Episode #82 – Invest In Companies You Love! Three Of My BEST Picks

 

Companies are on sale right now! In this episode, I dive into why I made these picks, and how you can, too (you may recognize some of the names).

My book, Building Indestructible Wealth: The Six Figure Earners Guide to a Multimillion Dollar Portfolio, launches today! Get your print and audiobook copies and a few other timely insights into what to invest in right now at this link: https://bit.ly/3xjGFQ7.

Do you have a question you would like me to answer on the podcast? Follow me on IG: @indestructiblewealth and send a message, or visit me at www.myindestructiblewealth.com for more resources.

—

Listen to the podcast here

 

Invest In Companies You Love! Three Of My BEST Picks

I’m excited about this episode because there are three companies that I know you love. You probably have their products in your house right now. I love them. Our family loves them and they’re now on sale. On my show, I try to mix it up for you. I give you guests. I bring on specific actionable investments, and I give you a mindset and ways of thinking and being. In this episode, I’m going to give you some specific actionable investments that can move the needle on your net worth.

Value Investing

There are two rules that if you follow, you will see extraordinary wealth over your lifetime. I talk about these in my book. The two rules are live on much less than you earn and invest the difference into assets that you understand, and hold for a long period of time. There are three companies that due to the market pullback are giving us an opportunity to invest in them at very safe valuations. Meaning the company stocks are not overpriced, but at a discount to what they normally traditionally trade at. That’s what value investing is. It’s when you’re picking up stocks of great companies that kick off lots of cashflow and earnings that are trading much lower than what they are normally valued at.

For one of these companies, I’ve been to their theme parks many times. I’ve watched their movies probably hundreds of times. I watched their shows on their relatively new streaming app. In fact, I and my boys watched the premiere of one of their streaming shows. For another, my kids play their gaming system pretty much every day. I wear their headphones every time I go to the gym, and if I’m on the treadmill at home. There are definitely higher quality headphones, better than Beats. In fact, much better. I’ve had two pairs of Beats and one pair of Biz. It’s not even close.

For the third, I’ve been wearing their gear and their shoes since I was six. I didn’t even realize I was wearing their logo on the shirt I have on. My son who rarely compliments me for anything, Tyler, said, “Dad, I love the shirt you have on. It’s cool.” I didn’t know how to take that. Is that sarcasm? No. He was serious. Their basketball star endorsements are two of probably the undisputed greatest of all time. Even my pastor wears their signature shoes up on the church podium when he preaches, and then again wears the shoes on the golf course.

I guarantee that you have purchased products from all three of these companies. You understand what they produce and what the brands represent. I’d be surprised if you didn’t like all three of these companies or if you didn’t love them like our family. On a show like this, I want to help you make safe and smart bets with the bulk of your portfolio. I want to help you invest in things that you understand. You’ll be a proud owner of these three companies that you know will have long-term potential.

Right now, there’s a special opportunity attached to each of these picks. They are about to unlock a treasure trove of digital assets that could send their stock soaring over the next 3 to 5 years. Even if that doesn’t pan out with what I’m about to share with you about their digital assets, you’re still buying great companies with high-quality products and enduring brands that are undervalued. They will rise regardless of where they’re at. I am very confident of that. Let’s get to it. What are we talking about?

Before we dive into the three companies, let’s set the stage for telling you about NFTs and how it is going to help these blue-chip companies. Blue chips are large established companies that got into real growth engines. Companies are realizing NFTs, Non-Fungible Tokens, will allow them to unlock billions of dollars worth of intellectual property that is sitting on their balance sheets. They’re diving into the NFT space.

If you guys aren’t clear on what an NFT is, I’ve gone over this in previous episodes. Look back and you’ll see that essentially, a non-fungible token is a digital asset that you have sole ownership over. The ownership is cemented in the blockchain. It’s indisputable that you are the sole owner of that asset. For example, when you get the title to a property that you buy, you get a set of papers and an email or digital copy as well of that title work, which proves that you’re the owner. That’s essentially the digital version of an NFT.

 

Let’s give you a simple example. Consider a company that has many digital images that could be turned into NFTs. This could be anything from comic book art and magazine covers to famous photographs and movie posters. The value of those digital assets is not sitting on the company’s balance sheets. In other words, nobody’s valuating the company based on its digital storehouse of assets. They’re intangible items that are part of a firm’s IP or Intellectual Property. Each of those images can now be monetized in a very specific way through the non-fungible token process.

Unlocking these assets will be powerful for companies that own them. To better understand how much money this process can generate, I learned that creating NFTs can carry profit margins anywhere from 90% to 99%. Think about it. There are no real costs of production. In addition, digital smart contracts can also generate royalties worth 10% of all future sales of the same NFTs. In other words, you buy this NFT and then in the future, you decide you want to sell it. You’re going to pay a 10% royalty payment to the parent company every time that that asset is exchanged.

These represent an awesome way to unlock real value from these assets immediately at very little cost. This is much better than finding a company with undervalued real estate or some other asset like that or a tangible asset sitting on its financial books. The company doesn’t have to disrupt its core businesses or spin off units to unlock this value. It doesn’t have to sell a building or another important physical asset. Once it sells, you capture that income but it’s gone. It can keep earning more money through royalties even after the initial value is unlocked.

Once investors fully grasped the potential, they’re going to start factoring this into their assessments of these large publicly traded companies, but they haven’t yet. We’re ahead of the curve. To make sure that the value has a high chance of getting unlocked, the research that I went through only considered firms that were already testing the NFT waters with actual offerings. They started looking at each company’s total brand value and assumed that part of that value could get unlocked through selling NFTs. We also know that NFTs often sell for big premiums over their physical counterparts.

Mattel signed a partnership with the WAX blockchain to launch NFTs of its Hot Wheels Garage brand, admitted 40 of these, and sold them at a starting price of $15. Even though the Hot Wheel car generally sells for $1 in stores. That means Mattel got fifteen times the revenue and didn’t even have to spend any money manufacturing the cars, and then it’ll make an additional 8% on secondary markets. That’s the beauty of discovering hidden assets before the rest of the world. You end up buying relatively safe investments with the kind of upside that’s usually reserved for a much riskier place.

The beauty of discovering hidden assets before the rest of the world is you end up buying relatively safe investments with the kind of upside that's usually reserved for much a riskier place. Click To Tweet

Disney

Let’s dive into it. I hope you guys get this. This is huge. The first company, I’ve been to their theme parks and watched their movies. I think you guys probably figured it out. We are talking about Disney. Disney operates a huge range of media companies. They have ESPN and Marvel. Every single Marvel movie that comes out, my kids and I are there. Pixar, Lucasfilm, and all the Star Wars brands fall under Disney, and then ABC television. There are several brands. That gives Disney the 10th most valuable brand portfolio in the world, estimated at $44 billion. The real growth engine will be technological innovation, which is one of the three major initiatives under their new CEO.

They’ve already begun selling these NFTs through a partnership with VeVe. It’s a digital collectibles company. To give you some real-world examples, the NFT of Jafar, the villain in Aladdin, dropped for $20. It’s now being resold for around $60. That’s a 300% increase. Donald Duck NFT is on sale for $169. The golden image of the Partners Statue of Walt Disney with Mickey Mouse dropped for $333. Now it’s up to $11,000. That’s a 3,200% increase.

While these are just small samples, it’s important to understand that it doesn’t cost much to make them. Disney can churn out as many NFTs as it wants. Think about all of those NFTs under the Star Wars and Marvel brands. There are many incredible opportunities and thousands of potential NFTs that could be hit by those two brands alone. There’s a huge amount of collectors out there that will be paying premiums for those.

You can start to see some of the potentials here. It’s easy to imagine the day when customers will purchase NFT tickets to a physical theme park, experience a blend of the real world and digital content during their visit, and also make related purchases across both of those layers as well in the real world, physical world, and digital world. What are we looking at with Disney? Where is it going to go? Disney has traditionally traded at an average price-to-earnings multiple of 29. What does that mean?

You got to get the PE ratio. That simply represents what an investor is willing to pay for $1 of a company’s earnings. For example, at a PE ratio of $20, an investor saying they’re willing to pay $20 for $1 of its earnings or profits. It’s simply calculated by taking a company’s share price and dividing it by its earnings per share. We are looking at just over the next few years, based on its fundamentals and its average P multiple 29, that Disney stock could rise approximately 135% over the next three years. This is without any substantial non-fungible token income at all.

However, Disney’s brand could hit $56 billion by 2025. If it could monetize just 1/10 of that brand as NFTs, it’s adding an additional $16.8 billion to its net income by 2025, almost doubling an already large company. If that happens, we’re going to get a price target of $542. That would be a 367% gain from the stock price now. If it is able to unlock more of its brand value through its NFTs, its stock could be much higher.

Remember, Disney’s total brand value is estimated at $44.2 billion. That’s a huge treasure trove of digital assets waiting to be unlocked. We can take advantage of this oversight from Wall Street and position ourselves before the market awakens to this hidden opportunity. If you want to be disciplined in buying the company up to its buy-up the price which we are suggesting is up to $141 per share. Once it gets over that price, you need to be patient and wait for it to fall back under that price before you were to buy it or don’t buy it. You don’t want to be overpaying for any company or any stock that you buy. That’s number one.

 

Sony

Number two, Sony. This is the company that I buy. My kids have their PlayStation. I had their Sony headphones. They’re much better than Beats. I’ve had two Beats before and both times it had a malfunction. The cloth goes around the speaker and tears off both times. It wasn’t the same. Sony is a much better quality headphone. Sony has businesses throughout the consumer electronics, entertainment, and telecommunications industries. Its gaming division is by far the largest brand. It also has Columbia Pictures, which has the franchises Spider-Man, Men in Black, and James Bond. It owns CBS Records Group, which has artists such as Michael Jackson and Beyoncé. Sony’s total brand value is estimated at $14.5 billion, which ranks 41st in the world.

What is its hidden NFT potential? They are releasing NFTs for legendary artists, Bob Dylan and Miles Davis. Sony is going to develop a range of opportunities for all of our recording artists with a focus on delivering accessible user-friendly experiences for both creators and fans. It partners with AMC to offer 86,000 NFTs to members of its AMC membership programs. AMC is a movie theater company. They were given to people who ordered advanced tickets for the opening of the latest Spider-Man movie.

According to their AMC CEO, “It led the company to sell more tickets in a single night than ever before.” Like Disney, the longer-term value here could be huge especially when you consider the NFT potential related to the company’s gaming platform and music catalog. What are we looking at? Where could their stock go from here? Let’s say, they don’t get this NFT cranking, where are they going to go?

Sony is one of the largest multimedia catalogs in the world, including multibillion-dollar movie franchises, chart-topping musicians, and one of the bestselling video game consoles of all time. By the time it wakes up, we could be seeing a price target of $291 per share. That’s 235% above its level now. That’s essentially tripling your money. A 100% gain is where you double your money. In a 200% gain, you triple your money. The buy-up to the price you want to stick with doesn’t pay over $106 per share for Sony. That’s where you want to be smart and disciplined. Think about, “I don’t want to overpay for any type of company no matter how much I love it.”

Nike

Let’s get to the third and probably my favorite out of the three. I do love Disney because of Marvel and Star Wars themes there. This third company is called Nike. You probably figured it out when I said I’ve been wearing their shoes and gear since I was six. It ranks eleventh in the world amongst its total brand portfolio with a value of $42.5 billion. Most of that’s related to the company sneakers, everything from running shoes to the Air Jordan basketball brand. Nike was growing consistently before the pandemic hit with revenues rising an average of 7% for a full decade.

I had a slight dip in 2020, but the company had an extremely successful year in 2021. They’ve been trying to shift their sales into the digital realm through its Nike and sneakers app. eCommerce sales represent about 21% of Nike’s revenue. Increasing online sales has been a goal of the CEO for several years. Online sales continue to grow rapidly, doubling since 2019. Almost half of those sales came through a mobile app. This all sets the stage for Nike to capitalize on the NFT trend in a major way.

What’s Nike’s hidden NFT potential? You could probably figure it out with brands such as Air Jordans. In addition to that, it’s filed seven trademark applications for the use of Nike and Jordan branding on digital goods, headwear, eyewear, bags, backpacks, and sports equipment. It then moved on to create a new business division called Nike Virtual Studios. It’s part of the company’s incredibly brilliant strategy to create a business solely on virtual products. The virtual goods market is expected to grow at a 22% growth rate over the next three years reaching a potential valuation of $189 billion by 2025. This is a trend that Nike’s tapping into.

The virtual goods market is expected to grow at a 22% growth rate over the next three years, reaching a potential valuation of $189 billion by 2025. Click To Tweet

Oftentimes, Nike’s virtual sneakers sell for more than the real ones. Nike launched its Nike Dunk Genesis Crypto Kicks, which is a collection of 20,000 NFTs. Buyers have been shelling out between 1.5 to 3 tokens for the shoes. It’s like $3,000 to $6,000. One pair sold for $130,000. What is it worth? Where is the stock going? Nike is expected to record revenue of $61 billion in sales by 2025, which would amount to about $8 billion in net income or earnings.

That alone would suggest that the stocks got a 112% upside over the next three years. It’s double your investment dollars over the next three years, which is incredible returns. That doesn’t factor into any NFT business. If the company should have grown its brand value from $42 billion to $47 billion by then, and given the fact that nearly a quarter of Nike’s business is already digital and growing rapidly, coupled with how aggressively Nike’s pursuing NFTs, it’s easy to forecast that the company will be able to convert more of its future brand value into NFT sales than even Disney or Sony. We’re looking at a price target of $1,424 on Nike. That’s a 1,074% gain from its price now.

That could still be too conservative based on the type of value Nike is already unlocking from some of its early NFT projects. Here’s the deal. Nike became a multibillion-dollar global brand by partnering with legendary athletes such as Jordan, Tiger Woods and LeBron James. Its next huge leap will be monetizing those icons and its world-famous swoosh logo through its NFT products.

Wall Street is sleeping on this giant. This won’t hit stay hidden for much longer. As the world enters the Metaverse, Nike is positioned to profit handsomely. You want to be buying Nike up to $149 per share. Don’t pay more than that. Whenever you are reading this, maybe it’s a few months or years from now, I want to make sure that you guys don’t overpay for these companies.

Think about this. Number 1) Do you understand these assets? Number 2) Would you be a proud owner of these companies? Number 3) would you be willing to hold onto these companies for long periods of time and let the growth prospects pay off and play out? If you can answer yes to all three questions, which I know that I can, and I’m not telling you to do what I’m doing. I don’t make any money at all telling you guys what stocks to get. I haven’t made anything from doing this.

I want you to position yourselves to create some indestructible wealth. These are three companies that we could all safely say are going to be around a decade, 2, 4, 5 decades or 100 years from now. We would not be surprised if these even much bigger companies are still cranking out products and services that you and I, our kids, and our grandchildren will love. These are the ones where I’m buying now that the price is right. I’m going to be holding onto these for a very long period of time. What are you going to do?