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Happy Easter and Passover to those who celebrate.
Back by popular demand, I’ll be joining Katie Stockton on Thursday (4/24) at 12:30p ET for an hour long deep dive into three stock picks. This is our fourth installment of the “fundamental analysis meets technical analysis,” and we’re having a blast!
These webinars are free for anyone to join. I share with everyone three of my favorite stocks right now, fundamentally speaking, and Katie rallies behind me with where they are from a price perspective and what could be around the corner technically speaking.
Please join us! Everyone seems to love these webinars, and we’re thrilled to be able to offer them to you all a few times a year.
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Portfolio Updates (YTD Performance):
As shown above, the Dividend Growth Stocks, Long Risky, and Berkshire Hathaway subsections of my portfolio in aggregate are all outperforming the S&P 500 YTD (down -9.44%). However, when you include the Long Technology subsection (Magnificent Seven) the portfolio’s YTD performance sits at -9.64%, exactly 20 bps lower than the S&P 500.
There are 12 stocks in the Dividend Growth Stocks subsection and 9 stocks in the Long Risky subsection outperforming the S&P 500 YTD — with the best performance coming in +22%, and exactly 6 stocks up double-digit percentage points YTD.
I’m not sure now is the time to be bearish on the Magnificent Seven. As I had shared with you all several weeks ago, I took profits across the portfolio (including the Magnificent Seven) when the S&P 500 and Nasdaq-100 were hovering around their respective 200-day moving averages.
Now that names like Amazon, Google, Microsoft, and others are trading at valuations we would have jumped at earlier in 2023 and 2024 — nibbling here sounds like a good idea.
Remember, we’re not trying to time the market — but instead use historical valuation multiples to confirm we’re getting a good / bad price on a stock. At these prices, our risk-to-reward ratio is leaning in our favor.
Week in Review —TLDR:
Netflix is expected to double their ad business in 2025, TSM maintained their guidance, and United Airlines experienced a sharp drop in foreign travelers to the US.
The U.S. / China Trade War continues, Webull had a dramatic first week of trading, Google could be in some serious legal trouble, the Capital One / Discover deal got approved by the Fed, Jerome Powell continues to butt heads with President Trump, Retail Sales soared above expectations, and Housing Starts continue to disappoint.
Key Earnings Announcements:
Netflix is expected to double their ad business in 2025, TSM maintained their guidance, and United Airlines experienced a sharp drop in foreign travelers to the US.
Netflix (NFLX)
Key Metrics
Revenue: $10.5 billion, an increase of +12% YoY
Operating Income: $3.3 billion, an increase of +31% YoY
Profits: $2.9 billion, an increase of +24% YoY
Earnings Release Callout
“We’re executing on our 2025 priorities: improving our series and film offering and growing our ads business; further developing newer initiatives like live programming and games; and sustaining healthy revenue and profit growth.”
My Takeaway
Predictable in an unpredictable world — and the market appreciates it.
Netflix reported strong Q1 earnings results and shared an encouraging Q2 guidance. Wall Street believes this quarter further validated their bullish thesis on the company as they remain well-positioned in the Media and Entertainment landscape with sustainable growth drivers that should prove to be predictable and defensive amid a range of macroeconomic uncertainties.
Netflix also maintained their FY2025 guidance of +12-14% revenue growth and operating margins of ~30%. All driver’s of Netflix’s longer term revenue growth, including subscription and advertising, appear intact. Retention trends remain stable, advertising revenue is on track to double in 2025, recent subscription price increases have been well digested, and engagement remains robust.
Wall Street models +25% annual EPS growth through 2027, climbing to $38 per share. Assuming at 35X P/E multiple on that, you’re looking at $1,330 / share — representing +40% upside from current prices. Not a bad idea!
No shares, yet.
Taiwan Semiconductor Manufacturing (TSM)
Key Metrics — displayed in $NT unless otherwise specified
Revenue: $839.3 billion, an increase of +42% YoY
Operating Income: $407.1 billion, an increase of +64% YoY
Profits: $361.6 billion, an increase of +60% YoY
Earnings Release Callout
“Our business in the first quarter was impacted by smartphone seasonality, partially offset by continued growth in AI-related demand. Moving into second quarter 2025, we expect our business to be supported by strong demand for our industry-leading 3nm and 5nm technologies. While we have not seen any changes in our customers’ behavior so far, uncertainties and risks from the potential impact from tariff policies exist. We will continue to closely monitor the potential impact on the end market demand, and manage our business prudently.”
My Takeaway
Wall Street remains optimistic of TSM’s continued AI strength. Customer behavior hasn’t changed and so TSM is not seeing any impact from macro uncertainty (including tariffs). As a result, their Q2 progress is well-ahead of historical seasonality. Wall Street is also reassured by the dismissal of M&A speculation.
As shown above, you can see TSM’s revenue by division (in USD) forecasted throughout 2025 — then also TSM’s free cash flow expectations (in NT) forecasted through the end of the decade. Wall Street expects 2025 to be a wash, with 2026 and beyond being years of material growth.
Wall Street seems to believe the company’s 2025 outlook assumes no tariff impacts. However, management pointed out that it may have more details to share in the coming months regarding customer direction and order adjustments due to potential tariff impacts. TSM still maintains its full year mid-20s growth guidance.
No shares.
United Airlines (UAL)
Key Metrics
Revenue: $11.9 billion, an increase of +5% YoY
Operating Income: $607.0 million, an increase of +513% YoY
Profits: $387.0 million, compared to -$124.0 million last year
Earnings Release Callout
“Our strategy coming out of the COVID pandemic was simple: Build the best airline in the world to attract brand-loyal customers. The people of United Airlines have executed and built that airline. United Next is on track and we will continue to execute our multiyear plan that has allowed United to thrive in any demand environment. It has given us industry-leading margins in the good times and we expect to expand our lead further in challenging economic times.”
My Takeaway
Raymond James
Wall Street remains in the “neutral” position on United Airlines. They’re concerned about United’s outsized earnings exposure to specific business segments that could begin to falter if things don’t begin to turn around. For example, their long-haul and premium customers are major earnings catalysts to both the upside and the downside. When you pair this exposure with aggressive CapEx growth and a levered balance sheet — you’re exposing the company to even greater earnings risk.
Wall Street expects United’s 2H25 YoY domestic capacity growth to remain in the mid-to-high single digits (similar to 1H25). However, US inbound (foreign travelers) softness is bubbling up. Specifically, United observed European & Canadian bookings are down -6% and -9%, respectively. And with United’s international margins being much better than their domestic margins, this is a problem (as shown above).
No shares.
Investor Events / Global Affairs:
The U.S. / China Trade War continues, Webull had a dramatic first week of trading, Google could be in some serious legal trouble, and the Capital One / Discover deal got approved by the Fed.
Quick Trade War Update
Source: Asia Times
President Donald Trump has expressed optimism about reaching a new trade agreement with China, suggesting a deal could be finalized within three to four weeks. This comes amid escalating tensions, with the U.S. imposing tariffs as high as 245% on Chinese imports and China responding with its own countermeasures. The Trump Administration claims that the elevated rate comes “as a result of its retaliatory actions."
Source: Financial Times
While Trump continues to emphasize his strong relationship with President Xi Jinping, he maintains that the initiative for progress lies with Beijing, stating, "The ball is in China's court.”
Analysts caution that China may hold greater leverage due to its control over critical sectors like electric vehicles and rare earth minerals, which are vital to U.S. industries. Beijing has called for negotiations based on "mutual respect" and criticized the U.S.'s unilateral tariff increases. There’s a lot of mixed feelings right now surrounding if any sort of deal will actually be coming — but it’s clear that a weekly update on all of this will be necessary (at least in the short-term).
“There’s no difference between China and any other country except they are much larger, and China wants what we have, what every country wants, what we have — the American consumer — or to put another way, they need our money.”
Webull’s (BULL) Public Market Debut
Source: Webull X Account
Webull, the online trading platform, saw its stock soar nearly +375% on its second day of trading following a SPAC merger with SK Growth Opportunities Corp., bringing its market cap to nearly $30 billion. Since then, the stock has come crashing down closer to its IPO price.
Founded in 2016 by former Alibaba and Xiaomi executive Wang Anquan, Webull gained popularity during the post-pandemic retail investing boom. The platform offers trading in stocks, ETFs, options, and crypto, along with tools like real-time data for a premium fee, and currently has over 23 million users across 15 regions.
Webull’s key competitors include Robinhood, Charles Schwab, and E-Trade — though the company claims its users are more “intellectual” than those of Robinhood. The company is projecting flat revenue of $390.2 million for 2024, similar to 2023. It’s worth noting that Webull’s Chinese connections have created some concern given the current state of the U.S. / China trade war.
Nice story, but this is yet another example of why I don’t typically invest in companies immediately upon IPO.
Webull Corp. (BULL) Stock Performance, 5-Day Chart, Seeking Alpha
"Becoming a publicly traded company marks a significant milestone in Webull's history. This next step in our company's journey will position us to serve the growing number of experienced, digitally savvy retail investors who demand a more sophisticated retail trading partner that can grow with and serve them over decades. Webull's advanced trading and investment offerings make us the partner of choice for the next generation of retail investors looking to capitalize on the dynamic world of trading and investment.”
Google (GOOG) Partially Loses Major Lawsuit
Source: Sergei Elagin Sergei Elagin / Shutterstock
A federal judge ruled that Google illegally monopolized online ad tech markets related to publisher ad servers and ad exchanges, marking the second time in a year it was found to be an illegal monopolist. Judge Leonie Brinkema stated that Google willfully engaged in anticompetitive conduct that harmed competition, web publishers, and consumers. However, she did not find that Google monopolized the advertiser-side tools market and ruled that acquisitions like DoubleClick weren’t inherently anticompetitive.
The Justice Department may pursue a breakup of Google’s ad tech business, though significant legal hurdles remain. Google plans to appeal the ruling, asserting that publishers choose its tools for their simplicity and superior performance. All of the ‘Big Tech’ companies go through major legal action, but this one has joined Meta as the two most likely to lead to actual consequences.
Alphabet Inc. (GOOG) Stock Performance, 5-Year Chart, Seeking Alpha
“We won half of this case and we will appeal the other half… The Court found that our advertiser tools and our acquisitions, such as DoubleClick, don’t harm competition. We disagree with the Court’s decision regarding our publisher tools. Publishers have many options and they choose Google because our ad tech tools are simple, affordable and effective.”
Capital One (COF) & Discover Financial (DFS) Merger Approved
Source: Angus Mordant / Bloomberg / Getty Images
The Federal Reserve and the Office of the Comptroller of the Currency have approved Capital One’s $35.3 billion all-stock acquisition of Discover Financial Services. Under the deal, Discover shareholders will receive 1.0192 Capital One shares per Discover share, representing a +26% premium at the time of the February 2024 agreement.
The merger will expand Capital One’s credit card offerings and deposit base, as it also acquires Discover Bank. As part of the approval, Capital One must comply with regulatory actions, including a $100 million Fed fine against Discover for interchange fee overcharges between 2007 and 2023. After closing, expected on May 18, Capital One shareholders will own 60% of the combined company, with Discover shareholders owning 40%.
Capital One (COF) Stock Performance, 5-Year Chart, Seeking Alpha
Discover Financial Services (DFS) Stock Performance, 5-Year Chart, Seeking Alpha
“The Board evaluated the application under the statutory factors it is required to consider, including the financial and managerial resources of the companies, the convenience and needs of the communities to be served by the combined organization, and the competitive and financial stability impacts of the proposal.”
Major Economic Events:
Jerome Powell continues to butt heads with President Trump, Retail Sales soared above expectations, and Housing Starts continue to disappoint.
Jerome Powell’s Speech at the Economic Club of Chicago
Source: AP Photo / Erin Hooley
Fed Chair Jerome Powell warned that tariffs could complicate the Federal Reserve’s balancing act between controlling inflation and supporting economic growth. He acknowledged that President Trump’s tariffs are likely contributing to rising inflation and could delay progress toward the Fed's 2% inflation goal. Powell emphasized the Fed's dual mandate — price stability and full employment — and said these goals may come into conflict due to tariff-driven economic shifts.
While the Fed is not yet ready to change interest rates, Powell said they are “prepared to wait for more clarity.” He also noted that near-term inflation expectations are rising, though longer-term expectations remain stable. Despite signs of slowing GDP growth in the first quarter, Powell maintained that the economy remains in a “solid position.”
As you’ll read below — Trump is furious at Powell. He feels that inflation is clearly coming down and that he has a duty to lower interest rates as soon as possible. The Trump Administration has begun publicly expressing that they want Powell to be fired.
“Our obligation is to keep longer-term inflation expectations well-anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem.”
“The ECB is expected to cut interest rates for the 7th time, and yet, “Too Late” Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete “mess!” Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS. Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now. Powell’s termination cannot come fast enough!”
“The Fed really owes it to the American people to get interest rates down. That’s the only thing he’s good for. I am not happy with him. If I want him out of there he’ll be out real fast believe me.”
Retail Sales
Source: WSJ
Consumer spending jumped in March, driven largely by a surge in vehicle purchases as buyers tried to beat impending import tariffs. Retail sales rose +1.4% from February, exceeding economists’ expectations of a +1.2% increase. Even excluding auto sales, spending was up +0.5% — which was also above forecasts.
The data was collected before President Trump’s April 2 “Liberation Day” announcement of broader tariffs, though some earlier levies had already taken effect in March. These early tariffs included imports from Mexico, Canada, and China, likely influencing consumer behavior. Regardless — this was a solid surprise to many economists, and some believe that the American consumer may be more resilient than expected during Q1.
“The increase in bar and restaurant sales shows that consumers were more likely to spend on this discretionary experience… We had been seeing waning momentum in this sector as the post-pandemic sugar high wore off and household budgets became constrained by higher prices and higher interest rates, but perhaps things aren’t as dour as the consumer sentiment figures would lead you to believe.”
Housing Starts
Source: WSJ
U.S. housing starts dropped -11.4% in March to an annualized rate of 1.32 million — the sharpest decline in a year — driven by a -14.2% drop in single-family home construction. High mortgage rates, which jumped to 6.81%, along with elevated home prices and consumer debt, are dampening demand and builder confidence. Building permits for single-family homes fell to their slowest pace in four months, while multifamily permits rose slightly.
The South, the largest homebuilding region, saw an -18% drop in single-family starts, with declines also taking place in the Northeast and West. Inventories remain elevated — the highest since 2007 — prompting builders to slow activity and offer incentives. Due to the slowdown, residential investment is expected to contribute a modest 0.15 percentage points to Q1 GDP growth.
“We do expect to be able to continue to leverage our relationships and our scale to navigate the cost environment better than smaller builders.”
“Looking ahead, bloated inventories, uncertain trade policy and slowing growth will likely create headwinds for builders. We expect construction activity to slow throughout the year ahead.”
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