[SPEAKER_01]: This is Invest Talk, from KPP Financial, helping investors make sense of the markets one day at a time.
[SPEAKER_01]: Here's your host, Justin Klein.
[SPEAKER_02]: Good afternoon fellow investors and welcome back to another edition of Invest Talk.
[SPEAKER_02]: This is our Thursday, July 9th, 2026 edition.
[SPEAKER_02]: A lot to discuss on today's show, a very up and down market, a very choppy market, especially over the past couple of months, and you can even go back all the way to the
[SPEAKER_02]: Vassilating up and down, you get cell-offs, like you did in the end of the first quarter, you got the rally that started most of, and was sustained through most of the second quarter, and then we have the most recent weakness over the past.
[SPEAKER_02]: Month.
[SPEAKER_02]: A lot of this has to do with changing expectations around
[SPEAKER_02]: what's going on in the AI sector or space in general because not just one sector kind of spans multiple sectors as well as fed policy, government spending, economic growth, all of this is feeding into the trends we're seeing right now.
[SPEAKER_02]: So we're gonna look at all of this and much, much more on today's show.
[SPEAKER_02]: Most importantly, we'll be your live calls.
[SPEAKER_02]: That's what this show is built on.
[SPEAKER_02]: That's what sustains this show is really hearing from you.
[SPEAKER_02]: This show is not about me, it's about you.
[SPEAKER_02]: I know I'm the one talking or Luke's the one talking, but we're just a couple of professionals.
[SPEAKER_02]: We do this every day, so we have a lot to bring to the table.
[SPEAKER_02]: But so to you, and that is your thoughts, your questions, so whatever's on your mind, don't hesitate to reach out and we're going to answer them.
[SPEAKER_02]: We're going to give you actionable.
[SPEAKER_02]: data so that you can, and perspective, so you can bring it back to your own personal situation and make better decisions with your money.
[SPEAKER_02]: Now, a quicker minder, Casey missed it.
[SPEAKER_02]: Our latest wealth webinar beyond the yield, how to invest for your income needs is posted over on a YouTube channel so go check that out for free.
[SPEAKER_02]: Now, in just a bit, we'll talk about today's market performance and run down the show topics for the hour, but as usual, we'll tackle this first-collar question now.
[SPEAKER_04]: I just had a quick question about Rambus or MBS wanted to see what your take is on that stock.
[SPEAKER_04]: Thank you very much.
[SPEAKER_04]: Love you, Michelle.
[SPEAKER_02]: Alright, looking at Rambus or MBS, this is a name that always brings back memories for me, because it's been around a long time.
[SPEAKER_02]: It's been a public company for a long time.
[SPEAKER_02]: We go all the way back 2007.
[SPEAKER_02]: was when it IPO'd, and it started off gangbusters really all the way through until 2011 it rallied from in the 80s all the way to high around 130 and fell off the cliff after it.
[SPEAKER_02]: Matt, it's been a long, long, long downtrend.
[SPEAKER_02]: Oh, I'm sorry.
[SPEAKER_02]: I lied.
[SPEAKER_02]: That was a different chart, scratch all of that, scratch all of that as I thought.
[SPEAKER_02]: This was 97 is one of my P.A.
[SPEAKER_02]: Yes.
[SPEAKER_02]: This is one of those dot com bubble.
[SPEAKER_02]: That's what I was going to do.
[SPEAKER_02]: 97 is one of my P.A.
[SPEAKER_02]: It was one of the big stocks during the tech bubble went from an early late 99.
[SPEAKER_02]: Actually, it was one of the last stocks to really rally.
[SPEAKER_02]: It rallied from about $16 already high around $126.
[SPEAKER_02]: Peaks!
[SPEAKER_02]: has been a long downtrend ever since until 2018 when a bottomed around six bucks has been rallying pretty much ever since now we're trading at around 114 dollars and change in a nice uptrend as pull back recently, but the overall trend is higher earnings expectations for this year 298 and then 374 next year which be an all-time high and what do they do?
[SPEAKER_02]: They develop semi-conductor memory architecture.
[SPEAKER_02]: And this is really for data-intensive computing systems, focusing on data centers and AI infrastructure.
[SPEAKER_02]: So their business is booming.
[SPEAKER_02]: As you would imagine, revenues up 27% last year, so it's got 16% this year, the 20% next year.
[SPEAKER_02]: Their balance sheet, net, about a billion,
[SPEAKER_02]: Cash in their balance sheets, so very clean on a 12 billion dollar market cap, pretty cashable about $330 million.
[SPEAKER_02]: Their operating margins are right now, or 35%, which is the highest it's been in the last decade.
[SPEAKER_02]: It doesn't typically have this level of profitability, and that's probably my biggest worry.
[SPEAKER_02]: That has pulled back from a high round 175, now, like I said around 114, so kind of had that
[SPEAKER_02]: I like this, I like this better than like a micron or sand disc.
[SPEAKER_02]: I much rather own this type of name with clean balance sheet, more consistent earnings long terms to go back or less decade they haven't had the boom and bust cycles.
[SPEAKER_02]: So if you try to play the memory space within AI, these are the type of names, this is
[SPEAKER_02]: rea good diversifier if you own a lot of micron or sand disc, any of those does memory stocks.
[SPEAKER_02]: So I'm going to give Rambus a thumbs up.
[SPEAKER_02]: Thanks for the call.
[SPEAKER_02]: And with a great show yesterday, we looked in the story concerning defense tech stocks in 2026.
[SPEAKER_02]: We explored whether this may be the new growth sector investors have been waiting for.
[SPEAKER_02]: We also answered listener questions on Google or alphabet.
[SPEAKER_02]: The question that was submitted
[SPEAKER_02]: by a listener to our program on AM-1220 in the Bay Area area.
[SPEAKER_02]: And if you listen or you happen to miss it, excuse me, go check it out.
[SPEAKER_02]: That's the way to get every show is to follow and Vestalk wherever you get your podcast.
[SPEAKER_02]: Now we have a lot of ground to cover over the next 45 minutes or so in time permitting you're going to get to all of it.
[SPEAKER_02]: And the main focus point is about India.
[SPEAKER_02]: Is it the best emerging market to invest in for 2026?
[SPEAKER_02]: As AI, the AI trade gets choppy or invested in looking for alternatives to mega-cap.
[SPEAKER_02]: And India is emerging as a serious destination for capital seeking growth without the AI boom bust boom and bust risk.
[SPEAKER_02]: We'll look at that topic in much much more, including the jobs market.
[SPEAKER_02]: We had a jobs figure in June that was
[SPEAKER_02]: weaker than expected.
[SPEAKER_02]: Without following three straight months of pretty good jobs figures.
[SPEAKER_02]: So which one is telling the true story?
[SPEAKER_02]: We'll look at that.
[SPEAKER_02]: And we'll look at tobacco stocks.
[SPEAKER_02]: Tobacco companies have been shifting away from actually cigarettes into what we call smoke list tobacco.
[SPEAKER_02]: It could be more vapes, it could be more.
[SPEAKER_02]: chewing tobacco type of products, things like that, and how is that industry evolving?
[SPEAKER_02]: What does that mean for investments within the space?
[SPEAKER_02]: Then lastly, HSP is pulling back from riskier private credit lending.
[SPEAKER_02]: What does that also mean for that sector or asset class in general?
[SPEAKER_02]: But also, what does that mean for the broader economy as well?
[SPEAKER_02]: So we'll dig into all of those stories.
[SPEAKER_02]: We also have voice bank calls on stocks, stocks, blitz, and then Kratos, Defense, and Security Solutions, KTOS.
[SPEAKER_02]: There is some questions that came in via the comment section on the invest talk of YouTube channel as well.
[SPEAKER_02]: But as always, we're going to head into our first break, first real break.
[SPEAKER_02]: Did you want me to call any time?
[SPEAKER_02]: Leave your question on the invest talk voice bank.
[SPEAKER_02]: Or if you're listening via our live stream on InvestTalk.com or possibly on AM1220 in the Bay Area, you can call right now at 80-899 chart and talk to me about next, still common on today's market activity.
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[SPEAKER_01]: Call Invest Talk 888-99 chart.
[SPEAKER_02]: It ain't 99 chart.
[SPEAKER_02]: It ain't 99, too.
[SPEAKER_02]: 4, 2, 7, 8.
[SPEAKER_02]: Let's take a look at the market today.
[SPEAKER_02]: We had another nice day for the hardware names, the chip names, anything surrounding AI after about a 3, 4 week pullback in the space.
[SPEAKER_02]: you're finding, it's finding support, it's finding a little bit of a rally.
[SPEAKER_02]: Now how sustainable that rally is, is a larger question.
[SPEAKER_02]: It always will regain that momentum or will lose.
[SPEAKER_02]: Continue to lose that momentum.
[SPEAKER_02]: So this is a, was a positive day overall, really on the back of narrative around a pipe material CEO talking up and extended semiconductor cycle.
[SPEAKER_02]: as well as meta-doubling, talking about doubling its compute capacity to 14 gigawatts by next year.
[SPEAKER_02]: So instead of the AI, hyperscaler, capex, spend narrative decelerating, it looks like at least for the moment, it's accelerating.
[SPEAKER_02]: In the market, certainly, like that.
[SPEAKER_02]: There were a few names under pressure, names like Costco is down 4%, that was on June sales, that were a deceleration from May, that slightly misconcensus.
[SPEAKER_02]: And then, because it has elevated evaluations, it's going to be a hit harder.
[SPEAKER_02]: It's makes sense.
[SPEAKER_02]: Then there's Pepsi.
[SPEAKER_02]: Their earnings were was focused on North American softness overall, and inflation headwinds.
[SPEAKER_02]: So that kind of dragged down the sector as a whole.
[SPEAKER_02]: Rates were down a little bit on the day, but 30 or so remains above four and a half.
[SPEAKER_02]: Sorry, 10 year above four and a half, 30 year above five percent on the 10 year trip or 30 year treasury.
[SPEAKER_02]: Really, there's a lot of supply corporate supply, corporate bonds supply coming on market.
[SPEAKER_02]: And so that's kind of pushing rates generally higher.
[SPEAKER_02]: Oil did pull back is,
[SPEAKER_02]: The kinetic activity in the Middle East to slow down a little bit, although still much higher obviously from a week ago.
[SPEAKER_02]: What else did we have?
[SPEAKER_02]: And this was jobless claims came in, kind of red and expected what we saw last week.
[SPEAKER_02]: Then there is the home sales.
[SPEAKER_02]: June existing home sales down 2.4% month over month.
[SPEAKER_02]: Consensus was for it to be closer to flat.
[SPEAKER_02]: So that was kind of a negative,
[SPEAKER_02]: overall, or the other asset classes.
[SPEAKER_02]: Dollar index was flat.
[SPEAKER_02]: Gold finished up 1.4% silver up 3.8% big, nice reversal in the precious metal space.
[SPEAKER_02]: It was look like it was threatening to break down yesterday, but you had a kick safe in the hockey terms.
[SPEAKER_02]: So we'll see if we get fall through to the upside.
[SPEAKER_02]: Bitcoin was up 1.6%.
[SPEAKER_02]: That would be that crew done 2% on the day, like I said, pairing Wednesday's rally.
[SPEAKER_02]: So that was the market overall for July 9th, 2026.
[SPEAKER_02]: Let's go talk to or take a YouTube comment question section comments section question here.
[SPEAKER_02]: KC5, CKX, CK5, CK5, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2, C2,
[SPEAKER_02]: Well, the market typically doesn't like these type of acquisitions when they feel like they're overpaying.
[SPEAKER_02]: Be, they feel like the strategic nature of the purchases off base.
[SPEAKER_02]: Or see it's just too large from a balance sheet perspective
[SPEAKER_02]: to make it, which makes the actual risk of the equity much higher.
[SPEAKER_02]: Fox in general doesn't have a very stretch balance sheet.
[SPEAKER_02]: Now, I didn't look at the, I don't know the news off top of my head, whether this was, yeah, they got a billion dollars in financing, however how this was financed, or is supposed to be financed.
[SPEAKER_02]: Yeah, I mean, I think the main issue here,
[SPEAKER_02]: There's a $20 billion market cap, so it's a big buyout.
[SPEAKER_02]: I don't think this is the buying opportunity at the current time.
[SPEAKER_02]: I think the market's reaction to this is correct, I think Roku is too expensive.
[SPEAKER_02]: So there are in $3.61, next year it's $144 stock.
[SPEAKER_02]: Think you're paying too much for it.
[SPEAKER_02]: So I actually think the market is right here for punishing Fox for overpaying for Roku.
[SPEAKER_02]: Now we're heading to a break, I'm ready for your calls now, 8-899 chart.
[SPEAKER_01]: There are a few things that make KPP financial special.
[SPEAKER_01]: One of them is parallel investing.
[SPEAKER_01]: This means they invest right alongside their clients.
[SPEAKER_01]: Here's how it works.
[SPEAKER_01]: When KPP financial makes a trade for their clients, Justin Klein makes the same trade for himself and KPP.
[SPEAKER_01]: On the same day, at the same price, and same percentage.
[SPEAKER_01]: No front running, no special treatment.
[SPEAKER_01]: Learn more about parallel investing at investtalk.com.
[SPEAKER_02]: Let's talk about the labor markets.
[SPEAKER_02]: We had on Thursday of last week, so about a week ago.
[SPEAKER_02]: The holiday shortened trading week, we had the jobs report for June, which was a bit worse than expected.
[SPEAKER_02]: because you had March April, May that showed labor or job production re-excelerating.
[SPEAKER_02]: So many are thinking, this might be just a blip.
[SPEAKER_02]: The question is, is it a blip?
[SPEAKER_02]: Let's look at some, let's look at various indicators of labor market strength.
[SPEAKER_02]: The first one would be consumer confidence,
[SPEAKER_02]: and the number of net respondents who say that jobs are plentiful versus those that say they're difficult to come by.
[SPEAKER_02]: That number was plus 45 in 2022 and it's been trending down ever since.
[SPEAKER_02]: And now it's getting close to zero, which means that we're approaching levels where these response
[SPEAKER_02]: or that jobs are hard to come by versus easy to come by.
[SPEAKER_02]: So that's number one.
[SPEAKER_02]: That's the lowest level since early 2021.
[SPEAKER_02]: Then there's the wage track green decks.
[SPEAKER_02]: This is a good real-time barometer of how much leverage employees have in the marketplace.
[SPEAKER_02]: Can they ask for bigger raises, whether they're staying with their job, or they're leaving their job, what is it overall?
[SPEAKER_02]: And this peeked out at about,
[SPEAKER_02]: Six and a half percent in mid 2022 on average.
[SPEAKER_02]: Now that's depending on what you're talking about.
[SPEAKER_02]: Job switchers peak data around eight and a half percent.
[SPEAKER_02]: Job stayers peak data around six.
[SPEAKER_02]: But blended average was right around six and a half percent.
[SPEAKER_02]: And all these numbers have been trending down ever since.
[SPEAKER_02]: And now we're at abouts on average three and a half percent.
[SPEAKER_02]: The lowest level since late 2021.
[SPEAKER_02]: Once again, shows you that.
[SPEAKER_02]: employees bargaining power in the labor market continues to decline and there's the ISM manufacturing survey and this is they have a they've what's called a a labor component employment component remember above 50 is growth below 50 and any of these figures is shrinkage services have generally been stronger over the past five or 60 years but that's also been in a downtrend
[SPEAKER_02]: and remains below 50.
[SPEAKER_02]: Although it has recovered from its recent low, which was closer to 47, but
[SPEAKER_02]: You know, it's growing.
[SPEAKER_02]: So that's the one that's probably this strongest then you have the National Federation of Independence, business hiring, that is the small businesses and that softening once again.
[SPEAKER_02]: And so what's showing you is that this, the previous three months is probably more of the anomaly than this particular jobs number.
[SPEAKER_02]: This is actually probably a more realistic look at what the labor market is doing.
[SPEAKER_07]: have a question about stocks blitz and general idea.
[SPEAKER_07]: Is it a good idea to purchase companies that are going into stocks blitz that are already on my watch list because I understand that general trend is that stocks also often spike after the split shortly thereafter.
[SPEAKER_07]: So if I'm already interested in stock and I've got it in following it looking for a good entry point.
[SPEAKER_07]: I just want to find out for some of the foxes.
[SPEAKER_07]: It's a good choice.
[SPEAKER_07]: I guess to buy them with the intent maybe a unloading them after a bomb and a fox split on maybe keeping half and then unloading the other off.
[SPEAKER_07]: All right.
[SPEAKER_07]: Thank you for your help.
[SPEAKER_02]: Well, the first thing to remember about any stock split is that it doesn't do anything to the valuation of the company, all it does is what's the stock trading at.
[SPEAKER_02]: Historically, it's been bullish in the near term because more retail investors think the stock is cheap, even though the valuation has not changed one aoda when you do a stock split.
[SPEAKER_02]: Just adding more shares and the valuation is always based on the number of shares outstanding,
[SPEAKER_02]: or the earnings per share, a cash flow per share, divided by the current price.
[SPEAKER_02]: And so that rate, those ratios do not change when you have a stock split at all.
[SPEAKER_02]: It's really a vanity thing.
[SPEAKER_02]: Nothing fundamental changes about the business or the valuation.
[SPEAKER_02]: But you're right, there is a psychological component here.
[SPEAKER_02]: I haven't looked at it though recently to see how impactful it is.
[SPEAKER_02]: I know a number of years ago I looked at it and it did have a short-term impact on the performance of the other company, but I would imagine with more indexing indexes don't care whether it's stocks but are not the same size, same percentage, same waiting, doesn't matter.
[SPEAKER_02]: So I'd imagine over time these stocks but are becoming less relevant.
[SPEAKER_02]: And so I wouldn't be trading on them to be honest with you, but there is some, some evidence that it can have short term, a short, give a short term tail, win to the price.
[SPEAKER_02]: Now, the next, the best talk we'll look into the story, NATO's anchor of Summit and the Defense spending boom, what it means for your portfolio.
[SPEAKER_02]: Many of you are called now, and eight, eight, nine, nine chart.
[SPEAKER_02]: at KPP Financial.
[SPEAKER_02]: Accountability means more than advice.
[SPEAKER_02]: It means we invest alongside you.
[SPEAKER_02]: Through our parallel investing approach, when we recommend an investment for clients, one or more KPP principles invest their own capital at the same time.
[SPEAKER_02]: same day, same price, same percentage.
[SPEAKER_02]: If your portfolio moves, ours does too.
[SPEAKER_02]: That is alignment, that is transparency.
[SPEAKER_02]: That is the KPP difference.
[SPEAKER_02]: Visit investtalk.com to get your free portfolio review.
[SPEAKER_01]: In the early days, in Vestock was Jerry Klein and Steve Peasley.
[SPEAKER_01]: Now the torch has been passed, and a new generation of hosts is on the job.
[SPEAKER_01]: Justin Klein and Luke Guerrero.
[SPEAKER_01]: So when you've got finance and investment questions, don't forget to call in Vestock.
[SPEAKER_01]: 888-99-Chart.
[SPEAKER_02]: Is it the best merging market to invest in for 20, 26?
[SPEAKER_02]: And if you look at the performance, you probably say, hmm, not really.
[SPEAKER_02]: It's been really struggling over the past, really, really year to date.
[SPEAKER_02]: If I go look at, if you look at some of the big ETFs, like an I and a, it's gonna go with, yeah, let's go with I and DA.
[SPEAKER_02]: That has been a rough year overall.
[SPEAKER_02]: Year to date, we're looking at negative 9%.
[SPEAKER_02]: A lot of people say they look terrible, why don't invest in that?
[SPEAKER_02]: Well, mainly because you look at Indian equity ownership by foreigners, it's near a 15 year low.
[SPEAKER_02]: A lot of people say it's terrible.
[SPEAKER_02]: I actually look at that as an opportunity.
[SPEAKER_02]: It's a sentiment check here.
[SPEAKER_02]: Why is that a 15 year low?
[SPEAKER_02]: We'll for a couple of reasons.
[SPEAKER_02]: Number one is energy is expensive in India, because they import roughly 85% of the crude oil with a spike in energy costs that's pressuring their current count deficit, weakening their currency, and stoking domestic inflation.
[SPEAKER_02]: That's one issue.
[SPEAKER_02]: But I would argue, over the longer term, this lack of spike in prices up to $152 per barrel, despite the closing of the straight-of-home moose is telling you that in general, sub-hundred-dollar oil is here to stay and any of you should be able to deal with that over the long term.
[SPEAKER_02]: Because that's worth spent for a number of decades.
[SPEAKER_02]: Then there's the sector concentration.
[SPEAKER_02]: You have a lot of domestic banks, you have material companies, energy companies, some tech companies, which is not a very well-diversified public market there.
[SPEAKER_02]: And so, one at question investors have to ask themselves, is where do I go?
[SPEAKER_02]: to maybe diversify away from these very concentrated AI risk from domestic US equities.
[SPEAKER_02]: And I think India is a great alternative.
[SPEAKER_02]: But ETFs out there, single country ETFs, IDN, INDA is the one I looked up.
[SPEAKER_02]: Let's go to the examples, the I shares MSCI, INDA ETF.
[SPEAKER_02]: But let's check in on different parts of their economy.
[SPEAKER_02]: is a bright spot.
[SPEAKER_02]: Overseas servicing, service orders are rising to the fastest clip in months.
[SPEAKER_02]: And it is global service integration remains intact.
[SPEAKER_02]: A lot of companies that are trying to diversify away from their supply chains in China are turning to India like Apple.
[SPEAKER_02]: They have a huge workforce, a very young workforce.
[SPEAKER_02]: There's a lot of potential to be unlocked there.
[SPEAKER_02]: And with the geopolitical instability and India is kind of in the middle, right?
[SPEAKER_02]: They're not really picking one side or the other.
[SPEAKER_02]: And their location puts them at the heart of a lot of different spy chains from Europe.
[SPEAKER_02]: Obviously to America as well.
[SPEAKER_02]: So despite India's services PMI dropping to a 17 month low, it's still a 57.4, which means it's above 50, which means growth.
[SPEAKER_02]: A lot of this is relative, but growth is still there.
[SPEAKER_02]: So you have very low equity ownership, but you still have an economy that's growing.
[SPEAKER_02]: And I zoom out to a weekly chart, these ETFs are still in an uptrend, really since the bottom in 2020, they've been in a strong uptrend, making higher highs and higher lows just recently you've had a lot.
[SPEAKER_02]: And with a stronger dollar, the group is been in decline.
[SPEAKER_02]: It's about 6% this year against the dollar, but the Nifty 50, they're major index, earnings are still up 10% in local terms, they're still getting good earnings growth.
[SPEAKER_02]: So to me, if you're looking at emerging market exposure, this still remains one of the best opportunities out there.
[SPEAKER_02]: Let's go back to the Best Type Voice Bank for a fresh listener question now.
[SPEAKER_06]: Oh, yes, Rachel's defense.
[SPEAKER_06]: I got general dynamics and listening to the podcast with just a little research.
[SPEAKER_06]: Could you guys run this down for me?
[SPEAKER_06]: Would this be a good investment for me to consider how listen to the podcast for your answer?
[SPEAKER_06]: Thank you.
[SPEAKER_02]: Are looking at Cretos Defense and Security Solutions about a $9 billion market cap?
[SPEAKER_02]: Bay Prevision Mission Critical Products, Services, and Solutions for the US National Security Priorities as a government solutions, segment and unmanned system segments, I think of drones.
[SPEAKER_02]: This is a name that had a big boom, big rise in price, peaked out, what is this round?
[SPEAKER_02]: I'm gonna $30 per share.
[SPEAKER_02]: How it's all hit down to 48.
[SPEAKER_02]: But earnings are expected to be a dollar seven next year.
[SPEAKER_02]: So obviously, 130, probably a bit too expensive, but now 48, got a mid 40's for looking multiple.
[SPEAKER_02]: To me, this is, it's becoming more attractive, but the technicals remain relatively weak.
[SPEAKER_02]: It's trying to find you a support level here.
[SPEAKER_02]: Oh, it's tough, because it is in such a strong downtrend.
[SPEAKER_02]: Yeah, 36 in the mid-30s, that's where I would pick this up.
[SPEAKER_02]: I actually think it's a good value there.
[SPEAKER_02]: Ernie's expectations for this year and next year are going down, 76 cents this year, dollar seven next year.
[SPEAKER_02]: They have met billion dollars and cash on their balance sheet.
[SPEAKER_02]: Their free cash flow is negative, so that worries me a bit.
[SPEAKER_02]: Their profitability metrics are pretty low, but this is more of a growth name.
[SPEAKER_02]: This is a bat once again on unmanned systems, drones, satellite communication equipment.
[SPEAKER_02]: Kind of the new frontier of,
[SPEAKER_02]: New Frontier of Defense Technology.
[SPEAKER_02]: That's what you're betting on here.
[SPEAKER_02]: And that this is a winner that will continue to get government contracts.
[SPEAKER_02]: So it's very high risk.
[SPEAKER_02]: They're still issuing shares.
[SPEAKER_02]: I don't like that.
[SPEAKER_02]: The technicals are going to get in a poor, but at 35 in that range, mid-30s, that's where I think it's worth a shot.
[SPEAKER_02]: Let's go check in on one more voicemail question now.
[SPEAKER_03]: Hi, this is a min calling from New Jersey.
[SPEAKER_03]: I have a question.
[SPEAKER_03]: about vertical holding, because in though is the as victory, R is like Rob, T is like Tom, Viati.
[SPEAKER_03]: I was watching this stock since early September.
[SPEAKER_03]: So let me know if I already missed the train, or I should wait to fall a pullback.
[SPEAKER_03]: If I should wait, what's your recommended entry point?
[SPEAKER_03]: Thank you so much.
[UNKNOWN]: Bye.
[SPEAKER_02]: I look at Vertive, another one of those data center companies provide data center management products and services.
[SPEAKER_02]: This is stock that back in 2023 was trading in the single digits.
[SPEAKER_02]: Now it's trading at $323 per share and that's after pulling back about 15% from its 52 week high.
[SPEAKER_02]: It's most recent major low was an early 2025 or on 55.
[SPEAKER_02]: And then once again, it's recent highs around 380.
[SPEAKER_02]: The space in general, I think is going through a reassessment of, you know, where is a, where is growth going to settle in that?
[SPEAKER_02]: I think everyone agrees there's secular tailwinds to the AI data center industry.
[SPEAKER_02]: But is it at the pace of close to a trillion dollars in CapEx spending a year?
[SPEAKER_02]: Honestly, probably not.
[SPEAKER_02]: There are two many supply chain bottlenecks that push it up the price of inputs like memory ships, for example, that suddenly, over the long run, makes it even a riskier to build out these AI data centers.
[SPEAKER_02]: So to me, it's going to need a pullback so that the supply chains can catch up.
[SPEAKER_02]: which means that growth in the sectors likely to moderate.
[SPEAKER_02]: When you're already seeing revenue growth this year is 28%.
[SPEAKER_02]: Sorry, last year is 28%.
[SPEAKER_02]: So it's gonna be 36% this year, but then back down to 28% next year.
[SPEAKER_02]: So certain eight, eighty next year, that's a $323 stock.
[SPEAKER_02]: The bit steep, right?
[SPEAKER_02]: You're talking about a 40 times multiple.
[SPEAKER_02]: I like the name, but where would that major support be?
[SPEAKER_02]: I'm gonna say that's,
[SPEAKER_02]: The first major support is going to be around 254, 255, that's 323 now.
[SPEAKER_02]: That's where I think it's worth a stab.
[SPEAKER_02]: So it's worth the risk that you could even have more desoloration.
[SPEAKER_02]: Now if you have more desoloration and growth in the space, it probably goes down to the low 200s and the next big support level you're on 215 or so.
[SPEAKER_02]: Those are my numbers on a vertive.
[SPEAKER_02]: I like the name, I like the balance sheet.
[SPEAKER_02]: I just worry that if growth slows, the multiples are going to hit, be hit considerably, and that puts it at high risk.
[SPEAKER_02]: So, adupation on vertive VRT is the symbol.
[SPEAKER_02]: Let's go answer a question that came in via web form over on vestalk.com.
[SPEAKER_02]: Nick says, I've been watching the Franklin Bootsie India ETF, L-I-N for a good entry point for a long-term whole temple.
[SPEAKER_02]: So you're starting to like it here at sub-35.
[SPEAKER_02]: but would like to get your take on it, thanks in advance for your advice.
[SPEAKER_02]: Well, this kind of ties in with our main talking point that I hit on a little bit earlier, and the Franklin Futsi ETF is pretty low expense ratio, only 19 basis points.
[SPEAKER_02]: Let me look at INDA, which you had up earlier.
[SPEAKER_02]: It was 61 basis points, so that's certainly more expensive.
[SPEAKER_02]: So I like this one that it's cheaper, FLI, and look at a longer term chart and look how this is,
[SPEAKER_02]: allocated.
[SPEAKER_02]: 10% industrials, 28% financial services that goes back to what I was saying earlier, very financial service is heavy.
[SPEAKER_02]: Only 8% tech.
[SPEAKER_02]: I like that this is very well diverse.
[SPEAKER_02]: Outside of that, 28% financial services, everything else is 12% of this portfolio or less.
[SPEAKER_02]: In the 7 to 4, it's in a longer term uptrend and I like the secular tailwinds for India.
[SPEAKER_02]: So yes, I think FLA and is a good vehicle for Indian exposure, and I think this is a good entry point.
[SPEAKER_02]: Let's go for one more voice mail question now.
[SPEAKER_05]: Hi, Luke and Justin.
[SPEAKER_05]: This is Rob calling from Las Vegas.
[SPEAKER_05]: I had a question on one oak symbol OKE.
[SPEAKER_05]: I just wanted to get your analysis of any future potential in this position.
[SPEAKER_02]: All right, looking at O, K, E is the symbol.
[SPEAKER_02]: This is the name that we stone for clients and frankly, we're actually about to rotate back into it.
[SPEAKER_02]: We were looking at some e-mpeenames and we own some e-mpeenames.
[SPEAKER_02]: We've done well, especially from the bottom and oil.
[SPEAKER_02]: But the lack of follow-through to the upside because of the geopolitical volatility in the Middle East.
[SPEAKER_02]: tells us a lot about the, the right tail risk.
[SPEAKER_02]: There's a left tail, which is the downside of potential probabilities of any investment.
[SPEAKER_02]: This is a right tail, which is great upside, you're seeing that right tail in memory stocks right now.
[SPEAKER_02]: Very rare, but it happens.
[SPEAKER_02]: That an amicent in the industry, the economy.
[SPEAKER_02]: Suddenly, allow for huge profits, which means huge upside-in share price.
[SPEAKER_02]: Usually short-lived, but it's nice to be in those sectors that have that right-tail risk and then you experience it.
[SPEAKER_02]: A lot of investors have right now.
[SPEAKER_02]: And in the oil patch, or the little industry, the thought was always, if there is geopolitical unrest that closes the streets of war news, you're going to get that right tail upside in the oil.
[SPEAKER_02]: Or oil goes to $150, $250 per barrel, these MP companies extract huge profits, and you benefit.
[SPEAKER_02]: But we didn't get that, which tells me I want to own
[SPEAKER_02]: pipeline companies.
[SPEAKER_02]: I want to own the refining companies.
[SPEAKER_02]: And one oak is a pipeline company.
[SPEAKER_02]: It's engaging gathering, processing, sale, and transportation storage of natural gas, and oil, and natural gas liquids, etc.
[SPEAKER_02]: So, it's a name that we're gonna rotate into, I think we're reading for a bit of a rally in oil, because I think if there is a rally in oil, the MP come is gonna benefit more on the short term, but it's pretty clear over the medium to long term, you rather own these pipeline names.
[SPEAKER_02]: So, I'm gonna give okay or one of eight thumbs up.
[SPEAKER_02]: Now, this is Invest Talk, I'm Justin Klein with one goal here, each and every week, they help you achieve your own version of financial freedom.
[SPEAKER_02]: And I work continues after this final break to the pitch questions.
[SPEAKER_02]: And now, eight and eight, nine, nine chart.
[SPEAKER_01]: Invest talk.
[SPEAKER_01]: Tell your friends they can listen live, download the free podcast, or watch invest talk on our YouTube channel.
[SPEAKER_01]: And they can leave their finance and investment questions anytime on 88899 chart.
[SPEAKER_02]: Let's go squeeze in another YouTube comment section question.
[SPEAKER_02]: Dan Max says, hey guys, love a show.
[SPEAKER_02]: I've been holding 20 shares of Microsoft since 2021.
[SPEAKER_02]: It's only returned about 13% profit.
[SPEAKER_02]: Do you think it's worth it to keep holding, sell some or sell all things?
[SPEAKER_02]: Well, it's hard to believe me say without looking at your overall portfolio, what is your general exposure to software, to the Mac 7, et cetera.
[SPEAKER_02]: Now, Microsoft, I still think is a very solid business.
[SPEAKER_02]: consistent business, it's struggled mainly because software has struggled.
[SPEAKER_02]: So just shows you that, yeah, it might before that Microsoft did very, very well.
[SPEAKER_02]: If you look back 5, 10 years old, it's doing amazing.
[SPEAKER_02]: But then, it came along and it's threatening their business.
[SPEAKER_02]: That was it.
[SPEAKER_02]: Truly threatening their business in a dramatic way, probably.
[SPEAKER_02]: not really, not as much as maybe the market is as priced in.
[SPEAKER_02]: And to me, that screen is buying opportunity more than sell it.
[SPEAKER_02]: So this is a good example of like, don't just look at the line on down or it's not it's middleing, it's a really assess the business.
[SPEAKER_02]: This is a good value because if very well,
[SPEAKER_02]: I think there's a decent chance it's seven next to three years that it's the best performing max seven name out there because of the reset in sediment around the space.
[SPEAKER_02]: So, no, it's not a name I would be particularly apt to sell after this downtrend that's been in for about a year plus.
[SPEAKER_02]: I might be adding more, but I have to look at your report for you.
[SPEAKER_02]: Thanks for the call.
[SPEAKER_02]: Now speaking of stocks that your sentiment waxes and lanes talk about tobacco stocks.
[SPEAKER_02]: A lot of people exclude them from their portfolio, but in today's day and age, when people are looking for dividends, looking for exposure to consumer staple stocks, oftentimes these tobacco names are some of the safest best businesses within that industry.
[SPEAKER_02]: names like Philip Morris or British American Tobacco, and a lot of times it's not because of their tobacco business.
[SPEAKER_02]: In fact, Tobacco use continues to be on decline, but it's the other type of smokeless tobacco products that are actually increasing in usage.
[SPEAKER_02]: And those businesses are booming.
[SPEAKER_02]: And if you invest in tobacco stocks that we own Philip Morris, that's our main exposure to the tobacco space,
[SPEAKER_02]: They have a huge lead in non-combustible products.
[SPEAKER_02]: 41% of their sales last year were non-combustible products.
[SPEAKER_02]: The market leader in smoke free products.
[SPEAKER_02]: Baby rolled out those fully, too.
[SPEAKER_02]: Was that equal, equals, I equals, equals, IQS.
[SPEAKER_02]: They're popular in Japan and Europe, but growing here.
[SPEAKER_02]: Bananas in as well, as in oral and nicotine patches.
[SPEAKER_02]: So they're really doing very, very well.
[SPEAKER_02]: They're not really a cigarette company anymore.
[SPEAKER_02]: They actually don't sell.
[SPEAKER_02]: any cigarettes in the United States.
[SPEAKER_02]: So I'll tell you a little bit about this.
[SPEAKER_02]: But according to Jeffries, well in two thirds, a two thirds of vape products in the US are now illicit, which means that there's room for public guidance to allow for more vape and smoke-free products to enter the market.
[SPEAKER_02]: There's even more growth opportunity for these names.
[SPEAKER_02]: And this is needed because the number of cigarettes sold in North America has fallen by a third since 2020, think about down 33% and just six years.
[SPEAKER_02]: Now despite that tobacco companies have been able to keep their revenue steady by raising their prices because the customers are addicted.
[SPEAKER_02]: I mean, I like this, but at the end of the day, still good business.
[SPEAKER_02]: There's still some of the best investments over the long term that we've seen.
[SPEAKER_02]: And income and value investors, traditionally, they've kind of shunned tobacco stocks, which has pushed the valuations down and oftentimes, the Divineals up.
[SPEAKER_02]: But tobacco stocks, like I said, there's some of the few companies within the space that are actually turning decent growth.
[SPEAKER_02]: Alcohol uses down, package food giants are struggling with increased input costs and
[SPEAKER_02]: And fewer and fewer investors are excluding tobacco names from there, or flows means that more and more people actually putting money into these names and that's why they continue to do very, very well.
[SPEAKER_02]: So, I want to highlight this space because this example of, you could buy the whole sector, or you could go find the best debris within a particular sector, and certainly within the consumer staple space, the tobacco names tend to be the most attractive.
[SPEAKER_02]: Let about does it, I'm Justin Klein, reminding you about KPP financials parallel investing.
[SPEAKER_02]: When you make a trade for our clients, make the same trade for ourselves, same day, same price, same percentage, no front running, no special treatments.
[SPEAKER_02]: We invest right alongside our clients.
[SPEAKER_02]: So, if you want to learn more, you can head over to investtalk.com.
[SPEAKER_02]: Please tell your friends and family about a free podcast downloads, which you can find any time at iTunes or Spotify, make sure to go follow us on YouTube as well.
[SPEAKER_02]: independent thinking.
[SPEAKER_02]: Sure it's success.
[SPEAKER_02]: That's some best talk.
[SPEAKER_02]: Good night.
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