What Is the One Stock I Would never under any circumstances sell Well, to be honest, there's no such thing because every stock has its price and you should as well. Every time you buy a stock, you should have an exit strategy. But this wasn't completely clickbait because this is one stock that's not palantir and not Tesla It comes very close to the definition of a stock I would never sell Now this stock of course is NVIDIA Now if you look at this Excel spreadsheet I got on the screen right here which is something I have available for my patrons. You can sign up below with a little link.

Now this spreadsheet shows you whenever I enter a position. what's the price that entered and my Target price for this stock NOW Initially the Target price for the stock for me was 350 dollars. When we got in, it was at 135.9 So we're pretty much flat with this thing for a whole two years plus. But of the past few months of the past six months, the stock has done 117 percent.

So if you take a look at this thing right here, our entire profit 129 returned on this stock basically was made. In the past six months we're either lost or broke even for the good part of over two years. But now it actually made us more than double our money. And the question is, is this still a hold at 311? Or maybe in your case, is this a buy at 311 Or maybe it's the right time to sell now.

I will use analytics and actual DCF valuation and some objective numbers. So take a look at whether this talk is a cell at the current price or not. But of course, as you know, any stock can have erratic behaviors. We can decide to sell it today and it can go to 400 tomorrow.

Or we can decide to keep it today and it can go to 200. Tomorrow There's no way of predicting the future. None of us have a crystal ball. We're just doing our best to figure out what's their fair market valuation for the stock in this video.

I'm gonna do exactly that. Of course this was not. Financial Advice: It's just my opinion. Which means it.

it's probably inaccurate. It's probably wrong, and it's probably the ramblies of a Madman So do your own research. But before we do I want to quickly introduce you to today's sponsor. Now today's video is sponsored by our friends from Delete Me Now Look You know me.

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Now on my Patreon page we have this thing. This is a chart that shows you everything I ever traded in everything I ever invested in but for the most part it's my investments now. I'm gonna make it a little bit bigger and myself a little bit smaller because I'm not the issue here. This thing is.

so as you can see, Nvidia is on the list. it's number five on my list. We got in at October 26 2020. We were flat for a while.

We entered at 106 136 dollars. Now the stock is at 311 so we're up 130 percent. Now the part that makes me freak out about this a little bit why I'm even raising this question is because my Target price, although it's 350 dollars as you can see right here on the screen, it's still a long ways away from 311. But that Spike that Spike within five six months is just too quick and it freaks me out.

Now here's where I have a lot of issues with this: Spike I Don't like being in crowded trades and I don't like to be in an environment where you have parabolic performance from any stocks Nvidia included. Now don't get me wrong, Nvidia has one of the best CEOs in the market. They have a terrific future. They're into everything that's basically the next wave.

AI Robotics That they're basically they're They're everywhere. They're everywhere where it counts and they will be great for a long time to come. But the question is whether the current 311 price is Justified Now I'll show you something that will make the decisions very easy for you. So hang on.

Let's start this journey together. and now we have to go and look at this stock analytically objectively without all the hoop line, the noise and the nonsense, and the you know, all the distractions now on the screen. Right now we're looking at Nvidia stock. So as you can see right here, this is the part that freaks me out a little bit.

So the past three months the stock is up 50 percent. A stock that has 50 in three months is a sign where I have to basically ask myself an important question. Is this Justified or not? Is this all hype and formal? Or is this actually legit? Now look, let's go to Stockton VP right here and let's take a look at the cards. I Mean there's not going to be a whole lot of surprises here.

Revenue is 27 billion dollars, operating income is 5.6 billion dollars, net income is 4.4 billion. I Mean this company is killing it. I mean it's not anything new. Um, the one issue I have with it a little bit.

As you can see right here, cash and cash equivalents are 3.4 and total debt is 12. I'm not a fan of heavily leveraged companies like that where you have four times more debt and cash. That's the one thing that I've never liked about their balance sheet setup, but you know you have to take the good with the bad. Looking at a stock, it's looking like a dating profile.

I Mean there's no perfect people out there. Everybody has their shortcomings and the good sides. This is the problem with Nvidia. One of the problems is that that is way way higher than what I would like it to be.

Of course they're trading at, you know, twice total assets to liabilities and it's fine. Now look when I gave it my 350 dollar price tag per share, my notion was that this revenue is going to go up I Didn't expect it to happen so quick. Well in my head it was like a three to five year plan. It shot up within six months.

The problem that it created is that Target price is not yet hit right? So you would say well, Tom your Target price is 350. it's going to be 311 so you're not there yet. You should send the stock. not necessarily when it happens too fast.

Here's what happens: your Revenue stays 27 billion but now your valuation spikes. And then if you scroll down right here the price to earnings ratio. you get a price to earnings ratio of 176 which is I think even four times higher than test right now I don't know what Tesla has, but what like three times higher? Let's take a look at Tesla just for the you know, for the for the hell of it. So I'm going to pull up Tesla here on the screen for you guys and let's look at Tesla so we can verify what I'm saying.

So if we go to Tesla and we'll look at their PNP right, the price to earnings ratio and let's see what they got. So Tesla's trading at 50p, 51p and Tesla is a notoriously expensive company. So if Tesla is trading at 51, PE Nvidia is trading at three times that more than three times that. So because it spiked so fast, revenues are still 27 billion.

but now the price have gone up insanely So now you're paying 176p. That's a lot. That's a very expensive company now. I'll show exactly what needs to happen for them to justify that price so you can make the decision for yourself.

I'm not here to basically give you fish um, he'll you know to teach you skills so you can do it for yourself. Let me show you exactly how so we go to this little DCF model which we have right here in stock MVP And by the way, if you don't have stock MVP you can get it for free for seven days. Try it out in the link below, it's not a problem. so in the DCF calculator they got over a stock MVP What we can do is I'm very simple.

We can actually plug the numbers to make sure that we understand what's the expected growth rate to hit that price of 311 right here. Okay, cool. So let's do it. Let's say we assume here that our ebitda growth rate for the next five years is going to be 30 per year, right? Depreciation, amortization growth.

Let's put it at three percent per year capex growth. Let's put it a two percent per year. And now let's do populate. Four percent long-term growth.

It's fine. 12 percent discount rate is fine. So we're getting 99. So basically on a 30 percent ebitda EB the growth for the next five years.

Every single year. On average, it's a hundred dollar stock. So it's not like if you're assuming 30 growth for this company for the next five years annually, it's not gonna hit 300. Now let's go double that sixty sixty percent ebitda growth per year for the next five years on average.

Populate: calculate 280 dollars. Still not there. Let's do 65. populate.

Calculate Now we hit it. So as you can see right here, we hit that price target of well. we shot up a little bit to 326 dollars. So five percent above the current price Target requires you to get 65 percent ebitda growth for five years annually on average.

So this means this company needs to grow its ebida, which is much harder to grow than the earnings than sorry than revenues five years in a row On average on 65 per year, that's a very tall order because of the spike in price. The current relation reflects that and I Don't know if it's realistic. Now you have to decide for yourself. But if you think that ebitda for this company cannot grow at 65 percent per year on average for the next five years, this company is too expensive.

It's very, very simple. Now if we go to what analysts are saying about this company and again, I'm not going to put in too much weight on analysts or the average price for this target you know for this company is 256 dollars. I Think a lot of it happened before the recent. Spike Because if you ask analysts now, of course they will reflect the current market price.

Uh, you know they'll probably give it closer. but the idea here I Want to show you guys look I'm up 130 the stock. It took a while, but you know, as a long-term investor I Don't mind. but when it happens too fast, you know how you lose weight.

For example, I lost some weight as you can see I Don't know if you know this or not. you know if you did comment below. but when you lose weight, right, you want to lose weight slowly. If you lose weight too quickly, it's not healthy.

The same thing with the stock price. If you are in the long-term investment thesis and the stock spikes up within five months, it's usually a very bad sign unless you had some crazy Catalyst For example, in the case of Palantir when we had two consecutive quarters of positive Gap Basically Gap Profitability and great guidance and bit of revenues Etc et cetera, when you had like a catalyst like this and the stock was already beaten down fine, but when it's stuck like Nvidia that's been always kind of over. performing, the market a little bit spikes up. It feels to me like a lot of Fomo and the numbers basically show for you guys to buy into the stock.

right now. at this price you have to assume 65 average annual growth for the next five years and and that's a very hard order to fulfill. But you know to each: Zone you make your decisions I'm just letting you know what's the right methodology to do it I Hope this video was helpful. Thank you so much! Huge shout out to delete me! Go Right now To Jointheliteme.com Get it.

Test it out! I Think you will love it I'm absolutely honored to work with these guys. And if you want to see my Excel spreadsheet with all my little price targets and all the companies I've invested in all my positions it's on right now. Go down below it's in the link, get it and I'll see you in the next video. All the best.