Transcription
Folks, can you believe there's less than 30 trading days left in 2024? You know what they say: time flies when you're having fun.
Today we're going to get into five stocks that you got to buy within the next 30 days. All five of these stocks are set up for huge future gains in 2025 and beyond, and I'm going to go through that in depth in this video here today.
There's one thing, and there's one thing only, I need from you guys here today. I spent many, many hours preparing this video for you guys. I hope you appreciate it. The only thing I ask from you is that you hit the like button on this video. You make it glow, you smash it, you do whatever you got to do to make that thing glow. I appreciate you all for being here. If you want to subscribe, like the sign in my garage says, you can subscribe to the channel. We just hit a new all-time high subscribers in the history of the channel. Appreciate you all for being here.
Okay, one piece of housekeeping I got to get out of the way here before we get into these five stocks is I know there's a lot of people that got into the stock market this year, 2024. Maybe you're a newer investor. Listen, there's a difference between being a gambler and an experienced investor. A gambler in the market just throws money in stocks, just kind of hoping they go up, right? An experienced investor thinks about things. They're well-thought-out decisions; they don't just throw money around, right?
Additionally, gamblers don't understand income statements. They don't understand balance sheets, cash flows, value in a stock; they don't understand how to do SWOT analysis on a company. Well, experienced investors understand how to decipher a great income statement versus a bad income statement, an okay income statement. The same thing with balance sheets, cash flows. They understand how to run valuation models to understand if a company's at a great price that you're buying today or a rip-off today, right? They understand how to perform SWOT analysis.
So, listen, for all you guys that are in my private stock group, make sure you're taking advantage of watching all those videos in those premium courses I've created for you guys—become a Master Stock Market Millionaire Playbook, all those, right? I've got videos teaching you everything across the board there, right?
Additionally, for those of you guys that don't have access to my private stock group, you want to apply for access, pin comment down there, click on that, fill out an application, and we'll see if we can get you access to all that at the end of this week or going into next week, okay? So you can take your game up from being a gambler in the market into a more experienced investor in a very quick amount of time, which is very, very key because there are a lot of opportunities out there, and you got to understand where the opportunities are, okay?
All right, guys, let's get into this first stock of these five stocks. Up here is AMD, Advanced Micro Devices. You know, I never thought I would be a buyer of AMD stock, but my gosh, is this stock looking like a phenomenal opportunity now at this point in time?
In regards to AMD, you understand they got a few different business lines now. The main business line is data center, right? And data center has been a business that's been a little trailing. Invidia beat AMD to the punch, so AMD is going to be playing a lot of catch-up in regards to this specific category, this big dog business in 2025 and 2026, right?
When you think about AI chips, think about this business line as well, right? Now this business is still already taking off, with 22% growth year-over-year in their latest quarter they reported. But keep in mind, the growth rates are going to get much, much, much bigger on an absolute number basis in 2025 and 2026 than what they are today.
Keep in mind these numbers they're putting up for data center revenue right now—these are small numbers compared to what they'll likely be putting up two years from now, okay? So keep that in mind. Great growth rate, but a long way to go. Client revenue should continue to climb as well.
Now, they have two very weak businesses right now. One is gaming—that's down 69% year-over-year—a disaster, right? Embedded is down 25% year-over-year. Those businesses are in a horrible spot in the short term, but keep in mind, likely in 2025, these two business lines are going to turn to being positives.
So right now, they're huge drags on the business, right? And that's why the company only grew revenue 18% year-over-year. But in 2025, these businesses are likely to go from massive drags in the business to actually tailwinds behind the business. So keep that in mind; it's very, very important to keep that in mind, right?
Additionally, you're likely going to see gross margins expand into the 60% plus range over the next two years as well. Check out Nvidia's gross margins. I don't think AMD is going to get to that level of gross margins, but they're going to get a lot higher than where they're at right now, which is around 50%. They're going to likely be 60% plus two years out from now.
Right now, there are people who don't really understand AMD versus Nvidia, and they see all these companies using Nvidia chips and buying every Nvidia chip—far as all the GPUs they can get their hands on, all the AI chips they can get their hands on from Nvidia, right? And the big companies like the Googles, and the Microsofts, right? And Meta and Amazon, all those sorts of companies—and they see AMD, and they're like, "Well, you know, if these companies are all buying chips from Nvidia, then that means they're not going to buy chips from AMD." False. Not true.
Listen, all those same companies are all going to be buying chips from AMD left and right over the next 5 to 10 years, right? Google, Oracle, Microsoft, Meta—all those sorts of companies. AMD is going to be better in some applications for certain reasons on the tech side versus Nvidia. Keep that in mind.
Additionally, these massive companies do not just want Nvidia to win. If Nvidia is the only one that wins in the AI chip market over time, that's going to put AMD—and those companies—into a situation where they're just going to have to pay through the nose for any Nvidia chips they want. You got to keep two great companies very healthy in this market.
Additionally, AMD's got a great workforce. There's going to be a lot of different applications that are better suited for AMD than Nvidia, right? So keep in mind there's plenty to go around in regards to Nvidia and AMD. This is not just one company wins and the other company loses. That's not the way it works; that's not the way it's ever worked in regards to these two companies, right?
And actually, it's important for Nvidia, believe it or not, it's important that for Nvidia, AMD wins as well because if AMD doesn't win as well, guess what? The government's coming down on them. They're going to say they have monopoly practices and all those sorts of things. We already know the DOJ is looking at Nvidia, right?
So it's very important for Nvidia that AMD also wins, and there's plenty of money to go around. So keep in mind, AMD is going to be playing a lot of catch-up over the next few years.
Now let me take you into some bullish and bearish scenarios I have for AMD, and you'll realize why, in my opinion, the stock has so much upside and why it actually makes sense to enter a position here at AMD.
Check this out: this is my bull case running it through THX Stocks.com. This is my bull case I have for AMD. I have them growing an average of 30% revenue in my bullish scenario and 40% net income. Now let me also explain to anybody that's newer to the market—like maybe it's your first year—why do I run a bull case, bear case, base case around the stock? The reason being is you've got to account for several different scenarios to potentially play out to really understand what the risk-reward is looking like for that stock. You can't just assume everything's going to be perfect because if that's all you're assuming, then you're set up for some potential real downside there.
Right now, 30% on average revenue growth, 40% on average net income growth—that puts them at a net income margin of 15% around 2028, right? Which is not very high. Keep in mind, Nvidia has been putting up netting margins recently of like 50% plus—it's been ridiculous, right? Now, if they're growing 30% top line, 40% bottom line, a semiconductor company like AMD probably commands between a 50 and a 70 PE ratio, which puts the compound annual growth rate on the low end of about 25% and on the high end of about 36%. In my bullish scenario, that is very, very attractive.
Now my base case—my base case is just a fancy way of saying this is what I think AMD is going to actually do. Like, if you have to put my numbers down, here's what I think they're going to do on average over the coming years. I think they're going to do an average of 25% revenue growth per year from 2025 to 2028. I think they're going to do an average of 35% net income growth per year from 2025 to 2028. Right now, if you're growing 25% top line, 35% bottom line, a 45 to a 65 PE is pretty fair, somewhere in there, right?
Which gives you a compound annual growth rate on the low end of 18% and on the high end of 29%. It's very attractive base case. Anytime we can be talking about compounding a growth rate around a 20% type number, that's very, very, very, very good, especially for a company that has a great management team like AMD does, a special workforce like AMD has, and a great balance sheet like AMD has—very attractive.
Okay, now here's a bear case I have for AMD, and this is what is really amazing. In my bear scenario, I have them growing revenue only 20% per year from 2025 through 2028. That would be a very bad number, and I mean very bad number, especially considering AMD's got a couple of business lines that are likely going to turn positive in 2025—a couple lower businesses, right? And the AI revenue that's really going to play catch-up in 2025 and 2026.
So if they only grew revenue 20% a year, very bearish. I mean very bearish, okay? Net income growth of 30% in this scenario, right? Now if they're growing 20% top line, 30% bottom line, you're going to pay somewhere between probably a 35 and a 45 PE, and it still gives me a compound growth rate on the low end of 7% and on the high end of 13% over the next four years. That's very attractive for a bear case. Many times when I run a bear case for a stock, my compounding growth rate is negative; it's not even in the positives, right? So if I can even in a bear scenario still make money in the stock over the next four years, I like that a lot.
Now here's something else very interesting, right? AMD's basically have next year's earnings per share growth; they're thinking around 200%. Major catch-up in earnings per share growth in 2025 for the company, and they have revenue growth of, you know, 27-28%. So I wanted to do—usually when I run my numbers, I do kind of an average of what I expect to be over the coming years, but for this scenario, I wanted to run non-average, right?
So here's what we got. Let's say they do—analysts think they're going to do revenue-wise 27% growth in 2025, and let's say they're going to do what analysts think they're going to do as far as net income—207% next year, right? And then let's say have growth slowing each year over the coming years down to 24% revenue growth there, 21% in 2027, and 17% revenue growth in 2028, right?
Then I have them getting no real, you know, we can call it extra lift in regards to their bottom line, their net income. So net income—24%, 21%, 17%—same exact numbers. That's actually kind of bearish. Right now, the PE you're willing to pay for the stock will go down over time because the growth rate keeps going down, right? So let's say it's 55 to 75, then 45 to 55, 40 to 50 in 2026, 35 to 45 in 2027, and then in 2028, let's say 30 to 40, somewhere in that range, right?
This gives me a compound growth rate on the low end of about 20% and 29% on the high end, with the most money being made really over this next two-year span in regards to AMD if we're going to go with non-average numbers over the coming next few years, right?
So the moral of the story is here in regards to AMD: this stock is a buy. It's a buy, and it's a very attractive buy right now. And I've never been a shareholder of AMD, but gosh, I think I got to get a position started here very soon.
Stock number two of these five stocks is Celsius Holdings, ticker symbol C-E-L-H. On this one, this is a $25 stock right now. Year-to-date, it's had a horrible, disastrous year—absolutely disastrous year. You look at a five-year chart of the stock; it's one of the best-performing stocks you will find in the entire stock market over the last five years. You pull up a year-to-date or a one-year chart of the stock; it's one of the worst-performing stocks, or even a six-month chart is one of the worst-performing stocks you will find in the entire stock market, okay?
Now, Celsius has built up a phenomenal brand over the last, I would say, five years, and they really came out of nowhere—like hardly anybody even knew a Celsius five years ago—and they built a massive energy drink brand. But the amazing thing Celsius has been able to do is they've been able to fit themselves into a category in which people really always thought of the energy drink category as super unhealthy. They always thought of the energy drink category as like male-dominated—like it's men who drink this, it's the landscaper, it's a construction worker, it's a guy who's going to the gym, but it's not like, you know, people that are as focused on health-related things.
It's not as many people, really, like women. Like that was what the category always was, but Celsius was able to flip that. Celsius has been able to build out a brand that is now in just about every store you could imagine, but they've been able to build out a brand for folks that are focused more on fitness—which is not what Monster was known for or Red Bull or those sorts of brands, right?
Additionally, women love to drink Celsius. If you go to any popular gyms, I'm sure you'll see plenty of women drinking Celsius. And that just wasn't, you know, that's never really been a thing. Like it was always like just men drink energy drinks; they're the ones drinking the Red Bull; they're the ones drinking the Monster, and that was how it was for a long time.
Additionally, it's huge in like the hospital area. If you're a doctor or nurse, I'm sure you could speak to this, or you work at a hospital, I'm sure you could speak to this—like I've heard from so many people Celsius is huge in the hospitals. Including Liz, one of the folks in my private stock group, right? She posted this photo: "The employees at my hospital love this stuff," right? Celsius just sells well; it sells very, very, very, very well and in places that you just wouldn't have traditionally thought an energy drink would be sold, right? It's unbelievable!
These are photos I took of my local grocery store. You know, Celsius has a huge brand presence in all these spots, and Pepsi's definitely—the Pepsi distribution deal has definitely helped them out immensely. There's another member of the private stock group this morning actually posted this one. I don't know why they put a Celsius endcap in this section; it was kind of a weird section that the store put it in, but whatever. Okay, Celsius is getting that distribution.
Now let me show you the numbers in regards to what I have for Celsius going over the next few years. This is my bull case I have for Celsius running on THX.com, okay? I have them growing 20% on average revenue 2025 through 2028. I have them growing net income on average 25% per year. That would put them at a net income margin of 14% plus come 2028. That puts them at a net income of roughly $400 million. We can call it revenue about $2.8 billion for this company.
So if they're growing 20% top line, 25% bottom line, a drink company—35 to 45 PEs about what you're going to expect here. This gives you a compound annual growth rate of 25% on the low end and 33% on the high end for this one. That's a very, very bullish scenario. And keep in mind, guys, these numbers I have here—these are really bad compared to how Celsius has been growing. Like Celsius growth rates have been exponentially better than this over the past number of years. Look at their growth rate last year, the previous year—like they've been growing a lot of triple-digit numbers.
So the moral of the story is like, you know, I think this is actually a pretty doable bull case. This isn't like crazy, like, "Oh my gosh, they're growing 100% a year" like they've been growing.
Right? This is my base case I have for Celsius: this is what I expect to happen. I think Celsius is going to be growing revenues 15% per year on average over the next number of years, and I think that net income's going to go up about the same—about 15% as well. I think it might be tough for them to get lift on the net income because it's a very competitive category. I think Monster is going to keep the pedal to the metal, which is another stock I own. They're going to keep the pedal to the metal, so it's going to be hard to get a lot of margin left in the business over the next few years in my opinion, right?
In this scenario of 15% top line, 15% bottom line, a 30 to 35 P/E is pretty fair, and that gives me a compound growth rate of, on the low end of 10% and on the high end of about 15%. Right now, if we run numbers on my bear case here, this would be really bad—only 10% revenue growth per year on average, only 10% net income growth on average over the coming years. This would be really bad, so 10%, 10% drink company—probably paying at 23 to 28, somewhere in there roughly—which gives me basically, you know, little to no gains in the stock over the next few years, right?
But that's not the worst bear case. Like remember, a lot of times when I run a bear case on a stock, it's like I lose like 5%, 10%, 20%, 30%, whatever, right? Even in this scenario, my bear case for Celsius—it's not that bad. So for that reason, I think Celsius sets up very, very attractive.
Now, I do want to show you one last one I do have for Celsius here: this is my ultra-bullish case. So this is a scenario in which they get back to like a 30% plus growth rate like they were growing before, right? So if they could do 30% on average 2025 to 2028—and let's say, you know, they just knocked it out of the ballpark, brand keeps growing massively over this next few years, sell-through is great, and maybe they can get a little increase in pricing here and there, right? I heard Monster's taking pricing this upcoming year or has this past year, so that should help Celsius.
So let's say 30%, 30%, right? So that puts us in a scenario where if they're growing Topline 30%, bottom line 30% year in and year out, a 50 to 65 P/E ratio is pretty fair for the company. That puts a stock somewhere between $104 and $135 come 2028, which gives me a compound annual growth rate on the low end of 42% and on the high end of 51%.
So Celsius is pretty attractive here, right? Because if I run a bear case, I'm probably flat on the stock over the next few years. If we really talk about this company knocking it out of the ballpark, my return profile is going to be ridiculous on the stock over the next number of years, right?
So now, very important I show you this next part here. Check this out: this is Celsius' balance sheet. You want to talk about a pristine, phenomenal balance sheet. And keep in mind, the whole market cap of the company is like $6 billion-ish, somewhere around there, right? If the stock goes any lower, it's going to be in the fives.
Look at this: cash and cash equivalents of $93 million. Now if you look at total assets, $1.7 billion in total assets—that's versus total liabilities of $456 million. So we can talk about a 4X total assets versus total liabilities. That's a phenomenal balance sheet. Talk about grade A. Now we got almost a 2X here of cash and cash equivalents versus total liabilities. Total liabilities on the company—that is insane! Absolutely insane!
So we're talking about this as a grade A income statement in regards to this company. So Celsius here, here's a way I'll view it: take advantage of all tax loss harvesting in the year-end. You got to understand anybody that's bought Celsius stock in the last probably two years, two and a half years, they've lost money in the stock.
If you looking and you've sold stocks for gains, right? You're an investment fund, you're an individual investor, whatever; you've sold stocks for gains this year. You know you got a tax bill coming here in a few months—you've got a little bit of time here; we can call it 30 trading days, or less than 30 trading days at this point in time—where you could look at a stock like Celsius and you say, "You know what? I'm going to go ahead and take a loss on this," and you know what? "I'll buy it back in the springtime. I'll buy it back in February; I'll buy it back in January, something like that," right?
And so you have tax loss harvesting that can come in the stock, and this is my opportunity that I view as somebody that has not been in the stock over the last few years that I'm looking at it and as a new investor to the stock, who's just started buying it here recently, I’m like, "Yeah, you guys could tax harvest all you want, and I'll gladly take those shares off your hands."
You want to sell me Celsius at 25, 22, 20? I don't care—give me it as low as you want—17? Give me it, please! Okay? I don't—I'm not really convinced it's going down there, but if it was, give me, give me, give me, please!
And so that tax-loss harvesting plays out here, and I'm just like taking advantage of as many shares as I can get my hands on here over this next little short period of time. And then we'll see where things shake out in 2025. I'll see how the numbers start coming in in that first quarter, second quarter. I'm looking for things to have bottomed, and start to get a little bit better, and a little bit better in Q1, Q2, within Q3 and Q4, getting back to growth. If I see all that playing out, oh, it's going to be a lot of fun in regards to Celsius stock, and I'll just keep adding in that first quarter and second quarter as well. So it's not like I'm just buying here in the short term.
Okay, all right, guys, stock number three of these five stocks up here, this one I love: Sofi Technologies, ticker symbol S-O-F-I. Sofi—$13 and some change stock here today—it's up about 44% year-to-date.
Now, Sofi, you got to understand, is at the cross-sections of, I would call it, new-age banking and fintech, okay? They're part banking, they're part fintech, they're part tech platform, okay? So in regards to Sofi, something very important you got to understand is many investors are underweight on this stock. This is a very attractive retail investor stock, right?
And I'm a retail investor—I've been in the market 16 years, right? I'm still just a retail investor. I'm underweight the stock; I got to be honest with you guys, okay? I own 3,700 shares in the public account. I want the stock to go down. I really want the stock to go down. I want 5,000 shares in the public account. Like, that's been my goal in regards to Sofi: get to 5,000 shares, and then I'm good. Like, you know, I wouldn't mind holding 10,000 shares of Sofi in the public account, but if I get to 5,000, I'm good with that.
So I'm just one of many people that's hoping this stock goes down—that's waiting for the stock to go down— that's like, "Please can the stock go down?" I can tell you I'm not the only person. There's a lot of people, and that makes it very difficult for the stock to go down because people start getting more and more impatient if the stock's not going down, and especially if it just keeps going up.
They're like, "Dude, like this thing is never coming down; I better buy shares now." Right? And so I've made 97% on the stock, but I'd rather just not have made any money right now. I'd rather the stock be right back at my cost basis, wherever that's at, right? Because I want to add more shares. So it's very important everybody understands that.
Now, in regards to Sofi's latest income statement, it's unbelievable. Look at this: loans and securitizations—$671 million vs. $539 million the same quarter last year. Total interest income—$723 million vs. $564 million. Net interest income (NII), which is one of the most important metrics you ever look at in regards to banking-related companies—$431 million vs. $344 million, right?
But keep in mind, they also have their tech side of the business as well. So if you look at total net revenue—$697 million vs. $537 million, right? And that's just that more Fintechy side; that's just not a side you get with traditional banks. And I think that's one of the other reasons Sofi is so attractive because I think about it, and I think about the banking side, so attractive because it's just so phenomenal with attracting the new age customers. But then they also think about the tech side, and that's so attractive, and it's just—it's a very special stock, right?
Now, if we look here, net income went to $60 million vs. a $266 million loss in the same quarter last year. So they flipped profitability, and that profitability is just going to likely keep pouring in bigger and bigger for at least the next, I would say, year or two. Then we'll see where the economy shakes at longer term and those sorts of things, but things are looking pretty good here in the short term; that's for dang sure.
Now, Sofi I believe has reached escape velocity, and this is very important to understand. In regards to a stock, there’s—when a company reaches escape velocity, the way I would, you know, put it like this—there's almost nothing anybody could do to stop the company now at this point in time. And that's the way I look at Sofi. They've got it down to such a science in regards to their marketing and being able to acquire customers in an efficient manner, right?
Get those new age customers and get people into the ecosystem of Sofi. They've got that down to perfection now at this point in time, and I don't see that slowing down. The tech side, I see that just continuing to be at escape velocity and just be gone, gone, gone. And so that's the way I look at Sofi. They've reached that level now at this point in time that there's just really no stopping them.
In my personal opinion, there's really no competition to make them stop. You know, the traditional banking companies, they can't do it. The fintech companies, they can't really do it as well because Sofi is so well integrated on the banking side; fintechs in general don't want to be banks, and banks don't have the ability to be fintechs. So that's why Sofi is such a special stock.
It's important everybody understands this: Sofi is such a special stock because they're really the only company out there that can be a bank, and they can also be a fintech. It's just not really possible for other companies to do that. So it was very special.
Right now, I've spoken about Sofi recently in a few videos. I spoke about it, if I recall, I featured it in six stocks to buy now, November edition. So not sure if you guys got a chance to see that video, but if you want to hear me talk more about Sofi, check out that one.
Additionally, this video from a couple weeks ago—Sofi and PayPal—buy, buy, buy! Right? That's when Sofi was $10 at that particular time. PayPal was $80. Definitely want to check out that video as well if you care about Sofi stock, right? That's definitely one.
By the way, one other video I want to just draw to your guys' attention: if you never got to see this, I created this video a little over a month ago—it was actually September 2nd—16 years of stock market advice in 52 minutes. Let me know in the comment section if you watched that video. I'm very curious; just let me know. You know if you watched that video and you really enjoyed that one, just let me know in the comment section. But this was my best video, in my opinion, I've created in the entire 2024, and I just want to draw to your guys' attention because if you ever see that thumbnail suggested to you here on YouTube, you know, watch that video. I know it's a beast; it's 52 minutes, but trust me, it's worth your 52 minutes, okay? It's well worth it. And you probably watch it two or three times and keep it in your notes for a long term and come back to that video because it's very, very, very helpful video.
Alrighty, next stock up here—the fourth one of these five stocks is a combo buy: Estee Lauder, ticker symbol E. On this one, it's a $63 stock here today, okay? It's a combo buy, though, and I'll take—I’ll show you the other stock to buy along with this one, right, and my views on that.
With Estee Lauder, with E, great brands! Great brands! I mean, these are one-of-one brands, and they own many of the best brands you could ever imagine in regards to cosmetics. Phenomenal!
Additionally, turnaround—they're really a turnaround story in regards to 2025 and 2026. The brands are phenomenal; the company—but it hasn't been managed the best the last couple of years, right? And so we got a new CEO incoming here, and I believe this gentleman's going to take advantage of what he's been given here in regards to these brands and turn this story really around in 2025 and 2026.
I believe over the next two years, the stock will go from a $60 stock to about $180 plus stock over the next two years, which still is a long way from where the stock used to be. This used to be like a $370 stock. So even when it goes to $180 plus over the next two years, in my opinion, like it's still like half of what it used to be. So keep that in mind, okay?
Now the other part of the combo buy is Elf Beauty, ticker symbol ELF. On this one, this stock has actually had a rough year-to-date as far as the stock price—it went down 14%. It looks not that bad compared to E, but almost all these stocks in the cosmetics and beauty space have had a very, very tough 2024 in regards to stock prices.
Elf’s numbers have been tremendous, by the way! It's a growth beast company—I mean, absolutely extraordinary numbers! They continue to take market share quarter after quarter after quarter, right?
And I would put this company in the top 10 most well-run companies in the entire public markets over the last five years. It is unbelievable how well-run this company has been over the last five years, and honestly, the stock price speaks for itself.
Now look at this! These are photos I snapped, you know, a couple weeks ago at my local Target, and I want to do this for you guys so you could really understand the presence Elf has now at this point in time. This entire section—a massive section—is all Elf Cosmetics products.
Now, the important thing to understand that—right? Cosmetics, skincare, all that type of stuff. The important thing to understand: when I first started investing in this company, about six years ago—or yeah, five, six years ago, whatever it was—right? When I first started investing in this company, they had like small sections in a Target store. And to see this expansion and the reason they've got this expansion into these Target stores and many other retailers is because the product sells through so phenomenal! It sells through like insanity, right?
They got another section right at the start of the area for Elf, right? They got another area for Elf as well, and so it's just been, you know, incredible to see their build-out in the physical stores and in the digital space. They're one of the strongest, if not the strongest, cosmetics and beauty-related companies in the digital space as well. So you got physical and digital—they understand marketing on the highest level possible.
Now, in regards to Elf, if you want to know why a stock has done bad this year, right? One, the whole beauty category has done bad this year, right? Two, consumers have been hit. Three, they've been spending like it's nobody's business. Selling general administrative expenses came out a whopping $186 million this latest quarter vs. only $212 million at the same time last year.
Now, my opinion is you're going to see spending chill out in calendar 2025 and 2026. I do not believe they need to add massively to selling general administrative expenses in calendar year 2025 and calendar year 2026. I believe they're going to be able to have those numbers moderate massively, which means the revenue is not going to stop pouring in. Like, the net sales are going to keep climbing and climbing substantially over the next two years here, okay?
In calendar 2025 and 2026, so what's going to happen, in my opinion, is profits and net margin—the bottom line margin—is going to fly for this company in 2025 and 2026. And people, for the first time in a long, long time in regards to Elf, they're going to actually pay a little less attention to net sales and market share growth, and they're going to pay more attention to net margin and EPS because I think the setup for 2025, calendar year 2025, in calendar year 2026 is ridiculous for Elf.
So that's my opinion on what's going to play out here, and that's going to be reflected in the stock price. It's going to be insane. Now in regards to Estee Lauder's latest quarterly numbers, you know what's interesting about this? This is a disastrous quarter for the stock.
The stock crashed on this, and the crazy thing about this is gross profit was down a hopping 1% for the company—1%! This is a disaster for Elf or for Estee Lauder, excuse me, and it's crazy because it's not even that bad. Like when I see companies report really bad numbers, their gross profits down like 20%, 30%, 40% on a year-over-year basis—1% put me to sleep! Like that is not that bad.
Now, I believe all these cosmetics and beauty-related companies are going to actually thrive in 2025 and likely 2026 as well. And the reason being here is we had a massive decrease. If you want to know what makes a healthy economy, what makes a strong economy, a great economy, it's built on really the back of two things, okay?
Especially when it comes to, if you're viewing it from the consumer perspective. You got to have low unemployment rates, and that's something we've had consistency, but you've also got to have real wages that are going up and going up, right? If everybody has a job, but they're losing to inflation, it—this doesn't set up for a good consumer backdrop, right? And that hurts spending at a lot of these consumer brand companies, and that's what we had for several years, right?
And you know if I just—the bottom line is, 2021 through 2023, you know, real wages were in a very bad place—a very bad place. And it just kept going down and going down, and that set up 2023 and 2024 for, you know, really tough numbers for anybody that sells to the consumer, right? Especially anybody that sells to, let's call it, people that make less than $100,000, which is guess what? If you're selling beauty products and makeup products and those sorts of things, guess who your biggest customer base is going to be? People that make less than $100,000 because that's what most people make—like less than $100,000, right?
So the moral story is because real wages were in such a bad spot for several years, it set up 2023 and 2024 numbers to not be in a good place, right? However, if we look here since 2023, we've been up-ticking in regards to real wages, and I don't see that stopping either because, as far as CPI and inflation, those numbers should be low for at least the next 6 months, if not the next 9 to 12 months.
Meanwhile, real—because the unemployment rate is still low, it's in the fours—that means wage strength is going to be still there, right? Which is very exciting for these consumer-related companies!
So I view 2025 and 2026 as great years for the consumer, which means these companies are going to be some of the ones that are going to benefit the most is Estee Lauder's, e.l.f., and many of these other brands, okay? So do keep that in mind in regards to this.
Now here's the deal: I own a thousand shares of Elf in the public account—up 1,584 of those shares. I might take that thousand shares to the grave. I'll be honest with you guys, or at least until Tarang goes bye-bye. Tarang is the CEO of this company that's done an amazing job. You know, I think he should be put on the top 10 best CEOs in the entire public market over the last five years. He's top 10 to me! And so until he goes bye-bye, or until— you know, I just got to hold the stock. I got to hold the stock because it's such a special company.
So I got to continue to hold that thousand shares there, right? It's the number two best-performing stock in the public account—the only one that's getting beat by Tesla's 2,400% gain, right? But number two, followed up there by Palantir at a 656% per gain and Meta at a 367% per gain, right?
So now in regards to Elf, if you want to hear me talk more about it, I did a video a little over a month ago. It was actually a combo video. I talked about Elf and Celsius; about a 29-minute video there. This is when Elf was actually $10.
At that particular time, so definitely want to check out that. If you want to hear me talk more in-depth about Elf, it's one of only a few stocks I spoke about this entire year, right?
Shopify—that video has aged very, very well. This video by Palantir and don't stop—it's $20 when I did that video five months ago; it's $60 plus now, right? This video has aged very well. Buy Tesla and don't stop—$180. Right? Look at where Tesla is today; I think it's about double that price.
Nike video is going to age very well over this next bit of time in my opinion. Elf is already starting to age very well, and I think Celsius is going to age very well as far as all those ones go. Look out, you know, over the next 6, 12, 18, 24 months.
Now in regards to Elf here, I believe this is going to become the third biggest cosmetics brand in the world in 10 years from now, okay? So right now, it's a $6 billion-something market cap on this one. I think I really believe they're going to become a, you know, 40, 50, 60 billion market cap long-term over the next 10 years, right?
And they can become that third big giant, and I believe Estee Lauder, over the next, actually, two years is going to take back over the mantle as far as the second biggest company. I think L'Oreal will remain number one for quite a while here, but I think Estee Lauder will come back and take the number two spot here over the next couple of years.
And I think Elf is going to just keep rising the ranks year after year after year and end up eventually taking that number three slot. And then who knows? Maybe Elf, long term, if we look out 20 years, maybe this company becomes the biggest cosmetics company in the world. It actually has the DNA to potentially become the biggest cosmetics and beauty company in the world. It has that potential; we'll see.
Obviously, I'll be a very happy camper if that happens because $6 billion into $185 billion—oh yeah, baby!
Okay, alright guys, next one up here—number five of these five stocks is Nike. Nike! Oh my gosh, they’re a table pounder right now for me, okay? I got to be honest with you guys—this is a dream come true in regards to Nike. I've always wanted to own this stock. Always! But the issue was the company always traded very rich. I couldn't wrap my head around the valuation and whatnot, right?
But here's the thing: over the last seven or eight years, the company's made tremendous progress, but the stock has not. The stock is back to pricing it was back in 2018, which, as a value investor, dividend investor—that side of me looks at Nike—one of the greatest brands in the entire world ever in the history of mankind—and I'm like, "Am I the only one seeing this?" Because I feel like I'm the only one seeing this.
And I know a lot of people are tax-loss harvesting on this—funds are tax-loss harvesting on this and those sorts of things right now, right? And I'm like, "Give me every share in sight!" This is a dream come true!
See, this is the sort of company I can own year after year after year, collect those dividends; those dividends will raise up, right? The stock will get back its mojo in 2025 and beyond, and I think I'm going to make a tremendous amount of money over the next many years in regards to stocks by just holding it and just getting those dividend money—dividends get bigger, and then I get stock price appreciation. It's unbelievable! So this is a dream come true in regards to Nike, and this is just a table pounder for me—buying every share in sight!
And it’s not like I'm taking some huge risk in regards to this. This is Nike; this is a very special company, right? And you got Elliot Hill taking back over the reins of the company—oh man, perfect!
Okay, now I don't even really want to speak about Nike that much because I've talked about this stock so much over the last, like, month or last few months here. I mean, it's been ridiculous because this is a stock I have viewed as just like buy every share in sight the second half of 2024, buy every share in sight, and that's, you know, and then just hold—just hold after that, right?
I believe I spoke about it in this video here; I spent $95,000 on these stocks. So you want to hear me talk about Nike? It's in that video, "My Warning to All Stock Market Investors." I believe I spoke about Nike in that video as well and talked about how a lot of people are chasing some of the hot stocks right now when they should actually be chasing after these value and these dividend opportunities that are like at 5-year, 10-year lows for a lot of these stocks—that's where they should be focusing their money on right now and holding those for the next few years.
I believe Nike is one of the stocks I featured in "Six Stocks I’m Buying Now: November Edition," and I believe it was also talked about in this video "Buy the Stock If You Like Easy Money!"
Right? And additionally, I did that video four months ago, "Buy Nike Stock and Don't Stop!" Right? 37-minute video just talking about Nike.
So yeah, you know Nike, I think that one's going to age very well. If we look out 2, 3 years from now, we're like, "Oh man, such an easy money stock. Why weren't people buying that one?"
Okay, alrighty guys, appreciate you joining me as always. Thanks so much for being here. If you're looking to access all my premium courses, take your knowledge up to a much higher level—take yourself from being a gambler in the market to an experienced investor—click the pin comment down there, fill out an application. We'll see if we can get you access to all my premium courses as well as access to our private Discord chat, exclusive videos from me, our research platform, which is THX.com. We can bundle that in if you're looking for access to that as well.
Pin comment down there, fill out a form—we'll see if we can get you access maybe later on this week or next week. Much love, and have a great day!