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Seven Stocks I'm Buying Now: January 2023 Edition
Welcome into today's video, folks! Yes, seven stocks I'm buying now. I'm going to share with you in this video the seven stocks I am buying and why I'm buying these particular stocks. In this video, I'm only going to be able to go a little in-depth with them because it's seven stocks. This series used to be three stocks I'm buying, but right now there's a lot of deals on the market, and I mean a lot of deals. There's probably a hundred stocks that I could be buying right now; there are deals everywhere in this market. So, I want to kind of share my perspectives in this video and share what stocks I'm buying. I hope you enjoy it as always.
First off, I want to thank every single person that subscribed to the channel. Thanks for being here, thanks for showing up, and I'm glad you guys always enjoy the content. Secondly, thank you to everybody that supports the channel on Patreon; I appreciate all you guys as well. And third, thank you to TickerBuddy for sponsoring today's video. I actually got TickerBuddy to give you guys a free seven-day trial of this software. I'm going to show you some of the software in this video when we do some analysis on these stocks. If you want to sign up for a free seven-day trial, that will be the pinned comment down there. I also got them to give you a $9.99 a month option if you decide to stay signed up for them once you try the seven-day trial if you like the product. So, that will be pinned in the comment down there. I hope you guys enjoy this video as always, and let's get straight into it.
All right, the action! First up here, Tesla. I am buying Tesla for the first time in years, and I mean literally years. If you've never heard of Tesla before, what the heck are you doing? You should have heard of this company by now. It's an automaker, energy company, plus artificial intelligence, right? Obviously, this is where most of their business comes from today: from autos. Secondly, in services around autos, so there's auto-related business. Then they have an energy side of their business, which is obviously solar panels, solar roofs, and battery packs for even cities or towns or even for your own personal house. They're also an artificial intelligence company, obviously with their self-driving software and many other projects they're working on, such as the Tesla Bot and many other various things that you aren't even seeing today but you will see in future years nonetheless.
Okay, the stock price obviously has been an amazing stock over the last number of years, and I'm somebody that participated in the stock. This is basically what I hold in the stock right now, and I'm looking to build back out my position. I sold most of my shares in 2021 and 2022 in regards to this stock; the valuation just went to the moon, to be quite honest, and the stock got very overvalued. What I found continuously, even before I owned Tesla stock, is that I tracked the stock, and what I've always seen from Tesla is that the company is either extremely overvalued or undervalued. Many times, it's either pricing in far too many years of growth in front of it or it's essentially way undervalued. Right now, Tesla stock is way undervalued. If we go back a year ago, two years ago, it was a very overvalued stock compared to where the company was versus where the company was trading. It was just very overvalued. So, I'm definitely looking to build out my position much bigger, and I would love to build this back into a position that's a million dollars again in the future.
Now, a few things here. If you're wondering where TickerBuddy gets all their analyst estimates from, it's essentially the S&P. These are all analysts—36 analysts here, 27 analysts here—giving their numbers and their projections. I'll show some of my numbers in just a moment here.
Okay, first thing: obviously, this company's in scale mode. They're scaling revenues, they're scaling EBITDA, they're scaling EPS, they're scaling free cash flow—everything across the board. The company has turned a huge corner over the last three or four years from a company that used to lose a ton of money to a company that people thought would never be able to turn the corner to a company that is obviously bringing significant free cash flow now, significant net income, and EBITDA. It's totally changed the game right now. In terms of analysts, they have them doing about $136 billion of revenue in 2024, with $32 billion of EBITDA, EPS of just over six bucks, and free cash flow of over $17 billion for good old Tesla.
Something that I hear time and time again, and if you've been a Tesla bull for many years, you've heard it a million times: we know this doesn't make sense, but they get put against Ford and GM. Through TickerBuddy, obviously, you can compare different stocks against each other. If you look at Tesla versus Ford or GM, the P/E ratios and the price-to-sales ratios are always significantly higher for Tesla versus Ford. Why is this? It's for two reasons. One is that Tesla's a forward-looking company; the whole market's going toward Tesla. It's more of a tech company than traditional automakers are, and so one should always command a much higher valuation for that. But the second reason, and the most important reason, the simplest reason, is that Tesla's growth is ridiculous compared to the other auto manufacturers. Tesla's a huge growth company versus traditional auto manufacturers, which usually just try to keep their current numbers or maybe grow slightly. Tesla's not one of those companies; it's a massive, massive grower.
Elon Musk retweeted this the other day from somebody who tweeted this out: U.S. light vehicle sales 2022 versus 2021. Look at Tesla's growth and look at everybody else in the red. It's Red Dead Redemption out there! It just goes to show you how strong Tesla's business is versus others. So, there's no reason that Tesla should be valued anywhere remotely close to where Ford or GM is valued in terms of valuation metrics. It just doesn't make any logical sense. So, nonetheless, Tesla's an incredible opportunity. When you see something like this happening, they just lowered the price on Model Y and Model 3. What's happening? From what we're hearing, Tesla is currently experiencing unprecedented demand in the United States following significant price cuts that happened last week. Many stores are hitting new records, and inventories are dwindling. I'm even hearing from folks that aren't even in the market for a Tesla that are considering buying a Tesla just to maybe flip it in a few months from now, which is crazy because, as we know, when Tesla demand gets rolling, Tesla raises prices. So, who knows how long these prices stay low for? It's a possibility that if crazy amounts of orders come in, next thing you know, what's Tesla going to do? Put the price back up again? I'm even hearing from some folks that are thinking about just buying one, just to buy one and flip it in a few months if demand keeps going like this. So, we'll see. Nonetheless, it shows you that all Tesla has to do is adjust pricing a little bit, and the next thing you know, everybody and their grandma's also buying a Tesla. It's ridiculous! They're coming to steal market share and dollars from every other auto manufacturer. If I were every other auto manufacturer out there, I would be scared to death of what Tesla's up to over the next few years.
Okay, now in terms of my projections for Tesla stock, let's look at those. This is my Tesla bear case. If you're in the private stock group, you obviously have access to all my different scenarios here. For the folks that aren't, here's my base case: I have this company doing $330 billion of revenue in 2027. I have them growing at an average growth rate of 32 percent, which I think is very doable for Tesla. I've been doing net income of about $51 billion in 2027, and I think it's very fair that you could value this company at a 30 P/E, maybe even a 40 P/E. But if you're just valuing it at a 30 P/E, you're at about a $1.5 trillion market cap in 2027 for this company, which for a company with that sort of growth, I think you could probably make a very strong argument that it should be valued more at a 40 P/E or 50 P/E if they're putting up that consistently a 30 percent type growth number. So, nonetheless, when we got a company here that's valued at $300 billion and the market cap over the next five years is likely going to be anywhere between $1.5 trillion to $2.5 trillion, in my personal opinion, it's significantly undervalued at this point in time. That's why I'm starting to add shares again in the stock and plan to continue to add shares of good old Tesla. I'm very excited for the future of Tesla, and I think—I don't know if I'm going to make more money from Tesla over the next few years than I did over the last few years; I'm not going to say that—but I do think I'm going to do very, very well for myself over the next few years.
Okay, number two of seven stocks. Tesla was super exciting, right? If you know anything about my investing philosophy, it's GVD: growth, value, dividends. Some of these stocks are growth stocks, some of them are value stocks, some of them are dividend stocks, some of them are exciting companies, and some of them are very sleepy, boring companies. Foot Locker would fit into that category of maybe a boring company. It's a shoe company, athletic apparel, and the stock hasn't really done anything in many, many years. Nonetheless, this company, in my opinion, is a money maker, and I think I'm going to make very good money on this. If you look at their income statement on TickerBuddy, it's not like it's super impressive revenue growth over the years or gross profit growth or anything like that, right? It seems like a pretty sleepy company, and it's not that it's not a Tesla. This isn't a Shopify or any of those sorts of stocks. You know what Foot Locker is? It's a consistent profit beast—a consistent profit beast company that throws off cash. It's one of the ultimate dividend stocks in the entire stock market, in my opinion, that completely gets forgotten about. People forget about it time and time again when it comes to this company.
The deal with Foot Locker is this: we're talking about a forward P/E of under 10, a dividend yield of over 4 percent, and a payout ratio of 33 percent, which means they have a lot more room in future years to raise their payout and raise the dividend year after year after year. So, I believe I'm going to stock that I will get capital appreciation. I do not think this is a stock that's going to triple, quadruple, or 5x. I do not think it's that sort of stock, but I do believe it's a company that I'm going to be able to sleep very well at night, collect those dividends, reinvest those dividends either into more Foot Locker shares or other stocks, and just have a grand old time nonetheless, and do very, very well for myself.
Now, if we pull up the balance sheet on TickerBuddy here, great balance sheet. I mean, we're talking about total equity of about $3.2 billion, which is roughly the market cap of the company. So, great income statement, great balance sheet, low valuation, huge dividend yield, consistent business model—yeah, I like this one, and I like it a whole lot.
Number three of seven stocks up here I am buying is back to the exciting growth stock, Shopify. Shopify is an e-commerce company, back-end for your business, and payments company as well. The stock has done pretty well over the past five years, up 246 percent, but it has been absolutely devastated—absolutely wrecked—starting basically around the second quarter, around the second quarter, third quarter of 2021. That's when the stock started getting hit very hard, and obviously, it's kind of been in a bottoming-out process over the last six months or so. The reason being is right here: you had the Rona run-up. Shopify already had incredible numbers, then you got Rona, and it put the stock literally to the moon. Then you had it coming off those insane growth rates and trying to figure out where's the normalization. We're going to start to see the normalization of Shopify's business in 2023 and as we move into future years, which I think is going to be very healthy. It's going to be back to a consistent growing company again. I'll share those growth rates with you in just a moment.
Okay, now in terms of analysts, if we look at TickerBuddy's analyst estimates here, right? 45 analysts cover the stock. They have basically a growth of about 20 percent for revenues for Shopify in 2023 and about 24 percent, so a re-acceleration of growth not only in 2023 but in 2024, which is pretty darn exciting, right? So, basically, we're looking at a stock that, in my opinion, is going to grow between 20 and 30 percent in revenues for this next decade, which reminds me similar to Amazon in the past because Amazon used to be a company that you could consistently count on to grow 20 to 30 percent a year. Shopify is now that company.
Now, I'm also more bullish than analysts on future profitability. Future profitability is very cloudy; it's hard to know because Shopify had a very ugly 2022, and now we're all going to try to figure out where this company's net income and EPS are going over the next few years. But I'm more bullish than the analysts on future profitability of this company. The way I view Shopify is very similar to if you were buying Amazon stock many years ago. Now, Amazon stock nowadays is a profit machine, a cash flow machine, everything like that, right? But back here, when Amazon was just a growth beast, it was very confusing how profitable Amazon would be in the future. Obviously, we got to see that over time, and I think Shopify is in a very similar scenario where everybody's trying to figure out exactly how profitable this company is going to be. I think Shopify is going to be one of the most profitable companies you're going to find out there, and I think they'll prove that out over the next five to seven years. But nonetheless, they're going through this awkward time of trying to readjust growth rates and trying to figure out where this company's really going—not just revenues, but net income and margins are going. I just think it's very similar to buying Amazon back then because people were very confused about what Amazon was like. How are they going to actually make money? They got all this revenue coming in, but are they actually going to make money? Oh yeah, they made a whole lot of money, and they're just in their early days of the net income story.
So, I absolutely love Shopify. Speaking about Amazon, what is our fourth of seven stocks up here? Amazon. Now, Amazon's interesting because I still view Amazon as kind of a growth company, but it's slowly shifting even into a little bit of a value company now at this point in time. It's kind of that awkward stage of like, is it growth or is it value? I still put them more into the growth category than the value category. It's a company, obviously, e-commerce. If you don't use Amazon, I don't know—are you alive? Come on, you have to use Amazon, right? It's AWS, which is basically almost the backbone of the entire internet nowadays. It's incredible what Amazon's built out over the past 15 years with Amazon Web Services. They have their huge advertising business that just continues to scale and build bigger. They own Twitch, they own Whole Foods, and they own a ton of other businesses as well. But that's kind of the core. If you're thinking about the core of Amazon, it's kind of those five businesses there.
The stock hasn't done much; I'll just be quite honest. Over the past five years, the stock's only up 48 percent for Amazon. That's horrible. I want to be quite clear about that—horrible. Amazon got caught up in the same situation as Shopify did, where they had this insane kind of growth during Rona, then they had to come off those growth rates, and then everybody's confused. Then interest rates went up, and it's like, well, what should we really value Amazon at? So, it's been a very confusing past five years for the stock. The stock's actually lower than it was in the summer of 2018. It's incredible to think about all the progress they've made over the past four or five years, and for the stock to be lower than it was back then—that's pretty wild stuff.
Nonetheless, Amazon is an absolutely amazing business model. If we go to TickerBuddy here and we look at analyst estimates, they have Amazon doing about $640 billion of revenue in 2024. I think analysts are far too bearish on EPS and net income. I think this company is going to scale net income and EPS like a monster over the next few years. Back in the Jeff Bezos days—because if you aren't aware of Amazon, they're not led by Jeff Bezos anymore; he stepped down from Amazon a while back. Now this company is led by Andy Jassy, who used to be in charge of Amazon Web Services, which is, guess what? The profit machine for Amazon. I believe what Andy Jassy is going to do with Amazon over this next decade is very similar to what Tim Cook did with Apple over the last decade, where he really took what Steve Jobs had built and made it into an absolute profit monster. That's what Apple became, and I think the same exact thing is going to happen with Amazon. You're already starting to see glimpses of the profitability, but I think we're in the early days. The profitability you're seeing from Amazon today is going to be what's called small potatoes compared to the profitability of Amazon three years from now, five years from now, seven years from now, and ten years from now.
Nonetheless, I think Andy Jassy is going to build just an incredibly profitable company, and by the end of it, don't be surprised if you see one of the most profitable companies in the world. Now, in terms of my Amazon base case, if you're in the private stock group, you have access to see all my different cases around Amazon. But my base case for Amazon here is 2027: $889 billion of revenue for this company. This is only assuming a 12 percent average revenue growth rate—not something crazy at all. I believe they are going to grow net income faster than revenue over the next five years, doing about 18 percent net income growth on average per year. That's going to equate to about $58 billion of net income in 2027. I think you could easily value the stock at a 30 to 40 P/E somewhere in there, which means the market cap should be in 2027 somewhere between $1.7 trillion and $2.3 trillion, which will be a pretty darn nice return on investment—not quite as impressive as Tesla, but I also do think Amazon comes with less risk than Tesla. So, remember, this whole game is about risk and reward, and I think that's a factor that's very, very important there. So, Amazon, nonetheless, I love this company, and I will be buying shares for probably the entire year of 2023.
Next up here, number five of seven, it's not a stock; this one is an ETF. Okay, this one is SDAO. Now, basically, what SDAO is, it's a 3X leveraged inverse of the Dow. This is not for me to make money; everything else I buy, I'm hoping it goes up in price over time, and I want to make money from it. SDAO, I'm not really looking to necessarily make money from it; it's a hedge. I'm hedging essentially in case the market tanks, specifically the Dow. I have a situation where I can make money on the market going down, and something I definitely learned over the past, I'd say, 12 to 18 months, having significant amounts of money in the market, is that I have to hedge a little bit. There's a reason high-net-worth individuals all hedge; those hedge funds are so popular, right? The way I kind of look at this is it's just a simple hedge to my portfolio—a small position. But guess what? If the Dow goes down 10, 20, 30 percent, my call options in SDAO are going to print ridiculous amounts of money, as well as if I own any SDAO straight up.
To give you an example of kind of how this works, right? I'll show you what happened today. Today, the Dow Jones Industrial Average went down 1.1 percent; SDAO went up 3.4 percent today. So, if there's a scenario where the Dow goes down 10, then SDAO should be up 30. That's all this is. It's a hedge. I'm not trying to make bank on this; it's just if the market tanks, I'm going to save face, and I'm going to be in a situation where I'm going to be able to capitalize on the market going down, go ahead and flip out of SDAO, and put that into long positions if it happens. Something I do know is that most of those Dow stocks are very, very overvalued right now. So, everybody knows NASDAQ stocks—many of the growth stocks made in NASDAQ stocks—are very undervalued right now. But I can tell you, I did a full video about this, I think it was maybe two weeks ago now: those Dow stocks, almost every single one is overvalued. If you look at where those stocks are usually valued at P/E ratio-wise, they're almost all overvalued. They all have to come down. I can see the Dow coming down 20 to 30 percent and then being in fair value for those Dow stocks. So, I don't know; we'll see. If the market tanks, SDAO will obviously print money, and I'll be able to flip that into long positions. If it doesn't, that's fine; it's only a hedge anyway, because if it doesn't do well, then likely means all my other stocks did absolutely phenomenal.
Now, certain things can happen where growth stocks could actually go up and SDAO could go down, and that's a similar phenomenon to what we saw today. I'm not usually counting on that, but it's always a possibility, right? Different—we've seen in this market, this nasty bear market that's basically started almost two years ago. You gotta remember this bear market really truly started almost two years ago when all the growth stocks, the Cathie Wood stocks, all those peaked around February of 2021. So, we're almost two years into this cycle. It's just 2022 was the first year where people really started to notice all the big stocks starting to fall.
So, nonetheless, SDAO. Number six of seven up here is CRSR, Corsair Gaming. Premium player in the gaming hardware space and the streaming hardware space. It came public a few years ago, and it went straight up to the moon as soon as it basically came public and then straight down. The stock's down about 14 percent roughly since its IPO. It's been kind of tough sledding for Corsair. At first, it was great growth, and then it was just a sinking business model because, you know, during Rona, essentially, everybody was buying gaming hardware and streaming hardware. So, they got this artificial demand that got put through for Corsair Gaming, and basically, things have normalized in 2022. So, 2022 was a disaster year for this company, and if we pull up TickerBuddy's analyst estimates here, you can see it was a disaster year. So, basically, 2022 was a disaster year, but they're back on track in 2023. The revenue should get back to growth, EBITDA should get back to growth, EPS, free cash flow—everything should get back to growth. This is a company that's not trading for some big valuation on it, and so we're going from a disaster year to back on track here at Corsair Gaming. I love this company; I love Andy Paul, the leader of this company, and I think the stock's going to do very, very well over the next few years. It's at a rather low valuation right now, and I just think they're on the right track. I see all the innovation happening with the company, and I'm very, very happy with this one.
Now, if we pull up the comparison tool in TickerBuddy, right, and we see Corsair Gaming versus Logitech, obviously, the best way, in my opinion, to value this because Corsair wasn't profitable this last year because basically they just had their profitability kind of devastated. It's just a one-year kind of freak thing; they're going to get back to profitability, no questions asked, in my opinion, in 2023. They had like a million things work against them in 2022 that aren't going to work against them this year. So, the best way to value these companies is versus each other’s price-to-sales ratio. If we look at Logitech, which, by the way, I think Logitech is going to do well over the coming years. I wouldn't mind owning Logitech; I don't personally own the stock because I think Corsair is a much better value, but I think Logitech will do well over the coming years as well. But if we look at Corsair versus Logitech, I think Corsair is going to outgrow Logitech, obviously huge on the bottom line but also on the top line as well. Price-to-sales ratio of 1 for Corsair versus 1.6 for Logitech. So, I think the stock's very, very undervalued versus Logitech, and that's why it's great to sometimes pull up comparisons—a comparison tool like this—because you can compare two companies that are somewhat similar. Of course, Corsair's not identical to Logitech; they're not identical to each other, but they're probably the closest comps they have to each other in the market. That's why comparison tools, I think, are very, very valuable.
Number seven of seven up here might be a boring stock to some, and that's fine. It's a pharmacy giant named Walgreens (WBA), which is the second place I ever got a job, actually, back in the day in the photo department. I used to work for Einstein Bagels before that, then I got a job making, I think, what was it? What did they hire me? I think it was like $8.25 an hour or something like that way back in 2008 or 2009. So, Walgreens—super simple, super low P/E in this company. It's at a forward P/E of maybe 8 on this stock, huge dividend yield. I mean, we're talking about a 5 percent plus dividend yield. They have a massively improved balance sheet now; they sold off some businesses and raised tons of capital. So, their balance sheet in 2023 is going to be an absolute rock-solid beast. Roz, the leader of the company, is going into year two in 2023, which is very exciting because we'll get to see her in action for real now. When you come over as a CEO, it's hard to make big changes in your first year. In your first year, you're really trying to just see what's going on with the business, see where you can make improvements, all these things. Year two and year three is where you really start to see those improvements, and obviously, all of the hard work behind the scenes starts to come to fruition in the numbers and those sorts of things. So, I think Roz is going to be putting this company in a really good position over the next few years. She has an amazing track record, and I think she'll do very, very well at Walgreens. I'm going to make great dividend money on this, and I think I'll get nice capital appreciation. It's not a realm of possibility to see a stock back to $50 to $60, where it used to be.
So, that is seven stocks I'm buying now: January 2023 Edition. I hope everybody enjoyed today's video. I appreciate everybody joining me. Thank you to everyone who has subscribed. Don't forget to get your free trial of TickerBuddy; that will be pinned in the comment down there. Enjoy that, and much love as always, folks! Have a great day!