Speaker 1: So, guys, what a month we have just had in the markets, we had that six percent drop where everyone was worried if the stock market would crash. The people who don’t understand investing panicked and sold in the long term. Buyers watched eagerly for more buying opportunities. Since the market crash, we have gone back up three per cent.
And that’s why I recommend being a long term buyer, because anything can happen over the short term. But over the long term, businesses will make money. And if you’re a business owner, a stock owner, you will make money. Anyway, the market correction that we’ve just had does remind us that we own a pricey market. So in this video, I’m going to go with the more conservative stocks. I’m going to go with to quite conservative picks that I believe are going for an attractive price. And one pick that’s a bit less conservative. But I still believe it’s going for an attractive price. And I like the company. Before we start, subscribe to the channel. If you want to learn more about different stocks on the stock market and flick this video, I like if you’re going to keep buying stocks even in a market crash when stocks are cheap. Now, the stock is a great one for anyone who enjoys high dividends, and the good thing about dividends is that they keep getting paid even in a market crash. If the company has quality with a strong balance sheet, and I believe AbbVie is. But first, let’s get into what the company is about. Every ink as a biopharmaceutical company that discovers, develops, manufactures and sells a bunch of pharmaceutical products, biopharmaceutical, that complex word just means a biology medical product. These products are used to cure certain health issues like autoimmune diseases, dermatology and oncology issues. But the three main reasons why I like this company is basically threefold. First, I like the price that it has going for the price is being beaten down into something very attractive. It peaked at one hundred twenty three dollars at the start of this year and ever since then it has kept going down. Now the second reason why I like the stock is because of the dividend that they pay three point eighty four and because the price is so cheap, it means a dividend yield of four point one six per cent. And the third reason why I like this company is because it is a dividend aristocrat.
A dividend Aristocrat is a company that has increased the dividend payouts for 25 consecutive years or more, and everything is a dividend aristocrat. Since it got spun off from Abbott Laboratories, which has been around since 1888, ever since INC has increased their dividends year in and year out. But the stock does come with risks and two of the biggest risks are one, the fact that they rely so much on one of their products called Humira and to regulatory and political risks. The industry has long been criticized for its high prices, and Trump has been looking into this industry and got regulators to revise some certain rules. I like the stock. I’m personally happy with the risk reward balance. I think this is a great stock to own and a market crash and to own before a market crash to help crash proof your portfolio. But let me know what you think of the stock in the comments.
Also, don’t forget that every bank is a dividend aristocrat and these stocks have been in the market since the idea was originated and they have been less volatile. So you’ve got less risk and you’ve got more potential for reward. See, this is a pharmacy health care company, they provide pharmacy care for the senior community, medical supplies, health information and care management products. Now, this is a stock that is very volatile, as you can see over the past year and has been nothing but ups and downs. It recently got there from the market correction of about six point five percent. Now, for me, the main reason why I like the stock is the price tag. Essentially, at the time of making this video, they are selling for price of seventy four dollars, earning two point ninety four PE ratio of twenty five, market cap of seventy five billion, and they pay us all a dividend of two point seven per cent. Now as I said, I like the price of the stock. It’s going for a lot better price the most stocks on the stock market.
So let’s put it into an expected return formula to see what we get. And guys, a lot of you might not understand how this works, but still, I think it is an important exercise to go through. It tells us around the return we can expect to get at a certain price with certain growth rates. I’ll make it quick. So the expected growth rate and free cash flow as 15 per cent current earnings is two point ninety four and the price is seventy four dollars. If we plug this into our formula, you can see that we can expect a return of around nine per cent with the stock. If growth and free cash flows can be achieved. Now, nine per cent might not seem like a whole lot, but it’s slightly better than the market. That’s a health care company which does a lot better than most stocks in a recession because people still need the health taken care of and it’s selling for a nice price. So that’s why I like the stock. But of course, do your own research on the stock and see what you come up with. If you don’t like the company, tell me why in the comments. Now, I’ve done a whole review on the stock, so if you want, check it out, but let’s do a quick synopsis of my overall thoughts on Jaideep Soerjadi is a Chinese e-commerce company. They sell electronics, home appliance products and general merchandise. The business model is very similar to that of Amazon’s core business, so they handle most of the transactions and logistics themselves. This way they can assure customer satisfaction. And now one of the main things that has helped with customer satisfaction is the same day delivery scheme, which ensures quick delivery. And I’m sure Chinese customers love this. Now, the stock has been beaten down lately. If we take a look, the stock has essentially fell from grace. It’s fallen over 50 per cent since the start of the year. So that’s half the price. Now, there are some key reasons why the stock has fell. One, Chinese stocks as a whole have done badly. I’m sure most of you guys will know this. They’ve been beaten up because of the US China trade war. And this has obviously affected Jade in a bad way.
To JD, CEO Richard Lui was arrested and then released on the accusations of rape. Now, we don’t know how true these accusations are. I mean, he was released. But before you buy the stock, make sure you analyze the situation well, or you might want to wait until some further news comes out on the situation. So obviously, this news has helped kill the stock even more. Now, this has left JD Price looking pretty attractive. They’re currently selling for a price of twenty three point three dollars. Obviously, they’re still a growing company. So they are generating negative earnings but have high expected growth. The market cap is thirty three billion dollars, OK? And with a lower price comes a higher expected return. Anyone who knows the formula will know that. So I’ll take you through my expected return calculation. Now for this calculation. We’re going to go with what the management expect and they expect a three to five per cent margin on revenue in the future. They see this and their shareholder statements. So if we have a three per cent margin, we get earnings of a dollar. Twenty six. Right. So this is the earnings model that I used. If they achieve these three per cent margins and the expected growth rate, we can expect a return of just over 20 per cent. Now, the key word is if they have to achieve these margins that they expect and they have to achieve the expected growth rates again, look at my other video on JD to learn a little bit more. Obviously, a twenty per cent long term return is great. But again, the risk with JD are definitely there. I mean, at the moment, they’re not even earning positive profits. But the key with JD is it’s a long term play. It’s definitely not a stock I would want to own for just a month. I mean, if we look at the current pattern, we can see that the stock is going downhill. So the next likely thing it’s going to do in the short term is keep going down.
If you don’t have any patients, don’t invest in the stock. If you don’t understand the risks, don’t invest in the stock. If you’re going to comment below and say the stock did bad over the past month, don’t invest in the stock. I like the stock for November because of its price, not because of its short term expectations. And those are my three stocks for the month of November. If you guys have a favorite stock out there, let me know. I read every single comment. Now, as you guys know, with my stock picks, I like to learn from the best, I’m not just picking these stocks out willy nilly. These are stocks that some of the best investors like as well. So my process is learning from some of the beta investors then seeing if I like the stock as well and then putting it in this video. So with this video alone from the People from the Investors podcast, great podcast about CVS health care stock, I learned from the dividend sensa about Abby and JADI is a stock that I personally am interested in. So that is how I choose my stocks. I think it’s the smartest way of picking stocks.
They’re screening of stocks or another investor that you like and then do your own analysis of them, which I recommend for any investor. Evron, thank you for watching. I’m so blessed to have every single one of you as a viewer. I know that if you’re smart over the long term with your money, compound interest will do amazing things.