Recent Buys Based on DCF & Margin of Safety (ADBE, HRB, PYPL, MSFT, META, HPQ)

I’ve been gradually building positions in a few names based primarily on discounted cash flow (DCF), intrinsic value, and margin of safety. I try to stay disciplined around buying quality businesses when they trade at a discount to reasonable long-term assumptions. Here’s what I’ve been buying recently and why: Adobe Inc. (ADBE) – High Quality at a Discount This is one of my more aggressive adds right now. Strong pricing power and entrenched ecosystem (Photoshop, Acrobat, etc.) High margins, recurring revenue, and excellent FCF generation Market seems concerned about AI disruption, but I think it’s being underestimated how well Adobe can integrate AI into its existing moat DCF View: Assuming moderate revenue growth (~8–10%) and slight margin compression Discount rate ~10% I still get a valuation above current price → margin of safety in the 15–25% range To me, this looks like a temporary multiple compression on a high-quality compounder ___ H&R Block (HRB) – Undervalued Cash Machine Another aggressive position. Boring business, but extremely strong cash flow Consistent buybacks + dividend yield Tax prep is not going away, even with automation DCF View: Low growth assumptions (~2–4%) High FCF yield Intrinsic value meaningfully above current price Feels like a classic value play with a built-in shareholder return engine ___ PayPal Holdings (PYPL) – Turnaround / Speculative Value More speculative, but I think the market may be overly pessimistic. Sentiment is extremely negative Still a massive user base and strong brand in digital payments Margin pressure + competition priced in heavily DCF View: Conservative growth assumptions Slight margin recovery over time If execution stabilizes, there’s upside optionality This is less “pure value” and more mean reversion + sentiment reversal ___ Microsoft Corporation (MSFT) – Quality Anchor I added roughly the same amount here as PYPL. Not “cheap” on traditional multiples But one of the highest-quality businesses in the world Azure + AI integration (OpenAI partnership) adds long-term tailwinds DCF View: Requires lower margin of safety due to quality Durable growth + strong reinvestment opportunities This is more of a “pay a fair price for a great business” position ___ HP Inc. (HPQ) – Stable + Income Smaller position. Low growth, but very predictable cash flow Solid dividend and ongoing buybacks Trades at low multiples DCF View: Minimal growth assumptions Value mostly comes from cash return to shareholders This is more of a defensive/value income play ___ Meta Platforms (META) – Letting Winners Run This is already my largest position (~9%). Initial buys around ~$140 → up over 300% Recently started adding small amounts again on pullbacks DCF View: Strong revenue growth + massive margins Continued monetization + AI + ads dominance Not adding aggressively due to position size, but still see long-term upside. ___ Portfolio Philosophy Focus on intrinsic value via DCF, not short-term price action Require a margin of safety, but adjust it based on business quality Blend of: High-quality compounders (ADBE, MSFT, META) Deep value / cash flow plays (HRB, HPQ) Turnaround/speculative (PYPL) ___ What I’m Looking For Next I’m currently searching for: High FCF yield businesses temporarily mispriced Companies with durable moats but short-term narrative risk Opportunities where the market is overly focused on near-term headwinds ___ Question for the Community What are some names you’re currently finding attractive from a DCF / intrinsic value perspective? Especially interested in: Underfollowed mid-caps Out-of-favor compounders Cash flow machines trading at a discount Would love to see what you guys are buying