Pat’s Picks – A Hot Real Estate/Technology/Everything Stock

Patrick here on Pat Picks on September the 11th, 2020, and really want to say hearts go out and prayers for everybody that was affected by nine 11, impacted by and all of those people that had to go through it really, really we'd love to offer support of any kind. If you guys want to just reach out a Pat, Pat, [email protected] We'd love to talk with you and give me any support we can So. 

Hey guys, welcome to the show today, Jill, thanks for being a supporter, everybody. That is a supporter. Everybody. That's a fan. That's listening to the show, everybody that helps us. And we appreciate everybody that listens in all 38 countries around the world. I mean really a blessing. So don't want to beat around the Bush any much longer. Let's dive straight into it. So Pat's Picks why is it? It's a new segment I created or I take the stock and I break it down. I break out the good, the bad, the ugly. And we focus on what to look for and what not to look for. 

And the goal is to do within five minutes. We may go over. We may go under, but really just, you know, hitting the ground running because I don't know about you guys. I don't just like sitting in the Washington 20 or 30 minute video on something that can be done at five. So let's go ahead. Cut the chase, get right to it. Also, if your not a supporter, head over to A in the show links, go to Support the show, and please give a support. We don't do ads. We just do straight use the Support and we'd love to feature you in the show. 

Give me a shout out. And I really appreciate you guys, all the guys who have supported us, you guys are awesome. So let's dive into it. So pets pick of the week of nine, 11 and 2020. It is Zillow. Now you may say, Oh, Zillow, Zillow. Oh, the app on the phone that let's you look at houses. Well, not only is Zillow letting you look at houses. There are starting to cut out the middleman and the deal. 

They are starting to cut out the real estate, brokers and agents, and just basically like Carvana sell you a house and then you just go to your house. And I think it's brilliant. I think it's going to cut out the middleman, unfortunately for all the real estate out there. But I think it's a brilliant business model and things are going to work and hate to say it, but cutting out the middleman has always been the name of the game for companies that are big enough. Zilla has a market cap have $19 billion, and I think they definitely can't afford it. 

And so here's one big thing that sticks out to me on Zillow right now is the massive amount of momentum and has it's over the 200 moving average over the 50 day, moving average. And it's hugging the 20 day moving average all the way since back in March. And a lot of socks have done this, but a lot of Sox you are getting corrected right now. However, Zillo is not and want to love about Zillow. Is this a two front Stock its a technology Stock but also a real estate, the stock, excuse me. 

And the biggest thing that sticks out to me there is the fact that both of these are poised to boom and the future with low insurance rates right now that you can go buy a house with like a 2.5% interest rate over 30 years, that's insane. And the Fed's don't play now a raise in the interest rate for years to come. Now this may be detrimental in the future. However, the short term companies like Zillow group are going to definitely benefit from it. And today when the market got corrected, got slim Zillow group stay green is definitely a, you know, definitely hang in there. 

And if you look over here, I had a have a chart of Zillow group in the past year. It's up a 100 in 60% in the past year. And I think it's only gonna keep going higher. Why do I say that? Because what did I just mentioned low interest rates, real estate. It's a stock and it's definitely dominant. And what it does, a lot of people know what Zillo is. What are the Zillow? If you ask somebody, most people can tell you it's a real estate app and it's in my opinion, the best real estate after he is. 

But if you're looking for prices on houses and information, the new, a wonderful job, they like Google for houses. So this is why I love the Stock. Now what I dislike about the stock is it is pretty high, is definitely a little expensive. It may be a little push, you know, definitely a push pretty high here also back in March to April, which was a slaughter, the stock had a massive sell off. And if you look in the past, it's had massive, massive sell offs. I'm not talking like a couple of dollars. 

I'm talking like it went from 65 to like 20 bucks. And the matter of like, I don't know, two, three weeks, I mean, it's really crazy, pretty volatile. I will say that, but any in it is still going up. It's still going up really high. And it has a lot of great things going for it. Last thing about Zillow group, I want to mention here is the revenues. Now what they're doing is, you know, really good. They're doing really good stuff with a revenues, having a great quarters, then a great earnings report and Zillow group is buying houses itself. 

And this is a pretty whack. And then there are selling them through Zillow. So it's definitely working and his revenues were $453 million. Then it's an insane amount of money. And another internet revenues, which was 35% are in sorry, 36.5% of their total revenues. It declined by 13% year over year. And they only made 280 million during the last quarter. 

And this was due to a higher uptake of discounts to partners and they also have premier agent's on Zillow. That's another thing that that is pretty, pretty hot on Zillow is people can be agents. People want to be agents for a Zillow and be listed on there. I mean its really in my opinion, super hot right now. So let's rate this sucker on a scale of one to three and then let's look at it short term versus long term. So short term scale of one to three, I will give it a, I'm gonna say two. 

It's pretty expensive. It's definitely expensive. Its had a really good run, but it may crash soon. I just don't know when, but I think you still have some juice left in It because of the aforementioned factor of interest rates are low buying a house right now is like buying candy. I mean it's really that easy, all like 2% interest rate's on how it is. It's insane. There's not enough houses to go around right now. So I'm in the short term actually. I'd probably say it's a one. 

I take it back. I'm changing. My mind just changed my mind. Pat Picks just got a Real it's a one. It's a one I would, I would definitely say this is a hot Stock to me in my opinion, because you're, comboing a lot of things here. Technology real estate, low interest rates. These are beautiful, great setup for a momentum play. Now in the five year broader a, you know, a longer term kind of investor outlook. If you're looking to invest in it, I would look always at the balance sheet, always at the revenue, always at work, where is the money going? 

Where's the guidance? And so the guidance for third quarter 2020, the revenues are expected to be between 543 million. If I were in to 81 million, which is obviously up from the last reported of 453 million. And you know, obviously the guidance is good. Obviously everything is projected to be higher and everything expected, expect it to be better. And I just really don't see Zillow doing bad. 

And for a while, until this interest rate thing, the dilemma is fixed. It's going to be good. So over the next five years, till 2025, I would say I would give it a to, and this time I'm sticking with the two because if the first start raising interest rates, this is going to make Zillow a lot of real estate unattractive again. And I just can't see us staying at near zero for the next five years. Now we may, we may, but I really don't see it happening. 

I think they're going to raise the interest rate up in the next two to three years for the next five years. I don't really see that becoming a reality. And so that's why I wouldn't make this a strong by, but I also wouldn't say it's not worth it because there is an offset chance that COVID last longer than what everybody anticipates and the feds keep the trace Lowe all the way through 2025. 

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