TIP780: Top Stocks for 2026 w/ Shawn O'Malley, Daniel Mahncke, & Clay Finck
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
In this episode, Clay Finck is joined by Sean O'Malley and Daniel Mahncke to share their top stock picks for 2026, featuring three compelling investment opportunities across different markets and sectors. Sean pitches Exor N.V. (EXO), an Italian holding company trading at a significant discount to net asset value that offers indirect exposure to Ferrari. (01:40) Daniel presents MercadoLibre (MELI), the dominant e-commerce and payments platform in Latin America with an unprecedented track record of 27 consecutive quarters of 30%+ revenue growth. (39:57) Clay rounds out the discussion with Meta (META), arguing that the social media giant is well-positioned to benefit from AI while trading at attractive valuations. (68:57)
- Main Theme: Each presenter makes a compelling case for companies that combine strong fundamentals with unique positioning in their respective markets, whether through discounted asset plays, emerging market dominance, or AI-driven advertising innovation.
Speakers
Clay Finck
Clay is the host of The Investor's Podcast and has been studying financial markets and billionaire investors since 2014. He brings practical investing experience, including running Meta ads for an e-commerce business, which gives him firsthand insight into digital advertising effectiveness and return on investment measurement.
Sean O'Malley
Sean co-hosts TIP's Intrinsic Value podcast where he conducts comprehensive weekly stock research and builds out a public investment portfolio. He has experience analyzing European holding companies and brings a value investing perspective to complex multi-asset situations.
Daniel Mahncke
Daniel co-hosts TIP's Intrinsic Value podcast alongside Sean, specializing in emerging market analysis and fintech companies. He has conducted extensive research on Latin American markets, including previous coverage of companies like NuBank, giving him deep regional expertise.
Key Takeaways
Discounted Asset Value Opportunities Still Exist
Sean's analysis of Exor demonstrates that significant market inefficiencies persist even in public markets. (04:58) The Italian holding company trades at a 60% discount to net asset value, with Ferrari alone worth more than Exor's entire market cap. This creates a situation where investors can effectively buy Ferrari exposure at half price while getting other assets for free. The key insight is that when discounts reach extreme levels (historically Exor traded at 25-30% discounts), the margin of safety becomes so large that even mediocre management performance can generate attractive returns. This challenges the efficient market hypothesis and shows that complexity and family control structures can create sustained mispricings that disciplined investors can exploit.
Emerging Market Digital Infrastructure Creates Massive Runway
Daniel's MercadoLibre pitch highlights how being early to digital transformation in developing markets can create extraordinary growth opportunities. (44:04) The company's 27 consecutive quarters of 30%+ revenue growth stems from building the e-commerce and payments infrastructure that Latin America lacked. With only 14-15% e-commerce penetration compared to 24% in the US and 30% in the UK, the runway for growth remains massive. The key lesson is that companies that build essential digital infrastructure in underserved markets can capture disproportionate value as those markets modernize, creating decade-long super cycles of growth.
AI Investment Should Focus on Proven Use Cases
Clay's Meta thesis emphasizes that the most compelling AI investments are in companies already successfully monetizing machine learning, rather than speculative future applications. (76:15) Meta has been using AI for content recommendation and ad targeting for over a decade, with demonstrable results in engagement and pricing power. The company's 10% year-over-year increase in ad pricing directly reflects AI's impact on conversion rates. Rather than betting on uncertain AI breakthroughs, investors should focus on companies where AI enhances existing profitable operations, providing measurable ROI today while building capabilities for tomorrow.
Capital Allocation Track Records Matter More Than Perfect Timing
The discussion reveals that successful long-term investing requires focusing on management's historical capital allocation decisions rather than trying to time perfect entry points. (24:45) Zuckerberg's track record includes navigating the desktop-to-mobile transition, acquiring Instagram for $1 billion (now generating nearly $100 billion in revenue), and consistently growing engagement despite competition. Even when specific investments like the metaverse don't pan out, strong capital allocators find ways to create value through their other decisions. The lesson is that betting on proven capital allocators, even when they make some mistakes, often outperforms trying to find perfectly timed opportunities with unproven management teams.
Hybrid Business Models Create Competitive Moats
Both MercadoLibre and Meta demonstrate how combining multiple complementary services creates stronger competitive positions than single-focus businesses. (43:39) MercadoLibre's integration of e-commerce, payments, and logistics creates a flywheel where each service strengthens the others, making it difficult for competitors to replicate. Similarly, Meta's combination of multiple social platforms, advertising technology, and AI capabilities creates network effects that are hard to break. The strategic insight is that businesses combining complementary services often develop stronger moats than pure-play companies, as the integration complexity becomes a barrier to competition while providing better customer experiences.
Statistics & Facts
- MercadoLibre has achieved 27 consecutive quarters of 30%+ revenue growth, a feat no other publicly traded company has ever accomplished. (40:01) This unprecedented consistency demonstrates the company's ability to maintain high growth rates at scale across multiple market cycles in Latin America.
- Exor N.V. trades at approximately 60% discount to its net asset value of €36 billion, with a market cap of only €15 billion, meaning investors pay about 40 cents on the euro for the entire portfolio. (07:06) The market value of just their Ferrari stake alone exceeds Exor's entire market capitalization.
- Ferrari maintains 80% customer loyalty with repeat buyers and generates returns on invested capital exceeding 20%, while compounding earnings per share at 18% annually for a decade. (03:49) The company's pricing power allows for 8-10% annual price increases without customer resistance.
