Road to a Million

Prelude

My goal is to have a one million $ dollars $ in my stock portfolio within 2 years. Every month (or more frequently) I will be sharing what stocks I am buying after diligent research. I have a balanced portfolio of high growth, value, dividend & ETFs. Feel free to follow me for updates of what I buy. My opinions are my personal opinions and I am not sponsored by anyone. I am 55 years old educated (MBA, PhD) professional with multiple investments real estate & businesses. I invest $2-20K a month in stocks.

Monthly Update

I currently have $413K in my portfolio.

Stocks I have bought in July

Stock # 1 – Ford (F)

Stock Summary

Ford has been delivering impressive financial results recently. In 2022, the company's revenue surged by 16%, followed by an 18.1% increase in 2023, significantly surpassing growth rates from previous years. This uptrend is partly due to the easing of supply chain disruptions that had impacted the industry during the pandemic, allowing Ford to capitalize on higher volumes and prices.

In its earnings announcement for the first quarter ending March 31, Ford's management reaffirmed its guidance, projecting adjusted earnings before interest and taxes (EBIT) to reach $11 billion at the midpoint for this year. Moreover, thanks to reduced capital expenditures, the company now anticipates higher adjusted free cash flow than initially forecasted.

Additionally, Ford's robust financial health is appealing to income-seeking investors, highlighted by the company's attractive dividend yield of 4.7%. This substantial yield contributes positively to potential returns for shareholders.

Strong Financial Performance:

Revenue Growth: Ford has reported strong financial performance in recent quarters, driven by the robust sales of high-margin vehicles like trucks and SUVs.

Cash Flow: The company is generating solid cash flow, essential for sustaining operations, investing in new technologies, and returning value to shareholders through dividends and buybacks.

Electric Vehicle (EV) Initiatives:

EV Transition: Ford is making significant strides in the EV market with new models like the Mustang Mach-E and the F-150 Lightning, which have received positive reviews and strong consumer interest.

Investment in EVs: Ford plans to invest over $30 billion in EV development by 2025, demonstrating its commitment to transitioning towards electric vehicles.

Market Position and Brand Strength:

Strong Market Position: Ford remains a leading automaker globally, with a strong brand and loyal customer base. Iconic models like the F-150 continue to dominate their segments.

Global Reach: Ford's extensive global footprint allows it to capitalize on growth opportunities in emerging markets and diversify its revenue streams.

Dividend Payments:

Attractive Dividends: Ford has a history of paying dividends, making it attractive for income-focused investors. The resumption of dividend payments post-pandemic reflects confidence in its financial stability.

Stock # 2 – SiriusXM (SIRI)

Stock Summary

In the past month, Sirius XM Holdings has seen a remarkable recovery, with shares soaring 36%, far outperforming the market. This resurgence comes after a tough start to 2024, where the stock had fallen by more than a third. However, recent developments suggest a more optimistic outlook for the second half of the year.

Upcoming Reverse Stock Split:

Sirius XM plans to execute a 1-for-10 reverse stock split this quarter, which, while typically viewed negatively, makes strategic sense here. This move will facilitate the long-overdue combination with Liberty Sirius XM Group's tracking stocks, potentially closing in the third quarter. This transaction is expected to clear up investor confusion and elevate Sirius XM's status, making it more appealing to institutional investors.

Valuation and Bargain Opportunity:

Despite the recent surge, Sirius XM's stock remains attractively valued, trading at less than 11 times trailing earnings and its expected $1.2 billion in free cash flow for the year. This offers a compelling investment opportunity in an otherwise inflated market.

Attractive Dividend:

While the stock's recent rise has reduced its yield from nearly 4.5% to 3%, Sirius XM's history of consistent dividend payouts since 2016, with annual increases, continues to make it an attractive option for income-seeking investors. Future dividend increases are likely, especially if the Federal Reserve lowers interest rates.

Pricing Power:

Following Spotify's recent price hikes, Sirius XM might consider raising its rates, which haven't been increased in 16 months. Given its unique content and market monopoly, higher prices could significantly enhance profitability.

Strong Market Position:

Monopoly in Satellite Radio: Sirius XM has a near-monopoly in the satellite radio market, providing a wide range of content, including music, sports, talk shows, and news, which helps in maintaining a loyal subscriber base.

Exclusive Content: The company offers exclusive content deals with popular personalities and sports leagues, attracting dedicated listeners who can't find the same programming elsewhere.

Subscription-Based Revenue Model:

Recurring Revenue: The subscription-based revenue model provides a steady and predictable income stream. This model also allows for potential price increases without losing a significant portion of the subscriber base.

Low Churn Rate: Sirius XM has historically enjoyed a low churn rate, indicating strong customer loyalty and satisfaction.

Growth Opportunities:

Connected Vehicles: The growth of connected vehicles and the integration of Sirius XM in new cars provide a significant growth opportunity. As more cars come equipped with Sirius XM, the company can expand its subscriber base.

Pandora Acquisition: The acquisition of Pandora has allowed Sirius XM to diversify its offerings and tap into the online streaming market, potentially increasing its market share and revenue streams.

Financial Health:

Strong Cash Flow: Sirius XM generates strong cash flow, enabling it to invest in new content, pay dividends, and buy back shares, which can drive stock price appreciation.

Debt Management: The company has been managing its debt effectively, with efforts to refinance at lower interest rates, which helps in maintaining financial stability.

In summary, Sirius XM Holdings appears well-positioned for a rebound, with strategic moves, attractive valuations, and potential improvements in fundamentals all contributing to a positive outlook for the stock.

Stock # 3 – Palantir (PLTR)

Stock Summary

Outside of the "Magnificent 7" stocks, intelligence software provider Palantir recently surged to a new 52-week closing high. The company specializes in developing and deploying platforms used in counterterrorism operations in the United States, the United Kingdom, and globally.

Palantir has exceeded earnings expectations for the past six consecutive quarters. Analysts project that the Denver-based firm will report second-quarter earnings of $0.08 per share in early August, representing a 60% increase compared to the same period last year. The company has consistently delivered an average earnings surprise of 4.17% over the last four quarters.

Despite its volatility, PLTR shares have significantly outperformed the market this year. The stock appears to be completing a cup-with-handle breakout pattern, supported by above-average trading volume.

Strong Market Position:

Government Contracts: Palantir has secured numerous high-profile government contracts, including with the U.S. Department of Defense, CIA, and other federal agencies. These contracts provide a stable revenue stream and highlight Palantir's credibility and expertise in handling sensitive data.

Commercial Expansion: Palantir is expanding its footprint in the commercial sector, signing deals with major companies across various industries. This diversification reduces dependency on government contracts and opens new growth avenues.

Advanced Technology:

Proprietary Software: Palantir's platforms, such as Gotham and Foundry, offer advanced data analytics capabilities that are difficult to replicate. These tools enable organizations to make data-driven decisions, enhancing operational efficiency and effectiveness.

Innovation: The company continually invests in research and development to enhance its software offerings, maintaining a competitive edge in the rapidly evolving tech landscape.

Data-Driven Economy:

Growing Demand for Data Analytics: As organizations increasingly rely on big data and AI for decision-making, the demand for advanced analytics platforms like Palantir’s is expected to rise. This trend positions Palantir well for long-term growth.

AI Integration: Palantir is integrating AI and machine learning capabilities into its software, offering clients cutting-edge tools for predictive analytics and automation.

Financial Performance:

Revenue Growth: Palantir has demonstrated strong revenue growth, driven by new contract wins and expanded services to existing clients. This growth trend is expected to continue as the company scales its operations.

Positive Cash Flow: The company has achieved positive cash flow, indicating its business model's sustainability and its ability to finance growth without relying excessively on external funding.

Stock # 4 – Joby Aviation (JOBY)

Stock Summary

Joby's core business model focuses on developing all-electric aircraft designed for quiet operation in densely populated urban areas. The company aims to generate revenue by offering commercial passenger services through an app-based aerial ride-hailing platform.

To support its development strategy, Joby has secured an exclusive six-year contract to operate air taxis in Dubai and entered into a multiyear collaboration with the U.S. Department of Defense (DoD).

This ongoing partnership with the U.S. Department of Defense (DoD) offers Joby a valuable chance to test the operational capabilities and maintenance requirements of its aircraft before launching commercially.

Financially, Joby is well-positioned, ending the most recent quarter with $1 billion in cash and cash equivalents. However, the company faces a high burn rate, spending $115 million in the most recent quarter. Significant regulatory setbacks could necessitate raising additional capital under less favorable conditions.

Innovative Technology:

eVTOL Leadership: Joby Aviation is a leader in the electric vertical takeoff and landing (eVTOL) space, developing cutting-edge technology that could revolutionize urban air mobility. Their aircraft promises a quieter, faster, and more environmentally friendly mode of transportation.

Early Mover Advantage: Being one of the pioneers in the eVTOL market, Joby has a significant first-mover advantage, with several prototypes already in advanced testing stages.

Strategic Partnerships:

Collaborations and Investments: Joby has secured strategic partnerships with major companies like Toyota and Uber. These partnerships not only provide financial backing but also bring valuable expertise in manufacturing and logistics.

Government Support: Joby has received substantial support from government entities, including funding from NASA and the Department of Defense, which helps in technological development and regulatory approval processes.

Market Potential:

Growing Urbanization: With increasing urbanization, there is a significant demand for efficient, short-distance transportation solutions. Joby’s eVTOL aircraft aims to address this need, potentially capturing a large market share in urban air mobility.

Sustainability Trends: The global push towards sustainable transportation solutions enhances the appeal of Joby’s electric aircraft, aligning with broader environmental goals and regulatory trends.

Strong Financial Position:

Recent IPO: Joby’s recent IPO has bolstered its financial position, providing the necessary capital to advance its technology, scale operations, and bring its aircraft to market.

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