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CBRE Positioned for Steady Growth Amid Real Estate Cycles

"Yeah, I gave a 5 to 10% rating. I think that that gives it the chance to slightly outperform the stock market at the upper end of that range. Safety score of eight. I think CBRE does benefit potentially from possible erosion and confidence of companies that are more involved with the intangible assets. There's a lot of attention being paid to real assets right now, whether it's precious metals or real estate, things that can provide sort of an inflation hedge. And I think that gives CBRE more angles to play as it looks to expand its business and keep its share price moving higher."

Dan Kaplinger assigns CBRE a 5 to 10% return rating over the next 5 years, emphasizing the company's ability to outperform the broader market by leveraging its position in real assets as an inflation hedge. He highlights CBRE's safety score and strategic business expansion to capture market opportunities amidst real estate cycles, presenting a moderately bullish view on long-term steady performance.

Positive Assessment of Agnico Eagle's Management and Cost Structure

"Overall, he's done a really good job, I think, of keeping Agniko Eagle competitive in terms of especially with cost structure. A lot of the time, sure, anybody can make money when gold is soaring above $4,000 an ounce, but the lower your costs are to produce that gold, the more you're going to make in profits. Management here has done a good job of keeping production high, earning as much as it can, sharing some of that with dividend in the form of dividends with shareholders as well, and keeping those cash costs down. It's been a winning formula. Yeah, I I like that the CEO here has uh um has a lot of experience not just the company but the whole overall industry. Uh he knows this very well. Uh the strategy of focusing on organic growth rather than an acquisitionheavy strategy also is working well here."

The speaker highlights Agnico Eagle's strong management and disciplined cost structure, noting that while gold prices boost profits, the company's low production costs and steady operational execution create a winning formula. This commentary focuses on the experienced leadership and their strategic focus on organic growth, which supports the company's long-term financial health.

Texas Roadhouse: Solid Operations Amid Consumer Pressures

"The bull case, the growth story isn't over. It can continue to deliver operating in profit margins that most restaurant tours would literally sell their families to earn. Not figuratively, but literally, the bear case, though is, consumers are starting to get squeezed, and that leads to a persistent downturn in eating out at pricier places like Texas Roadhouse. That cuts into profits because the bottom line is if you're a restaurant, and your revenues fall just a little bit, it really undermines your economic results."

The speakers acknowledge Texas Roadhouse's operational strength and disciplined management as key positives, while also warning that rising consumer cost pressures may erode profit margins. This mixed outlook suggests that while the brand is well-run, investors should be cautious due to potential revenue compression by higher input costs.

Medtronic Valuation and Expected Returns Commentary

"Let's talk valuation here. How will Medtronic's stock do over the next five years and how safe is it? Keeping in mind, a ten is a sure thing, a one is a lottery ticket. I'm going to 10-15% annualized returns with a safety score of eight. That's because Medtronic trades at about 17-18 times earnings, which equates to an earnings yield of about 5.5% and management expects to grow earnings per share in fiscal year 27 at a high single digit rate. That comfortably gets you into that double digit expected return range before even accounting for potential multiple expansion, which the stock still trades at a discount, too. I think that adds to the safety score of eight as well."

The speaker provides a detailed commentary on Medtronic's valuation fundamentals, noting its attractive earnings multiple and expected EPS growth that could yield 10-15% annualized returns over the next five years. The discussion highlights the company's discount relative to historical levels and implies a bullish long-term outlook despite underlying sector challenges.

Positive Company Commentary for SharkNinja

"SharkNinja, I'm at a seven. I think, Travis, you're grading a little bit on a curve here. I think my seven is the same as your eight. This is just a really tough industry. Economic pressures that can weigh on the business, but they've carved out a brilliant niche in being price conscious and now more of an innovator. The creamy soft serve ice cream machine is just a remarkable product and they're getting a premium price on that. They're starting to fish in more ponds than they have in the past. I'm just not sure if they can continue to do that and lead with pricing where cost is how they've always won. If they're not on my 100 stock watch list right now, they will be."

Jason Hall provides a company-specific commentary on SharkNinja (ticker SN), highlighting both the innovative product lines and the challenges inherent in a tough, competitive industry. He acknowledges the company's niche positioning with premium products but also expresses caution regarding its ability to maintain its pricing strategy. Ultimately, his commentary is positive enough to warrant a spot on his watch list, suggesting modest bullish sentiment.

Netflix's Declining Streaming Market Share Raises Competitive Concerns

"Netflix's share of TV time in the US has gone nowhere. It's about 8% over the past three years. Over that period, the streaming business in general has grown about 50%. So just do the math. The market share for Netflix in streaming is down by about a third. That's not a great trend, and who's eating their lunch? It's YouTube."

The speaker outlines concerns about Netflix's stagnant US TV time share amid a booming streaming market, emphasizing that a 50% overall market growth juxtaposed with an 8% share implies a significant relative decline. He points to YouTube as a strong competitor, suggesting potential headwinds for Netflix's market position.

Crocs Appears Attractive at Low Forward P/E

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"If I was only buying Crocs today and you were getting it for about a six price to earnings multiple on a forward basis, that'd be a phenomenal stock to buy. Problem is you're also getting Heydude. That has been a disaster for the company."

The speaker emphasizes that Crocs, trading at a forward P/E of about six, is an attractive buy despite the dilution from the Heydude brand, which has negatively impacted the overall company performance.

BlackRock's Strong ETF Moat

"Larry Fink's done a really good job capturing the ETF opportunity. I think that's just a master stroke. The surprise for me is just how well that BlackRock's been able to defend its turf. Both from companies trying to undercut on price and also for companies that are doing active ETFs. BlackRock has really been able to hold its own. And I'm really impressed the fact that it has been able to offer nearly identical ETFs. One catering towards institutions who are willing to pay more for liquidity, others for retail investors who want cheaper funds, not necessarily trying to trade them every day."

The commentary highlights BlackRock's strong ETF business as a competitive moat, with management executing a masterful strategy by offering similar ETF products tailored for both institutional liquidity and cost-sensitive retail investors. This dual approach helps the firm defend its market position and supports its status as a core holding for long-term investors.

Intercontinental Exchange Valuation Outlook Over Next 5 Years

"I think we're going to be a market perform here. 5 to 10%. We give it a safety score of eight. I think that Intercontinental's gotten a lot of the benefits of the efficiencies that it has gained already. And so I'm not sure that it's got a whole lot more in the tank to support further outsiz share price increases. But the stock's not overpriced. So there's definitely a margin of safety there. I think it's enough of a margin of safety even when we do see the next downturn in the stock market whenever that comes."

Dan Kaplinger provides a company-specific valuation outlook for ICE, suggesting that over the next 5 years, the stock is likely to deliver market perform returns between 5-10%. He highlights the company's efficiency gains and margin of safety while cautioning that there may be limited additional upside in share price appreciation.

Progressive's Consistent Performance and Valuation Concerns (PGR)

"I think 10 to 15% returns uh over the next five years and on but at the lower end of that I'm thinking it's probably a slight but consistent market beater. I think uh valuation I went with a seven. It may seem a little low. You know the valuation's okay here in terms of safety, but it's not great. They've earned that premium valuation though, right? This is a company that you might say I wish it were lower priced, but there's a reason I think that the market puts it where it does. But they do have a potential for a short-term hit if there's a major disaster."

Toby outlines a view on Progressive, highlighting an expected return of 10-15% over the next five years and positioning the stock as a slight but consistent market beater despite its premium valuation. He acknowledges that while the valuation isn't ideal, Progressive's strong fundamentals and safety record support its long-term performance, though there is a risk of short-term volatility due to potential catastrophic events.

Market Timing and IPO Caution in Volatile Conditions

"So, when you see the 10% decline or the 20% decline, that's not the time to freak out. That's not the time to start selling all your shares, it's actually the time to think about maybe trying to find some extra savings and make some investments when the market goes down 20%. Whereas, as the market rises, that might not be the time to get most excited about making the most speculative investment you can. So, think about steering clear of IPOs. Let those companies operate in the public markets a little bit."

Tom Gardner advises investors to remain calm during market dips, suggesting that declines of 10% or 20% should be seen as opportunities to invest rather than triggers for panic selling. He cautions against chasing the early-day hype of IPOs, recommending a more measured approach as companies establish themselves post-IPO.

Broadridge as a Defensive Core Holding with Potential Buy Signal

"I said five year returns in the 5-10% range, which is really why you own a stock like this with a safety score of nine. I see returns in the mid to high single digits, which really has been the case throughout, Gokey's tenure. But I see this with significantly less volatility than the S&P 500. So if you want a decent return that'll let you sleep at night, this could be the one for. Thanks both Matt and to Tyler, they've given Broadridge a strong overall score of 7.8 out of ten with no top its. This is one of those to put on your watch list. And if there is a little volatility on the downside, maybe it's a buy."

The speakers discuss Broadridge's stable returns, low volatility relative to the S&P 500, and a five-year return expectation in the 5-10% range. They suggest that if downside volatility remains limited, Broadridge (ticker BR) could be a good defensive holding for investors looking for a stock that provides reliable returns and safety, making it worthy of inclusion on a watch list and potentially a buy.

PulteGroup's 5-Year Double-Digit Return Outlook

"Let's see what you can justify on the valuation, Matt. How well will Pulte stock do over the next five years, and how safe is it? Ten is a sure thing. One is a lottery ticket. Ten to 15%, I said, with a safety score of six, I think most homebuilders are going to have double-digit returns over the next five years. The next year, I'm not so sure about. Mortgage rates could have somewhat of a delayed fuse. They tend to track longer-term interest rates, not what the Fed's doing. But even a percentage point lower would bring a lot of first-time home buyers into the market. That's about a third of Pulte's business."

Anand outlines a valuation perspective for PHM, suggesting that over the next five years PulteGroup could deliver double-digit annual returns (10-15%), despite short-term challenges like mortgage rate uncertainties and market headwinds. He emphasizes that while the long-term outlook is positive, the near-term environment may be tougher for homebuilders.

ADP: Solid Business Amid Disruption Concerns

"I see ADP as a really large, sticky professional services company with a 92% client retention rate and impressive free cash flow, but I also see it as having more potential to be disrupted than to grow from. Trading at about 24 times forward earnings for a business growing at single digits, growth and margin pressures are my biggest concerns. With expected five-year returns between 10-15% and a safety score of 7, the risk of AI solutions taking over payroll functions is a real threat."

The commentary highlights ADP's strong operational metrics such as client retention and cash generation, while cautioning that the mature nature of its business and potential disruption from in-house AI solutions may limit its growth prospects over the next five years.

EWBC's Market-Beating Potential Over the Next Five Years

"I am generally really bullish on banking right now. I think, as these episodes have made clear, this one isn't nearly as cheap as some of the ones we were talking about. It's I think 1.6 times book, which isn't bad, but you don't have that runway. I said it's not the same dividend as all the others. I think this is a market beater, 10-15% and probably closer to 10% on this one. Safety is seven. Banks have risks, but this is a good core business, a great relationship with its customer base. I think they know what they're doing, and they'll be fine."

The speaker expresses bullish sentiment on East West Bancorp (EWBC), highlighting its solid valuation at approximately 1.6 times book and a potential market beating return of 10-15% over the next five years. Emphasis is placed on the bank's strong customer relationships and niche focus, with an acknowledgment of inherent banking risks offset by a robust business model.

Vanguard Total World ETF: Aligned Incentives and Low Cost

"Yeah, my approach here was thinking about Vanguard as an organization. There's Invesco and there's Eyesshares which is part of BlackRock, which are some great organizations but most of them are built to generate and derive profit and we love that as investors, right? Vanguard's different. It's owned by investors in the funds that Vanguard creates. And if there's one thing that I love is when management incentives are extremely aligned with the investors. And in this case, it's perfect because the incentives are to build excellent investment products as cheaply as possible. And Vanguard is consistently the lowest cost. So even VT, which is twice as expensive as VO, that S&P 500 index, cost twice as much to invest in it, you still for every thousand you have in the fund, you're only paying 60 a year, right? Six cents for every 100. It's super cheap to invest in Vanguard Funds, and it's an organization that's built to do that."

Dan Kaplinger outlines the unique alignment of Vanguard's management incentives with investors, emphasizing the low-cost structure of Vanguard funds. He points out that despite VT being more expensive than VO in comparative terms, its expense is minimal relative to the investment amount, underscoring its appeal as a diversified core holding for long-term investors.

Fiverr's AI Transformation Catalyzes New Freelance Opportunities

"I took a look at earnings when they came out earlier this month, and you know, the argument here has been twofold. One is that a lot of people are worried that people aren't going to need freelancers anymore because AI is going to take care of it. And so if you don't have freelance human freelancers anymore, AI takes care of it. Then Fiverr, which is a network that connects freelancers to businesses that need their services, sees its base on which it can take a take rate deteriorate. But what we have seen also happen to counteract that trend is businesses are like, 'okay, yeah, I'm supposed to be using AI. I have no idea how to do that.' And Fiverr has realized that and in response has seen a big uptake in the number of AI smart human freelancers whose job is to make AI implementation a reality for businesses."

The discussion highlights Fiverr's challenge of a shrinking freelance market due to AI automation, offset by a growing opportunity as businesses struggle with AI implementation. Fiverr is benefiting from an increase in AI-savvy freelancers who help businesses adopt the new technology, raising questions about which trend will dominate in the long and medium term.

Long-Term Investment Recommendation for CLA

"For us as investors to close, just a brief statement that when you find a leader like Sebastian in a company with a great brand, with a worldwide opportunity, with a long-term vision, and it's misunderstood by the general media and there's a lot of confusion, that creates the pricing opportunity for us to make some great long-term investments. That's why we've recommended CLA and I expect at the Motley Fool and in our hidden gem service that we'll be recommending CLA many more times to come and of course we make investments behind our recommendations and typically hold for 5 years to 10 to 15 to 20 years in the cases of Netflix and Amazon and some losers that we have along the way as well."

The host outlines a strong long-term investment thesis for CLA, highlighting its leadership, global brand, and unique market positioning which have created a compelling long-term pricing opportunity for investors. The recommendation implies a commitment to holding the investment for multiple years, underscoring the company's potential to disrupt retail banking through technological innovation and customer-focused strategies.

Caution on Gold's 5-Year Return and Speculation Risk

"Sure thing, won a lottery ticket, Dan. I've given it a 0-5% rating, which is below what I'm expecting the stock market to do over the next five years, with a safety score of four. It's exactly the reason Jason just said. We've seen a huge move in gold already. On the day that we're taping this, gold just moved over $4,000 an ounce for the first time. Don't get me wrong. A 5% return over the next five years would mean a price between 5,000, 6,000 an ounce by 2030. I think there's a chance that speculation pushes it above that, but I think we could also be in another one of the situations we've seen historically, where you get a big spike and then you get an equally abrupt downturn from that peak."

The speaker discusses gold's recent performance and its potential as an investment over the next five years, noting that a modest 5% return implies significantly higher prices that may be unsustainable. The commentary highlights the risk of a speculative spike followed by a sharp downturn, urging investors to consider the asset's role in diversification rather than expecting high returns.

Bitcoin's Binary Outcome: Cautious Long-Term Potential

"I'm thinking 15% plus returns. I own Bitcoin. I own some Solana, I own a few other cryptoassets as well. But in a very small amount, my safety score is a three. The role of institutional money has increased, but guys, to a large extent, this isn't institutions that are filling their bags up with Bitcoin. These are institutions that are selling Bitcoin-backed financial instruments, largely to retail investors at this point. This is still a story. Until the story becomes one of financial function and disrupting other intermediaries and financial tools, we're riding the wave of the story of the future."

The speaker offers a nuanced view on Bitcoin, forecasting a potential 15%+ return over a five-year horizon while cautioning about significant risks. Despite owning Bitcoin and other cryptoassets, the speaker notes a low safety score and highlights that institutional involvement is largely through selling Bitcoin derivatives. The commentary underscores Bitcoin's binary outcomes and the uncertainty around its evolution into a true financial utility.

Positive Outlook on NiCE amid AI Integration Challenges

"I think this is a business that's built to do extraordinarily well. The tailwinds, I think support it continuing to grow despite that real threat of disruption. Software companies don't have true moats. They have things that they're good at that give them competitive advantages, but their only advantage is so long as the company keeps them that way. They're starting to show they can integrate AI, and where Dan and I disagree is that I think that the specialists like NiCE, are going to beat the AI generalists. Trust and expertise matters if you're the decision maker on the other end of making a long term agreement on an important software that's really critical to the operation of your business, and you combine those things with the valuation 13 times free cash flow. This is an extremely cheap stock. Sure, there's always going to be competitive threats and disruption, but I think that the valuation, the quality of the business make it pretty safe. They also set it up with those tailwinds to be an outperformer."

Jason Hall presents a bullish commentary on NiCE, emphasizing that the company, with its strong free cash flow profile and 13x valuation metric, is well-positioned to succeed despite AI-driven competitive threats. He highlights NiCE's effective integration of AI and specialist approach, which he believes will allow it to outperform AI generalists. Overall, his analysis frames NiCE as a safe, long-term investment with significant tailwinds.

Rocket Companies' Strong Acquisition Synergies and Attach Rate

"Great question. Thank you. I think one other thing I'd highlight is we did come out on our last earnings call and say that we have our total synergy target on the expense side of $140 million, only four months in. That's great. Now, we will fully realize that in the fourth quarter, which I think we laid out a two-year time frame full expense synergy. To your point, it's going really well. One thing I always think about, too, and sometimes I think shareholders don't give us enough credit for this is, mortgage attach is really exciting to your point, and we're well ahead of plan there. We said, our goal was 50%. We're already at 42, again, four months in, and that's really exciting."

Brian Brown, CFO of Rocket Companies, emphasizes the company's effective execution of its acquisition strategy. He highlights a $140 million expense synergy target achieved only four months into integration, and notes an impressive mortgage attach rate of 42% against a target of 50%. This commentary underscores Rocket's competitive advantage and operational efficiency as it combines its acquisitions to drive growth.

Palo Alto Networks Acquisition Impact and Long-Term Outlook

"Yeah, I want to I gave it a seven. And I want to give it an incomplete because it does have a $25 billion acquisition of Cyber Arc that hasn't closed yet. And so it's, you know, financials are going to look very different when that deal is closed. There's a cash component of the deal and so the balance sheet's going to look very different and I think financially the, you know, income statement, cash flow are going to look very, very different at the end of this deal. Management doesn't even expect the deal to be accreative to earnings per share until fiscal year 2028. So there is a lot of optimism baked into that deal and I'd really like to see what happens once they've got this thing sorted out."

John provides a cautious assessment of Palo Alto Networks (PNW), highlighting the significant pending $25 billion Cyber Arc acquisition. While he acknowledges the company's strong market position, he warns that the acquisition could drastically alter the company's financial profile, with earnings per share improvements not expected until fiscal year 2028. The commentary suggests that although there is optimism around the deal, investors should remain cautious given the potential for major shifts in the balance sheet and income statement post-acquisition.

SentinelOne's Underwhelming Financials and Competitive Risks

"Yep. I went 0 to 5% safety score of five. I think it will safely underperform the market from here. I think its financials aren't indicative of a company that will succeed long term. And I think based on its current incentive structure, it could just grow to hundreds of billions in revenue and still be producing negative operating margins."

The speaker expresses a bearish view on SentinelOne, highlighting concerns over its financials and incentive structure. Despite any growth, the company's high stock-based compensation and competitive challenges make its long-term prospects doubtful. This commentary suggests that even with revenue increases, persistent negative operating margins could hinder shareholder returns.

Rubrik's Long-Term Doubling Potential with Notable Cautions

"I put a safety score of five. And so, to me, that is a little bit lower than what some of my other scores would have indicated I would have gone with. It is competitive, and this is a largely unproven player. As far as returns go, if things continue on its current path, if it continues to execute like I believe it is right now, I see it easily doubling over the next 5 years. That's better than a 15% return annually. But I'm 50/50 on that."

The speaker highlights Rubrik's ability to potentially double in value over the next five years due to its execution, despite inherent risks in a competitive market and an unproven track record. The commentary reflects a bullish growth outlook tempered by safety concerns, making it a mixed but intriguing long-term play.

Bearish Commentary on Nike's Revenue Consistency

"I'm that rare fool that's not a cut in the world Nike bowl. I'm team just don't do it. I don't want to say that Nike's a four letter word, even though it literally is that. I just like to go to the tape. Nike has posted double digit growth just six times in the last 23 fiscal years. Put another way, 74% of the time over the past two plus decades, Nike's fiscal year revenue has been negative or in the low single digits."

The speaker highlights Nike's inconsistent revenue growth, noting that double digit growth has only occurred six times in 23 years and that the majority of fiscal years have been weak. This commentary casts a bearish light on Nike's current valuation and suggests caution until there is a clear turnaround.

Caution on Six Flags Valuation Amid Management Uncertainty

"I went with a safety score of five. I'm not happy with it selling. It's Maryland Park for redevelopment this year and cutting loose one of its California parks in 2027. But it's a reminder that there's value in its assets."

Toby highlights his cautious stance on Six Flags, noting that while the company's assets may hold some value, significant management instability and asset redeployment signals caution for investors.

Kyndryl Financial Momentum Insight

"Yeah, it seems like the drop in revenue is kind of subsiding. The expansion in margins, I think, is where you're seeing a little bit of momentum. So, I do like the momentum in the business, but until we see more, until you have a much higher margin business in, like I said, an industry where you should have a fair amount of tailwinds as companies are spending more on their IT infrastructure, spending more on AI. Obviously, a lot of that money isn't going to Kindle, but it's going somewhere. Can they sort of claw that into their business? We'll see. I think there's potential, but it can't go higher than a six with their financials as they are today."

Lou observes that while KD's revenue decline is easing and margins are expanding, the company's financial performance remains cautious until clearer high-margin improvements emerge from tailwinds in IT infrastructure and AI spending.

Sprouts Farmers Market Long-Term Hold Perspective

"I went pretty high here on a return perspective. 10 to 15%. Uh I I just think there's a lot going right with the business. they don't have to have a lot of capital to keep expanding. That said, some of the the macro dynamics, the potential volatility, the competition. I mentioned that, you know, Sprouts is not here. There are other options. So, it's this isn't there isn't maybe unlimited growth like it seemed like there was for something like Whole Foods, you know, 15 or 20 years ago. So, that's why I went with a relatively low uh safety score of six. But, I think you balance those two and the riskreward is pretty pretty high."

Travis outlines a positive return perspective for Sprouts Farmers Market, expecting 10-15% returns over the next five years despite acknowledging macro volatility and competitive pressures. He stresses the company's efficient capital management and sustainable growth, even if its expansion may not be unlimited.

Robinhood's Evolving Business Model Shows Maturation

"And it's very different than what it was in 2020, 2021 when it was really a yolo trading platform. They've moved into credit cards with their gold cards. retirements accounts are growing like crazy. They have their gold membership, which is what you need to get one of those gold cards. So, this is actually more of a Costco business model, I think, than a lot of people realize because that membership really gets you to buy into the ecosystem. And that ecosystem continues to grow with the amount of products that they have with the offerings and they have global expansion. They're just hitting on all cylinders right now. Love what Robin Hood is doing."

Travis highlights Robinhood's strategic evolution from a pure trading platform to a diversified financial services company with a membership-driven ecosystem. He draws an analogy to the Costco model by emphasizing the growth in credit card offerings, retirement accounts, and global expansion, noting that the company is maturing beyond its earlier, riskier persona.

Deere's Financials Show Mixed Signals Amid Cyclical Headwinds

"For financials, a ten is a fortress. A one is yikes. Both of you have sixes this time. Revenue has been heading in the wrong direction. You can't really blame them on that. We have tariffs, we have uncertainty and key sales channels. Deere to its credit, they're not sugar coating it. It is what it is. But hey, there's no easy fix here. The good news is they can handle it. The balance sheet isn't amazing, but it's sustainable, and this is a period where they just have to sustain."

The speaker assesses Deere's financial outlook as middling, highlighting declining revenue and uncertainty from tariffs and key sales channels, yet noting that the company is transparent and capable of sustaining its operations despite the challenges.

Howmet Aerospace's Turnaround and Succession Concerns

"I mentioned before, this company was a bit of a basket case before CEO John Plant took over in 2019. He was already on the board. He had a great reputation over at TRW, did great work there, and he gets a lot of the credit for Howmet's success. The downside and the reason I'm only at a seven is Plant is 72-years-old. Now, just this year, he signed a retention award of restricted stock units that don't vest until 2028. I don't think he's on his way out anytime soon. But at some point they are going to have to figure out what comes next. I'm not too worried. There's a good team there. There's a bench, but it does bring the score down a bit for me."

The speaker notes Howmet Aerospace's remarkable turnaround under CEO John Plant while flagging risks tied to his advanced age and an unclear succession plan, though he remains cautiously optimistic about the company's competitive strengths.

Innovation Ecosystem Advantage Highlighted by Tesla

"once they come through various stages of early venture capital we will see them emerge and so you know one might have expected electric vehicles to have come out of Detroit Mottown and yet it came out of Silicon Valley with Tesla and so the investor needs to look at the innovation ecosystem systems out there and not just the traditional industrial clusters."

The speaker emphasizes that while one might have expected electric vehicles to originate from traditional industrial hubs like Detroit, Tesla emerged from Silicon Valley due to the strength of its innovation ecosystem. This commentary implies that companies embedded in thriving ecosystems may be better positioned for long-term success.

Solid Financial Profile but Caution on Management's Growth Push

"I gave it 5 to 10% returns in line with my market call, but a safety score of six. A little bit lower than where I usually would go. And I think that here the concern I have, there's a real danger that management might kind of get out in front of its skis and try to push growth where really growth might not be available. And it's easy for management teams to get greedy, especially when the share price does things that we've seen. We've seen that stock down almost 50% from its highs earlier this year. I'm actually glad to see that. I think it builds a little bit more of a margin of safety for folks who are looking to invest now. But just be keep your eyes on management and the culture because you want to make sure that they don't ruin what has been a lovely cash cow for well over a century at this point."

The speaker highlights Texas Pacific Land Corporation's ability to generate 5-10% returns with strong financial fundamentals, but warns that management's potential overreach in pursuing growth could jeopardize its long-term stability. The recent 50% decline in stock price has built a margin of safety, yet the risk remains if the company's leadership pushes too aggressively.

Cisco Stock Offers Stability But Lacks Growth Catalyst

"Yeah, I think I've already telegraphed my expectations here. 5 to 10% in returns probably going to underperform the market. Safety score seven. I don't think this is a stock that's going to either beat the market or blow up your portfolio. Maybe put it in the better than a bond bucket in terms of total returns for investors. Maybe your goal at this point with part of your portfolio is not to beat the market. You just want something that's going to do better than bonds. It's going to lower the risk profile in your portfolio and something you can hold through market conditions. Maybe it fits that need, but I don't think it's a stock that I would want to own."

The commentary on Cisco (ticker SY) highlights modest growth prospects with returns in the 5 to 10% range, suggesting that while the company has strong market leadership and business fundamentals, its thin margins and rising refinancing risks limit significant outperformance. The stock is positioned more as a safe, bond-like holding rather than a growth catalyst, making it less attractive for investors seeking market-beating returns.

Trade Call: Preference for PSX in the Oil and Gas Space

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"Thank you to both Jason and Dan. They've given EQT an all right overall score of 6.7 out of 10 despite tons of respect for management. When I asked about top picks, Dan doesn't have any toppers. Jason, if you include the overall oil and gas space, he'd prefer Philip 66, ticker symbol PSX. Look out for a new scoreboard every market day at 7:00 p.m. Eastern."

The speaker shifts focus from EQT to the broader oil and gas space, explicitly recommending Philip 66 (PSX) over EQT when considering the entire sector. This trade call suggests a comparative preference, implying that PSX may offer a more attractive risk/reward profile in the current market environment.

EQT: Best-in-Class Business in a Tough Industry

"Yeah, I don't own any pure play natural gas businesses. If I did, there would only be one on the list for me, and it's EQT. Um, it's absolutely the best in the business, but I have to crib Peter Lynch here. A great business and a mediocre industry is a mediocre business and I'm just afraid eventually that's going to happen. It's just a tough, tough place to make a living. But EQT does it better than anybody. Natural gas prices have been in a basement for a long, long time, and that's really hurt EQT's overall profitability. They're giving a natural gas 10 out of 10 is what I'm hearing."

The speaker emphasizes EQT as the leading pure play in natural gas despite an overall tough industry environment. He highlights that while EQT outperforms its peers, the inherent challenges of a mediocre industry could eventually limit its prospects, underlining the dual nature of strong business fundamentals offset by tough market conditions.

Caution on SMMT amid dire cash concerns and execution risk

"They have less than $300 million in cash. They have a high burn rate, and the company is actually in pretty dire straits. Their last 10Q says cash is not sufficient to fund the company\u0027s planned operations for a period of at least one year. That\u0027s going concern talk."

The analysts express strong caution about Summit Therapeutics (SMMT) given its single-drug focus and significant financial weaknesses, including inadequate cash reserves and a high burn rate. This commentary highlights the company\u0027s potential inability to fund its operations, flagging substantial risks for investors.

GE Healthcare Not Compelling for Watch List Inclusion

"GE Healthcare is a leader in the medical technology industry. I think that aging demographics and the opportunity for AI to revolutionize medical imaging present great long term tailwinds for the company. However, GE Healthcare does face some strong competition, has some challenges in China, especially, and it could experience some more headwinds from tariffs. The stock has underperformed the S&P 500 badly since that spin off from GE a few years ago. They've given GE Healthcare an all right overall score of 6.7 out of 10 and it wasn't compelling enough for me to add it to my 100 stock watch list."

The speaker evaluates GE Healthcare Technologies (GEHC) by highlighting its leadership in medical technology and potential from AI and aging demographics, while noting significant headwinds including competition, challenges in China, and tariffs. Despite consistent profitability and a robust installed base, the stock's slow revenue growth and underperformance relative to the S&P 500 render it not compelling for inclusion in a watch list.

AbbVie Successfully Navigated the Humira Cliff but Faces Future Risks

"Abbvie has proven that it can successfully navigate a difficult patent cliff. Humira wasn't just Abbvie's top-selling drug for years. But Abbvie was able to significantly reduce its dependence on Humira, even before it lost US patent exclusivity in 2023 through some key acquisitions, the company developed two successors to Humira that will together generate more revenue this year than Humira did at its peak. The main reason I didn't give Abbvie an even higher score is just the intrinsic risk that's associated with developing new drugs, and there's potential negative impact of tariffs on pharmaceutical imports to the US if the Trump administration goes ahead with that."

The speaker emphasizes that AbbVie managed to overcome the major setback of losing Humira exclusivity by successfully diversifying its revenue stream through acquisitions. However, he expresses concerns over inherent risks in new drug development and possible negative impacts from tariffs, which temper his enthusiasm despite acknowledging the company's overall strength.

Rubrik's Emphasis on AI-Driven Cyber Resilience and Innovation

"Look, Rubric is the security and AI operations company. Obviously, cyber resilience and cyber security has been the focus of the company and now we are helping our customers deploy more AI agents faster and manage the risk and deliver accurate responses. We acquired a company called pertbase that was that delivers accurate model responses at 80% lower cost of inference and we incorporating that technology we created a new product called agent reind where your misbehaving agent because agents are probabilistic system or could be compromised by threat actor cyber threat actors. So how do you have an rewind button on your agentic action that is actually a misbehaving agent? We are now delivering the complete risk and ability to deploy agents faster platform. So at the end of the day look as I said before we are living on the age of innovation. Rubric has no finish line. We are in love with the market. We are not in love with our products. And my goal is to build a company that delivers to the emergent market needs so that our customers are at the forefront of their industry. If I do that, all of these ranking will take care of itself."

The speaker details Rubrik's integrated strategy to enhance cyber resilience by leveraging AI-driven technologies. He emphasizes the company's ability to deploy AI agents quickly, underscored by the acquisition of pertbase and the launch of the agent reind product, which serves as a safeguard for misbehaving agents. The commentary highlights Rubrik's commitment to continuous innovation and staying ahead of market challenges, aiming to provide a dynamic platform that evolves with emergent market demands.

CEO Praise Amid Strong Past Financials With Future Concerns

"Yeah, I really like what the founder and CEO, Luis Bonan has done with this business. Um, there are some education companies out there that have been decimated by AI and LLMs. Uh, embraced it. Uh, using AI to quickly expand features and product offerings. He's forward thinking and I think it shows here."

Toby praises Duolingo's CEO for being forward thinking by leveraging AI to expand product offerings, differentiating the company from competitors hurt by technological disruptions. While he acknowledges strong historical financial performance, he remains cautious about future challenges amid ongoing market evolution.

Valuation Pessimism Amid AI Risks

"Yeah, I was pretty low. Lower than I usually am. I went 0 to 5% average annual return over the next five years and a safety score of three. And I'll tell you, my score would be worse except that we've already seen a 50% draw down in the stock. Dolingo, I mean, I just feel like it's almost in a lose-lose situation looking forward here because if artificial intelligence takes off, I think that alternatives to Dolingo are going to outperform it. But if artificial intelligence fails, Dolingo's kind of gone all in with the AI first strategy. And so I just don't really see the way out for him."

The speaker expresses a pessimistic outlook on Duolingo, predicting very low future returns (0-5% average annual) and highlighting a past 50% drawdown. He warns that if AI disrupts the learning space, competitors may outperform Duolingo, while even success in AI may leave the company in a risky, all-in position.

Nike Stock Value Trap: Avoid Buying

+1.87%current return

"So, is Nike stock a buy here today? I don't think so. I think this continues to be a value trap in the future of athletics is going to be these smaller, more niche brands that are playing in a in the high end of the market and are able to have higher growth, higher operating profits, and are trading for only a slight premium in the market. For investors, riskreward matters and Nike is much higher risk than a lot of people think."

The speaker warns that despite Nike's lower valuation multiples, its declining sales, shrinking margins, and loss of wholesale market share make it a value trap. He argues that Nike represents a higher investment risk in an evolving athletic market landscape.

AI-Driven Underwriting and the Bionic Underwriter

"I will say that GPTs and natural language models are fundamentally changing how we think about our underwriters, turning them into what we call a bionic underwriter. Using an American football analogy, a traditional underwriter starts on their own 25-yard line, but with AI we essentially run back to the opponent's 20-yard line before the first offensive play is run. We might receive a submission that is ten, 20, or even 100 pages of complex data about risk, and our AI ingests all that information almost with zero human intervention. This enables our core systems, including pricing, to generate a robust narrative for our underwriters instead of having them pore over endless details."

Andrew explains the innovative integration of AI in Skyward's underwriting process, describing how the adoption of GPTs and natural language models creates a 'bionic underwriter' that enhances efficiency and risk evaluation. This technological advancement is positioned as a long-term competitive edge for the company.

Strategic Acquisition and Synergy with Apollo

"Yeah, so let me just say that for anybody who's listening, we take the seriousness of a transaction as any investor would in terms of being cynical. There's risk involved. I think that what makes this so darn attractive is that we have been working for two years with Apollo, and you could not find two organizations that are better matched in terms of their culture, their ethos, and their orientation about how we're going to compete and win. The thing that I love the most is that a big chunk of their business is focused on really interesting growth sectors, partnering with their customers and leveraging data to craft products and structure risk management solutions. I'm smiling because I am so excited about the future."

Andrew details the strategic rationale behind the acquisition of Apollo, emphasizing the cultural alignment, the focus on high-growth sectors, and the data-driven approach that differentiates Apollo. This commentary underscores the long-term growth catalyst for Skyward (ticker: SK) through complementary strengths and improved market position.

Strategic Acquisition of SC Pharma and Revenue Diversification

"Yeah, you know, I think you hit the nail on the head. Like we, we want to keep building this company, growing a great company, having a great culture. Um we'll have offices in Connecticut, Boston now, and here in California. Um, one of the things we have to do is diversify our revenue streams, right? You come to a quarterly earnings and two thirds of your revenues are from United Therapeutics. And until our pipeline hits, which will start happening pretty quickly now, we were stuck at their mercy. We were looking for an active revenue stream that we could add value to and was already product approved. SC Pharma popped up, and they were short on cash and capabilities. We believe that combining what we built on Fresza with what they have, where we go with our strategy, is going to turn one plus one into three or four."

The CEO emphasizes the strategic rationale behind acquiring SC Pharma to diversify revenue away from heavy reliance on United Therapeutics. By integrating SC Pharma's cash-starved but approved product with Mankind's existing strengths, the company aims to create outsized combined value and reduce regulatory and commercial risks in the near to medium term.

UT Partnership and IPF Catalyst

"Yeah, so I think when you look back, one of the key decisions we made back in 2018 was to license Taibaso DPI to United Therapeutics. At that point we were in a cash crunch. The board said, "Hey, you can't keep spending money on R&D on a Fresa. You got to pick something." And so we ran two trials. One was a phase one on Taibaso and one was a four-week study on a Fresa. And if you ask me, both were home runs. It was the first time in a hundred years that a meal time insulin beat another meal time insulin in a head-to-head trial. On Taibaso we showed we could dose three times higher than United Therapeutics could with tolerability and safety and so that turned into a licensing deal that provided a royalty stream which today is basically what our market cap is."

The CEO discusses a pivotal 2018 licensing decision with United Therapeutics that rescued the company during a cash crunch. The successful head-to-head trial not only validated their technology but also created a sustainable royalty stream, forming a key catalyst for future upside—especially as they advance their IPF program.

Stride (LRN) as a Long-Term Growth Play in Online Learning

-52.18%current return

"The third is a company called Stride, ticker symbol LRN. This is an online learning business. We interviewed their CEO, James Rue. Hes an absolutely fantastic leader and human being. And what has happened post pandemic is there are still so many scenarios where children and families want to get extra learning online. There are certain special needs situations where a student cant get the care and attention that they need in the school system. And then there are other situations where perhaps you just have an outstanding physics student or French student in the classroom at school that wants to do some extra learning online. Finally, Stride is extending into adult learning and certifications because we all want to be lifelong learners. So, its both a wonderful business for people to consider as a customer, but I think its an excellent long-term investment."

Tom Gardner positions Stride (LRN) as an attractive long-term investment, emphasizing its diverse offerings in online education and lifelong learning, bolstered by strong leadership and post-pandemic demand.

IBM as a Cautious Long-Term Investment

+8.97%current return

"The first one is International Business Machines, IBM. Weve all heard of it for decades. For so long it was not a stock that for so long it was an incredible stock and then for decades it was a real disappointment. Last five years has been wonderful. This is a company with advanced technologies, quantum computing emerging. IBM will be a leader as quantum computing emerges and theyre very well financially managed now. So there are certain aspects of their business that are still struggling but I think overall IBM is a great cautious investment for the next 5 years."

Tom Gardner highlights IBM as a mature company that, despite past disappointments, has experienced a strong turnaround over the last five years. He cites its leadership potential in quantum computing and strong financial management, recommending it as a cautious long-term investment.

Debt Concerns and Capital Allocation at Goosehead Insurance (GSHD)

"They took out, I think, it is the beginning of the year $300 million in debt. Part of it was to refinance an existing roughly $100 million in debt. But the bulk of it was largely used to fund a one-time special dividend. Now, part of that went to common shareholders, but there0s also a weird corporate structure, and there0s some owners of an LLC that has a stake in the business, which is largely the founding family. You don0 love that you0re taking out debt just to kick money back out to shareholders. But even with that $300 million in debt, it0s very serviceable by the strength of the business and the cash flows."

The speaker expresses caution regarding Goosehead Insurance's recent decision to incur significant debt, noting that while a $300 million debt is manageable due to strong cash flows, the motive—to fund a one-time special dividend and benefit a select group of insiders—is concerning.

Data Dog Company Commentary: Cautious Outlook on Growth and Momentum

"For financials, a 10 is a fortress, a one is yikes, lose at a six. Rick, you're at a seven. Data Dog has a clean balance sheet and revenue growth is holding steady in the high 20%. However, guidance suggests it will slow to the low 20s in the second half of the year. While revenue growth was 74% in the same quarter last year, there is slowing momentum, compounded by a 15% increase in share count due to stock-based compensation."

The speakers provide a detailed look at Data Dog's financials, noting a strong balance sheet and steady revenue growth in the high 20s, but caution that guidance points to a slowdown in growth alongside rising share-based compensation. This mixed view highlights a quality product facing potential headwinds in momentum.

Zoetis: Steady Business With Moderate Growth and Cautious Upside

"I think is this is a very good boy but not best in show. It is down 23% over the last year, but if they're seeing momentum in sales, this can be a mild market beater. I'm bullish on Zoetis because the flea and tick product line has significant potential."

The discussion provides a detailed analysis of Zoetis (ZTS), highlighting its steady business model with single-digit revenue growth and competitive market pressures. While management is well-vetted given the CEO's long tenure and previous experience at Pfizer, concerns such as regulatory issues and a high debt to cash ratio are noted. Valuation metrics point to a stock priced above 25 times trailing earnings, and although historical issues and modest financial growth raise caution, potential upside from a key product line in flea and tick treatments offers a bullish, yet measured, outlook. The panel remains on the watch list rather than issuing an immediate buy recommendation.

Sales and Support Transformation to Capture Broader Markets

"DocuSign was historically a direct sales company... But as our product roadmap changed to a broader agreement management solution, we had to restructure our sales and support to cater both to SMBs and larger enterprises."

The discussion highlights a strategic shift in DocuSign's sales and support approach as the company evolves from a simple e-signature provider to offering a comprehensive agreement management platform. The transformation includes digitalizing the buying process, enabling partner channels for enterprise clients, and enhancing post-sales support. These changes aim to sustain rapid customer adoption in the SMB/mid-market segment while gradually expanding into the enterprise space.

Evolving Pricing Strategy with Platform and Token Models

"Historically, the way DocuSign was priced is in batches of envelopes... Now we're rolling out a more complicated model that is a platform plus ... we attempt to capture some sense of the value that we're delivering."

The CEO discusses a shift in pricing strategy from a simple envelope-based, per-seat pricing model to a more dynamic platform pricing model incorporating tokens. This change aims to better align pricing with the value delivered by their broader AI-powered agreement management suite. While the model is still evolving, it underlines the company's intent to capture the increasing value proposition provided by its expanded offering.

Product Innovation: End-to-End Intelligent Agreement Management

"And so that's what we've done. We launched that in June of last year. And literally every stage of the agreement journey ... it became the heart of our launch and then we relaunched the company in a big way."

DocuSign is transitioning beyond traditional e-signature services to an end-to-end intelligent agreement management platform driven by AI. The CEO details how the company is integrating advanced AI workflows into every stage of the contract lifecycle, which could unlock new revenue streams, bolster its competitive moat, and potentially drive margin improvements as processing costs drop dramatically.

Ferrari (RACE) Investment Commentary

""Ferrari is synonymous with wealth and luxury. No other automaker can demand a premium quite like Ferrari can. The brand reputation is unmatched, even though the company faces challenges in the U.S. market and with its EV strategy. The financials look strong, with high revenue and profit growth as well as a robust balance sheet. Based on the current valuation, I expect around 10% returns over the next five years, with some caution due to premium pricing and macro cyclical risks.""

The speakers provided a detailed assessment of Ferrari (RACE), emphasizing the unparalleled brand strength, solid financial performance, and strong global presence. While they note some concerns in the U.S. market adoption and the evolving EV strategy, the overall commentary is positive with an expected 10% return over the next five years. The cautious yet optimistic tone highlights Ferrari as a resilient, premium stock suitable for long-term investors.

Royal Caribbean: Strong Operational Performance Amid Valuation Cautions

"Royal Caribbean very much the cream of the crop when it comes to how it performed both during the pandemic and coming out of it. They have seen huge demand with load factors above 100% and yet, despite the strong operational performance, the share price has tripled since 2019 with a 25% higher share count."

The panel discusses Royal Caribbean's remarkable recovery from the pandemic, citing operational strengths such as high load factors, innovative ecosystem expansion, and solid management execution. However, despite these positives, concerns about high capital intensity, significant debt levels, increased share count, and potential overvaluation due to a meme stock following temper the enthusiasm, suggesting that the stock's price may need to correct before it becomes an attractive trade.

Comfort Systems (FIX): AI-Driven Margin Expansion Amid Valuation Concerns

+2.50%current return

"Comfort Systems, ticker symbol FIX... companies in the maintenance and services businesses are underappreciated... they've been a huge beneficiary of the AI investment boom. Operating margins have doubled since the ChatGPT moment... if you start to see companies maybe pull back because the hyperscalers of the world aren\"t getting the return on investment that they were potentially hoping for, then you could potentially see a decline in revenue, a decline in margins."

The panelists discuss Comfort Systems (FIX), highlighting its strong operating margin improvements fueled by the recent AI-driven data center buildout. They note the company\"s stable returns on capital and effective deployment of acquisition strategy despite being in a low-growth, maintenance-focused industry. However, caution is expressed over potential valuation risks if the current AI-induced spending surge fades, which could lead to margin and revenue declines, making the near-term outlook uncertain.