“This company will usher in a new age of online retail for used cars.”
That’s what some “experts” were saying about a company that sold used cars out of a giant PEZ dispenser just one year ago.
But where they saw game-changing innovation, all I could see was a new marketing gimmick … and a downright toxic balance sheet.
Despite that, it was a favorite of the pandemic-bubble speculators … and for all the wrong reasons.
If you know me, you know I’m no speculator. I’m an investor. So while the speculators were busy gawking at the PEZ dispensers … I was looking at the numbers.
And when I looked under the hood, it was clear this company was more story than business.
The company showed a loss of $280 million in 2019. It had no earnings … and was living on borrowed money.
That didn’t matter to the speculators. In March 2020, the stock was trading at $50 or so per share. A year and change later — after it posted a $460 million loss in 2020 — it surged up to $350 a share.
But I knew that 7X surge was based on story, not substance…
So I set my price target … at ZERO.
Today, the stock price is a lot closer to my target — trading around $5.
But it’ll only get worse from here.
Watch the video below to see the worst stock to own in 2023 … and find out which Alpha “A-team” Stock I recommended my subscribers buy instead:
If you prefer to read the transcript, click here.
It’s much easier to figure out the worth of a business than to try picking the latest “disruptor.”
The big money is made by sitting, not trading. Holding a handful of quality businesses, buying at bargain prices and then waiting.
Doesn’t get any simpler than that.
And this bear market is creating so many bargain opportunities for quality businesses.
So to me, this period of time is like manna from heaven. We get to buy more great stocks at even bigger discounts.
We recently added a company that:
- Has a market share 5X bigger than its nearest competitor.
- Generates $1 billion in free cash flow.
- Is buying back shares.
And the stock market is offering us this business at a bargain price.
The tortoise beats the hare, and earnings beat stories.
To get my latest stock recommendation and invest like an owner, click here for the details.
Charles Mizrahi Founder, Alpha Investor
P.S. I’d love to hear what you think!
Did you avoid the Carvana hype? What are you buying instead?
Let me know at BanyanEdge@BanyanHill.com.
P.P.S. If you didn’t catch the first episode of The Banyan Edge Podcast, do yourself a favor and check it out right here.
The big topic this week was the energy market, and I had some BIG thoughts about the con of the so called “Green Energy Revolution” being pushed by the Washington elites right now.
In short, I believe those calling for the death of fossil fuels are about to have a rude awakening.
We’re at the dawn of a multiyear bullish trend for oil that very few investors are prepared for.
My colleague Adam O’Dell is one of the rare exceptions.
He’s going live later this month with a prediction about oil that you might find interesting.
To make sure you see it the moment it goes live, click here and put your name down.