Summary
Highlights
The speaker introduces his monthly video where he shares stocks he's buying, emphasizing the importance of understanding the thought process and financial projections behind each pick. He highlights the significant growth of his public account over the past three years and assures viewers that despite short-term market drama, long-term opportunities abound. He requests likes and subscriptions for his extensive preparation.
Despite only a 1% stock price increase in the past year, The Honest Company (HNST) does not reflect its strong business fundamentals. The company, which sells diapers, wipes, and skincare, has significantly improved its gross margins from the mid-20s to over 40% and moved from deep red net margins to positive. Shareholder equity has exploded, and with a market cap of around $400 million, they hold over $70 million in cash. The CEO, Carla Vernon, is praised for her leadership, transforming the company's financials. The speaker projects a 1-2 billion market cap for HNST before the 2030s, suggesting a potential 3x or more return in the next four years.
Salesforce (CRM) has seen stagnant stock performance over the past five years (down 5%), but the speaker believes the next five years will be different. The company has shown consistent revenue growth, from $21 billion in 2021 to an estimated $45 billion next year. Gross margins are pushing 80%, and net margins are around 20%, with potential to reach 30%. Earnings per share are expected to explode due to revenue growth, profit growth, and massive share buybacks. Their new 'Agent Force' AI product is highlighted as a major growth driver, aiming to integrate AI agents into business tasks within the Salesforce environment. CEO Marc Benioff is lauded for his leadership and track record, instilling trust in the investment.
Adobe (ADBE) has had a brutal past five years, with its stock price down 30%, but the speaker sees this as a very attractive opportunity. Adobe's products are essential for businesses, marketing professionals, and creative individuals. The company consistently delivers double-digit revenue growth and boasts exceptional margins: around 90% gross margins and 30% net margins. Its operating income is at all-time highs, and the company aggressively buys back shares, leading to exploding earnings per share. The CEO, who has led since 2007, is credited for navigating the company through the 2008 financial crisis and successfully transitioning to a subscription-based, cloud-first model. Adobe's current valuation, with low P/E ratios, makes it a compelling buy, especially given its strong position for the AI future.
Nike (NKE) is presented as a 'deal of a generation,' with its stock down 43% over the past five years. Nike is recognized as one of the most valuable global brands. Historically, Nike has offered generational buying opportunities after significant stock crashes. A major mistake by the board in 2020 by appointing an outsider CEO (John Donahoe) led to a downturn, but the return of Elliot Hill, a long-time Nike veteran, is rapidly fixing the issues. Hill's deep understanding of the business has led to significant improvements, including exceeding revenue estimates and growing the running segment by over 20%. The speaker expects Nike to return to its glory days, with the stock potentially reaching $150-$200 within 24-36 months, driven by revenue growth, expanding margins, and increased profitability.
PayPal (PYPL) has been 'dead money' since mid-2022, but new CEO Alex Chriss, brought in late 2023, is driving significant innovation. While 2024 showed little external change, 2025 is seeing a rapid rollout of new partnerships and products, including collaborations with Google and new peer-to-peer payment features. Recent quarterly results show a rebound in year-over-year revenue growth (5.1% in the latest quarter after a steady decline), suggesting a potential acceleration phase. Despite being priced for 'no growth' by the market (forward P/E of 13), PayPal's focus on profitable growth and aggressive share buybacks (even more powerful than Salesforce and Adobe) position it for double-digit earnings per share growth. The speaker believes a path to $130 (a double-up) is easy if high single-digit revenue growth is achieved, with potential for $200-$300 if double-digit growth returns.
Amazon (AMZN) is a major holding for the speaker due to its three core businesses: e-commerce, AWS, and advertising, all driving double-digit revenue growth on autopilot. Gross margins have climbed past 50%, and net margins are around 10% with potential to reach 20%. The company demonstrates astonishing growth rates in operating cash flow ($121 billion) and operating income ($76 billion, 40% year-over-year growth). The speaker presents his base, bull, and bear cases for Amazon's stock performance. Even in his conservative bear case, with only 10% revenue growth and 15% net income growth, he projects a double-digit compound annual growth rate (13-17%), making Amazon an undeniable buy. This consistent growth across various scenarios makes it a must-have stock.
The Cheesecake Factory (CAKE) has been a significant money-maker for the speaker, yielding over $47,000 in profits in his public account, plus dividends. The company operates the Cheesecake Factory, North Italia, and Flower Child concepts, with North Italia and Flower Child poised for a decade of expansion across the US and potentially internationally. Even with conservative estimates—a bear case of 5% revenue growth and flat net income growth—the stock still offers a 9-16% compound annual growth rate. His base case projects 7% revenue growth and 9% net income growth, leading to low to high 20s CAGR. The bull case anticipates 9% revenue growth and 11% net income growth, resulting in a 28-34% CAGR. Despite being 'sick of talking about it,' the consistent profitability and growth potential make CAKE a continued buy.
The speaker concludes the video, thanking viewers for watching the detailed 91-slide presentation. He encourages investors who want to elevate their knowledge to join his private stock group, which offers premium courses, access to a private Discord chat, exclusive weekly videos, and the ThousandX.com platform for financial analysis. Members also receive Steel membership cards.