hey guys how's it going with Andy from Magoo investing happy Tuesday this is actually the
one year anniversary of a major move in the stock market last year when the pandemic first hit this
is when we had a bunch of circuit breakers go off and this was one of my first experiences seeing
how much panic can go into the market when there's a lot of uncertainty so
it's really interesting to see what was happening a year ago and then yesterday we had one of
the weirdest days that I’ve seen on the stock market in a long time usually if you have one
type of stock that's leading the overall market maybe it's a tech stock versus the industrials
you have one that's up like a decent amount like two percent and then the other one usually isn't
down it's usually pretty flat on the day but yesterday we saw the tech stocks being down like
two percent overall and then the Dow jones is up two percent and it was really strange to see one
be up really big and one be down really big so that's going to be interesting to watch and then
woke up this morning and kind of expected things to be going down and no things are up really
big and so I made a video I think it was like two weeks ago talking about stocks that I was looking
to buy if they dipped further and I’m a man of my word one of the stocks that I was watching
came down to the zone that I drew in that video and I bought in yesterday morning so in today's
video we're going to be breaking it down into three parts as I always do and time stamps will
be in the description if you'd like to bounce around to the part that you actually care about
so part one I’m going to be talking about the news events in the recent earnings report that has been
moving the stock up and down significantly as I mentioned this is a stock that was down around
40 percent from its all-time highs after some a mixture of bad news and some catalysts as a
result of the stay-at-home stocks pushing the stock down significantly so I’m going to be
talking about what's happening there and then I’m going to be giving my long-term bull thesis for
the stock because when I buy stock at this point I’m not looking to really swing trade anything at
this point I’m looking to buy into stocks that I absolutely love that I think are at a significant
discount so I’m going to lay out the reasons why I’m very bullish on Peloton Stock (PTON Stock) for
a long term investment then part two we're going to hop on over to the charts because this was a
stock in a trade that was really initiated based off a technical analysis so we're going to hop on
over the charts and I’ll give a reminder to people that missed that video kind of what I was looking
at the charts and see how the price moved that resulted me buying into the stock even though
the overall market was selling off and the tech stocks had been killed recently and then part
three I’m just going to give a summary of how I’m feeling about Peloton Stock (PTON Stock) overall
and just kind of give my thoughts on the overall stock market because march for some reason seems
to have a ridiculous level of volatility in the past two years and so while the VIX index is down
because the stock market is up today things have been wild on the overall market and I think it's
very important to have a plan going forward for how you're going to be playing things also before
hopping into today's video we really appreciate it hit that like and subscribe button as would help
my channel out a lot we're getting close to 10 000 subscribers so thank you all for the support
so Peloton Stock (PTON Stock) went IPO back in September of 2019 and on the day that went public
it fell a pretty decent amount and that's very different than some of the IPO’s we've
been seeing in 2020. just a couple days before Peloton Stock (PTON Stock) went public we had
smile direct club which fell 28% on its IPO date. 2020 was definitely the year of hype and momentum
when it came to IPO’s and from the video that I talked about yesterday the median move on the
first day of an IPO being traded was up 20 so it's very interesting to see that just two years ago
stocks were falling after their IPO date I think about stuff like uber stock and Lyft Stock as well
for those of you that don't know Peloton Stock (PTON Stock) makes high quality fitness products
that we're in a great position to take advantage of the pandemic and the stay-at-home movement
this was a product that was set up very well because they were pretty unknown going into the
pandemic during 2020. there was that ad problem where they put up a potentially sexist ad I think
was like December of 2019 and people were pretty upset about that and the pandemic hits and it's
become one of the biggest stories of 2020. as a result of this stay-at-home movement the stock
was up 430% overall in 2020. and whenever I talk about stocks that have incredible years I always
ask the question is this type of level sustainable and so in today's video I’m going to be laying out
some of the reasons why I think that not only is this level sustainable but I think there's
incredible growth potential for Peloton Stock (PTON Stock) moving forward one of the ways that I
determine if I think a level is sustainable is by looking at the numbers and when you look at annual
revenue it's pretty impressive here's the annual revenue since the company has first released their
numbers since 2017 and every year they've doubled their revenue compared to the previous year so
not only was this a company that was in a great spot to take advantage of the state home movement
they were doing very well revenue wise for the couple years before that as well going along
with their revenue in their last quarter they had their first one billion dollar quarter it's crazy
to think about their one quarter outpace their entire 2019 just crazy to think about and so that
number and last chord was up 128 year-over-year so this is a company that has been aggressively
increasing their revenue over time and they have a track record of doing it while some people may
argue that this was a one-off thing that the pandemic really fueled their revenue growth
I don't necessarily think that way so here's a couple places that I’m watching as the pandemic
eventually eases and people are able to go back to back to gyms and work out outside because that's
kind of been the discussion that I’ve been seeing online is that when the weather starts getting
better people are going to be more likely to just exercise outside one of the things that
I really saw is that right now they're pretty limited on the amount of products that they're
selling right now they have their bike and they're coming out with a newer and cheaper treadmill and
they do have a digital app that allows people to do workouts from home and so that was definitely
a nice boost to the company during the pandemic but as of right now they have 1.7 million fitness
subscribers with the hardware and that number is expected to reach 2.3 million by the end of this
upcoming year so that is a decent amount of people but the reason that I think that this is a company
that's going to do very well in the future is that the company has come out and said that they have a
reasonable goal about hitting 100 million subscribers eventually and so the reasoning
behind that I thought was a very good case for why I like Peloton Stock (PTON Stock) as a long-term
investment the company came on their last earnings report and said that there's close to 200 million
gym goers in the world and they're paying hard money month after month to access inferior fitness
equipment and inferior locations and so this makes a lot of sense so I kind of wanted to look to see
kind of the expectation is that Peloton Stock (PTON Stock) is a very expensive product and I
it's hard to disagree with that but when I looked it up the average gym membership in the us is $58
and when you look at paying for the Peloton Stock (PTON Stock) bike it is over 39 months
you do have that long-term investment but it's 49 a month of a membership it's not too bad and
then you do have to pay for the subscription like 39 a month so it's not the cheapest thing in the
world but if you think of it as a gym membership instead of just paying it as a one-time payment I
think for a lot of people the accessibility not having to drive for me I hate having to defrost
my car in the morning hate having to look somewhat presentable if I could work out from the comfort
of my own home I’d absolutely love that I’m sure there's people that value that just for like $25
a month extra to be able to pay for that so I’m not saying that this is a cheap product by any
means but I think it's very easy to justify this type of purchase and save you time over
the long run about having to actually go to the gym and you know during the pandemic and working
out around a lot of people might be something to consider and so I’ve definitely considered
buying a Peloton Stock (PTON Stock) if I had more cash sitting around but one of the areas that I
see as a potential growth opportunity comes with their acquisition of pre-core this past summer
pre-core has hundreds of patents for gym equipment and as I mentioned Peloton Stock (PTON Stock) is
very limited in the types of products that they've released at this point as of right now they just
have their treadmills and their bikes as of right now pre-core has hundreds of patents that they
could use to release future products down the line and so one of the areas that I’m really looking at
and I saw a couple interesting articles about it is the potential about releasing an elliptical
in the future when I think of Peloton Stock (PTON Stock) I think of the younger demographics people
that are more in touch with the tech side I think having an elliptical compared to the bike or the
treadmill could be more attractive to the older demographic and that would increase the reach of
the company significantly and that would be one of the ways they could get to that 100 million
subscriber level obviously they're still at around 2 million so they still have a long way to go but
I think that's a fantastic opportunity for the company going forward and as I’ve always mentioned
when I talk about Peloton Stock (PTON Stock) is that they have an incredible retention rate of 96%
so when people buy into the company they are always very vocal about how much they like it
and the people that are buying in aren't leaving it so that is a one-year retention rate I got that
question on a previous video that is a one-year retention rate of 96 percent of people paying
for the subscription not just buying the bike and then not ever using it so people are buying
in loving the product and I think there's fantastic growth potential going forward but
I do want to talk about some of the problems that they have been seeing because as I mentioned the
stock fell 40% from its all-time highs and there definitely were mainly two catalysts that have
pushed it down in the past couple months the first reason comes from the overall sell-off that we've
been seeing from the stay-at-home stocks these were stocks that did incredibly well in 2020 and
it makes sense that people are taking profits and moving their money to more conservative locations
you've been seeing the switch from the tech stocks into safer place stuff like the airline stuff that
will bounce back as the economy recovers after the pandemic eventually finishes and so that's why
we've been seeing the Dow jones I was up yesterday and the Nasdaq was down around two percent so
people are moving out of tech and for a company like Peloton Stock (PTON Stock) that was up 430%
in 2020 it makes sense that there has been a selloff compared to its all-time highs
but the area that people have been pointing at as being a bear case for the company
I really don't see it that way the company has been having problems with their supply chain what
that means is that people are putting in orders to buy their products but they're not able to get
the products made and shipped out on time and so there have been a lot of cancellations and people
have been saying that as a potential bear case against a company but when I look at it I think
of it as a really short-term problem the demand is still there people still want the products
it just has to do with problems with the supply chain because of the pandemic and the company
has come out and invested 100 million dollars into air freight and ocean freight to try to
limit the bottleneck that they've been seeing and so yes this investment and freight is going
to hurt them in the short term but I think of this as being an investment for the long term
so as of right now the companies mentioned that's going to hurt their profit margins
I’m okay with that they are trying to invest into their future and while this yes does not look that
great for the short-term revenue for someone like myself that's investing for a long-term position
I think this is just kind of a blip in the road and it allows me to buy in at a significant
discount so while it seems like a bear case on the surface the more that I look at it I don't think
it's that big of a problem because the demand is still there people still want the products
is that they're just not able to get out the products as much as maybe they would have liked
so short term I think it's already been taken into account going into the next earnings report
so I think it's very likely that maybe if they beat those expectations the stock will skyrocket
because of it now that I’ve laid out my bull case and kind of given my response to the major bear
case that people have been bringing up against the company let's hop on over the charts because as I
mentioned this was a trade that I took 95 percent of the way the stock was moving on the charts yes
I would not have taken this type of trade if it was not a stock that I absolutely loved but this
was mainly a technical trade so let's hop over the charts and I’ll talk about what I saw there
okay so here we are looking at Peloton Stock (PTON Stock) stock ticker symbol $PTON and so these are
all lines that I drew out in a previous video so I have not moved them in any way to make my entry
look any better or any worse than it actually is and so I look for areas where the price movement
has justified me put in a support or resistance and so the three important areas that I drew
we have a support around the $100 mark you have a resistance that has been treated
mainly as a resistance but sometimes as a support at the $135 and then you have the all-time high
of around 171 dollars and so those are the three areas that I’m watching right now and so as the
stock was falling based off of the overall market sell-off and the problems of the supply chain
I was waiting for it to come down to this 100 mark and this previous Friday it came down here and
we have this very large candle what this means is that the stock opened at what is this 104 dollars
and then it had an intraday low down at $94 and so you might be asking doesn't that mean that
the support didn't hold up what I look for when a stock is trying to respect a support is I don't
really care what it does during the day I care where it closes so basically what happened is
that the stock opened here came all the way down to an intraday low of 94 and was bought back up
above the support and so this shows me that the stock respected the support perfectly and so I
did not actually see that during the course of the day and so yesterday when things were going I
ended up buying in around the 100 mark and so did not get the best entry overall I would have loved
to buy in around like 96.97 but I’m pretty happy with my entry of 100 and so when I look for these
investments I’m looking for what's the short-term potential and I see that going back up to
the $135 mark which would be a an increase of 38 percent and so when I look below it I see the
potential bottom as being down at like the 80 mark but this is a company that I love for a long-term
investment and if the market continues to sell off and Peloton Stock (PTON Stock) falls with it
I will be continuing to add on the way down but this is what I saw as being a fantastic entry I
had it charted I set an alert and I kind of missed the alert so that is my fault but I did have it
set up and I told myself that I was going to be buying in if that happened and so while I didn't
get the best entry I followed my trade plan and I bought in around the $100 mark so that was the
reasoning for why I decided to buy into Peloton Stock (PTON Stock) stock ticker symbol $PTON this
is somewhat of a risky trade after I bought in the stock did continue to fall further so there was
some risk involved with it and it is definitely risky buying into a tech stock as the tech stocks
have been selling off aggressively but this is a company that I love for a long term investment and
I took a relatively small position if you've been around this channel for a bit I refer to these as
feeler positions because I want to be involved with the company but I don't want to put myself
at too much risk because it is possible that stock continues to fall but based off of the
price movement and the fact that it came down to my support closed above it and then I bought in I
feel pretty good about this trade overall if the market continues to sell off I don't think that
support will hold and will likely continue to fall and I will add to my position the lower it goes so
that's kind of the way that I look at these positions is yes it's going well for right now but
I don't think this movement that we've been seeing is going to be sustainable I expect the
market to continue to sell off and so I was able to open a position make a little bit of profit
and I will continue to add if the market falls so let's summarize the reasons why I decided
to buy in the Peloton Stock (PTON Stock) stock ticker symbol p-t-o-n for a long-term investment
number one and the most important reason is that this was mainly a technical trade
the stock had a very solid support the 100 mark and the stock came down to it as the market sold
off at the end of last week came down to my zone and closed above that so I saw that as being a
potential entry and that's why I decided to buy in it has to do with the fact that I do also
love the company but the technical side of it was one of the main reasons why I decided to buy in
number two was the reasons for the stock falling I don't think as being a huge problem long term
short term is going to be hurting their profit margins because of their supply chain problems
but I don't see this as being a long-term problem to the company the demand is still there for the
products it's just that they're not able to get them out in a timely matter and that will hurt the
company in the short term and I think the 40% drop from the all-time highs is a fantastic discount
number three is I think the sky is a limit for this company from everything that I’ve seen they
have very high retention rate and brand loyalty and the fact that they've acquired the company
pre-core which has hundreds of patents for fitness equipment I think that they're going
to be expanding their product rotation of as of right now they just have the bikes
and the treadmill so I think they're going to be expanding their products in the upcoming years and
I think it's going to allow them to reach markets that they haven't been able to reach in the past
they have expanded to Australia now so now they're reaching more markets which are
going to include more people they have the target of reaching 100 million subscribers they are only
at 2 million right now so they do have a long way to go but I think the sky is the limit for this
company so overall I’m a big fan of Peloton Stock (PTON Stock) and it came down to my zone and I’m
a man of my word if I see a stock that I love coming down to a support and it respects that
support I’m going to be buying in most of the time so I don't know if this is going to be the bottom
of the stock market probably not we've been seeing an incredible level of volatility it's been really
tough to decide which direction the market's going to go so whenever I see an opportunity like this I
like to buy into stocks that I love but I’m still very heavy on cash at this point and I’m very
curious to see what you guys have to say about the overall stock market and when you thought about
my decision to buy Peloton Stock (PTON Stock) ticker symbol $PTON for a long-term investment
thanks for watching this video I appreciate all support and I will see you in the next video