3 Stocks Im Buying Now - July 2019
Application form to apply & try and get in my Private Stock Group/Financial Fortress
Today we do my favorite series called 3 stocks, Im, buying now July 2019 edition! In these videos, we discuss 3 stocks Im buying in the upcoming month. This is not to be confused with some series which are called 3 stocks to watch. These stocks I actually already own or I am actually planning on buying.
Want to join our free STOCKHUB discord chat? Here is the link
*My Instagram is: FinancialEducationJeremy
This is a Jeremy Lefebvre Production
Created by Jeremy Lefebvre
Three thoughts on buying July 2019 edition welcoming guys to my favorite series I do on this channel each and every month. If you’re new here I’m Jeremy and today we’re going to talk about three stocks I’m planning on buying in the upcoming month, upcoming month being July 2019.
And not only do I share what three stocks I’m planning on buying, but I go into detail on why I am specifically buying the stock. So hope you guys enjoyed this video. As much as I enjoyed making it for you make sure you smash the thumbs up button if you enjoy these videos each month.
And as always, let me just say don’t ever buy a stock just because I’m buying a stock. And don’t ever buy a stock because anybody’s buying the stock No matter how much you respect them how much you like them. Always make sure you’re doing your own research work and always making your own buying decisions.
With that being said, guys, hope you enjoyed today’s video, by the way, becoming a master of stock market course is linked down there in the description. And then it’s 70% off for the next few days until the month of June ends, guys. So if you want to go out and take advantage of that and learn about everything I look for in a stock, make sure you go ahead and take advantage of that guys link down there in the description.
That being said, let’s get into this. You guys coming in as a first stock, essentially a smaller company that not a lot of you guys have probably ever heard of before. It’s actually a retail related company, which I haven’t been very bullish on retail in many years.
But I gotta say I’m actually bullish on a couple retailers right now. And this one specifically is named at home ticker symbol home All right. Now this company has a business model in which essentially, imagine you buy a home okay? Or imagine you just own a home in general or apartment or something.
You buy decorations for that, right? You’re like, oh, that counter over there. They need something. Oh, I need a rug for this room over here. Oh, I need some Halloween decorations. Oh, I need some Christmas decorations, etc, etc. Okay, all those sorts of things is what they sell. They have very big store formats.
These stores are huge. Many of them are 10s of 1000s of square feet. Okay, so these are not small stores. And they also do sell furniture products. But they’re not necessarily a furniture retailer. So it’s not like it’s really one of those stores that you think about oh, I need a new sectional for the living room.
Let me go to at home. It’s more like hey, maybe I need a couple new barstools. Let me go look at at home. Okay, so that’s their business model, very big store format, they try to compete on price and they try to compete on selection, okay, which a lot of their competitors, especially a lot of smaller competitors, they can’t compete as much when it comes to price.
And they can’t compete nearly as much when it comes to selection. But at home does a great job of this, okay, at home has a market cap of 425 million roughly. And that is a very small company, when it comes to stock market, like most market caps are in the billions of dollars.
And a lot of these companies nowadays have 10s of billions or hundreds of billions. There’s actually a pretty small company share price on this one is $6.60 as of right now. So why am I bullish on this stock, okay, and then we’ll kind of get to the bad with the stock, which does have some negatives for it, okay, but it definitely has a lot of positives.
So one is, I believe that the store count will be able to expand by basically three to 4x, where it is now, essentially, they have just under 200 stores open right now. And when I kind of look at retail, and I look at a lot of their bigger competitors and whatnot and their type of store counts.
I believe that home can get to a place where they have 600 to 800 stores in the United States of America over time, okay. So which means they have a lot of growth ahead of them when it comes to expanding store count over time. And they’re also building their online business right now simultaneously, okay, so not only do they have a ton of expansion opportunity when it comes to the online landscape, but just physical stores.
I think they can three extra forex. And the good thing is a lot of stores are going out of business. Which means a lot of times these rents come down in a place like at home actually has a successful business model can actually pay cheaper rents than if you have a ton of competitors to compete with.
Okay, so that’s one of the reasons I’m very excited for this business. Also, there comes store sales, which is one of the most important metrics you can look at when it comes to a retailer or whether it comes to restaurant name or something like that. You always want to look at comm store sales, which basically is how much did sales go up or down in the past year versus a previous year.
Okay, and about 21 in the past 22 quarters for this company had been positive when it comes to comp store sales, which is once again one of the most important metrics you can look at now this latest quarter they had a negative point 8% number in everybody flipped out over that. So first off point 8% number negative is not that bad.
Second off, this was such an unbelievable hard quarter, the first quarter which basically covered January, February, March was such an unbelievably difficult quarter for any physical retailers out there in the reason being It was one of the coldest winters in United States in a long time. Like it was unbelievable.
And so if you’re thinking about it, was somebody really going to go out there and run to go get some new decorations for their house or were they going to go buy a new, you know, Chair for the corner over there when it’s freezing cold and everything’s covered in snow? No. Okay. I mean, I live in Las Vegas, okay, I live in Las Vegas, like one of the hottest place in United States.
And I remember like in February, I had snow this thick on my lawn and I was like, What the heck did I move to like New York or something? I’m like, I’m live in Vegas. Like it shouldn’t be snowing. I had this much snow on my back lawn like that was crazy. It was an unbelievable winter in the United States of America in that hurt retail sales when it comes to physical retailers in a massive massive way.
And so in my opinion, that’s the main reason they came up with a negative point 8% number everybody freaked out. Stop. dropped by 50 plus percent, which is awesome because that opened up an opportunity for me to be interested in start actually buying the stock now, but needless to say, it was a huge overreaction in my personal opinion, when you’re coming off of a brutally, brutally cold winter like we came off of in the United States.
Okay, expanding revenues and expanding that income. Two years ago, this company had net income about 27 million this past year, they did 48 million in their revenues have grown substantially over the past several years. And you guys know, I love a company that’s expanding revenues and expanding net income at the same time in this business model absolutely means that in a future years.
I think they’re going to be able to earn a lot more on that bottom line than what they’re earning. Now. Although here in the short term over the next six to 18 months, they are going through some stuff that we’ll get into in just a minute. Okay, expanding brand name.
So as they continue to expand store count, and as they continue to expand their marketing budgets, obviously, the brand names getting out there heavier and heavier in this type of store, a lot of times you’ll take friends and family members, because it’s a cool store to go to.
And you might be Hey, let’s go check out some Christmas decorations and whatnot. And you take friends and family there, and it helps expand the brand name over time. Okay, so very successful company with an expanding brand name, they have a four p under six on this company right now, which.
I think is ridiculously too low, like like, it’s unbelievable, because there’s a store that most of the time they have positive comp store sales, which means their stores are getting stronger. And then they have a huge opportunity, in my opinion, to expand store count over time.
And so I’m looking at this forward PE and I’m like, it just doesn’t make sense. Like even if it was around a 15 it wouldn’t really make sense down around a six like it’s just ridiculous in my personal opinion when it comes to a name like this, but it is what it is great opportunity for me.
Okay, good management team. When I think about management team and retail I’m really looking for like conference calls and to hear like how in tune they are with things, retail is an industry that I know very well and so I can just kind of pick up on you know, this management team has their stuff together, and they don’t, and it’s not just easy to have, you know.
Comes to our sales that are positive nearly quarter in and quarter out, that’s more proof of a good management team. And the way they’ve been able to expand the business over the past several years is is unbelievable, really because it is not easy to scale a massive retail company like this in such a short amount of time like they’ve done so I would definitely rate the management team as a good management team.
Okay, now so that’s like my bullish thesis and that’s why I’m very excited about this talk and that’s why I started buying the stock in why I should continue to buy the stock throughout the month of July okay, but there are three things that are Bad’s in the stocks case Okay, the first one being the balance sheet so the balance sheet of the company is not good at all matter of fact, the balance sheet on the stock is bad is for that reason.
I have to limit how big I make this position I cannot make this into one of my biggest positions even though I love a ton about it. As far as evaluation what I think the company can do over time, I cannot make this into a huge position simply because that balance sheet is extremely weak with this company so that limits how big.
I can actually make this position okay balance sheet is weak so that’s one of the bad things these other things are too very short term in nature so balance sheets more of a longer term issue, tariffs is a short term issue. So essentially a lot of the products that this company brings in from China.
I mean go to your every store out there and they pretty much like made in China products right so a lot of the products they import have gone from a 10% tariff to now 25% and the company is going to have to take the hit on a lot of that they were able to kind of get the 10% tariff to be carried by some of the suppliers as well as the customers.
But it doesn’t sound like they’ll be able to do that with the 25% tariff so profitability in the short term until this whole tariff situation gets cleared up could be hurt or until they get distribution lines from other countries or something like that or bring things back to the state or whatever the case may be okay so needless to say short term tariffs are hurting the company in their profitability in the second.
Thing that is hurting them in the short term is smaller competitors are going out of business essentially a case where they have a lot of competitors that are like smaller companies that have smaller store formats that really are not very competitive when it comes to pricing and selection in a lot of those companies are going out of business right now.
And when a lot of those companies are going out of business they go ahead and discount heavily like like what their products are selling for because they’re clearance items out there going out of business like it’s just negative obviously the creditors are trying to get whatever money’s left there in the business.
So in the short term and some of those smaller competitors go out of business it does hurt their business so tariffs smaller competitors going under short term problem balance sheet a longer term issue which is why I can’t make this into a massive possession was absolutely a position I can make into maybe a 20,000 30,000 maybe $40,000 position and kind of limited right there. But it is a stock.
I should be buying through the month of July okay that was the first one let’s get into number two already guys coming in a stock number two is oh my gosh, another physical retailer which makes me think is this like 2011 I cannot remember the last time I was applying to physical retailers.
Okay, and this one is Nordstrom ticker symbol JW en on this one, they own some pretty successful brands. Needless to say, okay, they own obviously their Nordstrom stores which are big department stores that really sell high end clothing, okay, you want the nicest pair of high heels you go to Nordstrom, okay, do you want an expensive suit you go to Nordstrom. If you want a pair of designer jeans, you go Nordstrom Okay, that’s what type of store this is.
Nordstrom is really a brand that’s catering to like the top 10% of income earners out there. Okay? You don’t go to Nordstrom because you’re trying to buy cheap clothes. Okay, you’re trying to buy the most expensive brand names out there. If you go into a store like Nordstrom, they’re not competing with JC Penney’s.
They’re not competing with Macy’s, okay, they’re not competing with dealers. They’re really in their own category pretty much by themselves. Okay, maybe Neiman Marcus is a competitor, but really, they’re competing on the very high end, okay, then they have Nordstrom Rack, which Nordstrom Rack is essentially this is not in actual big malls.
Usually this is in like strip malls or just standalone stores in general and Nordstrom Rack is really like inventory that they couldn’t sell for full price at the Nordstrom department stores, they’ll go ahead and discount that and sell it at Nordstrom Rack.
Okay, so for cheap people like myself that might want to buy $155 dress shirt, but get it for $45 we go to Nordstrom Rack, okay, that’s essentially what the business model is very successful stores extremely profitable for the company, generally, they’re still able to sell their clothing for profits, okay, even if it is discounted quite a bit, usually, they’re still able to make profits, everything’s just not big racks is a whole different experience.
And actually going to a Nordstrom store, you go to an actual Nordstrom store, super fancy, you go to Nordstrom Rack, and it’s like maybe slightly upgraded from like Ross or something like that, like, it’s not really a super nice experience, but a ton of designer clothes, and for generally much cheaper prices.
And then they have trunk Club, which is really like uncompetitive or something like Stitch Fix, which essentially they’ll sell is it’ll send you like five different clothing items, alright, and these clothing items are picked out based upon you do a bunch of questionnaires online that use artificial intelligence and whatnot to kind of figure out.
Okay, they’ll probably like this type of shirt, they’ll probably like this type of dress, they’ll probably like this type of high heels in etc, etc. Okay, and so they send you these different outfits, and you can keep them and pay the price. It shows you the price right there. This pair of shoes $150.
Okay, I have to keep this, oh, I don’t like this, I’m going to send this back in overtime, it basically gets to know you better and better. And hopefully the clothes they send you will become better and better in the future. And hopefully you keep more and more of the clothes as time goes on.
Okay, now everybody’s into that type of business model. But there is certainly a segment of the population that actually enjoys that experience look at look at a business like Stitch Fix, right? This has become a very big business on the back of these these consumers that maybe have good money, but they don’t want to actually go to physical stores and they want somebody to pick out their clothes for them.
Okay, so that’s definitely another big opportunity in expanding market. All right, company right now has a market cap of around $5 billion. I think it’s just slightly less than $5 billion right now share price of $32.50 which it has been a long time since Nordstrom has been around $32.50 unbelievably low share price, great brands, okay.
I’m buying a company that has these great brands, iconic brands, okay. Nordstrom Nordstrom Rack, trunk club, I wouldn’t really put it in that type of category yet, but it’s obviously an expanding brand. But they’re known for quality. They’re known for the Best Types of clothing items, the most instyle fashions and things like that.
Okay, so these type of brands when you just kind of think about them, if you’re a customer, there’s you just you just you trust that type of brand. Okay, company with a Ford P of nine, which I think is far too low when you’re talking about a company with the type of brand names his company has, okay, in this type of stability.
A company like this has a four P of nine in my opinion. It’s just ridiculous. Okay, it’s just it’s just undervalued, it’s too undervalued. Okay, which is main, my main play on this name is just an undervalued name. Okay, price to sales ratio, point three, one on this stock.
Okay, I don’t know when in the past Nordstrom ever had a price to sales ratio of point three one on it. Honestly, I can literally not think of a time when when Nordstrom ever had a price to sales ratio point three once like usually a price to sales ratio of point six to one is where Nordstrom usually trades down at a point three runs unbelievable. Basically, anytime a price to sales ratio gets under one is generally low.
When we’re talking about point three, one, that’s insane, especially when as a company with the quality of brand names This company has okay. They’ve been able to expand net income from 354 million to 564 million in the past two years. And you think of all the negatives in physical retail, you think of all the bankruptcies you think about mall traffic, and how much that has declined.
And you think about all these sorts of negative things that have happened for physical retailers. And yet this is a company that’s been able to expand their net income quite substantially over the past few years, despite such a negative environment for basically anybody that’s a physical retailer.
So that really speaks volumes to the management team at the company. And that really speaks volumes to the brand name that Nordstrom and Nordstrom Rack have that they could actually expand their businesses in that type of environment that is so negative like most physical retailers have seen their net income drop a substantial matter and and count.
I mean, we could go through a laundry list of physical retailers that have gone out of business, but yet you have this specialty one that’s really playing on the high end and guess what their business has actually expanded quite dramatically. And that brings me up to my next point. Okay.
Now this is not a core reason to why I bought this position is basically just a great company that’s undervalued is why I’m buying it, but they’re a perfect buyout candidate for Amazon. If you think about Amazon, two categories, they do not dominate right now, but they want to Okay.
One is food, and the other is clothing. Okay? And so what did they do in the food category, they went ahead and bought the biggest food retailer, they could, that played on the very high end, it was kind of the cool brand name. And like the one that understands trends and whatnot, they bought Whole Foods, right, they go out there, and they buy whole foods, Whole Foods stock dropped dramatically, the year or two previous to Amazon buying it.
So Amazon goes ahead and buys Whole Foods for a cheaper price. And a lot of people probably would have thought they could have got that stock for and once again, Whole Foods competes on the high end, like not everybody shops at Whole Foods, right? It’s like the top 10, maybe top 20% of income earners, maybe do shop at Whole Foods, okay?
And then you look at Nordstrom, and it’s a perfect acquisition target for Amazon. Amazon wants to take clothing more seriously. Well, they’re gonna need to probably acquire somebody that’s really successful. somebody that knows clothing really well, somebody knows trends, somebody that has massive amounts of data on basically what people like what people buy.
And if they buy this outfit, they might buy this outfit, and all those sorts of things, okay, and has a proven management team that is very successful when it comes to running this type of business model. So if you’re Amazon, you’re thinking, How can I get bigger in the clothing game?
And how can I buy a company that basically has all the supplier relationships with the highest of the highest end brands that are trusted? Nordstrom is a perfect buyout candidate for Amazon. And guess what Nordstrom stock has fallen about 50% over the past year or two. So Amazon will get to pick this company up for maybe 5050 bucks a share $55 a share or somewhere around there.
And I can guarantee you if Amazon said hey, we’re going to try to buy you guys out for $55 a share shareholders will probably vote yes on that being that the stock is at $32. Right now, if you’re going to give shareholders sell out for 55 bucks a share. And when the stocks at 32.
Right now a lot of shareholders would probably say, well, we’ll take it, okay. Perfect, perfect buyout candidate for Amazon. Okay, once again, not one of the core reasons of buying the stock, but it is a perfect buyout candidate. They do have expanding online businesses through trunk club and through their other businesses as well, as people kind of get more and more accustomed to ordering online.
If they’re trying to buy something that’s expensive, like like, you know, imagine you’re buying an expensive purse or something like that, right? You want to buy from a brand that you know, the person is actually real is going to come to you in a timely manner. And it’s not coming from like a fake Chinese website or something.
So if you’re going to buy something expensive like that, you’re going to trust the brand that actually will give you the authentic goods, which would be a business like Nordstrom, so they do have an expanding online business. This company has a 4.5% dividend yield right now, which essentially means, you know, I’m not necessarily a dividend investor, but I love to make some dividend money.
So while I hold this stock, I’m gonna be able to make 4.5% of my money. So even if the stock doesn’t go up a ton over the next few years, you know, let’s assume I hold this for the next three, five years. Even if the stock doesn’t move that much. I still make 4.5% on my money per year.
Now I’m hoping the share price will go up over time as well as hopefully the business expands over time. And hopefully as the business gets more respect over time, and it’s not like oh my gosh, this is gonna go out of business or something like that.
It is nice to make that 4.5% dividend yield. Okay. Now, the one thing that I can think of that’s bad for this company is mall traffic. Well, traffic has shrunk dramatically over the past few years. We know this, okay. But I think mall traffic now is at a point where it’s going to stabilize, it could decline slightly, but that’s more in the malls that are not in such the nice neighborhoods.
Okay, so if you think about the area’s Nordstrom is there in the most expensive malls in the most expensive zip codes and things like that, okay, so Nordstrom is really in a space where they’re not really so reliant on mall traffic, it’s a slight negative for the stock. But people don’t just go in buy a $500 pair of high heels.
Okay, that’s usually a premeditated decision. It’s not like somebody’s just walking through the mall and like, Whoa, I just went to the Apple Store and, and oh my gosh, there’s $1,000 purse over there that I just have to have laying by that now. Usually, that’s a premeditated decision, okay. And somebody doesn’t just, you know, on on happenstance, go buy a, you know, a $10,000 suit or something like that.
Usually, that’s a premeditated decision. Okay. So a company like Nordstrom, they’re they’re slightly hurt from mall traffic, but not nearly as much as a brand that might be dependent upon people making impulse buys and things like that people don’t impulse buy things that are hundreds of dollars with 1000s of dollars, because generally, most folks just don’t have that kind of money to make those type of impulse buys.
So needless to say it’s a strictly a buy that’s basically on valuation where the company is undervalued, great brand name, and I think we’ll do good on it over time. And I would like to build it into a pretty decent size position. Okay, I just sort of buying it very recently. Let’s get into stock number three.
Now you guys know this one already guys coming in a stock number three is a stock that I’ve been buying for the past several months. And I’m super excited because I’m going to basically be able to close out my position in terms of how big I wanted to get it. I basically wanted to get 300 shares in the stock.
And I should be able to finish out my position to get the 300 shares I have wanted in total. I’m getting very close. I think we’re up to 260 or so. So I think we need about add maybe you know, 40 or 50 more shares in the month of July. And then we’ll be at our 300 shares. And then it’s a hold for the next three to five years, and we’ll see where things go.
And this is Tesla’s stock ticker symbol TSL. A, if you do not know, Tesla, oh my gosh, you must never have watched my channel ever in the past, okay, they’re an electric vehicle maker. At the end of the day, they do have an energy side of their business, but because of electric vehicles that basically requires so much of their attention.
They’re basically an electric vehicle company right now that has a very small side project. That is the energy business at the moment. Okay, market cap on this one of under $40 billion right now in a share price on this one of about $220 a share. Okay, now why am I bullish in relation to the stock?
Okay, now, this was probably the messiest one, because I have a lot of reasons why I’m bullish for this stock. Okay, so let’s think about Tesla for a moment. Let’s think about the fact they are the dominant electric vehicle maker when it comes to the numbers in the United States.
In Europe, this is really by a mile and a half, there’s no one that’s really even remotely close to pushing them in when it comes to numbers as far as electric vehicles go. So that’s a great thing. And why is this such a big thing is because I believe in the future.
You know, the question is, how many years does it take to get there three years, five years, seven years, 10 years, but I believe all cars, trucks and SUVs in the future will be electric. So when you’re the company has a dominant market share when it comes to electric vehicles, and everybody will be getting electric vehicles in the future.
That’s a great thing for you. Like I literally can’t imagine somebody going and buying a new ice vehicle five years from now I just like I can’t get there mentally. like five years from now somebody goes and buys a new ice vehicle off the lot like I fully understand somebody buying a used one.
But buying a new one, it was just like, I can’t even comprehend that even like three years from now. Even nowadays, I think it’s crazy to buy a new ice vehicle you buy us because you only have 3000 bucks or 5000 bucks, you need to buy something cheap, then totally makes sense to buy a used vehicle.
But when you’re talking about buying new, like even now nevermind three years, not five years, not like I can’t imagine why somebody would want to buy a new vehicle in the future. Okay, so I believe all vehicles in the future will be electric vehicles. All right.
And when it comes to electric vehicles, they’re essentially three to five years in front of the you know, anybody you want to look at the three to five years in front, when it comes to tech, when it comes to supply chain. When it comes to overall skill. If you just look at the tech that’s in the cars versus their competitors, it’s not even really close.
Okay, there are three to five years in front of them when it comes to that the supply chain, which is such a big thing, because no one else has really scaled in mass when it comes to electric vehicles. Yet in terms of all the big players, their supply chain is off the charts.
It’s three to five years of friendly competition, their overall skill, no one has gotten to a scale that’s even remotely close. And it probably will be at least three to five years before another car company can get to this type of scale. When it comes to making electric vehicles.
Everybody talks about Oh, Ford, oh, General Motors, oh, Toyota, Nissan, blah, blah, blah. These companies they they have gotten to scale they’ve gotten to scale when it comes to building ice vehicles. They haven’t gotten to scale when it comes to building electric vehicles. It’s a different animal, just because ice vehicles built a certain way does not mean and electric vehicles built a certain way.
Okay, so a three to five years in front of the competition, that’s a very positive thing, when you’re talking about the whole market in the future is going to be going electric, in my personal opinion, okay, model y is coming in 2020, which is their affordable SUV. And that honestly should be a much bigger seller than actually model three.
When you look at the SUV market, it’s just there like the numbers should be much bigger for model y than the model three and you look at what Ilan Musk said Ilan Musk said basically when he went ahead and presented for the model y he said he couldn’t even like sell it hard because he didn’t want to take sales away from model three.
And he was afraid if he sold it hard. It might sell so well that people may not want the model three anymore or something like that. So needless to say, Elon Musk is scared about a selling so well. It’s probably going to sell really flippin Well, okay, then Tesla truck should be coming as far as production at some point in 2021 or maybe 2022.
At the latest in the Tesla pickup truck, we should actually get to see that it should be shown off at the end of this year at some point in time. That’s really exciting. The truck market is just massive. If you think about what’s the number one best selling vehicle in the United States of America, it’s actually the Ford F series trucks they sell nearly a million units a year so if you think about Tesla, they just kind of go to a bigger thing.
They’re like oh, let’s make a sports car. Okay, you just smell sell a small amount of that let’s make a luxury sedan we saw a little more of that let’s make a luxury SUV will sell a little more that does make it a somewhat affordable car model three Okay, now we’re starting to do some big numbers model y going to be even.
Bigger numbers and the pickup truck could be even bigger numbers than model y Okay, so needless to say over the next few years there are going to be massive years for the company we should see revenues go through the roof over the next few years.
Okay, then as these little side projects that aren’t so little Okay, you have the semi and you have the Roadster okay roadster is going to be like a 200 $250,000 Sports Car obviously you know what 1% or 3% of the population can actually afford something like that very small percentage Okay, so the Roadster might not do huge numbers.
But the semi has massive potential. The semi truck has massive potential for the company and could be a revenue generator in the you know, 10 billion plus dollar range. For the company on a longer term basis, but basically the semi is going to be hard to produce because it’s going to need so many batteries and you have the model y, you have the Tesla truck, you saw the model three, only so many batteries to go around over the next few years.
Now the semi actually might have to get put on the backburner just a bit for the next, you know, year or two, maybe even three years, unfortunately, I mean, if they could just make way more batteries way faster than we could get to even a bigger scale where somebody could come out and start doing huge numbers over the next year or two, you have Shanghai, the China factory was going to open over the next few months.
And that factory is going to be a game changer for Tesla, I think they’re going to sell the most profitable vehicles out of that factory. And I think numbers are going to be huge. The Chinese market could be potentially a bigger market for Tesla over the long term than any other market we’ll have to see over the next few years.
But when I look at China and we’ll look at how they’re going to push free V’s and when I look at the brand name that Tesla has very strong possibility that China long term could be the biggest market for Tesla we’ll have to see what happens with that okay, but he did say that factory opening is a game changer.
They have a visionary CEO of this company if you’re buying Tesla stock you’re buying for the visionary CEO that is Ilan Musk, which there are in many Ilan musk out there. Like if you think about just like, like how many public companies you can buy. And you think about like how many actually have a visionary CEO at the helm? at that company.
I can think of maybe three to five off the top of my head in that as yet. And those are 1000s and 1000s of companies, okay, like some that come to mind is the Nvidia CEO, Jensen Huang, obviously Jeff Bezos comes to mind and then off the top my head like I can’t think of that many CEOs that are really like visionaries, and you have Ilan Musk, obviously.
Okay, so he’s in a very special class of the visionary CEOs, okay, they’re winning at autonomous driving. And I think they will win long term. If you look at what Tesla has out there in the real world, when it comes to autonomous driving right now, it’s really quite a bit ahead of any other competitor out there.
So they’re already winning at this, I think they’ll win long term, if they win long term, that’s, that’s another thing that will get the company to market cap of 400 billion in the future 450 billion or 500 billion in the future, versus you know, less than 40 billion right now, if they can actually win at that, even if they’re number two is going to be huge for them. But if they’re number one, which.
I think they have a great chance of being number one, because the amount of data that company collect when it comes to autonomous driving in their mind, in future years, I think they’re gonna probably win that. And that’s something that will get this company to hundreds of billions of dollars in market cap in the future.
Okay, only bad thing I can possibly think of, in my personal opinion, when it comes to Tesla is they never had a yearly positive net income number. I think that possibly could come in 2020. When I look at 2019, it’s possible, but I’m not sure it will happen. Because obviously, they have to ramp the Shanghai factory, they’re going to probably do a lot of tooling for the model y and whatnot.
So they have a lot of different costs going around for the company here in the short term. So you know, yearly positive net income might not happen, but that could very well happen in 2020, which I think when that happens, that’s also a game changer for the stock because you think about that 2018 was the first time they could prove you know, hey, we can make a positive net income on a quarterly basis back to back quarters.
But now the question is, can they do it on a yearly basis? I think 2020 is going to be a big year where they could potentially actually come in with a positive net income number and so as I say, That’s why I’m so bullish on Tesla I’m happy to you know, hopefully you get my position finish building out in this month have my 300 shares and then we wait 357 years and we see if my whole bullish thesis plays out which.
I think it will anyways once again if you guys enjoyed this series, make sure you smash that thumbs up button. Let me know what your opinion is on any of the stocks discuss in the comments section. Thank you for watching and have a great day.