🤖📈 Top Trade Ideas for July 25

The company has a significant market share in the US and major metropolitan cities, with expectations for further growth. They aim to increase revenue by 30% year-over-year for the next three years. The product is considered superior to competitors, although its advantages are difficult to quantify. The company's forward earnings are strong. However, the stock's volatility is high, making it a risky investment. The product offers convenience and ease of use for restaurant owners. The stock price has become cheaper since IPO and is expected to correct. The company is executing its growth strategy well, and revenue growth is expected. The author predicts that the stock will continue to rise due to the superior product and growth execution. No other restaurant payment programs are comparable to the company's product.

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The author of the article received backlash from bullish investors after writing a bearish article about Tesla. They argue that high multiples on sales and earnings do not mix well with slowing underlying growth trends. Instead, they suggest owning a company with sharply rising growth and a low P/E ratio. They introduce the concept of the PEG ratio, which divides a company's price to earnings multiple by its business earnings growth rates. The author believes that if Tesla is a sell based on its future PEG overvaluation setup, First Solar is a buy. First Solar's business model is focused on producing and selling thin-film solar panels. Their panels are marketed as more costly upfront but offer better efficiency and longer lifespan compared to silicon-based panels imported from China. First Solar's thin film PV modules are competitive due to their affordable, high volume production and low environmental impacts. They deliver more usable energy per watt than conventional silicon-based modules, resulting in a lower levelized cost of electricity. First Solar is expected to benefit from government incentives and tax write-offs, resulting in a stronger operating profit outcome compared to competitors. The approval of the Inflation Reduction Act and other laws passed under the Biden Administration will provide a boost to First Solar's U.S. production. The author believes that First Solar's positive variables will result in a rare jump in corporate profits annually over the next five years. Wall Street analysts project EPS above $20 and total company revenues to increase between 2021 and 2025. First Solar is projected to experience the biggest expansion in profits compared to other top growth-stock picks in America. The author rates First Solar as a Buy and has a 12-month price target of $300, which would be a 50% price advance. They believe that buying First Solar at a low valuation and with above-average growth potential should deliver outsized investment gains.

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Ally Financial is an attractive bank that utilizes technology, maintains conservative reserves, and demonstrates strong profitability. The company reported a strong second quarter with adjusted EPS of $0.96 and ROTCE of 14%. They are raising rates on loans to offset lower net interest margins and are benefiting from competitors exiting the Auto Finance market. Ally has the potential for $100 billion in originations per quarter and has a strong balance sheet with historically good credit performance. They expect their net interest margin to be around 3.4% for the full year, but the author believes it could head closer to 4% in the future. The company is experiencing growth in other income sources such as insurance and credit cards, and their web-based auction platform, SmartAuction, is generating fee revenue and growing significantly. Ally is routing certain loans to partners to collect fee revenue without taking credit risk. Retail deposits and insured balances have increased, demonstrating their strong financial position. They have substantial reserves to handle any economic weakening and exceed regulatory minimums for capital requirements. The author believes Ally is undervalued and trading below its adjusted tangible book value per share. Despite challenges, Ally consistently produces a mid-teens ROTCE and has a cushion to handle credit weakening. The company is making progress in selling additional products and services without taking on additional credit risk. The author believes Ally's normalized earnings are over $4.50 per share and the stock should trade at $45. Investors can benefit from a 4.2% dividend while waiting for the stock's full value to be realized. The current opportunity is created by uncertainty in the economy and potentially higher capital requirements.

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