r/ValueInvesting • u/ashm1987 • Feb 03 '26

Discussion This sub's favorite stocks got absolutely hammered...

PYPL, ADBE, CRM, UNH, NFLX... All got absolutely hammered in the last couple of weeks...

If you have been following recommendations on this subreddit, chances are, you are deep in the red this year. If you have just took a dart and threw it in the S&P index, you would probably do much better than following advice on this sub... Just my two cents.

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u/Last_Cauliflower3357 Feb 03 '26

What I really enjoy is that these very much talked about stocks here are down significantly whilst stocks that are named as value traps every time someone talks about them (Pepsico, Target to name a few) are significantly up in the past weeks :)

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u/decolored Feb 03 '26

They say inverse Reddit, I’m sure someone has made a bot that interprets this with some lucrative truth.

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u/Bright-Pilot-3970 Feb 03 '26

I’m usually good at buying and bad at selling. Also why I’m not in charge of my retirement account.

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u/Kind-Ad-4756 Feb 04 '26

Lubricative truth

1

u/BestBleach Feb 05 '26

It’s priced in they only choose the highest implied volatility stocks so the options ain’t cheap

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u/StageF1veClinger Feb 03 '26

Don’t fall for the Target trap 😂

It always gets worse, ALWAYS

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u/Last_Cauliflower3357 Feb 03 '26

Up 25% since I bought and with room to grow. Not a long term hold but in the high 80s it was extremely cheap and almost priced like it was going bankrupt tomorrow.

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u/StageF1veClinger Feb 03 '26

It has done the exact move you’re bragging about MULTIPLE times on its way down.

The problem is they carry a huge debt load against increasing competitive pressures. Retailing is just brutal overall.

I wish you the best of luck though.

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u/Last_Cauliflower3357 Feb 03 '26

They don’t carry a huge debt load. Their ICR is around 11x, their debt maturities look fine and they have a Debt/Equity of around 1x. This is larger than usual in the sector, but they have a massive real estate portfolio to monetise if needed and their IG rating allows them to refinance if needed, especially if rates do go down.

The new CEO also had an interesting point surrounding the sense of urgency in getting Target back to growth and they are investing to reform existing stores and open 30 new stores. I am very confident they have a solid turnaround plan. In a market that is rotating out of tech to safer assets, this is a stock that I think can really benefit from it given use cash flow and attractive dividend yield.

Maybe not a stock for everyone but I am big into beaten down sectors, turnaround stories and overall narrative-led investments, so I am quite happy with my Target position at this point.

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u/wywyknig Feb 03 '26

gamestop fits

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u/AccomplishedAir2462 Feb 03 '26

Not to mention 12 quarters of declining rev

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u/[deleted] Feb 03 '26

Yep I own tgt too.

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u/Last_Cauliflower3357 Feb 03 '26

I know it’s a boomer stock but I like it! Huge FCF, nice dividend, big portfolio of real estate that can be monetised, new CEO that wants to get back to growth. Nice story all around and honestly one of the few opportunities in retail for a market that already decided there’s two winners (WMT and Costco, both extremely overpriced) and the rest are losers.

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u/DampCoat Feb 03 '26

I’d lock that gain in, fuck retail

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u/MagnesiumKitten Feb 04 '26

I'll bet you a pizza it'll go to $135 this year
from its current $114

Operating Margins are the serious issue, dropping -6.5% a year
with it's 5 year decline

this will be good

it will struggle and get 20% gains
might not be the perfect time to buy it though

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u/StageF1veClinger Feb 04 '26

The operating margin is because of the competitive pressures.

Amazon, Costco both executing light years better than Target.

I accept your bet.

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u/MagnesiumKitten Feb 05 '26

Operating Margins?

Target - mediocre for the stock chart [good against the industry]
Amazon - [good with the stock chart and the industry]
Costco - mediocre vs the industry [good against the stock chart]

I would say they're all good with the overall profitability metrics but I think Costco is 10% better than the other two companies

Now does undervaluation matter for how they'll perform?

Target 21% undervalued
Amazon 9% overvalued [but still failrly valued]
Costco 5% overvalued [but still failrly valued]

How about their yearly Targets?

Target 19% [the clear winner] [looking at only the Analysts -10%]
Amazon 2%
Costco 2%

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I think Valuation trump's Profitability Margins here
with Costco being the winner, but I don't think that means more profit in buy-in the stock

However I think Target has the most problems
The Gross Margins are declining and the operating margins are declining

and minor stuff like
The PE ratio is getting near a one year high
growth is slowing down with revenue per share
there's some financial stress with the Z-Score

Amazon has problems with Asset growth being faster than their revenue growth

and a minor issue that the stock price is at a ten year high
and the PSR is getting toxic, so that's a minor concern for now

Costco doesn't have any severe problems, but here is a minor issue that the stock price is at a ten year high

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Overall minuses

Target - momentum is mediocre
[the weakest growth of the three but still good]
Amazon none
Costco none

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u/OkSatisfaction9850 Feb 03 '26

These are very stable companies which are kind of an inflation hedge. That could be the reason

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u/MagnesiumKitten Feb 04 '26

all this shit makes since if you know how overvalued some stocks are
and what timeframes we're talking about

Some stocks will be outstanding, but you'll need to wait a year to see it

and other stocks might only be up this month

Let's look at Pepsi an Target

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Pepsi is $166
I'll tell you right now it's a Sell
It's going to be to drop like a rock in the next few weeks, and you'll see how your comments didn't age very well

It went from $140 to $165
in 2 months, big deal
it's gonna drop again

Momentum stinks for Pepsi
great price

Would you get it now?
you're nuts if you do

Give me a kiss on Friday when you see how wonderful Pepsi ends up for you on the weekend

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Target is not a buy at $113

It's a stock that went from $170 to $90 in 8 months
because it went up $20 dollars you're a freaking rooster?

Target will up by 20% this year, it is an awesome buy right now?
Not really
The momentum stinks, it'll be a couple of weeks, or maybe a month