Barons top 10 stocks to buy before the upcoming election

Today, we're diving into a few of these companies, analyzing their potential based on current data and future projections.

First up, Goldman Sachs. It's the largest company by market cap on the list, with its stock up over 25% this year. However, it's important to remember that short-term price movements don’t always tell the full story. As the saying goes, "In the short run, the market is a voting machine, but in the long run, it's a weighing machine." Whether a stock is up or down in the short term doesn't necessarily reflect its true value. If Goldman Sachs were down 25%, would that change your view of the company? It might suggest a potential buying opportunity, but simply being up 25% could also signal overvaluation. The key is to focus on the long-term fundamentals rather than the short-term fluctuations.

Next, we have Progressive Insurance, a well-known name, especially for those of us in Cleveland. Insurance is a necessity—whether for your car, home, or health—and that makes companies like Progressive essential regardless of economic conditions. Even Warren Buffett, through Berkshire Hathaway, has expressed confidence in Progressive's strong underwriting practices, a crucial factor in the insurance industry.

Then there's General Dynamics, a defense contractor. Defense spending tends to be resilient, regardless of the party in power. Politicians may campaign against wars, but defense budgets remain robust because these companies hold significant government contracts. While this may sound cynical, it's a reality that ensures steady revenue for defense contractors like General Dynamics.

SLB (formerly Schlumberger) in oil services, Newmont in mining, and several consumer discretionary stocks like Royal Caribbean, Lululemon, and Sketchers also made the list. It's interesting to note that Lululemon, despite being a high-end apparel brand, has been hit hard recently, which could present a buying opportunity. Sketchers making the list might surprise some, but it shows the diverse nature of this selection.

Now, analyzing these companies is crucial. Overpaying for a "good story" can still lead to poor investment outcomes. The most important factor is how much you pay for a company's revenue stream. If you've visited EverythingMoney.com, you might have noticed that we offer a limited number of daily spots for our Everything Money community and software. These tools are designed to help you analyze companies like the ones mentioned in Barons' list.

We're currently in a transitional phase, expanding our offerings and separating them into different categories. This means that the current comprehensive package we offer will soon be split up. If you've been following us, you know that I initially built this software for personal use, to make better financial decisions. But as our channel and community have grown, it's become more about how we can serve you better. If you join today, you'll be grandfathered in for life with access to all the tools and data, plus every future tool we develop—all at your current price. This is a limited-time offer, so if you're serious about improving your financial decision-making, now's the time to act.

Let's dive into one of the stocks I mentioned earlier: Lululemon. The stock is down significantly, but the company's fundamentals tell a different story. Year-to-date, Lululemon is down 53%, and over the last six months, it's down 48%. Yet, in the past five years, their revenue has nearly tripled, growing from $4 billion to $9.8 billion. Profits have also surged, from $645 million to $1.6 billion. Despite these impressive gains, the stock is only up 33% over the same period. This disconnect between stock performance and company growth highlights the importance of paying a reasonable price for a company.

At its peak, Lululemon's stock was at $516, but it's now down to $238. However, if we look at analyst estimates, we see expected EPS growth of 25%, 14%, 12%, and so on. These numbers suggest that if Lululemon can achieve these growth rates, the company's intrinsic value could be significantly higher. Using our Stock Analyzer Tool, I ran some conservative assumptions—projecting revenue growth of 5%, 8%, and 11% over the next 10 years, with profit margins of 14%, 15%, and 16%. The tool estimates a low price of $166 to $195, a high price of $406, and a middle price of $260 to $280. With the stock currently at $238, if my middle assumptions hold true, you could expect a return of around 10.5% per year, including dividends.

Finally, let's talk about Block (formerly known as Square), the owner of Cash App. Block has transitioned into the Bitcoin space, but I have some reservations about crypto. In my opinion, crypto is more speculative than a true store of value or hedge against inflation. Recent market events have shown that it’s not a flight-to-safety asset. During times of market turmoil, Bitcoin has often fallen more sharply than traditional assets. Block is a $36 billion company with a low return on invested capital and a significant portion of its revenue—43%—coming from crypto. While this could be a great bet if crypto becomes more integrated into society, it's a risky play if crypto's growth falters.

In conclusion, no matter which stocks you're considering—whether it's one of these top 10 or another—remember that long-term success in investing comes down to price relative to value. The best investors focus on buying good companies at reasonable prices and holding them for the long term. If you're interested in learning more about how presidential elections have historically impacted the market, check out our next video. Thanks for your time!

Everything Money is Not an Investment Advisor: Everything Money (including Paul, Mo, and Any other person including, but not limited to, other staff members, guests, personalities, etc.) is not an investment adviser, and it is not registered as such with the U.S. Securities & Exchange Commission or any other state or federal authority under the Investment Advisers Act of 1940 or any other law. The investments and strategies discussed in Everything Money’s YouTube videos and on Everythingmoney.com are not and should not be considered investment advice and may not be suitable for you. They do not take into account your particular investment objectives, financial situation, needs, or personal circumstances and are not intended to be specific to you. Before acting on any investment or strategy discussed, you should always do your own research and make your own independent decision about whether it is suitable for your particular circumstances. You should also consider seeking advice from your own legal, financial, tax, accounting, or investment advisers. Everything Money does not provide such advice.

READ THE FULL DISCLAIMER HERE: https://everythingmoney.com/disclaimer