnis will be stepping in his place. So, we pull up Apple in our stock analyzer tool. I'm going to pull up the last time I did Apple. Go right here. Boom. I did a 10-year analysis, guys. This might be hard, but I did 48 and 13% revenue growth. Next, for profit margin and free cash flow margin, I did 25, 26 and a half, and 28 for free cash flow and profit margin just a smidge higher than that. Now, what is the 10-year PE? PE 10 years from now versus today. I put 19, 23, and 28. Guys, Apple is a premium business. Look at these returns on capital. To be honest with you, I wouldn't blame you. put a higher number here, but I think 23 times earnings for me feels about right for a company like Apple on my middle assumptions. And finally, my 9% desired return. I hit the analyze button and the stock I have valued low side of about 150, high side 440, middle price of 240 for a discounted cash flow return of 6.76% per year over the next 10 years. Now remember guys, this current price return includes dividends that might be paying. Now guys, I want to remind everybody Apple's current price to free cash flow is 30. When Buffett was buying it was in the low teens. I remember a friend who of mine who was a huge Apple bull 10 and 12 years ago said to me, Paul, is Apple a value play? And my comment to him was exactly this. Based on the numbers, absolutely undervalued. However, and this is my mistake. This is back in 2014 or 15. I said, is the iPhone going to be the leader years from now? because if it's not, this could be something totally different. Well, obviously it's it continue to be the leader and is the clear leader now in phones. So, that's the thing to remember with Apple. Our next stock now listen guys, if you told me that Google was your favorite stock in the Mag 7, I would not argue with you. YouTube is still growing. Google Cloud is accelerating. Search is still dominant at 90% of global market share. Whimo, their self-driving Uber kind of service already operating commercial robo taxis. That being said, remember the opportunity at $300 per share or $380 per share is not the same as it is at $150 per share that we had just a short time ago. So, here are my assumptions on Google. Alphabet 7913% revenue growth. Profit margin 2530 and 35%. PE and price of free cash flow 2023 and 26. And I'm putting in my 15% return for myself. So I got to change that back to nine. Looking for intrinsic value. So guys, I hit the analyze button. The stock is currently at $392. Guys, I have 215 on the low side, 580 on the high side, 330 in the middle. And guys, if there's one company that I think I'm being really conserved, I actually think it's Google. Because I look at Google going, man, that their margin is huge. They're still growing like crazy. YouTube is still awesome. Google Ads are still I just look at going, "Yeah, I think this is a great company to sit there and maybe not be as conservative on, but still be realistic about it." But remember guys, this is a stock that a mere three and a half years ago was at $85 per share, $86 per share. People were calling for the head of the CEO and they were sitting there saying Google's dead, Tik Tok's taking over YouTube, blah blah blah blah blah. News follows the stock price. Just remember that as all of these MAG7 stocks fall in the future, which they will in a bare market. Now guys, our next company, Amazon, they're actually at all-time high. It fell like many others and got below $200 per share for a short window of time, but has since skyrocketed about 30%. AWS, their cloud computing, is driving the profitability of this business, which will likely end up being the first company in the world to reach $1 trillion in sales. So, here are my assumptions of Amazon for the next 10 years. 48 12% revenue growth. Profit margin 8, 12, and 16. Another example of all the numbers in the history not showing high numbers, guys. This could be even higher than that. could be 10, 14, and 18. I don't know. But remember, as they're getting up to 16, they got to have the low numbers. So, I don't mind for the next 10 years doing this PE 20, 23, 26. Guys, to be honest with you, I think of all the companies that deserve a a biggest premium possible, it's probably Amazon because they literally own the shopping market. That's literally it. It's go on Amazon, go on Amazon, go on Amazon. It's so easy. And finally, my 9% desired annual return. I hit the analyze button. The stock's currently at 272. I have a low price of 107, high price of 485, middle price of 240. It's only about a 7 and a half return percent return based on my assumptions, but it doesn't mean that it couldn't just get a lot better because some of my assumptions might be conservative. We don't know exactly. All right, next up, Microsoft. Now guys, Microsoft has gotten beaten up with the rest of the software business over the past year. I know it was down like over 30% from its highs at one point. But let me ask you a question. Do you really see a world without Microsoft in it? Let's see what the stock analyzer tool says about it right now. Guys, I have 7, 9, and 11% revenue growth. But again, look at this one, five, and 10year. I mean, it's getting faster. Their revenue growth is getting faster. I do think this is way too conservative. I'm actually going to change this right here, right now. 8 12 and 16%. Profit margin. I did 34, 37, and 40, 20, 23, and 26 for my ratios of PE and price to free cash flow and my 9% desired return. The stock is currently at 423. If you've ever confused a stock's price with what it's actually worth, you're not alone. Everyone has done this. Most investors never learn the difference, and it cost them. But you're going to be different. Everything Money software was built around one simple but powerful idea. Price and value are not the same thing. The stock analyzer tool shows you what a stock is worth based on the real numbers of the business. The eight pillars make sure the business is actually healthy. Together, they give you a clear picture before you ever hit the buy button. It eliminates as much guesswork as possible. It can help you stop overpaying for stocks just because they're popular. You'll start to see every investment as a piece of a business with a price that either makes sense or doesn't. You don't need years of experience to understand this. In fact, the biggest misconception is the people on Wall Street know better. They don't. You do. Your competitive advantage is that you don't have years of experience on Wall Street. That is to your favor. And this platform was built to teach you as you go. So, start the 7-day trial for just $7. Click the link in the description and get full access today. So guys, I hit the analyze button. I have a low price of 400, high price of,040, middle price of 640. Guys, 14.5% potential return. Now you're probably thinking to yourself like, Paul, why aren't you buying this? Well, first off, for myself personally, not for you. For me personally, based on the real estate and the businesses and the money I have, I want a 15% return now on any stock I buy. Not in the past. In recent years, it was 12%. I've increased it to 15 because I like the dollar cost average into lowc cost ETFs. The other thing is I did increase my my revenue growth assumptions. The question is do I feel comfortable at 12% revenue growth a year for the next 10 years? That's a tall task. Is that ample margin of safety? It actually looks like ample margin of safety because I'm giving myself the huge potential return here of 15%. Guys, this actually makes sense because Michael Bur, who I think is a phenomenal stock picker, added Microsoft to his portfolio. This is an amazing company with a lot of I mean, guys, Word, Outlook, I mean, all these things, the entire world runs on Microsoft. And as the world becomes more and more technologically advanced and more and more first world, etc., it's only going to get better for this company. So, this is something that I might want to consider selling cash secured puts on. So, guys, just to explain my cash secured puts, what I do with them. So, look at a company like Microsoft and I want to buy it at $400 per share, let's say, to get my 15% return. So, I go to the options chain and I go to a date in the future. Let's call it June 5th, which is a month from now and I look at strike prices, guys. If I go to the $400 strike price, somebody's willing to pay me $4.70, which will give me a 14.7% return on my cash. So, what's happening is this. If Microsoft falls below $400 a share, I get the stock at $400 per share. If it stays above 400 bucks, I still keep my 470. Either way, I keep my $470. So, either I buy it for 400 and keep $4.70, which means I basically buy it for $3.9530, or it stays above 400 and I still keep my $4.70 and I got a 14.7% annualized return on my cash. Which means if I did this over and over again and never got the stock, I'd make 14.7% return on my money. Guys, final stock, number one pick. Here it is. The only stock in the Magnificent 7 that based on my assumption still looks at a genuine opportunity based on my desired return. And the one that I personally have puts on, I'll probably add more. Meta. They own Facebook. They own Instagram. They own WhatsApp. Over three and a half billion people use one of their apps or so or pieces of equipment every single day. That's nearly half the population of this entire planet. The way they make money is very simple. Businesses pay to show ads to those people while they scroll. The more people use the apps, the more valuable the ads become and the more money Meta makes. And on top of that, they haven't even scratched the surface internationally on their advertising. In 2022, Meta had one of the most dramatic falls of any large cap company in history, down around 70% as Zuckerberg poured money into the metaverse, which he has recently exited. Investors revolted. They wanted him fired. The stock fell all the way to $88 per share. Everybody said Meta is done. The cost cutting that followed was extraordinary. What emerged was a leaner, more focused, more profitable business. Earnings came back, came roaring back. Free cash flow hit record levels. was my biggest regret in all of my investing history. I saw Meta I actually got lucky and bought it at the very bottom. I was buying it along the way, but I bought it at the very low of $88 per share. My basis was low and it skyrocketed to 12, not 195 and I said it's gone up too fast. It'll pull back. It never pulled back. Huge regret. But guys, we learned all of these. Let me actually walk you through a little bit more about this company before I show you my analysis. It is a $ 1.6 trillion business. It's got 82% gross margin, which means every extra dollar they sell, 82 cents of it is profit. They have 33 cents of profit for every single dollar they sell after taxes, after overhead in their pocket. They have a great balance sheet, very low debt, generates a lot of cash flow. I mean, everything's incredible here. Massive growth, not even much in terms of acquisitions, less than $5 billion over the last five years. Let's take a look at our community members. The average rating is a buy at 736 intrinsic value. Eight pillars, guys. It seems expensive because of this, but guess what? This thing has a lot of growth potential with really high margin. It could be a value play. Let's check out the analyst estimates. I mean, analysts look at their profit as almost doubling in the next four years. Incredible growth and profit and revenue growth. 25, 18, 16, 13, 13% revenue growth. So, let's go put it all together in the stock analyzer tool, guys. 10-year assumptions. I did 7, 12, and 17% revenue growth, 29, 31, and 33% profit margin, 20, 24, and 28 in terms of PE and 9% desired return. Guys, look at this incredible company's value. a low price of 580 to 600, high price of 1,900, middle price of a,000 for a potential 16% return on your money. Now, I sold puts at a much lower price when the stock was lower just a month ago. Those puts are now probably not going to hit, but I will be selling new puts as time goes on. Now, guys, there's far more to investing than just putting stock analyzer tool and all these things. There's all looking at the metrics, and we have a lot of metrics that are in our software. I want you to have the same confidence and knowledge to be able to talk about companies for what they are. When you buy a stock, you're buying a piece of a business. And I want you to be able to understand that. So, I encourage you to do one thing. In the description below in the first pin comment, there's a link to download our absolutely free key metrics PDF that'll explain all these metrics for you, the calculations, how it's done, and what they mean. Click it. You'll be smarter. You'll be more confident. You will sleep better at night. and you're going to impress everybody you know with your knowledge on companies. Now, if you've made it this far and you want to see my own personal magnificent seven stock picks, the seven stocks that I believe can beat the real mag seven over the next decade, click right here to watch the video. Thank you for your time.