Top 7 Stocks I’m Buying HEAVY in 2026!

Everyone is still talking about the magnificent seven as they should be. These are the market giants that have powered much of the S and P five hundreds gains over recent years. They're the ultimate darlings of the stock market. Now, 2025 has been a rollercoaster ride from April lows based on where the time was tariff news to all time highs just months later. And for those of you who don't know, 12 months ago, I made a bold move. I built my own version of the magnificent seven. These are seven stocks that I believed would outperform the real magnificent seven. And this is the key part over the longterm, not because of hype, but because of fundamentals and valuation. Now, today I'm going to show you exactly how my seven stock portfolio performed in 2025 quarter by quarter and where they stand going into 2026. I want to let you in on a little secret first. I still own six of these companies and the seventh has pulled back over 50% from where I sold. And by the way, I didn't purposely sell them. I sold covered calls that got taken away from me because they were so overvalued. I was fine with that. Now, before we dive into the performance of my seven picks, let's talk about the real magnificent seven and why I challenged them in the first place, because that's really important in terms of understanding my process. These seven companies, Meta, Google, Amazon, Microsoft, Nvidia, Apple, and Tesla guys, unless you haven't been paying attention, you realize that they've delivered unbelievable returns over the past decade. But here's the thing. When I ran all seven of these companies through our stock analyzer tool using what I thought were very reasonable assumptions for revenue growth and profit margins, the expected 10 year returns just did not impress me as a group. And let me give you more insight into what I saw. Meta led the group with an 11.5% expected return over the next decade. While Google and Amazon were the only other two stocks expected to provide above average returns for the longterm. In fact, based on my assumptions, Tesla's 10 year returns should be negative. If my assumptions turn out to be true, I've gone so far as to say that I believe Tesla stock will be lower 10 or 15 years from now than it is today, which is a very bold statement based on what people believe about Tesla. Now, if you want to see the entire in-depth breakdown, we released a video on December 24th that you absolutely need to check out, but hopefully now you understand why I created my own magnificent seven. These are companies that I believe will outperform because their price versus value is disconnected. It's hard to outperform when you're paying above value. It is much easier to outperform the less you pay relative to value guys. That's a very simple concept that everybody understand. This cell phone is worth a thousand dollars. If you pay 300 for it, you're going to do quite well. If you pay 2000 for it, you're not going to do well. But when it comes to valuing a company, it's harder than going to the store and saying, what is this phone worth? We just know you go to apple.com and say, okay, what do I have to pay for this phone with companies? We don't know the future of their cash flows. So determining the right value today is difficult. So let's break down how these companies perform this year because each quarter told a very different story and it goes along with our fourth tenant of principle driven investing. In the short run, stocks are a voting machine. In the long run, they're a weighing machine. What that means is in the short run, what's popular is going to go up. What's not popular will go down, but in the long run, the fundamentals of the business will drive the longterm value. So let's get into it guys. This is quarter one. As you guys remember, stocks fell and when stocks fall, the overvalue ones are going to fall the most. This is the magnificent seven. It stood up the year by beating me. The first month of the year, it was up and then plummet city. Mine were up about 1%, but look at this. At one point we were up over 8% to start the year. Very strong. I was shocked guys. I do not believe in short run that my magnificent seven are going to beat the real magnificent seven over any short run period of time. I was floored when this was happening. I was even more surprised as this was happening. Now, remember the market bottom on April 8th, the quarter, first quarter ends on March 31st. So this is very close to the end of the quarter. Now if you told me in 2026 stocks are going to be down 30%, I would say, yeah, my, my stocks are going to crush the mag seven because of the S and P is down 30%. My guess is the mag seven will be down 50% or more. And that sounds crazy, but remember the ones that drive it up are the ones that bring it down. Let's go to quarter two. Now guys, this is quarter two. Remember the market bottom on April 8th, right down here. So we were pretty much in line until here. And then boom, the mag seven crushed it up 18.97, 19% in Q2 alone. My magnificent seven, not bad. 5.6%. But again, I'm here to compete with the actual magnificent seven. So this was a monster quarter because they came off the lows and just started a skyrocket guys. Q3, same thing, big quarter for the markets, big quarter for magnificent seven, another 18% gain and a 2% gain for my mag seven. Again, nothing to cry about here. I was down a little bit to start, but the mag seven just kept on trucking. And guess what? I'm not, I have zero FOMO. I don't sit there and go, damn, this is wrong because I know then the long run, the market is a weighing machine. And if you overpay for a great story, you will end up with a bad investment. Now, keep in mind guys, after Q2, as I said, in Q2, the mag seven was up 19%, but year to date, it only brought it up to 2% because it was down 15% in the first quarter. So after Q2, I was still leading 7% to 2%. But guess what happened after at Q3, the market took over the magnificent seven took over. And that brings us into the fourth quarter. Now the fourth quarter, I took a big hit down 5.3%. Now keep in mind guys, I'm recording this video on December 29th. So there's still two more days of the market being open, but the mag seven up 4.7% I'm down 5.28. So let's see how it looks for the entire year. This is the entire year. My mag seven up 6%, the actual mag seven up almost 25% guys. Remember it's only been one year. I'm okay with this. Zero fear in my eyes about my magnificent seven versus the actual, but I will say this, this goes to show you that fundamentals matter. I was beating until I was winning until what is that? August of 2025 from January 1st until August, I was winning and it took a massive rebound in stocks for them to even come back. So I'm not worried about this. It has just been marching up. That is what we're trying to teach on this channel. We're trying to show you guys that if you focus on short-term price movements, it is going to take you away from the fundamentals. It'll take you away from long-term gains. Zero FOMO right now by me, right here. It doesn't concern me. And there'll be people in the comments saying, Oh, see Paul, you're deaf. Great. More power to you. If you're the kind of person that believes that fundamentals don't drive price in the long run, there's nothing I can do to help you. This is the full year performance. The big picture. Yes. My stocks are down. Now remember, I don't care about one year. I'm looking at the next decade and beyond. I'm willing to bet a lot of money that my stocks are going to vastly outperform the magnificent seven over the next four, five, 10 years. Now guys, keep in mind the title of this video as of right now is these are the top seven stocks I'm buying in 2026. But I want you to remember, what I buy is when price is below value. I do not buy, I do not fall in love with a company and say, I'm going to own this company no matter what. Yes. It'll probably make me miss out on companies that massively outperform, but I'm not here in that guessing game. I'm here to pick great companies that are priced appropriately because the fifth and most important tenant of our principle driven investing, a great story can become a bad investment. If you pay the wrong price, if you can ingrain that into your brain, you're probably going to do very well investing. So stock number one, Ulta beauty. And for those of you who don't know, beauty is one of the most resilient areas of consumer spending. Even during economic slowdowns, people still spend on cosmetics, skincare and self-care and Ulta dominate that category. They have over 44 million loyalty members driving repeat business and giving them pricing power over their competitors. They've also been expanding their footprint, not just with new stores, but they're growing their high margin services like salon and skincare. In addition, they continue to build strong partnerships with companies like target and coals other areas that women like to go to. So guys also is right now. It's six Oh seven a share. Doesn't matter to me what the share price is. That can be manipulated. This is a $27 billion company. What does that mean? If you bought every share outstanding on the market, it would cost you 27 billion. You don't a hundred percent of the shares. If that was even possible, their enterprise values, 31 and a half billion. This difference of 4 billion is essentially their net debt. And guess what? They generated a billion dollars in cashflow last year. Their five-year average 930 million guys. This company is skyrocketed. It is up year to date 41%. So guys pretty much all the returns of my magnificent seven are Ulta. That's basically it. Cause it's one seventh of portfolio. It's up about 6% for the entire portfolio for the year. That's entirely my gain on the magnificent seven. Now it's currently selling for 26 times free cashflow, which earlier this year was about 15 times and a PE of 23, no dividend, which I love. But look at this guys. This is a very important metric that for those of you who are new, I want you to understand return on invested capital. They have 22% and growing. What does this mean? It means when they invest money in their business, they get high returns on it. The reason that's important is it shows that when they take their cash, they can keep compounding and generating more and more profit down the road. If you compare this to a company that was making like 10%, the same two companies, one has 22%, one has 10% taking the exact same amount of money investing in the business. This company is going to crush the other one because they can keep investing at 22% returns, but the other company can only invest at 10% returns, which one's going to do well. Now, guys, if this feels overwhelming, I want to repeat Tom blue in the face. It was overwhelming at some point for every single person in history, including Warren Buffett. You're not alone. I'm here. I created this channel in order to simplify all this for you. And I assure you that if you learn the things I'm talking about here, you'll be a much better investor. These key metrics here are really important to understand. I have made a cheat sheet for you. Absolutely free. That'll give you all of these key metrics, explain them all to you, how to calculate them. That way you can have a better understanding when you look at other companies. So if you're interested in that, click the link below. And in a matter of minutes, you'll get this PDF sent to you. Very simple. It's absolutely free. And the best part is worst case you have it next to you. You sound smarter than all your friends. When they're talking about companies, they, Oh, I don't like this company because the returns on capital are blah, blah, blah, blah, blah. Either way, you're going to learn something for it. And this is precisely why I teach on YouTube. I was sick of seeing people follow this price movement versus fundamental movement. The price movement doesn't matter to me. What matters to me is how are the fundamentals of this company doing now guys, in a few minutes, I'm going to show you what price I'm willing to pay for this company. It's up 41% this year. So that's something you have to remember. Just because it's up, I immediately hear 41%. I go, Oh, maybe the price isn't sounding good anymore. But other people would say, Oh, it's up 40%. Let me get on board. I want you to understand that difference in the way in which we think. Let's look at the eight pillars for Ulta beauty. Now guys, look at this 24 times PE five-year PE 30 times five-year free cashflow. When it was 40% lower, these were all check marks. Everything else is good. And this is what I love guys. They were buying back shares and recently they were probably cheaper shares. That's what's important here. Buying back shares in and of itself is not good. Buying back cheap shares is what makes a difference. Now, let's go see what analysts estimates are for this company. So here's earnings per share. We have 2450 per share growing to $38 in the next five years. That's a lot of growth guys. That's double digit growth every single year except for one. That is a lot as they grow their company and as they buy back cheap shares, it can drive earnings per share up quite a bit because now they're splitting that revenue profit and free cashflow amongst less shares. And for revenue growth, still pretty solid 8%, 5%, 5%, 7%, five and a half. Not bad. Not, not a, not a huge grower, but they have good margins that allow them to keep growing their profit, especially as they buy back shares and keep giving you more of that. So what is the right price to pay for Ulta? So first off guys, I did a 10 year analysis. Now, first line revenue growth, I did three, five and 7% revenue growth, nothing huge, nothing low. It seems very reasonable. They don't do well, probably two or 3% of they do very well, maybe seven or 8%. So I'm comfortable here. Now, profit margin, I did nine and a half, 10 and a quarter, 11. And I did the same thing for free cashflow. Even though they're free cashflow, as you can tell here, it's actually been lower. It actually has been lower, but they're probably spending more on more and more stores. So I'm okay. Looking at these as the same because over a long period of time, free cashflow and net income should equal out. Okay. Now, what is the PE and price of free cashflow? 10 years from today? Not today, not five. The end of my analysis. Well, guys, I always tell people start at 15 or 16 where the market averages, you go higher for good companies, lower for bad companies. I consider this a good company. Why? They have high returns on capital that are actually getting better. Okay. They have decent growth rate, decent margins and they're buying back good shares or good allocators of capital. So to me, I gave them a premium 17, 19 and 21. There are probably people out there who'd argue much higher premium based on these returns on capital, but I'm okay sticking with this. And finally, what is my desired return guys? I'm always trying to look for what's the market, what's the intrinsic value. What's it worth based on the market average. So I put a 9% return in here. I hit the analyze button. The stock's currently at six Oh seven. This is what happens when a stock goes up 40% a year. I have a low price of four 18 high price of seven 50 middle price of five 60. So guys, I look at this going at current prices today. I don't know if I'm excited about this. So I want you to remember that. My excitement changes as the price changes because the value is really hard to change. Price can jump up. Price can drop guys. I'm going to tell you right now, the price of the stock is up 41% this year. I assure you that the fundamentals of business are not up 41% this year. That's something to remember. All right, let's talk about one that's raised a few eyebrows when I first added it, but this is one of my favorite opportunities. Southwest airlines. Now I get it. Airlines are a very tough business. Even Warren Buffett has discussed this many times. They require a lot of money to operate. That's called high capital intensive. Margins get squeezed very quickly and you're at the mercy of fuel prices, union labor prices, and global events. But here's why I included Southwest in my version of the mag seven. It isn't your typical airline prior to COVID. It delivered 47 straight years of profitability. Something I'm heard of in this industry, guys, how many airlines went bankrupt multiple times in that 47 years since then, since COVID, it has been a different story, but it seems that people have forgotten about the potential that this business has. Here's what I like about this company that has a main focus on. Look at the profit margin here. The 10 year profit margin is 4.8%. That's after factoring in five year of 1.4% before COVID, they were routinely, they were routinely routinely doing 10 to 15% profit. Now my question is why wouldn't they continue to do that at some point? They've worked some issues. They had outdated computer systems. They had things they had to work on. I think they're going to get back to that point. Guys, they're actually back to paying a dividend, which I don't get why, but they're paying a dividend here, but their free cashflow has been terrible lately, but their margins have been getting better. In fact, they're up a lot in the last quarter. In the last three months, they're up 25% mostly driven by higher than expected profit margin, which is exactly what I was expecting. And I can expect that to continue to get better proof in that. First off, let's look at the eight pillars. Look how terrible this looks. Four Xs, four checks. The only reason these are up is because it's coming off of COVID numbers. So of course, revenue is going to be up a lot. Eight pillars useless here. In my opinion, it's useless. Let's go look at analyst estimates. Guys, check this out. A dollar 13 growing to six 50 per share. That's a five X growth. Let me go further. Let's say analysts are right on this one and we don't know if they're going to be right. Let's say you assign a 20 multiple to Southwest four or five years from now. That's $130 stock. Now that's not a guarantee. Of course analysts have their buy it. How often does it actually happen? But the point is there's a lot of potential here. Let's look at the revenue, record revenue higher than it was pre COVID growing all the way to 36 billion, 8%, 5%, five and a half, seven and a half percent. Some big growth there. Guys, that's pretty solid for a cup for an airline. So what is this company worth to us today? Let's pull up stock analyzer. I think you're going to like my stock analyzer because I didn't go crazy here. I did three, five and 7% revenue growth. I did eight 11 and 14% profit margin and the same in terms of free cashflow. P E I only did 14, 17 and 20 mostly because it's an airline. And finally my 9% desired return. I hit the analyze button and the stock. This is why I'm excited. I have a low price of 62 high price of one 80 middle price of one 10. So guys, even on my low assumptions, 8% profit margin, and that 8% profit margin is lower than they did for years before COVID. I'm still at $62 a share and I was only doing a 14 PE and a growth rate of 3% per year. This company seems to have a lot of margin of safety for me. If my middle assumptions occur, I'm looking at exactly a 25% discounted IRR over the next 10 years. That's incredible. Now guys, let's move on to PayPal, a stock that's been absolutely crushed in the last three few years. Guys, in the last five years, the stock is down 74%. In the last 10 years, it's only up 60%, but here's what's interesting. 10 years ago, let's check this out. It did 9.25 billion in revenue. Last year they did 32.86. Their revenue is up three and a half times and their stock is only up 60%. So their revenue is up 250% but their stock is only up 60%. Doesn't mean it's a buy automatically. It could have been massive overpriced, but here's what people are focused on. That's what people look at. That's not what I look at. I look at fundamentals. When you're investing, you got to look at fundamentals. This was once a stock market darling, but since peaking back in 21, the stock has been on a steep decline and that's why it made my list. I love looking at these kinds of companies, companies where prices are down significantly and fundamentals are still getting better. At some point sentiment will get so negative that it disconnects completely from reality and that's when value investors step in. Same thing happens on the upside. Now let me be clear. PayPal is still a cash machine in 2025 PayPal generated solid free cashflow held onto its leadership and digital payments and continue to grow through Venmo brain tree and then buy now pay later. That being said, wall street has not been convinced. Why? Because the stock price isn't up a ton. Wall street is just as normal as everybody else out there, but this is a lot of the company to make massive repurchases of stocks at low forward multiples in history. Look at this. The stock is currently selling for 10 times free cashflow. 10 times. Guys buy back your shares like crazy. Buy them back. Keep buying the back because the end of the day, if you buy back half your share is really cheap. You can double your earnings per share. That's how powerful that is. Let's take a look at the finance at the eight pillars right now. Guys, it's an eight pillar thriller. They bought back 20% of their shares in the last five years. Cash flows up, net incomes up. Everything's up. Let's go check out analyst estimates. Analysts 9% growth and earnings per share, 13 and a half, 1717. Does this look like a company that's dying? Maybe analysts don't know everything. Maybe revenue. Not sexy. 5%, 6%, 7%, six and a half, 7%. Okay. But they have a good gross margin. That means every extra dollar they sell 50 cents of it goes to the bottom line before taxes and overhead. So this is what's important here. So let's go find out what we think the company is worth. So guys, here is my 10 year analysis on PayPal. I did four, six and 8% revenue growth. I did 13, 14 and a half and 16% profit margin guys, but look at their free cashflow much higher than their profits. I did 16, 19 and 22. If they keep growing their revenue, they can get that high PE 16, 19, 22. And my 9% return, the stock is currently at $59 per share. I hit the analyze button. This is why I'm interested. I have a low price on discounted cashflow of 94 high price of two 15 middle price of one 44. Remember guys, the peak of the stock was three 10. That's not even high enough. That's not even low enough to cover the highest of my assumptions. That's what I mean when I say follow the fundamentals. So this company right now I think has very attractive potential returns. I'm not worried about where it's going in the short run as long as I still think the fundamentals make sense. This stock makes sense to me. Now I said earlier that I didn't own one stock. I actually don't own two stocks. Alibaba, our fourth stock is one of them. I lost that one to covered calls as well. But the good news is it's getting a lot closer to my price of where I lost them at covered calls because at first I was like, crap, I think I lost it like one 40 per share and it was up to one 80. What was the high? One 93. So I was sitting there going, Oh my God, I missed out on so much potential. But I sat there and said, wait a second. Remember in the short run stocks are voting machine and this thing has run up quickly. It could pull back. I'm hoping it falls below my one 40 price. So I don't feel as guilty about it because I got a little too aggressive when it came to running my covered calls. So Alibaba is a stock that's been crushing it in 2025 and it was doing it very quietly. After years of underperformance, this has been a breakout year for Alibaba. The stock is up big as investors finally started paying attention due to the company's massive AI push, operational streamlining and renewed focus on shareholder returns. Revenue growth has even started to accelerate again, reaching double digits. Even after a great 2025, I believe this is just the beginning of a longterm rebound story. So this stock $355 billion market cap, it's actually paying a dividend here of 4 billion. It's five year average free cashflow of 17 billion. Last year was 6 billion. Why investment in capital expenditures for AI? We've seen this all across the board with Google, Amazon, Microsoft, Nvidia, all these companies are massively spending on capital, Facebook massively spending on capital growth. Our community members have it as a hold right now, but with an intrinsic value of 168, this is probably based on some, this whole rating is probably based on before the stock started to come back down. Let's look at the eight pillars. Not sexy, not great at all. Low returns on capital, net incomes down, free cash flows down. I'm not worried about this one so much. And the stock is currently still selling for higher multiples of free cashflow and earnings over the last five years. You might be like, well, Paul, what the hell you see here? Well, let's take a look. Let's go to analyst estimates first. Again, not sexy here. 9.55 a share growing to 12.26. Okay. And revenue growth, nothing too huge. 3.6, 11 and a half, nine and a half, seven and three quarters, 12%. Now before I get into stock analyzer, my thesis here is China's a fast growing country. It's the fastest growing area in the world for billionaires and millionaires. I look at that going, okay, so if they do, if China does continues to do very well, which I think they will, who's going to benefit from that? I think the China stuff has already died down a lot. I look at Alibaba as a big benefit of that growth. So let's go pull up my assumptions on Alibaba. I remember when Alibaba was a $60 a share and I was screaming from the rooftops going to me, this is a massive buy. And guess what? Sub a hundred there were other Michael Burry was a buyer. Tepper was a buyer. A lot of people were buying this company. 10 year analysis. I did three, six and 9% revenue growth for profit margin. I did 12, 15 and 18. Now look at this guys. This is my proof that free cashflow and profit margin. Yes, it was down in the last year, but look at the five-year average. Free cashflow was higher and same with the 10 year way higher than profit margin. And what is my PE 10 years from now? I did 14, 18, and 22 with a 9% return. The stock's currently at one 47. I hit the analyze button. Boom. I have a low price of 100 to one 30 high price of three 30 to 400 middle price of 200 to two 30. I think there's still juice on this thing. The question is why am I attached so much to the lower price? Cause at this price right here, this makes a lot of sense, but I'm personally attached to the fact that I lost it at one 40 and I want to buy it back at one 40. That's an emotional reaction and something that you have to sit there and contend with all the time. We're all humans. We deal with it right now. I should be selling puts on Alibaba at much lower prices to get it back, which is what I think I'm going to do next up. Adobe one of the most stable cash generating machines in the market, but one that's also now executing a new lever stock buybacks. Adobe has always had a strong business model, extremely high margins, guys, 90% gross margins on every product. They sell recurring revenue before you have to go to the store, buy a CD and say, I'm going to buy Adobe. Now it's software with recurring monthly revenue. And most importantly, industry dominance in digital media in 2025, this company kept growing revenue steadily, even though people were saying AI was going to eliminate them. And I disagree. They were expanding their margins and they maintained one of the best balance sheets in all of big tech. Unlike others, they're not just trying to chase the next trend. They're focused on strengthening the ecosystem that millions of professionals already rely on every day. Are they getting involved with AI? Absolutely. Cause let's be honest. AI is somewhat of a threat to their business if they do nothing about it. But these guys are not doing nothing about it. Pardon the double negative. They're doing a great job here. And the stock is down big all time. High was 700 back in November of 2021. Look at this guys. It's half. And I guarantee you that if I looked at this company in 2021 with a chart that looked like this, people would have said, there's no way it's going to fall in half Paul because we only care about as the recent news, the recent traffic. Now look at it. It's in a downward trend, but again, don't fall for that trap of worrying about price. Guys. The one thing I love, one of the many things I love free cashflow, higher than net income. Love that. Another thing I love their market caps, 150 billion enterprise value, 160, that $10 billion difference is our debt. And their free cashflow last year was essentially $10 billion. So there, they could write a check in the next year and get rid of all that debt. They don't pay a dividend and they're selling for 15 times last year's free cashflow. Guys, the market average is 15. This is not the mortgage average return on invested capital, 30%. This is not the market average profit margin, 30%. This is not the market average bottom gross margin, 90%. Let's go check out the eight pillars here. Now because earnings are less than free cashflow, we do have an X here. Guess how much I care as Jay Cutler would say, don't care at all. Here is their earnings per share estimates. $21 a share growing to 34 over the next five years. Steady growth, nothing insane. I did that for Tim because Tim loves that Jay Cutler story and revenue growth, 24 billion growing 50% over the next five years. Steady wins the race. When you have 90% gross margin, you don't need to grow revenue 20% a year to make a killing. Even seven, eight, 9% you are going to make a killing. So what is the stock worth to us today? So guys, 10 year analysis, look at this return on capital growing 10 years, 17% last five years, 22 last year, 30, four, seven, 10% revenue growth profit margin, 26, 29, 32, 38, 40 and 42 for free cashflow. I'm going to focus on free cashflow here. I do think I'm low even here because they're already at 41% and with that gross margin of 90%, they should be able to increase this quite considerably. What's my P and price of free cashflow? 18, 21 and 24, 20, 23, 26 probably be the same thing. And my 9% return guys, I think I'm being really conservative here. I hit the analyze button. The stock's currently at three 50. I have a low price of three 80, high price of eight 20 middle price of five 60. I just look at this and think this makes a lot of sense to me today. Stock number six, a company that has fallen off the pedestal Nike, but still one of the most recognizable brands in the entire world. And anybody says otherwise is delusional. Now 2025 was not an easy year for Nike major headwinds in China, shifting customers, consumer spending and concerns around margins. A lot of it had to do with tariffs, but a lot of it had to do with inventory and getting rid of bad inventory. But this is exactly the kind of setup I look for a great business going through a short term temporary rough patch. Here's the first question I ask. What does the world look like if 20 years from now, Nike no longer exists? 30 years from now doesn't mean it's not going to happen. If I pick a hundred companies that I think are going to be around in 20, 30 years, I'm sure a few of them would have fallen off, but we're not here to talk about just putting all your eggs in one basket. I asked this question of all these companies that I own, what is the world at the look like for this company had to exist? Now what we've seen recently is the early impact of Nike's multi-year turnaround plan. They've got a new CEO Elliott Hill who says they're in the middle innings of this turnaround. They're focused on cleaning up that inventory. So when you clean up inventory guys, here's what you're doing. You're saying we have a bunch of inventory. We're going to sell it to get rid of it at low prices. Well, that cuts in your margin that cuts into everything. So you've got to remember that's a short term problem. Once they get through the inventory, they're going to improve their profitability and they're going to ramp up innovation in both product and digital engagement. We did videos at this point and said, we're interested in Nike. Look, taking a look at it under a hundred, not even buying it under a hundred. We look at it. If you go back and find our videos, Nike will never be under a hundred. You're crazy. This is delusional. Now, Paul, you don't get it. Tariffs are ruining Nike. Nike is woke, go broke. Okay. It's always a story at some point. The question is which story do you believe into? I believe into the financial story, $90 billion market cap, 105 billion enterprise value. Yes. Free cashflow is down. That's part of the turnaround process. 3 billion last year. The average of the last five years, almost $5 billion. That does take a hit. I get that, but I don't believe that's the way it is going to be forever. 42% gross margin. Look at this 10 year profit margin, 9.88 five year, 10 and a half last year, 6.2. It's like Southwest. I just don't believe this is a permanent state for Nike. I just don't believe that they make shoes for 12 cents and selling for $8.4 billion each. They're not going to be a 6% margin business for very long. Okay. That's just my belief in it. So let's go to the eight pillars, eight pillar thriller at one 80. It wasn't at 60. It is doesn't mean you buy it, but it means it's something to consider here going, wait a second. Everything here is pretty good. Good returns on capital analyst estimates. Now analysts see a drop this year, upcoming year in profit, but growing to four 73 in the next three or four or five years and revenue continue to grow 2%, 5%, 5%, seven, five and a half. Okay, fine. Nothing insane. But again, you can make a lot of money by buying a great business at a reasonable price. I think that's what Nike is. So let's take a look at my assumptions on Nike for the next 10 years. And by the way, 10 year return on capital, 18.65 year, 18.5, three, five, 7% revenue growth. Okay. Pretty good. Profit margin, nine, 10 and a half, 12. Same for free cashflow. What PE and price of free cashflow would you put on a juggernaut like Nike? I put 19, 22 and 25. I can understand higher. And finally my 9% return. The stock's currently at $60 a share. Hope is not a plan. I used to buy stocks hoping that they would go up, but hope doesn't protect you. When the market turns, hope doesn't help you sleep better at night. Hope it doesn't decrease your fear. I had to learn how to build a real strategy. One that makes sure that I personally never go to zero. Now every investment I make is based on numbers, not hype. This is why I built everything money. It was built for me. I wanted the tools that gave me clarity, took the fear out of investing and help me make better decisions that helped me sleep better. People saw me using them on YouTube and said, Paul, can you give us that software? And I said, well, I can't because it's mine right now, but I can create it. And so I did. And a real community was born. Real people sharing ideas, live chats, live streams, and tools that help beat 99% of investors. I still use these tools like the stock analyzer every single day. Stop guessing. Start learning. Click the link below. Try our trial $7 for seven days and see how confidence will replace your fear. Boom. I have a low price of 50 high price of one, 10 middle price of 75. Now guys, they do pay a healthy dividend. This includes a dividend here. So go adding the dividend on top of that. Now let's wrap up with sprouts farmers market, which has been one of the most surprising stocks in this portfolio. At one point this year, sprouts ran all the way up to $170 per share driven by strong earnings, momentum in this very, very lucrative segment called health food. For those who don't know, I originally bought sprouts from 31 to $33 per share, but got very fortunate that I had my shares called away from me at one 65 using covered calls. And for a short time there, I was like, Oh crap, did I get rid of a winner? But I remember thinking to myself, I don't think it's worth anywhere close to one 65. So if it gets called away, I'm okay with that. It's not like Alibaba where it got called away at a price that I thought it was worth, which was just the way covered calls work. It had a very big run up very quickly. Now, since then the stock has fallen all the way back below 80 showing just how wild short-term price swings can be even for top quality businesses. However, fundamentals haven't fallen apart. In fact, they've gotten better. The business has continued to boast industry leading growth and margins. And I'll show you that in two seconds. And for principle driven investors like you and I, that's exactly the time when you want to step in and reassess. Now I'm not going to lie to you guys. I have a major bias on sprouts. I bought it from 31 to 33. Now it's at 80. It is very difficult to say it's a great price at 80. Even if my stock analyzer shows a hundred dollars per share or more, I got attached to that 31 to 33 price, but it's a good lesson. You have to remember that as fundamentals get better, it makes the stock a good price in the future. Don't just attach yourself to the price you paid. Same with the stock falls. If you paid 200 for a stock, it goes to a hundred. I started buying meta under 200 went to $88 a share. I still kept buying. Why? Because it still made sense there. That's easier because actually it's cheaper. But if the fundamentals get better, it's like the stock is getting cheaper of the stock goes nowhere. That's something to remember. And it's very, very difficult guys, $8 billion market cap, all time high of $182 a mere six to seven months ago. Incredible good returns on capital getting better 11% to 12% good growth, growth, three-year compounded growth rate, 11% guys, gross profit of 39% even better bottom line profits. 6% Kroger is like one and a half percent bottom line profit. And look at these profit margins are getting better. Why? Because they're putting more of their own brands, the private label in there and those private labels have 60% margin on 50, 60, maybe even a little bit more. That's going to drive up this profit margin. This is a business that could have seven or 8% profit margin in the future. Let's go to our eight pillars. Okay. Debt. I'm not worried about it's a, it's a retailer that has leases. The price of free cashflow and PE are higher than we'd like, but they have a lot of growth potential that could make it cheap. What do analysts think? Not as much gross growth as everyone thought on the earnings per share, five 30 going to $8, 10, 13, 11, and 9% earnings per share growth with revenue growth in the well into the double digits, 15, 10, nine, nine and a half. And nine and a half or 10, that's some big growth. And when those margins increasing, this is a compounder guys. So let's go to our stock analyzer and pull up sprouts. And by the way, I do have puts on sprouts at $8 per share. So I might get assigned these shares of this if the price falls a little bit further, but here's what I did. Six, eight, and 10% revenue growth. That's a combination of growing more stores because they only have 400 and some stores trying to grow to 1200 and also just the cost of everything going up. Profit margin. I did five and a half, six and a half and seven and a half%. I feel very comfortable with this number PE 16, 19, and 22 and my 9% return. I hit the analyze button. The stock is currently $8 a share. This is why you can't attach yourself to things 96 to two 20 with a middle price of one 47. So I'm hoping I get these shares at $8. Now listen, if you enjoyed this analysis, we're going to be continuing to do these performance updates every quarter in 2026. So make sure you're subscribed and tracking how these picks evolve as time goes on, because investing isn't about guessing one good week, month, quarter or year. It's about consistency and everything money. That's what we're here to remind you. Now, guys, if you want to learn how I generate income every single month, I mentioned cash secured puts to get stocks like sprouts. I use it with options, either covered calls or cash secured puts. Click the video on your screen to watch our full options course. It's a great way to generate money on the stocks you own and generate more return on the cash in your account to buy stocks you want at lower prices. I will see you there.