Hi all 👋
I’m introducing this series which I’ll be releasing every Sunday/Monday before market open where I’ll be looking at some potential adds/trims/buys/sells for the week.
The first 3 will be open to all and the last 2 will be for paid subscribers.
Last week we looked at UNH, LMND, ENPH, GRAB, and GOOGL.
UNH remains within zone above support we laid out.
LMND remains within zone above support. Not yet hit a key buying zone ~$30.
ENPH held strong and is showing some nice signs of consolidation, but no change in structure yet.
200 and 100 MA could meet around $4.20 if GRAB gets there. That would be a great buying opportunity.
Strong week for GOOGL. Still a great place to buy.
Here’s 5 charts for this week 👇
1. ZETA
As paid subs will know ZETA is currently on my watchlist and I think the current technicals put ZETA into a great position to be soon added to the portfolio. ZETA is a MarTech company with some extremely good fundamentals. Here’s the main numbers we need to look at:
Revenue Growth: 36%
EV/Sales: 2.7x
FCF Growth: 87% YoY
FCF guidance in 2028: $340M
From a valuation perspective, ZETA are guiding for $340M in FCF which is a 33.2% CAGR. With a very conservative 30x FCF multiple (for 33% CAGR), we have a $10.2B business which is a 3x from today. Considering HUBS is growing FCF at ~20% and currently trades at a 50x FCF multiple, my 30x FCF multiple used above is very conservative. At a 50x FCF multiple, ZETA could be a $17B business which offers nearly a 5x opportunity.
From more of a technical perspective, ZETA is currently sitting just above a nice support at $15 and just on the 100W SMA so there’s a nice bit of confluence here for a run into the $20s.
As always, 90% of my time is spent on the fundamentals and finding companies that are undervalued. The last 10% is timing the entry at some nice technical zones.
2. LYFT
LYFT is a very underrated company, which I understand because they’ve been in the UBER shadow basically since they formed and that’s why they’ve consistently traded at multiples approximately a half (or even a third) of UBERs. I own UBER in my core portfolio as I think it has an incredibly strong moat which a company like LYFT doesn’t have. However, that does not mean I don’t think LYFT is undervalued and could be considered as a swing trade at these levels.
LYFT has been consolidating for 2 years now in the $10-15 range, however, fundamentals have drastically improved in this time. Just over the last 12 months we’ve seen:
Adjusted EBITDA grow 79% YoY.
FCF hit $920M (last year FCF was just breakeven)
These are some pretty incredible improvements over the last year. If you look at FCF, LYFT are trading at just 7.38x FCF which is far too cheap considering UBER trades ~22x. LYFT seems like a stock with limited downside from here, fundamentally and technically which puts this as a very nice potential swing trade aiming for a minimum 100% move up the $32 range.
I’ll update paid subs on this ticker, but I’ll be adding LYFT to my watchlist first thing tomorrow morning.
3. SVM
Paid subs will know that this is a core position for me, and it has been for a while. It’s done ok so far but currently hasn’t broken past the $5 resistance area which is what I think will open up a move to the $7 range and give me the opportunity to return over 100% on this.
I’m very bullish on silver long-term for numerous reasons that I won’t get into in this article. It’s quite a cyclical market and silver is slowly starting to breakout but mining companies have yet to make any material move. The divergence between metals and mining companies is getting larger and larger which opens up this opportunity for a potential big move.
The chart is starting to look quite positive too with higher highs and higher lows basically since early 2024. If we can break up to $5.50 in the next move, then I’ll be very bullish on this name.
Paid subs get access to the last 2 charts 👇
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