A quick glance at Heineken, HCA Healthcare, Molina Healthcare, Booz Allen Hamilton, BellRing Brands, and ZoomInfo Technologies
1) Over the past few days, I've done a "quick glance" at 16 different stocks – thanks in part to suggestions from my readers. Today marks the last day of this series, where I'll take a look at six final stocks.
My next step will be to take a closer look at the ones my readers find the most interesting. Please let me know what you think by e-mailing me here.
In yesterday's e-mail, I wrote about the world's fifth-largest brewer, Molson Coors (TAP), which I think is quite interesting.
So today, let's look at the world's second largest: Netherlands-based Heineken, which trades on the Amsterdam Stock Exchange under the ticker HEIA. In addition to its namesake brand, it owns Amstel, Tecate, Dos Equis, and Tiger Beer.
The stock today is nearly 30% below its peak from three years ago. And it sits at a level it first reached 11 years ago:
Heineken's revenues and profits have stalled out – and even declined a little bit in recent years. Free cash flow ("FCF") hasn't grown at all in the past eight years, averaging 3 billion euros annually.
But the stock pays a decent 2.7% dividend and only trades at 14.2 times this year's earnings estimates, well below its average over the last quarter century of 17.4 times. I would say that's moderately undervalued, but not cheap enough to be interesting.
2) My old friend Michael Burry of The Big Short fame disclosed earlier this month that he was buying hospital giant HCA Healthcare (HCA). In a Substack post (for paid subscribers), he wrote:
My rule is to just buy HCA when it gets to 10-12x earnings.
At that level, there is always some dust-up happening. Earnings disappointed, or some regulation or health care funding problem is coming down the pike. Always something.
And they never matter in the long run because HCA is that good.
The stock did extremely well for 15 years, rising nearly 2,000%. But since it peaked at $556.52 just four months ago, it has tumbled 30%:
HCA's financials are very strong: steady growth and massive FCF, which it mostly uses to buy back stock. As a result, the share count today is half of what it was 15 years ago.
And the stock trades at 12.8 times this year's earnings estimates – half of the market multiple and in line with its long-term average.
3) Burry also owns managed-healthcare insurer Molina Healthcare (MOH), which he posted about on his Substack in December and May. He wrote:
Molina operates at the lowest expense ratio in its industry and focuses on a well-defined customer base it knows very well – those covered by Medicaid programs. This helps it maintain a best-in-class underwriting loss ratio as well... [It has] a federal guarantee of long-term profitability.
The stock today is more than 50% below its peak in 2024 and sits at a level it first reached six years ago:
While Molina's revenue and operating income have grown strongly, FCF is all over the map. And there has been a sharp drop in profits over the past year, which has inflated its price-to-earnings (P/E) ratio.
Using its enterprise-value-to-forward-revenues ratio instead, the stock is trading at 0.2 times. That's below its long-term average of 0.3 times and the 0.5 times it traded at from 2019 to 2024.
4) After reading what I wrote on consulting giant Accenture (ACN) from Monday's e-mail, a couple of readers suggested that I look at another consulting giant: Booz Allen Hamilton (BAH).
The stock is down 66% from its all-time high 20 months ago and hit a seven-year low yesterday:
Booz Allen has grown its revenues and profits nicely, until a modest pullback in the past year. It has almost no capital expenditures and produced $900 million in FCF in the past 12 months. It used two-thirds of its FCF to pay a 3.7% dividend and the rest to buy back stock.
And the stock trades at a mere 10 times this year's earnings estimates, well below its historical average of 17.8 times.
5) BellRing Brands (BRBR) is a company that makes protein shakes, powders, and bars. It took off in 2023 and 2024 due to health and weight-loss trends, but is now facing stiffer competition.
As a result, shares have been obliterated in the past year. They've fallen 85% from a peak of $80.67 in January 2025 to yesterday's close of $11.91:
This was a great growth story, which investors rewarded with a forward P/E multiple of 35 times as recently as a year and a half ago.
But then revenues flatlined and profits tumbled over the past five quarters. Now it trades at only 9.5 times this year's earnings estimates.
BellRing generated $186 million of FCF in the past 12 months and an average of $213 million in the past four years, so it shouldn't have difficulty servicing its $1.2 billion in debt.
6) Lastly, reader Michael F. suggested taking a look at cloud-based software company ZoomInfo Technologies (GTM):
The market is really punishing it because investors think AI is going to replace its data, despite 75% of its revenue being enterprise-level contracts.
Just as with Intuit (INTU) and others, when it comes to business customers, AI is not going to replace the one-throat-to-choke vendors, plus the organizational upheaval such a change can cause – smaller businesses will be even more loathe to change.
This chart is one of the ugliest you will ever see, with the stock down more than 96% in less than five years:
Based on this chart alone, I expected to see financials in full-scale collapse. But instead, I saw that revenues, profits, and FCF have been flat for the past few years. FCF in the past 12 months – and the past four years – was $376 million.
Meanwhile, share repurchases have averaged $477 million in the past three years and were $410 million in the past year. This has reduced the share count by 20% in the past two years.
The main reason for the stock's decline is its P/E multiple. It once traded at 160 times forward earnings. Today, it trades at 2.5 times this year's earnings estimates. That's not a typo – not 25 times, but 2.5 times!
This software business with stable financials has an 87% gross margin, 10% net margin, low capital expenditures, and is trading at 2.5 times earnings. That's pretty interesting...
Again, if you're particularly interested in one or more of these stocks, please let me know in an e-mail by clicking here.
Tomorrow, I'll start taking a closer look at the companies my readers expressed the greatest interest in, so stay tuned!
Best regards,
Whitney