Chit Chat Stocks

Texas Stock Exchange and Impact on ICE Shareholders

"If you're a shareholder of ICE, I think you should feel even more comfortable owning those shares ... the backing of BlackRock, Schwab and Citadel gives phenomenal support to a new player in the ecosystem."

The speakers discuss the approval of the Texas Stock Exchange and its potential impact on the competitive landscape. While the new exchange may not directly disrupt established players like the New York Stock Exchange, its strong backing from institutional players suggests that current ICE shareholders can remain confident about the enduring value of their holdings.

Nelnet as a Long-Term Hold for Capital Allocation Excellence

"I just really like management's capital allocation skills and the way that they treat shareholders ... They have grown book value per share at around 16% annually over almost 20 years."

Nelnet is featured as a "never sell" stock, primarily based on its strong management practices, disciplined capital allocation, and consistent reduction in shares outstanding. The commentary highlights how these factors contribute to long-term value creation, making the stock an attractive holding for patient investors.

Airbnb: A Never Sell for Its Long-Term, Wide-Moat Business

"It is Airbnb founder led, founder mission led. I think they have a long term plan to become a cant miss travel lodging and perhaps experiences platform, and I think this is a wide moat business."

The speakers include Airbnb among their "never sell" stocks, emphasizing its founder-led, long-term mission and wide moat in the travel and lodging market. Despite potential short-term valuation stretches, the stock is viewed as a long-term hold with significant upside potential.

Long-Term Hold on Interactive Brokers

"I bought it earlier this year. ... I think it's one that's going to stand the test of time and can be an easy, durable winner in your portfolio for if you have a decade to 20 year time horizon."

The discussion outlines the strengths of Interactive Brokers, noting its low commission structure, efficient cost management, and expanded product suite. The speakers express confidence in IBKR as a "never sell" stock thanks to its founder-led history, continual cost-cutting and reinvestment in technology, and resilient business model.

Avoid Nike Due to Margin and Competitive Concerns

"I think it's an easy pass for investors. It takes strong brand management, and if you look at Nike, with their stagnant growth and margin pressure, you're not getting paid for the risk."

The speakers discuss Nikes earnings report and long-term prospects, pointing out that constant currency revenue growth has been near flat and margins are under pressure due to heavy discounting. They highlight loss of market share in footwear to competitors like On Running and Hoka, and conclude that Nike, with its high valuation and large market cap, is an unattractive long-term buy compared to leaner names like Lululemon.

Compass Strategic Acquisition and Industry Disruption Commentary

-7.79%current return

"Compass is acquiring Anywhere Real Estate through an all-stock transaction, combining with 340,000 real estate professionals. The goal is to integrate these brokerages under Compass's software umbrella, promoting private listings first and potentially disrupting traditional MLS systems."

Compass (COMP) is discussed in the context of its strategic move to acquire Anywhere Real Estate, aiming to consolidate legacy brokerages under its proprietary digital platform. This could disrupt the traditional real estate listing model and impact competitors like Zillow and Opendoor. While the commentary is more strategic than a direct trade call, it provides actionable investor color regarding industry shifts.

D.R. Horton as a Resilient Share Cannibal in Homebuilding

-5.59%current return

"My second pick, I'm going to go with D.R. Horton. They are technically the largest home builder in America, trading at a much cheaper multiple, and they have an 8% buyback yield by spending nearly all their free cash flow on buybacks."

D.R. Horton (DHI) is presented as a top pick in the homebuilding sector due to its robust operational model, dominant market position, and significant share buyback yield. The discussion underscores its resilience even in a cyclically challenging housing market, making it an attractive long-term trade candidate.

MGM Resorts International Shares Reduction Opportunity

-7.81%current return

"MGM Resorts International, trading at a market cap of $9.4 billion with a price to free cash flow of 7.3, has reduced its shares outstanding at an 8.4% annual rate for a cumulative reduction of 52.5%. The stock is still cheap today despite concerns around Las Vegas spending."

MGM Resorts International (MGM) is discussed as a strong share cannibal candidate with aggressive share buybacks over the past decade. Its low valuation metrics and significant share reduction strategy suggest a potentially undervalued opportunity despite market worries related to the casino industry.

Adobe as a Future Share Cannibal Trade Call

-1.92%current return

"My number one company is Adobe. They kind of have been ramping buybacks over the last couple of years as the threat from AI has knocked the stock down and led to multiple compression. Today, I think they have like a 7% or 8% buyback yield. But with stock-based comp, they are reducing total shares outstanding by about 5.5% annually."

Adobe (ADBE) is highlighted as a potential future share cannibal due to its increasing commitment to buybacks, consistent revenue growth of around 10% per quarter and a solid buyback yield in the high-single digits. Although historically not known as a share cannibal, recent dynamics, particularly due to AI-driven stock compression, present an opportunity if the stock remains undervalued.

Caution on Kraken Robotics' Valuation

"I would maybe want to buy it at 10 times, 20, 30 EBIT. Right now, the stock is up 30% in the last month and the valuation is a bit too expensive for my blood. It might be better to wait for a pullback before taking a position."

Despite the strong growth potential, the speaker expresses caution regarding Kraken Robotics' current high valuation. The commentary suggests holding current positions rather than buying at high multiples, preferring to wait for a more attractive entry point given recent price gains.

Kraken Robotics Positioned for Defense Spending Upside

+3.08%current return

"The company is Kraken Robotics, and it is a company operating in the subsea defense domain. And Kraken Robotics should benefit from this."

Kraken Robotics is highlighted as a hypergrowth small-cap defense stock that stands to benefit from increased global defense spending and modernization initiatives in the subsea domain. The discussion underscores the companys advanced battery technology and its role as a critical subcontractor in the unmanned underwater vehicle (UUV) supply chain for major defense contractors.

Airbnb Embraces Promoted Listings Amid Growth Diversification

-0.57%current return

"Chesky says, "I think promoted listings is really, really interesting. We’ve looked a lot at this..." even though earlier he dismissed the idea, the conversation shows a shift in thinking toward experimenting with ads."

The discussion covers Airbnb’s renewed openness to promoted listings as a new revenue vector amid its expanding slate of growth initiatives (including hotels, international expansion, and other services). While the host appreciates the potential, a concern is raised over a possible dilution of focus. The consensus is to remain patient and hold the stock, with caution regarding execution.

Intel Restructuring Potential Through ASMC Spin-Off

+25.30%current return

"I just shared the charts... Intel burns $10 billion in free cash flow a year. They’re likely going to have to burn probably $100 billion or more to catch up to TSMC."

The speakers discuss the idea that Intel should split its chip design and manufacturing businesses to create a standalone chip manufacturing entity (ASMC). This restructuring is presented as a solution to unlock value and address Intel’s lag relative to TSMC, backed by investments from NVIDIA and major tech companies. The emphasis is on reducing conflicts of interest and boosting competitive positioning against TSMC.

Short Trade Call on C3 AI After Missed Revenue Guidance

-14.38%current return

"They guided for first quarter revenue of $100 million to $109 million, but reported only $70 million, missing guidance by 33%. I follow this company and am short a couple of shares. It is a total fraud."

C3 AI reported a significantly lower first quarter revenue than forecasted ($70M versus $100-109M), missing guidance by 33%. The speaker explicitly states taking a short position on the company, indicating a strong bearish trade call based on deteriorating fundamentals and revenue discrepancies.

Consider a Starter Position in SOFI on a 30% Dip

+18.50%current return

"I might be willing to take a starter position because I do like SoFi and I like where they're at, but unless this drops by probably 30% or more, I'm going to be holding off on making this a big position."

The hosts analyze SoFi Technologies (trading as SOFI) and note that while the company shows strong deposit growth and competitive positioning, its current valuation (around 4x book value and roughly 13x projected 2030 earnings) is expensive. They recommend waiting for a price drop of approximately 30% to align with a more attractive, single digit 5-year earnings multiple before initiating a larger position.

Buy Corporacion America Airports (CAAP) on Argentina Recovery Thesis

-15.76%current return

"I got a feeling that Argentina seems to be on the right path... I feel like I should buy. And they've been pretty good at buying new assets as well. Decent track record there."

Corporacion America Airports (CAAP) is presented as a low risk, high reward opportunity. The company, operating primarily in Argentina, has shown strong fundamentals with 14% traffic growth, 19% revenue growth (excluding cost-related adjustments), and a 26.4% operating income increase. With built-in pricing escalators in its government-negotiated contracts and trading at a low multiple (roughly six times EBITDA), CAAP is viewed as a defensive play that could benefit significantly from Argentina’s economic recovery.