Jon Quast

You would think that a stock that was dropped is on its way down in a decline.

But showing that maybe after all the indexes have rebalanced and all that selling pressure is done, these companies actually wind up doing kind of well.

And so I thought it'd be fun, you and I would pick one stock that's been dropped in the last 18 months and say, hey, this is our pick that's going to outperform over the next five years.

And I'll go first here.

I think Etsy.

So Etsy was dropped in 2024.

I'll tell you what I don't like.

I don't like that the buyer growth peaked a few years ago.

I don't like that revenue is barely climbing right now.

But this is a business that still generates over $600 million in free cash flow.

It trades at just 14 times its free cash flow.

And because it's generating cash and it's cheap, it's actually reduced its share count with stock buybacks by about 20% or by over 20% in the last few years.

So this is kind of interesting.

Shares are already up 40% in 2025.

So I think it's already bottomed out.

And, you know, the company just integrated with ChatGPT.

I think that this may be a way that Etsy can actually start finding some new user growth again by...

by having that integration with a huge user base at ChatGPT.

And so if this is something that can help accelerate the growth, the revenue growth of the company on top of it already being cheap and already buying back shares, this is something that I think can boost the stock price in coming years.

Love it.