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I have three stocks that are great potential buys right now, selling at or near their 52-week low. Stock number one is one of my favorite high-end restaurants of all time: Chipotle Mexican Grill.
Chipotle isn't just slinging burritos; it's running one of the most efficient cash-printing operations in the restaurant game. This isn't your typical fast-food chain; it's a premium brand. And I chuckle at that because I was joking about high-end restaurant, cuz I love Chipotle. When I don't go to Chipotle, you see their earnings fall. Now the numbers: absolute domination in 2024. They had 11.3 billion in Revenue; fourth-quarter growth was over 133%—that's double the industry average. Profit margin: 11.66%, a serious feat in a world of rising costs. Same-store sales growth—guys, this is the most important number when you look at any sort of retail establishment—over 7.4% growth, and they're not stopping. They have 3,437 locations today, with plans to double. Digital orders were 36.1% of fourth-quarter sales, and now Chipotle Lanes, which are their drive-throughs, have boosted Revenue by 10 to 15%. They're automating labor, innovating the menu, and scaling intelligently.
What's the bottom line to it? Chipotle isn't just growing; it's compounding, and that's the magic word for Value investors. But remember the most important tenant of our principal-driven investing—it's tenant number four: a great story can become a bad investment if… finish it for me… you pay the wrong price. Chipotle is awesome. $67 billion market cap; the stock is at 50 bucks. It did a big split last year. Profit margin huge; gross margin not that big, but it just shows you how much of their labor and cost are shoved into that gross profit number. Guys, look at this: basically no Acquisitions, only 10 Mill in Acquisitions in The Last 5 Years, and look at this growth rate: 10% a year for the last 10 years, 15% a year The Last 5 Years, 14.5% over the last 3 years. That's a combination of same-store sales and opening more locations.
Now, why do we look at 52-week low stocks? Well, guys, remember: in the short run, stocks are voting machines; in the long run, they're weighing machines. So if a stock's at a 52-week low, in all likelihood, it's probably some voting mechanism, the market saying, "We don't like you," for whatever reason. The question is: is that the fundamentals that are driving that drop? Well, we're always remember: news is going to follow the stock price, but with a 52-week low stock, it's a great place to start to look for Value. Has the fundamentals of the business changed, or have people's perceptions in the short run changed? That's what's key here. Let's go see what analysts are saying about Chipotle. Well, look at this: doubling their profit in the next four years—that's 16%, 19%, 19%, 21%, 15 and a half percent. What about their Revenue? 11.8, 13, 13.5, 15, 11.7. Guys, a real growth story here, and remember: growth is the most important aspect of any sort of investment. Our stock analyzer tool is what marries the story with the numbers. If you look at our stock analyzer tool, you have all these assumptions to make: Revenue growth, profit margin, multiples, and your desired return. You're taking that story and converting it to numbers; that's why we use a stock analyzer tool. As long as you make good assumptions—low, middle, and high—you'll get a range of values that allows you to make a decision on buying the company or not.
So let's see what my assumptions were on Chipotle the last time we took a look. I did a 10-year analysis. I did 6, 11, and 16% Revenue growth. Here's one thing I want to point out first: look at their increasing Returns on Capital. This is building up their MO status, and this shows that they can take this Revenue growth and convert it to profit very, very well. You've got to pay a premium for these kind of companies. If you're not… what are you doing? You're going to Value this like some dying retailer? No, this cannot be done that way. Profit margin: I did 8, 10, and 14, and same with free cash flow. PE: Now, guys, they're currently selling for 44 times earnings and 44 times free cash flow—little pricey even for a fast-growing company. I put 18, 21, and 24. And finally, a 9% desired return. Guess what? That's not exactly Fair because I'm looking for intrinsic value here. You need to have a margin of safety. How do you have a margin of safety? You increase your desired return. If you're fine with a 9 or 10% return, just go buy a long-term ETF; it's a lot less risky, way less research. If you want to buy an individual company, you need to get a higher return than this. I merely put in 9 or 10% to get my intrinsic value. So based on my assumptions, I have a low price of 14, high price of 66, middle price of 29. So guys, this is still on the rich side for me at 50 bucks a share. That's okay, but makes sense with this PE and price of free cash flow being so high.
Stock number two: PepsiCo. Pepsi isn't just about soda; it's a global Consumer Staples juggernaut with an absolute stronghold on snacks. Seriously, 60% of the Revenue comes from things people munch on daily: Lay's, Doritos, Cheetos, Quaker Oats—that's a 35% US snack market share. And let's be real: people might cut back on soda, but they're not giving up on chips anytime soon. Beverages still a beast: 25% market share across soda, water, energy drinks, and all hydration, and they are everywhere—over 200 countries, billions in Revenue. And the kicker: pricing power. When costs go up, they pass it on—it's inflation-proof. And PepsiCo isn't just sitting there and sitting still; they're pivoting into the health trends: Gatorade Zero, Bubly, making Smart Buys like SodaStream, and boosting margins through efficiency. It's not flashy, but it's a fortress: over 90 billion in Revenue, 50-plus years of dividend hikes, and monster free cash flow. It is not going to be a 10-bagger overnight, but for long-term compounding, PepsiCo could be a no-brainer if you pay the right price. So let's check out Pepsi right now to see what's going on with the company.
So first off, $28 billion market cap, generating $7 billion in free cash flow. But guys, look at this: their Dividends are $7 billion. Now, for people out there who love dividends, that's 3 and a half percent, which has been driven up a lot lately by the fact that their stock is at 151 right now. It's pretty close to their 52-week low; that's going to drive up your dividend yield. Margins: 55% gross margin—that means over half of every dollar they bring in goes to the bottom line before overhead and taxes—with 10% to the absolute bottom line. It's a premium company selling for 22 times earnings and 29 times free cash flow, and a good return on Capital: 5-year average of 15%, and almost 177% in the last year. All right, pretty good. Now the question is: how do you feel about the fact that their net income is significantly higher than their free cash flow, and their free cash flow is basically eaten up completely by their dividends? I don't like that part. If the stock becomes really cheap, I want the company to buy back shares. Will they buy back? Will they stop a dividend? That's one of the worst things that these dividend payers can do. When people have that reliable dividend, they want it forever. So let's go check out these eight pillars and see what it looks like. What's the story the eight pillars are telling us? Well, a lot of debt here, which isn't the worst thing—I mean, it's Pepsi; I doubt that the debt's going to be that problematic—but it's important to understand what caveats and Covenants they have in their debt that would trigger problems. 25 times 5-year earnings, 3 times 5-year free cash flow. Only bought back 1% of their shares—well, of course, cuz they're eating up all their money in dividends. Blah, I really hate that, by the way; that really drives me nuts.
So let's see what analysts are saying: earnings per share growth: 1.7, 6.5, 6.4, 8, 8.2—pretty solid earnings per share, nice and consistent. Revenue growth: 3, 3 and a half, 4, 8 and a quarter, 8 and a quarter—not much Revenue growth in the first couple of years, but some random jump-ups here with the 4 and 2 analysts here in the following years. So they see something we don't. Now, again, stock analyzer tool: story, numbers—put them together. So let's go put our numbers in for the stock analyzer tool. Let's see what I've done in the past here. Now, guys, I did 2, 4, and 6% Revenue growth. I did a profit margin of 9.75, 10, and 10.75, and free cash flow of 7 and 2, 8, and 8 and a half, cuz you see how much lower their free cash flow is than their profit margin. PE: 17, 20, and 23, and my 9% return. Now let's go back to this PE and price of free cash flow. What would Coke be? Pepsi's the second to Coke, but it doesn't mean they're not great. Pepsi is still a great company with a lot of hold in the snack market. Should it go higher or lower? I don't know. Now, guys, this is the stock analyzer tool—been used over a million times in the last year—but let me ask you something: how confident are you in your investing decisions? Do you really understand the companies you're buying, or are you just following stock tips, jumping in and jumping out? The stock analyzer tool here was made by me because I wanted to understand my investing decisions better. I know what it feels like to invest without a real process; I've been there early in my investing journey. I bought a stock called Global Crossing cuz my sister's boyfriend's father told me to buy it. He said it was the next big thing, and it was going to be awesome. And guess what? I didn't do my research; I didn't have a process; I had no community of investors to challenge my thinking. So what did I get for it? A stock that went to zero—gone. I didn't understand the second tenant of our principal-driven investing: every Investment is the present value of all our future cash flows. I looked at a stock back then as a ticker going up and down. The stock analyzer tool has helped me realize that every investment is the present value of all the cash flows I'm going to get from that investment, and that is exactly why it was built—for Everything Money. Because people sat there and saw this and said, "How do I get that?" In the time we didn't offer it, but now we do offer it, and it's helped people use this tool to be the number one tool in our software, and they share it in our community; they share it on Twitter; they share it everywhere they go. Now, right now, we have a waitlist for everythingmoney.com, and here's the deal: on April 15th, we're making major changes. This current offer is going to be gone forever. So if you join then, you'll be grandfathered in for life in the pricing tier that we've offered you. You get all of our tools, you get everything in here, and most importantly, our community. And guys, what's the use of that? It's going to help you make better decisions; it's going to help you sleep better at night; it's going to help you realize that the better process that you have, the better you'll do, the better you'll sleep. You're going to have access to everything here in just minutes; you can start analyzing stocks, researching real estate, doing whatever you want to lock in your financial future. Investing can be tough, especially when the market turns ugly, but guess what? In our community, when the market turns ugly, people cheer. So don't wait; click the link in the description below, start your 7-day trial, and see firsthand how the right process, the right tools, and the right Community can make all the difference.
All right, guys, so let's hit the analyze button. Boom. We have a low price of 75 to 100, high price of 140 to 180, middle price of 100 to 134. So guys, this is a company that's on my radar, but I just don't like their dividend policy, but I'm still going to add it to my watchlist, but I'm going to be very conservative about this. I want it as a screaming deal. I'm going to add it for $80 a share. So now the software will notify me by email, by app, and by the software here on my desktop when it hits $80 a share. If it ever does, it'll notify me.
Stock number three: Mo's absolute arch-nemesis: FedEx Corporation. FedEx owns Mo's brain. FedEx doesn't just deliver packages; it delivers profit. The $87.7 billion Logistics Powerhouse moves—you ready for this?—14.5 million packages per day across over 200 countries—that's 33% of the US shipping market, competing head-to-head with UPS and Amazon. But is it a great investment? Let's break it down. FedEx is laser-focused on profitability and efficiency: $4 billion in cost cuts, streamlines operations, boosting margins. AI and Robotics-powered Logistics, automating sorting hubs. They did a Freight spin-off; FedEx stock jumped 8% as investors cheered the shift toward higher-margin business. Are they shareholder-friendly? It appears to be that way: dividend growth plus aggressive share buybacks equals higher earnings per share, which will eventually lead to a higher stock price. With e-commerce now over 20% of total retail sales, FedEx is primed for long-term demand and growing. It trades cheaper than UPS, yet it's cost-cutting, expanding ground services, and leveraging tech for margin growth. For disciplined investors, FedEx is a compelling long-term bet if you pay the right price. So let's check out this company. They do have lower free cash flow than their net income—that's okay for right now—and their dividends eat up about half of their free cash flow: $1.3 billion, but a healthy dividend, market-beating dividend of 2.2%. Terrible return on Capital—okay, not the best—but let's go further from that. Very small Acquisitions: $228 million in The Last 5 Years on billion-dollar Revenue—that's nothing—and you still see 5- and 10-year growth of 5 to 65%—not bad. Current PE of 15, current price to free cash flow of 22. So guys, there's a lot of positives here, maybe some negatives. Let's go check out the eight pillars. What's that story telling us here? All right, a lot of debt here, guys—huge debt. My guess is a lot of facilities, a lot of airplanes, a lot of these leases in here that they need for operational reasons. All right, low return on Capital, but everything else: check mark—a lot of check marks here. This is the one that bothers me still: the difference in earnings and free cash flow. Okay, let's see what analysts think about the company: earnings per share: $19 to $32, 7%, 17, 12, 19, 7%—so pretty good growth here on earnings per share. And Revenue growth: 3 and a half, sorry, almost 4, 4, 5.8, 4, 2—nothing to write home about, which makes sense; they're already huge. So let's go to our stock analyzer tool and marry the story to the numbers to find the right price to pay for FedEx. All right, Revenue growth: I did 3, 5, and 7%. Profit margin: I did 3 and a half, 4, 4 and a half. And for free cash flow, a little bit lower: I did 3, 3 and a half, and 4. Now, PE and price of free cash flow: I'm trying to figure out why I did 10, 13, and 16. I think I'm being a little conservative there; I should do 13, 15, and 17 because their ROIC sucks, but there's still a Powerhouse here, and I still think they deserve some sort of at least Market matching, even though it's below Market on their—on their—um—ROIC. The average for the market is about 9%, so I'm doing a little bit lower than that. Is this reasonable? Maybe 12, 14, 16. Actually, let's do that; let's do a little bit lower: let's do 12, 14, and 16. And guys, I hope you see that I'm making these adjustments. Remember, investing isn't just about… this is the exact number—boom, that's it. Intrinsic value has a lot of gray area to it; that's what makes investing an art. Hit the analyze button. Boom. I have a low price of 145 to 170, high price of 300 to 350, middle price of 200 to 245. And guys, this return includes the dividend, so make sure you don't add the dividend on top of this. Guys, if you want to learn more about my entire process for investing, watch our next video, which is our full course on stock market investing. Trust me when I say it's worth the time. I'll see you in the community. Thank you for your time.