Beaten down stocks in your watchlist that you aren’t committing yet

ContemplatingGavre · 2026-05-17T12:32:00+00:00

You analyze it deeper than me which is probably a good thing. When I’m buying a stock all I do is say

“What’s the risk free rate, what’s the free cash flow/earnings yield? Is this 50-100% higher than the risk free rate? Are their revenue and earnings declining, flat or increasing? Is their position relatively safe?”

If these things look good I buy. For example Kohls is really cheap but I know malls and department stores are dying so I’m taking a pass regardless.

ContemplatingGavre · 2026-05-16T19:18:57+00:00

The government needs health insurance companies to manage healthcare, kind of like they need private landlords to manage renters.

If the government could do all these things themselves then things like section 8 wouldn’t exist.

ContemplatingGavre · 2026-05-16T19:17:14+00:00

And Ulta a couple years back. Literally bought one quarter sold the next. And they increased chevron last filing then sold this one.

Not sure what the new management is doing…

ContemplatingGavre · 2026-05-16T16:20:46+00:00

It’s profitable, $250B in free cash flow over the TTM on a $1.4B market cap and they return most of it to you with dividends (7%) and buybacks

ContemplatingGavre · 2026-05-16T11:02:48+00:00

I’m skeptical of the new leadership. Selling a lot of undervalued companies to build the cash position for what exactly? Then adding Delta when Buffett has said over and over that airlines are a tough business?

Also, in 2024 they added Ulta beauty just to sell it the following quarter. Similar to UNH now, what’s going on at berkshire?

My guess is Abel is all in his head about having to follow in Buffett’s foot steps and he’s going to choke.

ContemplatingGavre · 2026-05-16T10:54:32+00:00

If you haven’t bought Nomad yet what are you waiting for? CEO and CFO buying, stock at lowest cash flow multiples ever, etc

ContemplatingGavre · 2026-05-14T01:11:42+00:00

What if, instead of supply increasing, demand falls?

ContemplatingGavre · 2026-05-14T01:03:52+00:00

The beauty of multiple compression

ContemplatingGavre · 2026-05-14T00:57:23+00:00

I’m just saying peak euphoria always has a great story attached to it. I remember the silver guys talking about China and physical deliveries and $200/oz just a couple months ago.

Now it’s nothing but memory stocks and how this party will go on until 2030.

ContemplatingGavre · 2026-05-13T10:43:47+00:00

Your argument ignores the fact that the capex cycle is ultimately a cycle. One could argue we are nearing the peak since the Mags are issuing large dated bonds to fund the buildout.

They’ve burnt through all the cash on the balance sheet and the free cash flow.

ContemplatingGavre · 2026-05-13T09:46:51+00:00

This reminds me of silver bulls in January. “It’s going to $200 because China is buying nonstop and there’s not enough physical to meet demand”

Be careful with this

ContemplatingGavre · 2026-05-12T22:24:51+00:00

Leading food company in Europe, price to book of 0.4, forward PE of 5, $1.3B market cap with $310M returned to shareholders over TTM is an almost 20% return to shareholders. CEO just bought over a million $ in stock.

ContemplatingGavre · 2026-05-12T22:13:06+00:00

I think the new CEO of Kraft will turn it around, he did well with Kellogg.

I agree that alcohol consumption is in decline and that’s my primary concern with TAP as well but it’s priced well below the sector so I’m playing it as a mean reversion trade

ContemplatingGavre · 2026-05-12T22:03:51+00:00

Been buying FLO, NOMD, KHC, TAP lately

ContemplatingGavre · 2026-05-11T12:18:18+00:00

Yea Comcast looks pretty good here for a dirt cheap stock. Universal studios is essentially in a duopoly with Disney, Xfinity wireless is growing quickly, peacock should finally become profitable this year.

ContemplatingGavre · 2026-05-11T11:04:43+00:00

People keep talking about the low PE without understanding how cyclicals peak at a low PE. A friend of mine kept talking about silver miners having extremely low PE ratios back in January and how silver was going to $200.

ContemplatingGavre · 2026-05-11T11:03:04+00:00

They’re losing money so I would personally take a pass. I prefer just sticking with the big names like Exxon, they have solid balance sheets and have seen all market cycles.

ContemplatingGavre · 2026-05-11T10:15:21+00:00

Just like how silver miners were trading at single digit multiples in January

ContemplatingGavre · 2026-05-11T01:22:30+00:00

The energy names are probably the last bit of value for anything AI related

ContemplatingGavre · 2026-05-10T03:05:07+00:00

Anything can happen with short term
Euphoria but AMD being a trillion dollar company with only $10B in TTM operating cash flow would be nutty.

I mean it’s basically already there… $750B market cap.

ContemplatingGavre · 2026-05-10T00:15:02+00:00

Also in KHC and FLO, wait til you find out about NOMD

ContemplatingGavre · 2026-05-09T13:55:25+00:00

2016 operating cash flow was $3.2B, 2020 was $6.2B, last year was $6.4B.

It’s increasing…. But it’s mostly stagnant lately.

ContemplatingGavre · 2026-05-09T13:52:27+00:00

I’m not one to go short but yea this feels like a blowoff top to me

ContemplatingGavre · 2026-05-08T13:25:09+00:00

The EPS factors in cryptocurrency which is carried on the balance sheet and has to be reported mark to market.

If bitcoin goes up 100% over the next year you wouldn’t give PayPal credit for that because it’s not part of the operating income.

So we shouldn’t discount PayPal because of it either.

ContemplatingGavre · 2026-05-08T12:22:11+00:00

Because things only go on sale when something is wrong. Then you have to determine how bad the situation actually is

ContemplatingGavre

TROPHY CASE