[SPEAKER_03]: This is Invest Talk from KPP Financial, helping investors make sense of the markets one day at a time.
[SPEAKER_03]: Here's your host, Justin Klein.
[SPEAKER_02]: Good afternoon fellow, investors and welcome back to our final edition of Invest Talk for the week.
[SPEAKER_02]: It is Friday, July 10th, 2026, the first full week.
[SPEAKER_02]: of the, give Q3 of the second half of the year, a lot to unpack is usual, big market moves, to close out the week, a lot of headlines, to close out the week, and our job here is to help you see through the headlines and what really matters to you, your portfolio, the broader economy, different sectors, asset classes, etc.
[SPEAKER_02]: That's what today and every day on a best talk is really about.
[SPEAKER_02]: And then it's about answering your finance and investment questions.
[SPEAKER_02]: That's the biggest part of what we do here.
[SPEAKER_02]: So I'm Justin Klein and my job is to use this next 45 minutes to an hour to help you take that next step in your investment journey.
[SPEAKER_02]: They're always small, but they add up.
[SPEAKER_02]: Just like anything in life.
[SPEAKER_02]: go out and run a mile and suddenly you're ready for a marathon.
[SPEAKER_02]: Now you build up and you get your body in shape and build up to what your body can handle then you go out and tackle the big boy and that's what this is about and when you're here in the investment world it's you don't just tackle it one time it's you go back to the well over and over again and you have to keep your mind sharp keep your data
[SPEAKER_02]: Keep your emotions in check.
[SPEAKER_02]: So that's what this hour is designed to help you do.
[SPEAKER_02]: The Clicker minor case you missed it are latest wealth webinar.
[SPEAKER_02]: Beyond the yield, how to invest for your income needs, is posted over on YouTube channel so make sure you go check that out free to watch.
[SPEAKER_02]: And in just a bit, we'll talk about today's more performance.
[SPEAKER_02]: But, and then rendition is so topics, but first, let's answer this color question.
[SPEAKER_02]: Now.
[SPEAKER_09]: Hey guys, I'm trying to call you about aero environment incorporated.
[SPEAKER_09]: That's ticker symbol A, B, A, B. I'm seeking out your analysis on the stock.
[SPEAKER_09]: I did buy it.
[SPEAKER_09]: Let me know how you think this looks like.
[SPEAKER_09]: You know, if I want to hold it, you know, five to ten years.
[SPEAKER_09]: But I'm curious if you could get me your analysis.
[SPEAKER_09]: I'll listen to your answer on the show.
[SPEAKER_09]: Thanks.
[SPEAKER_09]: Have a good day.
[SPEAKER_09]: Bye.
[SPEAKER_02]: Looking at era environment, they defend technology company delivering integrated capabilities across airland, sea, space, and cyber, so a business that you think with what everything everything has been going on, they have, they would be in a cap bird seat, being an integral part of the defense infrastructure that is leaning more and more towards autonomous vehicles,
[SPEAKER_02]: Cyber security, all that.
[SPEAKER_02]: This is where they sit.
[SPEAKER_02]: And if you go look at their earnings,
[SPEAKER_02]: You'd say things are looking good, but the issue is that earnings growth is so lowing.
[SPEAKER_02]: It was 137% in 2023, up to $2.99, then 328 and 24, then $3.31 last year.
[SPEAKER_02]: This year though, earnings are expected to fall to $3.25, then you look at the stock price, it's $144.
[SPEAKER_02]: Now next year, earnings are expected to bounce back to an all-time high at $4.46, however,
[SPEAKER_02]: And that's why the stock is in a downtrend.
[SPEAKER_02]: Brothers strength is seven.
[SPEAKER_02]: Now one good thing about the chart, I would say, is that last week, it had a big, massive reversal on volume.
[SPEAKER_02]: I mean, that's good thing.
[SPEAKER_02]: But it needs to hold the lows from last week, which so far, the good news of this week's close, it held this week.
[SPEAKER_02]: So there's some,
[SPEAKER_02]: The some signals here on the chart that this could be the bottom.
[SPEAKER_02]: No, it's just a very short term couple weeks.
[SPEAKER_02]: You know, really what last week.
[SPEAKER_02]: But if it breaks below last week's low, then that becomes big problem.
[SPEAKER_02]: Then it's probably taken on the stairs to lower.
[SPEAKER_02]: What I do like about it, even though it is a bit expensive from a earnings perspective.
[SPEAKER_02]: And a cash flow perspective isn't negative.
[SPEAKER_02]: I don't love that.
[SPEAKER_02]: Does have a good balance sheet.
[SPEAKER_02]: But it has a good balance sheet mainly because it is just issuing more and more shares.
[SPEAKER_02]: But if you're looking at investors in the theme in the valuation, you're okay paying a pretty large premium, which you are here, then this would probably be a time to take a shot because this is now returned for the go to zoom out to a weekly chart.
[SPEAKER_02]: It seemed out to an area where it broke out back in 2025, early 2025.
[SPEAKER_02]: So you can see how volatile it's been.
[SPEAKER_02]: It's just deep, but a little over a year, 15 months.
[SPEAKER_02]: It's gone from a low around $100 per share that a high recently, 400.
[SPEAKER_02]: It was back in October, without or 144.
[SPEAKER_02]: It's because it shows you that it's not just about the theme
[SPEAKER_02]: so that it's a factor here.
[SPEAKER_02]: But it's about the right valuation.
[SPEAKER_02]: And you're getting much closer to that.
[SPEAKER_02]: So I think it's worth a shot at these levels, but understand it's still very, very high risk.
[SPEAKER_02]: Then the question too is, who's investing?
[SPEAKER_02]: Where's the money, the government contract's going?
[SPEAKER_02]: Is the Trump family invested in this particular name?
[SPEAKER_02]: I'm not sure if I've taught my hand to take a look at that as well if it is.
[SPEAKER_02]: Obviously, that would be beneficial for future government contracts.
[SPEAKER_02]: Now with a great show yesterday,
[SPEAKER_02]: We looked into this question, is India the best emerging market to invest in for 2026?
[SPEAKER_02]: And it turns out that before you pivot your portfolio eastward, you need to understand the real risks, which we talk about in yesterday's show.
[SPEAKER_02]: We also answer a question about Microsoft.
[SPEAKER_02]: And if you happen to miss it, go check it out.
[SPEAKER_02]: The best way to get every show is to show is to follow and best talk wherever you get your podcasts.
[SPEAKER_02]: We have a lot of ground to cover over the next 45 minutes or so, and time permittingly going to get to where we're going to get to all of it.
[SPEAKER_02]: Number one is about the travel industry.
[SPEAKER_02]: What the offseason boom tells us about the consumer economy, record heat blades, overcrowded, peak seasons are driving a surprising offseason travel.
[SPEAKER_02]: Boom with airlines, hotels, and travel platforms, seeing demand patterns that are rewriting the traditional tourism boom.
[SPEAKER_02]: or tourism calendar.
[SPEAKER_02]: Now for investors, this behavior, shift, shift, consumer spending is a window into the resilience or fragility of the American consumer in a high cost environment.
[SPEAKER_02]: So we're gonna look at that topic.
[SPEAKER_02]: We have other topics on the docket as well, one is HSBC pulling back from private credit and this links to one of the data points, we follow a lot of KPP, which is bank lending, our banks continuing to lend at the same pace
[SPEAKER_02]: the previous quarter and previous year, or is it decelerate?
[SPEAKER_02]: That could be a signal to what's gone on in the broader liquidity environment.
[SPEAKER_02]: And then the with the redux of the war in the Middle East, what's going on with US oil supplies and how much longer can we handle the
[SPEAKER_02]: We'll talk about that.
[SPEAKER_02]: We also have voice bank questions.
[SPEAKER_02]: One is on 401k.
[SPEAKER_02]: The other is on TTMI, TTM technologies.
[SPEAKER_02]: Then we have some questions that came in via the comment section on the Invest talk YouTube channel as well as always.
[SPEAKER_02]: But we're going to head into a quick break because we're going to be going to be in call any time and leave your question on the Invest talk voice bank.
[SPEAKER_02]: And if you're listening via our live stream or on AMTEL20 in the area, you can call right now at 88899 chart but up next, I'll comment on today's market activity.
[SPEAKER_03]: It's official, total lifetime downloads for the Invest Talk podcast have now surpassed 63 million.
[SPEAKER_03]: So tell your friends when they have financial investment questions call Invest Talk.
[SPEAKER_03]: 888-99 chart.
[SPEAKER_02]: It hit 99 chart, it hit 992, 4278.
[SPEAKER_02]: So I get through and ask your question on today's show.
[SPEAKER_02]: We closed out the week with kind of a mixed picture.
[SPEAKER_02]: Overall, you know, it was Brunk was broadly positive.
[SPEAKER_02]: The rest of the house was still negative by about half a percent.
[SPEAKER_02]: S&P was up about 42 base disappoints.
[SPEAKER_02]: Now, it's that cup of about a third of 1%.
[SPEAKER_02]: Dow about a quarter of 1%.
[SPEAKER_02]: Some of them pull back, some of them continue to hire it.
[SPEAKER_02]: Some of the, it was interesting.
[SPEAKER_02]: Sand is just a 3% and we had SK high necks came to market.
[SPEAKER_02]: I think I was up 13% on the initial listing here.
[SPEAKER_02]: So money coming out of names like Micron down one percent.
[SPEAKER_02]: Healthcare was down a little bit as well that had been strong as of late.
[SPEAKER_02]: You had some areas of tech like Palantir, Palton Networks, CrowdStrike, Apploven, IBM Netflix Oracle Palantir, all done.
[SPEAKER_02]: down on the day pretty nicely anything kind of cybersecurity related that was certainly down the max seven outside of video videos up 3% but the meta was up six but everything else was kind of muted kind of around the flatline.
[SPEAKER_02]: So what you have to remember is we are heading into earnings season, earnings season is next week, believe Tuesday, and before the bell or after the bell, we get some bank earnings.
[SPEAKER_02]: That's always first on the docket.
[SPEAKER_02]: So we'll get a little sense of that.
[SPEAKER_02]: There's a lot of positive expectations, especially with the volatility in markets and the IPO schedule that banks are going to have some good earnings.
[SPEAKER_02]: So I think that will be something to watch,
[SPEAKER_02]: There are two days of a tax in the US and we're on early in the week, the latest headlines have been kind of muted, but we've seen there's a pattern where you get re-escalation over the weekend and then everything comes down by Monday because President Trump doesn't want to.
[SPEAKER_01]: He doesn't want to disrupt the equity markets.
[SPEAKER_02]: So he tends to do these things on weekends.
[SPEAKER_02]: What else do we get today?
[SPEAKER_02]: Treasuries were weaker yields were up about three basis points on
[SPEAKER_02]: which means a bit more hawkish fed being priced in dollar index was up 0.1% gold finish down 0.7% silver down 1% Bitcoin up 1, WTI crude down about 1% as we head into the weekend and into earnings.
[SPEAKER_02]: Season.
[SPEAKER_02]: So that was the market today.
[SPEAKER_02]: Let's pivot to an investment stock voiceman question for a question that came in earlier on
[SPEAKER_06]: Hi, it's Rob from New York.
[SPEAKER_06]: Just have a question about TPMI, T4 Tom, T4 Tom, and for Mary.
[SPEAKER_06]: Hi, for India.
[SPEAKER_06]: I wanted to know what it's thought on that.
[SPEAKER_06]: It was a good entry point.
[SPEAKER_06]: It's a good aerospace and defense stock.
[SPEAKER_06]: It's got a forward PE about 37.
[SPEAKER_06]: I believe.
[SPEAKER_06]: And it has got a good pull back now from over the 200 to 140.
[SPEAKER_06]: So let me know if this is a good one to buy.
[SPEAKER_06]: And what's a good entry point.
[SPEAKER_06]: Thank you.
[SPEAKER_02]: Looking at TTM technologies, yeah, quite the pullback recently, down about 2.3% today, it's recent high was up around 220 and changed, now we're down to 146 and change.
[SPEAKER_02]: Now, 34% drop in the span of two weeks.
[SPEAKER_02]: So you can see how volatile this name is.
[SPEAKER_02]: It's one of those growth year names.
[SPEAKER_02]: earnings are expected to be $5.32 next year, 403 this year.
[SPEAKER_02]: That's all the way up from $1 10 and earnings back in 2020.
[SPEAKER_02]: And earnings have been growing, but you've seen a re-exceleration or an acceleration over the past couple of years.
[SPEAKER_02]: What do they do?
[SPEAKER_02]: They manufacture printed circuit boards and back playing assemblies in the aerospace defense industry, commercial, or read of frequency, segments, their designs, support customers in automotive, medical, industrial, and criminal.
[SPEAKER_02]: So I really like the diversity.
[SPEAKER_02]: of their business.
[SPEAKER_02]: However, the profitability is still pretty meager, frankly, is 11%, free cash flows still negative.
[SPEAKER_02]: Historically, you go the best since 2016, and that's 10 years.
[SPEAKER_02]: Their profitability is closer to, or frankly, is around 5%, which isn't great.
[SPEAKER_02]: Operating margins right now are 9%, but that's pretty much the highest they've been over the last 10 years.
[SPEAKER_02]: And what you're seeing right now is estimates for this year's earnings are coming down.
[SPEAKER_02]: And I think this needs a much further correction.
[SPEAKER_02]: Let me give you a number.
[SPEAKER_01]: Woo.
[SPEAKER_02]: I think there's a lot more down said to come here.
[SPEAKER_02]: 95 to 142 or 46.
[SPEAKER_02]: 95 would be the area that I would pick up.
[SPEAKER_02]: TT, M, I.
[SPEAKER_02]: are trying for our invoice bank, never closes so you can leave your finance and investment questions anytime as always, 8.99, chart and work continues after this break.
[SPEAKER_03]: In the early days, in Vestock was Jerry Klein and Steve Peasley.
[SPEAKER_03]: Now the torch has been passed and a new generation of hosts is on the job, Justin Klein and Luke Guerrero.
[SPEAKER_03]: So when you've got finance and investment questions, don't forget to call in Vestock, 888-99, chart.
[SPEAKER_02]: Let's talk about the latest bank to pull back is lending to the private credit industry.
[SPEAKER_02]: As I said, it's kind of the top of the show.
[SPEAKER_02]: One of the big stats that we follow, IKPPE is commercial bank credit growth.
[SPEAKER_02]: If it's rising, that's,
[SPEAKER_02]: more money into the system.
[SPEAKER_02]: Most people think that banks or the central banks are the ones that create money in this certainly can.
[SPEAKER_02]: But in a fractional reserve banking system, where commercial banks can lend 10 to 1, when they go at lend, they're effectively creating dollars.
[SPEAKER_02]: You're creating currency that goes into the system.
[SPEAKER_02]: That's liquidity.
[SPEAKER_02]: That's more dollars to go and chase assets, for example.
[SPEAKER_02]: To spend out the real economy that produces profits,
[SPEAKER_02]: So this is why bank lending is so important.
[SPEAKER_02]: And bank lending actually peaked in growth, at least peaked in February.
[SPEAKER_02]: I've got about 6.7% in chopped sideways until early April in the mid-Sixies, then went back down and late April around six, bounced a little bit and now we're back below 6% as well.
[SPEAKER_02]: So we've seen a downtrend, it's not major, but it's notable.
[SPEAKER_02]: And very well, it could continue to break down, especially when you get headlines like this, where HSBC is halting, lending to risk your private credit clients, because they're seeing high profile bankruptcies.
[SPEAKER_02]: Such as we saw in the fall, car loan company tri-color, as well as auto parts company first brands.
[SPEAKER_02]: That prompted lenders to review their portfolios in search of some sort of vulnerabilities.
[SPEAKER_02]: And some bankers, one maker is quoted as saying, we all reviewed our lending and it wasn't pretty.
[SPEAKER_02]: And one of the biggest collapses was,
[SPEAKER_02]: market financial solutions, collapsed in February, fraud, I'm a mid more fraud charges, and a lot of this within the space, and it barklies 228 billion pounds in losses.
[SPEAKER_02]: HSBC took a $400 million charge because it lent to a policy asset backed lending group, which had lent to MFS.
[SPEAKER_02]: So those are the ones that triggered this reappraisal of lending within the system.
[SPEAKER_02]: This is what it's called back leverage where these banks are lending to these private credit facilities when for short terms.
[SPEAKER_02]: Short periods in order to maybe get them through any issues.
[SPEAKER_02]: Keep them paying out their dividend or their interest to their investors.
[SPEAKER_02]: But we know that
[SPEAKER_02]: that inherently just adds more leverage to the entire system, but especially when it comes to private credit.
[SPEAKER_02]: May it just be still will lend to less risky private credit funds, that just means ones that aren't as much trouble.
[SPEAKER_02]: The problem with that is, yeah, you might not be as much trouble now, but you could certainly be in the future that's just how these things work.
[SPEAKER_02]: leverage on leverage.
[SPEAKER_02]: So you have HSBC, you have Barclays, it's a private credit, it's something that is you should be watching and I continue to be probably the biggest risk in markets.
[SPEAKER_02]: Let's keep things moving and drop another listener question now.
[SPEAKER_07]: My best talk this is Ralph from Chicago.
[SPEAKER_07]: I was calling to see if I should take part in a 401k.
[SPEAKER_07]: I'm a union employee, so I do have a pension.
[SPEAKER_07]: The 401k is not a match.
[SPEAKER_07]: I do allocate towards a
[SPEAKER_07]: So I was just hoping to see if this would be a good idea for not just one of which you guys not.
[SPEAKER_07]: Thank you.
[SPEAKER_02]: Great question.
[SPEAKER_02]: There are many people have access to 401k's, but their company does not match.
[SPEAKER_02]: No, I would say if your company matches, you need to take advantage of that match.
[SPEAKER_02]: all of it.
[SPEAKER_02]: If you aren't, then you're giving up the most surefire investment you will ever make in your life, which is a 100% guaranteed return on your investment to make sure you're doing that.
[SPEAKER_02]: But if you don't get a match, where should you allocate your funds?
[SPEAKER_02]: And he said he's contributing to a Roth IRA.
[SPEAKER_02]: I think that's great.
[SPEAKER_02]: If you're matching that out, then go for it.
[SPEAKER_02]: Keep doing that.
[SPEAKER_02]: Ignore the 401k.
[SPEAKER_02]: But then once you, if you can save more beyond the full contribution to your Roth, then that's when I would say, okay, a 401k is another good vehicle where you can save more on top of that.
[SPEAKER_02]: But it just depends on how much you're saving, but I would definitely start with a Roth or traditional IRA first and then once you've filled that up, then go with your traditional 401k, but these do have access to that to that a lot of people don't.
[SPEAKER_04]: Doesn't Vestock, I work continues after this break, but you can call me right now, or any time, 24, 7, 8, 8, 8, 9, 9, 8, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9, 9,
[SPEAKER_05]: Is it a good idea to sell your losses in a Roth IRA and just use whatever you have left to reinvestance a better stock?
[SPEAKER_00]: Wondering, what you thought about this read is it would be a good time to get in.
[SPEAKER_01]: I wanted to figure out about Apple.
[SPEAKER_01]: What did you think about their earnings call?
[SPEAKER_01]: So this is a good time to add to my position.
[SPEAKER_04]: Don't forget to call.
[SPEAKER_04]: Invest talk 888-99 chart.
[SPEAKER_02]: At KPP Financial, Accountability means more than advice.
[SPEAKER_02]: It means we invest alongside you through our parallel investing approach.
[SPEAKER_02]: When we recommend an investment for clients, one or more KPP principles invest their own capital at the same time.
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[SPEAKER_02]: Our focus point today is about travel stocks in 2026, so what the off-season boom tells us about the consumer economy.
[SPEAKER_02]: So, post-pandemic, the travel industry was very, very resilient.
[SPEAKER_02]: Over the 2025 and 2026 holidays, season more than half of Americans planned to travel.
[SPEAKER_02]: The highest since the onset of the pandemic, so it continues.
[SPEAKER_02]: But there are some nuances here, the shifts in more conservative approach to things like trip frequency, length, distance travel, the combination classes, et cetera, and it goes back to the well documented aspect of our economy, which is it's very cashaped, but the top of that case becoming a little thinner, pessimism by the wealthier class is increasing, and
[SPEAKER_02]: There's more economic uncertainty.
[SPEAKER_02]: So how does that manifest in the broader industry?
[SPEAKER_02]: Well, it has to do with the front of the plane, destination type resorts, upper class urban hotels.
[SPEAKER_02]: These are the ones that continue to see high demand, but there are cracks emerging.
[SPEAKER_02]: The share of hiring come travelers, those are in 200,000 or more.
[SPEAKER_02]: that indicate negative financial sentiment jumped to 15% in 2025 from 9% in 2024.
[SPEAKER_02]: So, you're seeing it.
[SPEAKER_02]: These more cost-trying can household, they plan fewer and more conservative trips than they were before.
[SPEAKER_02]: Then there's the corporate side.
[SPEAKER_02]: This is Deloitte's 2025 corporate traveler survey.
[SPEAKER_02]: 53% of respondents.
[SPEAKER_02]: who travel 10 or more times per year for business.
[SPEAKER_02]: So they expect to travel three or more times in a typical month, that is down from 63% in 2024.
[SPEAKER_02]: And we know that frequent corporate travelers are more apt to book premium option.
[SPEAKER_02]: Whether that's the hotel, whether that's the flight, whatever.
[SPEAKER_02]: What's interesting though is that the middle market, the more mass luxury, that is starting to see the biggest softness because the ultra luxury, even though there's a bit more pessimism, you're talking about, as I said, going from 9% to 15%, it's not dramatic, and that's where most of the profit is coming from, but the middle market, that's where you're
[SPEAKER_02]: You are seeing instead of economy plus maybe on airlines or going back to economy.
[SPEAKER_02]: For example, and they're looking for the cheaper hotel, not the one with just the brand name.
[SPEAKER_02]: But part of this is also a shift in who is traveling.
[SPEAKER_02]: Gen Z and Millennials now account for half of all travelers.
[SPEAKER_02]: Gen Z is having the biggest
[SPEAKER_02]: share, gain share of poll travelers, jumping from 8% in 2024 to 14% in 2025, but one in six, but one in six travelers are now Gen Z.
[SPEAKER_02]: And how is that demographic shift impacting the industry as a whole?
[SPEAKER_02]: Well, younger generations, they get a lot of their data from social media platforms.
[SPEAKER_02]: to plan their chip.
[SPEAKER_02]: Let's compare the one in three Gen Xs and one in seven baby boomers, pretty crazy, right?
[SPEAKER_02]: And Gen X or Gen Z and Millennials, they planned more trips than older generations, but they were more budget friendly.
[SPEAKER_02]: They weren't picking the premium options, which for airlines, hotels, etc.
[SPEAKER_02]: They have to earn more when you book the more premium option or margins there.
[SPEAKER_02]: Generate Generative AI, used in Trip Planning, tripled from 2023 to 2025, led mainly by Millennials.
[SPEAKER_02]: They're the generation most likely to use Gen-Ai tools to build that tenoraries, choose hotels, find things to do at the destination, and more.
[SPEAKER_02]: And I found this the most interesting.
[SPEAKER_02]: The amenities that younger generations wanted versus older generations.
[SPEAKER_02]: The boomer generation, they prioritize brand and location.
[SPEAKER_02]: Gen Z, they look for spas and pool amenities.
[SPEAKER_02]: Millennials, they associate luxury with on property dining, more convenience, shall we say?
[SPEAKER_02]: So that that was all very, very interesting.
[SPEAKER_02]: Obviously, the Gen Z, they're getting a lot of their travel ideas from TikTok, for example.
[SPEAKER_02]: But this is a shift, this is a good example of how when you're looking at projecting demand for particular industries,
[SPEAKER_02]: The shift from the boomer generation now to the millennial generation as the driving force of the economy and frankly, probably the political economy in the future is going to accelerate here.
[SPEAKER_02]: We know that boomer generation, they're aging, many of them are getting into not the go-go years anymore.
[SPEAKER_02]: The majority of boomers are well into their 70s.
[SPEAKER_02]: And we know once you hit 80s, you slow down your life dramatically.
[SPEAKER_02]: Don't tend to travel very much.
[SPEAKER_02]: Which means you don't tend to spend very much.
[SPEAKER_02]: Don't go out to eat as often.
[SPEAKER_02]: There's just a lot that happens in that latter phase of life that doesn't actually create economic activity.
[SPEAKER_02]: And travel is an example of that.
[SPEAKER_02]: Now, Fridays, we make time to fit in the quick rundown of key benchmark numbers, so let me hit that for you now.
[SPEAKER_02]: The two-year treasure yield, 4.21 percent, 2 weeks ago, is about 4.1 percent.
[SPEAKER_02]: So you're seeing the two-year yield rise, which is more expectation of Fed rate increases, mainly because inflation continues to stay sticky.
[SPEAKER_02]: 10 year treasury of four point five six two weeks ago that four point three seven so that continues to go up as well part of this two is what's happening in Japan you're seeing rates on their long-end go up which comparatively ours is certainly pushing ours up because once again everything is is relative in the investment world gold price at 41 14 ounce
[SPEAKER_02]: That's up $39 from just a couple of weeks ago.
[SPEAKER_02]: Silver, 59, 81, that's up a dollar in six cents, compared to two weeks ago, oil.
[SPEAKER_02]: $71.53, still up about a dollar, 69 since over the past couple of weeks.
[SPEAKER_02]: Then there's gasoline, $3.88, since a two cent decrease compared to two weeks ago.
[SPEAKER_02]: And here in California, we're still paying well over $5.5 down, $5.39, but that's a nine cent decrease compared to two weeks back.
[SPEAKER_02]: Over in Texas, everything's bigger in Texas except for gas prices.
[SPEAKER_02]: They are $3.40, for a sense that's $1.95 less than we were paying here in California.
[SPEAKER_02]: Let's pay the back to another listener question from A to
[SPEAKER_08]: I have a question about the fundamentals on a start to nearest sugar symbol.
[SPEAKER_08]: She has a calm, ethosome, same GPS, making about entering a position and wanting to know your analysis of the fundamentals.
[SPEAKER_08]: I look forward to hearing your answer.
[SPEAKER_08]: Thanks.
[SPEAKER_02]: I look at the statement a while.
[SPEAKER_02]: For nearest, they manufacture and supply steel pipes, steel pipes,
[SPEAKER_02]: earnings this year, so to be $3.78, it's up from $366 last year than $4.24 next year.
[SPEAKER_02]: So earnings are in a nice upper trajectory, turn equity about 11, 12% historically that is average closer to a 16% so it might be under earning a little bit.
[SPEAKER_02]: It's probably average.
[SPEAKER_02]: Yeah, that's less five years at 16% but 10 years it's closer to average.
[SPEAKER_01]: It's an an ice-up trend.
[SPEAKER_02]: Related strength is 66.
[SPEAKER_02]: So the top third of stocks in the past year.
[SPEAKER_02]: Net cash and it's balance sheet.
[SPEAKER_02]: So love that balance sheet.
[SPEAKER_02]: I also like that it's more of a nuts and bolts play.
[SPEAKER_02]: Meaning, as long as drilling activities happen in, it's growing here in the United States, you're in need piping.
[SPEAKER_02]: You need these still pipes.
[SPEAKER_02]: And their margins remain strong.
[SPEAKER_02]: Let's see how they, what are they doing with their cash flow?
[SPEAKER_02]: $1.87 billion for cash flow.
[SPEAKER_02]: They're buying back shares steadily from $590 million shares outstanding in the fall of 2023.
[SPEAKER_02]: And in three years, it's gone down to about 500 or four million shares outstanding.
[SPEAKER_02]: So you're talking about,
[SPEAKER_02]: 15% of their shares have been retired over the past three years.
[SPEAKER_02]: I like that consistency there.
[SPEAKER_02]: Obviously, their balance sheet will allow for it.
[SPEAKER_02]: So I'm going to give Teneris T.S.
[SPEAKER_02]: A thumbs up at a Luxembourg.
[SPEAKER_02]: Thanks for the call.
[SPEAKER_02]: From time to time, we'll receive questions via web form over on us.talk.com.
[SPEAKER_02]: Here's when that came in.
[SPEAKER_02]: It says, B2 Gold is on my radar because I think it's current price is becoming attractive for a company of this quality.
[SPEAKER_02]: BTG is a symbol.
[SPEAKER_02]: I have a high wrist tolerance.
[SPEAKER_02]: What do you think?
[SPEAKER_02]: BTG is definitely a smaller name in the oil and gas, or, I don't know, I guess.
[SPEAKER_02]: In the gold mining industry, the bulls up here.
[SPEAKER_02]: I like that some of their minds are mainly here in the United States, or North America, should we say?
[SPEAKER_02]: So the industry as a whole is certainly pulled back and this stock is pulled back from a high around 6 to 625 now we're at the 385 earnings next year.
[SPEAKER_02]: So to $2.25 we're talking about three and a half times for looking earnings pretty cheap to me.
[SPEAKER_02]: I think this is a very good opportunity.
[SPEAKER_02]: We're talking about free cash flow 3 to 78 million on a market cap of 5.1 billion.
[SPEAKER_02]: So nearly an 8% free cash flow yield.
[SPEAKER_02]: It's certainly higher risk, turning actually 16% a lot of the other names are much higher than this.
[SPEAKER_02]: But I'm gonna give this a thumbs up.
[SPEAKER_02]: It's right at the 100 week moving average.
[SPEAKER_02]: Like I said, good cash flow, earnings, growth is accelerating.
[SPEAKER_02]: Not a whole lot to be mad about this one.
[SPEAKER_02]: So I would give B2 gold, BTG, A thumbs up.
[SPEAKER_02]: Let's go tackle another voicemail question.
[SPEAKER_09]: I was wondering if you could talk about the stock for Murphy, USA, the ticker is M, USA.
[SPEAKER_09]: They want to change the gas station and to be good stars.
[SPEAKER_09]: So I'm wondering if you could give me your opinion.
[SPEAKER_09]: Thank you very much.
[SPEAKER_02]: All right, Murphy, USA, this should be in market.
[SPEAKER_02]: What do you feel?
[SPEAKER_02]: You could say they have a chain of gas stations throughout the United States.
[SPEAKER_02]: They make money on gas, but they make a lot of money on the convenience store.
[SPEAKER_02]: Connect with the 86% turnvestic capital 17%.
[SPEAKER_02]: They have a good balance sheet only about $3.5 billion in debt on about $11 billion market cap.
[SPEAKER_02]: Free cash flow about $555 million dollars.
[SPEAKER_02]: So solid 5% free cash flow yield.
[SPEAKER_02]: Then it has bid to peak out back in 2020 runs $689 million.
[SPEAKER_02]: But that's when.
[SPEAKER_02]: Everyone just had government checks burning a hole in their pocket probably bought a few extra things at the convenience store when they go they went and got gas.
[SPEAKER_02]: So I'm not really digging in for that you're seeing a reacceleration in their cash flow recently there are also buying back shares 10 years ago.
[SPEAKER_02]: about 38 million shares outstanding now and down to 18 million shares outstanding.
[SPEAKER_02]: So bought back over half of their shares in the past 10 years.
[SPEAKER_02]: So I like their capital allocation decisions.
[SPEAKER_02]: And this is one of those examples of that dividend yield only being point four percent.
[SPEAKER_02]: Doesn't look that amazing.
[SPEAKER_02]: on its surface, but its dividend has grown from 25 cents back in 2021 when they first started paying a dividend.
[SPEAKER_02]: Now it's up to 64 cents.
[SPEAKER_02]: So it's one of those dividend growers.
[SPEAKER_02]: I would say the biggest issue would be earnings are expected to fall next year, 9%.
[SPEAKER_02]: But it's still going to earn around $30 per share on the $600 stock about 20 times earnings.
[SPEAKER_02]: of a business, only give Murphy USA, thumbs up, and USA.
[SPEAKER_02]: This is the mess doc, I'm Justin Klein.
[SPEAKER_02]: We have Bowlin, one goal each every week.
[SPEAKER_02]: They help you achieve your own version of financial freedom and I work continues after this final break.
[SPEAKER_02]: It's good questions in right now, it's 8.99 chart.
[SPEAKER_03]: The weekend is here or almost here, but you've got finance and investment questions, so step up and call in in Vestalk.
[SPEAKER_03]: 88899 chart.
[SPEAKER_02]: Let's go answer it one more in Vestalk YouTube question.
[SPEAKER_02]: Brock Dawn says GGGG is down.
[SPEAKER_02]: What is a good entry point quality stock I think thinks?
[SPEAKER_02]: Is Lama Bad Done?
[UNKNOWN]: GGG.
[SPEAKER_02]: So this has come down pretty considerably.
[SPEAKER_02]: It was trading in the mid 90s, back in February.
[SPEAKER_02]: It's not long ago now we're in the mid 70s.
[SPEAKER_02]: Now what does GGG do?
[SPEAKER_02]: They design manufacturer and sell systems and equipment used to move measure control dispenses for a fluids and powdered material.
[SPEAKER_02]: So they're in the industrial business mainly.
[SPEAKER_02]: They also are in the oil and gas business, chemical business,
[SPEAKER_02]: The system is dispensed, water gas, wastewater, petroleum, food, lubricants, etc.
[SPEAKER_02]: So kind of a very niche type of industrial name.
[SPEAKER_02]: Earnings is sure it's supposed to be up 5% to 310 and 337 next year up 9%.
[SPEAKER_02]: One of those secular growers, they made it earned $1.99 and $1.99 in 2019, and every much earned more money outside of 2024, where we're profited to about 9% then, but bounce back in last year, and then like I said, the $3.37 next year, $74 stock.
[SPEAKER_02]: This year was that, you know, it's still after the drops out of mid-20s multiple, not exactly cheap.
[SPEAKER_02]: free cash flow yield is right around 5% which is good return equity right around 20% that's solid as well what are they doing with that cash flow well they are generally buying back shares general that cash in their balance sheet I think this is a good risk versus reward down at these levels once it's obviously poor
[SPEAKER_02]: So I would like to see this get off the map and find support here, not break, say, $70 per share, a couple of 70, it would be a bit more worried.
[SPEAKER_02]: But I love the business, I love the balance sheet.
[SPEAKER_02]: So I'm going to give GGGF thumbs up at these levels.
[SPEAKER_02]: Let's talk about the risks of a top-heavy economy.
[SPEAKER_02]: We know we've seen huge IPOs talking, you know, Elon Musk is a trillionaire, at least as of now, probably won't be for very long, but you're seeing huge numbers.
[SPEAKER_01]: Billions, tens of billions of dollars, mega mergers,
[SPEAKER_02]: Invest it rounds larger than a billion in account for 61% of total VC funding this year, just giant transactions, cash holdings of America's S&P 500, of each $2.2 trillion.
[SPEAKER_02]: Firms of higher-profit margins than ever, that are earning more compared to GDP than ever.
[SPEAKER_02]: High-purscalers, we know, are spending eight or a billion dollars this year in capital expenditures, so you're approaching a trillion dollars coming up.
[SPEAKER_02]: So it's kind of easy to get lost in these numbers.
[SPEAKER_02]: It's just massive mergers, massive capital flows.
[SPEAKER_02]: And the question is, is this the right way to run a global economy?
[SPEAKER_02]: The one thing we do know is that larger companies are getting valued higher.
[SPEAKER_02]: I think a lot of this has to do with passive investing more than anything.
[SPEAKER_02]: P ratios with larger firms are the mid 20s, about 26 on average, smaller firms around 15.
[SPEAKER_02]: So the market is valuing these bigger names higher.
[SPEAKER_02]: And mega mergers are ever present.
[SPEAKER_02]: Last year, the target value of the acquired firm was over 50% of the buyer's market capitalization more often than not.
[SPEAKER_02]: And a lot of times that was debt that was taken out in order to make that acquisition.
[SPEAKER_02]: What this tells you is that if there is one company that
[SPEAKER_02]: So it makes the wrong move and run of the world.
[SPEAKER_02]: I think it very well could be significant disruption to capital markets because of how large and concentrated the markets is.
[SPEAKER_02]: So it's not just about the exposure you have.
[SPEAKER_02]: Even if you're not in the major indices, it's now becoming
[SPEAKER_02]: a problem for the broader economy potentially.
[SPEAKER_02]: And we know this is feeding into the political economy as well, whereas only 15% of Americans trust big business.
[SPEAKER_02]: That's down half since 2000.
[SPEAKER_02]: So this is an issue that spans both the economy as well as politics.
[SPEAKER_02]: I'm Justin Klein, reminding that K, P Financials, Parallel Investing.
[SPEAKER_02]: We make a trade for our clients.
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[SPEAKER_02]: And you can learn more.
[SPEAKER_02]: Bening over to investtalk.com.
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[SPEAKER_04]: Invest talk is a trademark of KPP financial, because of the nature of the interactive dialogue inherent in the format of this program.
[SPEAKER_04]: It's important for the listener to understand that not all comments made will apply to that.
[SPEAKER_04]: Specifically, nothing said shall be taken to be investment advice.
[SPEAKER_04]: or shell statements on this program be considered an offer to buy or sell security.
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