[SPEAKER_05]: On radio, on YouTube, streaming live on investtalk.com and for our podcast subscribers, this is Invest Talk.

[SPEAKER_05]: Independent Thinking, shared success.

[SPEAKER_05]: Invest Talk is made possible by KPP Financial, a registered investment advisor firm serving clients throughout the United States.

[SPEAKER_05]: Here is KPP Financial Portfolio Manager, Luke Guerrero.

[SPEAKER_01]: Good afternoon fellow investors and welcome back to another episode of Invest Talk.

[SPEAKER_01]: As you are well aware, we are now into the fourth quarter and it won't be long until we're all taking a little bit of a well-deserved rest and break with our families over this holiday season.

[SPEAKER_01]: And I think I can speak for each and every one of us.

[SPEAKER_01]: When I say that this year has moved so, so quickly and with that whip lash of time,

[SPEAKER_01]: It is easy for us as people with things going on in our lives to lose focus.

[SPEAKER_01]: But now is not the time to do so you've seen thus far this year how quickly things can change, how narratives can change, how the market can therefore change and what that does to your portfolio.

[SPEAKER_01]: And so each and every day through 2025 all the way going back to the 90s really.

[SPEAKER_01]: We here at Invest Talk have hopefully been a part of your financial journey, and that's because our objective for each podcast, each radio program, is to help make you a better and more informed investor.

[SPEAKER_01]: We do that by bringing a mixture of educational and actionable material at the table, but the most important part of this show is dictated by you, our listener, through your finance and investment questions, and because that's the case,

[SPEAKER_01]: Before we go and talk it out about today's market performance, before we run down their show topics, let's tackle this color question now.

[SPEAKER_07]: Hi, this is Mike from Dallas.

[SPEAKER_07]: I'm curious what you think of co-part.

[SPEAKER_07]: CPRT from a long-term hold basis.

[SPEAKER_01]: Thank you.

[SPEAKER_01]: Well, my co-part is an online vehicle auctioneer and remarketing service.

[SPEAKER_01]: They operate in 11 countries, the U.S.

[SPEAKER_01]: Canada, UK, Germany, among them with over 200 physical locations and a pretty large inventory of vehicles.

[SPEAKER_01]: They sell salvage and used wholesale vehicles via online auction through their virtual bidding to buyers.

[SPEAKER_01]: Not necessarily like you and me, yes, they do sell the members of the public, but they also sell to insurers, repairs, rebuilders and exporters.

[SPEAKER_01]: And this business model is largely fee-based.

[SPEAKER_01]: Most of the revenue is derived from service fees for this auctions, for listings, for transaction support, and even for storage and services related to closing out once the auction's have been successful.

[SPEAKER_01]: And also occasionally, instead of payment through fees, we'll take ownership of at least a small part of the vehicle to start to unlock value for itself.

[SPEAKER_01]: Now, it's at pretty strong revenue and earnings growth in fiscal Q22025.

[SPEAKER_01]: They're reported 14% year-over-year revenue growth grows profit up 13% in income rose by about 19%.

[SPEAKER_01]: Get, you're today, companies down 22.93% down fixed 16.17 over the past 52 weeks.

[SPEAKER_01]: And some of this may impart B because, well, valuation metrics looked a little high.

[SPEAKER_01]: Now, it's currently sitting at 25.6 times for looking earnings 4.7 times price to book value, which is below its average closer to the lower end of its range.

[SPEAKER_01]: It was as expensive as 43.6 times

[SPEAKER_01]: But again, the stocks underperform, right?

[SPEAKER_01]: They've fallen relative to their 52 week high.

[SPEAKER_01]: They were down multiple days this month by over 1%.

[SPEAKER_01]: And so in spite of this fee revenue, in spite of the scale that they appear to have, there's a bit of a risk here.

[SPEAKER_01]: Now, I mentioned the biggest risk, right?

[SPEAKER_01]: You're seeing a bit of valuation compression here.

[SPEAKER_01]: Margin's are trimming down a rather staying relatively stable.

[SPEAKER_01]: In spite of that, though, we're turning on equity has fallen a bit from 20.2.

[SPEAKER_01]: percent to 18.6 percent.

[SPEAKER_01]: They've also have a bit of competitive disruption, right?

[SPEAKER_01]: The competing auction companies, remarketing platforms, and really just to change in how rekt used cars are processed or rather are processed.

[SPEAKER_01]: And so, what I see here is, again, repricing based evaluation, also a bit of a repricing based on growth.

[SPEAKER_01]: Growth still looks good, but it has certainly slowed a bit, right?

[SPEAKER_01]: It's only about 10% is what you're supposed to see from 2024 to 2025, with a five year average to 16.1%.

[SPEAKER_01]: So, you know, I would let this thing repriced quite a bit from here.

[SPEAKER_01]: Looks like it's not a consistent downward trend after that.

[SPEAKER_01]: Big drop off in April.

[SPEAKER_01]: and seems to be trying to find some level of support.

[SPEAKER_01]: I would wait, I would watch, I do like the business idea, just don't think now, is the right time that is co-part ink to your CPRT.

[SPEAKER_01]: We've got a lot of ground to cover in the next 45 minutes or so, and here's a little bit of what we have planned.

[SPEAKER_01]: My main focus point concerns this headline, recession by zip code.

[SPEAKER_01]: why 22 states are already feeling the downturn.

[SPEAKER_01]: In that segment, we will look into how 22 U.S.

[SPEAKER_01]: states may already be in recession and what it could mean for you.

[SPEAKER_01]: We'll also touch on how emerging markets are doing pretty well.

[SPEAKER_01]: One of the biggest stock rallies in the past 15 years, gold, speaking of rallying, gold topped 4,000, and we'll talk about what that means, why that is.

[SPEAKER_01]: And should we have time at the end of the show, the parent company of the New York Stock Exchange has set to invest $2 billion in poly-market, what does all that mean?

[SPEAKER_01]: What does all that mean for risk in the market as well?

[SPEAKER_01]: We also have some voice links, calls ready to play, including one on where to invest, fear a young guy, and another on the fair, Isaac Corporation ticker, FICO.

[SPEAKER_01]: This was some questions that came in from the comments section of the Invest talking YouTube channel, and hopefully some live calls throughout the show.

[SPEAKER_01]: We're going to do a break, please remember you can call any time and leave your questions on the investor talk, voice bank.

[SPEAKER_01]: If you're listening via our live stream or possibly on Am 1220 in the Bay Area, give me a call now at 88899 chart.

[SPEAKER_01]: Up next, today's market activity.

[SPEAKER_06]: serious investors are certain to have finance and investment questions.

[SPEAKER_06]: What do you think is a good price?

[SPEAKER_06]: And the best person to ask your question in the right way is you.

[SPEAKER_07]: I was wondering it from your standpoint if they're at downside in buying fractional shares versus whole shares.

[SPEAKER_06]: And 24-7 rain or shine, Justin Klein and Luke Guerrero stand ready to provide their unbiased dancers.

[SPEAKER_07]: Okay, he is the simple, you like the business.

[SPEAKER_07]: I will say we've trimmed it a bit and cut it as a lower waiting.

[SPEAKER_01]: Now while gold is hitting these record highs, it's driven by the safe heaven demand by central bank buying across the board.

[SPEAKER_06]: Your participation makes an invest talk better.

[SPEAKER_02]: This is Marlow from York City area.

[SPEAKER_06]: Let's take a live call, Sam from San Jose.

[SPEAKER_06]: So don't forget to call, Invest talk.

[SPEAKER_06]: Great advice.

[SPEAKER_06]: Thank you.

[SPEAKER_06]: 888-99 chart.

[SPEAKER_06]: millions of downloads have proved there's value in every invest talk podcast call anytime 24 seven invest talk eight eight eight ninety nine chart

[SPEAKER_01]: Let's talk a little bit about the market today before we move any further in this show U.S.

[SPEAKER_01]: stocks finished a bit lower overall.

[SPEAKER_01]: They did claw back a little from where they were headed earlier in the day with the Dow finished down 20 basis points as some p 500 down 38 NASDAQ down 67 Russell 2000 down 1.12% In fact,

[SPEAKER_01]: SB500, Brogi's streak of seven straight gains, and those indices S&P Nasdaq Russell 2 all came off of their Monday record closest.

[SPEAKER_01]: Some of the worst performers software on the back of the news out of Oracle HDDs semis among the worst performers builders, autos, travel and leisure.

[SPEAKER_01]: Parallel accessories also pretty poor performers on the day.

[SPEAKER_01]: It wasn't all terrible outperformers on the day included staples, hospitals, managed care, PNC insurers, and industrial metals.

[SPEAKER_01]: On the bond side treasuries, a bit firmer across the curve yields look to be down

[SPEAKER_01]: on multiple maturedies.

[SPEAKER_01]: Same time, dollar index was up to 60 basis points extending.

[SPEAKER_01]: Some of that strength we saw on Monday, gold up 70 as well.

[SPEAKER_01]: Rather, dollar was up 60, gold is up 70.

[SPEAKER_01]: Gold ending above the four thousand and ounce level for the first time today.

[SPEAKER_01]: While that digital gold bit coin down 3.2% and crude oil settled down about 10 basis points.

[SPEAKER_01]: Really a big story because there wasn't much is select tech under performance.

[SPEAKER_01]: There was a big tailwind earlier in the week on Monday, right when AMD and OpenAI announced their deal.

[SPEAKER_01]: But there's a bit more scrutiny today.

[SPEAKER_01]: You have

[SPEAKER_01]: talk on the street, focusing on bubble concerns, on the lack of return on investment, on productivity concerns.

[SPEAKER_01]: On the circularity of a lot of these investments, customers investing in the companies in which they are selling products to or vice versa.

[SPEAKER_01]: Then you add on top of that, right?

[SPEAKER_01]: You had a bit of flagged information regarding the financial challenges or goals facing and renting out its envidia chips.

[SPEAKER_01]: Small caps, another standout, as of late, really underperforming today on the Fed easing narrative.

[SPEAKER_01]: And so you see this pullback coming despite the lower rate backdrop.

[SPEAKER_01]: Elsewhere is pretty quiet, there's a catalyst to vacuum, if you will, a macro catalyst to vacuum amidst this government shutdown.

[SPEAKER_01]: Remember that a lot of the reporting

[SPEAKER_01]: doesn't come out when the government shut down and so there's a waiting game right now for the start of Q3 earnings next week.

[SPEAKER_01]: Now we did get some things.

[SPEAKER_01]: We got the latest New York Fed consumer survey which showed a slight raise in year ahead inflation expectations though the near-term optimism improved a bit and still some signals of a better labor market outlook.

[SPEAKER_01]: Now looking ahead.

[SPEAKER_01]: September, FOMC minutes will be the highlight on Wednesday while a couple fed governors are scheduled to speak as well.

[SPEAKER_01]: It's going to be a treasury auction of 10 year notes on Wednesday as well.

[SPEAKER_01]: We get a pre-recorded video from Jerome Powell as well as more fed speak on

[SPEAKER_01]: Thursday and Friday will bring the University of Michigan consumer sentiment and inflation expectations for September, along with some more Fed comments.

[SPEAKER_01]: Not a lot of macro activity, not a lot of macro results until the government opens back up.

[SPEAKER_01]: And every day, it seems like we are receiving questions over on our YouTube channel.

[SPEAKER_01]: If you want to go check out YouTube, we know we taking a little step back we're trying to figure out how we can best give content.

[SPEAKER_01]: To not just you, the listener, but you, the viewer.

[SPEAKER_01]: So stay tuned, we got some things in the works.

[SPEAKER_01]: We're going to freshen that up for you all, but while you're over there, looking at one of our existing videos, because we do have a lot of evergreen material that I think is applicable all the time.

[SPEAKER_01]: You will leave a question over there on the comment section.

[SPEAKER_01]: We get to those as soon as we possibly can.

[SPEAKER_01]: And this question came in from GolemLev.

[SPEAKER_01]: It's on ticker PGR.

[SPEAKER_01]: It says I'm looking to add some more of progressive.

[SPEAKER_01]: Finally, they're looking good and have solid support around 235.

[SPEAKER_01]: However, I noticed some of their senior level workers sold stock recently.

[SPEAKER_01]: What is your take on this?

[SPEAKER_01]: Is it a good opportunity to buy some more?

[SPEAKER_01]: What progressive is one of the major players in the U.S.

[SPEAKER_01]: auto insurance industry that do property and casualty insurance as well their main lines of operation right they got the personal auto and specialty lines where they underrated auto policies for cars, motorcycles RVs and various high risk lines they have the commercial and business insurance.

[SPEAKER_01]: So think of auto and liability coverage for trucking businesses.

[SPEAKER_01]: This will solve the independent agents over the phone and increasingly through their digital platform.

[SPEAKER_01]: Now a key metric is its combined ratio, right, a measure of the underwriting profitability.

[SPEAKER_01]: In Q22025, progressive posted a combined ratio of 86.2% outperforming greatly with the estimates would be now growth in premiums in that same period.

[SPEAKER_01]: Looks like they increased about 18% year over year revenue growth up 15.7 slightly below some expectations.

[SPEAKER_01]: Now these trends, right, are very important.

[SPEAKER_01]: Not just the underwriting trends, but the premium growth and retention trends that some that we have to watch going forward.

[SPEAKER_01]: What are claims costs?

[SPEAKER_01]: If you're an auto insurer, if you're rebuilding cars, if you're paying for rebuilt cars, your margins are going to slip, if the cost of rebuilding those cars goes up.

[SPEAKER_01]: Right?

[SPEAKER_01]: It doesn't make common sense.

[SPEAKER_01]: Your input cost of fixing something, going up is going to erode some margins.

[SPEAKER_01]: That's something that we certainly have to be concerned about with not just progressive but across the board.

[SPEAKER_01]: There's also a bit of liability, law changes in multiple states that is something that they should be concerned about.

[SPEAKER_01]: In terms of valuation though, it's fine 14 times.

[SPEAKER_01]: Price before looking, you're sitting below, or rather at the low end of it's five-year average.

[SPEAKER_01]: It's under 400th industry by about 4% this year, but it's a pretty solid performer year in and year.

[SPEAKER_01]: I think what is worrisome for me is how much exposure they have, dot ohjards.

[SPEAKER_01]: And that is the primary driver of this company.

[SPEAKER_01]: I just personalized, make about 84% of their business.

[SPEAKER_01]: And so in this rising cost environment, margins can continue to erode, which is what you've seen a little bit and you could continue to see a bit further.

[SPEAKER_01]: Coupled at with a little bit of forward guidance lowering downgrading with past couple months.

[SPEAKER_01]: I mean, it's not all bad, right?

[SPEAKER_01]: They got solid cash flow.

[SPEAKER_01]: pretty stable profitability and really very little debt.

[SPEAKER_01]: Either way, I think progressive is a good company.

[SPEAKER_01]: I think that maybe given what's going on from a pricing perspective, I would be a little hesitant to add more of these levels.

[SPEAKER_01]: Regardless of what Insiders are doing, people sell all the time inside.

[SPEAKER_01]: Wouldn't read too much in that.

[SPEAKER_01]: That's progressive corporation.

[SPEAKER_01]: Tigger PGR.

[SPEAKER_01]: As we move to New Break, let me tell you about a new series that has debuted on our Invest Talk channel.

[SPEAKER_01]: It's called Invest Talk Innovators, our latest episode just in the spoke with Anthony Katz, the visionary founder of Hyperice.

[SPEAKER_01]: To watch the full interview, visit our Invest Talk YouTube channel.

[SPEAKER_01]: Look for Invest Talk Innovators.

[SPEAKER_06]: Luke Guerrero is here, and he's ready with answers to your financial investment questions.

[SPEAKER_06]: Call in Vestock, 888-99, chart.

[SPEAKER_01]: My main focus point today is about a dirty word in economics.

[SPEAKER_01]: Recession.

[SPEAKER_01]: And we're going to look at recessions by zip code because it made me the case.

[SPEAKER_01]: that 22 US states may already be in a recession.

[SPEAKER_01]: And so depending on where you live, you may be feeling the economy a bit differently.

[SPEAKER_01]: Now, Moody's analytics chief economist, Mark Zandy, says that the US economy is teetering on the edge of a contraction.

[SPEAKER_01]: He estimates 22 states and Washington, DC.

[SPEAKER_01]: are already in recession-like conditions, marked by job losses, weakening labor market, but also weakening output.

[SPEAKER_01]: Another 13 states, he says, are what he would call treading water, leaving only a minority showing clear growth and momentum.

[SPEAKER_01]: on the precipice, right?

[SPEAKER_01]: Vulnerable to even the most modest of external shocks.

[SPEAKER_01]: California, New York, these are the big swing states.

[SPEAKER_01]: If either slips further, it could tip the U.S.

[SPEAKER_01]: into recession.

[SPEAKER_01]: And he's not the only one that believes this UCLA's Anderson School of Business, separately noted that a California recession is now plausible reinforcing that concern.

[SPEAKER_01]: So what has really led to these diagonals, any points to the tariff policy as a key source of drag, it's injected on certain de-supply chains.

[SPEAKER_01]: It has frozen a bunch of expansion plans.

[SPEAKER_01]: And just generally increased layers of uncertainty that has made businesses want to hire less, pause projects.

[SPEAKER_01]: And so at the same time, created a bit of a demand issue in the labor market and in economic growth as well.

[SPEAKER_01]: Now within DC, right, you're going to see a lot more of a recessionary environment because of some deepened doge cuts, but the overarching theme across the board here is that a pretty weak labor force, a rather weak labor force growth nationwide has compounded the string, especially in manufacturing and farm heavy states.

[SPEAKER_01]: Now, this is just the opinion of this economist and the UCLA Anderson School.

[SPEAKER_01]: Certainly, there are other economists that disagree regions banks, Richard Moody, sites pretty solid consumer spending, business investment, and 3.8% GDP growth for Q3.

[SPEAKER_01]: Now, little complicated, right?

[SPEAKER_01]: We're still in a transitionary period in terms of global trade.

[SPEAKER_01]: I generally also don't like to look at one quarter of growth anyway.

[SPEAKER_01]: I think smoothing it over multiple quarters gives you a more clear picture.

[SPEAKER_01]: But I do take his point, right?

[SPEAKER_01]: Consumer spending has been very strong.

[SPEAKER_01]: Business investment has not been as weak as many believed it would be.

[SPEAKER_01]: But while GDP and spending look firm, job market softening signals a deeper structural issue.

[SPEAKER_01]: And we keep getting reinforcing data here.

[SPEAKER_01]: And as growth has kind of been a bit different across different industries, the weakness here is more acute in certain places, agriculture, mining, light manufacturing industries hit hardest by tariffs, and sluggish transport demand.

[SPEAKER_01]: And so I think people forget.

[SPEAKER_01]: This is an important story because I think people forget, right?

[SPEAKER_01]: I think people misunderstand what it means for the economy to be good.

[SPEAKER_01]: The old adage in economics is

[SPEAKER_01]: A good economy means that money is moving around, but it doesn't mean that money is moving to you.

[SPEAKER_01]: And so what we saw in spite of inflation was pretty strong economic growth and we've seen it so far this year as well.

[SPEAKER_01]: And so when people feel their personal situation is bad, it doesn't necessarily mean that the economy is struggling broadly.

[SPEAKER_01]: But what we're seeing here now is starting to show a bit of struggle in various areas.

[SPEAKER_01]: And because of the way the economy is set up, because different states can feel things differently, different products come from different places.

[SPEAKER_01]: Agriculture, heavy places, manufacturing, heavy places.

[SPEAKER_01]: The high level doesn't give people a general understanding of what they are feeling in front of them.

[SPEAKER_01]: Given these dynamics, it'll be interesting to see as we head into the end of the year and into next year.

[SPEAKER_01]: As we start to possibly see more inflationary effects of tariffs,

[SPEAKER_01]: whether or not consumer spending and all the areas of good within the economy can continue to profit up.

[SPEAKER_01]: Let's keep things moving, drop it another fresh listener question, may not be able to answer it but at least we can hear it.

[SPEAKER_04]: Hello, I have saved up around $80,000 and I'm 21 years old and I was wondering why I should do invest my money and what I should do to make it grow.

[SPEAKER_04]: I was considering buying or putting money down on a house or a townhouse or a condo in my area, but a lot of things seem very expensive.

[SPEAKER_04]: I was wondering if maybe there's another state or another city where I could possibly invest in property or whether or not this is the right time to invest in property.

[SPEAKER_04]: Thank you, hope to hear it on the next podcast.

[SPEAKER_01]: It is not the right time to invest in property.

[SPEAKER_01]: I think I've probably said that more on this show than I can count, it is the most expensive time to buy property relative to renting property in like the entire history of us tracking this.

[SPEAKER_01]: And as somebody using their 20s, you can take on a lot more risk.

[SPEAKER_01]: Properties fine.

[SPEAKER_01]: I think we're all warped by our parents' buy-and-houses for 10 bucks and now they're worth 10 million.

[SPEAKER_01]: But it's certainly speaking, equities outperform.

[SPEAKER_01]: They're highly liquid.

[SPEAKER_01]: They have far more benefits.

[SPEAKER_01]: If you live in your house and you sell your house, you gotta go buy another house.

[SPEAKER_01]: And you gotta find somebody to buy your house.

[SPEAKER_01]: It's great that you're saving fantastic, I think the best place that you can start is understanding, starting to understand equity markets, starting to understand the benefits of buying stocks, and start by putting it in a broadly diversified ETF.

[SPEAKER_01]: On the next investor talk, we'll look into this story, OpenAI strategy of striking enormous multi-year hardware deals.

[SPEAKER_01]: We'll both AMD and Nvidia secure its AI infrastructure and prevent a chip monopoly, but it introduces financial risk.

[SPEAKER_01]: That's tomorrow.

[SPEAKER_01]: For now, I'm Luke Rary, and take your calls.

[SPEAKER_06]: In Vestock innovators, Justin Klein and Luke Guerrero, interview company leaders, founders, and visionaries.

[SPEAKER_06]: So head over to the Investock YouTube channel and look for Investock innovators.

[SPEAKER_06]: Luke Guerrero is here now and ready to answer your finance and investment questions.

[SPEAKER_06]: Call Investock 888-99, chart.

[SPEAKER_01]: It's going to will from San Diego who's asking about trailing stops and streaming on AM1220.

[SPEAKER_01]: Hello.

[SPEAKER_01]: Hey, you will, how's it going?

[SPEAKER_03]: Oh, pretty good.

[SPEAKER_03]: Thanks for taking my call.

[SPEAKER_01]: Good.

[SPEAKER_03]: Thanks for coming.

[SPEAKER_03]: That you have made during this hour.

[SPEAKER_03]: You mentioned possibility that some states are in recession or approaching recession.

[SPEAKER_03]: So I'm wondering if it's a good idea to put trailing stops

[SPEAKER_03]: on some of my winter.

[SPEAKER_03]: Well, you know what?

[SPEAKER_01]: I think it's generally a good idea to put trailing stops on your winners, especially the ones that you're letting run, and then revisit them.

[SPEAKER_01]: As for those who are listening who don't know what a trailing stop is, it is a dynamic stop loss, right, that automatically adjusts as a trade moves in your favor.

[SPEAKER_01]: So if you are along something,

[SPEAKER_01]: You're going to it's going to move up.

[SPEAKER_01]: If you're short something, it's going to move down.

[SPEAKER_01]: And so you set it as a fixed percentage or a dollar amount.

[SPEAKER_01]: And so is the asset moves favorably.

[SPEAKER_01]: It moves up with it.

[SPEAKER_01]: Now it won't move back down, right?

[SPEAKER_01]: So if you set a 5% stop on a hundred dollars, right?

[SPEAKER_01]: It sets it at 95 dollars.

[SPEAKER_01]: If it goes up, continues to climb.

[SPEAKER_01]: Now the benefit here is it removes a bit of emotion.

[SPEAKER_01]: for some of these selling decisions.

[SPEAKER_01]: It enforces some pretty strict discipline as well.

[SPEAKER_01]: But it also depends on what the asset is, right?

[SPEAKER_01]: In volatile markets, which is not really what we're seeing too much here, tight-trailing stops can trigger a pretty premature exit from your positions.

[SPEAKER_01]: So it does work really well in trending markets, like what we're seeing.

[SPEAKER_01]: When you want all of those winners run, which it sounds like you want to do.

[SPEAKER_01]: So here's a little advice.

[SPEAKER_01]: If it's a highly volatile asset, just widen those trailing distances out of it if it is a less volatile asset, you can keep it a bit tighter.

[SPEAKER_01]: But overall, I think because it enforces that discipline, using trailing stops is a pretty solid idea.

[SPEAKER_01]: Thanks for the call.

[SPEAKER_03]: Great, thank you.

[SPEAKER_01]: That's a bit another fresh collar question from 80 to 99 chart.

[SPEAKER_08]: Hi, they're just an enlook.

[SPEAKER_08]: A long time listener to your show.

[SPEAKER_08]: I love everything you do and educate me on.

[SPEAKER_08]: Listening for many, many years, this is Matt from the Minneapolis area.

[SPEAKER_08]: I have a quick question.

[SPEAKER_08]: I've stuck up in following a lot lately, and it seems to consistently do good, I feel.

[SPEAKER_08]: The stock is ticker FICO, the phrasic corporation, which, you know, monitors the credit scores and stuff.

[SPEAKER_08]: I don't know.

[SPEAKER_08]: It is expensive, but it does seem to be jumping here today that I'm sending you the message.

[SPEAKER_08]: It's up like $60 something dollars here in one day, because it always jumped like this.

[SPEAKER_08]: I'm sure not, but it does seem to consistently go up.

[SPEAKER_08]: Is this worth buying or having some?

[SPEAKER_08]: I'll be listening to the podcast to hear your answers.

[SPEAKER_08]: Thank you, have a great day.

[SPEAKER_01]: The Fair Isaac Corporation is ticker FICO.

[SPEAKER_01]: It is best known for those FICO scores, right?

[SPEAKER_01]: The credit scoring system used by a vast majority of U.S.

[SPEAKER_01]: lenders to assess whether a consumer, whether a customer, is credit worthy.

[SPEAKER_01]: But it also provides decision management and analytical software to find ancient institutions

[SPEAKER_01]: earning most of its revenue by licensing those scores that software and data analytics services.

[SPEAKER_01]: Now, they recently announced a new direct licensing model for mortgage scores.

[SPEAKER_01]: And so what that does is it allows a Trimer Dressellers who aggregate these credit bureau data to license of

[SPEAKER_01]: FICO scores without going through your providers, right?

[SPEAKER_01]: Your equifax, your experience, where you're trans union.

[SPEAKER_01]: So it shifts margin power.

[SPEAKER_01]: Instead of paying embedded markups via credit bureaus, lenders or resellers might now get more transparent, pricing by getting rid of the middleman.

[SPEAKER_01]: Another thing that happened for them is earlier in 2025, the Federal Housing Finance Agency approved use of Vantage Square 4.0, the competing scoring system, jointly controlled by the big credit bureaus for mortgages sold to Fannie Mae and Freddie Mac.

[SPEAKER_01]: You're today's company is down 5.59% over the past 52 weeks.

[SPEAKER_01]: It's down about 3.86%.

[SPEAKER_01]: And that's in spite of a 15% revenue growth.

[SPEAKER_01]: and Q2, driven in part by surging mortgage-related licensing activity and a platform revenue.

[SPEAKER_01]: It's pretty strong, fundamental.

[SPEAKER_01]: I mean, in terms of debt, it's got about $2 billion in debt on a $44 billion market cap company.

[SPEAKER_01]: Its cash flow has been steadily improving.

[SPEAKER_01]: Its valuations.

[SPEAKER_01]: Kind of high, but not as high as it has been.

[SPEAKER_01]: I mean, it's still above its five-year averages here, so I'm getting 50.6 times priced for looking earnings, sitting at 58 times priced at cash flow, 23.6 times priced at sale sales.

[SPEAKER_01]: No matter what growth has been pretty consistent, study about 8.2% on an annualized basis while margins, and they tend to be within financial data industry, financial services, pretty solid, right?

[SPEAKER_01]: Growing from 29.9% net margin,

[SPEAKER_01]: to about 36.6 this year, EBITDA margin from 43.5 to 55.4.

[SPEAKER_01]: Now there are some key risks out there, and how quickly can new direct licensing model be adopted?

[SPEAKER_01]: Is this going to lead to essentially revenue cannibalization, shifting from intermediary based licensing to direct could reduce volumes, it could compress fees, and

[SPEAKER_01]: And what is their sponsor criteria is going to be?

[SPEAKER_01]: They may develop counter strategies, bundle services, pricing adjustments, legal responses.

[SPEAKER_01]: Anytime you have a big shift like this within an industry, it tends to not go as smooth.

[SPEAKER_01]: Now it's been really strong, really strong since 2019, but it hasn't moved much over the past year.

[SPEAKER_01]: The momentum is fading and it's a bit expensive.

[SPEAKER_01]: So for now, I'd keep it on my watch list.

[SPEAKER_01]: It did jump a bit on some of these announcements.

[SPEAKER_01]: But either way, I mean, the trend just is not strong here from a momentum and growth perspective.

[SPEAKER_01]: So great company, solid, balance sheet, keep it on my watch list for now.

[SPEAKER_01]: See how things start to shake up as they're trying to rework their main business line.

[SPEAKER_01]: That is the fair-ise it corporation, take your FI, CO.

[SPEAKER_01]: Now, investors have been absolutely pouring money.

[SPEAKER_01]: into developing world assets because the dollars becoming weaker and cheap valuations have sparked the biggest emerging market surge in over 15 years.

[SPEAKER_01]: The MSCI emerging market index is up 28% this year.

[SPEAKER_01]: It's strongest run since 2009 while local currency government bonds tracked by JP Morgan have gained 16%.

[SPEAKER_01]: That easily outpaces developed market equities.

[SPEAKER_01]: Returns have been closer to 17% underscoring a pretty sharp rotation away from US dominance.

[SPEAKER_01]: And after a decade and a half of underperformance, sentiments flipping, and the driving force is a weakening dollar, a soft dollar makes it easier for developing countries to service their dollar-denominated debt.

[SPEAKER_01]: It eases financial pressures for much of the world.

[SPEAKER_01]: and the Fed's pivot to rate cuts has also fueled fresh demand for these high yielding local currency bonds in various markets from South Africa to Brazil.

[SPEAKER_01]: In Asia, falling inflation has helped sustain pretty attractive yields from Thailand to Malaysia, even with relatively low policy rates.

[SPEAKER_01]: And so equity investors are chasing.

[SPEAKER_01]: This AI boom that is global through emerging market chip makers, pushing Korea's cost me and Taiwan's Tyx2 record highs.

[SPEAKER_01]: Tyx1 semiconductor alone now represents roughly 11% of the MSCI benchmark.

[SPEAKER_01]: A reflection of just really how central AI hardware has become to EM performance.

[SPEAKER_01]: Now, when you think about that, it may be that

[SPEAKER_01]: There are broader structural issues.

[SPEAKER_01]: If breath is narrow, if these companies have subsumed the index, is this emerging market's doing well?

[SPEAKER_01]: Is this a select few companies doing well?

[SPEAKER_01]: Now, some managers see the shift of symbolic, are the dusk of US exceptionalism with global investors rediscovering value beyond Wall Street.

[SPEAKER_01]: But valuation gaps, they're still pretty darn wide.

[SPEAKER_01]: The US, SP500, it's 23 times.

[SPEAKER_01]: It leaves a bit of room for further re-rating.

[SPEAKER_01]: Now, Andy has been a pretty notable underperformer here, where lofty valuations and weaker than expected earnings have kept games pretty muted, even amidst a broader rally.

[SPEAKER_01]: But...

[SPEAKER_01]: As you can see, this year has been a year where especially accounting for the dollars return, US stocks have frankly underperformed their international counterparts.

[SPEAKER_01]: So as more investors are de-dollarizing, emerging markets stand to benefit.

[SPEAKER_01]: All right, you have it another YouTube comment section question.

[SPEAKER_01]: This went on, T-E-A-M.

[SPEAKER_01]: The ticker is team.

[SPEAKER_01]: We pull this up here on,

[SPEAKER_01]: My handy-dandy screen, and it says, would love to hear your thoughts on team as a long term by and hold, seems like a good entry point or should I keep it on my watch list team, as that lies at Lason.

[SPEAKER_01]: I've never been able to pronounce this company's name, which is funny because we use it.

[SPEAKER_01]: It's a holding company which engages in providing team collaboration

[SPEAKER_01]: They have confluence is what we use it for use project management through it as well.

[SPEAKER_01]: Now, they've been strongly pushing it to AI cloud and platform integration trying to evolve from really a tools vendor to more of a workspace productivity platform.

[SPEAKER_01]: Now, they recently agreed to acquire DX developer intelligence platform for about a billion dollars in cash and stock.

[SPEAKER_01]: And what they're hoping to do is extend their analytics

[SPEAKER_01]: And AI workflows.

[SPEAKER_01]: It also acquired the browser company for 610 million, again, an AI push for it.

[SPEAKER_01]: And so it's really signaling the shift here.

[SPEAKER_01]: They're aiming not just to host projects, but to embed itself deeper within workflows.

[SPEAKER_01]: Trying to make its tools more sticky and have a bit higher value.

[SPEAKER_01]: But anytime you're doing integration, especially from acquisitions,

[SPEAKER_01]: you run the risk of poor execution, right?

[SPEAKER_01]: This is what execution risk is, especially when trying to do it multiple fronts at the same time.

[SPEAKER_01]: Now they're pushing for a bunch of layoffs, support efficiency, they have some pretty aggressive cost cutting.

[SPEAKER_01]: But I mean, the company is pretty poorly, and that's aside from the fact that I really like their platforms.

[SPEAKER_01]: We use them, I like them.

[SPEAKER_01]: Year to date, it's on 38.32% down 10.39% over the past 52 weeks down to 30.52%.

[SPEAKER_01]: Over the past three months, it is a perennial issuer of shares that from 250 million, 2021 to 265 million.

[SPEAKER_01]: It doesn't pay a dividend.

[SPEAKER_01]: It's got very little debt 1.2 billion on a effectively a $40 billion market cap company.

[SPEAKER_01]: It's got a little bit of short interest out there.

[SPEAKER_01]: Now there is some insider selling.

[SPEAKER_01]: And as I mentioned earlier, should not be your decision point broadly, but the whole industry is continuing to shift more toward these AI enhanced productivity tools.

[SPEAKER_01]: And what they're trying to do is advance with them, get more recurring, more sticky revenue, but they don't have yet.

[SPEAKER_01]: And so given that there's really no positive trend here and with that execution risk, I think I'd probably keep it in my watch list again, in spite of me liking their products.

[SPEAKER_01]: That is, at Lason, at Lason, I'll never know how to pronounce it.

[SPEAKER_01]: Corp, Tigr, T-E-M, T-A-M, sorry.

[SPEAKER_01]: You know, let's grab another colleague question now.

[SPEAKER_02]: I had a question about Bank of America and JPMorgan.

[SPEAKER_02]: I currently own Bank of America, roughly 3% of my position.

[SPEAKER_02]: I'm up about 80% pretty well for me over the years, but I'm looking to possibly sell out of that position and invest into JPMorgan, looks like they're probably the top company and they're ROI, looks a lot better than Bank of America at this point.

[SPEAKER_02]: Monica, get your thoughts on that.

[SPEAKER_02]: I look forward to your answer on the podcast.

[SPEAKER_02]: Thank you.

[SPEAKER_02]: Bye.

[SPEAKER_01]: Make America JP Morgan two of the largest financial institutions in the world.

[SPEAKER_01]: JP Morgan an 870 billion dollar market cap company.

[SPEAKER_01]: Bank of America.

[SPEAKER_01]: Bit smaller, 389 billion dollar market cap company.

[SPEAKER_01]: You're today.

[SPEAKER_01]: They both performed pretty well, Bank of America up 14.43% year to day, JP Morgan up 28.36% year to date.

[SPEAKER_01]: Now Bank of America, again, one of the largest by assets, primarily driven, not just income, interest rate tailwinds have been very beneficial for them.

[SPEAKER_01]: They're trading revenues, been good.

[SPEAKER_01]: They're efficiency in their digital banking has been very good.

[SPEAKER_01]: They're credit and loan loss has been top of the industry.

[SPEAKER_01]: But if I get to be honest, JP Morgan's JP Morgan.

[SPEAKER_01]: I think if you're gonna be on one of these two banks, you are correct in wanting to go towards JP.

[SPEAKER_01]: I'm their scale, their diversification, their global reach.

[SPEAKER_01]: their exposure to capital markets gives them potential for higher returns.

[SPEAKER_01]: Their trading revenue was up 15% year over year.

[SPEAKER_01]: Their investment banking fees grew 7% year over year.

[SPEAKER_01]: And so we're moving into a face here where you're starting to see.

[SPEAKER_01]: And it could be because rates are coming down a bit.

[SPEAKER_01]: Or the projected path of cutting is coming down a bit.

[SPEAKER_01]: But we're moving into an area where from a capital market's perspective.

[SPEAKER_01]: I have an activities picking up, IPO activities picking up, investment banking fees, revenues, stand to pick up a bit.

[SPEAKER_01]: And so although these are both massive banks, large banks, wide diverse loan books, diverse asset bases, structurally, probably some of the safest of the financial institutions, I just think given how JP Morgan has grown over the past decade,

[SPEAKER_01]: Jamie Diamonds, kind of a rock star.

[SPEAKER_01]: Given the exposure you're going to get from the commercial investment banking side, there's also pretty large asset and wealth management business that's gonna give you some pretty solid fee revenue.

[SPEAKER_01]: I think moving on from Bank of America, getting that JP Morgan exposure, good way to go.

[SPEAKER_01]: That is, JPM and BAC, thanks to the call.

[SPEAKER_01]: This is Investock.

[SPEAKER_01]: I'm Lou Guerrero.

[SPEAKER_01]: We have one goal here, and that's to help you achieve your financial freedom, or we're continues after our final break, so get your questions in now at 888-99 chart.

[SPEAKER_06]: 24-7 Rainer Shine, there's always value in the Invest Talk podcast.

[SPEAKER_06]: 888-99, chart.

[SPEAKER_00]: I just in the loop, this is Kevin calling from Southern California.

[SPEAKER_00]: I'm calling today to ask about a company called Mercado Libre.

[SPEAKER_00]: The ticker is M-E-L-I.

[SPEAKER_00]: I have held this company in the past.

[SPEAKER_00]: but also does a lot of other things in addition to just the commerce.

[SPEAKER_00]: So I held this stock in the past.

[SPEAKER_00]: I took profit that when it would reach like a $900 a share and then a $1,300 a share and I pulled out of it thinking it would come back down.

[SPEAKER_00]: It took off and now it's starting to trend back down.

[SPEAKER_00]: I'm trying to see what price do you think would be a good entry price if I wanted to start

[SPEAKER_00]: dollar cost averaging back into stock.

[SPEAKER_00]: I appreciate your thoughts as always.

[SPEAKER_00]: Thanks again.

[SPEAKER_01]: Mercado Libre.

[SPEAKER_01]: And I practiced saying that during the break about 10 times.

[SPEAKER_01]: He is a Latin American powerhouse in e-commerce.

[SPEAKER_01]: They were in a marketplace platform.

[SPEAKER_01]: They have logistics and fulfillment infrastructure, digital payment processing, credit and lending, and advertising for merchants.

[SPEAKER_01]: Get this in Q1 of 2025.

[SPEAKER_01]: They're quoted 37% year over your revenue growth.

[SPEAKER_01]: 37% operating income rose, 45% year over year.

[SPEAKER_01]: But can you sustain that growth, right?

[SPEAKER_01]: Unique buyers increase 25% year over year.

[SPEAKER_01]: Item sold rose 28% over year.

[SPEAKER_01]: These are gang busters numbers here.

[SPEAKER_01]: From the FinTech and credit monetization, monthly active users up 31% credit portfolio grew 75% payment volume.

[SPEAKER_01]: Anywhere from 20 to 30% depending on the country that you are looking at.

[SPEAKER_01]: Add revenue up 26% it's a solid company as I'm trying to say here.

[SPEAKER_01]: $109 billion market cap company also got 8.8 billion in debt cash flow trend looks fantastic.

[SPEAKER_01]: Profit margins have been expanding a bit from 8.4% even though it's a 14.9% in 2025.

[SPEAKER_01]: Turn on equity.

[SPEAKER_01]: Taking a bit of a dip was 51.5% still a respectable 33.8% this year.

[SPEAKER_01]: Revenue growth.

[SPEAKER_01]: 55.3% on an annualized basis.

[SPEAKER_01]: And you know what?

[SPEAKER_01]: That's not too backloaded, either.

[SPEAKER_01]: Projected a girl from 20 billion in revenue to 28 billion.

[SPEAKER_01]: This year, that's still nearly 50% revenue growth.

[SPEAKER_01]: Training at 35 times, price to 4 looking earnings, 19.1 times, price to book value, 4.5 times, price to sales, does not pay a dividend in a little bit of short interest, but not too much.

[SPEAKER_01]: Now recently it's taken a little bit of a hit, maybe some contraction coming back down to Earth given where this company has been, but I mean it's not a clear downward trend.

[SPEAKER_01]: It's big spike up in March, April, Liberation Day, obviously for many reasons, a company that primarily operates in Latin America stands to gain from a turf war with the United States if you're trying to sell the same things Amazon is.

[SPEAKER_01]: But since then it's come down a little bit, right?

[SPEAKER_01]: And so you see this huge run up up 28.65% year to date and spite of it being down 13% over the past three months.

[SPEAKER_01]: And as broke its support, maybe headed a bit downward, I would wait to see, there's a little bit more of a defined trend here.

[SPEAKER_01]: Is it going to revisit some of those marches?

[SPEAKER_01]: That's kind of where it is right now.

[SPEAKER_01]: Either way, I would definitely start to DCA into this thing, pretty soon, if you plan to, because I mean, it's a stellar name, it's got stellar growth.

[SPEAKER_01]: And I mean, these trends are getting a tier in my eye.

[SPEAKER_01]: These trends are beautiful here.

[SPEAKER_01]: That is Mercado Libre,

[SPEAKER_01]: Tigger M-E-L-I.

[SPEAKER_01]: Fortunately, we don't have much time left for my last talking point.

[SPEAKER_01]: I was going to talk about some gold, but instead, I'm going to direct you to head over to the Invest talking YouTube channel.

[SPEAKER_01]: to search in Vestock with two T's in YouTube, because although we also have some YouTube classroom series or in Vestock Innovator series, should have a fresh webinar up there as well.

[SPEAKER_01]: Very applicable, we talked about AI.

[SPEAKER_01]: In the types of businesses, you can invest in outside of those big boys that have been covered over and over over the past couple of years.

[SPEAKER_01]: So dive into that and if you got questions, give us a call, hate a date, 99 chart.

[SPEAKER_01]: I'm Luke Graham, this completes another invest talk program.

[SPEAKER_01]: Today's show, may do think about your own financial picture, your investments, your taxes, your retirements, your kids college fund, your cats college fund, your dogs college fund, and whether or not you really maximizing all of that.

[SPEAKER_01]: Well, it can be financially offered no cost portfolio reviews, because we want to help bring clarity and confidence to your financial lives.

[SPEAKER_01]: Just go over to invest.com and click on the portfolio.

[SPEAKER_01]: Review button, we also would greatly, greatly appreciate.

[SPEAKER_01]: as we thank you for listening.

[SPEAKER_01]: We'd greatly appreciate you to tell at least one friend, one family member, about our free podcast downloads.

[SPEAKER_01]: It really helps us out.

[SPEAKER_01]: As well as leaving us an iTunes review while you're over there.

[SPEAKER_01]: Independent Thinking?

[SPEAKER_01]: Share its success.

[SPEAKER_05]: This is Invest Talk.

[SPEAKER_05]: Good name.

[SPEAKER_05]: Invest Talk is a trademark of KPP financial, because of the nature of the interactive dialogue inherent in the format of this program.

[SPEAKER_05]: It's important for the listener to understand that not all comments made will apply to them.

[SPEAKER_05]: Specifically, nothing said shall be taken to be investment advice.

[SPEAKER_05]: or shell statements on this program be considered an offer to buy or sell security.

[SPEAKER_05]: Because such advice is rendered solely on an individual basis, and at times will require that the investor review a prospectus before investing.

[SPEAKER_05]: Invest talk is a copyrighted program of Klein, Pavlis, and Peasley Financial, a registered investment advisor firm, which retains all rights.

[SPEAKER_05]: For more information regarding KPP's investment advisors,

[SPEAKER_05]: Thank you for listening and your comments and questions are welcome on our 24 hour listener line at 888-99 chart