One of the biggest losers from the Mag 7 this earnings season is Nvidia (NVDA). We called the top for NVDA back in August 2024 and are not surprised to see it fall precipitously after reporting excellent earnings. The narrative that valuation does not matter is being disproved before our very eyes – along with many other false narratives that have plagued our society. If you’ve been following our reports on the company’s stock, you would know that the recent drop in price is still not nearly enough to make the stock attractive.
NVDA is not alone. Crowded trades and overvalued stocks are everywhere. Good stocks are harder and harder to find as the market was hitting new highs. Accordingly, we see opportunity in market pull backs. We see a golden era for stocks over the next couple of years as markets exorcise more false narratives (remember NFTs…haha) and embrace fundamentals again.
Meanwhile, our proven-superior research continues to give you an edge in finding good stocks. We work harder and smarter with our Robo-Analyst AI to scour the markets and the data to identify the stocks, ETFs and mutual funds with the best risk/reward. Our track record proves our research works. The only question is when, not if, you want to raise your game and enjoy the benefits of our research like our other clients.
Speaking of clients, we publish an update to one of our Long Ideas earlier this week.
Below, we present a large excerpt from our latest Long Idea report, available to Pro and Institutional members. You can buy the full report a la carte here.
We’re not giving you the ticker for this pick, but we are happy to share much of our work because we want you to see how good our research is.
This stock offers favorable Risk/Reward based on the company’s:
- consistent top- and bottom-line growth,
- growing patient and hospital numbers,
- strong position as the industry leader,
- high dividend and share repurchase yields on shares, and
- cheap stock valuation.
You need a Professional Membership or higher to view all the content on this page.
Already a member?
Learn more about our research here.
Consistently Growing
This company has steadily grown its top- and bottom-line since 2007.
This company has grown revenue by 6% and net operating profit after-tax (NOPAT) by 8% compounded annually since 2007. See Figure 1. The company has improved its NOPAT margin from 10.2% in 2007 to 11.9% in 2024 while increasing invested capital turns from 1.32 to 1.48 over the same time. Rising operational and capital efficiency drive return on invested capital (ROIC) from 13% in 2007 to 18% in 2024.
Figure 1: Revenue and NOPAT Since 2007
Sources: New Constructs, LLC and company filings
Patient Admissions and Hospital Locations on the Rise
Year-over-year (YoY) in 2024, the company’s:
- same facility revenue increased 7.9%
- same facility admissions increased 4.9%
- same facility inpatient surgical volumes increased 2.2%
- same facility emergency room visits increased 4.9%
Longer-term, the company has grown its admissions (general measure of inpatient volume) YoY in 8 out of the last 10 years.
The company’s total admissions grew from 1.8 million in 2014 to 2.2 million in 2024, or 2% compounded annually. Over the same time, the company has expanded the number of hospitals it operates from 166 to 190. See Figure 2.
Figure 2: Number of Admissions and Hospitals: 2014 – 2024
Sources: New Constructs, LLC and company filings
…there’s much more in the full report. You can buy the report a la carte here.
Or, become a Professional or Institutional member – they get all Long Idea reports.