3 Stocks I'm Buying Now! October 2020
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Holy Smokas guys! Welcome to my favorite series I do! 3 Stocks I’m Buying! October 2020 edition! Today I will talk to you about 3 high growth stocks that I have found in the stock market that I love! All these 3 stocks are in different sectors!I am super excited about these three stocks and I am expecting to get insane ROI.
I put in a lot of work doing these videos and I appreciate hearing your opinions of these stocks in the comments! Let me know what you think of these stocks and do you think these three stocks are stocks to buy now? Also drop names of stocks that you think are stocks to buy or stocks to watch now!
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Well hello there guys and welcome in to today’s video. I hope you have a great day out there as always today we get to do my favorite video doing a series each every month called three stocks I’m buying now this is the October 2020 edition we are doing here today this is my favorite series I do on the channel each and every month.
If you don’t know I just posted last night, my three dividend stocks that I’m planning on buying in October 2020. I posted that on financial education too late last night so if you haven’t gotten a chance to check out that video, if you’re into dividend stocks, you might want to check out that later on. Okay.
But today we’re talking about three high growth stocks. Okay, this is my favorite series because I love high growth companies, okay, dividends I like it’s okay, okay, but the high growth stocks, that’s what I’m talking about. And all three of these stocks are in very different sectors. And all three of these companies I’m sharing with you here today are very different.
Okay, make sure you do your own research out there. Don’t just buy a stock because I’m buying stock. Remember, this video is called three stocks. I’m buying Okay, now three stocks you should buy. These are three stocks.
I’m buying and I’m gonna give you my full bullish thesis on these stocks, which I think is the most important part of these videos, not just the name, give me the bullish thesis Okay, let me know in the comment section what three stocks or if any stocks you are planning on buying in the month of October,
I would love to see kind of what stocks you guys are buying in and what stocks you guys believe in the most over the long term. So I’ll definitely be reading through the comments of this video. If you don’t mind smash that thumbs up that helps you to channel out in a massive way it is free to do also if you’d like to stock.
market related content videos where I talk about stocks and things like that maybe consider subscribing also, we have resources linked in the description down there several really good ones. So if you want to check out the description area, definitely do so definitely some good resources linked for you down there.
Let’s get into this guy’s the first stock up here number one of three is a company named Stitch Fix ticker symbol s f II X on this one. Okay, this is the first stock of these three that I’m planning on buying in the month of October 2020. Okay, market cap on this one under $3 billion.
It is a major growth company even now, but I think in future years, it will definitely be Stitch Fix is a website slash app, where essentially you can get clothes sent to you that are styled specifically for you. So you go ahead and put in a bunch of your data on what type of clothes you like, what size you are all those sorts of things.
And then essentially Stitch Fix has a stylist which will go out ahead and pick out those clothes, those clothes will be sent to you. And you get to pick out which ones you want to keep in that box, which ones you want to take back. And basically you get a discount for the more clothes you buy, that were actually in that box that was sent to you, you get to give feedback in the program is just absolutely amazing.
It’s definitely an artificial intelligence heavy program that also involves some human control. I think it’s really a special business model here. Okay. NET revenues for the latest quarter came in at 443 million. That is an 11% increase year over year. And you think about it right? clothing sales are down massively right now, right.
I mean, especially over the last couple quarters, because most people just aren’t going places doing things that they would usually buy a lot of clothing for including work and weddings, and big birthday parties or holiday celebrations, all those sorts of things that’s just been completely shut down for the last I don’t know, six months or so. Right.
And so you can’t think of a worse scenario for clothing sales and his company’s going 11% like look at every single other company and the clothing space. They’re all down massively, and this company just grew 11% in their latest quarter, the reported active clients grew 9% year over year. So they’re getting even more clients through the door. net revenue per client even actually increased 2% year over year on an adjusted basis.
That’s pretty amazing. In itself, right. The company did take a net loss mainly based on the fact that his company is spending heavily right now to invest in his business for the next decade of growth essentially, and as well as a Roni Roni.
Just messing up a ton of things in their business model, as most companies have been kind of messed up here in the short term, this company’s balance sheet phenomenal $143 million in cash $143 million in short term investments $95 million in long term investments in no long term debt on this balance sheet, amazing balance sheet.
Okay? Remember, I talked about the business model, this is always the most important thing whenever you go into any investment. And specifically, if I’m getting involved with the growth stock, it has to be an attractive business model.
The amazing thing about Stitch Fix is business models. I think that the first company really in the apparel space to make artificial intelligence a serious thing with their business model, because they’re taking in so much data.
And that data can basically tell you like what type of clothes This person will like, what type of size will fit them perfect, all those sorts of things. So you add the data science, which is essentially artificial intelligence with the buyers and the stylists and it makes for actually a very magical business model.
I had my eyes open up to artificial intelligence actually using the pin door applique and even all these years later, even though I have an apples music subscription, all sorts of things. I still use Pandora on a regular basis.
Why is this because artificial intelligence that’s in Pandora is magical and especially if you give it a ton of features. Back, like you thumb up your thumb down songs, you skip songs that you don’t like things like that also starts feeding this algorithm of artificial intelligence. And it creates actually a amazing listening experience.
And all it takes is like a matter of few days or a week or so. And the next thing you know, I have the station that’s like, unbelievably curated, and it just plays song after song. I will like, and that’s magical. And so I feel like that’s the type of business model we’re talking about when in terms of at least artificial intelligence, using it so that they know exactly Oh, this person is going to like this type of clothing.
And you know, other companies use artificial intelligence on a high level, we just don’t know what Okay, the platform you’re watching YouTube is arguably the top artificial intelligence platform and all of the world you’re watching this on right now. Okay, Amazon uses artificial intelligence on a very high level.
And Stitch Fix is right there with these guys, at least, it’s just not a big company like those are yet right. But in terms of using artificial intelligence to actually have the business model performed very well, Stitch Fix is doing that.
I think that makes it a magical business model, you’re looking at all this different data, right? The client data, the merchandise data, the feedback data you give. So if you don’t like something you can explain, like why you didn’t like it.
And the more feedback you give Stitch Fix, the better off, you’re going to be as a customer of Stitch Fix, essentially. So through the artificial intelligence program, it can actually give you like a percentage that this person will actually like this item, like there’s a 63% probability they will like this dress or this code or something like that, that is magical, because it’s just not things that other companies have in this space.
And then if you’re the stylist, you can look at the Client Profile, you can look at historical interactions, you can look at the merchandise data, you can look at recommended algorithms, all those things like that. It’s absolutely amazing. All right, so they have a powerful growing client base with millions of active clients was 3.5 million, right? significant revenue growth at scale, we’ll look at that revenue growth in just a moment.
All right, strong client retention drives recurring demand and visibility. Remember, I talked about how powerful these artificial intelligence programs are, I mean, YouTube, Amazon, Pandora, and then if you get in with Stitch Fix, and you start using this regularly, they’re their artificial intelligence so powerful.
They’re gonna continue to send you clothing items that you actually like,okay, strategically investing in long term growth in brand building, capital efficient business model with high inventory turnover, they’ve demonstrated operating leverage enables further profitable upside.
So get the numbers here, okay, active clients from 2017, they were at about 2.2 million to now they’re over 3.5 million revenue has grown from 977 million to 1.7 plus billion dollars. Over the past few years, net revenue per client has climbed from 2017 $445 to $486, is where it is at now. Okay, now, they’re already under their fiscal 2021. Now at this point is Stitch Fix.
So analysts expect this company to grow 17.5% in fiscal 21, I think they’re going to grow 20% Plus, as far as 2022, their fiscal year 2022. Analysts believe this company will grow 16.6%, I believe they will grow 20% plus in 2022, as well.
So I think those numbers are low. The other numbers I think are low, you know, let’s have this company losing money, I think they’re actually going to make a profit this year, it’s going to be a very, very small profit. But I think they’re going to make a small profit in fiscal 21, and then pushing into fiscal 22.
I think the profit will be quite accelerated from what analysts have right now. And I think if that happens, I think this is going to be a stock that really, really starts moving heavy, okay. Katrina lake is the CEO over there.
And she’s a very good CEO. This is a founder led company, you guys know, I love companies that are founder LED, there’s just a difference. And if you look at even like historical standards on founder led companies and their stock performance over time, versus non founder led companies, it’s quite substantial.
Okay, I absolutely love founder led companies. And she’s a really good CEO. She’s been in the public markets for several years now. And she’s proven that she can continue to lead this company. And the last thing that made me really convinced on her other than just being the public markets for a few years, and seeing kind of how she’s navigated all this is she made a very tough decision recently, which was to lay off 1400 stylists in California, to basically have stylists and other places that are more affordable.
Okay, maybe my city, Vegas right out in Texas, there are a lot of markets out there, we can hire style, especially since it’s kind of remote work, right? Where you can get them just for so much cheaper employees for so much cheaper that can do just as good at work, if not even better work. Because sometimes a market like San Francisco, in California, in general can be just so competitive.
And never mind that you have, you know, different tax situations. It’s just, it’s a, you know, from what I hear from business folks out there time and time again is California is a tough place to do business nowadays for many various reasons. And I saw her make a decision like that.
And I said, that’s a tough decision, man. But that’s the type of thing that you have to make those type of decisions. If you want to build a massive company, you have to be able to make the tough decision. You can’t make the tough decision in big business, you will end up eventually getting shuttered down.
And that’s just the way business is it’s doggy dog. And yeah, that decision really made me just Love Stitch Fix more than ever. So I definitely love that stock as definitely a stock. I’m interested in buying more and more of this month it’s a sock I just started buying very recently. And I can continue to add to that one for hopefully weeks, if not months to go in to the future.
All right, stock number two, three up here of stocks. I’m buying October 2020 edition is another founder led company. Oh, man, you know, I love the founder led companies, right? This man Drew housden. Do you know him?
He’s a CEO of this company we’re about to get into. He’s a billionaire. He’s homeys with the Zuck Benioff. He’s invested in companies with Jeff Bezos and the eBay founder and just you know, well connected gentleman who’s doing a phenomenal job leading his company.
Now in the public markets, it’s Dropbox, ticker symbol d b X on this 119 dollar stock, it is the most attractive risk reward profile in the entire stock market that I can find right now. Okay, the chances I lose money in the stock over the next five years, almost non existent.
And the chances I double or triple or more of my money over the next five years in the stock. extremely high, in my opinion, okay, so Dropbox, cloud storage, that’s kind of always been their thing, right.
But now they’re moving into even more of a smart workspace place over the past, you know, year or so in, this is something they’re going to continue to innovate on, they got new products and services coming out later this year, as well as moving into 2021.
And so this is a really, really exciting business model at a really, really compelling valuation. Notice, when I go into my Dropbox, which I use Dropbox, pretty much on an everyday basis, I noticed their cross promoting their products on a way higher level than they’ve ever done it before.
In the past, let’s just put it that way. It’s not even close. So it company was 600 million registered users and only 15 million paying users, every single month pretty much for Dropbox, the pain users increase and increase.
And this company has almost unlimited amount of paying users to go after over the next 357 10 plus years, this company has at least a decade plus of growth in front of them, just with the products they have in the market. Now Never mind if they continue to launch some game changing products over the next, you know, several years, just off of what they have.
Now, this will be a company that has endless growth for the next 510 years. 80% of their subscribers use Dropbox for work, this is huge. Okay, you want to know what else is huge is they’re doing deal after deal with colleges.
This deal was just announced pretty recently, it was kind of on the DL, the Arizona State University and did a deal with the University of Michigan. And this basically means the students there use it, and the faculty use it. Why is this so big?
They’ve done a lot more deals with colleges recently, this is going to be something they continue to expand into in a real major way. Why is this so big? What you want to get college kids using Dropbox as their cloud and as their smart workspace?
Because if college kids start using this all the time, guess what they’re gonna end up graduating, they’re going to get into the workforce or go start companies. And guess what, if they’re already used to love this product, they’re going to continue to use it not going to be like, Oh, no, now I’m going to switch to something else.
No, Dropbox has a phenomenal product, in my opinion. I’ve tried all the cloud products out there. And they have the best cloud product, in my opinion out there in terms of ease of use, just being able to open it, send it to anybody you need to send it to, it opens, you can download, it’s just like everything is so cake on that.
And so with all these college students graduating over time, they’re just gonna end up using Dropbox out there in the real world unless their company is tied in with, you know, something like Microsoft Teams or something like that.
And they, you know, doesn’t make sense outside of that type of scenario, I think, you know, this will be a huge growth vector. And this is a very intelligent and very intelligent move on Dropbox. It’s one of those things, it doesn’t show up huge in the numbers short term.
But when you play this out long term, it gets pretty dang interesting because you start investing in his company in the past month or so. And this is a company I’ve been using for over five years now Dropbox I absolutely love it is still stuck around.
I basically started using that back when I had my real estate marketing company, I would send photos, videos, to clients, I tried the different products that were out there at the time. And Dropbox was just a easiest buy for for me to use.
And for my clients to use all my different customers I had in that real estate marketing business. And I still use it for all my cloud stuff today. Like, you know, we have like coaches in my private stock group and things like that, if I need to communicate with them, like send them over a voice message,
I do it right through Dropbox is so easy, right on my phone, just hit the record button, automatically uploads to the cloud, boom, copy, link, send it over to its cake students, like I get like tons of emails each and every day in DMS from people that are in my private group.
And a lot of times I’ll just respond because we easier especially if it’s a complicated message to send out there. I’ll just do it basically in a voice memo rate in the Dropbox and it’s what I use for my cloud overall.
I love that product and I’ve loved that product for five years now. And you know, it’s grown with me and I have absolutely 0% interest in leaving Dropbox to that tried what else is out there? I’m just like, this is just the easiest.
This is just the best in my personal opinion. Okay, now Dropbox. What they’re doing right now I think is is just huge. Okay, they’re trying to build the world’s first smart workspace that people use on an everyday basis where you can leave comments.
Where you can pick up a file. So let’s say you’re you’re using a file with somebody, right? And you guys are working on it together. And you know, you save it back in Dropbox, things like that, you can actually see the activity that somebody was doing with that you can see where that file was shared.
And when you think about a team experience, especially if a small business, you know, this is type of stuff that’s really, really big. And that’s the type of stuff that wall street isn’t even like understanding or can’t even comprehend how big this is yet, okay? Remember, Wall Street, they couldn’t even they couldn’t even wrap their head around how Facebook was going to make a ton of money back in 2012.
Okay, never mind, you know, working on the first smart workspace, like they can wrap their head around this, they’ll wrap their head around that once it’s already deployed out there in a major way, okay. And the amazing thing with their business models is all about self serve, right? They’re trying to land and then expand. So you think about it, right?
They got me to start using their product back in 2015, when I started my real estate marketing company, right, and that’s what I used. And that’s what I would send to all the different realtors I’ve worked with, right, I’d get the photos done video, job done, whatever I was doing, send it through Dropbox, those folks always had a very easy time basically downloading them,
I never had real issues like, Oh, I don’t understand how to use this or understand how to do this, or this doesn’t work on my computer. No, it was like cake for them. And then imagine how many of those folks ended up signing up for Dropbox and using that as their cloud because they had a good experience, because I introduced them to that, right?
That is the magic and the business model. The other magic in the business model is, like I said, unlimited growth to this company, 315 million potential high value targets. So let’s assume for the next 10 years, not one person on this planet, signs up as a new user of Dropbox, okay? Even if that was to occur, there will still be massive growth for Dropbox.
Obviously, that’s super unrealistic, then no one’s gonna sign up for Dropbox anymore. But even if we play that scenario, there’s still ridiculous amounts of just current Dropbox users that are on free packages, that will end up upgrading over time, essentially.
So I mean, you know, they just have a small fraction of what they will have in future years as unlimited growth there. And then they bought hellosign. Couple years ago, this deal, I think, kind of went on the DL and I think hellosign is gonna be the number two player in E signing of documents long term. And this is a massive market. And there’s basically native integration.
Now in Dropbox with this, this is a game changer, you look at DocuSign, right. DocuSign is the number one player in this market, and will probably continue to be the number one player for maybe ever and ever, as long as they stay, you know, hungry, essentially, unless hellosign somehow takes him out, which I don’t I’m not projecting that at all.
Okay, but DocuSign is a $41 billion market cap on it right now. 41 billion there number one player there hellosign long term, I think will be the number two player there in Dropbox, his entire company right now has an $8 billion market cap on it. So needless to say, Dropbox has massive. And when I say massive, I’m talking about gargantuan upside potential here.
It’s a company that integrates very well with slack. they integrate very well with zoom. And they integrate very well with basically everybody, they’re an open ecosystem. They love to work with everybody.
And I think that that business model of being an open ecosystem could be very big, long term with businesses, not like every business is just gonna want to sign up for one company and get that company all the power people want best of breed products.
And sometimes, you know, the big dog, they don’t have the best of breed product. And actually, usually they don’t, okay, usually it’s a lot of these other players that are just focused on that. Okay, no financial highlights 19% year over year growth in 2019. Operating Income obviously has exploded over the past several years.
As far as the latest quarter 16%, year over year growth in q2 2020. That’s very nice revenue growth. 16%. Right, operating income up massively. As far as long term target models, they’re looking at gross margins of 78 to 80%.
So we’re talking about is on a non GAAP basis. By the way, we’re talking about gross margins that, you know, it’s hard to find with other companies out there, and companies targeting long term for annual free cash flow of 1 billion plus dollars.
All right, the main competition for Dropbox for the past decade has been Google Drive box, OneDrive from Microsoft will continue to be the main competition in my opinion for them. And over the next decade, they’ve competed very well. They’ve absolutely grown this business year after year after year, after year, all the way till now they’re still growing like a beast.
And it’s a competitive space. Everybody wants to win it right. And everybody wants to be a big player there. But ultimately, at the end of the day, Dropbox is doing a phenomenal job in that space. Okay, no true long term debt on this company cash and cash equivalents of 334 million short term investments of $783,000,001.2 billion in total current assets on that balance sheet. Absolutely. Amazing.
Like I stated at the top of this one, okay. Dropbox is the number one risk reward stock in the stock market, in my personal opinion, I can find out there. As of today, there’s not a more attractive stock I can find from a risk reward profile.
I mean, there’s some stocks out there that feel like might have more upside. There’s definitely plenty of stocks. I feel like I might have more downside. But like I said, I’m investing as company. I’m putting my money and I continue to put in my money in October, and I’ll probably continue to put in my money throughout the rest of 2020 if not in 2021 in the stock and when I look at it just at the end of the day,
the chances I lose money in the stock is so ridiculously low and the chance I double, triple or more my money over the next five years is ridiculously high and when I get those type of risk rewards I’m going to take that every single time all right already guys, those are the first two up there now for number three so basically I have three properties three properties I’m going to tell you about now Okay,
these three stocks are you know going to be probably buys but they’re not for sure Stitch Fix Dropbox those are for sure me I will definitely add those stocks in October these three I’m about to share with you here or .
I’m going to probably add them in basically October 2020 especially if either the stocks or any of these stocks that you see any type of material drops in their stock prices that will really make me jump on these Okay, the first one of these three properties is the FB the FB Okay, money just ends up there constant first off the stocks, he’s still using money.
I mean, it’s just still easy money. I’ve been calling stock easy money since it was 100 something dollars a share. It’s $270 a share. It’s still easy money. It’s at a 23 four p the top five balance sheet in the world, arguably the most powerful products in the entire world.
This company owns right Facebook, Instagram, WhatsApp, I mean, and then you think about VR long term and AR with Oculus. Oh my gosh, okay. And money just ends up there constantly. So I mean, you think about the your local restaurant you do really great.
Where are you putting ads, you putting ads on Facebook and Instagram, okay, any type of business, any type of business out there, when you make a bunch of money and you you’re going to spend on advertising where you spend money to spend money on Facebook and Instagram.
That’s just what you’re doing. If you have a brain and you know anything, you know anything about marketing, okay, I can tell you, I don’t have time to build like an organic audience on Facebook. Like I’m maxed out between YouTube looking at stocks all the time and my private stock groups, I don’t have time to like build organic Facebook audience. So we run ads on there.
And look at this, we just spent $750, then another $750 that’s just today, right? Yesterday, we spent $750. So there we are, we just spent over $2,000 in a matter of what a 24 hour 48 hour time period on the FB and that’s just getting myself back money essentially at the day because you know, Facebook’s amazing bismol and we’ll continue to do that as long as it basically gives us a positive ROI if we wouldn’t be doing that if we didn’t get a positive ROI from this, obviously Okay,
so FB fi nominal, these number two of three probably out there for me is upward ticker symbol up Wk. Now this stock just hit its 52 week high very recently. And you know, I don’t like to buy a lot of stocks that are 52 week highs.
But at the same time, this is going to be possibly the biggest player in the freelance economy, which is something that continues to take off and will continue to take off for the next you know, at least decade if not several decades into the future.
And they’re going to be possibly the number one player in this market. And I’m looking at this company as $2 billion valuation for arguably what will be the most powerful freelance economy company in the world long term right or at least up there and I’m looking at the stock I’m like, I haven’t bought nearly enough of this stock yet right I got 15k worth of shares in one account that were up 39% on I got another 15k of shares that I’m up 52% on on another account, I’m like, I haven’t been buying the stock nearly heavy enough.
I need to add this one aggressively. Because I think this is the type of company that’s going to have a 510 maybe even more than $10 billion market cap on it over time and when you’re at two, there’s a long runway for growth in front of it.
So that’s number two a three probability there in Upwork got to buy more of that one in the last probably of the bunch number three of three is switch ticker symbol s w ch amazing data center company that gives you the ultimate protection especially if you’re a big business or midsize business in terms of you want to have your servers and things you don’t want on the cloud you want it in a very safe and secure place that that that you know electric is very low cost you go to switch for that okay,
that is a company that I covered on for stocks $15 or less that are by now I basically released a video about two weeks ago I would really into detail into switch stock in that video as well as a few other stocks.
So if you want to check out that more in detail, check out that video you can just literally type that in YouTube or go to my YouTube channel and you can actually watch that video if you didn’t get a chance to see I talked about a few other stocks in that one as well but definitely talk about switch in that video there.
Hope you guys enjoyed today’s video. As always, if you don’t mind smash that thumbs up to help out the YouTube channel and a massive massive weight in it is free to do as well as if you love stock market related content.
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