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

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[SPEAKER_05]: Independent Thinking, shared success.

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

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

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[SPEAKER_00]: Good afternoon, fellow investors, and welcome back to the Friday March 6th, 2021 edition of Invest Talk.

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[SPEAKER_00]: I'm your host, Luke Guerrero, and I'll be with you over this next hour as we dissect market news.

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[SPEAKER_00]: Talk about market performance and answer your finance and investment questions.

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[SPEAKER_00]: And, oh, by the way, you haven't heard?

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[SPEAKER_00]: Market madness is already here.

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[SPEAKER_00]: So when I let all of those out there who want to potentially have a chance to win $1,000 or $1,500, you follow us on YouTube to head over to investtalk.com to submit their market madness bracket today.

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[SPEAKER_00]: Alrighty, and just a bit, we'll talk about today's market performance and run down those show topics.

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[SPEAKER_00]: But why don't we kick things off by answering a fresh college question now?

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[SPEAKER_03]: Hi there.

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[SPEAKER_03]: I'm interested in your analysis of heard schoolable figure ATZ and the turnaround narrative.

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[SPEAKER_03]: Thank you.

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[SPEAKER_00]: Tiger HTZ is herds global, it is the world's largest car rental brand.

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[SPEAKER_00]: It's about $1.3 billion market cap away off of its highs back in $20, $21,34 is a share now trading down at $4,12, $4,12 cents that is.

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[SPEAKER_00]: And as such as Hertz, Hertz, it's dollar, it's thrifty, it's a 500,000 vehicle fleet that has a very airport heavy footprint globally.

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[SPEAKER_00]: When I was recently in New Zealand, we used a Hertz rental car there.

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[SPEAKER_00]: Now, in a merchant bankruptcy in June of 2021, and it's still carrying some pretty hefty leverage, 15.8 billion dollars in long-term debt, negative free cash flow that is projected to be positive next year.

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[SPEAKER_00]: In spite of that, it's still projected to lose money.

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[SPEAKER_00]: It has not made money since December of 2023.

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[SPEAKER_00]: Now, in terms of guidance,

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[SPEAKER_00]: They did guide a little bit lower than what was expected in their most recent quarterly earnings.

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[SPEAKER_00]: But there are some things that are positive.

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[SPEAKER_00]: I feel like I've been harping on the negative here.

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[SPEAKER_00]: Let's talk about the positive.

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[SPEAKER_00]: While the turnaround is pretty real, they have over one billion in EBITDA improvement in a single year.

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[SPEAKER_00]: That's not noise.

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[SPEAKER_00]: They have rotated out of there,

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[SPEAKER_00]: it advised disaster with Tesla because who wants to on vacation spend time charging their vehicle that didn't make any sense at all to their 500,000 optimized fleet so they solved that problem.

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[SPEAKER_00]: Their car sales probably on the back of the fact that they bought a bunch of electric cars which was once again a stupid idea.

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[SPEAKER_00]: has made them one of the largest, they're one of the top five use car dealers by volume in the United States.

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[SPEAKER_00]: And so that has led to.

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[SPEAKER_00]: utilization of a fleet that was not wanted.

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[SPEAKER_00]: They also have had a bit of a liquidity enhancement in terms of their pipeline.

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[SPEAKER_00]: 200 million in financing plus 500 million in other opportunities.

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[SPEAKER_00]: And another 400 million in first lean capacity that they refinanced in June at a lower rate, which is freed up some of that liquidity crunch.

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[SPEAKER_00]: But there are risks, liquidity is expected to dip in Q22026 below one billion and unrestricted cash.

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[SPEAKER_00]: They are still burning.

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[SPEAKER_00]: free cash, free cash flow, was not positive and is unlikely to be positive until next year at the earliest.

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[SPEAKER_00]: They have, as I mentioned, that massive, massive leverage.

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[SPEAKER_00]: And in a way, there is still a bit of a hangover from the Tesla EV debacle.

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[SPEAKER_00]: It costs them billions in impairments and set them back probably two to three years.

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[SPEAKER_00]: And then there's the thin float in the stick about bankruptcy, the rising cost of insurance.

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[SPEAKER_00]: Bottom line is they are executing a genuine operating turnaround.

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[SPEAKER_00]: You have seen it a lot of ways.

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[SPEAKER_00]: They have stopped the bleeding.

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[SPEAKER_00]: But at the same time, there are still some structural weaknesses in this company that could lead you to say, okay, high risk high reward.

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[SPEAKER_00]: It's certainly not for the fate of art.

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[SPEAKER_00]: around two, but given those issues, until I see some meaningful turn around and a move towards at least having positive free cash flow, it seems to be a bit too risky for me.

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[SPEAKER_00]: That is hurts, international, to your HTZ.

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[SPEAKER_00]: We got a lot of ground to cover in the next 45 minutes or so, and it all kicks off with my main focus point about the wholesale prices surge, and how that is signaling persistent price pressures.

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[SPEAKER_00]: Holesale prices rose sharply in the latest report, pointing to persistent inflation that could complicate Federal Reserve policy decisions.

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[SPEAKER_00]: This unexpected uptick in producer prices suggested inflation?

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[SPEAKER_00]: Well, the fight is far from over.

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[SPEAKER_00]: despite the earlier optimism about cooling pricing pressures.

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[SPEAKER_00]: Also, we did get news that the U.S. economy shed at 92,000 jobs last month, and the month before it was revised downward, so we'll touch on that.

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[SPEAKER_00]: So to John Cutter warning today, that the Gulf is within days of stopping energy exports is oil 200 on the horizon.

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[SPEAKER_00]: And should we have time at the end of the show?

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[SPEAKER_00]: We did get the news a couple weeks back, that the United States government is supposed to refund tariffs, but how's that actually going to play out?

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[SPEAKER_00]: We also have some voice bank calls ready to play, including one on World Pool Corporation and another on Lincoln National Corporation.

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[SPEAKER_00]: So also some questions that came in from the comment section of the Invest talking YouTube channel, and hopefully some live calls throughout the show.

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[SPEAKER_00]: We're headed into a break.

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[SPEAKER_00]: Please remember, you can call anytime and leave your questions on the University of Oismank.

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[SPEAKER_00]: If you're listening via our live streamer on AM1220 in the Bay Area, pick up that phone, dial 88899 chart, and give me a call to answer your questions.

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[SPEAKER_06]: KPP Financial is excited to announce the third annual Invest Talk Market Madness Contest.

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[SPEAKER_06]: Instead of basketball brackets, Justin and Luke will be watching companies perform head-to-head in an epic showdown.

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[SPEAKER_06]: Invest Talk Participants can compete for the $1,000 grand prize.

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[SPEAKER_06]: and demonstrate their market prowess by locking in their stock victory predictions.

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[SPEAKER_06]: And yet this, if the contest winner is also following the Investog YouTube channel, Justin will bump up the prize to $1,500.

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[SPEAKER_06]: So if you are ready to test your skills in this unique competition, do not wait.

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[SPEAKER_06]: It's free to join the fun.

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[SPEAKER_06]: Visit Investog.com and search market madness.

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[SPEAKER_06]: Then submit your bracket predictions to enter.

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[SPEAKER_06]: Get it done before the deadline, March 18th at 1159 p.m.

07:53.223 --> 07:58.670
[SPEAKER_00]: U.S. equities sold off sharply on Friday to close out what was.

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[SPEAKER_00]: Really a brutal week hit from both sides by an escalating oil shock and a jarring deterioration in the labor market.

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[SPEAKER_00]: The Dow fell nearly 1% of the S&P dropped 1.3 of an Azdaq shed 1.6 and the Russell 2000 led the down side again off 2.3%.

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[SPEAKER_00]: Equate S&P actually underperformed the capoated on the day a reversal of this defensive breath leadership that we've seen in a recent weeks.

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[SPEAKER_00]: And the oil story intensified dramatically crude oil surged over 12 percent.

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[SPEAKER_00]: It's best session since 2020 and closed above $90 a barrel

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[SPEAKER_00]: Cut a warrant that all gold producers may have to shut down production within days, scenario that could drive oil to $150.

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[SPEAKER_00]: Kuwait has reportedly already started cutting production.

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[SPEAKER_00]: A late afternoon, headline about the US announcing a $20 billion reinsurance facility to restart shipping offered a little bit of relief, but hopes for a near-term conflict off-ramp continue to fade after the president posted this morning demanding unconditional surrender.

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[SPEAKER_00]: The longer this drags on, the more traction the complacency concerned, it's gained.

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[SPEAKER_00]: The resilient narrative that supported markets earlier in the week, it's running on fumes.

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[SPEAKER_00]: Then came the Labor Day, February non-Farm Pables, came in at negative 92,000 and outright decline.

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[SPEAKER_00]: Completely up-ending the labor market stabilization theme and better growth sentiment from the ISM prints that we saw earlier this week.

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[SPEAKER_00]: Prior months, in fact, were revised down in other 69,000.

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[SPEAKER_00]: With that, the unemployment rate ticked up to 4.4% and the participation rate dropped half of 0.262%.

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[SPEAKER_00]: Retail sales are mixed to the headline fell two tenths of a percent but X-Auto's was flat at the control group rose at three tenths.

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[SPEAKER_00]: Mac 7 names broadly lower led to the downside by meta and video and Amazon.

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[SPEAKER_00]: Banks, credit cards, transports, machinery, and consumer discretionary names all lag software was again one of the few relative bright spots alongside energy, defense exchanges, and grocers.

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[SPEAKER_00]: Treasuries are mixed with some curve steepening, though yields ended the weak sharply higher, gold gained 1.6% and silver added a 2.6%

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[SPEAKER_00]: Next week is quieter with the Fed and it's pre-FOMC blackout.

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[SPEAKER_00]: It's CPI Wednesday, Looms Large, given the oil-driven inflation backdrop.

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[SPEAKER_00]: Treasury is also auctioning off 119 billion in 310 and 30-year paper.

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[SPEAKER_00]: This next question comes from our invest talk YouTube channel comment section question bank.

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[SPEAKER_00]: Let's on ticker, B-A-L-L.

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[SPEAKER_00]: is ball corporations.

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[SPEAKER_00]: It says, can you please review and let us know what do you think about ball?

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[SPEAKER_00]: Well, ball corporation is the world's largest aluminum beverage can manufacturer.

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[SPEAKER_00]: It also produces aluminum containers for personal care and household products.

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[SPEAKER_00]: It's about 260 million, I'm sorry, 16.9 billion dollar market cap.

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[SPEAKER_00]: I was looking at shares that standing really quick.

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[SPEAKER_00]: In terms of revenue, it will does about 13.1 billion in revenue.

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[SPEAKER_00]: That's what it did in 2025, projected to grow to 13.9 and 2026.

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[SPEAKER_00]: So still some decent growth there.

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[SPEAKER_00]: A lot of employees, 16, 100 employees with plants in North and Central America in Europe and Asia and in South America as well.

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[SPEAKER_00]: It is more than anything, a pure play aluminum packaging name.

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[SPEAKER_00]: after a history of also being in the aerospace defense industry.

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[SPEAKER_00]: But that's all the often February of 2024.

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[SPEAKER_00]: So what's going on here?

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[SPEAKER_00]: Well, it's up 18.05% year to date.

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[SPEAKER_00]: It's up 27.53% over the past three months.

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[SPEAKER_00]: It's up 1984 over the past 52 weeks.

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[SPEAKER_00]: And now it's trading at 15.5 times a price

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[SPEAKER_00]: What you're seeing is, well, big volume catalysts, sporting events historically drive meaningful can consumption spikes in the lead up to the world cup in 2026 with the US being a host, and that being where they get a large portion of their revenue, about 47%, certainly a bolstering their projected growth into the end of this year.

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[SPEAKER_00]: But, risks are about to.

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[SPEAKER_00]: We talked about the temporary, or rather the potential cost increase of two aluminum at the end of yesterday's show.

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[SPEAKER_00]: That's one of the reasons why it's down 1.09% today.

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[SPEAKER_00]: Had a bit of a surge coming into the end of February, but it's dropped off since then.

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[SPEAKER_00]: Turns if it's leverage, not too much there, 7.2 billion in debt is worth sitting right there.

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[SPEAKER_00]: But overall, I like this name.

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[SPEAKER_00]: It's selling off its aerospace segment.

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[SPEAKER_00]: Definitely cleaned up a lot of the issues that it had making it more of a pure play.

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[SPEAKER_00]: But there's a lot of uncertainty in costs.

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[SPEAKER_00]: Natural gas in Europe elevated prices, aluminum and aluminum tariffs, elevating costs and inputs.

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[SPEAKER_00]: And so the longer this war drives on, the longer their input costs become, and then you could see continued margin compression.

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[SPEAKER_00]: Something you're already seeing a little bit when you look at EBITDA margin, but still a lot of risk that asymmetrically affect a company that is entirely dependent on the input of aluminum.

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[SPEAKER_00]: So given that, I think for now, I would keep this on my watch list.

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[SPEAKER_00]: That is ball corporation ticker B-A-L-L.

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[SPEAKER_00]: I want to briefly mention the newest KPP premium news letter, which will be distributed tomorrow.

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[SPEAKER_00]: This week in the Insight section, we discuss the current market, giving you an update on the current market environment, given how much has changed in the past week.

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[SPEAKER_00]: The stock idea section each and every week.

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[SPEAKER_00]: We give you an idea of two different names.

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[SPEAKER_00]: One of them is a photo mask producer.

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[SPEAKER_00]: And another is a semi conductor producing company.

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[SPEAKER_00]: And in the portfolio management section, we'll touch on energy prices.

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[SPEAKER_00]: It is likely that for the foreseeable future, the cost of energy and the inflationary impulse because of energy is going to be the dominating story in the market.

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[SPEAKER_00]: At least till we have some sort of resolution on the horizon.

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[SPEAKER_00]: It's one of the things we've talked about a lot on this show.

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[SPEAKER_00]: And so we discuss that in the newsletter amongst those other topics as well.

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[SPEAKER_00]: If you're interested in learning more, visit us at invest.com and subscribe.

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[SPEAKER_00]: The newsletter will come to your inbox on Saturday mornings.

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[SPEAKER_00]: Moving to new break, still to come, my main focus point and more answers to your finance and investment questions.

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[SPEAKER_00]: I encourage you to call now.

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[SPEAKER_00]: You know the number 88899 chart.

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

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

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[SPEAKER_00]: So the producer's price indexed for January, came in a bit harder than expected.

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[SPEAKER_00]: And I don't want to spend some time on this because the timing could not be worse.

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[SPEAKER_00]: Headline PPI rose 50 basis points on the month, the biggest increase in four months, and above the 30 basis points that Wall Street was expected.

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[SPEAKER_00]: On a 12 month basis, wholesale inflation is running at 2.9%.

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[SPEAKER_00]: Well above the Fed's 2% target.

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[SPEAKER_00]: But the real alarm bell is in the core number.

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[SPEAKER_00]: Core PPI which strips out food and energy jumped 80 basis points in January.

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[SPEAKER_00]: That's the biggest monthly increase since July and nearly three times what economists were forecasting.

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[SPEAKER_00]: On a 12-month basis, core wholesale inflation accelerated to 3.6% from 3.3% in December.

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[SPEAKER_00]: That is moving in the wrong direction.

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[SPEAKER_00]: Now, why does wholesale wholesale inflation matter?

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[SPEAKER_00]: PPI measures the prices producers pay for their inputs, supplies, material, services.

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[SPEAKER_00]: It's a leading indicator of consumer inflation because when businesses pay more, they eventually pass those costs along.

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[SPEAKER_00]: So when PPI is running hot, it typically means that could be CPI, consumer price index, and the Fed's preferred measure, the PCE price index, are going to face upward pressure with a bit of a lag.

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[SPEAKER_00]: And the composition of this report, it tells an important story, the services side drove the increase.

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[SPEAKER_00]: Service prices jumped 80 basis points the most since July, over 20% of that increase, came from a single category, a 14.4% search in margins for professional and commercial equipment wholesale.

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[SPEAKER_00]: A pair of retailing, chemical wholesaling, telecom services, health and beauty retailing, they all moved higher.

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[SPEAKER_00]: This matters because service inflation is what the Fed cares about most.

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[SPEAKER_00]: It's sticky or harder to reverse and most reflective of the underlying economy and labor market conditions than goods prices.

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[SPEAKER_00]: On the good side, there's actually some good news.

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[SPEAKER_00]: Good prices fell 30 basis points in January.

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[SPEAKER_00]: The third decline in five months and prices of raw materials, they also decline, which could suggest some easing deeper in the supply chain.

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[SPEAKER_00]: So it's not all bad, but the services component is dominant enough to overwhelm the

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[SPEAKER_00]: Now here's what the context makes this report really uncomfortable.

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[SPEAKER_00]: The PBI data was already going to be a problem for the Fed before the Middle East issues.

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[SPEAKER_00]: The Fed's referred inflation gauge PCE was trending higher in the last three months in 2025, sitting at 2.9% annual growth in December.

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[SPEAKER_00]: Core PC was expected to post its largest gain in a year when the January number comes out.

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[SPEAKER_00]: So we were already in a world where inflation was proving sticky and the Fed was on hold.

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[SPEAKER_00]: Then you layer in the energy shock, Brett crew now at 89.

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[SPEAKER_00]: Katari officials, warning, it could hit 150.

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[SPEAKER_00]: If the disruption persists gas prices are spiking, the Fed tends to look through volatile energy moves and focus on cornflation, but major energy shocks they are different.

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[SPEAKER_00]: They feed into the cost of transporting goods of heating buildings of running factories.

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[SPEAKER_00]: They bleed into core prices.

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[SPEAKER_00]: And perhaps more dangerously, they can shift inflation expectations.

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[SPEAKER_00]: If businesses and consumers start expecting higher inflation, two, three years out, that becomes self-fulfilling.

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[SPEAKER_00]: Market-based inflation expectations are already moving the five-year break even rate, climbed above two and a half percent this week.

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[SPEAKER_00]: So the Fed is effectively staring at a nightmare scenario.

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[SPEAKER_00]: They've got wholesale inflation accelerating.

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[SPEAKER_00]: Consumer inflation already above target.

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[SPEAKER_00]: And as we'll discuss in a moment a labor market, they've just lost 92,000 jobs.

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[SPEAKER_00]: A central bank that simultaneously watches inflation rise and the job market weakened has pretty much no good options.

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[SPEAKER_00]: If they cut rates to support employment, they risk fueling inflation.

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[SPEAKER_00]: They hold rates to fight inflation, they risk deepening a job downturn.

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[SPEAKER_00]: This is the classic stack-flation bind, and it's not theoretical anymore.

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[SPEAKER_00]: The data is pointing in that direction.

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[SPEAKER_00]: For investors, the implication is that Ray cuts are getting pushed further out, not closer.

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[SPEAKER_00]: Fed funds future show the probability of two cuts that see her has dropped to about 55% from nearly 80% last week.

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[SPEAKER_00]: The Fed is widely expected to hold steady at its meeting later this month, but February is PPI report, do March 18th?

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[SPEAKER_00]: It'll be very important.

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[SPEAKER_00]: If it confirms the January acceleration, if it has the narrative shift from when does the Fed cut to does the Fed cut at all this year, we might be in a problem.

20:17.495 --> 20:22.062
[SPEAKER_00]: And that reprising would ripple through everything, bonds, stocks, housing, credit.

20:23.825 --> 20:33.900
[SPEAKER_00]: The irony is that there were some positive signals in this report, good deflation, easing raw material costs, some of the headlines driven by volatile trade margins.

20:34.150 --> 20:45.173
[SPEAKER_00]: But in this environment, the market is going to focus on the bad news, because the bad news is what changes the Fed's calculus, and the Fed's calculus is what drives everything else.

20:45.473 --> 20:53.664
[SPEAKER_00]: Now, I know I talked about it at the top of the show, but I want to mention it one more time, because it is my favorite time of year, time for invest talk of market madness.

20:53.704 --> 21:06.921
[SPEAKER_00]: Now, if you didn't participate before, market madness is effectively like March madness, but instead of college basketball teams going head to head, we have companies going head to head on a daily basis to see who's return is higher.

21:07.582 --> 21:11.667
[SPEAKER_00]: If you are a participant in this game, subject to some rules that are on our website,

21:12.558 --> 21:18.898
[SPEAKER_00]: And you win, you could win $1,000, or if the winner is following us on YouTube, you could win $1,500.

21:18.938 --> 21:22.710
[SPEAKER_00]: That sounds interesting, that sounds like fun, which I think it is.

21:22.850 --> 21:25.318
[SPEAKER_00]: Head over to invest.com and submit your bracket now.

21:26.851 --> 21:30.576
[SPEAKER_00]: On the next investor talk, we'll look into this story, the new labor market reality.

21:30.877 --> 21:33.540
[SPEAKER_00]: Low-higher low-fire economy becomes the norm.

21:34.141 --> 21:41.652
[SPEAKER_00]: CEO say they won't add many jobs in 2026, signaling a fundamental shift towards a low-higher low-fire labor market.

21:41.672 --> 21:50.364
[SPEAKER_00]: This new employment paradigm could reshape everything from consumer spending patterns to corporate profit margins, as companies prioritize efficiency overgrowth.

21:51.345 --> 21:56.132
[SPEAKER_00]: That's Monday.

22:05.495 --> 22:24.988
[SPEAKER_06]: The weekend is here or almost here, but you've got financial investment questions, so step up and call in, in Vestalk, 888-99 chart.

22:25.255 --> 22:33.043
[SPEAKER_04]: This is a pretty good company that's been around for a while, has been formed for quite some time now, and was interested to get your thoughts this year.

22:33.103 --> 22:41.891
[SPEAKER_04]: It would be a super bargain at this place, and then right now they have around a 6% dividend, which is nice.

22:42.392 --> 22:45.295
[SPEAKER_04]: But as you said, that should be the reason for buying it.

22:46.016 --> 22:50.520
[SPEAKER_04]: But I do think they think they think they have good products, and we're looking at your thoughts on,

22:50.703 --> 22:52.666
[SPEAKER_04]: What do you guys think around this level?

22:52.987 --> 22:56.592
[SPEAKER_04]: Looking forward to hearing what you guys think, and thank you for what you guys do.

22:58.755 --> 23:05.586
[SPEAKER_00]: World pool corporation is a U.S.-based manufacturer of kitchen and laundry appliances.

23:06.848 --> 23:11.695
[SPEAKER_00]: They own World Pool Kitchen Aid, Maytag, among other groups.

23:13.238 --> 23:14.820
[SPEAKER_00]: Now in terms of size,

23:15.239 --> 23:23.030
[SPEAKER_00]: So, the $3.5 billion market cap company with about $6.25 billion in debt.

23:25.013 --> 23:34.307
[SPEAKER_00]: It also has been struggling with lowered free cash flow down from $1.6 billion in 2021 to 81 billion this year.

23:34.667 --> 23:36.269
[SPEAKER_00]: It's our 81 billion this year.

23:37.892 --> 23:44.942
[SPEAKER_00]: At the same time, margins have kind of been all over the place definitely compressing from their highs during the pandemic.

23:45.817 --> 23:46.718
[SPEAKER_00]: And it's at a rough year.

23:46.818 --> 23:52.925
[SPEAKER_00]: It's down 18.55% this year down 22.75% in the past three months.

23:52.945 --> 23:56.849
[SPEAKER_00]: Now 37.42% in the past 52 weeks.

23:57.910 --> 24:02.676
[SPEAKER_00]: This is led to trade near the low, actually it's still, but it's the average price to forward looking.

24:02.696 --> 24:08.382
[SPEAKER_00]: And trading at 9.9 times the average being 8.7 in the high being 14.3.

24:09.712 --> 24:16.981
[SPEAKER_00]: Now, what has been causing this name that has had a consistent six to eight percent dividend yield the past three years?

24:17.021 --> 24:18.522
[SPEAKER_00]: What has been causing this name?

24:18.562 --> 24:20.785
[SPEAKER_00]: Default.

24:23.148 --> 24:25.230
[SPEAKER_00]: Well, the housing markets at 30 year low.

24:26.592 --> 24:39.567
[SPEAKER_00]: Existing home sales, due to mortgage and the market, applies demand, therefore, which is heavily tied to home turnover, has really suffered as well.

24:40.492 --> 24:45.217
[SPEAKER_00]: is their EBIT headwind in 2026, from the tariff that we're now in 2025.

24:46.918 --> 24:56.968
[SPEAKER_00]: They've also had a rough time of the promotions that they put in place, not really bringing in demand because of these structural issues with the housing market.

24:58.370 --> 25:01.913
[SPEAKER_00]: And so with this, you can ask yourself, okay, is it turning around?

25:01.933 --> 25:04.396
[SPEAKER_00]: There's nothing from a momentum technical basis that tells you it is.

25:04.416 --> 25:06.938
[SPEAKER_00]: It's been on a consistent downtrends in 2021.

25:09.280 --> 25:24.905
[SPEAKER_00]: And so you can say, okay, a name that has a 6% dividend yield that is still generating positive free cash flow and is going to see free cash flow growth in the next year is 9.9 times price earnings is 1.3 times price to book that.

25:24.926 --> 25:25.526
[SPEAKER_00]: You cheap enough.

25:26.488 --> 25:30.434
[SPEAKER_00]: Maybe, but now in the structural problem is persistent.

25:30.455 --> 25:31.997
[SPEAKER_00]: And so until you see

25:33.580 --> 25:43.486
[SPEAKER_00]: housing market, demand, and housing turnover move, I think you're unlikely to see meaningful growth in revenue from this company.

25:43.506 --> 25:47.978
[SPEAKER_00]: So for that reason, world pool corporation can have to pass.

25:50.978 --> 25:56.366
[SPEAKER_00]: On Fridays, we generally like to make time to fit in a quick rundown of key benchmark numbers.

25:57.087 --> 26:00.913
[SPEAKER_00]: Two-year yields at 3.529% today for perspective.

26:01.354 --> 26:05.280
[SPEAKER_00]: Last week, it was at 3.383, and 218-eenweeks back, it was 0.64.

26:06.521 --> 26:09.326
[SPEAKER_00]: The 10-year yield was at 4.113% today.

26:09.506 --> 26:16.817
[SPEAKER_00]: Last week, it was 3.949, and all the way back 215-weeks scale, it was 1.762.

26:17.759 --> 26:22.246
[SPEAKER_00]: Gold is priced at $51.49, it is $129 less than last week.

26:22.967 --> 26:28.295
[SPEAKER_00]: We're way higher than 31 weeks ago, it was $33.48 and 210 weeks back when it was 18.06.

26:28.476 --> 26:39.733
[SPEAKER_00]: Silver, $84.41 per ounce, $9.31 less than last week, $109.202.80 and 208 weeks back that number was 23.94.

26:40.793 --> 26:49.588
[SPEAKER_00]: oil was selling for $89.93 per barrel that is $22.91 higher than last week, a 33% increase.

26:50.811 --> 26:57.843
[SPEAKER_00]: 76 weeks ago that I was 67.79, 118 weeks back it was 74.30, 217 weeks ago is 66.62.

26:59.506 --> 27:05.957
[SPEAKER_00]: National Abbott for a gallon of regular gasoline is 332 per gallon, a 34% increase compared to last week.

27:06.410 --> 27:09.694
[SPEAKER_00]: 114 weeks ago, sorry, 144 weeks ago, that number was 356.

27:09.714 --> 27:16.384
[SPEAKER_00]: 122 weeks back, it was 425 and looking all the way back four years, a gallon of regular gas was 357.

27:17.866 --> 27:22.231
[SPEAKER_00]: California was 490, a gallon, a 26-cent increase compared to the last week.

27:22.912 --> 27:26.978
[SPEAKER_00]: 121 weeks ago is 532, 197 weeks ago, it was 587.

27:28.200 --> 27:35.910
[SPEAKER_00]: For comparison, in Texas, gas is 297 per gallon today,

27:38.000 --> 27:42.406
[SPEAKER_00]: keep things moving and get back to another question from the investor talk voice bank.

27:42.426 --> 27:45.290
[SPEAKER_01]: Hello, this is Isaiah from Tennessee.

27:45.310 --> 27:49.275
[SPEAKER_01]: I wanted to call about A, C, M, A.

27:49.316 --> 27:52.360
[SPEAKER_01]: It's a biologic group.

27:52.700 --> 27:55.604
[SPEAKER_01]: I'm up about 105 percent.

27:55.624 --> 27:58.648
[SPEAKER_01]: It's about 4 percent of my portfolio.

27:58.668 --> 28:05.678
[SPEAKER_01]: I'm just trying to figure out whether to take some profits off this high or, you know, just let it let it

28:06.063 --> 28:09.370
[SPEAKER_01]: appreciate your help and any within that you provide.

28:09.831 --> 28:10.231
[SPEAKER_01]: Thank you.

28:13.137 --> 28:17.526
[SPEAKER_00]: A DMA is ADMA biologics.

28:17.586 --> 28:23.278
[SPEAKER_00]: It is a 3.73 billion dollar market cap company.

28:24.777 --> 28:30.323
[SPEAKER_00]: And what they do is they manufacture and market and develop specialty plasma derived biologics.

28:30.363 --> 28:38.673
[SPEAKER_00]: Now, 98.8% of its revenue comes from the United States, and most of it comes from the biomanufacturing segment of their business, which makes up 96.7%.

28:38.993 --> 28:46.442
[SPEAKER_00]: You're to date, it is down 15.63% down 22.47% over the past three months.

28:46.882 --> 28:51.848
[SPEAKER_00]: Down 8.99% over the past 52 weeks, it was very strong.

28:51.828 --> 28:58.702
[SPEAKER_00]: coming out of the pandemic from 2021 into the end of 2024, but since then, there's been a bit of a momentum.

28:59.324 --> 28:59.624
[SPEAKER_00]: Turn.

29:01.328 --> 29:04.194
[SPEAKER_00]: One of the reasons why, well, growth has slowed.

29:04.635 --> 29:12.351
[SPEAKER_00]: They exploded out of the pandemic from

29:13.715 --> 29:24.755
[SPEAKER_00]: projected to go to 637 this upcoming year still growth, but certainly a lot slower than the 64.6% they saw on an annualized basis before.

29:24.795 --> 29:33.090
[SPEAKER_00]: Terms of debt not much debt going on for this company only about 76 million dollars in debt.

29:34.370 --> 29:36.213
[SPEAKER_00]: margins, cut all over the place, though.

29:36.654 --> 29:44.947
[SPEAKER_00]: Even to margin has grown from 11.6% in 2023 to 57.7% is where it's projected to be in 2026.

29:48.252 --> 29:49.835
[SPEAKER_00]: And so things are headed in the right direction.

29:49.855 --> 29:51.157
[SPEAKER_00]: I would say from a fundamental basis.

29:51.197 --> 29:54.643
[SPEAKER_00]: I mean, it's trading at 15 and a half times price to four looking earnings.

29:56.526 --> 29:57.788
[SPEAKER_00]: Certainly not too expensive.

29:58.809 --> 30:01.153
[SPEAKER_00]: But one of the hardest things to overcome

30:04.087 --> 30:09.354
[SPEAKER_00]: is momento and momentum took a turn in the end of 2025.

30:09.974 --> 30:14.680
[SPEAKER_00]: And so in spite of this having improving fundamentals, right?

30:14.700 --> 30:19.867
[SPEAKER_00]: This isn't a fundamental deterioration, it's more related to their pipeline.

30:20.567 --> 30:24.492
[SPEAKER_00]: Now, one benefit is they have a pretty strong US-based supply chain.

30:24.512 --> 30:27.656
[SPEAKER_00]: So there's a big tariff policy vote for them.

30:31.521 --> 30:32.322
[SPEAKER_00]: But overall,

30:33.567 --> 30:37.152
[SPEAKER_00]: The market is telling you that you should probably move on and find opportunities elsewhere.

30:38.233 --> 30:41.077
[SPEAKER_00]: That is ADMA byologics to your ADMA.

30:45.663 --> 30:50.811
[SPEAKER_00]: So we got the February Employment Report this morning, and it was ugly.

30:51.712 --> 30:57.219
[SPEAKER_00]: The economy lost 92,000 jobs far worse than the 50,000 gain economists had expected.

30:57.960 --> 31:01.465
[SPEAKER_00]: And a sharp reversal from January's 126,000 gain.

31:02.069 --> 31:10.962
[SPEAKER_00]: The unemployment rate ticked up to 4.4% and on top of that December in January, we're actually revised down by a combined 69,000 jobs.

31:11.803 --> 31:15.648
[SPEAKER_00]: The US has now lost jobs in three of the past six months.

31:16.509 --> 31:20.415
[SPEAKER_00]: And the losses were widespread, health care, social assistance,

31:20.598 --> 31:30.076
[SPEAKER_00]: which has been propping up the labor market for months, shed 18,600 jobs, partly due to a 31,000 worker Kaiser Permanente strike in California.

31:30.738 --> 31:33.603
[SPEAKER_00]: But as one economist noted, this is a labor market so soft.

31:34.144 --> 31:38.573
[SPEAKER_00]: It cannot withstand a single strike because nobody else is hiring.

31:39.008 --> 31:48.042
[SPEAKER_00]: Leisure and hospitality lost 27,000 jobs, manufacturing lost 12,000 jobs construction, which had been benefiting from data center demand lost 11,000 jobs.

31:48.082 --> 31:53.210
[SPEAKER_00]: Federal government employment fell by 10,000, reflecting the Trump administration's workforce cuts.

31:54.051 --> 31:58.418
[SPEAKER_00]: Private sector jobs fell by 86,000 overall.

32:00.693 --> 32:20.435
[SPEAKER_00]: Though White House attributed to weaknesses in this report to one-offs, including a technical adjustment to how BLS accounts for business openings and closings, and their report did incorporate annual population revisions, showing 1.4 million fewer people employed, as of December than previously reported, reflecting these sharp drop in immigration since Trump took office.

32:21.196 --> 32:23.879
[SPEAKER_00]: But their revision doesn't explain February's outright job losses.

32:23.999 --> 32:30.666
[SPEAKER_00]: It's a baseline adjustment, not a reflection of current month deterioration.

32:30.882 --> 32:32.324
[SPEAKER_00]: is what this means for consumer spending.

32:33.385 --> 32:38.111
[SPEAKER_00]: Income growth, adjusted for inflation, is under pressure, and that constrains people's abilities to spend.

32:39.453 --> 32:41.856
[SPEAKER_00]: Consumer spending is 70% of GDP.

32:42.396 --> 32:46.722
[SPEAKER_00]: If the labor market can't generate jobs, consumption weekends, and then the economy slows.

32:48.364 --> 32:48.905
[SPEAKER_00]: It's not pretty.

32:50.567 --> 32:51.308
[SPEAKER_00]: Certainly not pretty.

32:51.868 --> 32:57.295
[SPEAKER_00]: And it was far worse than even analyst's worst case scenario.

32:58.642 --> 33:08.821
[SPEAKER_00]: Now, the market response was, as expected, treasure yields fell, reflecting this increased expectation that the Fed may have to cut rates, stocks dropped, down on S&P fell by more than 1% each.

33:09.503 --> 33:10.204
[SPEAKER_00]: But here's the tension.

33:10.264 --> 33:14.372
[SPEAKER_00]: As we just discussed in the focus point, inflation is still running hot.

33:14.875 --> 33:25.937
[SPEAKER_00]: The Fed can't cut to support a weakening labor market without risking further inflation, especially with oil and energy prices spiking, and they can't hold rates to find inflation without risking more job losses.

33:26.619 --> 33:36.799
[SPEAKER_00]: This report will certainly justifiably understandably revise questions about whether last year's three rate cuts were sufficient to protect the labor market.

33:36.779 --> 33:39.121
[SPEAKER_00]: fun employment continues to rise in the coming months.

33:39.602 --> 33:42.645
[SPEAKER_00]: Pressure will build on the Fed to resume cutting around mid-year.

33:43.205 --> 33:45.648
[SPEAKER_00]: But the energy shock makes that incredibly difficult.

33:46.488 --> 33:47.750
[SPEAKER_00]: I said it in the focus point.

33:48.030 --> 33:49.952
[SPEAKER_00]: It seems to me like the Fed may be boxed in.

33:51.013 --> 33:54.336
[SPEAKER_00]: All right, let's grab another listener question now.

33:54.356 --> 33:58.320
[SPEAKER_02]: Hi, my name is Ernesto and I'm calling from Horkering, California.

33:58.861 --> 34:05.487
[SPEAKER_02]: And I just want to do a shout-out to you guys on that

34:05.956 --> 34:07.357
[SPEAKER_02]: they believe it's a still company.

34:07.377 --> 34:14.124
[SPEAKER_02]: I'm just wondering if you see any revenue or earnings estimates for the next three years.

34:14.664 --> 34:15.685
[SPEAKER_02]: It's it's going at all.

34:16.066 --> 34:17.347
[SPEAKER_02]: Thank you for all that you do.

34:17.407 --> 34:19.869
[SPEAKER_02]: I'll be looking forward to your answer on the next podcast.

34:19.949 --> 34:20.290
[SPEAKER_02]: Thank you.

34:21.911 --> 34:24.594
[SPEAKER_00]: New Court is in fact a steel manufacturer.

34:24.614 --> 34:27.937
[SPEAKER_00]: It is North America's largest steel manufacturer.

34:28.517 --> 34:35.524
[SPEAKER_00]: If three segments, there's steel mills, there's steel products,

34:38.018 --> 34:40.521
[SPEAKER_00]: One thing to know, they are a dividend king.

34:40.541 --> 34:45.688
[SPEAKER_00]: They have 53 consecutive years of base dividend increases.

34:49.012 --> 34:57.704
[SPEAKER_00]: You did eight, there are 3.46% up, 5.83% over the past two months, up 27.85% over the past 52 weeks.

34:57.764 --> 35:00.768
[SPEAKER_00]: They are a $39 billion market cap company.

35:01.209 --> 35:04.633
[SPEAKER_00]: That's very little debt, only 7 billion in debt.

35:05.862 --> 35:14.055
[SPEAKER_00]: Perrel to valuation perspective, they're trading near the middle of their range about 14 times price to forward looking earnings about 1.9 times price to book value.

35:16.740 --> 35:19.744
[SPEAKER_00]: And so what's really been driving this well?

35:21.387 --> 35:25.974
[SPEAKER_00]: They've certainly got a windfall from those section to 32 tariffs, 50% on steel imports.

35:26.435 --> 35:33.186
[SPEAKER_00]: Trump doubling the steel tariffs from 25 to 50% for nearly all trading partners has greatly benefited a new court.

35:35.647 --> 35:40.152
[SPEAKER_00]: Which means, with the tariff rollback, there is certainly a risk overhang.

35:40.192 --> 35:42.755
[SPEAKER_00]: Now they did not exist before.

35:42.775 --> 35:47.340
[SPEAKER_00]: And you saw that you saw its price drop off from about $192 to share to $168.75.

35:49.182 --> 35:53.446
[SPEAKER_00]: Now, but in spite of that, there's still record backlog.

35:54.568 --> 36:01.435
[SPEAKER_00]: Management highlighted materially higher order backlogs, versus prior years in energy infrastructure, data centers, manufacturing.

36:03.372 --> 36:13.325
[SPEAKER_00]: And in a Q4 call they said that there is a secular demand for resharing a data center build out that has really given them a multi year underpinning independent of the tear for sheep.

36:13.365 --> 36:14.546
[SPEAKER_00]: Now that is what management would say.

36:15.227 --> 36:19.032
[SPEAKER_00]: Nobody's going to come out right and say these tariffs they're being rolled back were in big trouble.

36:20.654 --> 36:21.535
[SPEAKER_00]: But there's a Q4 miss.

36:23.418 --> 36:26.061
[SPEAKER_00]: And there was a revision downward for Q1 as well.

36:29.426 --> 36:32.890
[SPEAKER_00]: And so is it a blip in the radar?

36:33.241 --> 36:40.850
[SPEAKER_00]: I mean, you have seen some material growth from 2020, but they reached a peak in 2022, and they haven't quite recovered since.

36:41.491 --> 36:47.599
[SPEAKER_00]: Gravity's projected to grow from a 32.49 billion to 35.75 billion this year, which is good.

36:47.639 --> 36:50.782
[SPEAKER_00]: Margin's are projected to expand, which is good.

36:50.842 --> 37:01.155
[SPEAKER_00]: But Andrew and the Rinkle of infrastructure demand, energy demand, energy cost, production costs, input materials.

37:03.228 --> 37:08.037
[SPEAKER_00]: All of a sudden, the tear of weakness isn't the only structural issue here.

37:10.682 --> 37:22.485
[SPEAKER_00]: Overall, I do think that the downside risks are pretty low, given where it's trading, but with Q4 being a miss,

37:23.275 --> 37:33.433
[SPEAKER_00]: and they're being macro issues that affect this company, I would be hesitant to enter a position until after I see April earnings.

37:33.453 --> 37:34.314
[SPEAKER_00]: It's only a month away.

37:35.456 --> 37:36.638
[SPEAKER_00]: Q4 earning weren't great.

37:37.379 --> 37:38.642
[SPEAKER_00]: It's way to see what Q1 looks like.

37:40.104 --> 37:42.889
[SPEAKER_00]: Thanks for the call.

37:42.909 --> 37:45.874
[SPEAKER_00]: Well guys, we almost did it, guys, and gals.

37:46.006 --> 37:46.707
[SPEAKER_00]: We almost did it.

37:46.767 --> 37:53.175
[SPEAKER_00]: We almost made it to yet another weekend, but we're not quite there yet.

37:53.215 --> 38:04.871
[SPEAKER_00]: We still have one segment left in this show, which means if you have a burning question that you want to get answered, you're going to have to pick up that phone now and dial that number.

38:04.891 --> 38:05.812
[SPEAKER_00]: This is in Vestock.

38:06.012 --> 38:11.980
[SPEAKER_00]: I'm Luke Guerrero and we have one goal here to help you achieve your financial freedom, but I can't do it alone.

38:12.888 --> 38:18.443
[SPEAKER_00]: Our work continues after this break, so get your questions in now at 8899 chart.

38:29.813 --> 38:36.982
[SPEAKER_06]: KTP Financial is excited to announce the third annual Invest Talk Market Madness Contest.

38:37.503 --> 38:42.770
[SPEAKER_06]: Invest Talk Participants can compete for the $1,000 grand prize.

38:43.331 --> 38:48.497
[SPEAKER_06]: So if you are ready to test your skills in this unique competition, do not wait.

38:48.858 --> 38:52.783
[SPEAKER_06]: Visit InvestTalk.com and search Market Madness.

38:55.109 --> 38:58.280
[SPEAKER_00]: It's going to mint from Cupertino, you had a question for us?

38:58.822 --> 38:59.063
[SPEAKER_00]: Yes.

38:59.705 --> 39:06.891
[SPEAKER_04]: Question for the app, V, A, B, B, B, V. If you can keep some sort of the forecast for the next few years.

39:07.529 --> 39:14.199
[SPEAKER_00]: Okay, so let's add V, which is a global bio pharmaceutical company spun out of Abbott in 2013.

39:14.720 --> 39:18.085
[SPEAKER_00]: Now, they have three core businesses.

39:18.146 --> 39:23.053
[SPEAKER_00]: They have their immunology, which is about 50% of their revenue, neurosciences, which is about 18.

39:23.073 --> 39:31.326
[SPEAKER_00]: And they also have their oncology, which is about 11% of their revenue.

39:31.306 --> 39:36.173
[SPEAKER_00]: It doesn't even range over the past 52 weeks from 184 to 232.

39:36.895 --> 39:45.027
[SPEAKER_00]: But through all that, there are 71 basis points here today, up 1.78% in the past three months of 9.19% in the past 52 weeks.

39:45.828 --> 40:00.250
[SPEAKER_00]: Now, you have seen revenue growth around 6% on an annualized basis, big growth from 2020 into 2021, and then it kind of tapers off, but projected to have about 10% revenue growth from 2025 into 26.

40:00.770 --> 40:05.156
[SPEAKER_00]: In terms of company size, it's a $410 billion market cap company.

40:05.596 --> 40:09.662
[SPEAKER_00]: Quite a bit of debt, about 60 billion in debt.

40:09.682 --> 40:12.325
[SPEAKER_00]: Now, what has really been driving this company?

40:12.345 --> 40:15.970
[SPEAKER_00]: Who if you look at their relative strength going back to 2020?

40:16.070 --> 40:19.955
[SPEAKER_00]: I mean, it's pretty strong compared to the S&P 500.

40:20.156 --> 40:29.528
[SPEAKER_00]: They have outperform their industry every year, except in 2023, and this year, where they're lagging by 70 basis points.

40:30.385 --> 40:35.054
[SPEAKER_00]: Sky Rizzi replacing Humera faster than anyone model.

40:35.134 --> 40:41.405
[SPEAKER_00]: There combined sales from Sky Rizzi and Rhinvacher already exceeded 31 billion.

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[SPEAKER_00]: And that really not just surprised Wall Street, but actually surprised the company itself.

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[SPEAKER_00]: So Humira's erosion, because remember with all these companies, you got to worry about patent cliffs.

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[SPEAKER_00]: He might as a erosion, it continues, but it's manageable.

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[SPEAKER_00]: They're global revenue from a decline 26.1%.

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[SPEAKER_00]: But it's really been made up for by Skyrisi.

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[SPEAKER_00]: Neuroscience has also become a second growth engine for them as they are testing drugs related to Parkinson's that are on track for approval later in 2026.

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[SPEAKER_00]: You have a potential catalyst towards the end of the year.

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[SPEAKER_00]: Now there are aesthetics drugs, thank Juvederm, down 10.8% Botox Cosmetics, facing a global headwind economically.

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[SPEAKER_00]: Certainly that has been a dampened revenue, but not to the point where you're not seeing growth from their other segments.

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[SPEAKER_00]: One of the things that really benefited them is that Abby voluntarily agreed to provide a low Medicaid prices and expand their direct to patient affordable offerings.

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[SPEAKER_00]: And so, you know, they've had a bit of a tariff exemption from that that has

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[SPEAKER_00]: helped them with future pricing mandates for three years.

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[SPEAKER_00]: So with that stability investors have done a better job of pricing, what company growth might look like.

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[SPEAKER_00]: So overall, I think Abby is a pretty strong company.

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[SPEAKER_00]: I mean, it's trading only at 15.6 times price to four looking earnings, which sounds cheap, but that's near the high of the past five years.

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[SPEAKER_00]: But they approve it that they have a consistent, strong pipeline and consistent, strong growth.

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[SPEAKER_00]: So ABBV, that's a good one for me.

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[SPEAKER_00]: Well, I don't know if you checked out our newest YouTube video series yet, but as you can tell, right?

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[SPEAKER_00]: We only have seven minutes ish to talk about our main focus point every day.

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[SPEAKER_00]: But we feel Justin and I feel as though there's more to talk about.

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[SPEAKER_00]: And so, we started this new series, which you can check out on our Invest talking YouTube channel where we pick one focus point a week.

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[SPEAKER_00]: And we do a deeper, focused video that last about 20 to 25 minutes.

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[SPEAKER_00]: We talk about the topic, we show you the data, we show you charts, we show you visuals.

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[SPEAKER_00]: And so for those of you who want to go in a little bit more depth than what we could possibly do on this show, I encourage you to head over to our Invest Talk YouTube channel that is Invest Talk with Tucci, Tucci is to check out our new weekly video series.

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[SPEAKER_00]: Well, everybody, we made it.

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[SPEAKER_00]: This concludes another episode of Invest Talk.

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[SPEAKER_00]: My name is Luke Guerrero, and I want to thank you for joining us yet again and encourage you to tell your friends and family members about our free podcast downloads, which you can get at iTunes and Spotify.

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[SPEAKER_00]: And I also encourage you to go check out our YouTube channel where you can leave your finance and investment questions in the comment section.

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[SPEAKER_00]: Don't forget to sign up for our Invest Talk Market Manus contest.

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[SPEAKER_00]: Get all the details now at Invest Talk.com.

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[SPEAKER_00]: And while you're over there, now may be a great time as we approach the end of Q1 to schedule a portfolio review.

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[SPEAKER_00]: Times like these.

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[SPEAKER_00]: lot of volatility a lot of changes are exactly the times when you need to be focused.

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[SPEAKER_00]: So Justin and I look forward to talking to each and every one of you.

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[SPEAKER_00]: Independent thinking shared success.

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[SPEAKER_00]: This is in Vestock.

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[SPEAKER_05]: Enjoy your weekend.

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[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.

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

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[SPEAKER_05]: Specifically, nothing said she'll be taken to be investment advice.

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

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[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.

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

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[SPEAKER_05]: For more information regarding KPP's investment advisors, call 1-800-557-5461.

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