👉 My Favorite Stocks Right Now: 7/12/23

Hi everyone!

And a major “welcome!” to the ~1,000 of you who have joined throughout the last week or so after my Mattel (Barbie) video went viral on TikTok and Instagram.

I should have been more diligent about sharing the idea with you all here on Substack, but it honestly wasn’t something I thought would be so well received. At the end of the day, Mattel (MAT) is still undervalued from a free cash flow perspective — so if you’re interested, go for it!

Personally, I took a small $500 position on Monday. I’ll likely make 10-20% and exit before the movie premiers next week.

⚡ My Favorite Stocks Right Now

I have some super exciting news as it relates to this week’s favorite stock ideas — I’m teaming up with the incredibly talented Katie Stockton of Fairlead Strategies to host a 45-minute livestream diving deep into each of these names both from a fundamental and technical analysis perspective!

Katie was actually on CNBC yesterday discussing a few of her favorite current setups — including Mattel (MAT). You can watch that clip here.

If you’d like to join us, the livestream will take place via Zoom July 18th at 12p ET. To toss your name on the RSVP list, click here! 

You’ll receive a confirmation email and an invite to your calendar.

👉 Monday.com (MNDY)

I’ve spoken about this company ad nauseam — and I’ll continue to until I’m blue in the face. Not only does Monday.com have $950M in cash on their balance sheet, they have $0 long-term debt, and produced record free cash flow ($38.7M) during Q1.

Here’s a quote from their recent earnings release:

Beyond the incredible financial position this company finds themselves in, they also have a proven track record of introducing new products to their customers — and more importantly, being able to sell the hell out of them.

Another great callout is their ability to recruit and maintain profitable relationships with enterprise partners spending more than $50K / year with them.

The main reason I’m so excited about this company, specifically, is the potential for their operating (and free) cash flow to continue multiplying throughout the rest of the decade — driving their stock price higher.

I truly believe this will be one of my biggest winners over a several year time horizon.

👉 Uber Technologies (UBER)

In case you missed it, here’s an incredible Twitter thread I shared in February that breaks down exactly why I’m excited about this company for the foreseeable future.

Alongside this thread, I was actively sharing my excitement for the company in our subscriber-only Week in Review posts after they reported their Q4 earnings — their stock price has since risen +33%.

The excitement is simple — the company is adjusted EBITDA positive for the first time ever, which will continue to propel their free cash flow higher.

For added perspective, their GAAP net loss during Q1 2022 was -$5.9 billion. Their GAAP net loss during Q1 2023 was -$157.0 million, a massive improvement!

Wall Street expects Uber’s adjusted EBITDA to rise by +50% to $5.4 billion during 2024, as well as report their first ever GAAP profitable year of operation. I’m very optimistic about how this “flip to profitability” will continue to positively impact their stock price over the coming 12-24 months.

👉 Salesforce (CRM)

This Mega Cap Tech stock has been one of the larger positions in my portfolio for several months now — especially after other Mega Cap Big Tech names like Google, Amazon, Apple, and Tesla all experienced an unwarranted selloff during the winter months.

As you can see below, Salesforce’s stock (black line) sold off aggressively near the tail-end of 2022 — trading at just $125 / share. his became alarming to me after I realized throughout the last 15+ years their stock price moved (generally speaking) in tandem with their operating cash flow (blue line).

So, I loaded the boat (comparatively speaking) — giving this name a 14% weighting inside of the “Long Technology” subsection of my portfolio.

Until their stock price in black is trading again alongside their operating cash flow in blue — I’m a buyer and will continue to dollar cost average into the name. They also just announced a +9% price increase on their products — the first increase in seven years. Wall Street was happy to see this and their stock price continues to trade higher this week.

👉 VanEck Morningstar Wide Moat ETF (MOAT)

Unfortunately, I have to keep this one short because I’m still actively doing my research — but I wanted to notify you all regardless.

According to VanEck’s website, the ETF “seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Morningstar Wide Moat Focus Index, which is intended to track the overall performance of attractively priced companies with sustainable competitive advantages according to Morningstar's equity research team.”

Here’s a link to the Morningstar Wide-Moat Focus Index, which includes a more detailed description.

So, why am I sharing this?

Outperformance across the board. 

On a “Total Return” basis (dividends reinvested), the MOAT ETF has outperformed the S&P 500 Index on the 1-year, 3-year, 5-year, and 10-year time horizons. Heck, even from a pure price return perspective it has outperformed on all of those time horizons!

I’m still doing my research, so stay tuned — but this ETF might be something very interesting. It’s hard to argue with 10+ years of market-beating performance.

Again, welcome to the 1,000+ of you who have recently joined us! And be sure to RSVP for Katie Stockton and I’s livestream taking place on July 18 at 12p ET!

Disclaimer: This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.