Welcome back, everyone, it's time for a portfolio update will be looking at every single position in the story fund and the changes that I've made, I've made some minor changes to reposition my portfolio with the goal of catching up and outperforming the S&P 500 by the end of 2025 that is the goal and so far I'm in a tough situation where down around 13% below spy. So my portfolios, that blue line, the S&P 500 is the red.
Line and ever since that late December sell-off in Tech and high growth multiples, high price to sales, companies, and all the, the money, all the capital moving into into Commodities and to oil companies and to Consumer defensives, right? Like the Kroger's type of stocks, since that transition is happen, this portfolios just struggled, this was a factor rotation, the factors that were rotated was out of growth out of potential upside into defense
This that's what the market did. And ever since that's taken place, my portfolio has trailed the S&P 500 ranging from around 7% to 15% somewhere in there. And even though this looks, you know it looks difficult like I have a lot of ground to make up. The truth is 13% can be made up in a very short amount of time. So I still remain very optimistic that with this portfolio right now. I have a decent chance of
catching up and surpassing spy. You look at it just to Dam up 1.3 1% This thing can really move in either direction quickly, and if you look throughout history, there's some times where I've made up 10% in like, you know, just a couple months, right? A month or two. So the fact that we have until the end of 2025, I think gives me enough time to be able to make up ground here. But let's go ahead and look at the portfolio.
Now, like I said, this is a gross centered aggressive portfolio with what I consider to be world-class companies that I think have the potential to have massive returns to have massive amounts of Free cash flow. They are companies that I think are very difficult to compete with companies that are very difficult to uproot their
position of being a leader. And I'm looking for these companies to buy them on dips, to buy them an opportune times, but over the past six months, it's been very difficult. A lot of these companies have been knocked down, so I'm excited to go through this. We're going to look at every single holding, I'll share my thoughts on them as well as some recent changes. I did to reposition this portfolio. So first off, let's go through some recent changes here. I sold out of three positions.
Two of them are tiny positions that I just kind of sold the remainder of it. And then one of them was a very large position that I exited. And this might look like a big change in my portfolio, but this actually isn't as big of a
change as it seems. So let's go ahead and go through it. The first company that I finally just exited my position entirely was Facebook and luckily enough, I exited this one at a decent profit, I made around 460 dollars on it and the reason that I actually Made money with Facebook is before the huge sell-off in it. I saw news that Mark Zuckerberg was going into the metaverse and
that was his initial focus. And you know, he did a lot of plans that I wasn't really a fan of I didn't really love all these metaverse plans. I didn't get it, I didn't understand it, maybe I'm behind the curve but I took a lot of my profits at that time, right then and then Facebook had its enormous like 30% plunge. So luckily, I I sold most of my position before. That happened. That's the only reason that I'm in the green because the remainder of that position has been a losing position.
Now, in terms of Facebook. Right now, I actually think that it's probably undervalued. I think it's a good company. I think if you're heavy on Facebook, you'll be just fine. So don't take me selling 400 bucks of it as an indication, that the company is going to do terribly. I basically wanted to just get rid of the very small positions and move that into the ones that I have as bigger positions as my
higher conviction. So, I sold out of the remaining four hundred and seventy dollars of my portfolio. Around half a percent. So not a big change there. The next one that I sold completely out of which was also like a point three percent position at this point was
atlassian. And I sold this one at a pretty significant profit so I did lock in a lot of gains on this one and if we bring up the chart here of atlassian, you'll see the over the year, the stock price quickly doubled, it went up into territory that I simply could not justify the valuation of it. So I thought, you know, I'm going to lock in a lot of gains on this one and so 80% of my Ian. That's what I did. It turned out to be a good move because atlassian soon came down
in price. And now that I have around $1400 of gains in that one, I decided to just exit the position until I really want to go back into it heavily. And so I sold out of $334 of just the remaining position. Again, I think I'll asking is a great company. This isn't an indication by me that I'm bearish on the company. I'm simply trimming those very small. You know, point three percent positions, point five percent positions, Now those are the two smallest positions in my
portfolio by far. The next holding that I sold is a very significant position. It was the large twenty one thousand dollar ETF igv and I sold this one at a four thousand dollar loss. So this one actually locked in a loss. Now this might look bad because you might think I'm selling at a loss, but let me explain what I did with this money because it's actually not as big of a change. As it looks. I GV has three Top Holdings that make up a large percentage of this ETF.
Those top Holdings are Microsoft Salesforce, and Adobe, they make up a huge chunk of this ETF. Now, what I did with this money from the proceeds of the sale is I bought Microsoft Salesforce and Adobe with a large chunk of this sale. And then the rest I put into Amazon because I did some back-testing and check this out, a portfolio, that's an even split of Microsoft Adobe in Salesforce Paired the igv performs very similarly, in fact, they go up at the same
times. They go down at the same times, they have a very close correlation to each other but Microsoft Adobe in Salesforce have historically over any time period perform slightly better. So the way that I look at this is almost like a you know a lateral change I sold out of an ETF that holds these three companies as major positions in
to just those three companies. And in the process, this has an immediate tax benefit the The gains that I've incurred for my recent sales, which I have made gains. From my recent sales, are going to incur a tax burden by selling out of igv at a loss and realizing that four thousand dollar loss, I can use that to reduce my capital gains burdened by the end of this year, assuming I lock and more
companies at a gain. And in the meantime, I'm not really selling out of these positions because I'm just moving them out of an ETF into individual Holdings. So, even though this is a lateral change, I have an immediate tax benefit and in my Opinion. I think there's a decent chance that the three companies, Microsoft Adobe and Salesforce will continue to perform very well against IG V, the mixture of those three companies plus the other companies mixed in. So I think it's a good change.
I think I'll have tax benefits from it. It's really not as big of a change as it seems on paper, but that is the last change that I made to my portfolio. Now that we've gone over those changes. Let's go ahead and take a look at my portfolio as it stands right now again it's at a hundred and seventeen, thousand dollars of value with Dollars in the red, which is down around six percent. So it's in the red, it's not where I want it to be but this has been a pretty tough past six
months. Now, let me go ahead and just kind of give an overview of where we are, the big change that I've been making or the big thing that I've been doing to. Reposition. My portfolio is I've grown a higher conviction in Amazon, a much higher conviction in this company, I've been reading everything about it, I've been studying the company I've been looking at a lot of analysis on it. And when I Can all the options of different companies to invest in right now.
I feel like there's a ton of value in Amazon, and I know it has the high P/E ratio, right? The 50 plus PE ratio. But if you really do a deep dive into this company, and you realize the assets that they own, it makes more sense in context. I think the earnings potential for Amazon are enormous. And I actually think that right now, it's one of the deeper value companies in the market, in terms of its ability to pay dividends, do share BuyBacks.
Be highly profitable and show Ridiculous amounts of free cash flow in the, in the brief future. I think it will be within the next couple of years. So Amazon's a company that I've been continually adding to this position, buying more and more of this stock, as it floats around its current stock price. I bought it when it's below.
2700, I bought it. When it's above 3,400, I'll keep buying it. Anywhere within those ranges, anytime its trading around three thousand dollars, I'll continue to buy this stock because in my opinion, I think even on a conservative estimate. It's worth around 4,500. So Amazon has grown to a very large holding in this portfolio right now, it makes up around 40 percent of the portfolio. That's right. 40% in to Amazon. And to put this in perspective,
I took a hit on Netflix, right? This one went down quite a bit. In fact, a lot of my losses are from Netflix. This is a big position I bought into at the wrong time and it took a huge dip because they're their subscriber gains came in way underneath, what was expected? And so this one, I took a big hit on but even with Netflix not performing well over the next three years I could still outperform spy. Even with Ali Baba not performing well over the next three years.
I could still outperform spy. It could still happen. Even with Spotify not performing. Well over the next three years, I could still outperform spy now, if Amazon doesn't perform well over the next three years, I'm not outperforming spy that is just the message here. I can survive if Netflix doesn't perform well, if Ali Baba doesn't perform well and if Spotify doesn't, but I can't survive against the S&P 500, if Amazon doesn't, because this just makes up too big of a position.
I can't recover if Amazon dips 50% and never recovers. If that situation plays out, I've lost the S&P 500 will win. Now, I don't think that situation will play out. Now, if we look at Amazon, I just want to go over a couple things here real quick. If you want a bigger Deep dive, there is a playlist on my channel.
Channel of three hours of content in depth research, that go into different parts of Amazon, overall, big Tech, and valuation goes over the marketplace and how under under earning it is currently with its potential and it goes over AWS and the future growth of that company. So, I would recommend if you're interested or baffled of why I'm buying so much Amazon. I would watch that playlist. It's just in the playlist part of this channel.
Now Amazon's an interesting company because a lot of people don't really realize the Types of businesses. They actually have and what they make money with. For example, many people don't know. The Amazon is in the advertising business.
That's right. They are an ad business like Facebook like Google. In fact, Amazon makes more from advertising then YouTube. So if you're investing in Google because YouTube is growing and you think that ads are good thing and YouTube's going to benefit from that realize that Amazon makes more money from their Marketplace ads than YouTube and they're growing at a Faster Pace. That's something that a lot of people don't realize, that's
just one part of their business. Now, the next thing that I'd mentioned is last, we heard in April of 2021 Jeff, Bezos said that Amazon Prime topped, 200 million members to put that in perspective. Netflix has 222 million members, Costco has 67 million members, so 200 million members is a lot, and Amazon has one of the highest. In fact, it actually is one of the only companies that beats out Costco. In terms of retention rate and
customer satisfaction. Basically a lot of people view their Amazon Prime membership is like a utility bill. They just pay it they don't even know what they're paying. They're going to pay it, no matter what like they have. No thought of ever canceling. It that's how sticky this type of membership is when I see this type of business, I think that it's very difficult for another company to uproot this or disrupt this. I think it will just continue to
grow. The next thing that I'd point out about Amazon is the way that they work, they always go for scale first. First then profitability and you can see this pattern over and over again. They've done the same thing with AWS. They've done it with their Marketplace. They're doing it with their Prime Membership. They're going for scale, they're going for huge amounts of customers, and then they start to turn the wheels on how to monetize, we saw what their Market Place, just over the past
four years. Then make this ad business out of nowhere, that's now surpassing YouTube. Well, now, you can see the Amazon is really bolstering their spend on their Amazon Prime video library. They're competing. With Netflix directly. Amazon, spent thirteen billion dollars on Prime Prime video this year. Netflix, spent 17 billion. So Amazon is catching up to Netflix in spend on their video library. Now, there's differences between Amazon and Netflix and I know this as a Netflix.
Investor Amazon has many ways that they can benefit from their Prime video and ways that Netflix can't, for example, when squid game came out, one of the top-selling items where those values Vans shoes that all of them war with their suit. This was a squid game show, but Vans benefited and Amazon benefited because they sold those Vans shoes. Everybody went online, they bought the Van shoes and that was Amazon benefiting from from Netflix has content.
Now, Netflix is trying to create a shop where they can sell that stuff, you know, in and of itself and try to create that ecosystem. But Amazon has an advantage here. If they create content that's very popular, that feature is intriguing. Intriguing clothing or different things. They can link that potentially with their Marketplace and have crossover sales directly. They could say, Hey you like this show? Here is the shoes that they wear
in this show. Hairs that jacket that everyone's talking about that they were in the show right there on the marketplace, right next to the video. Basically, Amazon has a lot of ways to be able to monetize their content on Prime Video in the future that I think other companies can try to do. They can try to mimic it, but it won't be as successful as Amazon because they have a massive infrastructure Market Place built directly into their
streaming service. All of it is linked and that gives them an inherent advantage. And then, of course, I can't forget to mention AWS, it's grown to a 71 billion dollar run rate. It is a massive company in and of itself. It has around 40% margins, the Tailwind show that this thing will grow for the next at least ten plus years. And I think that most analysts aren't understating its
potential growth. So when I look at Amazon, some people might think Joseph this is you know risky to have 40 percent of your portfolio. And one company, I don't really think it's as risky as a lot of people think, because I've you Amazon, not as just one company, but I view it as a huge advertising business with their Marketplace ads, making up 20 to 30 billion dollars. I view it as a Prime subscription video business, that has 200 million plus
subscribers. That's like Costco, you know, and Netflix and then I view it as AWS which has a 71 billion dollar run rate. It's in web hosting almost an indestructible business model. I view it as a lot of Different companies, linked together under one company, kind of like a tech version of Berkshire Hathaway. Now, if we look at the fundamentals using qualtrics insights, this is a website that's available. As part of the patreon, we can get an idea of how the numbers look for Amazon.
It's currently out of one point. Five seven billion dollar market cap or trillion dollar market cap. Rather it has a PE ratio of 54. So that's the part that deters a lot of investors again. I think the Amazon games, the bottom line, they don't spend a lot of their cash flow to the bottom line. They just throw it in. Other projects and reinvestments. I think if they wanted to, they could bring this down drastically. I really think so.
I think overnight, they could Amazon is a Growth Company. Some people say, the growth is slowing. Consider the fact that from 2022, 2021, Amazon added more general merchandise value than what Target revenues in an entire year. So just in one year of incremental increases Amazon added, a full Target worth of general merchandise value. That's How much they added just last year. So the company is growing in one year, they grew a targets worth of growth.
The ibadah shows steady growth as well. Now here's an interesting thing, Amazon's free cash flow again. This is a one and a half trillion dollar company it was growing. Its free cash flow steadily. Like a company of this size should and then in 2021 during one of their highest growth years, the free cash flow went into the - by fourteen billion dollars so it from positive 26 billion to negative 14 billion. So A lot of investors are like
what's going on here, right? Cash flow is the amount of money they're taking in - their Capital expenditures and it's what's left behind that. So Amazon must have done a lot of capex. A lot of spending in 2021 to throw this number into the - and of course we know that they hired hundreds and hundreds of thousands of new employees.
They open up every single year hundreds of warehouses, they throw more money into spending on different projects that you know there's so many of them we don't have time to talk about all of them. So we don't have the specifics of every single program. They spent their money on a 2021. But what we do know is they
spent a fortune. They spent a fortune on capex, in my opinion, it's very unlikely for them to continue this level of spend throwing their free cash flow perpetually into the - I think that's very unlikely. I plan on seeing this number swing back upwards in the coming years so that's the free cash flow. The net income has grown over time. This number is thrown off a little bit by the ribbon steak. It should be lower than it actually is.
Because the river and steak affected the net income and the earnings per share. And then if we switch over to quarterly, the debts pretty low, at forty eight point seven for the cash, currently continues to climb at 96 billion dollars. So they have a lot of money, they don't pay a dividend and their shares outstanding Are Climbing. Over time, albeit, not by that much. They're just paying their employees.
It's a minor amount of dilution they just announced 10 billion dollars a share BuyBacks and that is a miniscule amount for this company ten billion dollars of BuyBacks. One and a half trillion dollar company not a lot. So I really don't take that into account overall Amazon. In my opinion, again, I think this company has so much profitability potential in the near term and the near future. I think we could see enormous amounts of free cash flow.
So I'm very bullish on it. I think that these metrics will look funny in hindsight, but time will tell. That's a company that I have 40 percent of my portfolio in. Now next up we have Netflix, one of my favorite companies obviously. But so far this one has been a terrible stock. Tone. I have it as 15% of my portfolio, I'm down 9600 dollars and the current value is 18,000 dollars.
So this is one where the story for Netflix basically is that the, the street investors in it were expecting a certain amount of subscriber growth for this quarter.
They're expecting Netflix to say that they're going to grow five million subscribers, Netflix said that they're expecting two million and when you give half or less than half of the expected growth in a forecast that stock tends to fall and unfortunately, I was part of that false I've lost some money so far with Netflix, but I remain bullish on this company.
In fact, after it fell in price, I bought more of the company on the dip, or at least, hopefully, the dip, and then Bill Ackman entered into the position as well. And here we are, we're still invested in Netflix. Now, as of right now, Netflix has a forward P/E ratio of 30:2, so it's not way up there in the astronomically High area. It's come down a little bit more to reality in 32, but it's still an elevated PE. So there's still high.
Stations of this firm. And I think that Netflix has a decent chance of really proving that they're deserving of this higher multiple. Keep in mind that even though the projections were below, what the street wanted the stock is still doing well. Look at the revenue growth, this is a growing firm and it's growing very quickly. That's a good thing for investors in Netflix. The ibadah also looks really good, the free cash flow. We look over annually here. This paints a little bit
different of a picture. The big concern for Netflix has historically been Losing money, they're losing money. They're going to be swamped by debt. They're never going to be profitable. Their business model. Doesn't allow them to ever be free cash, flow generative clearly, they've proven the Skeptics wrong there. They lost money in 2017. 2018, 2019, then they turn positive in 2020. Now, 2020 was unique and that reversed slightly back to barely in the - 130 million dollars in 2021.
But Netflix has reiterated many times, they are going to be free cash, flow positive. Positive from here on out in 2022. This should be a positive number. So we'll be looking for that to be positive in the future and that's the whole idea of buying these companies. Every company that I'm doing research on, I'm looking for how they're going to be a massive free cash flow generative machine.
That's what I'm looking for. So I'm buying Amazon, I might be buying all these companies with these great stories and different aspects. But really, at the end of the day, I want a company that can do a lot of this. A lot of cash flow I think Netflix will get there. I think they're on the verge of turning that corner and going from a money-losing company to a free cash, flow generative company. They've leveraged debt with low interest rates for a long time, to grow their library and to
grow their subscriber base. And now they're turning that corner. So whenever I do analysis on any of these companies, I'm wanting the free cash flow. That's the big thing that I'm looking for because that's what funds paying down debt. Doing share, BuyBacks growing, the cash balance, growing the earnings. Paying dividends right? All of that comes from the free cash flow. So this metric right here is Paramount it's incredibly important. Now let's go ahead and move on the net income.
It's growing over time. Netflix has always had a very quickly growing net income. If we look at the, let's move over to quarterly. If we look at the debt here, Netflix has a reduction in their debt over the last five quarters because they're becoming more free cash flow generative. Now they have fourteen point six nine billion dollars of debt their cash. Gone down a little bit.
They have six billion dollars of cash right now and then if we look at the earnings per share, this is pretty interesting. This Paints the picture of when a company that's been leveraging debt and growing and trying to reach scale finally reaches scale. See how much their earnings exploded late 2017 and they've climbed very rapidly if we move over to annually here. I think this paints a clear picture. Look at this growth in EPS.
This is pretty impressive. Even if you're not a Netflix investor you have Admit that this earnings per share growth is impressive in 2021. They had $11 of earnings $11.24. When I was doing my analysis on Netflix and my discounted cash flows and research on the company.
I came to the estimation that they will have $33 of eps in 2026. So in 2025, by my goal, by by the end of 2025, to beat the S&P 500, I think that Netflix will have a four deep Us of $33 that seems aggressive but I think that they can do it. And on a 27, Ford PE ratio, for example, that is $890 per share. So that's my estimate.
I think that Netflix will be worth around 800 to 900 dollars in 2025, based on a thirty three dollars per share earnings in 2026. Now there's some variables maybe they'll trade at a lower PE than 27, but in my opinion, I think a 27 is a pretty decent multiple on a company. If it has Chained to grow for the next five years. And it really has hundreds of millions of subscribers. So that's my valuation on the company, their shares outstanding have been going up, but it's decelerating.
And in fact, we look over at quarterly hair, their shares have basically topped out and this should start to go down because they announced share BuyBacks. So again they are becoming free cash flow generative. That's the big thing. I'm looking for every one of these Investments, I think Netflix will have enough free cash flow to start doing, share BuyBacks to start improving their What she and improving the standing of their company reducing risk in it. And that's the reason that I'm
investing in this company. Now, after Netflix, just shy of Netflix, we have Google at a 14.7% waiting, so around the same size as Netflix now, nobody's strangers to Google, so I won't go over. Just the basics of the company but if we look at the fundamentals here, Google's basically on paper like almost the perfect fundamental company almost as close as Microsoft, right?
Except it's a lot cheaper than Microsoft on paper so it has nearly Early perfect fundamentals and it's trading at a very reasonable PE ratio a 23. That's the story with the company. You're buying an incredibly high quality company that has multiple monopolies, that continues to grow faster than many smaller companies that has a perfect balance sheet with 140 billion dollars in cash and only
twelve billion dollars in debt. So they're not at risk of any kind of default or anything happening to it, their earnings per share grew rapidly in 2020, which is kind of a concern because Certainly some pull forward, so it's not going to be growing this rapidly in the future, but even at very conservative estimates, they're going to continue to grow and like I pointed out I'm investing in free cash flow looking for highly profitable, free cash, flow generative companies,
they'll be able to use all of this money to continually pay dividends or do share BuyBacks, and in the case of Google, they throw and a share buyback. So they are completely eliminating. Their share count over time and it's pretty dramatic. They've gone from 694 m. Million to 662 million and the course of two and a half years that is a dramatic level of share buyback. So, the bowl case for Google is extremely simple. It's an incredibly powerful well-established Monopoly that's
trading at a 22 PE ratio. Now, moving on, we have Microsoft just under Google with a 9.1% waiting which is ten thousand seven hundred dollars. Now if we bring up Microsoft hair, much like Google, it has Flawless fundamentals. I mean, it's just fundamentally almost the perfect company. If we look at any of them, Tricks are the revenue is growing steadily. It's in fact growing almost perfectly. It looks like it's made up. We have the E better hair. That's growing.
Dramatically free cash. Flow growth is exceptional. Look at this free cash flow in 2020. 156 billion dollars from 2020 which was 45 Microsoft is growing their free cash flow way faster than analysts expect. So if you think analysts can easily do analysis on, big companies like Microsoft, they've been wrong time and time again on the free cash flow. It continues to be Beat analyst, expectations. You look at the net income, that's growing like crazy.
The debts declining over time, they have way more cash than debt. They're growing their dividend over a long period of time. Never they don't have a chance of canceling, the dividend and the shares outstanding is declining as they do rapid share BuyBacks. So again, the fundamentally perfect company. It trades at a slightly higher PE ratio than Google, which I
think makes sense a little bit. You might consider Microsoft and Google on even terms and they should trade The exact same PE ratio, I don't necessarily believe so Google is in the advertisement business, which I think is a little bit more volatile than Microsoft's. Microsoft's is in a lot of subscription businesses which are not volatile at all. So I think investors are slightly giving a premium to Microsoft which I think is warranted.
So Microsoft right now I think is under undervalued. I think the company should be trading mid-30s, multiple that's what I think this company deserves, but that's just my opinion. I think Microsoft is undervalued, and I think that this company will outperform the broader Market from now until the end of 2025. Now after Microsoft, we have Ali Baba at a 5.3 percent holding.
I'm not going to go into this one because I've recently made so much content about it. So if you want to see Ali, Baba just gone view, one of the previous videos, but I haven't sold any of this company. My last purchase of it was in October of 2021. So I haven't been buying it. I haven't been focusing on it anymore. I'm just kind of holding this company and seeing how it plays out. It's 5% of my portfolio, so it's still a decent. Amount. And in my opinion, there's still a decent chance.
This one will make a comeback and I know everyone hates it right now. Everyone disagrees with that. Charlie Munger apparently sold. 50% of the holding in my opinion. I think that skeptical. I think Charlie Munger, this is just my guess, but I think he's just as bullish on Ali, Baba as ever. But regardless there's just so much layered - news on this company that I don't see it. Moving up in the short term.
I think it's going to be it's going to have its stock price suppressed in the short term but over the next five years Years, things, may change. Now, next up, we have Salesforce many Microsoft making up five percent of the portfolio. This is a great company that the market sold off with all the other tech companies. So they kind of just sold this one off in the bucket of the text sell-off. And I think it's a little bit, undeserving, because Salesforce is, it's a very high quality company.
It's not like most Cloud companies. We look at the fundamentals here. The big thing that we're looking for again is a growing free, cash flow. We look at Salesforce and what Sure. Does this paint, this is growing free, cash flow and 2019. They had 2.8 billion in 2020. They had 3.7 billion in 2021, they had four point six five billion. This number is growing steadily. That's the main thing that I'm focusing on is I'm building positions and firms that I think will have this free cash flow
growth for over a decade. Just continual expansion of their free cash flow. Now, Salesforce has leverage cheap debt to buy things like slack. They leverage sheep debt to grow Ow, but they do not need it to grow. They are very much free cash flow generative. They have 11 million dollars of
cash on the balance sheet. Right now, they are doing some dilution as they're paying their developers that way, but I suspect in the future, they'll be a very free cash flow generative company even more so than now, they'll pay down the debt and they'll be doing aggressive, share BuyBacks. I really see that in the future sales force. So in my opinion, I think this company is a steal right now. I'm excited to have it in my portfolio. I think it will outperformed the S&P 500.
Now after that, we have Adobe At a 4.7 waiting. That's $5500. This company has all the things that I just mentioned that I look for it has a massively growing free cash flow. You can see the trends over time, the company has everything you look for growing revenues ibadah free cash flow, net income, very stable and low debt, it's not an indebted company at all. In fact, they have more cash than debt currently.
They don't currently pay a dividend, but they're growing their earnings per share at a pretty substantial rate. You don't see EPS growth like this, that often that is when they switched over to To the subscription model. And then, of course they are actually doing aggressive share buyback. So they have enough free cash flow to basically engineer their earnings for the long-term future and my opinion. Adobe doesn't have that many
real competitors. I've looked at this space and there's some applications that compete with some parts of the company but no company really. Competes with all of adobe just doesn't exist. So I see this company as as outperforming, the S&P 500, the broader index, and I also see it as a very risk kind of off-balance. Like I think the company is going to be very difficult to disrupt, so that's another one that I'm excited to have in my portfolio. Now, we're moving to the next
two. Smallest ones, which are Apple and Spotify. Apple. I have so much content on this one. If you want to see my bull case in apple, go watch any of the videos on both my channels about apples. So I've gone over extensively, the bull case on Apple. I won't go over that right now. Spotify is one. That is just tough. I'll be honest.
This one's a tough one to hold. Let's go ahead and look at the The numbers of Spotify, the company trades at a price to sales of two point seven, two point seven. So investors don't expect much out of Spotify. This is a bottom of the barrel price to sales and they're basically saying this company will never really be profitable in the future, and I think that there's valid Arguments for that. So even though Spotify has continually grown its Revenue, a lot of the revenue is eaten up
by the music labels. So, a lot of it goes to that they are starting to grow podcast which is Higher margin business. So there is some light at the end of the tunnel. The problem is, they're facing off against big Tech. They're facing off against YouTube and YouTube premium. With YouTube music, they're facing off against Amazon, and Amazon music with Audible, and all of their podcasts are buying and they're facing off with apple, with apple music, and apple podcasts.
And the honest truth here is all those companies are so profitable with their other businesses that they could price their music service at zero, they could have them Isaac service perpetually be free and still be fine as a company, just to attract customers Spotify, can't do that. So I look at the potential pricing power that Spotify has.
And I don't think that it's anywhere close to as much as Netflix because Netflix has a lot of unique content, you can't get anywhere else, like the next season, a stranger things. Spotify really doesn't have that much unique content at this point. I think that Spotify is a company that does potentially have a good future.
The are generating some free cash flow but what spot Really needs to do is grow their creator Community, they need to make it, so people can discover podcast, they can discover new creators, and they can grow that Creator Community the same way that YouTube has. And unless they're able to do that and get tons of craters on, with tons of kind of exclusive content on Spotify, the same way that YouTube has done it on their platform. I think this company will
continue to struggle. So that's the reason that Spotify is not a company that I've been continually adding to. I've been adding new money into Amazon and Netflix and Google. And Salesforce and Adobe, I have not been adding it to Spotify. I put my initial investment in this so far, it hasn't turned out. Well, I'm going to let this one ride and see how it goes, over the next five years and see if there's any real developments that I like.
But right now, the timeline is just too long in the company, too far out for the prophets, I'm looking at companies that can generate profits and real free cash flow. A little bit quicker. I think a Netflix is one of them. Obviously, Adobe is, and Salesforce is with Spotify, the prophets are just way out in the future. And I'm a little bit impatient so that one, I'm not selling but I'm just holding in my
portfolio. So that's a portfolio as of now, we have nine Holdings overall, the top three positions, Amazon Netflix and Google make up around 55 percent of the portfolio combined, and then the last six make up the other 45%.
So that's the breakdown. And again, my main focus with every one of these companies, when I'm doing analysis, what I'm looking for are, which companies are going to be able to leverage their their platforms or Or their, their Marketplace, to be able to generate significant upside and their free cash flow. That is a major Focus that I'm that I'm focusing on now, especially moving into higher
interest rate environments. I think these companies will do very well and the companies that I think will actually surprised to the upside with the amount of free cash flow. They'll generate I think are these ones that I have the biggest waiting to Amazon Netflix, Google and Microsoft. These companies already generate a lot of free cash flow while
all but Netflix does. But I think that they'll surprise to the upside I think Netflix And Amazon will generate an incredible amount of free cash flow in the future. So that's the major focus of the portfolio. I think these companies are very hard to disrupt and unroot and compete against. I think they'll be around in ten years even though some of them haven't worked out. If a few of these bets do work out over the next four or five
years which I expect they will. I have a very good chance of actually catching up to the S&P, 500 and surpassing it. So don't count me out yet. I still think I have a chance in this, and if you want to see how this turns out, Out. I'll be tracking this every single week week by week, so, just make sure you subscribed. We can look at this together. That's all for now. I'll see you next time.