Consider Entravision (EVC) as a potential "sum-of-the-parts" value play, where the market may be overlooking its high-growth Smadex digital ad business and valuable Spectrum assets. UK travel operator Jet2 plc also appears undervalued, trading at less than 7x earnings despite consistent growth, share buybacks, and new route expansions. For a contrarian growth opportunity, look at Duolingo (DUOL), which has fallen significantly from its high due to AI fears but continues to post strong user and revenue growth. The investment thesis for EVC is that its valuable assets are worth more than its current $400 million enterprise value, offering a mispriced opportunity. Finally, DUOL's strong fundamentals, including 41% revenue growth, suggest the AI threat is currently overblown, presenting a potential entry point for believers in its platform strategy.

Duolingo (DUOL)

• The stock has performed poorly, falling almost 70% from its all-time high.
• Primary Risk: The main risk is competition from Artificial Intelligence (AI). The concern is that if AI can translate languages instantly, the need for an app like Duolingo could diminish.
• Bullish Case:
  • Duolingo is positioned as more than a language app; it's a gamified, habit-forming platform.
  • The company is expanding into other subjects, with Music and Chess being two new verticals currently being pursued.
  • Despite competition, the company's financials remain strong:
    • Revenue over the past 12 months is up 41%.
    • Daily Active Users (DAUs) are up 36% to 50 million.
    • Trailing 12-month free cash flow recently hit $350 million.
• Valuation & Other Notes:
  • The company's stock-based compensation is noted as being "on the high side."
  • A Price-to-Earnings (P/E) ratio of 22 is considered "more than reasonable" given its 37% free cash flow margins and 40% top-line growth.

Takeaways

• The investment thesis for Duolingo hinges on whether you believe it is a durable, engaging platform or simply a language tool that AI will make obsolete.
• The stock's significant drop could present a buying opportunity for investors who believe in its platform strategy and expansion into new educational areas.
• Strong growth in users, revenue, and free cash flow suggests the business fundamentals are currently not being disrupted by the perceived AI threat.

Jet2 plc

• The stock of this UK travel operator has been stagnant, falling about 6% over the past year despite a viral marketing meme in 2025.
• Market Perception: Investors seem to treat Jet2 like a "fragile airline," overlooking its 40+ years of operational history.
• Bearish Sentiment: The stock has suffered from management comments about a trend of late bookings, which reduces near-term sales visibility.
  • Counterpoint: The podcast notes that management has flagged this trend for years, and it has not yet had a material impact on full-year results.
• Bullish Case:
  • The company continues to show solid progress, with sales growing 5% in the first half of the year.
  • It has initiated another share buyback program.
  • It is expanding its operations by opening six new routes in London's Gatwick airport.
• Valuation:
  • The stock trades at a low valuation of under 7x earnings.
  • The company has "plenty of cash on its balance sheet."

Takeaways

• Jet2 appears to be a potential value investment, as the market may be overly pessimistic and pricing it like a riskier, less-established airline.
• Positive catalysts for the stock in 2026 could include the new route expansions and continued share buybacks.
• The low earnings multiple and strong balance sheet provide a potential margin of safety for investors.
• Disclosure: The podcast host mentioned they own shares in Jet2.

Entravision Communications Corp (EVC)

• Initial Perception: At first glance, EVC looks like a "value trap" because its core TV and radio station businesses are in long-term decline.
• Bearish Case:
  • The company has taken repeated impairment charges on its assets.
  • The balance sheet carries "meaningful debt."
• Bullish Case (Hidden Value): The market appears to be heavily discounting two key assets within the company.
  • 1. Smadex: A Spanish-based digital advertising platform (DSP) owned by Entravision. Its revenue grew over 100% in the most recent quarter to $76 million.
  • 2. Spectrum: The company owns highly valuable wireless spectrum that could be worth over $300 million in a future auction. This is supported by a past auction in 2017 where EVC realized $263 million.
• Valuation:
  • The company's full enterprise value (including debt) is roughly $400 million.
  • The argument is that the market is not assigning much value to the combination of the high-growth Smadex business and the valuable Spectrum assets.

Takeaways

• EVC is presented as a "sum-of-the-parts" investment opportunity, where the value of its individual assets may be greater than its current stock price suggests.
• The investment thesis is that you are buying into a high-growth digital advertising business (Smadex) and valuable physical assets (Spectrum) while the declining legacy media business obscures their value.
• The stock is described as a "mispriced opportunity" because the market seems to be ignoring these valuable components, focusing only on the declining TV and radio segments.
• Disclosure: The podcast host mentioned they own shares in EVC.