I Ranked The Free Cash Flow Of Popular Stocks

00:31:18
https://www.youtube.com/watch?v=uQP6SaBHFCc

概要

TLDRThe video presents a ranking of 24 popular stocks based on their free cash flow profiles, categorizing them from S to F tier. Key companies analyzed include Meta, HIMS, Shopify, Nvidia, Disney, and Uber. The analysis focuses on free cash flow generation, growth rates, and the impact of stock-based compensation on shareholder value. Meta and Nvidia are highlighted as strong performers, while Disney and CrowdStrike face challenges due to stagnant growth and high dilution, respectively. The video emphasizes the importance of free cash flow in assessing a company's financial health and potential for shareholder wealth generation.

収穫

  • 📈 Meta shows strong free cash flow growth but faces dilution.
  • 💡 HIMS is growing rapidly but has significant stock-based compensation.
  • 🚀 Shopify is on a solid growth trajectory, ranked B tier.
  • 🏆 Nvidia is a standout with exceptional free cash flow, ranked S tier.
  • 📉 Disney struggles with flat free cash flow, placed in E tier.
  • 🔍 Uber demonstrates consistent growth, ranked A tier.
  • 💰 CrowdStrike needs to manage stock-based compensation better, ranked D tier.
  • 🍰 Cheesecake Factory shows stable cash flow but lacks growth, in C tier.
  • 📊 Dualingo is on a positive trajectory, ranked B tier.
  • 🚗 Grab is growing but still has more to prove, currently in C tier.

タイムライン

  • 00:00:00 - 00:05:00

    The video introduces a ranking of 24 popular stocks based on their free cash flow profiles, emphasizing that the presenter does not own any of these stocks. Companies like Meta, HIMS, Shopify, and others will be evaluated on their ability to generate wealth for shareholders through free cash flow growth.

  • 00:05:00 - 00:10:00

    The analysis begins with Meta, which shows strong free cash flow growth despite some volatility. The presenter notes the impact of stock-based compensation on dilution, ultimately placing Meta in the A category due to its solid performance but acknowledging room for improvement.

  • 00:10:00 - 00:15:00

    Next, HIMS is discussed, showcasing rapid revenue growth and subscriber increases. However, the significant dilution from stock-based compensation leads to a C rating for its free cash flow profile, indicating potential for future improvement as the company matures.

  • 00:15:00 - 00:20:00

    Shopify is highlighted for its impressive growth in free cash flow, moving from negligible amounts to $1.73 billion. The company is rated B, showing strong performance but not yet reaching the elite tier. FICO is then praised for its exceptional free cash flow generation, earning an S tier rating due to its consistent and rapid growth.

  • 00:20:00 - 00:25:00

    E.L.F. Beauty is examined next, revealing a volatile free cash flow history and significant dilution, resulting in a D tier rating. Disney's complex business structure and stagnant free cash flow over the past decade lead to an E tier rating, reflecting investor concerns about its growth potential.

  • 00:25:00 - 00:31:18

    The video continues with Dualingo, which shows promising free cash flow growth and is rated B. Carvana, despite turning around from significant losses, is placed in the F tier due to its overall negative cash flow history. Uber is rated A for its strong growth metrics and positive free cash flow trajectory, while Robin Hood and Warner Brothers Discovery receive lower ratings due to inconsistent cash flow performance.

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ビデオQ&A

  • What is the purpose of the video?

    The video ranks 24 popular stocks based on their free cash flow profiles.

  • Which companies are included in the ranking?

    Companies include Meta, HIMS, Shopify, Nvidia, Disney, and more.

  • What criteria are used for ranking?

    Companies are ranked based on their free cash flow generation, growth, and predictability.

  • What tier did Meta receive?

    Meta was ranked in the A category.

  • How did Nvidia rank?

    Nvidia was ranked in the S tier.

  • What issues were noted with HIMS?

    HIMS has significant dilution affecting its free cash flow per share.

  • What was the ranking for Disney?

    Disney was placed in the E tier due to flat free cash flow over the past decade.

  • What tier did Uber receive?

    Uber was ranked in the A tier.

  • How did CrowdStrike rank?

    CrowdStrike was placed in the D category due to high stock-based compensation.

  • What is the overall conclusion of the ranking?

    The ranking provides insights into the financial health and growth potential of popular stocks.

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  • 00:00:00
    Welcome back everyone. We have another
  • 00:00:01
    tear ranking video. These are always fun
  • 00:00:03
    to do. And in this case, I'll be ranking
  • 00:00:05
    the free cash flow profile, the free
  • 00:00:07
    cash flow of 24 of the most popular
  • 00:00:10
    stocks in the market. And here's the
  • 00:00:12
    kicker. These are stocks that I don't
  • 00:00:14
    own. Not a single one of them. So, they
  • 00:00:16
    are 24 popular companies that I do not
  • 00:00:19
    own. We have stocks like Meta, FICO,
  • 00:00:22
    Elf, Grab, Shopify, Spotify, Hymns,
  • 00:00:25
    Robin Hood, Cheesecake Factory, Warner
  • 00:00:27
    Brothers, Discovery. We have Crowd
  • 00:00:30
    Strike, Dualingo, Disney, Reddit,
  • 00:00:32
    Nvidia, on and on. So, we'll be ranking
  • 00:00:35
    these companies based on which ones are
  • 00:00:36
    generating the most wealth for
  • 00:00:38
    shareholders. Which ones are growing
  • 00:00:40
    that free cash flow undiluted the
  • 00:00:42
    fastest and the most predictable. Now,
  • 00:00:44
    let's go ahead and jump in. Okay, so
  • 00:00:46
    we're starting off with a big one here.
  • 00:00:47
    We have Meta. Let's take a look at this
  • 00:00:49
    one. I've looked at Meta. This is one
  • 00:00:51
    that I've been tracking, and obviously
  • 00:00:53
    the share price shows this company's
  • 00:00:55
    been on a roll, but we have to look at
  • 00:00:57
    the free cash flow. What I like to do
  • 00:00:58
    personally looking at free cash flows of
  • 00:01:00
    companies is quarter by quarter free
  • 00:01:03
    cash flow is pretty volatile. You don't
  • 00:01:05
    get the best picture. It looks a little
  • 00:01:07
    messy. So I like using the quarterly
  • 00:01:10
    trailing 12 months. That just means the
  • 00:01:12
    most previous four quarters combined.
  • 00:01:14
    Every single every single quarter it's
  • 00:01:16
    showing the trailing one year. So this
  • 00:01:18
    is what it looks like with meta. Overall
  • 00:01:21
    very very strong. you have these these
  • 00:01:24
    valleys and peaks, but underneath that
  • 00:01:27
    you see consistent free cash flow
  • 00:01:29
    growth. Now, there is a couple things.
  • 00:01:31
    It doesn't look perfect. We have a big
  • 00:01:33
    low in 2022. We have it resurgence back
  • 00:01:36
    upwards. Now, it's starting to go back
  • 00:01:38
    down a little bit. If we look at this on
  • 00:01:40
    a per share basis, we can see that it
  • 00:01:42
    looks a bit better, meaning that Meta is
  • 00:01:44
    doing buybacks. So, it's actually
  • 00:01:46
    increasing faster. One of the issues I
  • 00:01:48
    think with Meta along with a lot of big
  • 00:01:50
    tech companies is when we factor in the
  • 00:01:52
    stockbased comp, we do have a lot of
  • 00:01:54
    dilution here. So even though they're
  • 00:01:56
    generating $52 billion in free cash flow
  • 00:01:59
    over the trailing 12 months, they have
  • 00:02:01
    $17 billion of stockbased
  • 00:02:04
    compact of somewhere around 33%. I'd be
  • 00:02:07
    happy to own a company that has a free
  • 00:02:09
    cash flow profile that looks like this.
  • 00:02:10
    Meta is going in the A category. It's
  • 00:02:12
    not there yet in the elite category of
  • 00:02:14
    S. It's not perfect. There's just a bit
  • 00:02:16
    too much stockbased comp. Other than
  • 00:02:18
    that, pretty good. Next up, we have
  • 00:02:20
    HIMS, the subscription drug company.
  • 00:02:22
    This company is sure growing fast. Look
  • 00:02:24
    at the revenue of it. Sheesh. It is
  • 00:02:26
    growing really, really fast. Total
  • 00:02:28
    subscribers are going up like crazy. We
  • 00:02:30
    have the monthly revenue per average
  • 00:02:32
    subscriber. That's also going up like
  • 00:02:34
    crazy. Now, $84 per sub. But we get to
  • 00:02:36
    the free cash flow. How does all of this
  • 00:02:38
    translate to profits? Well, I'll give
  • 00:02:40
    the caveat that HIMS still feels like
  • 00:02:42
    it's early in its journey. So, I'm not
  • 00:02:45
    expecting much, but looking at this, it
  • 00:02:47
    looks pretty good at first glance. It's
  • 00:02:50
    going up like crazy. Plus 346%
  • 00:02:53
    year-over-year. Rapid free cash flow
  • 00:02:55
    growth. I like seeing that. Now, we have
  • 00:02:58
    to dig in a little bit deeper. When I
  • 00:02:59
    look at the free cash flow per share,
  • 00:03:02
    let's see how dilutive they
  • 00:03:04
    are. You see the You see the change
  • 00:03:07
    there? We go from free cash flow. And
  • 00:03:09
    this is like this is like that Homer
  • 00:03:11
    Simpson meme where he has the clip
  • 00:03:13
    pulling all of his fat behind him, all
  • 00:03:15
    of his skin tight. It it's what you're
  • 00:03:17
    seeing right here. You're seeing that
  • 00:03:19
    meme play out where we go from the free
  • 00:03:20
    cash flow. It looks really pretty at
  • 00:03:22
    first glance. This is what management
  • 00:03:24
    would love you to focus on. When you
  • 00:03:25
    factor in dilution and you divide it by
  • 00:03:27
    the amount of shares outstanding because
  • 00:03:29
    HIMS is diluting, we can look at that
  • 00:03:32
    right here. They have to have shares
  • 00:03:33
    going up. I I don't even have to look at
  • 00:03:34
    it, but you can see the shares going up.
  • 00:03:37
    210 million, 221, 229, 234, 235, 240,
  • 00:03:42
    246. If you're a shareholder, you own a
  • 00:03:45
    percentage of a company. As they print
  • 00:03:48
    more shares, your percentage gets
  • 00:03:50
    smaller. You're entitled to to a smaller
  • 00:03:53
    portion of the cash flows. So, it
  • 00:03:55
    directly affects how much cash you are
  • 00:03:58
    entitled to as a shareholder. So, we
  • 00:04:00
    don't like seeing this part of it. When
  • 00:04:02
    we put these side by side, this is the
  • 00:04:04
    dilution that's happening. Roughly half
  • 00:04:06
    their free cash flow is eaten up by
  • 00:04:08
    stockbased comp now. Again, this is a
  • 00:04:10
    company early in its journey. So, I
  • 00:04:12
    don't consider that too much of a
  • 00:04:14
    problem right now. Looking at the free
  • 00:04:15
    cash flow profile today, it looks like
  • 00:04:17
    it belongs in a C. It's not terrible,
  • 00:04:19
    but it's also not amazing because they
  • 00:04:21
    have so much dilution going on. Now,
  • 00:04:23
    it's trending in the right direction in
  • 00:04:25
    a year or so. I could see it moving up
  • 00:04:27
    to a B or an A. That's what we like to
  • 00:04:29
    see. Next up, we have Shopify. This is
  • 00:04:31
    the best company out of Canada. Some
  • 00:04:33
    people will argue that it's Brookfield.
  • 00:04:35
    I don't agree. I think Shopify is a
  • 00:04:37
    better company. It is a genuinely
  • 00:04:39
    amazing tech company, a finance company.
  • 00:04:41
    They're building out a a huge digital
  • 00:04:43
    ecosystem. I think it's great. So, this
  • 00:04:46
    one is one that I really like. I've
  • 00:04:48
    looked at it. I hope to own it someday.
  • 00:04:50
    When we look at the free cash flow
  • 00:04:51
    profile, let's bring it up here. First
  • 00:04:54
    glance, it looks like it's growing
  • 00:04:55
    rapidly. We're looking at operating
  • 00:04:57
    leverage. You don't have companies grow
  • 00:04:59
    free cash flow this fast without a lot
  • 00:05:01
    of operating leverage. Went from
  • 00:05:02
    essentially nothing in 2022 now
  • 00:05:05
    generating 1.73 billion. So massive
  • 00:05:09
    parabolic growth when we look at this.
  • 00:05:11
    The free cash flow per share also
  • 00:05:13
    doesn't look too much worse. Notice the
  • 00:05:16
    subtle change there. It goes from a 64%
  • 00:05:19
    growth rate to a 63. Right now Shopify
  • 00:05:22
    is in the B tier category. well on its
  • 00:05:24
    way, doing great, but it's not quite up
  • 00:05:26
    there with the A or S tier companies
  • 00:05:28
    that are in the elite category. Next up,
  • 00:05:30
    we have FICO. I bet you can guess where
  • 00:05:32
    this one's going to go. Come on. It's
  • 00:05:34
    going to go in the the S tier. FICO is
  • 00:05:37
    an S tier free cash flow generative
  • 00:05:39
    company. And the way to think of that is
  • 00:05:42
    try to find a company that has a better
  • 00:05:44
    free cash flow profile than FICO. It's
  • 00:05:48
    insanely difficult. They almost don't
  • 00:05:50
    exist. there there's not many companies
  • 00:05:51
    on planet Earth that have generated more
  • 00:05:53
    free cash flow at a faster clip and a
  • 00:05:56
    more consistent basis. When we look at
  • 00:05:58
    this over time, back from 2002 to 2015,
  • 00:06:02
    FICO would be somewhere in like a C-
  • 00:06:04
    tear. It's not really growing. It's just
  • 00:06:06
    kind of maintaining. And they were
  • 00:06:07
    growing a volume of scores over that
  • 00:06:09
    time period. In 2017, they started to
  • 00:06:11
    change their pricing structure once they
  • 00:06:12
    got to saturation. And they flexed
  • 00:06:14
    incredible pricing power. Now, there's
  • 00:06:17
    so much pricing power inherent in this
  • 00:06:20
    company that the government's looking at
  • 00:06:21
    it. That's when you know a company's
  • 00:06:23
    very, very powerful. When the only
  • 00:06:25
    entities that can really prevent it from
  • 00:06:27
    raising prices is the government. Now,
  • 00:06:30
    the free cash has grown 48% over the
  • 00:06:33
    past one year. In the past 5 years, it's
  • 00:06:35
    grown 21%. Not only that, but it's so
  • 00:06:37
    efficient, they've done so many buybacks
  • 00:06:39
    along the way that it's grown at 49% on
  • 00:06:42
    a free cash flow per share basis. So,
  • 00:06:44
    this one goes in the S tier. It doesn't
  • 00:06:46
    have anything else to prove. Next up, we
  • 00:06:48
    have the beauty company, E.L.F. Beauty.
  • 00:06:50
    This is the makeup company. Let's go
  • 00:06:51
    ahead and take a look at this one here.
  • 00:06:53
    We can bring it up on Qualram. If you're
  • 00:06:54
    not aware, E.L.F. Beauty is one of these
  • 00:06:56
    companies that came in and they
  • 00:06:58
    disrupted the makeup market, the beauty
  • 00:07:00
    market with lower price goods. And they
  • 00:07:02
    somehow convinced girls it's okay to buy
  • 00:07:05
    lower price goods. They're they're just
  • 00:07:07
    high quality, but they're at a better
  • 00:07:09
    price point. You don't have to break the
  • 00:07:10
    bank to buy some makeup. And so, it's a
  • 00:07:12
    great product overall. I really like
  • 00:07:14
    what they're doing. When we look at the
  • 00:07:16
    revenue growth, they certainly had a ton
  • 00:07:18
    of revenue growth since 2021, going from
  • 00:07:20
    400 million up to 1.3 billion. But with
  • 00:07:23
    a lot of these companies, they are so
  • 00:07:26
    susceptible to different economic
  • 00:07:27
    changes that their margins go up and
  • 00:07:30
    down. And this is what we see over time.
  • 00:07:32
    Now, this isn't the prettiest free cash
  • 00:07:35
    flow history that I've seen. We're
  • 00:07:37
    currently sitting at the same free cash
  • 00:07:38
    flow it generated over the trailing 12
  • 00:07:40
    months that it did way back in 2016. I
  • 00:07:44
    don't like seeing that. I'd rather have
  • 00:07:45
    a company reach new highs in free cash
  • 00:07:47
    flow and never go back down. That's what
  • 00:07:49
    Bergkshire does. It's never going to go
  • 00:07:51
    back down. FICO is never going to have
  • 00:07:53
    free cash flows today of what it had in
  • 00:07:55
    2016. It'll just never happen. Same
  • 00:07:57
    thing with Netflix and many other
  • 00:07:59
    companies. The other thing that we can
  • 00:08:00
    look at here is if we zoom in a bit to
  • 00:08:01
    the past 5 years, we go to the free cash
  • 00:08:03
    flow per share. It also doesn't look
  • 00:08:05
    quite as compelling because the company
  • 00:08:08
    is doing a substantial amount of
  • 00:08:10
    dilution. So to fund their operations,
  • 00:08:12
    to get through whatever time periods
  • 00:08:14
    they're going through, you can see the
  • 00:08:15
    share count going up like crazy. Right
  • 00:08:17
    now, I put ELF in the Dtier category.
  • 00:08:19
    Now, keep in mind, this is just on their
  • 00:08:21
    current free cash flow profile. It can
  • 00:08:23
    improve over time. There's other aspects
  • 00:08:25
    of a company, but the free cash flow is
  • 00:08:27
    a bit too volatile for this one to be
  • 00:08:29
    included with these other companies.
  • 00:08:30
    Next up, we have Disney. I used to own
  • 00:08:33
    Disney at one point. It was actually a
  • 00:08:34
    company that I lost money on,
  • 00:08:36
    unfortunately. A small amount, but I did
  • 00:08:38
    lose some money on it. And we're going
  • 00:08:40
    to take a look at Disney's free cash
  • 00:08:42
    flow here. The biggest thing that
  • 00:08:43
    investors need to appreciate about
  • 00:08:44
    Disney is the magnitude of the
  • 00:08:47
    transformation and the complexity of the
  • 00:08:49
    business. This business is far more
  • 00:08:51
    complex. The transition they're going
  • 00:08:53
    through is far bigger than most people
  • 00:08:55
    anticipate. They have ESPN, they have
  • 00:08:58
    parks, they have cruise lines, they have
  • 00:09:00
    streaming services, they have disperate
  • 00:09:03
    media conglomerates and different things
  • 00:09:04
    that they own. Disney's so big, so
  • 00:09:08
    complex that it's very difficult to do
  • 00:09:10
    analysis on. Now, when we bring up the
  • 00:09:12
    free cash flow of this company over
  • 00:09:14
    time, it it reminds me a little bit of
  • 00:09:17
    ELF in terms of having a lot of history,
  • 00:09:20
    a lot of volatility, long periods of no
  • 00:09:23
    growth. Overall, what I don't like in
  • 00:09:26
    this recual line is the fact that we're
  • 00:09:29
    back to where we were back in 2014. So,
  • 00:09:32
    we have essentially a full decade of
  • 00:09:35
    flat free cash flow. Now, if we just go
  • 00:09:38
    through the past couple of years, it
  • 00:09:40
    looks great. It looks like they're
  • 00:09:41
    growing it. But again, if you're an
  • 00:09:42
    investor since 2015, which many people
  • 00:09:44
    are, you've seen no growth in this
  • 00:09:47
    company over the past decade. And stock
  • 00:09:49
    prices follow free cash flow. So, when
  • 00:09:52
    we bring up the stock price over the
  • 00:09:53
    past 10 years, you have 3% returns. Not
  • 00:09:57
    per year. This is just your return. 3%.
  • 00:10:01
    Not good. So, what we see here is a
  • 00:10:03
    stock that's just trying to reclaim the
  • 00:10:05
    same free cash flow as it had during its
  • 00:10:06
    peak era, 2015. I'm putting Disney in
  • 00:10:09
    the E tier. I think it deserves to be
  • 00:10:11
    there until it can grow a stable line of
  • 00:10:14
    free cash flow for more than a couple
  • 00:10:16
    years. Right now, it just hasn't proven
  • 00:10:18
    that. This company's already lost a lot
  • 00:10:20
    of trust with investors. Next up, we
  • 00:10:21
    have Dualingo. This is the app you can
  • 00:10:23
    learn different languages. It's a
  • 00:10:25
    subscription and adear model. They also
  • 00:10:27
    have added in a lot of different things
  • 00:10:28
    like you can learn math or chess.
  • 00:10:30
    There's there's all these different
  • 00:10:32
    verticals are going down. The revenue is
  • 00:10:34
    growing very quickly. We see lots of
  • 00:10:36
    metrics like EBA moving up. So, how does
  • 00:10:38
    this translate into the free cash flow
  • 00:10:40
    line? When I look at it, it looks
  • 00:10:42
    honestly pretty good. There's not much
  • 00:10:45
    to complain with here. It looks good
  • 00:10:47
    across the board. 52% year-over-year
  • 00:10:50
    based on the trailing 12 months. They've
  • 00:10:52
    never had a quarter with negative free
  • 00:10:54
    cash flow. Let's go ahead and take a
  • 00:10:55
    look at their stockbased comp. Their
  • 00:10:57
    stockbased comp is big, but it's mostly
  • 00:11:02
    fixed. It's not going up that much. So,
  • 00:11:04
    the free cash flow is growing
  • 00:11:05
    dramatically faster than the stockbased
  • 00:11:07
    comp. We see the free cash flow per
  • 00:11:09
    share looks pretty good, growing 41%
  • 00:11:12
    year-over-year. This company has done
  • 00:11:14
    nothing throughout its history except
  • 00:11:16
    grow its real free cash flow per share
  • 00:11:18
    over time. Dualingo for me is going to
  • 00:11:20
    go in the B tier category. It is getting
  • 00:11:22
    close to that A tier category. It just
  • 00:11:24
    needs more time to prove itself. Next,
  • 00:11:26
    we have Carvana. Notable for their
  • 00:11:28
    vending machines of cars. You've seen
  • 00:11:30
    these huge buildings on the side of the
  • 00:11:32
    road. It's a company where they they
  • 00:11:34
    make it real easy to buy or sell your
  • 00:11:35
    cars. That's the whole pitch. And I'm
  • 00:11:37
    frankly surprised that this company is
  • 00:11:38
    still in business. For a time period
  • 00:11:40
    there, I thought they were going out of
  • 00:11:42
    business. Let's take a look at how
  • 00:11:43
    things have evolved. The revenue went
  • 00:11:45
    down. Well, it spiked in 2021. Then it
  • 00:11:48
    started to trend downwards. Then in
  • 00:11:50
    2024, it started to pick back up. So
  • 00:11:53
    things started to head in the right
  • 00:11:54
    direction. Now this company was
  • 00:11:57
    extremely cash flow negative at one
  • 00:11:59
    point losing up to $3
  • 00:12:02
    billion a year on a trailing basis. They
  • 00:12:05
    were losing three over $3 billion per
  • 00:12:07
    year. But they turned it around. Losses
  • 00:12:10
    went from 3 billion to 2.5 down to 1
  • 00:12:13
    billion down to minus500 million. Then
  • 00:12:16
    they started to actually have positive
  • 00:12:17
    free cash flow. Now, it's not like
  • 00:12:20
    they're generating crazy amounts of
  • 00:12:22
    money. In fact, it's going to take a
  • 00:12:24
    long time based on this to grow to where
  • 00:12:26
    they make up for their losses, but they
  • 00:12:28
    are now actually a free cash flow
  • 00:12:30
    positive company. Good job for them, at
  • 00:12:32
    least not going bankrupt. I think that
  • 00:12:34
    needs to be applauded. That's a a pretty
  • 00:12:36
    remarkable thing to do given the
  • 00:12:37
    circumstances. But, I'm going to put
  • 00:12:39
    this one in the F-tier category for now.
  • 00:12:41
    It It's just It just doesn't look
  • 00:12:43
    pretty. Next up, we have Uber. We all
  • 00:12:46
    love Uber. Let's go ahead and take a
  • 00:12:47
    look at this one. Uber's growing real
  • 00:12:49
    fast. We have Bill Aman in on the stock,
  • 00:12:51
    buying it big. And every metric, you
  • 00:12:54
    just look at these charts. They're all
  • 00:12:55
    moving up and to the right. Exactly what
  • 00:12:57
    we want to see. They have active users
  • 00:12:59
    growing, revenue, gross bookings, the
  • 00:13:01
    amount of trips done, EBA, and this is
  • 00:13:03
    all translated into a much stronger than
  • 00:13:06
    previously thought company. For a while,
  • 00:13:09
    Uber had the same thing where it was
  • 00:13:11
    losing a lot of money. It looked like
  • 00:13:12
    things are going bad. They started to
  • 00:13:14
    move things in the right direction. they
  • 00:13:16
    reached scale. A lot of the centralized
  • 00:13:19
    expenses of running a robo taxi network
  • 00:13:21
    like having the support staff, the
  • 00:13:23
    infrastructure, you know, the the all
  • 00:13:25
    the people to help out with everything,
  • 00:13:27
    those scale really well with the amount
  • 00:13:29
    of rides done. So, you see that
  • 00:13:31
    operating leverage kick in and then they
  • 00:13:33
    turn positive in 2022. Now, it's growing
  • 00:13:36
    consistently. What I see here is
  • 00:13:38
    basically a line of free cash flow
  • 00:13:40
    growth all the way back from Q1 of 2020.
  • 00:13:44
    just a a big line from negative to
  • 00:13:46
    positive. I'm going to put Uber with
  • 00:13:49
    Meta. It's not perfect, but it's really
  • 00:13:52
    good right now. I think it's a tier.
  • 00:13:54
    Next up, we have Robin Hood. This one's
  • 00:13:56
    become more popular as this company's
  • 00:13:58
    pushing out a lot of new products, a lot
  • 00:13:59
    of new features. They're doing some cool
  • 00:14:01
    things. Now, granted, free cash is not
  • 00:14:04
    always the best metric to use for
  • 00:14:06
    anything that resembles a bank. So, I
  • 00:14:08
    understand it's not the the best metric
  • 00:14:10
    here. And this is what we see with some
  • 00:14:12
    banks or different financial
  • 00:14:13
    institutions when measuring free cash
  • 00:14:15
    flow. It doesn't look that consistent,
  • 00:14:17
    but in terms of free cash flow, they're
  • 00:14:18
    not really generating anything above
  • 00:14:20
    their stockbased comp. Now, again, this
  • 00:14:22
    is a free cash flow ranking, and I have
  • 00:14:23
    to rank it primarily by the free cash
  • 00:14:25
    flow. I understand there's good things
  • 00:14:26
    going on with Robin Hood. It's not a bad
  • 00:14:28
    company. I'm not saying that, but right
  • 00:14:30
    now, the free cash flows don't look
  • 00:14:32
    amazing. Next up, we have Warner
  • 00:14:33
    Brothers Discovery. This company's gone
  • 00:14:35
    through a bit of a journey. It is the
  • 00:14:37
    HBO Max or the Max or the HBO Max
  • 00:14:40
    streaming service. They keep changing
  • 00:14:41
    the name of it. Let's go ahead and take
  • 00:14:43
    a look at the free cash flows. Now, when
  • 00:14:46
    we look at the free cash flow, let's
  • 00:14:47
    bring it up here. Where is it? There it
  • 00:14:49
    is. We have the free cash flow chart. It
  • 00:14:51
    looks pretty good. We have the free cash
  • 00:14:53
    flow going up dramatically in 2022. It
  • 00:14:57
    went up to $7 billion, but it started to
  • 00:15:00
    come back down. In fact, it it's
  • 00:15:02
    actually come back down by half. So, the
  • 00:15:04
    free cash flow looks okay. We had a big
  • 00:15:06
    spike there. The real problem with this
  • 00:15:08
    company that you'll see is this is the
  • 00:15:11
    tricky part. This is why we have these
  • 00:15:12
    additional tabs here that you can click
  • 00:15:14
    on. You want to look at the free cash
  • 00:15:16
    flow per share because remember you're
  • 00:15:18
    buying shares of a company. Dilution
  • 00:15:21
    matters. When we click on this, the
  • 00:15:23
    picture changes. We just look at that
  • 00:15:26
    again.
  • 00:15:30
    You you see the difference these two
  • 00:15:32
    different metrics make? We're visually
  • 00:15:34
    illustrating here. One of them it looks
  • 00:15:38
    pretty good like it's going up over
  • 00:15:39
    time. The other paints an entirely
  • 00:15:41
    different picture. Now why is that the
  • 00:15:44
    case? Because they diluted shareholders
  • 00:15:46
    a lot to fund a big acquisition. It's
  • 00:15:49
    not just Warner Brothers, it's Warner
  • 00:15:51
    Brothers Discovery. To buy Discovery,
  • 00:15:54
    they had to dilute shareholders a
  • 00:15:56
    sizable amount. When we look at this
  • 00:15:58
    metric, which I think is more telling
  • 00:16:00
    for the real situation that shareholders
  • 00:16:01
    are in, it really does look terrible
  • 00:16:04
    right now. This is not a great
  • 00:16:06
    performing company with its free cash
  • 00:16:08
    flow. And on a side note, the investors
  • 00:16:10
    were correct to deny David Zatlaf, the
  • 00:16:12
    CEO of the company, a $51.9 million pay
  • 00:16:16
    package. Now, this almost never happens
  • 00:16:18
    because in most cases, people are pretty
  • 00:16:20
    happy with their CEOs. They're usually
  • 00:16:22
    generating wealth, doing their thing.
  • 00:16:24
    But investors roundly denied it. They
  • 00:16:26
    said they don't want to pay him and I
  • 00:16:27
    don't think they should. As an investor,
  • 00:16:29
    you want returns. That's why you're
  • 00:16:30
    paying the CEO to operate the company,
  • 00:16:32
    to execute, and at the end of the day to
  • 00:16:34
    get positive returns. When we look at
  • 00:16:36
    this company, it's down 71% over the
  • 00:16:38
    past decade. Over just the past 5 years,
  • 00:16:39
    it's down 62%. Why would you want to pay
  • 00:16:43
    the CEO50 $60 million when you're
  • 00:16:47
    getting crushed in the stock? It makes
  • 00:16:49
    no sense. So, I agree with the
  • 00:16:51
    shareholders. I would have voted to not
  • 00:16:52
    pay him as well. Now, let's go ahead and
  • 00:16:54
    move this to the F where it belongs.
  • 00:16:56
    Next up, we have Spotify. This is
  • 00:16:57
    another company, another stock I really
  • 00:16:59
    like qualitatively. I like the product.
  • 00:17:02
    I like how users are addicted to it. I
  • 00:17:04
    love how ubiquitous it is. I love how
  • 00:17:06
    big the total addressable market is. It
  • 00:17:08
    reminds me in a lot of ways of Netflix.
  • 00:17:10
    Now, I've hitched my ride to Netflix
  • 00:17:12
    firmly. I actually think that Netflix is
  • 00:17:14
    a bit better than Spotify for a couple
  • 00:17:16
    different reasons, but Spotify is not
  • 00:17:18
    bad and the stock is doing fantastic.
  • 00:17:21
    You see revenue is growing, their
  • 00:17:23
    monthly active users growing over time.
  • 00:17:25
    We have some cool charts here showing
  • 00:17:26
    that the the premium users, adup
  • 00:17:29
    supported users are both growing. And
  • 00:17:31
    how is this translating into free cash
  • 00:17:33
    flow? Well, similarly to Netflix, the
  • 00:17:36
    company has had explosive operating
  • 00:17:37
    leverage and free cash flow growth over
  • 00:17:39
    just the past 2 years. So in 2023, it
  • 00:17:42
    was $58 million of free cash flow. The
  • 00:17:45
    trailing 12 months, it's 3 billion. Huge
  • 00:17:48
    growth for this company. really
  • 00:17:50
    tremendous growth. When we look at it on
  • 00:17:52
    a per share basis, it looks about the
  • 00:17:54
    same. Again, 200% free cash flow per
  • 00:17:58
    share growth. Obviously, the stock is
  • 00:18:00
    going to move up. When we look at the
  • 00:18:02
    stockbased comp, it's actually going
  • 00:18:03
    down as they're growing free cash flow.
  • 00:18:05
    I'm putting it in the A tier category.
  • 00:18:07
    Very good. A very good start, but they
  • 00:18:09
    need a few more years to really justify
  • 00:18:11
    being in the S tier category. Now, next
  • 00:18:13
    we have MCI. If you're not familiar with
  • 00:18:15
    this company, it's the one where they
  • 00:18:16
    have the indices for companies outside
  • 00:18:19
    of the US. So, global indices. It's kind
  • 00:18:22
    of like the S&P global or the, you know,
  • 00:18:25
    S&P index, but for foreign companies.
  • 00:18:28
    And it has a lot of growth because
  • 00:18:29
    foreign markets have lots of organic
  • 00:18:31
    growth. So, what we see here is a
  • 00:18:33
    company that's growing organically over
  • 00:18:34
    time for long periods of time. We have a
  • 00:18:37
    company that has high retention rate.
  • 00:18:39
    They earn a lot of money through fees by
  • 00:18:41
    people linking to their ETFs. basically
  • 00:18:43
    the same way that the Dow Jones indices
  • 00:18:46
    or S&P Global earns money with their
  • 00:18:48
    indicy business and you see the
  • 00:18:50
    retention rate remain very high
  • 00:18:53
    95.3%. People can't move away from these
  • 00:18:56
    ETFs. We look at how this translates
  • 00:18:59
    into the free cash flow profile. Now
  • 00:19:02
    this this people, ladies and gentlemen,
  • 00:19:05
    this is what an S tier free cash flow
  • 00:19:07
    profile looks like. It goes up and to
  • 00:19:10
    the right consistently almost every
  • 00:19:13
    single quarter, quarter after quarter
  • 00:19:16
    organically for years. They prove this
  • 00:19:19
    through years of time. We go over time
  • 00:19:22
    and it's a bit rocky. Back in like 2012
  • 00:19:26
    to 2013, but still not even bad. Ever
  • 00:19:29
    since then, for well over a decade, they
  • 00:19:32
    have had a straight line. I mean, I
  • 00:19:34
    mean, just look at it visually. You can
  • 00:19:35
    see it's very easy to determine which
  • 00:19:38
    companies are fundamentally strong based
  • 00:19:40
    on their free cash flow profiles. Now,
  • 00:19:42
    of course, we can look at the big
  • 00:19:43
    caveat. Are they are they diluting
  • 00:19:45
    shareholders like crazy? Let's look at
  • 00:19:47
    the free cash flow per share. They're
  • 00:19:49
    not only not diluting shareholders, but
  • 00:19:51
    they're such an efficient business, they
  • 00:19:53
    funneled this back into share buybacks,
  • 00:19:55
    which means that the free cash flow on a
  • 00:19:56
    per share basis is growing even faster.
  • 00:19:59
    Take a look at that. It looks like a
  • 00:20:02
    steeper line when you have a free cash
  • 00:20:04
    flow per share. This one is going in the
  • 00:20:06
    S tier category. I I just think it
  • 00:20:08
    belongs there. Next up, we have
  • 00:20:09
    Cheesecake Factory. Now, some investors
  • 00:20:11
    kind of scoff at food companies,
  • 00:20:13
    restaurants, especially sitdown
  • 00:20:15
    restaurants. I don't. I've made a lot of
  • 00:20:17
    money with restaurants. Every investment
  • 00:20:19
    that I've made into a restaurant, like
  • 00:20:21
    Starbucks, Chipotle, Texas Roadhouse,
  • 00:20:23
    they've all made money. Uh Chipotle was
  • 00:20:25
    a fantastic investment. It went up
  • 00:20:27
    around 30% in just a few months. Texas
  • 00:20:30
    Roadhouse is literally one of my best
  • 00:20:32
    investments of all time. substantial
  • 00:20:34
    gains in that company. So, I take
  • 00:20:36
    restaurants rather seriously. I've
  • 00:20:38
    looked at Cheesecake Factory a time or
  • 00:20:40
    two. My biggest apprehension for this
  • 00:20:43
    company is that their restaurants are
  • 00:20:45
    very ornate and kind of elaborate. They
  • 00:20:48
    they're not really easy to just open up
  • 00:20:50
    anywhere. They also have a very complex
  • 00:20:52
    menu and most restaurants find it
  • 00:20:55
    difficult to scale with as big or robust
  • 00:20:57
    of a menu as Cheesecake Factory. So,
  • 00:20:59
    they basically have a more elaborate
  • 00:21:00
    operation that inhibits their ability to
  • 00:21:03
    rapidly scale like a Texas Roadhouse,
  • 00:21:05
    like a Starbucks, like a Chipotle. But
  • 00:21:07
    either way, I think there's a lot of
  • 00:21:08
    positives to it. I really like
  • 00:21:10
    Cheesecake Factory. I think it's a fun
  • 00:21:11
    place to go. I always uh look forward to
  • 00:21:14
    it. When we look at the free cash flow
  • 00:21:16
    on this restaurant, it doesn't look
  • 00:21:19
    great right now. It's basically
  • 00:21:21
    generating free cash flow consistently,
  • 00:21:23
    which is good, but it's not growing it.
  • 00:21:26
    And while it's true not every company
  • 00:21:27
    needs to grow free cash flow, you can
  • 00:21:30
    run a a big profitable business and have
  • 00:21:32
    the same free cash flow every year. As
  • 00:21:34
    an investor, you want growth to beat the
  • 00:21:36
    market. You want growth in these
  • 00:21:38
    metrics. I'm going to put this one in
  • 00:21:40
    the Ctier category. It's not terrible,
  • 00:21:43
    but it's also not amazing. Right now,
  • 00:21:45
    they still have some work to do to
  • 00:21:47
    really grow that free cash flow per
  • 00:21:49
    share over time. Next up, we have
  • 00:21:50
    Airbnb, the company that's trying to
  • 00:21:52
    become the everything app. They are
  • 00:21:54
    basically a direct competitor to a
  • 00:21:56
    company that I own, which is Booking
  • 00:21:58
    Holdings. Now, when I initially looked
  • 00:22:00
    at Airbnb, that's what actually led me
  • 00:22:03
    to Booking Holdings. It it shows up when
  • 00:22:05
    you're doing research on the company,
  • 00:22:07
    and then I saw more research more from
  • 00:22:08
    my Discord, different members, and I
  • 00:22:11
    started to like Booking Holdings more
  • 00:22:13
    than Airbnb. The stock has outperformed
  • 00:22:15
    Airbnb almost over every time period.
  • 00:22:18
    Uh, we have the free cash flow line
  • 00:22:19
    here, which is all right. It's really
  • 00:22:23
    not amazing. When we look at this, it
  • 00:22:24
    really hasn't moved much over the past
  • 00:22:26
    year. We look at the free cash flow per
  • 00:22:28
    share. It's up 5% over the past year.
  • 00:22:31
    I'm going to put this one down in the D
  • 00:22:32
    category. I think it has a lot to prove.
  • 00:22:34
    It really has to keep up with its
  • 00:22:36
    competitors and even try to grow faster.
  • 00:22:39
    Next up, we have Service Now. This is a
  • 00:22:40
    company that I've looked at similar to
  • 00:22:42
    Salesforce. From my research, Service
  • 00:22:44
    Now is actually a better company than
  • 00:22:46
    Salesforce. It has more organic growth,
  • 00:22:48
    a little bit more operating leverage,
  • 00:22:49
    higher margins, a faster topline growth
  • 00:22:52
    rate, but it is far far more expensive.
  • 00:22:54
    Salesforce trades at a substantial
  • 00:22:56
    discount to Service Now. We look at any
  • 00:22:59
    of the metrics, they're all moving up
  • 00:23:00
    and to the right, and the free cash flow
  • 00:23:02
    is no different. It looks really, really
  • 00:23:05
    good. We're looking at a company growing
  • 00:23:07
    at 16% in the past one year, 30% over
  • 00:23:10
    the past 2 year in a kar. The only thing
  • 00:23:12
    that I'd take away is that they do a lot
  • 00:23:14
    of stockbased comp. Now, they're growing
  • 00:23:17
    their free cash flow faster than the
  • 00:23:18
    stockbased comp. So, that per share
  • 00:23:20
    growth is still strong, but this is a
  • 00:23:23
    lot of expense. It's a big drag on what
  • 00:23:25
    they could otherwise return back to the
  • 00:23:27
    shareholder. I'm putting it in the Btier
  • 00:23:29
    category. It's very strong, consistent
  • 00:23:32
    for a long period of time, but that huge
  • 00:23:34
    amount of stockbased comp, over 50% of
  • 00:23:36
    the cash flows being eaten up by that
  • 00:23:38
    bumps it down from the AER category.
  • 00:23:40
    Next up, we have Nvidia. Let's go ahead
  • 00:23:42
    and take a look at this one. You might
  • 00:23:44
    be able to guess where this one goes. Uh
  • 00:23:46
    it looks kind of like like this is the
  • 00:23:49
    type of company that you wouldn't even
  • 00:23:51
    be able to make it up. I mean it would
  • 00:23:53
    it would seem silly if you if you just
  • 00:23:55
    guessed that it would grow the way that
  • 00:23:57
    it has. You would seem like a lunatic,
  • 00:24:00
    like a heretic uh prophesying of some
  • 00:24:02
    great company that would grow grow free
  • 00:24:04
    cash flow the way that it has. Look at
  • 00:24:06
    this history. It's hard to actually
  • 00:24:09
    illustrate how fast the free cash flow
  • 00:24:11
    has grown. So, no matter what way you
  • 00:24:14
    look at it, this is S tier free cash
  • 00:24:16
    flows. Nvidia is a very easy one to
  • 00:24:18
    rank. Next up, we have the social media
  • 00:24:20
    company Reddit. This is one of the newer
  • 00:24:23
    social media companies to the market,
  • 00:24:25
    even though Reddit's been around for a
  • 00:24:26
    long, long time period. Now, they've
  • 00:24:29
    implemented a lot of things that are
  • 00:24:30
    kind of one-time things like licensing
  • 00:24:32
    data and that type of thing to grow
  • 00:24:34
    their revenue rapidly over just the past
  • 00:24:36
    year. So, we see some rapid growth here
  • 00:24:39
    and I do like the direction this is
  • 00:24:40
    going. free cash flow positive rapid
  • 00:24:42
    growth year-over-year on a very good
  • 00:24:44
    trajectory. When we switch this to free
  • 00:24:46
    cash flow per share, it doesn't look
  • 00:24:48
    quite as good. Obviously, they have a
  • 00:24:50
    lot of stockbased comp. Looks like
  • 00:24:51
    that's getting under control a bit. Uh
  • 00:24:54
    it it feels like even though Reddit is a
  • 00:24:56
    very old company, it feels like they're
  • 00:24:59
    just getting to market maturity, like
  • 00:25:01
    they're just trying to get their their
  • 00:25:03
    operating efficiency under control just
  • 00:25:05
    now. In fact, they're they're actually
  • 00:25:07
    early in their journey of becoming a
  • 00:25:09
    profitable company. They're on a good
  • 00:25:11
    track, but this company has a lot more
  • 00:25:13
    to prove to be able to show that it's a
  • 00:25:16
    great free cash flow generative company.
  • 00:25:18
    Right now, it's just way too early to
  • 00:25:19
    tell. Next up, we have Brinker
  • 00:25:21
    International, which is a weird name,
  • 00:25:22
    but it's the company that owns Chili's.
  • 00:25:24
    And I like Chili. I think it's actually
  • 00:25:26
    a fun time. Who doesn't like going out
  • 00:25:28
    to Chili's? Like, I think you have to be
  • 00:25:29
    a bit of a prude to not enjoy going to
  • 00:25:31
    Chili's. Uh, sign me up for the triple
  • 00:25:34
    dipper. That's always my go-to. But I I
  • 00:25:36
    like everything. The chips and salsa
  • 00:25:38
    there is really good. Chili's has
  • 00:25:39
    actually done an incredibly good job
  • 00:25:41
    turning this company around. They used
  • 00:25:43
    to have a bloated menu. Uh everything
  • 00:25:45
    took long to prepare. They implemented a
  • 00:25:48
    lot of best practices. They have new
  • 00:25:50
    grills. Uh they simplified their menu.
  • 00:25:52
    They lowered prices. They really did a
  • 00:25:55
    great job turning this around. It's been
  • 00:25:56
    a great turnaround story and you've seen
  • 00:25:58
    that in the stock price. Look over the
  • 00:26:00
    past 5 years. Went from $41 now up to
  • 00:26:03
    $144. So Chili's implemented all of
  • 00:26:06
    these changes from a restaurant that
  • 00:26:08
    seemed like it was struggling, not doing
  • 00:26:09
    well. Now they're really relevant, doing
  • 00:26:12
    a great job. When we look at the free
  • 00:26:14
    cash flow, it's also following. Now,
  • 00:26:17
    this is again one that you can go way
  • 00:26:18
    back to 2015. Uh it's not too much above
  • 00:26:22
    that point, but the company has
  • 00:26:24
    fundamentally done a lot of changes over
  • 00:26:26
    just the past couple of years to really
  • 00:26:28
    grow the free cash flow. On the free
  • 00:26:30
    cash flow per share basis, it looks a
  • 00:26:33
    little bit better. They're not really
  • 00:26:34
    diluting shareholders with this growth.
  • 00:26:36
    They've reached an all-time high in free
  • 00:26:39
    cash flow per share. I like it. I think
  • 00:26:41
    Chili's is headed in a great direction.
  • 00:26:43
    I'm actually going to put this one up in
  • 00:26:44
    the Btare category. Might seem a little
  • 00:26:47
    aggressive, but this company really has
  • 00:26:49
    had a fantastic turnaround. Free cash
  • 00:26:51
    flow is growing really, really fast, and
  • 00:26:53
    it seems like these changes are
  • 00:26:54
    sticking. Like it's going to do well for
  • 00:26:56
    a while. Next up, we have a company that
  • 00:26:57
    you may not be familiar with. It's one
  • 00:26:59
    called Verisk Analytics and it's one
  • 00:27:02
    that's it's a bit out there, right? It's
  • 00:27:04
    a company that you don't deal with as a
  • 00:27:06
    customer. The best way to describe this
  • 00:27:07
    company is they use a lot of analytics
  • 00:27:10
    and risk measurement tools to help
  • 00:27:12
    insurance companies properly price
  • 00:27:14
    different risks for policies that
  • 00:27:16
    they're implementing. So, for example,
  • 00:27:17
    if an insurance company wants to have
  • 00:27:19
    like a hurricane policy, Verisk
  • 00:27:21
    Analytics will help them be able to
  • 00:27:23
    price that policy to where it's not too
  • 00:27:25
    expensive, not too cheap, where it's
  • 00:27:27
    factoring in all the risk and they have
  • 00:27:29
    a lot of data to be able to do that.
  • 00:27:30
    Now, qualitatively, fundamentally, this
  • 00:27:33
    is an extraordinary company, one that's
  • 00:27:35
    similar to S&P Global, Equifax. It's
  • 00:27:38
    deeply embedded. It's part of the
  • 00:27:40
    process of thousands of different
  • 00:27:42
    companies. It's high margin software
  • 00:27:44
    subscription type revenue just very very
  • 00:27:47
    good. It grew 17% year-over-year over
  • 00:27:50
    the past year. We have 15% growth over
  • 00:27:53
    the past 2 years. When we look at this
  • 00:27:55
    on a per share basis, it's growing much
  • 00:27:57
    faster because they're also not
  • 00:27:59
    dilutive. Their high margin, they
  • 00:28:01
    funneled this into buybacks. Vary
  • 00:28:03
    Analytics belongs in the S tier
  • 00:28:05
    category. They have S tierfree cash
  • 00:28:07
    flows. Next up, we have CrowdStrike, the
  • 00:28:09
    cyber security company. They went
  • 00:28:11
    through that whole debacle with the bad
  • 00:28:13
    update, but things have recovered
  • 00:28:15
    soundly since then. Everything's moving
  • 00:28:18
    up and to the right just like we want to
  • 00:28:19
    see. We have this nice growth arc for a
  • 00:28:22
    couple of years, just consistent free
  • 00:28:24
    cash flow growth, then it flattens off.
  • 00:28:27
    Not the biggest problem in the world.
  • 00:28:29
    It's okay for companies to take a break
  • 00:28:30
    as they do different investments or they
  • 00:28:32
    have different different things happen
  • 00:28:34
    with a company for a time. Not every
  • 00:28:36
    company is going to be perfectly
  • 00:28:37
    consistent, but this does raise some
  • 00:28:39
    question marks of what's going on. The
  • 00:28:41
    big problem for this company is the
  • 00:28:43
    stockbased comp. It's one of these
  • 00:28:45
    situations where the stockbased comp is
  • 00:28:47
    competing with the free cash flow line.
  • 00:28:50
    You see that we have the free cash flow
  • 00:28:52
    growing and it's trying to out compete
  • 00:28:55
    their stockbased comp, but they hire so
  • 00:28:58
    many people. They pay them so much
  • 00:28:59
    money. They have all these engineers and
  • 00:29:01
    analytic experts and salespeople. They
  • 00:29:04
    have marketing people they have to pay.
  • 00:29:06
    Then on top of that, they have elite
  • 00:29:08
    engineers that they have to pay. So the
  • 00:29:10
    people in the company are becoming
  • 00:29:11
    wealthy. They're getting a lot of value
  • 00:29:13
    out of the company, but you're the
  • 00:29:15
    shareholder. We want to know what wealth
  • 00:29:18
    we're generating. When we look at the
  • 00:29:20
    net between the two, it doesn't look
  • 00:29:22
    quite as good. I'm going to put this one
  • 00:29:24
    down into the D category. CrowdStrike
  • 00:29:27
    needs to prove that it can really grow
  • 00:29:28
    the free cash flow without the
  • 00:29:29
    stockbased comp following up with it.
  • 00:29:32
    They need to do that for some time. Next
  • 00:29:33
    up, we have Tesla. Let's go ahead and
  • 00:29:35
    take a look at how Tesla's doing with
  • 00:29:36
    their free cash flow. We have a company
  • 00:29:40
    that was doing really well in 2022, but
  • 00:29:43
    that was given a lot of tax credits, a
  • 00:29:46
    lot of incentives, and a lot of
  • 00:29:48
    stimulus. Their customer base was
  • 00:29:50
    infused with cash during a time period
  • 00:29:53
    where interest rates were very low. So,
  • 00:29:55
    you had this combination of of money
  • 00:29:58
    raining down upon people and low
  • 00:30:01
    interest rates. And Tesla's lineup of
  • 00:30:03
    vehicles was really fresh. So right now
  • 00:30:05
    the free cash flow has been flat for the
  • 00:30:08
    past three or four years. Hasn't grown
  • 00:30:10
    much. Right now Tesla belongs in the
  • 00:30:12
    seat tier category. Now finally we get
  • 00:30:14
    to Grab. You probably heard about this
  • 00:30:16
    company, but if you haven't, it's
  • 00:30:17
    basically like the Uber or Door Dash of
  • 00:30:20
    Asia. So Indonesia, these type of
  • 00:30:23
    countries, they use Grab. They're not
  • 00:30:25
    using Uber and Door Dash as much as
  • 00:30:27
    they're using Grab. We see a very
  • 00:30:28
    similar trajectory as Uber. We can kind
  • 00:30:32
    of draw this straight line going up from
  • 00:30:34
    2022 into current day. Now, it's it's
  • 00:30:37
    not perfect, but we're getting along
  • 00:30:39
    that point. When we look at the
  • 00:30:40
    stockbased comp, there's not much of it,
  • 00:30:42
    and it's actually going down. I really
  • 00:30:44
    like what I'm seeing here. If we zoom in
  • 00:30:46
    a bit further, we go to the free cash
  • 00:30:48
    flow per share. It doesn't look too much
  • 00:30:50
    different. Just good growth all around
  • 00:30:52
    with this company on a free cash flow
  • 00:30:53
    basis. I think that Grab is further away
  • 00:30:56
    on its journey than Uber. It still has a
  • 00:30:59
    bit more to prove. Over time, we could
  • 00:31:00
    see this one move up to the B tier and
  • 00:31:02
    the A tier, but right now I see it as a
  • 00:31:05
    C. So, there you have it. These are some
  • 00:31:06
    of the most popular companies in the
  • 00:31:08
    market that I don't have in my portfolio
  • 00:31:11
    ranked by their free cash flow. Let me
  • 00:31:13
    know if you disagree or agree on the
  • 00:31:15
    rankings. That's it for this time. See
  • 00:31:17
    you in the next one.
タグ
  • free cash flow
  • stock ranking
  • Meta
  • Nvidia
  • Disney
  • HIMS
  • Shopify
  • Uber
  • CrowdStrike
  • financial analysis