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you will learn about micron this is monash pub rise one of his top holdings we'll talk all about it we'll show you the financials behind micron and use our stock analyzer tool in our amazing everything money software if you're looking to trade my con on a quicker pace mo will show you the charts and trends so you can trade this in our bid and ask nation our community to a couple guys that own and operate over a hundred million dollars in real estate stocks and multiple businesses and they'll give us a mindset and walk us through the process whether we should be buying or avoiding this company paul mo welcome in boys thank you seth and um i don't know how we're gonna do this but follow us on instagram wherever it is so um let's let's talk about microphone mic runs up a lot today it's um it's up ten percent today they had big earnings right yeah big earnings uh they it it they rose yesterday they're doing well today uh people are very excited about this paul we mentioned uh you know we spoke to manesh prabrai uh in in austin the interview is out guys if you haven't seen it and pabrai is a huge fan of micron paul it's one of his three uh one of his only three uh holdings in his investment at the moment and he's adding more and a lot of our favorites also have micron in their account so what fun is that what fun is that in because i thought i thought his right hand man told us that that they have like 10 holdings yeah you're right now this might not be this is third quarter so maybe this is asked after they've reduced down he's been in love with the cerritos growth properties for a long time now and of course he reduced alibaba so i think as you follow along an interview guys i think you'll see that he is in love with 10 cent i i wouldn't be surprised if 10 cent is on his holdings moving forward last quarter yeah that's one portfolio because look it says 190 million in value he's they they manage about 750 million dollars in value that's what they told us two weeks ago okay anyway keep going on micron last week all right so micron um we've talked about this company before um in the past so let's just get right to the eight pillars go to the exclusive software that we have seth are you sharing it yep go ahead perfect all right let's go micron technologies now what is the affiliation with micron and the new strain of the um mccovid virus their sister sister strains sister companies okay so you're telling me micron technology created the micron actually yeah their earnings jumped because they actually created omicron and now it's allegedly allegedly that's why it's up ten percent okay great too soon all right so 100 billion dollar company um let's see if i can make this a smidge bigger yeah there's a smidge 100 billion dollar company our first pillar we want under a 22 and a half uh five year pe it's currently seven oh sorry 14.9 wow that's pretty low wow yeah that's great that's great pillar number one yeah pillow number two we won a five-year return on investor capital greater than nine percent it's 7.2 not great but still pretty solid um code number three revenue growth so we're going to the income statement of our exclusive software five years ago 20.3 billion last year 27.7 now seth look at this we go from 8 9 16 16 to 12 4 20.3 thirty point four twenty three point four twenty one point i mean this is all over the board in terms of revenue yeah why is that let me go to the cash flow statement and they see they sold anything you know they didn't even know their dispositions hmm that's weird so guys first thing i want to know as an investor is how does such an established company have such big fluctuations in revenue i don't know all right pillar number four we want net income growth over the last five years so i scroll down a little bit further 5.09 to 5.86 and again look at these jumps 5.09 14.1 6.3 2.7 5.86 all right you got to understand why these jumps are happening these are these are immediately going what is going on here but again it's okay as long as we we understand a pattern as to why that is happening all right pillar number five we want shares outstanding decreasing because we don't want the company diluting our ownership we want to own more and more of the business and not own less and less of the business by keeping our shares so five years ago they had we scrolled the bottom of the income statement on our exclusive software they had 1.11 and now they have 1.12 barely higher so it's still an x but not by much pillar number six stuffy we like our debt to be low yep right yeah so what we do we go back to the main page of our exclusive software we go to the five year average free cash flow 3.57 we're gonna multiply that by five that equates to roughly 17.8 billion dollars right here so we want their long-term liabilities to be under 17.8 so we go to the balance sheet in our exclusive software scroll all the way to the bottom 8.49 less than half so they can pay off their debts very quickly right so um i'm initially looking at this going okay we have the cash flow metrics to look at now but pr really really loves this stock so why does he really love his stock anybody have any input no what do you think i have no idea i was like no i mean i look at the i i really don't i look this to me is like the with when buffett bought verizon i just i don't know what he sees buffett loves verizon i i don't know what he sees should we get the free cash flow ball yeah let's go to the free cash flow statement on our exclusive software guys now free cash flow as a reminder is cash from operations unles with that pay dividend and invest back in yourself so we added to our exclusive software this line that gives you the actual free cash flow without you having to do the math we go back five years it was three point four two and last year was two point four four look at the previous year this is choppy what is going on choppy up and down i don't get this so okay i'm looking at like revenue right now and if i if i'm just looking at it in five year blocks 2012 through 2016 the revenue did increase then if you look from 2016 to basically call 2021 it did increase maybe he's seeing and saying okay i really understand this business they over a long period of time they are going to increase it's going to be a wavy ride but maybe he looks at it that way maybe he really i mean we know that really does his he he's very concentrated in his investment so maybe this is one of those ones where he studies the hell out of it and understands exactly why there are these fluctuations and goes with it that way and their debt levels are pretty reasonable they don't have a lot of debt i mean they can their average five-year free cash flows 3.57 so they can pay off their cap their debt in two and a half years or so so i don't know that's it but either way their free cash flow is not increasing because went from 3.42 to 2.44 and our final pillar that by 20 to get a market cap of where we kind of look at and 3.57 times 20 is a little over 70 billion but if you remember market cap was 100 billion so that's an x there too so let's look at this eight pillars tab this is pretty uh ugly yes i'm perplexed i am really really perplexed not even a high return on invested capital in the last five years i mean the debt is low and the five-year pe is low so like you said mo maybe he just looks at it as a total of five but the five-year free cash flow is not good i know the one thing that throws off my thesis is the the cash flow now let's go to stock analyzer tool um everyone's watching guys this stock downloader tool is one of the best parts of our software has been one of those popular this will allow us to make assumptions about the future and determine what we pay for a stock today and maybe there's something that pabrae sees or somebody sees out there in the long term like you said mo of the company so let's do years of analysis let's pick 10.
let's go low middle and high so look at these revenue growth numbers over the last 10 years and that's with no acquisitions yeah i know so i kind of like that a lot guys you remember we looked at the cash flow statement and there were no acquisitions or dispositions based in the last 10 years so i'm going to be conservative and i'm gonna go four six and eight percent revenue growth profit margin um 20 21 22.
look at that free cash flow it's so low hmm man what are they doing let me go back to their free cash flow statement let me go back but i want to sit there and see this is um was it mu oh there we go let's go to their cash flow statement they're free they're capital expenditures but that's a lot of capital expenditure have they been investing they must have been you know what so something i want to look at guys so look at how free cash flow decreased big time sorry because of look at their capital expenditures in the first half this decade in the first you know six years this decade and look at it now it doubled yeah so maybe they're spending a lot of money on new new factories this is something to look at because this could be um theory right here that they're spending a lot of cap they're doing a lot in capital expenditures now for the future and that would also explain the difference between earnings and free cash flow let's do a quick little little scuttlebutt research um micron technology capx expenditures bo do you want to check out their um oh yeah what's going on yeah yeah and if you actually so when did let's go back to and let's look so that started in really 2018 that big jump and i'm over here that's when they got a new ceo so maybe they maybe that that guy changed their ways and that's really what he's what they hired him to do is really make that push into building their business well let's look at their capital expenditure plan maybe you're right moe that's probably it yeah i mean that that date of may 8 2017 i mean that's i don't think that's a coincidence micron promises 150 billion dollars of spending on plants and r d wow would you look at the app so guys the play here might be it's a temporary hit to capital expenditures and it'll also be a future hit to earnings but when earnings are hit capital expenditures will be a lot higher because they've already paid all those capital expenditures off so let's say they double their capital expenditures you can add five billion dollars maybe a year to their free cash flow number average and it becomes eight and a half billion on average at eight and a half billion 100 billion dollar market cap is only 11 times uh 12 times free cash flow and for coming like micron that might be okay so let's go back to our stock analyzer tool i'm gonna provide them with um still do this but i'm gonna give them a higher multiple i'm gonna give them a higher multiple of free cash flow with the lower let's go with 25 28 31 and guys like usual 12 and a half percent desire return because you can invest in an etf and get nine or ten percent so in order to buy an individual company provide some margin of safety do 12 and a half percent analyze button okay all right not bad well before this big jump today it had been right in our middle wheelhouse here and again that's only assuming six percent revenue growth which isn't a huge number guys so that's probably what he sees this is probably what he sees how's the chart of this company let's see how it's been doing uh it's incredible i mean i think just since i think since like october and november it's up from 63 bucks to oh my god 65 90 since october 12th holy cow yeah so that was probably the thesis there he probably bought a lot going hey at 66 dollars a share this company is at that time was probably 70 billion and he thought he was buying 11 or 12 billion a year in future cash flows so i could be incorrect about this but i think he's held this for a very long time how long is a very long time not three months because i think i've looked i think i started looking into pub rise holdings a year ago and i think he held this seth i'm looking here look at my chart can we add this it's a seth and paul favorites the top 10 favorites boom baby so guys why is this something paul favorite go look at every other video about tech and what we first one of the first things we do is we look back at 2000 and we look at the chart and see what the stock was in 2000.
if i hadn't told you if i told you in 2000 that this company that had just hit these huge numbers would be the same price 20 years later or lower you'd have called me crazy now look at it it's the same price now here's the crazy part last year they had 27 billion in revenue let's see what they did in 1999.
oh my god 2.5 billion in revenue 10 times larger and the stock is flat so if i told you 1999 that the company would be doing 10 times more revenue in 20 years where would you have seen the stock price go i'm gonna be the jerk who says this if this doesn't cause you to go hmm and wonder why you're probably gonna have less money than you should in life and that's fine leave the money to me i just look at this going this is exact prime example of how over hype and overvaluation causes problems no matter what happens the fundamental business if you buy the if you buy the right business at the wrong price it is still going to be a bad investment that's all that matters is the price you pay that's it yeah i love when you say that if you guys are interested in getting this software behind paul this financial data if you've been making decisions in the past and you felt alone and you felt on an island investing you can join our everything money community and paul will show you right now so guys we created the software because early on the channel our subscribers wanted to be able to analyze their own companies without having to wait for us to make videos so we just merely made the software and i'm glad it took hundreds of thousands but it is now here you can join it now here's what you get you get everything you saw in the video we just did you get the all of everything in the mobile app this is all mobile friendly carry anywhere you go if you're on the bus anywhere you can use it you get 30 years of financial data you get that stock analyzer tool our most important aspect you get exclusive daily content between one and three videos every single day just from us only for the users of our software you get access to seth moe and i you get all the future growth of the software too which includes real estate calculators stock screeners and most importantly what's active right now you get access to our community of like-minded investors so many people around the world are alone in how they think about investing but in our community over 6 000 people are talking every day in organized chats talking about all of their favorite investments why they look at them why they don't this includes crypto this includes tesla we're not discriminating it's only value it's all types of investing all available for you one dollar a day whatever price you sign up for today is locked in for the future sign up now there are if you sign up right now you get no sales tax for quite a while because we're not big enough yet so as you saw compared to our other competitors we are vastly more cost effective and you get just as much you get more than you get from the competitors so sign up now everythingmoney.com one dollar per day and paul is paul's right uh not only do you can you sign up today you get lock in that price but this goes up every month so those people paying eight dollars from last year are being joined today by all of our new subscribers who are currently paying 30 a month so join today mo let's head over to you and look at those beautiful charts for the people in the bid nast nation what's going on with micron on the charts so obviously micron has gapped up bigly today um about this with this with this wick first of all and with this kind of jump this thing is going to pull back down and it's going to come right back down somewhere in this area of 84 don't be fooled so if you're in this i know you're not seeing this today but take profits on it not only that look at this we have this this opening right here the red line is not crossed over yellow so this means that the trap door is open trapdoor means that there is a higher probability this thing continues in a downtrend which it's technically in right now and the red line starts continuing down here stock price falls back down like i just said so this is there's a high probability that this is going to happen when you see jumps like this on a day of of big exuberance take profits on it that's exactly what you need to do let it make that little pullback and then go ahead and and swing trade it long and if you want to day trade something like this here's my trading view day trading setup not using street smart edge anymore but with that said look for these engulfing candlesticks that happen where you can get into them with good consistent volume and just run them up and just stay in them as as long as this red line is over 80 you could stay in these things or when volume starts to fall off you can hop out but this is a great stock to make money on today you could have made it in the morning guys if you want to jump into the bid destination come join me you get the trading 101 series which is all of these rules that i can give you on you get to learn them on a daily basis you get the employed trader series my saturday weekend seminars every one saturday per month and a discord community of 950 plus people come and join me we will keep you posted on micron uh perhaps we missed the boat paul when it was down 30 percent lower but um an interesting company and obviously um we will take a look at what manesh prabrai uh does uh moving forward in this quarter so keeps posted thanks for watching the video fondle that thumbs up on the way down and we'll see you next time
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