Not Good BUT: Watch these Stocks for 2022.

hey everyone meet kevin here in this

video we're going to talk about a

problem with some data that's coming up

which is not so great for the market but

we're going to also talk about some of

my favorite stocks going into this

evolving market that we're going to be

expecting over the next 12 months now

the first thing we're going to talk

about is black friday sales data then

i'm going to talk about 10 to 15 stocks

that i'm going to be paying attention to

or not paying attention to for a very

particular reason as we go into next

year and uh encourage you to share your

commentary down below as well but let's

take a look at this first of all uh

early black friday data is out final

data will not be out until early 2022

but there are many many mixed estimates

okay

so right now you've got indications from

mastercard that black friday in-store

sales were up nearly 43 compared with

the same time a year ago

this is not too much of a surprise since

we were still in the midst of a pandemic

last uh last black friday in fact we

were in the middle of a winter wave so

that's not very very exciting this was

actually more concerning here adobe's

current estimate for online spending was

8.9 billion for this black friday that

is actually less than last year is at

the lower end of expectations and is the

first time that we've seen a reversal in

the trend of online spending now this

could potentially be because people have

been spreading out their purchases more

people have bought stuff before black

friday that they weren't just waiting

for black friday and maybe we saw less

sales than expected

on black friday and we also saw

thanksgiving day sales come in flat at a

sign of five point or at a total number

of a one point or five point one billion

dollars

again reiterating that potentially

people because of fears of supply chains

or whatever else have moved some of

their spending upwards

now online sales according to

mastercard though and this is where the

the data is a little confusing according

to mastercard spending polls black

friday online sales were up 10.6

so you've got adobe projecting a miss

the first decline ever since last year

we were at 9 billion online and

accordingly to adobe now we're at 8.9

and mastercard saying we beat slightly

the point here is well we're not seeing

consensus it's a sign that we're not

beating expectations across the board

which is something honestly i expected i

expected to blow these uh these

estimates out of the water i thought we

were gonna have one of the biggest black

fridays that we've ever seen with the

amount of money that people have right

now

saved up either from the wealth effect

of stocks or real estate or leftover

stimulus or whatever else and so this is

making me kind of wonder hey wait a

minute maybe we've got to pay attention

a little bit to a shift in what might

come next year and this is an

interesting one so first of all we know

that right now we're expecting inflation

inflation inflation month over month

over month over month at some point

though next year we do expect businesses

whether or not supply chain issues have

completely resolved themselves we do

expect businesses to have much more

inventory to have a lot of product and

people certainly expect to have less

money next year than they did this year

especially if if they were relying on

any kind of pandemic relief related

payments and so this is leading me to

wonder maybe for 2022 it's time to

really focus our investments not

financial advice of course but

potentially our opportunity to focus our

investments on margin place really

really really important the reason i say

that is if consumers already right now

are spending their money they're kind of

spreading out their spending and we're

seeing unclear mixed signals for black

friday then that's a sign that spending

in 2022 might not be as violent as we

potentially expected especially coming

out of the end of of this year where we

were expecting crazy crazy spending and

if it's all getting buttered out more

and people have done their spending it's

not all getting consolidated on black

friday cyber monday anymore or people

are taking a little bit of a breather on

spending spending spending which we've

been doing like crazy then we're going

to want to look at companies next year

that have potentially more product to

sell or more whatever to sell but

potentially face the risk of having to

lower some of those prices to be

competitive to try to prompt those sales

to get people to spend the leftover

money that they do have in 2022 and this

is where i believe it's really important

to look for margin place or companies

that have a room to actually discount

prices because when they have room to

discount prices it means they can remain

competitive companies with very very low

profit margins net profit margins might

be a little bit more beaten up next year

now we are already seeing some companies

get beaten up this year that have very

very low margins like redfin or expi but

that could be because of the real estate

cycle so i'm going to kind of like put

them aside i think there are a lot of

interest rate fears for for these

particular stocks

but here are some examples so

etsy right now sits at a 25

net

margin and it's like it's expected to

grow over 18 percent for the next five

years i think this is actually

phenomenal now etsy makes a lot of money

really in not just commissions from

store owners but also advertising right

advertising to grow their business so

this it's not exactly directly product

sales but still their net margin sitting

at 25 means even if their cost of labor

goes up a little bit they still have the

buffer of of a nice fat margin so i

think this is really good at etsy

and face has growth expectations of over

25 through 2024 with net margins around

22 that's because they get into the

higher margin products like converters

and batteries compared to getting into

solar panels which they don't do which

are extremely low margin see i've been

more nervous for solar panel

manufacturers as those margins get

squeezed but inverters and batteries

have much more room in them here's

another one paypal paypal is expecting

growth of 18 through 2025 with a 22.4

net margin not gross margin net margin

it's really good visa is expecting 12 to

15 growth through 2025. listen to this

one folks visa has a 53

net margin they bring so much freaking

money to the bottom line out of all the

companies we're about to talk about visa

has the highest net margin it is crazy

and both visa and paypal have sold off

recently paypal is selling for 26 times

2022 expected earnings visas sitting at

28 times

2022 earnings so honestly both of these

companies for just a one year out p e

not incredibly expensive they've

recently sold off they've got incredible

growth visa expecting to grow a little

slower than paypal but that margin at

visa 53

my goodness

now some folks think that maybe

companies the payment processors like

paypal and visa might be selling off

because blockchain might come in and

start robbing them of some of their

business but i i expect paypal and visa

will actually incorporate and adopt

blockchain so i'm not too worried about

their capabilities of innovating this

space

uh money losing companies also expected

to be out of favor in going into 2022 as

labor costs might go up then research

and development costs go up product

costs go up service costs go up whatever

data center costs go up then then you

become

basically a money losing company that

just loses more money these would be

companies right now and this is not to

bag on them it just is what it is

companies like pound here lemonade

insurance a firm they're all expected to

lose money and probably lose more money

now one of the things that i like about

pound tier is that long run phenomenal

company it's going to be about five

years to really grow them though

lemonade they're they're betting on

millennials it's probably going to take

10 years for that bet to start paying

off until millennials actually start

buying homes

more homes and a firm

well

they might be a money-losing company

if people have less cash in 2022 they're

more likely to use a firm

which i know i don't know how we feel

about that from maybe like an ethical

point of view because it's like kind of

like man so what you're saying is sell

to people that have no money right but i

mean okay that's that's sort of the

business side and then there's the the

you know

but anyway uh growth uh growth expected

of over 40 through 2024 for a firm which

is really good and kind of shows the

projections that uh the street does

expect uh some big growth there for a

firm ironically folks zoom we get the

zoom gets pooped on all the time but

they're expecting 18 growth through 2025

net margins of almost 30 percent there's

they're only well they're selling for

27.8 times 2025 earnings so you're

really kind of projecting out to 2025 on

that one not bad for for a growth

company 18 growth though could be a

little better for that uh you know a

little higher on the peg ratio here then

we've got google uh with growth

exceeding 14 to 16 for the next five

years expecting net margin though 33 to

36 percent really really really good now

tesla has low net margins but impressive

gross margins and that's because they're

really early on the s curve and so just

compare gross margins of for example

tesla to ford tesla sits at about 30

without regulatory credits for gross

margins ford sits at just 15

so a lot more efficiency over at tesla

of course we've got some work to do to

get the bottom line moving up and

that'll come with scale

squares expecting average growth of

around 25 margins on the low end out of

the payment processors really on the low

end for square just five to six percent

net now that could be because square uh

inc includes a lot of bitcoin uh

purchases and sales in in their total

revenue and so it skews the numbers a

little bit because they actually lose

money processing a lot of their crypto

transactions that's probably why this

this number looks so low so probably

can't do a direct like for like

comparison between square and visa and

paypal for that reason does make the

analysis a little bit more complicated

but it is something that you know if you

got hedges just looking at that bottom

line number it is something that's a

little bit of like a

little eyebrow eraser

unsurprisingly nvidia is expected to

grow over 20 through 2026 and this blew

my mind okay because i know they do

software data centers chips and

everything but folks this blew my mind

nvidia's and net margins set at 41.2

percent that means they make a hundred

dollars on the top line they bring 41.2

percent to shareholders 41.2 dollars to

shareholders that's nuts compare that to

amd growing at 15 to 25 relatively

similar growth rate but net margins

about half of what nvidia's are closer

to 21

now don't count the advertisers out like

trade desk i do think advertising to

consumers is going to be a big deal in

2022 as more businesses try to compete

for market share of whatever leftover

money people have or they're left over a

firm buying power

but trade desk is expected to grow 25 to

30 percent over the next four years net

margins around 30 to 33 percent don't

count trade desk out i think that's

that's potentially a good one uh for

comparison though amazon sits at 16

growth through 2025 only margins of

around five to eight percent though on

the lower margin side unsurprisingly as

well restaurants like the cheesecake

factory net margins around just four and

a half percent not a surprise so i do

think certain retailers

uh restaurants probably going to have a

little bit more pain although they could

just trade solely off the covet news

quite frankly yeah but uh yeah anyway so

for me the highlighter in the stock

sector is really probably for 2022 going

to be on advertising companies like

google and trade desk products with high

margin because those advertisers are

also high margin but that's a service

products with high margin and face

nvidia tesla they're going to have

pricing power and when we start having a

sort of an overwhelming backlog

potentially of inventory they'll be able

to lower prices still get sales and just

shave a little bit off of their margin

but still have very strong and growing

businesses and payment processing

companies honestly like paypal and visa

even though they've sold off recently i

don't know if it's justified so pay

attention to some of these you know

obviously not financial advice but these

are some of my thoughts these are some

of the companies that i'm looking at and

researching in depth we'll talk more

obviously in the course member live

streams folks thank you so much for

watching this video i hope you're having

a wonderful weekend and we'll see what

the market does tomorrow thanks again

goodbye