Is ABDE a value stock? What about PYPL?
I see these posts everyday and everyone has their own opinion. I made a post about MU being value when it was trading around $100 and it was generally scoffed at.
Who is right?
I think the biggest problem people have is that they look at individual names and try to determine exactly the right answer for that equity in a vacuum.
Which ends up with people giving strong opinions in either direction.
People need to think more about the thematic reasons why they do or they don't think each are value stocks.
For example. I think fundamentally ABDE is a value stock. I don't think there is an argument it is not. They are growing rev around 10% y/y and are trading around a 10x pe and around a 10x fcf. That is the definition of value.
Now the people who say it is NOT a value stock will say that AI will get better and people and corporations will use LLMs to replace ADBE and their forecasts are wrong and rev will erode enough over time that $200 right now is mispriced. Fine. I'm not here to say that is correct or not. If it is correct, then ADBE will likely trade down and will become a value trap. There are risks in every trade. People should hedge that risk, and not conflate value stock with growth, or speculation, or forecasting out impacts of Ai.
IF the Ai thesis is correct, that also means that other SaaS companies will get decimated and potentially other Ai and Ai adjacent companies will gain tremendous value.
This brings me back to portfolio construction thoughts and simply not putting your foot in the ground on specific names.
A. This isnt a yolo sub so being "wrong" shouldn't matter too much because individual names shouldn't make up a large % of your portfolio.
B. This is a value stock sub and not growth or speculation focused, which is unfortunately the tone of a lot of posts.
C. If you are "wrong" on ABDE and Ai takes over, make sure to have a portfolio that can grow in different scenarios. Be long Ai somehow in growth names (NVDA, AMD, CRWV, BE, ect) or value names (HAL, GOOG, META, ect)
Hope some of these thoughts are helpful.