9 Stocks That Could Make You Rich

Today on the Joseph Carlson Show, we're going to be going over nine stocks that could make you rich. None of these stocks are in my portfolio. So, we're not going to be talking about Meta, we're not going to be talking about Uber, we're not going to go into DoorDash or Texas Roadhouse or Costco. No, all 10 of these companies are brand new companies and I'll be laying out the case for each one. Now, we do have a big news item to get to. This is the fail of the week today. We have David Ellison, the owner of Paramount, the guy that's trying to buy Warner Brothers Discovery. Well, that's been an ordeal for David.

And he's running into trouble with a lot of states suing him. One of those states is California. David Ellison doesn't like that California is suing him and so he's threatening to pull Paramount out of California. That's right, Hollywood may lose Paramount. We'll be discussing the whole thing in the fail of the week. Now, as we jump into these new companies, just as a reminder, if you want to follow more of my content, I have another YouTube channel and I post there rather consistently, around two times per week on the Joseph Carlson After Hours channel. Also, if you're interested in more financial content, we have Qualtrim Studio, which has a lot of in-depth videos, ones on building wealth, extensive portfolio updates and much more. You can try that out at $10 per month at qualtrim.com. Now, starting off today, we need to look at these companies and again, none of these are in my portfolio. So, these are not ones that I'm invested in, but these are all companies that I find very interesting, ones that I think have potential to make investors wealthy. The first stock that I'll be highlighting is IMAX. This is one that I found interesting for some time, especially because so many movies

now, especially the big ones, are being released in IMAX. The latest one to be released was The Odyssey, which is going to do over a billion dollars of sales. This movie was shot 100% using IMAX cameras and that is the most important distinction here. A lot of people view IMAX as just having a square screen or a tall screen and that's not really what IMAX is. To understand what this actual stock is, what the company is, you need to understand what IMAX actually is. In a lot of ways, I would compare IMAX to something like S&P Global and Moody's.

It almost sets a standard, a standard of the way something should be. But in this case, for that standard to exist, it has to be done in IMAX from beginning to end. IMAX is involved in the entire production of an IMAX movie. For example, Christopher Nolan contacted IMAX saying that they wanted to use IMAX for The Odyssey. This happened years ago. Christopher Nolan also had the release time and he had the exclusivity. This is why The Odyssey had IMAX and the new Spider-Man didn't. Nolan was first in line. IMAX had made a commitment with Nolan before he started filming the movie itself. But then from there, you also have to film in a certain style.

Most IMAX movies have a portion of the movie, a large part of it, done in IMAX cameras. These are incredibly huge film cameras that capture detail that digital cannot replicate. It's a more difficult task to film with IMAX, but it captures more detail on the screen. And this is another big misconception about IMAX. A lot of people think that IMAX simply means that the screen is tall or that the image is more boxy and squared and not widescreen. But that's not really what IMAX is. IMAX cameras actually collect more detail, meaning that there's more pixels, more resolution on the screen to display more information.

So it's not simply taking an image and stretching it to a square image or really tall image. There's actually just more to show. It collects more data. It can display more on a larger screen while keeping more detail. So IMAX is bigger cameras, more film, more detail, bigger picture. And it doesn't end there. IMAX also has incredibly detailed and specific standards for audio. For an IMAX auditorium, they have specific details of how the audio must work, how everything must sound. And in order to ensure a consistent experience whenever somebody goes to any IMAX theater across the globe that they all have the same level of quality of audio quality and visual quality. IMAX also routinely audits these theaters making sure that they're compliant with all the standards.

Are you starting to see what IMAX is now? This isn't just a stretched screen or a bigger image. IMAX represents the standard of the highest level of viewing a movie. A standard that nobody else so far can match. And this is where the stock gets interesting. We know that right now IMAX stock has gone up a bit. It's up 40% this year off of the back of these big movies. When you look over the past year it's up 100% and seeing the stock trend up like this may give you the impression that you missed the train or that the stock is overvalued. But that may not be the case. When we look at IMAX's actual multiples they don't look too bad. It's at a 27 forward PE ratio with a 4 and 1/2% free cash flow yield. It does have some stock-based comp so that takes it down to a normalized 3 and 1/2% free cash flow yield. But when I look at IMAX I see something that other investors I believe are still missing. IMAX is being priced on its current financials and the current economic of the business as if it's going to continue organically growing how it has previously. But I believe there's a chance for a dramatic

change. And that is that IMAX gets treated less like a movie theater and more like a concert. If you think about what IMAX represents it changes the movie going experience from going to the movies to now going to an event. When you go to an IMAX movie and you see it on the biggest screen with the biggest sound system in the biggest auditorium you are going to an event. An event like going to a comedy club or a concert or a ball game. Events and comedy clubs have surge pricing. They have pricing based on demand. They have flex pricing. So the more demand there is for Taylor Swift tickets the more demand there is for a World Cup game the higher the price is.

All of these companies are doing this except for IMAX. IMAX is a company that still prices their tickets for about $15 to $20 per ticket for a movie that people are lining up for months to see. People would obviously pay multiples over the price of the ticket that IMAX is charging. But that's the issue. IMAX can't set the ticket prices, only the theaters can. IMAX is an asset-light business that doesn't own any physical theaters. They simply license their technology, they work with creators, and they audit the theaters to make sure that they're up to standards. But that's where the trouble comes in for IMAX.

Companies like AMC, the biggest distributor of IMAX movies, so far have priced their tickets on a flat rate. They haven't leaned into the flex pricing. And because of that, IMAX is leaving a huge value surplus on the table. Tickets that could be selling for $70 a movie are now selling for $20 a movie. But there's reason to believe that could change. And just think of the potential here. Right now, IMAX is being priced with steady organic growth, maybe growing revenue by 10% to 15% per year.

And it looks like it will accomplish that even with its current pricing structure, simply because the demand for good movies in IMAX has been raised. And every year, there's more movies coming to IMAX. The next one is going to be Dune 3. After that, they already have movies lined up for 2027 and 2028, and they're even in talks with producers for movies in 2029. Years into the future, IMAX has signed up deals. They already have organic revenue growth. There's already a resurgence of people interested in this concert-like experience going to an IMAX movie. And I believe it's only a matter of time until companies like AMC move to surge pricing, to demand-based pricing based on the key IMAX releases. If and when that happens, IMAX's revenue could jump in a single year. It could go up substantially because those tickets would be worth so much more. As an example, on the secondary markets like eBay or other websites that you can flip tickets, the first week release of the IMAX 70 mm tickets for Nolan's The Odyssey were going anywhere for $300 to

$1,000 per tickets. This movie went viral on social media. People felt like they needed to see it with IMAX, and many people with deep pockets were willing to pay much more than the standard ticket price. Now, of course, the tickets being more expensive isn't good for consumers, and I know that many of you may gripe that this is another example of tickets becoming more expensive, but that is the name of the game. If there is enough demand, companies will eventually match that demand with increased prices. And IMAX has something special that no other company has been able to match. So, even with the price trending upwards, I believe there is huge potential for this company. Now, next up we have Reddit, a website that everyone in the world is familiar with. It's been around for seemingly ever, but the interesting thing about Reddit is as old as it is, it economically seems like a young company. When we look at Reddit, it looks like it just started in 2020. The revenue was only $93 million. That's not a lot for one of the biggest websites in the world, but that's actually just when they went public. And it seems like Reddit really started to monetize right

after going public. In 2020, the revenue started to grow dramatically, almost doubling in a single year, continuing to double, going up to $500 million in a trailing 12-month period only in 2 years. This is substantial. Reddit obviously did something right when going public to make it so that their revenue jumped. Then over the next couple of years, revenue slowed down, and then something came along where they were able to monetize and grow revenue even faster. Not only is it an old company with young economics, but it's also a company that seems like the last bastion on the internet for authentic conversation.

In a world where everything is filled with bots and spams and scammers, and every comment section where there's a hundred bots trying to plug some crypto coin, Reddit seems like the one place left where humans still go to discuss things with other humans. Humans talking to humans is very valuable. And Reddit is actually cited as one of the places that all the AIs want to go to get that data, the data of real humans. So, part of this revenue growth is the result of Reddit monetizing the AI companies, the Googles, the ChatGPTs, the OpenAIs, the Clauds. They all want that juicy human data. They all want to train on Reddit's comments and Reddit's website. And for that, Reddit can license out to these companies to be able to look at these conversations, and in the process they make a fortune. That's a growing revenue stream, but the most important part of Reddit's revenue stream is their organic advertising in and of themselves. We've seen companies like Meta already be heavily specialized in advertising and monetizing their user base. Meta makes a fortune, and Reddit seems to be learning

from Meta. When you look at this revenue, the huge majority of it is driven by their own organic advertisements throughout their website. For example, if you go to a running subreddit, it'll advertise you running shoes, and Nike shoes, and On Running, and all of these different types of shoes. If you go to the Battle Station subreddit that talks about people's computer setups, you're going to get advertisements for mechanical keyboards, you're going to get advertisements for standing desks, and all different things applicable to those subreddits. And this is where the advertising can get incredibly granular. There's subreddits for virtually everything, and Reddit has advertisers for all those specific subreddits. It's an interest-based advertisement that's highly applicable to the communities in those subreddits.

So, and that makes the advertising increasingly effective. Also, the fact that Reddit has so much real traffic from real humans is also increasingly valuable. At a $30 market cap and these type of growth rates, I believe Reddit is a company that we could look back in a couple years and see it at a 50 or 60 billion-dollar market cap and still going strong. Next, I have to highlight Mercado Libre. It's the best company in all of South America. It is very similar to Amazon, but that's also where a lot of investors get it wrong. It is true that Mercado Libre is a massive retail business, but its biggest difference from Amazon is that while Amazon focused on cloud hosting and retail, Mercado Libre is focused on the financial aspect. And this is where this stock gets really interesting. If we look at some of the KPIs here, one of them is the Fintech monthly active users. And this has been growing substantially. In 2024, they had 49 million monthly active Fintech users. Now they have 88 million.

It's also growing every single quarter. And a lot of this is credit card. So this is very different than Amazon, and it's also different in the growth profile than an Amazon. The biggest differentiator is that Mercado Libre's total addressable market is not limited by Latin America's retail. It's not limited by Latin America online sales. It's now a much greater TAM. The company now makes money anytime people spend or save or borrow or transfer money from one person to another. That is a very interesting bull case for this company and one that they're seizing. The difficult part about Mercado Libre is like many of these companies that are highly ambitious and go for multiple huge verticals, investors have to wait.

While the revenue continues to grow at a pace that we've never seen before for any company ever, we also have the stock price relatively flat for the past 5 years. That is because of both it being overpriced, like many companies in 2021, but also they're sacrificing their short-term economics and profitability to get more growth. So investors in this company need to be patient, but the prize is likely huge. And building up both a massive banking and Fintech company in Latin America, as well as the biggest retailer. A turnaround play means that a company is currently doing really poor. The stock price is down big-time and you think it might turn around. This is one of Peter Lynch's favorite categories. Was finding companies that the market became incredibly bearish on and then trying to determine whether or not they had hope to have a big turnaround. Adobe is down massively from $660 per share. Now it's down to 255. So the stock is still down around 60 to 70% from its all-time highs. Nike traded up to around $180 per

share on its peak and ever since then it's been tumbling down this mountain. Rollins, which is a pest control business, is also on a big downturn. Copart, the global auctioning platform for cars, is down big as well. So let's look at each of these and start off with Adobe. I believe Adobe has a high potential for a turnaround and the reason why is because this is one of the clearest cases of the fundamentals not matching the story. There is a massive massive disconnect. Typically, when you hear a story of a company, the fundamentals should follow it to some degree. They they should go up with the story or they should go down with the story. But in this case, the fundamentals are saying one thing, the story is saying an entirely different thing. We can look, for example, about the risk of disruption. This is what Adobe's actual revenue looks like. Can you see the disruption in the revenue?

Well, let's zoom into the past 10 years. Can you see the disruption in the revenue? I sure can't. It just grew 13% year over year. It's one of the most gradually growing, consistent growing quarterly revenues that we've ever seen in a company. In fact, it's better than most companies out there. You would have a hard time finding another company that grows as consistently as Adobe. But even so, there are still big concerns for Adobe and reasons the stock is down so much and so cheap. And that is because there's a new paradigm shift. There are new ways to edit videos, new ways to edit images, and this is impacting Adobe's decisions. For example, they are making strategic pivots to try to gain and be the central platform for this new wave. They're trading off lower revenue growth in the future for faster user acquisition on all of their free platforms. So, Adobe's still trying to grow their ecosystem and get more people into the Adobe suite. They know that they own the high end. If they can get more of the low end users, the more simple use cases for AI into the Adobe

suite, they can monetize them later on. Leadership frames this as a now or miss it moment to become the default AI platform for creativity and productivity across web, mobile, and conversational surfaces. While this transition is happening, the market has discounted Adobe to a massive extent already. Again, this company is trading at below a 10 forward PE ratio. The free cash flow yield is 10.4%. Adobe trades at a valuation that already anticipates destruction to capital. It already anticipates much slower growth, unattractive returns. So, if you're the daring type and you want to go in for a turnaround play, Adobe today represents one of the best opportunities. The next turnaround play we get to is Nike. Now, this one like Adobe's down big for entirely different reasons. Unlike Adobe where the metrics are going up, but the stock price is going down, Nike's actual metrics are going down. Nike's revenue was climbing for years and then now it's decreasing. The revenue's actually declined over the past couple of years.

The EBIT of the company's in a decline, the net income of the company's in a decline, the free cash flow of the company's in a decline. Now, you may look at this company and say, "Well, Nike's not a great stock because the numbers are going down. It's in decline and it still trades at a relatively full valuation. It's trading at a 24 forward PE ratio, a 3.6% free cash flow yield." But, I believe that's the wrong way to look at Nike. The big reason that Nike looks expensive today is because these declines in these numbers are temporary and they're actually self-induced by Nike's management. Nike right now is going through a huge change in their execution structure, the way that they run their business. They're getting rid of old inventory. They're not selling everything just digitally. They're going back to their normal logistics and retailers. They're actually offloading a lot of inventory, a lot of old product that they're substantially discounting to get them off of the shelves and off of their books. The question for investors is if the brand will sustain.

If you believe Nike still has a solid brand that can charge a premium and margins will eventually tick back up after these changes, then Nike is likely deeply undervalued today and a good turnaround play. Then we have Rollins, a massive pest control company that was at a big premium because of how well it was doing. I wouldn't call this one a normal turnaround play because Rollins really isn't in desperation. The company's not doing that poorly. In fact, the company's actually operating quite well. But the stock price got way ahead of itself. It was trading again at $65 per share. Now it's trading at about half of that. For years Rollins Corporation traded at a premium, around a 57 trailing PE ratio. Now it trades at a 33. The free cash flow yield used to trade around a 2% free cash flow yield.

Now it's traded all the way up to a 3.5. So why is Rollins trading for much cheaper than its historical average? Well, the big reason why is they missed their earnings. The company simply didn't live up to its expectations over the past couple of quarters. The numbers came in softer than expected and the stock got massively derated. Now that doesn't mean that it's dirt cheap today. Rollins still trades at a healthy valuation, but it's much more reasonable. No longer is it in the 50s or 60s PE ratio, now it's down to a 30. So this is a company that after years of waiting is finally down to a valuation that makes sense given the business prospects. Rollins is after all a fantastic company. As it turns out, pest control is a very reliable and predictable business. People don't want bugs in or around their home and they're willing to dish out money every single year, year after year. In fact, a lot of people don't really consider this money discretionary. They consider it a must-have for living in a home, and for many people that own real estate or own properties, they rent out places, they also need to have pest control for their tenants. I like the company a lot. I

think Rollins is actually one of the better non-AI companies to own. And now it's finally at a valuation worth looking at. Next up we have Copart. This looks like a very dated logo. It almost looks like a logo from like the 1990s, back in the Blockbuster days. So, you might look at the company and think, "Ah, this this is a really old company." But a lot of these type of companies actually have really good businesses, and Copart is one of them. But basically, how Copart makes money is when a vehicle is totaled, the insurance company needs to do something with that vehicle. And the insurance company doesn't want to sell that vehicle directly. They look for a partner that they can just offload that vehicle to, and have that partner deal with the vehicle. And that's exactly what Copart does. A vehicle is totaled, the insurance company trying to sell the wreck itself, it sends that vehicle over to Copart. Copart stores the vehicle, lists it on its online auction platform, and sells it to dismantlers, rebuilders, used car buyers, exporters, and other buyers. So, Copart is an ancillary

effort to an insurance company in getting rid of totaled or damaged vehicles. And there's some important nuances here, like Copart usually doesn't own the total vehicle itself. It simply does all the logistics and the mechanics of getting rid of it, but they're not actually buying the vehicle itself. They more or less charge service fees along the way. That makes the company a lot more attractive, as they don't have to hold the inventory costs of all these vehicles. Now, the interesting thing about this company is it was priced as a very durable compounding machine that could grow double-digit revenue. So, investors would buy Copart expecting it to grow between 13 to 15% per year, like it had done in many of the years prior.

Investors had good reason to believe that this company would continue to grow like it has throughout its history, but then it just recently stopped. If you notice right here the long-term revenue, it seems to just have a ceiling. The revenue stopped in just the past year. In fact, it literally has stopped growing. The revenue grew by less than 2%, which adjusted for inflation is not really growing at all. Some investors are looking at the company going, "Huh, this used to grow super fast and now it's not growing at all. I'm bouncing out of this company. I want nothing to do with it." And massive selling pressure has driven the price down approximately 50%. But if we look at the actual story of what's going on with this company, it's not nearly as bad as it sounds. And there's reasons to believe that the revenue will pick up once again in the future. We can first look at why the revenue stopped growing.

Part of this was simply because of tough comps. The revenue was growing really fast in recent years, but that's because of huge hurricanes. Hurricanes destroyed thousands of vehicles. Insurance companies had to pay out huge amounts. Those vehicles were all given to Copart, and then they were later auctioned off or disassembled. In fact, when we do rough math and try to estimate how much of an impact the hurricanes had on the revenue decelerating to flat, it's estimated to be around 70% of the impact, meaning that only 30% of the revenue deceleration is organically based and not hurricane based. So this visibly looks much worse than it actually is, meaning that the organic business is much healthier than what's being priced into the stock. There are other factors playing into the decline of Copart today, like the fact that insurance has gotten much more expensive, a lot of people are not going for the comprehensive insurance, they're just going for liability, and those are factors that are likely to be priced and changed in the future as well. So some of this is also cyclical. But the opportunity exists. If you believe that

Copart can get back on track, it can resume normal steady high single digits or low double digit revenue growth, then the stock is most likely underpriced today and is a good candidate for a turnaround play. Now, next we get to the fast-growing companies, and we have two of them. We're going to start off with Nembus Group. This is one of the most popular stocks online. It's one that everybody is getting in on except for Michael Burry. Michael Burry listed that he was short this company at around $210 per share. So, the fact that it's up 23% today is not helping out his short.

Right now, he's already deeply in the red on it, but maybe he can hold it long enough that it will go back down. Either way, Michael Burry has a lot of things working against him with this short position. So, to actually look at the company today and its organic growth, you can zoom in to just the past 2 years. We can look at the trailing 12-month quarterly revenue, and back in Q4 of 2024, it was $100 million. In Q1 of 2026, it is $877 million. This is why the stock is moving up so fast. It's really being driven by the revenue itself. The stock is up 176% and it will surge up 20% or more in a single day. You also have to be careful when you're going into these very hyped momentum-driven stocks. You know what you're getting into. These zigs and zags along the way are anywhere from 10 to 20%. So, you can expect to see those constantly if you hold this company.

There's a massive group of investors that are constantly looking at this company. It already has tremendous amounts of momentum. And momentum can carry stocks like this far further and longer than investors believe. And even looking past the technicals and the momentum factor and the hype, Nembus really does have some great fundamentals. They have access to Nvidia GPUs. They have access to power and financing. Customers prepay them for their capacity. Nembus reinvests all of the money that they're getting into building extra capacity. Their scale is producing at 40 to 50%. Their infrastructure continues to grow, and so does their EBITDA and their earnings.

But as long as this company continues to grow the revenue as fast as it has been, it's likely that this company will continue to see more momentum. Then we have Cava, the company that sells the Chipotle-like, but this time Mediterranean and Greek-influenced food. They come in bowls and they're very healthy, and overall, Cava is a well-liked company. A lot of people like these bowls. Now, Cava is still in the early stages of a restaurant that has a proven concept. They currently have 476 restaurant locations, and they have the potential to grow that to multiple thousands. So, this is one that still has enormous growth potential ahead of it. They've already shown that people like this type of food. It's healthy for you. It's easy to justify, and many people get in the pattern of eating it at least once a week. And so, Cava does have loyalty, it has brand recognition, it has a meal that is both healthy and well-liked by most people. Part of the issue is investors have always been looking for the next Chipotle. When is there going to be another company that will grow super fast and take over America with thousands of locations?

Cava rocketed up in stock price from $40 up to $140 from 2023 to 2024. And that again was all because of the story and potential of this company. But the valuation metrics were really crazy at the time. So, the stock price had a little bit of settling down to do. Now, settling around $60 to $70 per share. Revenue is going up in a very consistent, reliable pattern. 26% revenue growth year over year. That's very fast. They're actually growing their restaurant locations by about 20% year over year, so they're continuing to expand all across the United States. With the long runway of growth, the proven track record, the great unit economics, and the fact that the stock has come down around 50%, I think this one is worth looking at. Now, moving on, we get to the fail of the week, which in this case, I have to highlight this entire situation. In fact, I think that this entire situation is a big fail. David Ellison is now saying that he'll pull Paramount out of California starting October 1st if the

states refuse to negotiate a settlement in the antitrust suit, Ellison told Paramount senior executives last week that he will relocate Paramount's operations outside of the state of California if the deal doesn't close by September 30th. Sources confirmed that the final hurdle to closing Paramount and Warner Brother Discoveries merger is the antitrust case. Therefore, if Rob Bonta, who is the Attorney General for California, does not agree to negotiate in a settlement in this case by then, the company will begin its process of exiting California starting October 1st.

Ellison told the team the Paramount and Skybound board that has approved the move. So, first of all, imagine that the type of power you must feel being the son of Larry Ellison. He's like the one of the richest people on planet Earth. This guy was able to buy Paramount, a a major studio, and he has enough money and enough influence to be able to buy Warner Brothers Discovery with Paramount. David Ellison is like the most spoiled rich kid in all of the world. There is no chance that he's going to look at an Attorney General of California and have that hold up the deal. David Ellison going up against California regulators is like an unstoppable force meeting an immovable object. Bonta responded saying, quote, "In the span of weeks, Paramount agreed to halt the merger until the court decision or until June 2027, asked for a November trial, and is now back with another attempt to blackmail the state into letting an illegal deal through.

Paramount has lost the plot and it continues to lose in court." And this is why these are both fails. David Ellison is going to any ends to make this deal go through, any costs, and he's doing so largely with dad's money. And then you have California, which is suing their company saying that what they're trying to do with this merger is illegal, even though it's passed every other regulatory body, regulations in Europe, it's passed the Department of Justice. Everyone has said that this deal is okay, except for California and these other 12 states. When David Ellison responds saying that if you don't like our company and you're going to sue us, we're going to move away, they say, "How dare you? How dare you threaten to move your operations from a state that's currently suing your business?"

Well, of course he wants to move. Why would he want to operate in a state that currently wants his company to fail, that wants a merger to fail that he desperately needs to survive? So, this entire thing is the fail of the week. That's all for this episode. See you in the next one.