hi i'm jimmy in this video we're looking
at the top seven value stocks that we
have found coming out of our private
investing community over on discord
we're looking at some large cap stocks
we're looking at some small cap stocks
and we've even got a pretty good
dividend stocks towards the end of the
video but before we jump into those
companies i just want to tell you real
quick about a website that we're
building so right now we've already
built the ability to calculate disc the
fair value of stocks using discount of
free cash flow but the future of the
website the intention is to introduce
many valuation methods that allow us to
value all different types of companies
everything from fast growing companies
to small unprofitable companies
financial stocks lots of places have
trouble valuing financial stocks the
plan is to value as many stocks as
possible we punch in a ticker the
website kicks back the fair value for
that stock right now like i said we've
already got discounted cash flow up and
working you can come over and test that
out if you'd like to i'll leave a link
in the description below as to how to
sign up for that but for now let's jump
over to the top seven value stocks that
we found so this is a piece of the
website that we're building this is the
discounted cash flow calculator and we
can see that our first company is merck
it's a pharmaceutical company and we can
see we get a fair value here of 115
dollars per share that's an upside of
more than 30 percent
we've got a dividend yield of a bit over
three percent and just so we're on the
same page basically the way this works
is we take analyst estimates for free
cash flow we discount those back to
today using our required rate of return
in this case i'm using a nine percent
required rate of return
that gives us our fair value of 115
bucks per share so merck looks like a
company that could be worth researching
more to see if it's something that we
want to add to our long-term investment
portfolio now another company that's
similar to merck sort of a competitor of
merck is pfizer and we can see that
pfizer we get a fair value of pfizer
stock of about 58 per share
again a decent upside they too have a
dividend yield north of three percent
when we look at their debt well we can
see that they have about 40 billion
dollars in debt cash they get about 37
billion dollars in cash that's less than
a dollar per share in debt or net debt
that's debt minus cash and if we want to
take a closer look at their cash well we
can click on this button down here so we
can see that we get about 1.7 billion in
actual cash and cash equivalents 31 or
32 billion in short-term investments
these are investments that they can
quickly convert to cash if they want to
and along those same lines they've got
about four billion dollars in available
for sale securities so that's where we
get those cash numbers if you're curious
if you're trying to find them on the
balance sheet so overall pfizer looks
like a company that could be a good
long-term investment it's got a decent
dividend yield and it is a more
defensive type of investment so from a
value perspective this looks like that
could be there okay now we're jumping
over to a small cap stock in crocs
ticker symbol crox
for this one we get a fair value of 85
dollars per share and that's after we
account for their 46 dollars per share
in debt so that 85 dollars is after the
purge the debt and cash per share if we
didn't think it was appropriate and some
people don't like to include debt and
cash in their calculation well if we
don't this stock is even more
undervalued where we get a fair value of
about 132 dollars per share so overall
if we're looking for a small cap stock
this could be an interesting one to
consider okay now we're jumping over to
another small cap stock although
slightly larger than crocs and that is
the robert half international company
ticker symbol rhi this one we get a fair
value of 98 dollars per share now rhi
actually has cash per share which is our
first company on this list that has more
cash than they have debt so that
actually increases the fair value of the
company you can see the difference
between these two numbers that
ultimately show us
how what the fair value would be with or
without cash and debt but i also think
that it's important to point out here
what happens with these smaller cap
companies many times we don't have
analyst estimates in this case we do
have two analysts estimating the first
two years of our free cash flow numbers
but in year three we don't have any
analyst estimates so ultimately the way
this works is the computer the website
calculate the website will take
previous numbers so historical five-year
numbers for revenue growth
and what percentage of revenue is
converted into free cash flow free cash
flow revenue what is the average over
the past five years and it projects out
numbers going out however many years we
want to go in this case we only need it
for one additional year that's going up
to 2024 and we can see the computer's
estimating 707 million dollars in free
cash flow
well one of the things i like to do to
make sure that that number is reasonable
is compare it to previous years and when
we look at previous years 707 million
seems perfectly reasonable well if
that's the case it looks like this stock
could be a good buy plus for a
relatively small company the stock is
still is actually paying a dividend of a
bit over two percent so hopefully in
time this is one of those companies that
can gradually increase their dividend
okay next up is the stock i've actually
analyzed in the past i'll leave a link
in the description below to the video i
did
for the stock is paypal ticker symbol
pypl we could see we're getting a fair
value of 100 per share so just like it
did back then the stock looks like it is
undervalued right now and that's using
analyst estimates going out the next few
years if we didn't want to include their
cash in debt we end up in practically
the same spot since they only have about
a dollar per share in debt so you end up
with 101 dollars per share pre-debt and
cash so overall looks like paypal could
be an interesting one if it is a stock
that we'd like to own
for the long run okay our next value
stock is the stock i've actually
analyzed in the past and that is general
electric general electric we're getting
a fair value of 106 dollars per share
now it's been a while since i did a deep
dive on this stock and i know that
they've been going through a lot of
struggles recently so i think that this
is one of those that i want to do an
updated video on if you'd like to see me
do an updated video on general electric
please let me know in the description
below in the comments below let me know
in the comments below because this is
one of those they've only got 11 per
share in debt the fair value is at
more than 25
upside this could be one that's worth
looking closer at my biggest question
with general electric is do we think
that they're going to start growing
revenue again if you look down here you
can see that the five-year average
revenue growth is negative
obviously we don't want it to remain
negative if we're going to be long-term
investors here so
this is why i'd like to do a deeper dive
on this stock and if we do
think that the revenue is going to start
growing again this potentially could be
an interesting stock to look at
okay our next stock is actually an
energy stock that pays a decent dividend
and that is energy transfer ticker
symbol et we could see we're getting a
fair value of about 21 bucks per share
and this is a midstream company we in
the oil and gas industry there's
upstream companies that dig for oil and
gas midstream companies that ship the
oil and gas think uh pipelines ships
things like that and then downstream
companies that refine the oil and gas
and then perhaps sell it at a gas
station or something like that
midstream companies are interesting
because they tend to do business
a decent amount it's much more
consistent than
upstream or downstream is because
they're sort of the toll collectors of
the energy industry
no matter what the price of oil is if
oil prices go up oil prices go down they
charge a fee based on how much they ship
how much they transfer around so for a
company like et which is paying a six
percent dividend more than six percent
well this could be one of those
companies that give us a decent dividend
and a decent amount of exposure to an if
to an industry that many of us could use
in our portfolio but also a defensive
version of it and that we're not exposed
to how high oil prices are not exposed
as much as to how high oil prices are so
please let me know in the comments below
which companies you think we should do a
deeper dive on and if you'd like to sign
up to get access to the website and to
our private investing community i will
leave a link in the description below we
got a link right here and thank you so
much for sticking with me all the way to
the end of the video i really do
appreciate it thank you and i'll see in
the next video