MU, SZL, PGY: Three Under-the-Radar Stocks With Major Upside

SPEAKER_1 (0:00)

Excited to welcome in our next guest, that's Ed Butowsky. He's a managing partner at Chapwood Investments, and he's got a couple companies on his mind here to discuss. Let's start with the big one here. Maybe we'll walk through it, although this is not an unfamiliar name by any stretch, Ed. We're talking some Micron.

Ed Butowsky (0:20)

Yeah, I mean, Micron is absolutely an animal that I don't think the investment world has seen in recent years. I mean, you have a company that's up about 300% year-to-date and it's still selling at a 40% discount to the tech sector.

And that's all because of earnings and potential earnings. They have a 50% backlog at this point, and the demand just continues to grow. And Micron, in the United States, is the largest producer of memory, but SK Hyatt, I think I said that right, in South Korea, is the largest producer of memory. So Micron has some competition, but I would be a buyer of this all day long, and I am, I love this company.

SPEAKER_1 (1:11)

Ed, is it safe to say then, I don't love this analogy, but it might be the best one we got, that you still kind of see this AI infrastructure boom in the early endings of the game?

Ed Butowsky (1:24)

Oh yeah, yeah. And nobody really can calculate exactly what the total addressable market is, because it continues to change every single day. But Micron will absolutely be the leader when it comes to memory. So I'm not concerned about all the rhetoric about slowing down on AI.

I just think that's not going to happen, and the demand is already there, and they've already have signed contracts to supply companies with memory. So, I mean, they're really, you could take it out of the tech sector and say that these were burgers, and if there was a 50 percent backlog for burgers, the price of burgers would go higher. Micron has a lot of pricing leverage as well that they can utilize, because there's not a lot of companies out there who can compete with the efficiency and the technology that Micron has.

SPEAKER_1 (2:21)

Let's shift gears here a bit. We're going to discuss a little buy now, pay later. Oftentimes, when that comes up, people think of maybe, I don't know, Klarna, or maybe they think of a firm, but one of the names that's been a tremendous winner in this space, certainly up until recently, has been Sezzle. Now, correct me if I'm wrong, I believe this is a company that operates primarily North America, United States, Canada, but I'm curious what maybe stands out to you with Sezzle versus maybe some of its peers.

Ed Butowsky (2:57)

Well, I'll tell you, I'm not the smartest guy in the world. I just read the research and realized that there's a target price of $169 on Sezzle and Sezzle is currently selling at 115

They're just hitting everything correctly, and the way they have their repayment plan set up seems to be very interesting and appealing to a lot of people out there because their earnings are really strong and their expenses have become very low. So they're hitting on all the numbers that you would want Sezzle to hit on and how they're compared to Klarna, I don't really know. I just know that they are in great demand in Canada and in the United States.

SPEAKER_1 (3:47)

Yeah, exactly. And it's still a name too, even with its pullback, that's had a pretty impressive performance. So perhaps many who have been waiting for that opportunity now have been given that with a little bit of a pullback off those highs. Now, the last one on your list here, I got to be honest with you, Ed, I'm not sure I've looked at this name. This is PGY and I believe it's Pagaya Technologies. So talk to me about what stands out here.

Pretty impressive looking chart as it's been almost a straight line going back to March.

Ed Butowsky (4:20)

Yeah. I mean, I again feel the same way about this as I do with Sezzle. But Pagaya has to do with approving credit applications and using their AI technology to do so. So they have a lot of artificial intelligence that allows companies to approve credit facilities much quicker, instead of going through a very long, arduous process.

They again also are doing incredible work, and they're growing very quickly as well. They're an Israeli-based company, and I always love it when Israeli-based companies do well during a war period. I think it shows a lot of the tenacity that the Israelis have, and for them to have selected the United States and Canada for their primary places of business is excellent. And we have a target price of about $29 on this, and it's selling in the low 20s right now.