State of the Portfolio: Part 1

As the market has reached new all-time highs and some valuations seem unsustainable, it’s time to take a step back and look at the stocks in the Asymmetric Portfolio.

Below, I’m going to give an idea of where companies sit from a valuation, balance sheet, and growth perspective. These metrics aren’t all-encompassing and may miss some key information, but this is a snapshot to help you/me figure out where there are opportunities and what stocks may be worth trimming.

If there is a market downturn, I want to own companies that can survive and ultimately thrive on the other side.

Tomorrow, I’ll be back with Part 2.

On Sunday, I’ll recap with some stats about the portfolio overall.

Spotify

Spotify continues to perform extremely well operationally. The problem is, the valuation keeps getting higher and higher.

When I first bought Spotify, the stock was unloved because it wasn’t a proven cash flow giant. Now that it is and investors like the stability of the subscription model with low churn, shares have become a safe haven. We saw that today when the Nasdaq dropped 3.56% and Spotify was UP 1.7%.

The valuation is a concern, but this is a rock-solid company today.

When Would I Buy?: I don’t think shares are a “no-brainer” until Spotify has a price to FCF of under 15x, which is a $50 billion market cap, or significantly lower than here.

When Would I Sell?: I’m considering trimming now. But if we get to $1,000 without a huge increase in growth or margins, I would consider selling more/all.

Coinbase

Another stock that’s gone from unloved to highly valued.

On the balance sheet side, Coinbase is in great shape. And with positive free cash flow, primarily from the stablecoin business, the direction of operations is up and to the right.

Valuation is high, but not crazy. As I have shown this year, I’ll buy shares opportunistically, but not at a high point in the market, which may be where we are today.

When Would I Buy? Under $200 per share is a compelling valuation, and I think we may already be at a local operational peak for crypto companies.

When Would I Sell? No reason to sell anytime soon, but an enterprise value to sales ratio over 30 is nosebleed, so somewhere around $700 per share, I would consider it.

Portillo’s

Nothing has gone right for Portillo’s in 2025, and that’s why it has so many red marks below.

But the valuation is now becoming so compelling that a turnaround, even a modest one, could drive shares higher simply because of multiple expansion.

I also think there’s an opportunity to sell some real estate to a REIT to free up cash and reduce the upfront cash outlay for each new restaurant. So, the net debt you see below could be improved in the future, another potential catalyst for the stock.

When Would I Buy? I’ve been buying…

When Would I Sell? Much, much higher.

Virgin Galactic

This has been my biggest miss, and nothing is going well financially.

I haven’t sold the few shares I have because nothing has really changed about Virgin Galactic. As they get closer to a 2026 launch of commercial operations, I will look at shares again, but for now, it’s a holding pattern given the incredibly stretched balance sheet, low market cap, and high cash burn.

When Would I Buy? Not until I see a runway to profitability and commercial flights being booked.

When Would I Sell? I may never sell, just to remind myself that stocks can go to zero.

On Running

High growth, a strong balance sheet with no debt, positive free cash flow, and a reasonable stock price.

What’s not to love about On Running right now? We will see if consumer spending and/or tariffs impact the stock negatively in the future, but based on what we know today, On is about as solid as it gets.

When Would I Buy? I’ve been buying.

When Would I Sell? On’s shares aren’t all that expensive today, but a 15x price to sales multiple would be an opportunity to take chips off the table, but that would be at about $160 per share.

Airbnb

Revenue growth has slowed, and the multiple is high for Airbnb, which makes me a little cautious.

But there’s a solid balance sheet and strong cash flow, so if shares get cheap enough or operations start to show more growth again, I could see buying shares again.

When Would I Buy? If growth picks up, I would consider this a good price, but with operations where they are, I’m not all that interested until about $75 per share, when buybacks could reduce the share count over 10% per year.

When Would I Sell? If the stock doubled, I would consider it.

Disney

There’s still a lot of debt on the balance sheet, but the free cash flow turnaround has been stunning.

Disney has leveraged the stability of the parks and improved streaming cash flow enough to go from $8.4 billion in trailing 12-month free cash flow six months ago to $11.5 billion today. And as streaming grows and ESPN streaming contributes to the business, there should be more growth in both revenue and cash flow.

When Would I Buy? The valuation is compelling now, but under $100, you’ll probably see me nibble a little more.

When Would I Sell? Shares could double, and I wouldn’t sell. I think the upside for streaming at Disney is still not well understood.

MGM Resorts

Pressure on spending in Las Vegas has resulted in a disappointing year for casino stocks. But the value proposition is still very strong.

MGM Resorts is trading for only about 10x enterprise value to free cash flow, and that’s as free cash flow is depressed because the company is investing in MGM Japan. When that casino comes online, Japan goes from negative cash flow to potentially the highest cash flow casino in the world.

When Would I Buy? I’ve been buying, but $20 per share would be a steal.

When Would I Sell? If shares tripled, I would consider it. I think the Japan casino could change the picture, though, and that’s the real 10x opportunity.

Alphabet

Shares are up 53% in the past six months because the market is finally seeing that AI is more of an opportunity than a threat for Alphabet.

And while the company is spending ~$85 billion this year on capex, primarily related to AI, Alphabet has such massive cash flow that it’ll still have some left over on top of the net cash on the balance sheet.

Shares aren’t as cheap as they were a few months ago, but this is a giant that looks to be getting stronger in a world of AI.

When Would I Buy? I liked buying under a 20x P/E multiple, which was under $190 per share.

When Would I Sell? If the stock doubled in the next year, I may sell some.

Crocs

Growth is down and margins are struggling, so this isn’t the uptrending story it seemed to be a year ago. Guidance for a drop of 9% to 11% in revenue in Q3 spooked investors, and trade policy changes seem to be throwing management for a loop.

But Crocs shares are still relatively inexpensive if management can get back to growth; this could be a great opportunity for a strong cash flow company going through a bit of a turnaround.

When Would I Buy? Any share price weakness is a good opportunity. $50 per share, I would be very tempted to back up the truck.

When Would I Sell? A 4.0x price-to-sales multiple, I would likely sell some, and that’s at about $220 per share.

Zillow

Strategically, Zillow is heading in the right direction. But the company still doesn’t generate net income, and that’s the biggest red flag for Zillow.

If revenue keeps growing in the mid-teens or higher and management can improve margins, this could be a very big opportunity for investors. The balance sheet and cash flow give Zillow a lot of flexibility to be aggressive in a potentially down housing market.

When Would I Buy? 20x free cash flow is about a $7 billion market cap, so Zillow would have to fall significantly to be a “no-brainer.” That said, I would love to add shares under $50.

When Would I Sell? I’m not sure we know the long-term potential of Zillow, so I don’t have a price.

Celsius

Celsius is back to growth after acquiring Alani Nu, although that deal hurt its balance sheet significantly.

Since last spring, Celsius has gone from green to red on the balance sheet, and its valuation has become more stretched.

When Would I Buy? When shares were under $30, the stock was compelling.

When Would I Sell? I’m considering trimming some of the position now. The enterprise value to sales ratio is a little rich, given the values you see above.

Disclaimer: Asymmetric Investing provides analysis and research but DOES NOT provide individual financial advice. Travis Hoium may have a position in some of the stocks mentioned. All content is for informational purposes only. Asymmetric Investing is not a registered investment, legal, or tax advisor, or a broker/dealer. Trading any asset involves risk and could result in significant capital losses. Please, do your own research before acquiring stocks.