4 Undervalued Stocks I Plan to Keep Buying
Summary
Daniel provides an update on four core portfolio holdings: Meta, Amazon, MercadoLibre, and Construction Partners. Daniel explains the current cash position involving a new home purchase but emphasizes the intent to buy more of these stocks at current prices. Daniel highlights how AI agents are changing the consumer landscape, particularly with Meta's new Muse app.
Mentioned Stocks
Reasoning: Daniel evaluates the potential risk of AI agents bypassing Amazon's platform but concludes the risk is minimal. Daniel points out that Amazon is building its own AI tools like Rufus and that consumer browsing habits are difficult to break. Daniel maintains that the stock is cheap and remains a core holding in Daniel's portfolio.
Reasoning: Daniel highlights the successful launch of the Meta Muse agentic app, which has reached the top of the App Store charts. Daniel states that the stock is currently trading at an attractive 20 times forward earnings and remains undervalued despite a 19% rally. Daniel views the AI capabilities of Meta as a significant driver for future revenue growth and has been buying shares over the past few months.
Reasoning: Daniel argues that the 20% sell-off in the stock is overblown and largely due to macroeconomic fears rather than fundamental issues. Daniel notes that the business is durable, generates strong free cash flow, and benefits from inflation-indexed contracts. Daniel sees a potential for over 20% annual returns at the current stock price below $100 and has been nibbling on shares recently.
Reasoning: Daniel emphasizes the company's growing dominance in Latin American e-commerce, digital advertising, and fintech markets. Daniel notes that the company is outperforming competitors like Amazon and Walmart in Mexico and possesses superior credit risk management. Daniel believes the business is extremely undervalued relative to its long-term growth prospects of 20% annually.