3 Stocks I'm Buying Now! December 2020
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Holy Smokas guys the last month of the year and I usually don’t buy too many stocks during this time period but today I will talk to you about the 3 stocks I’m buying now December edition! This has always been one of my favorite series to do on the channel and I am blessed to do it another month!
Hope you enjoy this video where I talk to you about the stocks that I am buying now! I will go in-depth about why I am buying these stocks now. Also well tell you if I own any of these stocks already or if I’m buying into a brand new position! Leave me a comment on what you think of these stocks! Also let me know if there is any stocks to buying now or any stocks to watch now.
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All right, so it’s on by now December 2020 edition welcoming guys to today’s video. Thank you for joining me on my favorite series I do on this channel each and every month where we get into why I am buying these three particular stocks in the month of December of 2020.
And I just did a little reminiscing, okay a little reminiscing before I got started with this video and I wanted to see when I actually started this series and what I found was I started this in August of 2016 okay look at that over four years ago right 11,000 views and then.
I want to see like what happened over the next four years and look at that okay in August edition 153,000 people watch that video that is ridiculous.
Okay, absolutely absurd. And so you know, usually I asked you guys for a thumbs up Give yourselves a thumbs up today guys, because you guys made this series legendary. Okay, y’all made this series a classic. That’s just a flat out honest truth.
I mean, from from where it started 11,000 views to you know, 100,000 plus views these videos are getting nowadays, like you guys made this series a classic and I appreciate each and every one of you guys, as always.
So without further ado, start getting this guys if you want to join stock hub where you can chat stocks with a ton of other investors out there. It’s linked in the description.
I will also have that link is probably the top pin comment. Okay, it’s absolutely free to join in there. You can talk stocks with a ton of other investors. I think we got like, I want to say like 27,000 members or something now and also if you’re trying to apply for my private group, you want to know all the strategies on how.
I make money in the stock market what I look for in stocks and join the private discord chat and you know, all those sorts of things. If you want to apply for that.
I’ll probably have that as like the second pin, comment down there’s also linked in the description. All right, this is completely random. Okay, but I just saw this I was like prepping the video. He’s too long.
Because you know, these two guys were racing on lawn mowers literally out there. I caught them and then all sudden, I think they saw me take a picture.
They’re like, splits was completely random. Okay. Alright guys, let’s start getting these three stocks. Alright, first one up here is Dropbox Okay, ticker symbol, db x market capitalization of $8 billion on this cloud company.
They’re more than just a cloud company. Okay. $8 billion. I can tell you. Dropbox has me amazingly excited. Okay, I am ultra bullish on Dropbox stock in not just the long term, which you guys know, I’m a long term investor user, I’m looking out years in the future.
But I’m super bullish on the stock in the short term meaning over the next year or two. Okay, I did a video very recently that I just released on the channel, basically calling Dropbox my next 3x stock. I was buying even call options and Dropbox stock.
And I don’t usually do that. Like usually I just buy the shares for me to buy like 2023 call options just show how unbelievably bullish I am in this talk in the short term.
And long term. You guys know, I rarely do this, right? I think the only time I can remember making a very short term prediction anytime recently was a couple months ago, I did that video about the stock is going to 2x fast.
And that was a video where I went to Nordstrom stock and saying like that stock was going to double over the course of the next 12 months, essentially. And it did okay, it already has doubled since that time.
And so you know, like this is very few and far between that I’m this confident that I’ll make short term stock price predictions, okay. But Dropbox is amazing. Okay, so the cloud side of their business, it’s unlimited Tam, like literally unlimited Tam.
And what I see going in the future of cloud, okay, is people need more and more cloud over time, like this is not going away, like mine, my needs for cloud is way more than it was five years ago, or three years ago, or even a year ago, okay?
And that’s pretty much every single person out there and every single business out there, okay. And cloud event, there’s a lot of players playing cloud, everybody has their different kind of strategies, okay, Dropbox, they love to play in the environment of like, not just like families and families using Dropbox for small businesses and midsize businesses, okay.
And when it comes to Dropbox, they’ve carved out a beautiful niche of just simplicity of using a cloud product cane, everybody’s been fighting over the cloud. And what I see is that market share battle is going to start to end in 2021. And I believe that all the cloud companies are going to start raising prices, okay, they’ve all battled over market share.
Now they realize, you know, if they battle anymore, it’s just a zero sum game, essentially. And so all these players, in my opinion in 2021, and moving in future years, will start going up on price.
Just as you know, the number used to be invest in Uber, right. And Uber and Lyft, always battling out over market share, and they would never make any money, they would lose money. And they realize that’s a zero sum game.
And so, you know, they’ve started to go up on prices overall over the past year or two. And yeah, I think that’s going to happen in the cloud business. So the only difference is a cloud business is already very profitable. Okay.
Smart workspace is a brand new business for them. That’s collaboration, teams being able to communicate better around projects and project collaboration. This is a huge news like growth vector for the company, okay, and it can make drawing Costs way more relevant as a company for small and midsize businesses than ever before.
Okay, not just that also schools and education dropboxes became the become a bigger and bigger player in using the smart workspace as well. Okay, that’s really exciting Wall Street’s not even seeing as Okay, well.
She’s not even seeing that, okay, you want to know what else Wall Street’s not even seeing right now the signing of documents business they bought hellosign, a couple years ago, they’ve integrated that now very well over the past, you know, six to 12 months.
And that’s massive Tam, like all these documents that have been physically signed over the past 100 years. It’s all moving online, okay. Everything in the future will be a signing of documents, I’m very confident that it’s probably going to be basically I think, over the next five years, everything’s going to move to online signing up everything.
There’s old school stuff, I mean, I just, you know, did a did a signing recently for a refinance of a mortgage rate. And it’s still like all like, you know, you the person has come to houses, all physical documents, man, that stuff’s going all the way that’s going all the way over the next few years.
Okay, you’re seeing big publications, write articles about the moves that Dropbox is making in terms of their spaces. Okay, which is that remember, I talked about that workplace communication and collaboration, huge growth vector for the company.
And that’s just something that it’s, it’s like, in Wall Street’s not even seeing this right now. I mean, they usually don’t see things until you know, it’s right in front of their face, and it’s not in front of their face enough, right yet to be there, but it’s gonna happen, okay.
And when it comes to true housden, Drew housden, the CEO of Dropbox, the founder of Dropbox, he’s actually moving to Austin, he’s going to focus all around Big Vision stuff moving forward, which I think is super important. He’s going to get out of the hole day to day decision making and just to kind of what I call the, you know, a lot of the busy work, let’s put it that way. Okay.
And I love this move. Okay. I think if Dropbox is going to grow into a massive tech company, you’ve got to make this move. It’s super important. Okay, one of my biggest investments, which is Facebook, I’ve always loved how you know.
Zuckerberg, he can just focus on the big vision stuff. And then you have Sheryl Sandberg, who’s a CEO, she really handles a lot of the business work, okay.
You just need that that read him person that they can handle that stuff. So you can go after the big vision stuff. Kay, always loved that Steve Jobs. He always had Tim Cook, great. Tim Cook nowadays is the CEO of Apple, right.
But you always have Tim Cook to lean on and a few other key players that just like drove the business and Steve Jobs could always focus on the vision stuff.
I love that. Okay, Heck, even in my own life, I hired somebody in 2019 Blake, right. And he’s kind of like my right hand, man. So I can just because all I want to do I just want to focus on Big Vision stuff. I want to you know, pick stocks, essentially.
And I want to make YouTube videos. And that’s all I want to do. I don’t want to run a business and do the all the day to day grind in hiring and all that stuff that you have to do. I just don’t have time for that. Okay, I like to focus on what I like to focus on over time.
So I love that drew house is moving that type of role, because I can tell you, it just ends up a lot better ends up way better than the whole situation where you’re drowning in a bunch of busy work. Okay. And when it comes to Dropbox for peanuts companies, 20 I mean, not 24 P. It’s just silly.
Okay, if we go ahead and we go to your DNA research, okay, what we’re gonna find is s&p 500. Large caps are trading at Ford Pease of 22. Okay, Dropbox is trading under those companies. It’s the most disgustingly mispriced stock in the entire stock market by a mile. Okay.
It’s ridiculous. Look at the s&p 500 technology companies, they’re trading at four apiece on average of about 26. Remember, Dropbox was at at 20. Okay, as far as growth companies, which Dropbox is a growth company, they’re trading at over 27 for P. And once again, Dropbox was at a 20. And look at the growth going forward for Dropbox about 15%.
This year 11% or so next year, like very nice growth numbers. Never mind if some of these prices start to raise over time, over $1.2 billion on the balance sheet cash and cash equivalents and short term investments.
So the company’s cash loaded to the sky DocuSign, the biggest player in esigning A documents Okay, as hellosign gets more and more built out, and Dropbox starts to break out those numbers more and more, which I think is going to happen over the next couple of years.
Dropbox will start being pumped more and more with DocuSign Okay, DocuSign trades at a $42 billion market cap Kay if hellosign can clearly emerge over the next couple years, which I think they will because their integration with Dropbox and how well Dropbox just executes.
I believe Hello, sounds good emerges at number two player and if they can, then Wall Street has to start to respecting that and then you have to start coughing against DocuSign which is huge. So then you got the workspaces business, you have the cloud business and then you have the signing of documents.
I mean, you know, this is very, very exciting company, okay. Dropbox, recurring revenues, the holy grail of business. This is why so many This is why Apple has seen the P e ratio that Apple can command nowadays versus what they can command a few years ago has Gone, you know, and expanded tremendously, mainly because a lot of people are looking at the services side of Apple’s business.
Now and they’re like, Oh my gosh, it’s just a recurring revenue stream and people love that. Okay? Intuit, you know, which owns QuickBooks always a business that’s traded at a huge premium because of recurring revenue.
Okay? Microsoft, it has been a huge step up in in how people value Microsoft stock, because at the end of the day, people look at Microsoft recurring revenues, it’s beautiful, okay, Dropbox, all recurring revenues, month after month or year after year, and they have no customer concentration. So that’s another beautiful thing.
A lot of these business models, you know, they’re very dependent upon what you know, a few customers, let’s say, Dropbox is not like that. If Dropbox awesome customers is not the end of the world for them, they have no customer concentration and recurring revenues.
It’s one of the most beautiful business models I can find out there. Nevermind the valuation, okay. And so when I look at Dropbox, stock, it’s a stock ready for the lift off, okay. And when it lifts off, it’s not coming back. It’s not coming back, that thing will take off, and it’s not coming back.
That’s all I can say about that people will be looking at that one, they’ll be like, Oh, man, is it gonna fall back to $19? And $18? Given man? Yeah, when that when that thing goes, it’s gonna be long gone.
Because, you know, once a stock starts moving, that’s when Austria really starts to wake up and find it when when Tesla made that that first huge move initially, from on a split adjusted basis from about $250 to about, you know, 600 $700 that’s what woke Wall Street up, and then they started coming in in droves, obviously, this year.
Okay, and so will Dropbox stock 5x 210 x its stock price over the next five years, in my opinion, it will, in my opinion, it will when I just look at how cheap the company is, when I look at the business model overall, all the different growth vectors for the company.
Drew housden, just focusing on Big Vision stuff, there’s no doubt in my mind that this this is a type of company that it will 5x or 10x, its stock price over the next five years.
Okay, now, I think of 2x, two 3x is in the back. That’s that’s just my personal opinion once again, but I think a 2x, two 3x is in the bag for this company. 5x 210 X is what I honestly see for this company over the next five years, okay, and you can tell I’m putting my money where my mouth is with the stock.
I mean, this isn’t a stock I’ve held for very long, and I’ve been building out this position heavily over the past month or two, okay? I mean, look at this in the public account, for instance, I hold $90,000 worth of shares in there. In my main private account, I hold $137,000 worth of shares in that account.
And then on top of that, as far as options go, I want another $26,000 worth of options. like yeah, this is a stock I’m buying heavily over the past month or two, including I actually just bought some here today. And I plan to continue to buy this one because I just think the risk reward is is literally the most attractive I can possibly find in the stock market. So yeah, I’m slightly excited about this one. Needless to say, All right. Alright, guys, let’s get into number two of three. Up here.
If you follow me on Instagram, I gave you a little hint last night in my Instagram story. And yeah, it is beyond me. There’s another stock that you know, this one I’ve really just started buying recently like the last two or three weeks, okay, look at how aggressively.
I’m already adding shares. You know, I already hold $41,000 in the public count in this in my main private account, I already own almost $100,000 a little under 100k or the beyond meat in there.
And that’s in a matter of just like like literally just been buying the stock for like two three weeks and I’m adding so dang aggressively and I plan to continue to add the stock very aggressively. Okay, beyond me.
You guys should know them as the vegan meats company and a plant based protein meats All right, they just announced a huge deal with Pizza Hut very recently, we got that pizza, I think the second day after it had been launched.
And yeah, I enjoyed it and need to say enjoying the beyond meat products. I’m super excited about this company.
here’s here’s what we have happening with beyond meat. Okay, first off, two, three years ago, no onehad heard of this company unless you were super involved in like the vegan community no one ever heard of beyond me then no clue about this company. And now you know, if you go into your average grocery store, good chance they carry beyond meat.
Now, they might not carry many different types of products from beyond me. But good chance your grocery your local grocery store is carrying beyond meat products. Okay, and so more and more stores are carrying these products.
Now, more SKUs will continue to come for this company. Like if you start carrying the burgers next thing you know, you start carrying, you know the other kind of meats and other sausages and the pre made type stuff and the taco mix isn’t all these sorts of things and breakfast sausages.
So more and more SKUs will continue to come this company’s innovative they’re continue to come out with new products, packaging everything across the board. And then on top of that more and more restaurants will continue to carry beyond meat products. Okay, and I’m talking, you know, big restaurants, I’m talking small restaurants and I’m talking about fast food locations.
I mean a Pizza Hut deal. Can you imagine how big that deal is? I mean, we’re talking about 1000s and 1000s and 1000s of locations overall and I need to include this In the slideshow, guys, but keep in mind, beyond meat has a very good chance to get the McDonald’s contract. Okay, who knows, you know, it’s nothing’s for certain, but beyond meat has a very good probability of getting to McDonald’s contract.
You know, McDonald’s, that opportunity dwarfs any other fast food location out there, okay? Just keep that in mind very good chance it’s possibility to get beat up by another company, but very good chance they win, okay? I mean, that’s mass, okay.
And it’s not just in terms of the product you sell. But it’s the branding. That’s the biggest part like that. It’s like, it’s so much marketing, free marketing. It’s amazing. Okay, I love the way they do it over there.
Right. Now, as far as growth goes, this is a fast growing company in current year expected 37% growth next year, something we love to see in a reacceleration of growth, one of the most powerful things you can see in any stock, okay.
51% plus revenue growth expected in 2021 for this company, and then imagine, just imagine for a moment if McDonald’s and them did a deal next year. And you know, they got, you know, massive distribution all over the United States and maybe even worldwide to locations. Like imagine what that does that business model.
Imagine what that does for revenues next year, and the year after and for future years. Like that’s just crazy, right? If we look at a world map, here’s kind of the way I see beyond meets opportunity, their main market, obviously, at least in the short term, is North America.
No doubt about that. Okay. Then from there, it’s all about Europe, right? And beyond meat will continue to expand in Europe, you know, their business is so small internationally, I mean, their business is still small, the United States Remember that? Okay, let’s just keep that in mind.
That’s their main market, but it’s still small. Even in North America, the North American build out over the next five years is going to be massive. Okay, then you’re okay. Europe is just huge opportunity for beyond meat in Europe. Alright.
Then after that, China. And here’s the thing, guys, if they can be successful, the way they’ve executed in North America, so far, China could be the biggest market in the world for this company. I mean, keep in mind, we’re talking about 1.4 billion people in China. Okay. And yet a lot of people are merging into the middle class.
And you know, what, beyond meat right now, they’re building several factories in China. I mean, if you think that the opportunity is big for this company, North America, I mean, expect a 2x, two forex type opportunity in China for beyond pay long term.
Okay. And then the sneaky market that I don’t think a lot of people even thinking about is India, I think there’s big potential for beyond meat in India, long term, okay. And that’s another market that could be just massive, okay.
And obviously, this should be a company that expands all over the world, those just kind of the main markets I’m thinking about for the next five to 10 years for this company.
They remember beyond me, this was, this was a little teeny, tiny, like baby company just a few years ago, 2017, they’re doing $33 million of revenue, 33 million. And now we’re talking about a company that should do 600 $700 million of revenue next year, that just shows you how fast this company is growing, how like how much scale they’re getting, to how much marketing exposure they have, that people are going out of their way to buy the products.
And keep in mind, like, you know, with people like the product, they buy it again and buy it again, buy it again, that’s the beautiful thing about the food business, everybody has to eat. And when people make a product, they just keep getting it right. That’s why Coca Cola and Pepsi treats such premiums. They have great brand names.
And at the end of the day, like you know, somebody likes to drink Coca Cola everyday or Pepsi every day, they’re gonna go buy Coke and Pepsi, if they’re out. Okay, so really, really powerful. When we look at that growth right there, right, from 33 million to 600 plus million.
I think that’s honestly, the reason very good food company is moving up so much, which is my other speculative vegan company, right? I mean, look at that one here at a 27% gain.
I think everybody’s just, you know, jumping on that one out, because they realize the market for this company is massive, long term. And I think that’s why you get I mean, look at that $48,000 gain today, like, I saw that number, and I want to bring it into this video.
And I was like, man, like, you know, sometimes I see these numbers, and I just like, I feel like I take it for granted a little bit. You know what I mean? Like, you just you as the numbers get bigger and bigger. And I remember like, a decade ago, I was so happy because I just got a job that paid by 40k a year, right.
And here we are one stock in one day. $48,000. Like, that’s just that’s crazy.But a lot of people want in on the next player in that market. And they feel like very good food companies could be potentially the next beyond meat. And so you know, that stock is just, you know, incredible, right?
When it comes to beyond me, Ethan Brown, you know, and this is one that if you’re if you’re if you’re going to place in order for the stock, okay? And you want to actually be an owner of this company, you’ve got to believe in the guy in front, right, because the valuations rich, Ethan Brown,
I got to say, um, of the companies I hold, he’s one of my favorite CEOs out there, you know, and he might make it to the top soon, okay. I think he’s an absolute visionary. I’ve watched countless interviews and listen to call conference calls and everything with this guy cave.
I think he’s the most visionary guy in the food game, point blank period. Okay, I think there’s more innovation going on with him and the company in general than any other food company in the entire world by a mile. And the food space is a hard space to change, let’s be quite honest, right?
People get used to eating certain things, and they just, you know, that’s just the way they are for the rest of their life. And so for somebody to come in and say, I’m going to change up this whole game, it’s it’s special, okay?
And here’s the thing, it’s not just about being a visionary, and having all these visions on, you know how to do this and do that, but it’s actually making it happen. And he’s actually doing it. So it’s, it’s incredible to watch.
You know, it’s kind of like the lot of people say, Are you betting on the stock, you’re betting on the jockey betting on the horse or betting on the jockey. and in this situation, man, it’s both, but I gotta say the jockey is pretty special.
And I think he will be respected. You know, if we fast forward 10 years, I think he’ll be respected as one of the better CEOs out there my personal opinion, okay. And I put out a video 18 days ago on beyond meat that was super in depth, okay, that was like a 3035 minute video just on beyond meat stock.
So if you want to check out that that was posted here on the main channel, you can you know, watch that video and go much more into it. But at the end, the day I called that stock, my next tech stock, I said, This is my next Tesla stock in the amount of similarities.
I find between this stock and Tesla stock is he meant Pencils of stock that has gotten me over 10x now, okay, over 1,000% gain and I see definitely some very similar characteristics between the companies, right, both companies can have some haters and shorts.
Both companies kind of are, you know, emerging has like cult followings, obviously, Tesla’s way further ahead of beyond because it’s just a much older company, then beyond is but I definitely see a cult following emerging around beyond me.
And obviously tests as you know, I feel like the most cult following stock out there certainly the most cool following stock I hold, right, the both companies have a visionary in front of it, right?
Elon Musk is obviously further ahead of Ethan brown in terms of just like the way he’s viewed because it’s just been doing this for way longer has been in the public eye, like no one heard of Ethan brown before a couple years ago, for the most part, right.
And so both companies have visionaries in front of them. Full companies, when people are buying these stocks, they’re not selling the stocks, they’re buying for the long term opportunity, which is very, very exciting.
That’s exactly what I feel beyond me. I think people are buying this one for the long term opportunity, and they’re not gonna care if beyond those 250 250 350, in my opinion, they’re probably going to be holding for the long term with this company, which is extremely exciting. And there’s multi layered growth, I saw obviously saw a multi layered growth with Tesla.
And I definitely see what beyond that being a multi layered growth approach, where it’s like different products, more products coming out in the future. Like if you think about how many SK use this company can get in long term. It’s crazy, right? And then you think about they have the retail side of their business.
And then the restaurant and the fast food side of the business. So is multi layered growth. So many thing, characteristic a reminds me of Tesla, it’s a stock that reminds me most of Tesla in the stock market, in my personal opinion. Okay, and so yeah, yummy. I’m super excited about that one.
So Dropbox and beyond meat or the automatic buys for the month of December, those stocks have just, you know, they’re just like, you know, in the bags, like for sure buys, okay? But I want to share with you three maybes or we can call them even like three probably stocks that I’ll probably be buying in the month of December 2020.
Okay, and these stocks I’m very excited about as well. Okay, one of these stocks, the first one up here is called the real real ticker symbol real for this company. Okay, this is stock number one of these three up here to $1.22 billion market cap, this is a stock.
I don’t own in any of my accounts as of right now. But it’s really, really intriguing when it’s around 12 to $13 right now, okay, I guess that really smart Mark cap on this company. Basically, if you have, let’s say, luxury items, like let’s say you have a Louis Vuitton bag, you can sell it on the realreal.
And basically, they have people that you know, look at the bag, make sure it’s real things like that as the best of their abilities, we better process than anything else that you could possibly do. And you know, versus buying eBay or some other site, right, they’re just in a really, really interesting space and in a in a space that, you know.
it’s kind of niche down in something like, you know, you’re always think about like, could Amazon come after this and I just don’t see this being a business Amazon who want to get into to be completely honest and hire a ton of people to try to verify if that Louis Vuitton bag is real, or if they are amazed, what you know, whatever is real and things like that.
And so I think this is a pretty niche down business that is in a very special space. And I don’t see there being actually any competition here long term, which is pretty darn exciting. Okay. And when it comes this company, huge growth expected 36% growth expected next year in 2021 are talking about, you know, big, big numbers, okay.
I mean, you look at the growth over the last few years, it’s immense. 2017 they do $137,000,000.20 18 they do $207,000,000.20 19 they do $380 million. And obviously this year, you know, their business has been hurt in a very bad way because their own router right? That’s obviously hurt them massively, but next year they should get back on the right track with you know, expect it 30% plus growth again, okay.
And the way I kind of view a company like the real real is I, I see these companies emerging as kind of the future of what I call just like clothing accessories the way people buy stuff, Kate, I see Stitch Fix as being one of those companies I see the real real I see another stock you own RV Lv revolve, okay has been one of the stocks in Farfetch.
I feel like those four stocks, I feel like some of those companies might buy each other out over time. Or maybe they all combine and they make kind of like a big conglomerate or something.
But I see those four stocks is just kind of being like the future of clothing, fashion and things like that. And the way people buy a lot of these products moving forward with the fact that a lot of department stores have gone under or going under and just different ways people are looking to buy merchandise.
So it’s a very interesting stock the real real and it’s definitely a possible buy for me in the month of December and it could be a stock I start building a position in and a decent size position I can’t build it into crazy position because they are a money loser as of right now. But I could definitely build some sort of position in that stock a stock number two or three up here, that is a maybe this one, I already have a position and it’s called switch.
Okay, ticker symbol, and this one’s SW ch it’s a $15 and some change stock here today. And this is a stock I already own a decent amount of shares. And okay, so switch I own 2000 shares, I think this one’s a public count account 2000 shares there. And then I in my main private account.
I own 1500 shares in there so far. So it’s a you know, it’s a stock I already had bought some shares in but I could definitely buy more shares of the stock moving forward.
Okay, switch the technology infrastructure company powering the sustainable growth of the connected world, okay, they operate these massive data centers, just game changing, like properties and locations and the way they do things the way they brand, it’s, it’s pretty special for their industries put it that way.
As far as like their customer base 36.8% of their revenue comes from their top 10 customers. They only have point 2% revenue churn in the latest quarter.
Okay, very, very low number 5.3%. revenue growth in the latest quarter year over year. Obviously, Roni Rona has messed up the business model in the short term to some sort of extent, right. But, you know, because usually they have people fly out, come see the facilities, things like that, and then sell there on the spot.
It’s not like that right now, obviously, because travels was pretty much shut down. So, you know, just still put up a 5% revenue growth number is nice, okay, 10.5%, adjusted EBIT, ah, growth from basically q3 2019 to q3 2020. A very nice number as well.
They’re these facilities they built that are absolutely massive, okay, in the city I live in mainly, I’m not living there right now. I’m in m&a Arizona at the moment, but Las Vegas, my city, like we have many, many switch facilities there.
Okay, that’s the main market, in terms of housing, these facilities in their massive, okay, if you’ve ever driven up to a switch facility, you know, they’re massive, and they’re protected very, very well. Okay.
taho, they got a bunch of facilities over there, Grand Rapids, Michigan, they actually bought like this pyramid structure and build a whole epic facility in there. And then Atlanta, they have some massive facilities have just opened Atlanta over the last year or two.
And, you know, they have more future build out there for kind of their South East locations and kind of getting all the, you know, the companies that are in the south east to come to the Atlanta facility for you know, basically housing, their servers or things like that, that they can have in the cloud.
Okay, very compelling financial model on this company. 55% of the increase in q3 2020 revenue was attributable to growth from customers who have been with switch for over one year, okay. So people that know their customers that are with switch, they’re spending more money with switch, that’s good.
Okay, while the remaining 45% of the increase came from new customers, so they’re also attracting more new customers. Okay, long term licenses. Typically, they do three to five year contract with the ability to escalate rates over time, stable monthly recurring revenue.
They have three year average annual churn of point 6%So yeah, when you have less than a 1% churn for a business model, you’re doing pretty darn well for yourself K. That just means your customers let you know they’d like to stay with you.
They want to stay with you. Okay. I mean, literally any business model that has a revenue churn of less than 1% on an annual basis is ridiculous. Okay, that’s the best way I can put it there patent protected technology that enables just in time cap x deployment in low cost construction, vertical integration creates additional capex savings, low maintenance capex of 1.6%, of revenue in q3 of 2020.
In the company has over 950 plus customers, I expect them to be over 1000 customers by this time next year. If you look at the revenue growth over the last few years, it’s good like obviously, some years are better growth years for this company than others.
Okay, a lot of that has to do with facilities open when they can get some of these big customer contracts done, but at the End of the day like like, what do you want to see you want to see growth, you want to see growth in top line, you want to see growth in adjusted EBIT? Ah, and this company has that, okay.
Also, they’re not just dependent upon like one industry or one sector, something like that very diversified, like their biggest sector by far is cloud it and software that makes up about 25% of their revenue. Okay. But I mean, look at that.
They’re they’re all over the place. It doesn’t matter what, you know, business, we’re talking about, like,like, they like to use switch at the end of the day. Okay. As far as capital expenditures, this company has been spending a fortune last couple of years, okay.
I mean, look, at the nine months, they’ve already spent $240 million in capital expenditures, the numbers are massive, there’s no doubt about that. There’s no doubt about that, okay. But what I see for this company is in the second half of 2021, and moving into 2022, capital expenditures is going to go down massively,
Okay, because they’re gonna build out a lot of what they need to build out. And I think there’s gonna be a switch in this business model, which goes to just cash flow machine, that’s the way I see this business, a cash flow machine, that’s going to enable them to basically start using that cash flow into new growth vectors and new sectors and new industries that they want to go into.
Okay, that’s the way I see it, because I’m just looking at their facilities and kind of build out times. And that’s just, you know, honestly, what I see at the end of the day. So I think that’s pretty darn exciting.
If you’re looking at the cash flows k revenue, as far as revenue for this company, 2019, they did 462 million, as far as a midpoint for 2020 guidance funds, and 14 million expected adjusted EBIT are 231 million in 2019 264 million expected in 2020.
As far as guidance, that’s midpoint once again, they could come in with a beat on that capital expenditures 308,000,020 19 310s expect at the midpoint. And like I said, the companies are spending a lot of money on the build out right now.
And that’s just slow substantially in second half of 21, especially moving into 22 and 23. Okay, the company’s pretty much one of the most sustainable companies of any company in the world, like, you know, it’s really hard to find a company is more sustainable than switch at the end of the day, like 100% clean energy index, it’s amazing, they get an A on everything across the board.
I mean, when you can even beat on Apple and Facebook and Google like, you know, that’s pretty dang awesome. And companies like Salesforce, right? So yeah, the company’s super sustainable as well. And they have an interesting new business.
They’re going to be getting into this upcoming year that I don’t even think a lot of people know about, right, it’s called switch century which is autonomous security robot that can actually go around in different cities and facilities and things like that, that could actually be a huge cost savings to a lot of companies and a lot of infrastructure and things like that.
And so I think that’s a very very interesting business model that now I don’t think anybody’s even looking at that on wall street but man when you start adding up the numbers on what these robots will likely cost in terms of you know customer to get them but it could still make huge financial sense for a company to get this or a city get this or cities to buy many of these right and so.
It’s gonna be pretty interesting to see how kind of that transpires if you want to know more about those like century robots and things like that they got actually a little epic two minute video on the website you can just like Google like switch century and watch the video it’s pretty cool and pretty epic okay.
Alright guys so that was switch stock number three of three maybe slash probably and yeah, I’m gonna probably buy shares the stock in December high probability probably even buy some tomorrow to be honest. Suppose you bought some today but I’ll probably buy some tomorrow. Okay, wb a Walgreens boots Alliance up here.
It’s a $38 stock. It’s got a forward P of eight and come on and then we’ll talk about Walgreens here and before P of eight, that’s just silly. Okay, a dividend yield of almost 5% so we’re talking about massive dividend yield.
Okay, so I already love this one going into 2021 because I feel like this is a perfect like turnaround play at see a lot of things turn around for the right way for Walgreens boots Alliance, this coming year, okay, but also remember those Ronnie runner shots that are gonna start getting distributed all in 2021 guess what Walgreens is going to likely be one of the biggest like givers in my opinion of those shots out there.
And with people coming in to get those shots at Walgreens is going to dramatically increase the in store revenue opportunities for this company. It’s not just about like, you know, they may make some money on giving those shots out.
If people are gonna be coming in those stores and the next thing you know, they buy soda and they buy a box of band aids and they buy this and they’re like, oh, let me get my you know, my pharmacy needs here and things like that. So it’s just massive opportunity for the company overall.
Okay, I did a video in one of the stocks featured in that was Walgreens This was on financial education to a couple of days ago. It’s called my top seven dividend stocks for 2021. So if you want to check out that video, go to financial education two and that goes into those seven stocks.
I think you guys will enjoy that if you want to know more about the dividend stocks I invested in essentially and you know the cash flows that those stocks can produce and things like that. Hope you guys enjoyed today’s video. As always, if you don’t mind smash a thumbs up helps you to chill out in a massive, massive way.
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