Name: 3 Best Stocks to Buy Before The End of Jan 2026
Uploaded: 2026-01-02T10:55:03+00:00
Duration: 1247 s

Speakers

Paul Gabrail — Host / Value Investor

Summary

Paul Gabrail presents three stocks he is looking at to buy early in 2026: Target, Nike, and Sprouts Farmers Market. He frames them as out-of-favor but fundamentally sound businesses trading below his discounted cash flow estimates. He reviews their risks, metrics, and valuation assumptions, arguing disciplined investors should focus on price versus value rather than hype.

Paul highlights a market at all-time highs after a strong 2025 and warns against chasing hype.
Target is presented as beaten down by inventory issues, theft, and consumer pressure but still cash-generative and cheap on his DCF.
Nike is described as down sharply from highs but attractive on a turnaround thesis and 12.5% mid-case DCF return at $57.
Sprouts Farmers Market (SFM) is presented as a high-margin specialty grocer with private-label expansion and attractive value at about $80.
Each stock is run through his DCF analyzer with revenue, margin, multiple, and desired-return assumptions.
He emphasizes margin of safety, returns on capital, strong balance sheets, and long-term business durability.
He teases a separate list of seven stocks meant to beat the Magnificent Seven over 10 years.

Ideas

Paul Gabrail Host / Value Investor 2:27

Target is mispriced despite temporary struggles.

Target has been hurt by inventory problems, theft, consumer pressure, and political noise, with shares down about 25% year-to-date and more than 50% from 2021 highs, but Paul sees the selloff as overdone. It still has real cash flow, over 2,000 stores across all 50 states, more than $100 billion in revenue, a nearly 5% dividend, 14% five-year return on capital, and trades below 15x free cash flow and 12x earnings. His DCF uses 2-4% revenue growth, 3-5% margins, 17-23x terminal multiples, and a 9% desired return, producing a low value of $106, middle value of $170, and high value of $250; at about $95, the mid-case return is about 17.5% including the dividend.

Paul Gabrail Host / Value Investor 10:26

Nike is cheap with comeback potential.

Nike is the world's largest athletic apparel and footwear company, but the stock has fallen from over $180 to below $60, almost 70% from highs and lower than a decade ago, while new CEO Elliott Hill says Nike is in the middle innings of a comeback. Paul points to a 2.75% dividend, 18% five-year return on capital, 42% gross margin, 10% ten-year net margin, and eight green pillars, though free cash flow is depressed. His DCF uses 3-7% revenue growth, 9-12% margins, 19-25x terminal multiples, and a 9% desired return, producing a low value of $50, middle value of $75, and high value of $110; at $57, the mid-case return is about 12.5%.

Paul Gabrail Host / Value Investor 15:00

Sprouts is undervalued high-margin grocery grower.

Sprouts Farmers Market is a high-margin specialty grocer focused on natural and organic foods, with a loyal health-conscious customer base, expansion into fast-growing states like Texas and Florida, and private-label gross margins of 50-60% versus 39% overall gross margin, which could lift company margins to 7-8%. It has only about $2 billion in debt, 400 stores, a goal of 1,200-1,500 stores, and 11-12% returns on capital. Paul previously owned it in the low $30s, lost the shares through covered calls, and now at about $80, his DCF uses 6-10% revenue growth, 5.5-7.5% margins, 16-22x terminal multiples, and a 9% desired return, producing a low value of $96, middle value of $150, and high value of $220, making it attractive again.

3 Best Stocks to Buy Before The End of Jan 2026

Summary

Ideas

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