What's up guys and welcome back to wall street millennial if you've been following this channel, you know that we cover a wide range of topics related to stocks and investing today, we're going to reveal some of the top positions in our own investment portfolio. Keep in mind that we are not financial advisors and this video is only intended to share some of our own opinions and rationales for our stock positions. As always, make sure you do your own research and consult with a professional before making any investment decision in this video we'll go over the top three stocks in our portfolio. The full list of 13 stocks are available on our patreon platform, which we just launched today, but more about that later, our first position is tesla, based on the unusually poor like to dislike, ratios and comments on our tesla related videos.

It seems like a lot of you, aren't the biggest fans of tesla in the world and with the stock having more than 10x in value over the past two years. It's true that most of the easy money has already been made, but we still believe the company's leading edge technology and musk's. Visionary leadership will eventually take the company's market cap above one trillion dollars for each of our positions. We've made a valuation model and research report.

Analyzing, the company and explaining our investment thesis in 2020. They finally made an annual net profit of 690 million dollars, but this included 1.5 billion dollars worth of regulatory credit sales, which will decrease as other automakers ramp up their own ev production for simplicity and conservatism. We assume that they make no money from these sales going forward, even though they did make some in the first half of 2021.. We made projections for each of their vehicle models over the next 10 years and we expect a lot of growth in deliveries once the berlin and texas gigafactories become operational over the coming years, but just selling cars alone isn't enough to justify tesla's current 730 billion dollar Market cap, we believe the real upside for tesla will be from their full self-driving technology, an eventual robo taxi network.

Here's our research report for tesla. In it, we go into detail about tesla's, autonomous driving technology and the economic potential of the robo robo-taxi network, which we think could easily become far larger and more profitable than uber. Once operational, tesla has already proven their full self-driving technology and they continuously improve it as they get more real-world driving data from tesla's on the roads. The main uncertainty is when they will get regulatory approval for a fully autonomous taxi network, as the regulators are very conservative with regards to self-driving cars, if everything goes according to our projections, tesla could make more than 50 billion dollars of net profit.

This would justify a market cap in excess of one trillion dollars, based on a 20 times price to earnings. Multiple. Most of these projected profits will come from the robo taxi network. We rank each of our stock holdings with a risk score from 1 to 10..

We give tesla a high risk score of 8 as there are significant uncertainties regarding the timing of the robo-taxi network, also because the stock price is already so high, there's not a ton of upside left and our time horizon is pretty long. Our 2027 price target of 1023 dollars per share only implies a 5.8 annual return. So while we like tesla's stock, it's not our highest conviction position. Next off we have virtue financial, which we think has much greater upside than tesla and is also less risky.

We give it a risk score of just 4 out of 10. virtue is a market maker, which means they sit between other market participants who want to buy or sell stocks options or other assets. They only make a few pays off of each transaction, but they trade at such high frequencies that this adds up to hundreds of millions of dollars worth of net trading income every quarter. Importantly, they benefit from high market volatility and trading volume.

The greater the market volume, the more transactions there are for virtue to market make on when volatility is high, spreads widen and they can make even more profit from each transaction. They had a blowout year in 2020, as their revenue and profits were boosted by volatility and increased volume. As more retail traders entered the market in the first quarter of 2021, they also benefited from the gamestop and amc short squeezes, which caused unprecedented volatility. In 2020.

They made a record and ten cents of comprehensive earnings per share. This is a huge number given that the stock is only about twenty five dollars per share. Of course, 2020 was an exceptionally good year for them, so we should not expect them to repeat this. Going forward but they're off to a good start in 2021, making two dollars and 56 cents of eps in the first half alone.

We think that in a normal year, virtue can make about three dollars of earnings per share. This gives them a dirt cheap valuation of about eight times price to earnings, but there are two factors which make virtue even more undervalued and appears on the surface. Firstly, the rise of commission-free retail trading is here to stay, while volume will likely moderate from the record levels of 2020. It will probably continue its secular growth trend upwards over the next few years.

This could represent upside risk to our eps projection of three dollars. In a normal year, but more importantly, virtues revenue, profitability and stock price are all correlated with the vix volatility index. We've written about this in detail in our research report, this correlation makes frutsu extremely valuable as a volatility. Hedge market crashes are often accompanied with large increases in the vix, which benefits virtue, for example, during the early days of the pandemic, virtue stock skyrocketed, while the rest of the market was tanking.

Because of this, we believe virtue deserves a premium valuation based on our dcf valuation. We have a price target of 56 or almost one hundred thirty percent upside from its current level. It also pays an almost four percent dividend yield, which we view as very safe. The third position in our portfolio is chinese.

E-Commerce. Giant alibaba alibaba is the largest ecommerce company in the world. It's about twice the size of amazon, as measured by gross merchandise value. The stock price has been cut almost in half since october of 2020, as sentiment around the company, and chinese stocks in general turned sharply negative.

It all started with the disappearance of founder jack ma after he gave a speech critical of the chinese government. There have also been some anti-trust fines levied against alibaba since the dd fiasco. In july, chinese stocks in general have been in free fall for a multitude of reasons. We think that these fears are overblown and alibaba's thought could easily triple over the next five years.

We've written a detailed report explaining why this is as well as a valuation model. Instead of going over the full report in the video, you can read it for yourself for free. We just created a patreon page today. If you decide to support us by becoming a patron, you get access to our entire stock portfolio, with all the research reports and valuation models, we'll also post patreon, exclusive weekly newsletters about significant market events over the coming weeks.

By becoming a patron you're supporting the wall, street millennial, youtube channel and helping us to continue delivering regular content, the link to the patreon page is in the description below. If you don't want to become a patreon, you'll always still get free access to the top three stocks in our portfolio, and you can find the link to this on the patreon landing page links to the valuation models and research reports are on the columns to the Right hand, side of the sheet there will be no changes to the youtube channel. We will continue publishing the same type of content that we always have before you wrap it up, make sure to follow us on twitter as well link in the description below. We also just made the account today and we'll tweet frequently about the stock market and investing as always.

Thank you so much for watching and we'll see you in the next one wall, street millennial signing out.