Why I JUST Invested $500,000 into THIS Contrarian Stock | 2-3x

hey everyone me kevin here i am so

excited to announce that i have made

a 500 000 contrarian bet

into a stock that when you hear about it

you might think wow why

why why would you buy that like we're

leaving the pandemic that's stay at home

like no that's stupid

well i don't think it is and that's

because i think it is a contrarian bat

that has been oversold by wall street

and has some serious legs folks

it is peloton yes peloton i'll explain

why it might not be why you think

has little to do with that silly little

bike that you hear about at home it's

got a lot more to do

with what else is happening but here you

go folks uh i bought 4

800 shares of peloton for 104 dollars

and

31 cents on march 26th i talked to

course members about this at length that

day

we analyzed it in depth we talked about

it in depth

uh we talked about buying it talked

about why we thought it was oversold

i haven't gotten a chance to do a video

on the channel yet

so here it is here's my video on the

channel about it

so i'm super excited about peloton

mostly and this is the big one for me

mostly because

of two factors which i know i said big

one but it's really two factors

factor number one they're acquisition

folks of pre-core

anytime you go to a high-end gym or

hotel

you see pre-core equipment this stuff is

high quality equipment they've got high

quality products but they don't have

that

peloton software yet right that peloton

screen with the technology the

interactiveness

with trainers or works they don't have

that

but they've got the quality machines

from ellipticals

to weight training to rowers to various

different kinds of products

that paluton just doesn't have right now

i mean i mean even to the fact of going

to

uh a high quality look at this 1200

1200 for a bench but they actually

sell these things and i'll tell you why

they sell these things and it's the big

reason

well my first big reason as to why i

really like

peloton buying precor so peloton prides

itself on quality

and i have two bikes in my garage i have

a peloton bike in my garage

and i have which was like 20 300 bucks

or whatever and i have this 500

bike that i got from china in the garage

as well it doesn't have a monitor it

just has a little ipad stand which i

kind of like because then i can just

like write things and stuff which i

can't do in the peloton

screen i really like that 500 bike

but guess what really matters long term

quality for commercial applications and

guess who's going to be spending money

to get people coming back to gyms and

hotels

gyms in hotels gyms in hotels my guests

are going to spend a ton of money to try

to attract

people to come back to gyms and hotels

rather than work out at home

there is no doubt in my mind that

peloton is going to get

into the commercial product space

with high quality pre-core manufacturing

on top of peloton screen their monitor

their interactiveness

peloton fitness mats because they just

acquired a smart

mat company and peloton fitness

watches because they just acquired a

fitness watch all of these can

integrate into the training that paluton

obviously does with their monitors

this is really good but combine this

with the commercialization of their

products

for hotels and gyms which will be coming

in the future we don't know that for

sure

yet but we expect peloton because of

their acquisition with pre-core and they

say it

in their latest report they mentioned we

want to get into commercial products

they don't have any commercial products

right now we expect peloton to get into

interactive

strength training in addition to cardio

which is a huge huge potential vertical

stress

strength training which they don't even

touch right now they just do cardio

right right now they're just doing

the treadmill and the bike and get into

strength training

all the doors open up precor being a

high quality leader in that field is a

big

big big big plus for peloton which also

has a reputation for high quality

now all of a sudden you start getting

smart gyms and smart gyms inside of

hotels

you create an endless opportunity for

peloton to be a way for gyms and hotels

to attract people back

during our next our recovery over the

next few years

that's going to take some time peloton

does not have any kind of commercial

products right now

they do not have strength training

products right now but

it's because of this reason right here

this sort of trojan horse that peloton

is doing

i think peloton is highly undervalued

right now based on wall street consensus

estimates

wall street trades for about 66 times

forward price to earnings and that is

based on wall street's consensus

estimates for 2024

earnings but wall street also assumes

that peloton's growth is going to

decline

from 34 to just 23

to 22 in 23 to 24.

this in my opinion totally misses the

commercialization boom

that's rationale number one for throwing

half a million dollars

into a contrarian bet like peloton

because we generally think of peloton to

stay at home i see peloton

as the recovery for gyms and hotels over

the next few years

i think it's going to be a little hard

for hotels and gyms to make really big

investments anyway coming right out of

the pandemic

so it's going to be a few years but in a

few years as gyms and hotels really want

to start growing again

after they get back onto their footing i

think smart fitness equipment

is going to be their big trojan horse to

get people to come back

and peloton stands to be a massive

beneficiary

of making gyms more high quality and

getting higher quality

well like overall the products of

quality like the product quality up

but then also introducing new services

and gyms like smart gym equipment

that you can't really access at home

unless you have a ton of money i mean

the peloton bike and the peloton

tread the treadmill are expensive for

what they are

but if you could get that quality at a

gym that'd be a gym i'd be interested in

going to

all right now the second thing that i

really like about peloton

is the pandemic really accelerated their

ability to market

without marketing and that's really just

the

viral nature of uh peloton and what

we've seen during the pandemic

and that persists like nobody's gonna

think

in in a year or two my expectation

obviously could be wrong right

nobody in my opinion is going to think

in a year or two that peloton is all of

a sudden

low quality right so if a gym comes out

and says

new partnership with peloton gym

equipment blah blah blah we have feature

peloton equipment here

people who can't afford peloton are

going to want

that experience and going to a gym that

has that kind of equipment

it's going to be very desirable and if

one gym does it

other gyms are going to have to compete

so you'll see if let's say an la fitness

starts

you'll see the 24 24-hour fitness come

in my expectation

okay now the the second thing that i

really wanted to hit on was was revenue

so uh

the revenue and advertising so take a

look at this

peloton's revenue doubled more than

doubled from 2019 to

2020. this makes sense we were in a

pandemic

and so did their subscription revenue

their subscription revenue almost

3x but take a look at this their sales

and marketing expenses

barely went up their sales and marketing

expenses went up from 160 million to 177

million this is

barely barely a move up uh and that's

really because

they didn't need to spend more money on

marketing they didn't need to spend as

much money on commissions

at malls to help people sell this

product the product was selling itself

in fact peloton has stated in this

report that they purposely pulled back

on advertising expenses

because of supply chain issues because

they're so overbooked

they have so many sales now you might be

thinking

but come on kevin this is going to

decline like the sales are

going to go down it's a stayed home play

why would you buy this now well that was

a suspicion of mine at first as well

but what i did is i pulled up the

website rankings for this company just

to kind of see

all right what's what are our analytics

looking like

and i compared them to other companies

as well whether it was nordictrack or

some of the other companies

peloton had a very unique trend going

for it

and it's very odd to think that peloton

would have this trend given that if it's

true if we're reopening

and people are less interested in

peloton we would expect to see

peloton's website data fall their

website ranked to fall

but take a look at what's actually

happening at peloton

the year started right here january 2021

and the website traffic for peloton has

never been higher this right here is

2021.

peloton's website rankings are not only

increasing

you can see we've had you know we've had

some increasing right here

we had a little bit of a flat period

here in march

and now we're increasing again right

here going into april

this is very unique given that we are

now way higher

than where we were in 2020 during the

you know the big bulk of the pandemic

maybe it's this is a symptom of people

having stimulus checks that they want to

spend on fitness equipment

and maybe and this is another argument

maybe people realize like hey look

it's time to work out again you know

kovid was a fun break from working out

and

really met the kovid 19 and maybe it's

time to

uh exercise again like i'm not immune to

that either like i get it

so uh you know peloton has potentially

attractive staying power as a stock that

in my opinion has been

sold off as as a stay-at-home play

that's not in anymore

and i think wall street's really missing

the boat on it so those are a couple of

the reasons that i really

like this but the other thing about

peloton one of the complaints that i

generally see

when people talk about peloton uh or

when people hear me talk about peloton

one of the complaints is i wrote it down

here ah yeah

somebody mentioned that nobody uses

their peloton equipment anymore in the

future that it becomes a

clothing rack somebody said uh in that

they are

basically products that uh flood the

market

of uh what's it called like craigslist

and ebay

and people uh just uh just aren't

interested in the product anymore

uh and yeah that might be true but the

beautiful thing is

peloton's churn is very very low

peloton's churn

on a monthly basis is point seven four

percent which if i annualize that

well it comes out to about eight point

six percent which they're growing at a

way faster clip than that they're

growing you know four times that right

now

uh but the thing about peloton gym

equipment

is this subscription model is very very

sticky what that means is

when people think about oh i should

cancel my monthly subscription because i

haven't used my peloton in six months

they're actually in a weird way unlikely

to cancel it

because it's almost like they're

agreeing to failure or admitting to

failure wow i'm canceling my

subscription

wow i'm such a bomb i said i'd use this

and i don't

and that feeling that i'll get back to

it soon

is exactly how the gym industry makes a

lot of money

and i would expect the same will end up

being true

for peloton in the long run we'll see so

when you now combine some of these

factors like

fitness watch fitness map potential

strength training equipment

new cardio equipment like rowers or

ellipticals

you combine it with the fact that maybe

people want to exercise

more going into a recovery and a

reopening

in addition to the fact that in the

future gyms and hotels are going to be

interested in

investing more in creating attractive

reasons for people to go to their gym or

hotel

rather than go to an airbnb or rather

than have a home gym

why potentially go to a home gym or go

to an airbnb

when you could go to a real gym or a

hotel gym and experience some high

quality smart fitness training equipment

this in my opinion is going to be a huge

opportunity

for hotels and gyms wall street is blind

to it

peloton has brand established and their

website analytics are going

up to where they do not necessarily have

to be worried about advertising more

they're growing like crazy and peloton

has established itself

as the apple of fitness it is a quality

brand folks peloton for me is a big

long bet my expectation is there's no

reason why

peloton could not double in the next

two to three years certainly within the

next five years

but between you and me i think it'll

happen sooner

i'm not looking to trade on peloton

peloton's a long buy and hold for me

but i've got a big fat position in

peloton now and i'm really excited about

it thank you so much for watching this

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