3 Stocks I'm Buying Now! November 2020 Edition
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Welcome guys to my favorite series I do on the channel! 3 Stocks I’m Buying November edition! I love talking about specific stocks that I am buying! But more importantly I love explaining to you guys why I love these stocks and why I am buying these stocks. It is a red stock market right now and there is some great deals coming to light so I have to take advantage of these discounted prices.
Hope you enjoy this video where I talk about several stocks that I am interested and why I’m buying these stocks! Leave me a comment with your opinion. Are you buying any of these stocks? Are you buying any other stocks right now? Enjoy!
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Three thoughts on buying November 2020 edition welcoming guys to my favorite series I do on this channel each and every month Some call it three stocks to buy some top three stocks to watch. I call it three stocks personally buying and it’s not just about me sharing what three stocks these are that I’m buying.
It’s all about me giving my bullish thesis on these three stocks, why I’m bullish on them and kind of explaining that and I think there’s a little bit to be learned out there around how I make a bullish thesis around a stock.
I think that’s actually much more important in these videos than just these pure three stocks. So anyways guys that’s pretty much the whole Intro Hope you guys enjoyed today’s video as always, if you haven’t had a chance to get in the hub yet go ahead and do it.
It is our completely free discord chat where you can chat with about stocks with a ton of other investors out there including the stocks we’re going to talk about here today if you want to join in there like.
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I appreciate each and every one of you guys as part of the thumbs up squad and makes this job pretty awesome. All right already guys, let’s start getting in this first stock up of these three is Callaway golf company ticker symbol.
Eli, this is what I call one of my exes. Okay, we haven’t been together in quite a while but Callaway and I were hooking up again. Okay. And Callaway has had some some big news recently.
Okay, Callaway if you don’t know it’s a golf equipment maker, the biggest in the world, the baddest in the world and $1.4 billion market as up to date for this company. But the reason I’m getting back in the stock is this company had Earth shaking news recently. Okay, look at this.
This just came out this past week, golf giant Callaway acquires Top Golf in $2 billion deal. When I saw that I was absolutely in shock. I was like, Did I just read that right? It was like scrolling on the bottom bar of the TV. And I’m like, did I just see that right? Immediately I went on my iPad start looking this up.
I’m like, yeah, this is legit. I can’t even believe this because this was a deal. That, you know, just came out of nowhere, basically, in terms of like Callaway actually buying the whole company.
They’re already invested in the company, but buy the whole company. And also that was talked about this was going to be a $4 billion deal in the past like Top Golf was going to be basically go IPO for like $4 billion or something like that.
This was crazy. Golf giant Callaway acquired the rest of sports entertainment company Top Golf, and an all stock deal Tuesday with the ladder valued at $2 billion. Now keep in mind the deal still has to close it should close in early 2021. Okay, it’s looking pretty good, though. Okay, Top Golf was founded in 2000. And just six years later,
Callaway made its first investment in the company, which included an exclusivity deal across all locations in 2018 Callaway increased its stake to 14%. And now it owns the entire company as long as this all goes through in the paperwork and all those sorts of things.
Revenue at 1.1 billion in 2019 for Top Golf customer demo look at this over 50% of Top Golf 23 million guests last year identified as non golfers that would be me too.
I would identify as a non golfer you know what I mean? Just like I go to talk golf many many times per years I would say probably five to 10 times per year I’ll go to different Top Golf locations and I don’t identify myself as a golfer but man it might get me closer and closer to becoming a golfer.
And that would obviously be very good thing for Callaway cuz it’s good probability Callaway might sell me some club or different equipment that Callaway sells right okay scale 71 locations across five countries 30 states in Washington DC are either opening or coming soon this deal will help.
Top Golf scale its operation and give Callaway access to millions of prospective golfers all while providing a case study for the industry as its finds this new ways to appeal to younger and more casual players which is super important for the game of golf and super important for Callaway.
Okay, look at this here. This comes out CEO chip Brewer got a lot of respect for this gentleman. Look at what he says here. Okay. Talk golf is the single best thing that happened to golf since Tiger Woods. It’s going to be the largest source of new golfers for our industry. That’s a big statement, man.
We’re talking about Tiger here, okay, is a biggest thing since him. I gotta say I probably agree. I mean, I can’t think of anything bigger. That’s happened since you know Tiger Woods obviously became a huge name in the 90s.
Inspired tons of people to you know, take up the game of golf. I can’t think of anything bigger than talk golf actually. I mean, this is a place that attracts millions and millions and millions and millions of people all over the world to come basically play a sport that they would never ever even think about playing.
But man it’s a fun place. It’s a fun place to go. It’s a good time. Here’s some pictures of our Las Vegas location. Man this location is epic. This is gonna be the coolest Top Golf for them all it’s right off the strip. The views are absolutely beautiful from this location has multiple pools. It has a VIP area like it’s just epic man.
It’s a great place not just to go golf but to hang out. Have some drinks, watch you know games, things like that. It’s absolutely amazing. Okay, Top Golf. It Heel could value company at $4 billion. This came out before Roni Rona took off. Okay, this came out back in January 2020 out of Bloomberg.
And this is what’s really interesting about this deal. Well, I mean, there’s a lot of things that are really interesting but the valuation because it was literally taught that this company was gonna IPO this year, and it might have if it wasn’t for Ronnie Rona, for $4 billion.
That’s a big valuation. Look at this even as recently as July Top Golf said in talks to go public via Churchill capital driving range company earlier I $4 billion IPO Top Golf says it remains focused on growth and reopening safely and that was just this past summer.
Okay, so it was a lot of talk that there was might this might have been a spec deal potentially coming or full blown IPO or you know, one of those blank cheque type situations that we’ve seen some companies do out there. And I mean, holy smokers guys, 4 billion was really interesting. I thought 4 billion when I heard that was pretty interesting for Top Golf.
If they were going to IPO 2 billion. Yeah, okay, I like that a lot. All right, I heard it da 2.5 billion is a real number in my opinion, because you got to include the debt company I’m sure it has some cash in the balance sheet but they also have over a half a billion dollars in debt on the balance sheet.
So really what Calloway is paying for this company is 2.5 billion Okay, then in my in my terms, if you actually run the numbers and things like that, if you include the debt okay, but still 2.5 billion, that’s a 1.5 billion less than what we were talking about literally.
Just before the ronnie Rona happened Okay, Callaway had about $165 million somewhere around there roughly in cash as of its latest quarter it had debt of 628 million This is long term debt as well.
Okay, so if you put the debt load from Top Golf in the debt load of Callaway together, it should be somewhere around 1.1 to $1.2 billion in long term debt when these companies are combined, which is definitely a good amount Okay, there’s no doubt about this.
However, keep this in mind 2022 when hopefully everything’s back to normal, okay, the company should be able to put up and talk about from Callaway together should be able to put up $3 billion plus in revenues in my opinion pretty easily Okay, now as far as net income goes, that remains to be seen because remember Top Golf is all in growth mode.
Top Golf is not about profitability right now or the bottom line. It’s all about growing more locations growing their massive Tam which at the end of the day, this is a company that can just fit a lot more top balls.
I mean, heck in my city alone, I think there could be two more Top Cops I think there can be one in Henderson I think there could be one in Summerlin as well. Okay. So yeah, I think this is a company that just has unlimited growth in front of it over the next decade and it’s gonna be you know, huge revenue numbers in the future.
Now, Callaway is a very profitable business model by itself very profitable, okay. In Top Golf locations by themselves are very profitable, okay. It doesn’t mean Top Golf as a company’s profitable because they’re expanding so many locations.
Hiring a ton of employees, expanding the business bigger and bigger to go after this massive opportunity. But the fact is, like, it doesn’t take a rocket scientist to go to a Top Golf on a Friday night and walk around in realize, Oh, my gosh, this company is a goldmine.
Okay, it doesn’t take a rocket scientist to figure that out. Even in this Roni. Roni time. I can tell you their locations are more than likely still an absolute goldmine. And I’ve been to several since Top Golf reopen.
And I’m telling you these locations are packed in a are doing business, man. I mean, there’s a lot of times you can’t even get into the locations on some nights, Kay. I mean, it’s just you know, like I said, it doesn’t take a business genius to walk around one of those and realize, oh, man, they’re making a few dollars in here tonight.
Okay, now, so the company right now has a $1.45 billion mark cap on it. Now, once they issue those shares, there’s another 2 billion out there, the real market cap on paying, if I’m buying the stock here today is about 3.5 billion, somewhere around there, roughly.
Okay, around 3.5 billion, but I’m getting a company that has a revenue growth base that has two iconic brands in the golf game Top Golf right. And Callaway massive nevermind, we’re not even talking about the top trace or technology anyway.
That proprietary information technology at this company has Okay, we’re just talking about it from the top golf location perspective in Callaway, the company, so I’m getting a revenue growth beast, I’m getting a company that should grow revenues, top line 10% plus per year, for the next 10 years, like for this whole decade 2020 through 2030.
This is totally a company I can definitely see growing revenue 10% per year pretty much every year. And that’s incredible.
There are that many companies that you can look out to over the next decade and say that company is going to grow double digits probably every single year for the next 10 years. And I think this company absolutely can as a combined company, okay, which which Callaway alone would not have been able to do that in my opinion at all.
Now, the risk I know a lot of folks love for me to speak about the risk in regards to any stock out there, especially one that I’m really excited about. So Eli the risk is they could mismanaged Top Golf.
So essentially the head of Top Golf, he’s gonna step down from the company and pursue other opportunities. Once this deal is closed over the rest of the top golf team should remain intact, but there’s always possibility that maybe Callaway just wants to dismantle the top golf team and she of the culture there.
I don’t think that’s going to happen. I don’t think chip Brewer wants to cause any drama there or make any missteps there. So I don’t see that happening. However, it is a risk, you got to think about these things.
What happens if Callaway completely mismanaged the company and got rid of all the good employees that are at Top Golf that are helping the company expand massively. Also, the other risk is debt interest.
So we talked about this 1.1 to $1.2 billion of debt on the balance sheet, obviously, you got to pay interest on that that’s a possibility that eats into the cash flow, right, as they continue to pay down that debt over the say, the next 510 years.
It eats into cash flow. So rather than paying out dividends, maybe doing share buybacks, things like that, they have to worry about paying down that debt. So that’s absolutely a risk as well. And then the last risk is competition eats.
Top Golf, and there’s just too much competition in the space and everybody wants to build the epic, Top Golf locations, just under different names, essentially, I think it’s gonna be tough. And the reason being is essentially a Top Golf location cost 20 to $50 million to build, okay, never mind, the team you got to put in place to get one of these projects built, opened and open well, right 20 to 50 million.
I mean, you better be well capitalized for this. It’s not like just every anybody can just, you know, come up and be like, I’m gonna build one of those locations, it doesn’t really work like that.
You need the land, and the land in premier locations, like Top Golf ones, generally a little expensive. Okay, so 20 to 50 million is what you’re looking at for a build out. And I think that’s going to keep a lot of competition away. Okay.
So Eli is very interesting, in my opinion, for a long term investor like myself, that is looking out from a perspective of what this company will do in the future years, and not just the future months, if you’re looking at Ely for the future, you know, six to 12 months.
I don’t think it’s the right way of looking at this stock. But if you’re looking at it from the long term opportunity of top offs, expansion around the United States and around the world over the next 10 years, I think it’s really darn intriguing.
Okay, that’s why it’s the first stock up here of these three second stock up here of these three stocks is Dropbox ticker symbol, d, b, x is a stock that’s right under $18 right now, and this is one we’re gonna have to battle with. Okay. And when I say battle, I’m talking about battle with the short sellers. We’ll get into that just a moment.
But Dropbox is a cloud company valued today at $7.4 billion. And guess what this company is reporting earnings this week, literally just a few days from now, Dropbox will be reporting their q3 earnings, this is going to be massive, it’s probably going to move the stock price big.
I don’t you know, who knows if it goes up a bunch down a bunch, we will see on telly. If it goes down a bunch, I will gladly be picking up more shares for obviously much cheaper price.
Okay. The company said it expects revenues between 481,000,480 $4 million for this quarter, we’ll see what that comes in at analysts are expecting about 482. So right in line there, folks expect the company to have about 19 cents per share of earnings.
And that suggests an improvement of 46.2% from the prior year, quarter massive improvement there. And notably, the company beats estimates in each of its trailing four quarters.
I love a company that just continually beats numbers and Dropbox, don’t be surprised that they beat these numbers as well. The average surprise being 20.83% for Dropbox, hey, it’s a company that’s expected to grow 10.9% revenues next year, I think they’re going to grow more than that I think more to like, probably like 12 to 14%.
That’s kind of what I expect next year for the company maybe even better than that. But I’d like to be a little more conservative. I’m thinking 12 to 14%. So I think that you know, 10 11% number is just too darn low.
But regardless, it’s very nice growth even if they only did that number right, especially when you start looking at the valuation which we’re going to look at ETS wise 50 cents a year ago, 78 cents of earnings per share expected in this current year and next year, 91 cents expected.
So this is a business that isn’t just growing to grow, they’re growing more and more and more profitable. And that is a huge thing and something I’m super excited about for this particular stock, the valuation it’s it’s a joke, it’s a complete joke for this company.
Okay, the four p on this company is under 21 that is silly. This is a profit machine that’s becoming a bigger and bigger profit machine a cash flow machine that’s becoming more and more of a cash flow machine in the future a revenue grew a very nice revenue growth company.
Right we’re talking about double digit revenue growth and to be trading at a 21 or under 21 four p it’s just silly company should be trading at a 35 to 45 four p in my personal opinion right now based upon where the business is at Dropbox has remained around on my iPad on its front page for over five years now that services folder phenomenal.
It’s what I use for cloud is what I prefer for cloud I love the service and there’s millions and millions and millions of folks out there that feel the same exact way and they love it for their cloud needs out there. Just super easy to use.
I just love Dropbox. I don’t know what else to say about it. Okay, fortress balance sheet. I mean look at the balance sheet. They were talking about over $1.1 billion in cash sitting around this balance sheet never made remember the company is only what $7 billion mark cap seven and a half billion dollar market cap and remember the company’s super profitable So likely that cash number is going to continue to build.
Next thing you know, is going to be 1.3 billion 1.5 billion, 2 billion as a coming years come. So yeah, it’s a it’s a beast of a balance sheet. However, there are shorts everywhere in regards to this particular company.
There’s no doubt about it. Okay? shorts are everywhere on the stock, and they’re just swimming around it like a bunch of sharps. Kay, I mean, I haven’t dealt with this level of shorts in a particular stock I’m involved with probably since tests on my ass, okay, which obviously tests on my ass always had a lot of shorts swimming around it.
I mean, they still are, but they’re just much quieter than before. In the past, okay, in the show very misleading things like this, okay, not sure if these folks are short, or they represent shorts, or what the situation is here. But graphs like this are so darn misleading. Look at this. So I blanked out the numbers there.
On the left hand side, if you look at that, you would assume the company’s going to go down to what 1% growth, a half a percent growth, like, like, just look at how misleading this chart is. Now, let’s go ahead and show you those numbers.
They put the bottom of the chart at 9% growth. Who does that other than jokers that want to mislead people? Okay, who puts the bottom of the chart at 9%, you don’t do that, you put the bottom of the chart at 0%. Okay, and then you have a 10% number and a 15% number and a 24. You don’t I mean, like that’s just completely ridiculous.
To put that that’s just a such a misleading chart. So anybody that’s even thinking about looking at Dropbox, they’re gonna see this article, and oh, my gosh, dark clouds around Dropbox, what’s going on here, and then they see a chart like that, and like, oh, man.
This company is going to not grow at all, in the future, look at that, they’re gonna be down like 1% growth, men, if they’re going down, 1%, they’re probably gonna go negative.
It’s just a complete joke at the end of the day, okay, all I can say the shorts is dank you thank you for the gift that you have given me, which is keeping the stock price low. So I can continue to buy in heavier and heavier in this company, rather than just shooting up like crazy.
Remember, shorts are very short the stock, I’m going to share short, we’re talking almost 21 million shares, or short sold in regards to Dropbox stock, that’s a massive, massive number.
The shorts are very happy to short the stock, they think it’s going down a bunch K. And I just got to say get ready shorts, get ready to get your short shorts. You know, I won’t go any further than that. Okay, just get ready.
That’s all I’m gonna say in regards this company, because I think this company is going to continue to execute, continue to put a very nice numbers. And I think the word will get out about this company.
And more and more investors are going to be intrigued by this one get in? And I think, yeah, I don’t think it’s going to be a very pretty situation for short sellers out there, in my personal opinion, and they are very shortcake.
Now in regards to Dropbox stock, I will keep building this position out as much as possible, okay, and I can’t go too too heavy in this one. But I can’t go to too heavy in any stock. But I’m gonna continue to build this out. I’m gonna try to buy as much as possible for the next two months.
Because I think there’s a good probability this one could start to move pretty nicely and 21. And I want to make sure I’ve got my position, at least you know exactly where I want it going into 21. But I might even still buy this one in 21. I mean, if it’s anything under $20 a share, dude, I’ll continue to load up this one.
As long as I mean, if it’s under 20, I will continue to buy, continue to buy continue to buy, it doesn’t matter. Okay, this has a possibility of becoming that number one biggest stock, no problem, I have no problem sleeping at night. If I’m holding Dropbox as my biggest stock in the entire stock market. Let me be very clear about that.
Okay. And I cannot say that for many of the stocks I hold, okay, a lot of the stocks I hold, some of them might be a little more speculative. Some of them might be a little bit, but Dropbox, dude, clouds not going anywhere.
Dropbox is amazing company, an amazing service. They have almost unlimited Tam, they have low revenue churn. It’s an amazing business model, they own hellosign, which is a competitor to DocuSign, which is something that’s going to continue to take off over the next 10 years. And I’m looking at all this and I’m like, you know, I just don’t think Wall Street sees what I see in this company. We have a difference of opinion.
I think I will went on this list like I’ve been able to, you know, kind of beat Wall Street with a lot of these stocks. We’ll see. Let’s come back to this one in a few years from now. Yeah, I like it a lot in shorts. Get ready. So I got to tell you, okay, stock number three, a three. All right, stock number three, three.
So I got four probably up here in regards to what I call, you know, what I’m looking at when I’m thinking about these stocks to buy the two stocks are automatic. Okay, Eli in Dropbox, those are autos those are for sure buys but these other four stocks, I’m going to probably buy them during the month of November 2020.
Okay, four properties. The first probably of these four up here is a very good food company. All right. Now this one’s shot up in price a lot. Okay. I mean, a lot like we’re already up I think $65,000 on our position, and I’ve only been in that stock for like, I don’t know, probably less than two weeks now.
Okay, so $65,000 plus gain in less than two weeks. It It’s gone up a lot, there’s no doubt about that. But I might still buy some more of the stock. And the reason being is the end of the day, I think that this company has a possibility to be a billion dollar company, if not a multi billion dollar company five years out, 10 years out.
And so when I’m looking at it from that perspective, at a $200 million $250 million market cap, and I think this has the potential to be a multi billion dollar market cap five years from now, um, you know, I should still buy some more, even though it’s gone up so much, and it’s hard to do that. But at the end of the day,
it’s amazing company look at this due to overwhelming demand processing time on orders will be two to three weeks for their orders. I mean, they’re just, you know, the company’s just putting up some amazing numbers people are ordering from their website, left and right.
And phenomenal news, I did a full on video about this particular stock if you want to watch it a few days ago, actually, it was last week on the main channel. So if you want to check that out, go ahead and do it. Okay. Stock number two, a four of these probably stocks is switch ticker symbol SW CH, there’s a company that has a $3.4 billion market cap on it right now. And I really like to switch stock, hey, they own these massive data centers.
So not everything can be on the cloud, essentially, if you’re a big company. And so that’s where somebody like switch comes in. And they have these amazing data centers that have amazing protection, all those sorts of things. Okay, look at these some of these pictures.
I mean, they’re epic. All right. And it’s just amazing business model. And they have a new product coming out in 2021, which is essentially what they call autonomous security robots, okay. And these robots can basically you know.
I don’t want to say protect areas who their robots out there in a day, but they can, if they see something going on, somebody can be watching the cameras on that that’s like from a remote location, and call the police if something’s going on. And so I imagine these could be really big.
I think in my city alone, Las Vegas, these could be really big on the strip area, where sometimes you just can’t have officers or, or security and things like that, and these kind of going around different locations.
I think this could be really interesting business model on the amount of corporate campuses that could use one of these, if not several of these around them. I mean, there’s a lot of places colleges, stadiums and cities in general.
I yeah, I think this has pretty big dang potential guys. So that’s, that’s really, really exciting to me. And that’s just something that’s completely on the DL on the stock K, it trades a 62 four P which on its face value looks expensive, okay?
It looks it absolutely looks expensive. I mean, the market in general, what’s going to trade out 24 P or somewhere around there, and we’re at a 62 by the end of the day, this company deserves a big premium, in my opinion, a very big premium because one this company hasn’t even been you know, focused on profits.
That’s not even like their biggest thing right now. I’d even include that. Okay, but one they have a recurring revenue business model, which those are the best business models in my personal opinion, because you get to forecast so much, you know, what’s going to likely come in over the next six months, 12 months, 18 months, 24 months, super low churn in this company.
If somebody signs up with switch, they’re generally staying with switch. I love that about this company. Okay, the company has very nice growth, very nice growth going for years and years and years to go in the future for this company.
And also their real estate is worth a lot Okay, they own a lot of land in a lot of very valuable structures. And that stuff is worth stuff okay? And is usually worth a lot and so when I look at this, this company absolutely deserves to trade at a big premium to the market.
Okay, I really like that one. Stock number three of four for the probably for the month of November is Nordstrom JW n it’s a stock I’m gonna have to probably pick up some more shares out it’s still under $2 billion market cap as long as this company’s anywhere remotely close to this valuation which is just far too cheap.
I’m picking up some k it’s Nordstrom, we’re getting Nordstrom Rack trunk club, amazing business model. You know, something has obviously been hurt in the short term by the closures and the Roni Rona and all those sorts of things but long term love this company trading at eight and a half for PE just far too cheap.
Yes Nordstrom I love this one as a value play as Nina I don’t even want to call it a turnaround play it’s just something that’s been devastated because a once in a year you know once in 100 year event came out of nowhere and smacked Okay, so yeah, definitely love Nordstrom they expand their online business big time.
Winning resorts is stock number four for up here in these properties. I’ve been buying the stock super heavy anything around $70 a share I’ve been buying and buying and buying think I just bought a bunch more here today.
Love Wynn resorts a billion dollars for the entire company. just silly. I did a full like 20 plus minute video on Wynn resorts super in depth. If you want to check out that type in I can’t stop buying this stock into YouTube.
And yeah, you’ll go ahead and pop up there and you can watch that video super in depth about Wynn resorts if you’re interested in that. Hope you guys enjoyed today’s video as always, if you don’t mind smash that thumbs up helps out the YouTube channel and algorithm like a ton appreciate each and every one of you guys, that’s all ask for payment.
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