The Mag 7 just recorded its longest selloff since April 2024. Tesla (TSLA) has been the biggest loser of the bunch, with its stock falling nearly 30% over the past month. Sales in Europe plummeted, full-year sales fell year-over-year for the first time in the company’s history, discounts were placed on Cybertrucks, and one of its autonomous features is being probed by the NHTSA.
Tesla is just one example of an overhyped stock reconciling with the economics of the underlying business. Even without the recent controversy around its CEO, the company has been facing serious competitive threats, namely cheaper and higher quality EV options, for years. It’s about time the market paid attention and unraveled another false narrative.
There are many other false narratives like the ones driving TSLA. We expect the market is getting smarter and will unravel more false narratives as we enter a Golden Era of stock picking, as detailed in the Golden Metric for picking stocks. It is an exciting time to be an investor.
Now, more than ever, diligence matters. As with everything in life, the best opportunities are found through hard work and persistence. That’s what we do best at New Constructs. Check out the research we published this week:
First up, Our Long Idea this week has consistently grown its top- and bottom-line while protecting its strong position as the industry leader. However, its stock remains cheap even after outpacing the overall market.
FREE STOCK pick: enjoy one from our Safest Dividend Yields Model Portfolio here.
We also hosted four Earnings Watch Parties for these companies
- Zoom Communications, Dominos Pizza, Owens Corning,
- Workday, Cava Group, Instacart,
- NVIDIA, Lowe’s, Photronics,
- EOG Resources, Warner Bros., Monster Beverage, and more.
CEO David Trainer recently put together two case studies showing how to apply Expectations Investing to Spotify (SPOT) and Affirm (AFRM). You’ll be shocked to learn the expectations for future profit growth priced into these stocks.
Filing season is here! Our analyst team parsed hundreds of 10-K’s and 10-Q’s in the first short week of this filing season. In this report, we highlight one company that understated its profits by $283 million (26% of GAAP earnings).
On the Model Portfolio front, we published the latest Dividend Growth Stocks Model Portfolio for February.
Links to all our newly published research are below along with a preview for next week’s research.
We hope you have a great week!
Long Idea: A Healthy Business
Members can read the latest Long Idea here.
The Golden Metric Advantage: Our Secret Weapon to Find Undervalued Stocks Missed by Wall Street
This Week’s Earnings Watch Party Replays
Earnings Recap on Diamondback Energy, Zoom Communications, Dominos Pizza, Owens Corning & More
Earnings Recap on The Home Depot, Intuit, Workday, Cava Group, Instacart, and More
Earnings Recap on NVIDIA, Lowe’s, Photronics, Nutanix, IonQ, and More
Earnings Recap on EOG Resources, Installed Building Products, Monster Beverage, Warner Bros., and More
Uncovering Hidden Profits During 10-K Filing Season
David’s New E-Letters:
The Shocking Truth about Spotify’s (SPOT) Valuation
A Terrible Business With An Incredibly Optimistic Valuation
Dividend Growth Stocks Model Portfolio Update for February
Featured Stock in Safest Dividend Yields Model Portfolio February 2025
Danger Zone Podcast: 2/18/25: Why This Audio Service Stock Is in the Danger Zone
Upcoming Research
- New Long Idea: 3/5/25
- Most Attractive/Most Dangerous: Model Portfolio Update: 3/5/25
- Exec Comp Aligned with ROIC: Model Portfolio Update: 3/14/25
- Q&A with our experts and other members of our Society of Intelligent Investors. Join here.