Most big tech companies are morphing into Super Apps - Monopolisation. Uber revolutionized the transport industry, and everyone knows how it was done. As of writing this, in the USA Uber has now added Expedia to its services. USA customers can book hotels from the app. What I like about Uber the most is not just the name but the premium feel when using the app.
The reason I don’t conduct in-depth analyses of stocks is that I dislike having 100 reasons to buy something. A tendency to get stuck in the mud, when it’s not going so well, grows, and then you end up losing more than you should.
Simplicity = profitability. Cut it when the main theme changes and move on. Over the past 10 years, the market has closed positively YoY 70% of the time. Opportunities are plentiful.
Let’s get into the Data:
Some of the key takeaways:
Super Cash Machine - Free Cash Flow is sitting at $9.76 Billion, which is a 41% YoY. To put it in perspective, in 2019, they burnt more than $4 billion.
Current P/E is 15.88x but the 3 year average is at 44x. By these metrics, the stock is undervalued, and a reasonable estimate is $105-110 bux in my opinion.
Return On Equity is at 39.93%, which translates to a return of 40 cents to every invested dollar. That’s a whopper.
Altman Z Score translates to: bankruptcy risk using profitability, leverage, liquidity, solvency, and activity ratios. A score of more than 3 means the stock is stable. Uber’s score = 4.08.
I took a buy position at $72.71 - will add if it crosses $80 per share - 10% weighting - and counting on strong earnings. But my main focus is the forward guidance. If we dip below $67.30, I will cut half the position and wait for another buy opportunity later. But won’t close entirely, this stock is a winner and is worth holding through the year, regardless of Summer Doldrums coming up.
Attached below is my chart snapshot on the Weekly timeframe:
Yours Forever, Heavens Banker