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This MONOPOLY Tech stock could easily double! | Fundamental Analysis of stocks - YouTube
Channel: unknown
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hi everyone welcome to today's video so
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on today's video i am going to do two
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specific things first and foremost i
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will speak about why am i bullish about
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tech stocks especially given current
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economic scenario second i will discuss
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the stock that mr mohinish babrai is
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extremely bullish about it's a monopoly
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tech stock and he feels that it will 2x
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3x in the coming few years so i will
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dissect that stock further and i will
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present my viewpoint along the way i
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will discuss some of the prominent tech
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investing opportunities across india and
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the us so stay tuned on this video and
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let us get started so first and foremost
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let me present my viewpoint as to why am
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i bullish about tech stocks especially
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given the environment right now so if
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you study the current macroeconomic
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scenario which is being played out by
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the russia ukraine crisis and the
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looming impact of the covet crisis there
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are two specific issues that the world
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is grappling the first issue is the high
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inflation issue that everyone is saying
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that in india across the world in the
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u.s inflation is going to be really
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really high so that's a problem for
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every company second people are saying
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that there are going to be supply chain
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issues that companies want to undertake
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manufacturing but they are not able to
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manufacture stuff because the suppliers
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are not supplying enough material to
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them there are extensive shortages
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around semiconductor petrochemicals
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bunch of other different different goods
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that are required for manufacturing but
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if you take a look at the tech sector
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basically tech sector number one is
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somewhat isolated from both these crisis
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to a very large extent i am not saying
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that tech companies are not going to
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suffer because of supply chain
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disruption or inflationary concerns but
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what i'm trying to outline is that the
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impact of these factors on tech firms is
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going to be low number one a large chunk
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of tech companies are b2b based they are
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not selling stuff directly to customers
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so b2b type of companies will have lower
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impact of inflation so that is point
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number one even the brands that are
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selling directly to customers so pick
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the case of apple now apple is a great
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brand similarly samsung is a very good
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brand similarly google or microsoft if
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they are launching some hardware devices
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which are being sold to customers they
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are also excellent brands so these
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brands are not going to get hit by
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inflation a lot again i am saying that
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it's not as if that these companies will
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have zero impact due to inflation but
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the extent to which these companies will
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get hit due to inflation that will be
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low a classic case in point is apple if
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you take a look at its recent revenues
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the revenue numbers have been up the
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stock price has barely fallen why
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because apple caters to top line
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customers prices are already very high
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if inflation is high they will pass on
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the entire price rise to consumers and
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consumers will still choose to buy apple
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so these type of strong brands are going
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to get impacted by inflation the least
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that is precisely what is happening in
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apple's case and a bunch of other tech
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companies final reason here is that the
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profit margins when it comes to tech
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companies is usually very very high now
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if profit margins are high then firms
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have a lot of resilience in terms of
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dealing with any kind of downturn and
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due to high inflationary concerns if
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some tech companies have to absorb a
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little bit of hit in the short term they
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are well prepared to do it so from that
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particular perspective this high
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inflation issue is not going to hit the
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tech market that much compared to other
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sectors in the economy
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second key reason if you take a look at
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supply chain now if you consider even
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something like apple now apple is a
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high-end manufacturer so to say it can
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shift its contract to some other parties
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why because it already has a very high
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profit margin so it can go and give that
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money to its new suppliers to create new
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supply chains very very easily for it
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and that is again the reason why apple
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stock has not taken a hit much that is
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true for majority of the tech companies
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that tech companies a they do not
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require a lot of material to manufacture
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stuff and even in cases like apple where
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they do the profit margins are so high
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that they can pick up that money that
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additional money and continue to
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maintain their supply chain properly and
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smoothly so this is the reason why i
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feel that tech companies are well poised
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and well placed to deal with the current
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pandemic situation and also the
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inflationary concerns that are happening
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in the economy also very recently if you
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check the performance of some of the
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monopoly tech stocks for example alibaba
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have been bullish about the stock i took
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a lot of heat from many of you on that
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stock that alibaba will get listed this
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bad thing will happen that bad thing
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will happen and just a couple of days
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back alibaba in one trading session one
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trading session it grew by 37
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37 it's not a joke the reason why that
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happened was that alibaba is a
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fundamentally sound stock there was
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nothing wrong with a stock like alibaba
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it was deliberately being beaten down by
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running news after news news after news
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news after news but fundamentally from
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an economics point of view there was no
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issue with the stock on a side note many
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of you might now want to take positions
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in alibaba should you be doing it should
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you not be doing it i still feel that
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alibaba should give an uprun even more
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up run but wait for it to consolidate a
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little bit because if a stock has given
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such a massive run up it will come down
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a little bit then you could consider
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aggregating it again this is not an
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investment advice please act as per your
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understanding and your analysis okay so
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now let's talk about the stock that mr
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mohanishwara is very bullish even i am
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very bullish about that stock what is
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the name of the stock the stock's name
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is meta i have made an entire video on
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meta stock and here you can go and check
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it out but i will give you some recent
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updates and also discuss mr munich
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public's viewpoint around meta so let us
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listen to this clip very very quickly
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when i look at facebook is that i see a
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company which is that revenue is not
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going anywhere
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their cash flows are not going anywhere
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i think those are pretty uh solid i
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think the user base is pretty solid so
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if i were to look at facebook i would
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say that
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even with five or ten percent
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annual growth which doesn't really seem
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like a big leap for them to get to the
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stock uh ought to be a double
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at current interest rates so i don't
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have any issue with
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saying that
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you know meta in two or three years
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is an easy double i think that's a
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that's a reasonable bet so there are
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three specific reasons why mr mohanish
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bhabra is bullish on the meta or
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facebook stock first and foremost reason
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is that the stock itself has corrected
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quite a lot and here is a quick recap as
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to how much the stock has corrected by
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so at its peaks meta stock was trading
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at roughly 400 and corrected by almost
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50 percent and now it has started to go
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back up it is very important for us to
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understand why was it that the meta
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stock fell the reason was that the
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monthly average users of meta declined
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it's not as if that it's revenue decline
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it's not as if that it's profits decline
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it's not as if that some of its
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fundamental business line went away it's
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not as if that some of the major goals
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with which meta platform was starting it
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got disrupted no such problems even the
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overall number of users went up but the
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problem was that on the facebook's
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platform the monthly average user
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declined slightly not much slightly and
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due to that change the markets
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overreacted that's my personal opinion
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and the meta stock fell by roughly 50 so
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right now mr mohinish pabra thinks that
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you know what you cannot go wrong with
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the valuation at which meta is trading
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so the stock is deeply discounted and mr
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mohinish babra is a deep value investor
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so he sees a lot of value in facebook
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meta stock now the second key reason why
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mr mohanish babra is very bullish about
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the meta stock is that the ad revenue
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part of meta's growth story it is still
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very much intact and the ad revenues are
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actually growing so let me show you some
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numbers and these are the numbers up
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until the third quarter of 2021. so you
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see this blue line it has been
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constantly going up there has been no
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dip here in terms of the ad revenue part
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of facebook or meta now ad revenues are
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one of the most prominent business lines
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for the facebook's business as you can
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see that the advertisement revenue for
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meta is very much compared to the other
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revenues that facebook has so as long as
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this first segment keeps on doing well
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meta stock is likely to do well and mr
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manish pabra feels that there is
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absolutely no problem in terms of the ad
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revenue business of facebook they have
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long term sticky customers they will
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continue to advertise on facebook and
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for a foreseeable future the ad revenues
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from facebook is not going to go away so
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this business is strong it is deeply
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discounted right now therefore he is
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very bullish also if you take a look at
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the latest result for meta what you will
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see is that the overall revenues have
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gone up both from a quarter to quarter
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perspective and year on year perspective
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and again this proves the resilience of
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the ad revenue business of meta so there
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are absolutely no problem with the stock
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and what mr munich public saying that
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you know what right now if you go and
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buy meta you are getting the meta part
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of the business for free because the ad
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revenue part is already deeply
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undervalued so let me just illustrate
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this point by plotting it graphically so
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here what is essentially happening in
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summary is the ad revenue part is deeply
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discounted so if you go and buy meta now
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this is deeply discounted
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this part is also very resilient and you
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are getting this business for free so
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that is what mr mohinish pabra is saying
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and therefore he considers that if you
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just simply buy this stock just leverage
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and benefit from the ad revenue growth
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your investment will 2x or 3x in the
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coming few years do i agree with this
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the answer is yes is this an investment
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advice the answer is absolutely not
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please research and do your own analysis
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and only reach your own conclusions now
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comes the third and final reason why mr
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munich babra is bullish about it or
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somewhat bullish and little bit
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skeptical about meta and let me cover
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that point it has to do with the future
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business of facebook because facebook
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realizes that ad revenue business good
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it is not going away immediately but yes
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10 15 20 years down the line
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this ad revenue business and web 2.0
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space it is going to take a hit and they
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have to move to a meta worse what is the
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metaverse metavice essentially is a new
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planet that is being created again
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please watch my facebook video here you
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will understand what metaverse is and
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facebook is trying to develop a social
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medias
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now in terms of creating this social
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methods okay great you have created an
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artificial reality virtual reality type
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of a metaverse you need like special
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glasses you need like a special computer
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you need like a special tablet or a
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special mobile phone to access that
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planet now google glasses was one such
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experiment that did not do too well for
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google and mr munich fabric thinks that
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meta might also meet a similar future
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and even facebook slash meta does not
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know what truly metaverse is so let's
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listen to his commentary and then i will
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give you my perspective his opinion at
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the current valuation of around 560
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billion he believes that just the ad
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business will give investors a fairly
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handsome return across the next few
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years but it was interesting to hear
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that he isn't particularly excited about
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the metaverse side of the business in
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fact he says he views the metaverse side
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of the business as kind of an additional
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layer that he's not willing to pay for
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and this is where the discussion got
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really interesting because monish went
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on to start discussing why he thinks the
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metaverse will not see white adoption
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anytime soon and divya had some really
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interesting opposing thoughts
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but let's start at the start monash's
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first main point was the form factor so
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google glass i thought was a
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revolutionary product a big leap forward
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very strong technology so i think when
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you get to the ergonomics and what users
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are looking for if things are even
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slightly off they won't work and i think
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that was the case with
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google glass it was slightly off uh
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whereas something the iphone has been
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right on but
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eventually uh the device will change i
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know it will change and we and mera is
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trying to go in that direction the
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problem is that i believe it the
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revolution is going to come out of
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some guys in a garage i don't believe it
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will come out of facebook so his
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viewpoint is simple that hey if you are
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creating such sophisticated tech
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there is a very high likelihood of
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failure and this innovation might come
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from garages not from facebook or
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companies like facebook necessarily
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might be true but let's hear the other
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side of the argument from divya naren he
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has a solid understanding of tech and he
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has worked quite extensively with the
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winklevoss brothers and i will put a
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snippet here and you can go and check
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out his biography so let us listen to
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what he has to say like a twitter or
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could uh or any of these companies like
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do they have the firepower to develop
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the tech and we're talking about
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sound haptics um obviously the 3d kind
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of immersion immersive experience
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into a form factor that's small enough
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to be adopted by
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you know hundreds of millions of people
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or billions of people that's really hard
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the
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form factor was a huge problem for
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google glass like that's one of the main
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reasons it failed obviously the
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technology was was worse back then but
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when you think about what v2 v3 v4
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of ar glasses is going
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t and when you think that these glasses
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are in a form factor that is already
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iconic right so when they partnered with
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ray-ban or exotica they implanted all of
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this tech into the wayfarer which is the
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most iconic form factor of any sunglass
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in the history of sunglasses you're not
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sacrificing aesthetics when you purchase
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that product you just kind of think
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through okay in a couple years like what
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that next version of that of that
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product is going to look like
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and then you think about like who's in a
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position to develop that like it's not
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that many people right i mean
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they spent over 10 billion last year on
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vr ar
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and everything in reality labs how many
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companies are in a position to do that
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and still have 35 to 40 percent
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operating margins on a consolidated
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basis not that much so divine render
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makes some really interesting points
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number one he says that you know what
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the new age deck ar vr it is maturing
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somewhat it's not the same scenario as
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was the case with google glasses the
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technology itself was very nascent at
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that point
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now the ar vr all these technologies
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have had a lot of adoption taking place
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that's point one point two is that big
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companies like facebook are already
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somewhat ahead in the race if you need
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mass adoption of these products you need
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these companies which can invest a crazy
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amount of money in the r d i definitely
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agree with this viewpoint more because
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the reality labs which is a part of
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facebook it is amping up its r d like
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anything it has invested crazy amount of
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money in terms of research previously
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what used to happen was that when it
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came to these garage oriented
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innovations it was somewhat of a norm
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simply because some new tech was being
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discovered but if that tech has been
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discovered and if it has to be taken to
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masses a big company like facebook slash
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meta or google or amazon is now well
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placed yes that inception of ai or vr
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might happen out of garages but getting
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it to masses is something that a big
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company might be better equipped to do
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so in summary this is what i think about
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the facebook slash meta stock number one
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it is underpriced no doubt about that
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number two there seems to be no
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fundamental problem with the stock per
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se number three the ad revenue business
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is going to stay intact for a
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foreseeable future number four the meta
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part of the business can become its
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growth engine going forward in the
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future simply because of the fact that
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facebook has been early on it no other
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big company is going after the social
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methods the way or the scale at which
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facebook slash meta is doing their focus
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seems to be on that game yes it's very
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likely that the risk profile is very
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high if facebook tries to experiment
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and fails in this social methods
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narrative or if some crypto players take
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a lot of lead in this game then facebook
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stock is going to suffer it's going to
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be volatile but will it fall a lot i
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highly doubt it so there seems to be
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much more upside compared to downside on
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this talk again not an investment advice
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please invest at your own behalf through
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your own research now comes the final
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part of the video that what other tech
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stocks am i bullish about or am i
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considering buying so i'm quite bullish
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about amazon google at this stage as
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well i feel that they are doing amazing
[941]
work in terms of the new acquisitions
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that they are making i will make a
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separate video on the new acquisitions
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that these companies have made but the
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focus seems to be really good there has
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been no dip in terms of the sales volume
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or the growth rate at which these
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companies are growing some key indian
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stocks i feel that something like tcs
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and wipro are also good am i an investor
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in them no why because i invest all my
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tech money either in u.s stocks or in
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the crypto domain but yes there is
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fundamentally no problem with tcs and
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vipro they are also going to benefit
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going forward i don't know about the
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growth rate it's very hard for me to
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predict their business model as of now
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especially with the entire consulting
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game in tech becoming plug and play so i
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don't feel very confident in terms of
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the future growth prospects of something
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like tcs right now the business model
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seems fantastic but i would love to
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learn from you as to what you think
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about the tcs talk i will research more
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and i will present my analysis third and
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finally in india i am quite bullish
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about the gaming company tech stocks for
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example something like delta cop i had
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already built a position earlier and i
[997]
am sitting on a huge pro on something
[998]
like delta cop will i qualify it as
[1000]
technology stock the answer is no it's
[1002]
more of a gaming slash casino stock for
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me i will again study that stock further
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and try to build more position in case
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the opportunity presents itself this is
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again not a buying recommendation for
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something like delta cop the stock has
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already given a lot of run up since the
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time i had made the video last year but
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to cut the long story short this is a
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great time to be purchasing some of the
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tech companies especially the ones which
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are in monopoly domain and specially the
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ones which are making profits and have a
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very clear business model i hope you
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enjoy the video please press the like
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button and i will see you tomorrow
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you
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