NFLX is significantly undervalued (fair value >$118 vs price ~$67) due to strong financials and content efficiency; it is the speaker's largest portfolio holding.

These are Amazon, Netflix, Uber, Nvidia, Pinterest, Meta, Visa, Adobe , and McDonald's. Let me explain why I believe these stocks represent excellent value at the moment.

Netflix stock is trading near its 52- week low of $67 , but I've calculated its fair value at over $118. In my opinion, it is one of the most undervalued stocks, and of course, one of the main reasons behind the decline in Netflix stock trading is the lack of growth in user engagement.

Netflix is reporting low single-digit growth in user engagement, and investors are concerned that it is losing its appeal to consumers.

Another challenge and one of the reasons for the decline in engagement on Netflix is that consumers are watching more short-form content, which reduces the time spent watching long-form content on the platform.

Fortunately, Netflix is responding to this by launching a special section for short content on its platform, and although it is still in its early stages, there is optimism and encouragement that it may maintain and regain consumer engagement as the platform's use increases .

One of the reasons I'm excited about Netflix is the experience the company has gained over the past decade and more in creating content that gets huge views and generates billions of dollars in revenue, and they can do it effectively, which means they don't need to spend a lot to attract that engagement.

Their operating profit margins are best in their class. The company is generating free cash flow at double-digit growth rates reaching billions of dollars, and I expect this growth to continue as more people cancel cable subscriptions and switch to digital streaming instead .

This results in a risk- reward balance that I find among the most attractive in the market, and Netflix has the largest allocation in my portfolio, meaning that most of my assets are directed towards Netflix stock.