Episode Transcript
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Speaker 1 (00:05):
What's stocks and ETFs offer the most profit potential in
the new year.
Speaker 2 (00:09):
We're here at Money Show.
Speaker 1 (00:10):
We've asked our top experts that very question every year
for decades, and the result is our annual Top Picks Report.
The twenty twenty five edition clocks in at ninety pages.
It features seventy eight picks from forty four different experts.
These analysts, traders, editors and other contributors are specialists in
a wide range of markets, sectors and asset classes. Today,
(00:31):
three of them have joined me for a very special
Money Show Moneymasters Podcast roundtable. They'll tell you how they
arrived at their picks, why they chose the names they did,
what unique features make them so potentially profitable. Joining me
are Tom Hayes, founder, chairman and managing member at Great
Hill Capital, as well as the editor of Hedge Fund Tips,
Miss Schneider, chief strategist at market gage dot com, and
(00:53):
Chris Preston, investment analysts and editor at Cabot Wealth Network.
Thank you all for taking some time out to talk today,
Thanks for.
Speaker 2 (01:00):
Having us, Thanks for having us that great again.
Speaker 1 (01:03):
A lot to talk about there, you know, I want
to kind of avoid getting to macro or a big
picture of views with this episode. But I do think
it's important to ask something right off the bat, and
that's you know, is this finally going to be the
stock pickers market we keep talking about? You know, we've
had this just by big tech and you're fine otherwise, Tom,
Why don't you start with that and let me know
if that is case?
Speaker 2 (01:21):
Why are why not? Yeah?
Speaker 3 (01:23):
I think that's a great question. That's a million dollar
question for this year, Mike, Thanks for having me. I
think what we're seeing though, if we're realistic and objective
about what's going on in the market, what we're seeing
is a deceleration in earnings growth for the Magnificent seven,
which kind of has driven the bus looking backwards, earnings
(01:45):
growth dropping from thirty three percent last year to twenty
one percent this year. However, the multiple on the Magnificent
Magnificent seven has not yet de rated in accordance with
the earnings growth acceleration, So I think they're going to
perform less well, they'll do okay this year. But if
(02:06):
you contrast that to kind of the broadening theme and
take a look at the other end of the spectrum,
going from large cap growth to maybe small cap value
you look at earnings growth acceleration. In the small cap
six hundred, earnings growth is growing from eight percent last
year to twenty one percent this year. The difference is
(02:27):
for that same twenty one percent earnings growth, whether you
talk about MAG seven or you talk about small caps,
is the price you pay. And on MAG seven you're
still paying thirty three times earnings for twenty one percent
earnings growth. On small cap you're paying fifteen or sixteen
times earnings for the same twenty one percent earnings growth.
So I think that this is in fact going to
(02:50):
be the year of the stockbecker who can look under
the surface. The idea of setting on an autopilot and
letting the indices take you to paradise is probably going
to be a little less well founded in twenty twenty
five than it was in twenty twenty four.
Speaker 1 (03:06):
Got it, Messa, It looks kind of like paradise and
the backdrop there you're in New Mexico.
Speaker 2 (03:10):
I know, what are your thoughts? There? Is this finally
going to be that stockpickers market?
Speaker 4 (03:15):
Well, first of all, yes, thanks for having me on
as well, and yes, that is Santa Fe, New Mexico
behind me. It is paradise, but unfortunately paradise is very ephemeral,
as we know, and especially in the market. So I
agree a lot with what Tom says. In terms of
a stock pickers market, I could argue that it's always
in essence of stock pickers market, except when you have
(03:37):
a consensus of almost one hundred percent that it's all
going to be heavy in one area, like we've seen
over the last two years in tech, it just makes
everybody look that much smarter. So I think this year
we will really see somewhat of a separation between here's
a woman saying this, the men and the boys, if
you will, so that that's kind of how we're approaching
(03:59):
the market. We have a factor that we have not
had since right at the end of COVID, which of
course is Trump, and that we saw today was a
perfect example of how headline sensitive this market is going
to be, and he loves to create headlines. Today alone,
there were about a half a dozen, ranging from a
(04:19):
hostile takeover to Greenland to interest rates are too high,
so the market is going to need to settle in
And so in terms of a stock pickers market, I
think the best tip I can say is that in January,
after ten trading days, we have what we call a
six month calendar range. That range is going to be
uber important for in terms of deciding which stocks will
(04:42):
break out of that range and will be sort of
Trump friendly, if you will, which will sort of chop around,
and which will break down and that will make it
easier for US stock pickers.
Speaker 2 (04:53):
Got it? Got it, Chris.
Speaker 1 (04:54):
I'm going to pivot to methodology in a second, but
I just want to see is there anything else briefly
you'd want to add to that sort of a big
picture there.
Speaker 5 (05:00):
Yeah, I feel like both of what mission Tom said
is pretty spot on. It could both be more of
a stock pickers market but also a more democratic market.
You know, there's been the least democratic bull market the
last what is twenty five twenty six months now, where
it's carried by you know, a few dozen stocks, I
mean MAG seven in particular, but you know a lot
(05:23):
of stocks have not participated. Small caps have not participated'roout
like three percent last year and still below the twenty
twenty one highs. You know, you look at the equal
weight index, you know it's lagged S and P and
NASDAC by a long shot. I mean, you know, the
Dow has trailed by a similar margin. So I think
(05:45):
there's a lot of the guest stock pickers market, but
there's a lot of good stocks to pick from because
there is value out there. So I think, you know,
I think I still saw a stat the other day
from Ryan Dietrich of a Carson Research Group who said,
you know, the lot there's been eight times since nineteen
fifty the SMP has been up twenty percent back to
(06:07):
back years, and all eight times has been up another
twenty percent the next year. I don't know if I've
forecast that, you know, nine for nine, but you know
the idea that the bullmarket will you know, bull markets
don't die of old age, and this isn't even old age.
The average bull market lasts you know what, over sixty
sixty months, so we're not even halfway there. Doesn't mean,
(06:28):
you know, there are factors that could derail it, but
I think it's a stockpicker's market, but also a environment
ripe for picking a lot of good stocks out there.
Speaker 1 (06:39):
Well, Chris, let me you know, you brought up a
good point there at the end of that's methodology. I mean,
how do you approach your market analysis what is it
that you focus on. What is it that goes into
picking a top pick, whether it's for this Money Show
project or anything for that matter.
Speaker 5 (06:52):
Yeah, So I run at Cabot Wealth Network. I run
two very different advisories newsletters. One is a value newsletter
and one is more growth heavy. And with even with
the value one, I tend to be more growth oriented.
Eve with the value one, I try and look for
growth at value prices. And I think, you know, value
(07:16):
is underperformed growth for more than a decade. Now doesn't
mean it's historically that's not the case, but so it
doesn't mean that's gonna last forever. But you know, I
guess I'm maybe more malleable than you know. I don't
stick to one system and just ride that, you know,
for the next few decades. So, you know, I like
looking for value now, but it has to have some
(07:38):
sort of growth aspects.
Speaker 4 (07:39):
You know.
Speaker 5 (07:39):
Even even Warren Buffett has you know, Apple, b I
D you know, several growth stocks in his portfolio that
he's found value in. But yeah, I think there is
such a limits to you know, growth. I think Tom
just just outlined the slowing down of the MAGS seven
(08:00):
and that's why I look a little bit more for
value because there's less value there. You know, I don't
think they're going to suddenly, you know, reverse course and
fall twenty percent this year. But you know, a blend
of value and growth is sort of my philosophy.
Speaker 3 (08:12):
I guess, Tom.
Speaker 1 (08:14):
I know from previous conversations you kind of had that
nickname turn around Tom, So I know that value is
where you like to be looking talk about your methodology.
I mean, how do you separate a value opportunity from
a value trap?
Speaker 3 (08:25):
Yeah, I think that's that's a great thing to point out,
and I agree with some of what Chris said. We
do like to see growth, but price is what you pay,
values what you get. So we do look for stocks
that are down a lot in terms of price, and
then we try to distinguish whether value has been destructed
on an equivalent basis and what we find across most
(08:46):
of the durable businesses that we get involved in Number one,
they've been around for many, many years. They've operated through
many cycles. They're going through a temporary impairment like they
have through different cycles, whether they're clical business or they've
had different other headwinds in the past, and the first
thing that we do is we look for solvency risk.
(09:08):
So you know, if a stock's down fifty or sixty
or seventy or eighty percent, the market is saying that
there might be an existential crisis. So the first thing
that we say is are they going to make it
through this cycle? Are they going to live another day?
So that comes down to balance sheet analysis, looking at
the debt, looking at when the maturities come due, and
(09:29):
if I can get comfortable with that, then then the
key is going to be leadership. Do they have a
new jockey that has a track record of success. That's
a key factor. And then finally is free cash flow.
Do they have enough runway to execute on the turnaround
plan because obviously it's been mismanaged to some degree, or
the stock wouldn't be down eighty percent, you know, But
these are durable businesses. Whether we're talking about you know,
(09:51):
Disney that was at one point down sixty percent, Disney's
not going anywhere Boeing seventy percent. These are high quality,
the durable businesses that fell on rough times, but they're
not going anywhere anytime soon. So now to distinguish between
a value trap, I think people get hot in that
(10:12):
just because the price is down means it's cheap, and
that's not always necessarily the case. Oftentimes a stock that's
down a lot deserves to be down a lot and
may face an existential crisis. So that's something that you
need to be able to discern from experience and doing
proper analysis and not just looking at price. And two
(10:33):
is doing lazy asset analysis where you say, well, the
breakup parts alone is worth more than the price that
it's trading at. But there's no catalyst for a recovery
of growth. There's no turnaround story, there's no new leadership,
and I think that's where people get stuck in quote
unquote value traps. And by the way, many of the
(10:54):
greatest value traps are broken growth stocks. Okay that never
ever recover. People forget that as it relates to value generally.
What I see in the market right now is people
blinded by recency bias in that because since twenty ten,
(11:15):
growth has outperformed value. Therefore it's always going to persist,
Meaning what's happened in the recent past is going to persist.
And if you look back to nineteen twenty seven, value
has outperformed growth, by four and a half percent per
year per year, including this aberrational zero interest rate policy environment,
(11:38):
and my kind of view there is value and growth
are tied at the hip number one. So it's not
either or I don't buy something because it's a value
stock or because it's a growth stock. I buy because
I'm getting a lot of value for less price than
the alternatives, highest and best use of the capital. And
I think that unless you believe that we're going back
(12:03):
to zero interest rate policy or close to it, not
having some element of value and or international, which is
also trading at low multiples and small caps, et cetera,
is maybe a little risky at the moment if you've
got all your eggs in one basket. Because I think
we are in a period of regime change and that's
(12:27):
going to create a lot of opportunities, a lot more
opportunity in four hundred and ninety three stocks than in
seven got it?
Speaker 4 (12:32):
Got it?
Speaker 2 (12:33):
Miss?
Speaker 1 (12:33):
I want to make sure we leave plenty of time
for everybody's picks, yours included. So I'm going to kind
of pivot to that part of the conversation with you
and give you the microphone first. I find it interesting
your pick in the healthcare kind of this GOLP space.
It's interesting the top performer among the twenty twenty four
stocks was actually a company called Viking Therapeutics from John McCammon,
a biotech firm that's got a potentially promising anty obesity
(12:55):
drug that's in development.
Speaker 2 (12:55):
So why don't you talk about your pick there?
Speaker 4 (12:57):
Yeah, And I just feel because my esteem co panelists
here are not technical traders, then I think it's really
important to know that market gauge is a little bit
different because we have quantitative models that really basically blend
across all asset classes, from sector rotation to us on Nascar.
(13:19):
Excuse me now, I've got a Nascar on the brain
because I'm going to talk about one of my picks,
but to nastech leaders to everything you know, pretty much.
So we do that based on trend strength indicator, and
we also do that on the earnings growth, especially when
we're talking about small and mid cap stocks. So I
(13:41):
just wanted to say that because my own personal picks
are really a hybrid of fundamental and a lot of
the value that Tom just talked about looking at growth stories,
but also really I have to use charts. I must
use charts. I spent fourteen years on the Commodities Exchange
as a chartist, and even though there were some fantastic
bull moves during that time, I was able to anticipate
(14:04):
based on breakouts before other people. And that's kind of
my wheelhouse. So my two picks are related to that.
So to talk about the first one, you're mentioning ad
V ABBV, which was a pretty good performer in twenty
twenty four, but not necessarily as good as it had
been before that. I like it for a couple of reasons.
Number one is in the biotech space, which two times
(14:27):
point might be something that can really move up this year.
Not only is it involved with a lot of neuroscience
and immunology, which of course we saw a big move
today and Maderna off the lows, but also they have
allergant is that one of their sectors that they have
in their company that does botox botox. In terms of
(14:50):
the vanity trade, and this is really part of my
theory is that with the diet drugs, the people are
going to spend more money on themselves. So we go
from to a meet if you will, or what I'm
calling vanity and avy can benefit from that because, as
we know from a practical standpoint, from an esthetic standpoint,
when you lose a lot of weight, your skin tends
(15:12):
to sag and wrinkle, and botox is a really big
fix for that. So that's where my story comes from.
They also pay a dividend, and they've been paying a
dividend for many, many years, so they're a good, solid
company in terms of the actual chart points. Right now,
it seems to have and this is where I would talk.
One's sixty to me, is my baseline support breaks down
(15:34):
under one sixty, I would not necessarily want to be
a buyer. But right now it's been trading somewhere between
one seventy five and one eighty. And so we get
through these these recent highs, these January highs to my
first point, then I think this has a potential to
be at least a three hundred dollars stock this year.
Speaker 2 (15:53):
Good. Thanks, miss Chris. I want to pivot to you.
I mean, you've got to pick.
Speaker 1 (15:56):
I'm a Starbucks guy, so it's interesting to think about
this other one.
Speaker 2 (15:59):
It's Dutch bros. Correct, it's not sure for brothers exactly.
Speaker 5 (16:02):
Yeah, I accidentally, so I live in Vermont, and we
don't have a Dutch Bros Here. So I was shamed
when I said Dutch Brothers once on our on our
Cabot Street Check podcast. Our producer shamed me for saying that.
But yeah, Dutch Bros. Right, that's yeah, Well, it's it's
you know, it's not in Starbucks' stratosphere yet, but it's
(16:26):
a drive through a coffee company that has now nine
hundred and fifty locations and I believe eighteen states in Washington,
d C. With a very aggressive goal of expanding to
over four thousand locations within the next ten to fifteen years.
It's added, it's been adding, you know, over thirty locations
(16:48):
each of the last few quarters. I think is on
track for over one hundred and fifty new locations in
twenty twenty four.
Speaker 2 (16:56):
And the growth.
Speaker 5 (16:58):
As for the stock, it's you know, it's it was
up over eighty five percent in the last year, but
it's still trailing. It's twenty twenty one highs. You know,
it's currently trading at fifty seven for the fifty seven
a share is seventy six in late twenty twenty one,
and you know, given the growth and the expansion, you know,
(17:20):
will it ever be a true threat to Starbucks? No,
you know, probably not, but you know that given the
sort of star Wars sort of sort of swallowed up
the coffee market, swallowed the US coffee market whole, and
you know, it could. I think there's room for a
little bit of competition and Bros at least, and it's
(17:43):
you know, it's ambitious expansion plans. Is trying to sort
of fill that void. And you know, so far, so
good in the last year, and I think the momentum
will keep up for the next year.
Speaker 1 (17:54):
Great, Great, Tom, I gotta ask you about your first pick.
I mean, it's one of those names that just can't
stay out of the news, and not in a good way.
So sell me on Boeing here.
Speaker 5 (18:03):
Yeah.
Speaker 3 (18:04):
Well, Boeing is what we call a legal duopoly between
Airbus and Boeing. They deliver ninety nine percent of the
commercial aircraft. As far as the recent crashes, which have
been terrible, they're predominantly concentrated to the older planes.
Speaker 5 (18:21):
You know.
Speaker 3 (18:21):
The risk The fear was that it was around the
seven thirty seven Max, which has had a ton of problems,
but they got rid of the old CEO. Fortunately we've
got Kelly Ortbergen, who as an engineering background versus a
sales background or a financial engineering background, and that's a
good thing. He's on the floor in Seattle. He's fixing
all of the problems. He solved the labor union strike.
(18:44):
And when he was at Rockwell Collins before he came here,
he created a lot of value for shareholders. Rockwell Collins
quadrupled in value for shareholders before it was sold in
a period of six years. He's a turnaround specialist. They
have half a trillion dollar backlog. I mean, imagine buying
a business that had ten years of demand that they
(19:05):
couldn't possibly fulfill, that they didn't have the capacity to
fulfill all at once. It's a great problem. You got
airlines waiting, and sure they can get angry and say,
you know, the landing gear didn't come down right, or
the door had a problem, etc. And they're working on
fixing all of that. But at the end of the
day they can say, fine, I'm taking all my business
(19:25):
to Airbus and rather than wait ten years, they're going
to wait twenty years for their planes. So that's not
an option. What they have to do is work with
Boeing and that's what you've seen, whether it's Southwest, whether
it's everything else. And the commonality across all the carriers
is they have utmost confidence in Kelly Ortberg's engineering, prowess,
safety excellence, and turning the company around.
Speaker 2 (19:44):
So with a sock.
Speaker 3 (19:45):
Down that's down that materially some you know, seventy something percent,
it fell maybe peak to trough, and you have a
business that's going to get back to free cash flow positive.
They raised twenty billion dollars cash to take solvency risk
off the table. All the components that I look for
turnaround Tom looks for in a turnaround situation are perfectly
(20:09):
in place. Pricing power, durable sustainable mode performs through cycles,
pricing power, It's all there.
Speaker 2 (20:17):
You just have to be patient.
Speaker 3 (20:18):
Now, you play the time arbitrage game, and most people
can't wait two to three years for a double.
Speaker 2 (20:23):
But we're patient.
Speaker 3 (20:24):
We like to do that rinse, repeat, over and over,
and we think Boeing is going to be one of
our next ones. Fair enough, Miss, I know you and
Chris both had automotive plays kind of in this EV space,
So why don't I start with you first?
Speaker 2 (20:36):
Miss Rivian was the name you're looking at?
Speaker 4 (20:39):
Oh? Now, You've got me curious about what Chris picked. Okay, well, yeah,
I'm Rivian. Well, I'm very much like Chris. This is
somewhat of a controversial call out because I've been seeing
a lot of reports about the EV hoaxes over and
certainly with Drill Baby Drill. People think the gas prices
(20:59):
will go so low people will go back to gas guzzlers.
But I don't believe that at all, because, first of all,
even Elon Musk has basically said that ninety nine percent
of the people who drive evs do not go back
to a gas car. Thereafter, Number one and number two
is that the future obviously is in ev and when
you're talking about software technology, particularly self driving cars, as
(21:23):
far as I know, that will be a lot easier
to execute with evs. So why do I like Rivian? Well,
Rivian hats again, this is a fundamental technical story, right,
consumer instinct. I've seen a lot more on the road,
particularly when I went back east and went to Massachusetts.
Interestingly enough, I saw about five Rivians in a very
(21:44):
small town, so that I was already in the stock,
but still I thought that was interesting. They made a
great deal with Volkswagen in twenty twenty four. They've gotten
a lot of government money to build their plant in
twenty twenty four, and the problems which were a how
many cars were they going to sell and a shortage
(22:05):
of supplies that they had in terms of their parts,
both got resolved recently and so the number of cars
beat and apparently now they do not have the supply
chain issues with their parts. And so that's why we
saw the stock just this week go from like thirteen
up to sixteen sixty. And now with the market coming down,
(22:26):
it's settling down. That one big day was such a
huge rain. It's now basically consolidating within that range. So
you know, all of these are our reasons. And the
final one is again in the Trump administration, I do
believe that anything made in America will actually and by
the way, Boeing made in America will actually be a
(22:47):
plus for companies because they may get incentives, and there's
been talk about ev incentives going a way. I don't
think that will happen. So I believe that Rivin has
a lot of upside potential. And last thing I'll say
about the chart, it really needs to hold around thirteen dollars.
Now I would not again, I would not want to
(23:08):
be really involved in it if it went down below
that too much. And this fifteen to sixteen, sixteen fifty
now will be the calendar range high to clear. And
then I see no reason why this can't go up
continually as we go through this year in the next
couple got it.
Speaker 1 (23:24):
Well, Before I get to Chris's pick, what you've just
said there is a very good point. I mean I
always let people know, and it's in the forward to
the report. This is a point in time. You know,
we ask for contributors picks for the next twelve months.
But of course markets change, economies change, dot prospects change.
So I always remind people if you're reading this report,
follow the work of these people, go to their websites,
go to use the links that are in the report,
(23:45):
to go to their pages, and subscribe to their products
because they may like something now, things could change in
six months, four months, eight months, who knows. But that's
an important thing if you're watching this to keep in mind. Chris,
I do want to ask you now, I mean your
play BYD obviously is a global player in the sector.
Speaker 2 (24:00):
What do you like there?
Speaker 5 (24:02):
Yeah, so you know b y D b y d
d Y is the the A d R ticker symbol.
You know, it might be the one ev maker that
kind of makes Elon musk sweat these days, but only
in one country, China, which is where they do roughly
ninety percent of their business now. But they're expanding globally.
(24:24):
You know that they have factories in the works. They
have a plant it is Pakistan that's that's just underway,
one in Thailand that's just started deliveries, and they're expanding
into or opening new plants in Cambodia, Hungary, Indonesia, Pakistan, Turkey,
(24:44):
Mexico and Vietnam are possible targets as well. No US
footprint in the works as of now, although they do
make electric buses in California. I'm not sure that's moving
the needle a whole lot, but so it's one a
lot of US investors aren't familiar with, familiar with, and
I think that's you know that plus sort of the
China baggage these days has has limited the stocks. The
(25:10):
stock hasn't gone along with the growth of the company
the last couple of years. You know that when they pivoted,
they've been a huge uh car automaker in China for years,
but they pivoted in twenty twenty two to all evs
and hybrids, and when they did that, revenues tripled that year,
(25:31):
and they've continued to climb, you know, not they haven't
tripled every year, but you know, to the point where
they sell more evs and hybrids as they did last
quarter than Tesla. So it's it's a little bit of
a value pay. I mentioned earlier that you know, it's
in Warren Buffett's portfolio, so it's a little bit of
(25:51):
a value play. But I like the growth, and it's
clear that the stock price has not cut up with
the growth. You know, if you look at you can
make the argument that it's a bit like Tesla, you know,
ten eight to ten years ago. You know, it's it's
trading at UH fifteen times UH forward earnings and by
the way, that's less than a quarter of it's five
(26:13):
year average UH forward pe ratio, which is around ninety.
You know, you compare that too, you know to Tesla's
it's just a fraction of it. You know, not not
to denegrate Tesla in any way, and I agree, I
like miss your your pick of Rivian uh with you know,
clearly under Trump, especially the America First agenda should benefit
(26:37):
you know, American car companies. And and I too, am
seeing way more rivians on the road, uh than it
did even a couple of years ago. It used to
be a little novelty a couple of years ago to
see one. Now see them just basically anywhere. But b
W I D if you know, it'll have to combat
a lot of you know, US China tariff baggage. But
(26:57):
I still, you know, if we're looking out you know,
multi years, I really like its potential and that includes
this upcoming year.
Speaker 1 (27:06):
Got perfect, Tom, I want to get back to your
last pick. You know, my household may or may not
have spent some time on the website this holiday season.
It's Etsy. Obviously a lot of people know what company does.
What's your case there?
Speaker 3 (27:18):
Yeah, this is another one of my favorites. Down eighty percent.
We like to buy things down quite a bit. But
what's very interesting is the price is down eighty percent.
But like I say, prices what you pay, values what
you get. They certainly their growth rate decelerated post COVID.
They had a huge surge in COVID. They are the
(27:39):
fourth most trafficked e commerce site in the US, behind
obviously Amazon, Walmart, and eBay ninety two million users. But
what's beautiful about their business is it's a niche product, handmade, customized,
named products, so it's not a race to the bottom
in me too products where you're just competing on price,
(28:01):
which they couldn't compete against Amazon, and Amazon had tried
to compete with them years ago and realized they couldn't
and got out of the business. So and then you've
got a winner like Josh Silverman, who was successful at
eBay with shopping dot Com, founded evite, sold that to
Barry Diller over at IAC Interactive, and then when he
was at Skype, he grew three hundred million users. So
(28:26):
you know, you have a situation where they made a
couple of they had the huge growth. They've been able
to keep that level of free cash flow, keep the
level of peak level of COVID revenues, and it's now
trading at about it nine times free cash flow, So
they got so much cash gushing in healthy balance sheet,
a turnaround and plan. They've got this gift mode, they've
(28:48):
better curated the website, they're growing internationally, they're focused on men.
They've got all these initiatives in place that are getting traction,
but at the same time they're buying in all the float.
So they just announced a billion dollar buy back. They
bought in about nine percent of the shares in twenty
twenty four, so effectively, just from the free cash flow,
they could buy in the whole entire company in about
(29:11):
you know, nine years, and that alone if they didn't grow.
But it does look like growth is reaccelerating. And this
is the perfect combination of characteristics that we look for
in turnaround situation. So we think this is gonna be
a great one over the next couple of years.
Speaker 2 (29:27):
Perfect.
Speaker 1 (29:28):
Well, I mean, these are some great ideas, you know. Obviously,
I appreciate you taking time out to talk about them here.
They're in the report. I do want to briefly mention
if you're watching this, Miss will be joining us at
our Dallas event coming up in April, so you can
check that out on the Money Show dot com website.
Speaker 2 (29:44):
Miss. You're also market gage dot com.
Speaker 1 (29:45):
Is the best place to go for more information, right,
Thank you, tom As I mentioned if you're familiar with
his hedge fund tips dot com websites fantastic, lots of
great information. They are great ideas to look at. And Chris,
what's the best place somebody get more information on your picks?
I know I get to see your articles and other
materials when I digest it for our website.
Speaker 5 (30:05):
Yeah, Keviotwealth dot com is our website. I run Cabot
Value Investor in Cabot Stuck the week, and then I
have a weekly podcast called Cabot Street Check that is
available perfect Well.
Speaker 1 (30:17):
Again, all these contributors, we're in the twenty five Top
Picks report. You can go to the link in the
description of this video get your free copy. Take a
look at what they had to say in more detail. Mish, Tom, Chris,
thank you so much for joining me and let's hope
for a very profitable twenty twenty five.
Speaker 2 (30:32):
Thank you, hig Thank you.
Speaker 1 (30:35):
We'll have more interviews for you every week, so I
encourage you to subscribe to the Moneymaster's podcast so you
can stay up to date with the insights from top
money experts. You can follow me on Twitter at real
Mike Larson and follow money Show for more investing and
trading content on Twitter, Instagram and YouTube at money Show.
Speaker 2 (30:52):
Thanks for listening. See you next time,
What's stocks and ETFs offer the most profit potential in
the new year.
Speaker 2 (00:09):
We're here at Money Show.
Speaker 1 (00:10):
We've asked our top experts that very question every year
for decades, and the result is our annual Top Picks Report.
The twenty twenty five edition clocks in at ninety pages.
It features seventy eight picks from forty four different experts.
These analysts, traders, editors and other contributors are specialists in
a wide range of markets, sectors and asset classes. Today,
(00:31):
three of them have joined me for a very special
Money Show Moneymasters Podcast roundtable. They'll tell you how they
arrived at their picks, why they chose the names they did,
what unique features make them so potentially profitable. Joining me
are Tom Hayes, founder, chairman and managing member at Great
Hill Capital, as well as the editor of Hedge Fund Tips,
Miss Schneider, chief strategist at market gage dot com, and
(00:53):
Chris Preston, investment analysts and editor at Cabot Wealth Network.
Thank you all for taking some time out to talk today,
Thanks for.
Speaker 2 (01:00):
Having us, Thanks for having us that great again.
Speaker 1 (01:03):
A lot to talk about there, you know, I want
to kind of avoid getting to macro or a big
picture of views with this episode. But I do think
it's important to ask something right off the bat, and
that's you know, is this finally going to be the
stock pickers market we keep talking about? You know, we've
had this just by big tech and you're fine otherwise, Tom,
Why don't you start with that and let me know
if that is case?
Speaker 2 (01:21):
Why are why not? Yeah?
Speaker 3 (01:23):
I think that's a great question. That's a million dollar
question for this year, Mike, Thanks for having me. I
think what we're seeing though, if we're realistic and objective
about what's going on in the market, what we're seeing
is a deceleration in earnings growth for the Magnificent seven,
which kind of has driven the bus looking backwards, earnings
(01:45):
growth dropping from thirty three percent last year to twenty
one percent this year. However, the multiple on the Magnificent
Magnificent seven has not yet de rated in accordance with
the earnings growth acceleration, So I think they're going to
perform less well, they'll do okay this year. But if
(02:06):
you contrast that to kind of the broadening theme and
take a look at the other end of the spectrum,
going from large cap growth to maybe small cap value
you look at earnings growth acceleration. In the small cap
six hundred, earnings growth is growing from eight percent last
year to twenty one percent this year. The difference is
(02:27):
for that same twenty one percent earnings growth, whether you
talk about MAG seven or you talk about small caps,
is the price you pay. And on MAG seven you're
still paying thirty three times earnings for twenty one percent
earnings growth. On small cap you're paying fifteen or sixteen
times earnings for the same twenty one percent earnings growth.
So I think that this is in fact going to
(02:50):
be the year of the stockbecker who can look under
the surface. The idea of setting on an autopilot and
letting the indices take you to paradise is probably going
to be a little less well founded in twenty twenty
five than it was in twenty twenty four.
Speaker 1 (03:06):
Got it, Messa, It looks kind of like paradise and
the backdrop there you're in New Mexico.
Speaker 2 (03:10):
I know, what are your thoughts? There? Is this finally
going to be that stockpickers market?
Speaker 4 (03:15):
Well, first of all, yes, thanks for having me on
as well, and yes, that is Santa Fe, New Mexico
behind me. It is paradise, but unfortunately paradise is very ephemeral,
as we know, and especially in the market. So I
agree a lot with what Tom says. In terms of
a stock pickers market, I could argue that it's always
in essence of stock pickers market, except when you have
(03:37):
a consensus of almost one hundred percent that it's all
going to be heavy in one area, like we've seen
over the last two years in tech, it just makes
everybody look that much smarter. So I think this year
we will really see somewhat of a separation between here's
a woman saying this, the men and the boys, if
you will, so that that's kind of how we're approaching
(03:59):
the market. We have a factor that we have not
had since right at the end of COVID, which of
course is Trump, and that we saw today was a
perfect example of how headline sensitive this market is going
to be, and he loves to create headlines. Today alone,
there were about a half a dozen, ranging from a
(04:19):
hostile takeover to Greenland to interest rates are too high,
so the market is going to need to settle in
And so in terms of a stock pickers market, I
think the best tip I can say is that in January,
after ten trading days, we have what we call a
six month calendar range. That range is going to be
uber important for in terms of deciding which stocks will
(04:42):
break out of that range and will be sort of
Trump friendly, if you will, which will sort of chop around,
and which will break down and that will make it
easier for US stock pickers.
Speaker 2 (04:53):
Got it? Got it, Chris.
Speaker 1 (04:54):
I'm going to pivot to methodology in a second, but
I just want to see is there anything else briefly
you'd want to add to that sort of a big
picture there.
Speaker 5 (05:00):
Yeah, I feel like both of what mission Tom said
is pretty spot on. It could both be more of
a stock pickers market but also a more democratic market.
You know, there's been the least democratic bull market the
last what is twenty five twenty six months now, where
it's carried by you know, a few dozen stocks, I
mean MAG seven in particular, but you know a lot
(05:23):
of stocks have not participated. Small caps have not participated'roout
like three percent last year and still below the twenty
twenty one highs. You know, you look at the equal
weight index, you know it's lagged S and P and
NASDAC by a long shot. I mean, you know, the
Dow has trailed by a similar margin. So I think
(05:45):
there's a lot of the guest stock pickers market, but
there's a lot of good stocks to pick from because
there is value out there. So I think, you know,
I think I still saw a stat the other day
from Ryan Dietrich of a Carson Research Group who said,
you know, the lot there's been eight times since nineteen
fifty the SMP has been up twenty percent back to
(06:07):
back years, and all eight times has been up another
twenty percent the next year. I don't know if I've
forecast that, you know, nine for nine, but you know
the idea that the bullmarket will you know, bull markets
don't die of old age, and this isn't even old age.
The average bull market lasts you know what, over sixty
sixty months, so we're not even halfway there. Doesn't mean,
(06:28):
you know, there are factors that could derail it, but
I think it's a stockpicker's market, but also a environment
ripe for picking a lot of good stocks out there.
Speaker 1 (06:39):
Well, Chris, let me you know, you brought up a
good point there at the end of that's methodology. I mean,
how do you approach your market analysis what is it
that you focus on. What is it that goes into
picking a top pick, whether it's for this Money Show
project or anything for that matter.
Speaker 5 (06:52):
Yeah, So I run at Cabot Wealth Network. I run
two very different advisories newsletters. One is a value newsletter
and one is more growth heavy. And with even with
the value one, I tend to be more growth oriented.
Eve with the value one, I try and look for
growth at value prices. And I think, you know, value
(07:16):
is underperformed growth for more than a decade. Now doesn't
mean it's historically that's not the case, but so it
doesn't mean that's gonna last forever. But you know, I
guess I'm maybe more malleable than you know. I don't
stick to one system and just ride that, you know,
for the next few decades. So, you know, I like
looking for value now, but it has to have some
(07:38):
sort of growth aspects.
Speaker 4 (07:39):
You know.
Speaker 5 (07:39):
Even even Warren Buffett has you know, Apple, b I
D you know, several growth stocks in his portfolio that
he's found value in. But yeah, I think there is
such a limits to you know, growth. I think Tom
just just outlined the slowing down of the MAGS seven
(08:00):
and that's why I look a little bit more for
value because there's less value there. You know, I don't
think they're going to suddenly, you know, reverse course and
fall twenty percent this year. But you know, a blend
of value and growth is sort of my philosophy.
Speaker 3 (08:12):
I guess, Tom.
Speaker 1 (08:14):
I know from previous conversations you kind of had that
nickname turn around Tom, So I know that value is
where you like to be looking talk about your methodology.
I mean, how do you separate a value opportunity from
a value trap?
Speaker 3 (08:25):
Yeah, I think that's that's a great thing to point out,
and I agree with some of what Chris said. We
do like to see growth, but price is what you pay,
values what you get. So we do look for stocks
that are down a lot in terms of price, and
then we try to distinguish whether value has been destructed
on an equivalent basis and what we find across most
(08:46):
of the durable businesses that we get involved in Number one,
they've been around for many, many years. They've operated through
many cycles. They're going through a temporary impairment like they
have through different cycles, whether they're clical business or they've
had different other headwinds in the past, and the first
thing that we do is we look for solvency risk.
(09:08):
So you know, if a stock's down fifty or sixty
or seventy or eighty percent, the market is saying that
there might be an existential crisis. So the first thing
that we say is are they going to make it
through this cycle? Are they going to live another day?
So that comes down to balance sheet analysis, looking at
the debt, looking at when the maturities come due, and
(09:29):
if I can get comfortable with that, then then the
key is going to be leadership. Do they have a
new jockey that has a track record of success. That's
a key factor. And then finally is free cash flow.
Do they have enough runway to execute on the turnaround
plan because obviously it's been mismanaged to some degree, or
the stock wouldn't be down eighty percent, you know, But
these are durable businesses. Whether we're talking about you know,
(09:51):
Disney that was at one point down sixty percent, Disney's
not going anywhere Boeing seventy percent. These are high quality,
the durable businesses that fell on rough times, but they're
not going anywhere anytime soon. So now to distinguish between
a value trap, I think people get hot in that
(10:12):
just because the price is down means it's cheap, and
that's not always necessarily the case. Oftentimes a stock that's
down a lot deserves to be down a lot and
may face an existential crisis. So that's something that you
need to be able to discern from experience and doing
proper analysis and not just looking at price. And two
(10:33):
is doing lazy asset analysis where you say, well, the
breakup parts alone is worth more than the price that
it's trading at. But there's no catalyst for a recovery
of growth. There's no turnaround story, there's no new leadership,
and I think that's where people get stuck in quote
unquote value traps. And by the way, many of the
(10:54):
greatest value traps are broken growth stocks. Okay that never
ever recover. People forget that as it relates to value generally.
What I see in the market right now is people
blinded by recency bias in that because since twenty ten,
(11:15):
growth has outperformed value. Therefore it's always going to persist,
Meaning what's happened in the recent past is going to persist.
And if you look back to nineteen twenty seven, value
has outperformed growth, by four and a half percent per
year per year, including this aberrational zero interest rate policy environment,
(11:38):
and my kind of view there is value and growth
are tied at the hip number one. So it's not
either or I don't buy something because it's a value
stock or because it's a growth stock. I buy because
I'm getting a lot of value for less price than
the alternatives, highest and best use of the capital. And
I think that unless you believe that we're going back
(12:03):
to zero interest rate policy or close to it, not
having some element of value and or international, which is
also trading at low multiples and small caps, et cetera,
is maybe a little risky at the moment if you've
got all your eggs in one basket. Because I think
we are in a period of regime change and that's
(12:27):
going to create a lot of opportunities, a lot more
opportunity in four hundred and ninety three stocks than in
seven got it?
Speaker 4 (12:32):
Got it?
Speaker 2 (12:33):
Miss?
Speaker 1 (12:33):
I want to make sure we leave plenty of time
for everybody's picks, yours included. So I'm going to kind
of pivot to that part of the conversation with you
and give you the microphone first. I find it interesting
your pick in the healthcare kind of this GOLP space.
It's interesting the top performer among the twenty twenty four
stocks was actually a company called Viking Therapeutics from John McCammon,
a biotech firm that's got a potentially promising anty obesity
(12:55):
drug that's in development.
Speaker 2 (12:55):
So why don't you talk about your pick there?
Speaker 4 (12:57):
Yeah, And I just feel because my esteem co panelists
here are not technical traders, then I think it's really
important to know that market gauge is a little bit
different because we have quantitative models that really basically blend
across all asset classes, from sector rotation to us on Nascar.
(13:19):
Excuse me now, I've got a Nascar on the brain
because I'm going to talk about one of my picks,
but to nastech leaders to everything you know, pretty much.
So we do that based on trend strength indicator, and
we also do that on the earnings growth, especially when
we're talking about small and mid cap stocks. So I
(13:41):
just wanted to say that because my own personal picks
are really a hybrid of fundamental and a lot of
the value that Tom just talked about looking at growth stories,
but also really I have to use charts. I must
use charts. I spent fourteen years on the Commodities Exchange
as a chartist, and even though there were some fantastic
bull moves during that time, I was able to anticipate
(14:04):
based on breakouts before other people. And that's kind of
my wheelhouse. So my two picks are related to that.
So to talk about the first one, you're mentioning ad
V ABBV, which was a pretty good performer in twenty
twenty four, but not necessarily as good as it had
been before that. I like it for a couple of reasons.
Number one is in the biotech space, which two times
(14:27):
point might be something that can really move up this year.
Not only is it involved with a lot of neuroscience
and immunology, which of course we saw a big move
today and Maderna off the lows, but also they have
allergant is that one of their sectors that they have
in their company that does botox botox. In terms of
(14:50):
the vanity trade, and this is really part of my
theory is that with the diet drugs, the people are
going to spend more money on themselves. So we go
from to a meet if you will, or what I'm
calling vanity and avy can benefit from that because, as
we know from a practical standpoint, from an esthetic standpoint,
when you lose a lot of weight, your skin tends
(15:12):
to sag and wrinkle, and botox is a really big
fix for that. So that's where my story comes from.
They also pay a dividend, and they've been paying a
dividend for many, many years, so they're a good, solid
company in terms of the actual chart points. Right now,
it seems to have and this is where I would talk.
One's sixty to me, is my baseline support breaks down
(15:34):
under one sixty, I would not necessarily want to be
a buyer. But right now it's been trading somewhere between
one seventy five and one eighty. And so we get
through these these recent highs, these January highs to my
first point, then I think this has a potential to
be at least a three hundred dollars stock this year.
Speaker 2 (15:53):
Good. Thanks, miss Chris. I want to pivot to you.
I mean, you've got to pick.
Speaker 1 (15:56):
I'm a Starbucks guy, so it's interesting to think about
this other one.
Speaker 2 (15:59):
It's Dutch bros. Correct, it's not sure for brothers exactly.
Speaker 5 (16:02):
Yeah, I accidentally, so I live in Vermont, and we
don't have a Dutch Bros Here. So I was shamed
when I said Dutch Brothers once on our on our
Cabot Street Check podcast. Our producer shamed me for saying that.
But yeah, Dutch Bros. Right, that's yeah, Well, it's it's
you know, it's not in Starbucks' stratosphere yet, but it's
(16:26):
a drive through a coffee company that has now nine
hundred and fifty locations and I believe eighteen states in Washington,
d C. With a very aggressive goal of expanding to
over four thousand locations within the next ten to fifteen years.
It's added, it's been adding, you know, over thirty locations
(16:48):
each of the last few quarters. I think is on
track for over one hundred and fifty new locations in
twenty twenty four.
Speaker 2 (16:56):
And the growth.
Speaker 5 (16:58):
As for the stock, it's you know, it's it was
up over eighty five percent in the last year, but
it's still trailing. It's twenty twenty one highs. You know,
it's currently trading at fifty seven for the fifty seven
a share is seventy six in late twenty twenty one,
and you know, given the growth and the expansion, you know,
(17:20):
will it ever be a true threat to Starbucks? No,
you know, probably not, but you know that given the
sort of star Wars sort of sort of swallowed up
the coffee market, swallowed the US coffee market whole, and
you know, it could. I think there's room for a
little bit of competition and Bros at least, and it's
(17:43):
you know, it's ambitious expansion plans. Is trying to sort
of fill that void. And you know, so far, so
good in the last year, and I think the momentum
will keep up for the next year.
Speaker 1 (17:54):
Great, Great, Tom, I gotta ask you about your first pick.
I mean, it's one of those names that just can't
stay out of the news, and not in a good way.
So sell me on Boeing here.
Speaker 5 (18:03):
Yeah.
Speaker 3 (18:04):
Well, Boeing is what we call a legal duopoly between
Airbus and Boeing. They deliver ninety nine percent of the
commercial aircraft. As far as the recent crashes, which have
been terrible, they're predominantly concentrated to the older planes.
Speaker 5 (18:21):
You know.
Speaker 3 (18:21):
The risk The fear was that it was around the
seven thirty seven Max, which has had a ton of problems,
but they got rid of the old CEO. Fortunately we've
got Kelly Ortbergen, who as an engineering background versus a
sales background or a financial engineering background, and that's a
good thing. He's on the floor in Seattle. He's fixing
all of the problems. He solved the labor union strike.
(18:44):
And when he was at Rockwell Collins before he came here,
he created a lot of value for shareholders. Rockwell Collins
quadrupled in value for shareholders before it was sold in
a period of six years. He's a turnaround specialist. They
have half a trillion dollar backlog. I mean, imagine buying
a business that had ten years of demand that they
(19:05):
couldn't possibly fulfill, that they didn't have the capacity to
fulfill all at once. It's a great problem. You got
airlines waiting, and sure they can get angry and say,
you know, the landing gear didn't come down right, or
the door had a problem, etc. And they're working on
fixing all of that. But at the end of the
day they can say, fine, I'm taking all my business
(19:25):
to Airbus and rather than wait ten years, they're going
to wait twenty years for their planes. So that's not
an option. What they have to do is work with
Boeing and that's what you've seen, whether it's Southwest, whether
it's everything else. And the commonality across all the carriers
is they have utmost confidence in Kelly Ortberg's engineering, prowess,
safety excellence, and turning the company around.
Speaker 2 (19:44):
So with a sock.
Speaker 3 (19:45):
Down that's down that materially some you know, seventy something percent,
it fell maybe peak to trough, and you have a
business that's going to get back to free cash flow positive.
They raised twenty billion dollars cash to take solvency risk
off the table. All the components that I look for
turnaround Tom looks for in a turnaround situation are perfectly
(20:09):
in place. Pricing power, durable sustainable mode performs through cycles,
pricing power, It's all there.
Speaker 2 (20:17):
You just have to be patient.
Speaker 3 (20:18):
Now, you play the time arbitrage game, and most people
can't wait two to three years for a double.
Speaker 2 (20:23):
But we're patient.
Speaker 3 (20:24):
We like to do that rinse, repeat, over and over,
and we think Boeing is going to be one of
our next ones. Fair enough, Miss, I know you and
Chris both had automotive plays kind of in this EV space,
So why don't I start with you first?
Speaker 2 (20:36):
Miss Rivian was the name you're looking at?
Speaker 4 (20:39):
Oh? Now, You've got me curious about what Chris picked. Okay, well, yeah,
I'm Rivian. Well, I'm very much like Chris. This is
somewhat of a controversial call out because I've been seeing
a lot of reports about the EV hoaxes over and
certainly with Drill Baby Drill. People think the gas prices
(20:59):
will go so low people will go back to gas guzzlers.
But I don't believe that at all, because, first of all,
even Elon Musk has basically said that ninety nine percent
of the people who drive evs do not go back
to a gas car. Thereafter, Number one and number two
is that the future obviously is in ev and when
you're talking about software technology, particularly self driving cars, as
(21:23):
far as I know, that will be a lot easier
to execute with evs. So why do I like Rivian? Well,
Rivian hats again, this is a fundamental technical story, right,
consumer instinct. I've seen a lot more on the road,
particularly when I went back east and went to Massachusetts.
Interestingly enough, I saw about five Rivians in a very
(21:44):
small town, so that I was already in the stock,
but still I thought that was interesting. They made a
great deal with Volkswagen in twenty twenty four. They've gotten
a lot of government money to build their plant in
twenty twenty four, and the problems which were a how
many cars were they going to sell and a shortage
(22:05):
of supplies that they had in terms of their parts,
both got resolved recently and so the number of cars
beat and apparently now they do not have the supply
chain issues with their parts. And so that's why we
saw the stock just this week go from like thirteen
up to sixteen sixty. And now with the market coming down,
(22:26):
it's settling down. That one big day was such a
huge rain. It's now basically consolidating within that range. So
you know, all of these are our reasons. And the
final one is again in the Trump administration, I do
believe that anything made in America will actually and by
the way, Boeing made in America will actually be a
(22:47):
plus for companies because they may get incentives, and there's
been talk about ev incentives going a way. I don't
think that will happen. So I believe that Rivin has
a lot of upside potential. And last thing I'll say
about the chart, it really needs to hold around thirteen dollars.
Now I would not again, I would not want to
(23:08):
be really involved in it if it went down below
that too much. And this fifteen to sixteen, sixteen fifty
now will be the calendar range high to clear. And
then I see no reason why this can't go up
continually as we go through this year in the next
couple got it.
Speaker 1 (23:24):
Well, Before I get to Chris's pick, what you've just
said there is a very good point. I mean I
always let people know, and it's in the forward to
the report. This is a point in time. You know,
we ask for contributors picks for the next twelve months.
But of course markets change, economies change, dot prospects change.
So I always remind people if you're reading this report,
follow the work of these people, go to their websites,
go to use the links that are in the report,
(23:45):
to go to their pages, and subscribe to their products
because they may like something now, things could change in
six months, four months, eight months, who knows. But that's
an important thing if you're watching this to keep in mind. Chris,
I do want to ask you now, I mean your
play BYD obviously is a global player in the sector.
Speaker 2 (24:00):
What do you like there?
Speaker 5 (24:02):
Yeah, so you know b y D b y d
d Y is the the A d R ticker symbol.
You know, it might be the one ev maker that
kind of makes Elon musk sweat these days, but only
in one country, China, which is where they do roughly
ninety percent of their business now. But they're expanding globally.
(24:24):
You know that they have factories in the works. They
have a plant it is Pakistan that's that's just underway,
one in Thailand that's just started deliveries, and they're expanding
into or opening new plants in Cambodia, Hungary, Indonesia, Pakistan, Turkey,
(24:44):
Mexico and Vietnam are possible targets as well. No US
footprint in the works as of now, although they do
make electric buses in California. I'm not sure that's moving
the needle a whole lot, but so it's one a
lot of US investors aren't familiar with, familiar with, and
I think that's you know that plus sort of the
China baggage these days has has limited the stocks. The
(25:10):
stock hasn't gone along with the growth of the company
the last couple of years. You know that when they pivoted,
they've been a huge uh car automaker in China for years,
but they pivoted in twenty twenty two to all evs
and hybrids, and when they did that, revenues tripled that year,
(25:31):
and they've continued to climb, you know, not they haven't
tripled every year, but you know, to the point where
they sell more evs and hybrids as they did last
quarter than Tesla. So it's it's a little bit of
a value pay. I mentioned earlier that you know, it's
in Warren Buffett's portfolio, so it's a little bit of
(25:51):
a value play. But I like the growth, and it's
clear that the stock price has not cut up with
the growth. You know, if you look at you can
make the argument that it's a bit like Tesla, you know,
ten eight to ten years ago. You know, it's it's
trading at UH fifteen times UH forward earnings and by
the way, that's less than a quarter of it's five
(26:13):
year average UH forward pe ratio, which is around ninety.
You know, you compare that too, you know to Tesla's
it's just a fraction of it. You know, not not
to denegrate Tesla in any way, and I agree, I
like miss your your pick of Rivian uh with you know,
clearly under Trump, especially the America First agenda should benefit
(26:37):
you know, American car companies. And and I too, am
seeing way more rivians on the road, uh than it
did even a couple of years ago. It used to
be a little novelty a couple of years ago to
see one. Now see them just basically anywhere. But b
W I D if you know, it'll have to combat
a lot of you know, US China tariff baggage. But
(26:57):
I still, you know, if we're looking out you know,
multi years, I really like its potential and that includes
this upcoming year.
Speaker 1 (27:06):
Got perfect, Tom, I want to get back to your
last pick. You know, my household may or may not
have spent some time on the website this holiday season.
It's Etsy. Obviously a lot of people know what company does.
What's your case there?
Speaker 3 (27:18):
Yeah, this is another one of my favorites. Down eighty percent.
We like to buy things down quite a bit. But
what's very interesting is the price is down eighty percent.
But like I say, prices what you pay, values what
you get. They certainly their growth rate decelerated post COVID.
They had a huge surge in COVID. They are the
(27:39):
fourth most trafficked e commerce site in the US, behind
obviously Amazon, Walmart, and eBay ninety two million users. But
what's beautiful about their business is it's a niche product, handmade, customized,
named products, so it's not a race to the bottom
in me too products where you're just competing on price,
(28:01):
which they couldn't compete against Amazon, and Amazon had tried
to compete with them years ago and realized they couldn't
and got out of the business. So and then you've
got a winner like Josh Silverman, who was successful at
eBay with shopping dot Com, founded evite, sold that to
Barry Diller over at IAC Interactive, and then when he
was at Skype, he grew three hundred million users. So
(28:26):
you know, you have a situation where they made a
couple of they had the huge growth. They've been able
to keep that level of free cash flow, keep the
level of peak level of COVID revenues, and it's now
trading at about it nine times free cash flow, So
they got so much cash gushing in healthy balance sheet,
a turnaround and plan. They've got this gift mode, they've
(28:48):
better curated the website, they're growing internationally, they're focused on men.
They've got all these initiatives in place that are getting traction,
but at the same time they're buying in all the float.
So they just announced a billion dollar buy back. They
bought in about nine percent of the shares in twenty
twenty four, so effectively, just from the free cash flow,
they could buy in the whole entire company in about
(29:11):
you know, nine years, and that alone if they didn't grow.
But it does look like growth is reaccelerating. And this
is the perfect combination of characteristics that we look for
in turnaround situation. So we think this is gonna be
a great one over the next couple of years.
Speaker 2 (29:27):
Perfect.
Speaker 1 (29:28):
Well, I mean, these are some great ideas, you know. Obviously,
I appreciate you taking time out to talk about them here.
They're in the report. I do want to briefly mention
if you're watching this, Miss will be joining us at
our Dallas event coming up in April, so you can
check that out on the Money Show dot com website.
Speaker 2 (29:44):
Miss. You're also market gage dot com.
Speaker 1 (29:45):
Is the best place to go for more information, right,
Thank you, tom As I mentioned if you're familiar with
his hedge fund tips dot com websites fantastic, lots of
great information. They are great ideas to look at. And Chris,
what's the best place somebody get more information on your picks?
I know I get to see your articles and other
materials when I digest it for our website.
Speaker 5 (30:05):
Yeah, Keviotwealth dot com is our website. I run Cabot
Value Investor in Cabot Stuck the week, and then I
have a weekly podcast called Cabot Street Check that is
available perfect Well.
Speaker 1 (30:17):
Again, all these contributors, we're in the twenty five Top
Picks report. You can go to the link in the
description of this video get your free copy. Take a
look at what they had to say in more detail. Mish, Tom, Chris,
thank you so much for joining me and let's hope
for a very profitable twenty twenty five.
Speaker 2 (30:32):
Thank you, hig Thank you.
Speaker 1 (30:35):
We'll have more interviews for you every week, so I
encourage you to subscribe to the Moneymaster's podcast so you
can stay up to date with the insights from top
money experts. You can follow me on Twitter at real
Mike Larson and follow money Show for more investing and
trading content on Twitter, Instagram and YouTube at money Show.
Speaker 2 (30:52):
Thanks for listening. See you next time,
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