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In this podcast, Motley Fool senior analyst Anthony Schiavone and Motley Fool Asset Management's Chief Investment Strategist Bill Mann join host Ricky Mulvey to discuss:
Then, Motley Fool Canada's Jim Gillies joins Ricky to discuss speculation in the market and to shine a light on five stocks to keep an eye on.
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A full transcript is below.
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This podcast was recorded on July 04, 2025.
Ricky Mulvey: The market keeps roaring and you're listening to Motley Fool Money. It's the Motley Fool Money radio show. I'm Ricky Mulvey joined today by Motley Fool senior analysts Bill Mann and Anthony Schiavone. Fools, good to have you both here.
Bill Mann: Ricky, how are you doing, man?
Anthony Schiavone: How is it going, Ricky?
Ricky Mulvey: Doing pretty well. We are airing this show on July 4, and we're recording a few days early. We're going to look back on the first part of the year. Bill, I can give you plenty of reasons to be negative about maybe a trade war coming up. We had some softer jobs data, but it really seems like investors want to buy American equities. How about that? American exceptionalism? We have some of the best companies in the world located on our shores. As you look back on the first half of the year, any broad reflections on stocks and the market reaching record highs.
Bill Mann: I would say that one of the most interesting things that's happened in 2025 is that all of the asset classes within, the biggest asset classes in the US have sort of congregated. I saw something really interesting the other day that showed that the highest and lowest yield among the five major US asset classes is now less than 1%. US corporates are yielding about 5.2% all the way down to three month treasury bills that are about 4.3%. I don't I don't want to dwell too much on things that have never happened before, but this has not happened before. It really speaks to the fact that all of the asset classes in the US seem to be focusing on what is going to happen with the state craft in this country, that they are staying at a single point and wondering what's going to happen. Yeah, the market is up a little bit. It's up a lot from where it was in the lowest points of April and yet, the US stock market has under performed most stock markets around the world for the first half of 2025.
Ricky Mulvey: You're not saying that this time is different, but merely that this has never happened before, really clean way of couching that there, Bill. Anthony, how about you? Anything you want to add? Broad reflections on the market in the first half of the year?
Anthony Schiavone: Yeah, for me, coming into this year, we knew that the SP 500 returned roughly 25% each of the last two years, and that the SP 500 was valued at roughly 23 times forward earnings coming into the year, which is well above its long term average about 17 times. Now, at the beginning of the year, if I told you that during the first six months of 2025, we'd have global trade policy that would change dramatically. Geopolitical tensions would increase. The SP 500 would experience a roughly 20% drawdown, and gold would be up more than 20%. I don't think you would have predicted that the market would have returned roughly 6% in the first half of the year. I think the key takeaway for investors is to embrace the limits of your knowledge and to be comfortable knowing what you don't know because even with a perfect understanding of future events, the direction of the market is still going to be unpredictable.
Ricky Mulvey: How about embracing this for the limits of your knowledge? Wall Street Journal has an article about the best performing stocks, what's driving the market, specifically from the previous high in February of this year. Take a second and think of what that stock could be the best performer since February of this year. Maybe you're thinking of a big tech company? Or how about Palantir which has a frothy valuation right now, but it is not and it's Dollar General, up by 50%. To be clear, long term holders of this stock are still down quite a bit, but those who've picked up shares on this value play have done quite well this year. Dollar stores, these are the opposite of a growth story, but why are investors warming up to them? What's going on here?
Anthony Schiavone: Yeah, this is probably one of the rare times in the last few years that so called value is outperforming growth. So coming in of the year, Dollar General was hated by the market. I think shares are down more than 70% off their all time high earlier this year. I think investors started warming up to Dollar General earlier this year when there were growing concerns about the health of the consumer and the economy. Dollar General is a bit of a counter cyclical business where middle and higher income consumers tend to trade down during challenging market environments. And if we go back to 2008 to the great financial crisis, Dollar General actually grew their same store sales by 9%, which is a large number during one of the biggest financial catastrophes we've ever seen. Then you factor that in, and you think about on a recent earnings call, Dollar General's CEO said that they're actually seeing the highest percentage of trade down customers they've seen in the last four years. And the Dollar General's been an outlier in retail space because they actually raised their guidance in the first quarter at a time when many of their competitors and other companies were pooling guidance. I think the combination of a beaten down valuation and improving business fundamentals is why Dollar General is suddenly loved again by the market.
Ricky Mulvey: Don't pay attention to the bond market, pay attention to the dollar stores. That's exactly what you just said, Anthony, just kidding. You can pay attention to the bond market, as well. Bill Mann, the MAG Seven this year really hasn't done a whole lot. This is from James McIntosh in the Wall Street Journal, and this is a sentence I did not think I would say this year. Big tech isn't dominating the market's returns like it used to. Big tech used to dominate the market returns. What's going on here?
Bill Mann: It's all we ever talked about for several years. When you look at the MAG Seven, just looking at their price earnings ratio, which is not a perfect way of measuring how expensive a stock is or what the expectations are, but it's good enough. Tesla is about 180 times earnings, and Netflix and Nvidia are 60 and 48. Microsoft is at 38? These are still far beyond the price to earnings ratio of the S&P 500 in general, which is about 28 times. When you have situations like this, Things that can't go on forever won't go on forever. The MAG Seven is now, each one of them is well over a trillion dollars. I think Tesla actually has fallen back below that level. The fact is that these have become massive amounts of the percentage of the overall valuation of the stock market and huge as comparison to the size of both the US economy and the global economy. It is natural to see some reversion to the main.
Ricky Mulvey: Not only are these valuations loftier than the market average, and higher valuations can make sense for exceptional companies. One can think of Amazon and why an investor would pay a higher price to earnings multiple for Amazon than let's say, I'm going to make fun of Target for a moment than Target. However, the other piece of this story, Bill, is concentration and the MAG Seven while it hasn't been driving returns, it still makes up more than one 1/3 of the S&P 500 market cap a decade ago, it was closer to 12%. I know that's a boring story, market concentration, but is that something investors should be paying attention to?
Bill Mann: It is definitely a risk factor. It's a risk factor that comes with a nice shine on it because these companies have absolutely fantastic business models. These are cash flow generating machines of the likes we have never seen in our lifetimes and probably will not see again, the companies outside of this group. Yes, it is very much the case that having such a large overall percentage of the S&P 500, which is in some ways the overall stock market of the US, it's a risk factor for sure, because if anything happens to these companies, for example, some of them are actually, in some ways, being upended by AI. And that's something that would cause the market to take a look at these companies. And if they fall, I don't know, just a little bit, being that large of a percentage of the overall market, it has an outsized impact on the market itself.
Ricky Mulvey: The other big macro story I want to hit is that the United States Senate has narrowly passed The Big Beautiful bill with a vote of 51 to 50. To my constituents, I would like to tell them I did not read the entire bill, but one thing I did notice is that this bill takes away the EV tax credits that I think it was 7,500 for a new car, and then about 4,000 for used vehicles. I should have put that in my show notes. Anyway, this tax credit is a direct attack on my lease where I was able to get a brand new EV for 1,500 down and 100 a month for 24 months. This was at the taxpayer's expense, but it was a great deal for me. Besides my personal feelings on this, what does this removal of the tax credit mean for the electric vehicle industry?
Anthony Schiavone: Yeah, well, Ricky, I don't think it's a great development for the EV industry as a whole. If the bill passes, it would eliminate the $7,500 tax credit for purchasing or releasing a new EV. That's problematic because according to Kelly Blue Book, new EVs cost roughly $10,000 more than new combustible engine cars before subsidies. At a time when consumer budgets are already stretched. Now EVs look like they're going to be even more expensive compared to the gas powered cars within the next few months. That's probably not a good development for EV manufacturers, but it might be a good development for some of the legacy automakers like GM and Ford. But I'm really having trouble seeing how this could be positive for the EV makers, at least, you know, in the long term, maybe they get some pull forward over the next few months for people looking to purchase EVs ahead of that tax credit expiration. But yeah, definitely not a good sign for the EV makers. It's difficult to tell what's impacting Test law on any given day, whether it's President Donald Trump threatening to deport Elon Musk or the removal of the EV tax credit. Actually, it's the removal of the EV tax credit that means more for the business. Anyway, Bill Mann, the bigger story here is that we have moved from the austerity of DOGE to adding potentially $3 trillion to the deficit, according to CBO estimates. What is that deficit spending for people like me, and is that important for investors to pay attention to?
Bill Mann: It's been important for investors to pay attention to for the last 30 years, and yet we really haven't because ultimately a government, you know, a government deficit is something that the country that has the reserve currency should be able to handle. Now, we are at about $37 trillion in accumulated government deficit in the United States of America. According to the scoring, The Big Beautiful Bill will add three trillion to that deficit. What's a trillion or two on top on top of 37 trillion at some point? It will start to matter. It has to start to matter. It is a massive burden. It's a claw forward. It does perhaps lead toward, you know, a reasonable argument that you should hold as stores of value like gold. It also speaks to holding companies that have the capacity to withstand inflationary pressures, companies that have pricing power, it's the same thing. That's actually where I would be more focused.
Ricky Mulvey: After the break, we're taking a look at the biggest economic story lines for the second half of the year. Stay right here. You're listening to Motley Fool money. Welcome back to Motley Fool Money. I'm Ricky Mulvey, joined again by Motley Fool Asset Management's Bill Mann, Motley Fool Senior Analyst Anthony Schiavone. Before we get back into the show, we do have two pieces of housekeeping. First, Bill, you've got a new disclosure you got to read.
Bill Mann: I do. I serve as chief investment strategist at Motley Fool Asset Management, an affiliate of the Motley Fool. While affiliated, Motley Fool Asset Management is a separate and independently regulated entity. None of the investment decisions made at Motley Fool Asset Management involve individuals from the Molly Fool's media or business operations. As you know, Ricky, all of Motley Fool Asset Management operates independently in this way.
Ricky Mulvey: Thank you, Bill. For those who may not have listened to the show last week, this is my final time hosting Motley Fool Money and wanted to tell the listeners. About four years ago, I applied for a job as an associate producer at an Internet company I had heard of, and discovered the Fool, a place that would become an important and good part of my life. Chris Hill and Dylan Lewis, they took a chance on me, and few places would allow someone in their mid 20s to host a top investing podcast. But the Motley Fool lets people learn by doing and gives employees the chance to do work that other places reserve for much more senior people. I'm lucky that I got the chance to work with Chris and Dylan and luckier that I can call them mentors today. For those who don't know, Chris is laser focused on valuing listeners time, and Dylan's keen editorial sense made the show better for you. Both of them are managers who care deeply for the people around them. Their good work ripples through today's program. I'm optimistic about the future, and the difficult part is saying goodbye to the hardworking, kind people. Mary Long, Dan Boyd, Rick Engdahl, and Tim Sparks, to name a few. The analysts you hear every day and a special shout out to the Denver Fools who showed up from time to time in person, it made it a better place. The good, decent people here are what made my choice to leave the organization difficult.
For you listening, thank you for spending time with the show. I don't take that time for granted. What comes next? It's a little unclear, to be honest. I'm still figuring out what the paths could be, having coffee, posting more on the Internet, but I'm pretty sure about one thing. I'm not done podcasting. I'm not done making things. If you want to keep in touch, I'll invite you to connect with me on LinkedIn, where I'll be posting from time to time. Now back to the show. It's good working with you, Bill and Anthony. Glad to have you on my final episode of Motley Fool Money.
Bill Mann: It's been a pleasure working with you as well. And one thing I would say, although you are going to be very much missed, you are someone who brings curiosity every day into everything that you do. I can speak for Chris and for Dylan in saying, very strongly, taking a chance on you was not the risk that you think it was. We knew from the outset that you were going to be a star, and that is something that you have been. I thank you as well for having the opportunity to work with you.
Anthony Schiavone: I'll just echo what Bill said. It's been a pleasure work with you the last three or four years. I have learned a ton from you, listening to you on this show, and yeah, just wish you nothing but the best on your next adventure.
Ricky Mulvey: We don't have a ton of time left in this segment. For the first half of the show, we looked back on the storylines that drove the market to all time highs. Let's look forward to the biggest economic storylines that you all are paying attention to. Bill, we'll start with you. What is a business economic storyline that you're watching as we end the year or not end the year. We still have six months more in the second half of the year.
Bill Mann: It's over. There's a really interesting story in the Wall Street Journal about the housing market in the US, and when we say housing market in the United States, it's really important to make the point that there are thousands of little housing markets that only kind of barely interact with each other. Housing prices across the country are down and no place more so than Cape Coral, Florida, which has seen a decline in average housing price of 11%. This is really interesting because ever since COVID started, Florida has been the obvious winner. It's had a huge amount of population influx. I think maybe now we may be seeing the beginning I don't know if I would call it buyers remorse, but we are beginning to see a recognition of the things that make the Florida market special and maybe not in a great way.
Ricky Mulvey: Special because it's really hard to buy homeowner's insurance there, Bill. Ant, I'll ask you very quickly, one thing in 15 seconds that you're going to be watching in the second half of the year.
Anthony Schiavone: From a market perspective, I'm looking at small caps. They've under performed large caps each of the last four calendar years, and that's according to JPMorgan's most recent guide to the Markets report they put out every quarter. What I found interesting is that the first half of this year, small caps are the only asset class with a negative return. Every other asset class JP Morgan lists has a positive return. I'm looking for a bounce back in the second year. Maybe they can turn positive. Obviously, they struggled a lot over the past four years, but I'd be interesting to see if that tide eventually turns later this year.
Ricky Mulvey: I really hope so. I own some small cap index funds, and previously on the show, I had a lot of fun talking about small cap companies with Mr. Bill Mann. Up next, Motley Fool Canada's Jim Gillies joins me to shine a light on some less discussed stocks that you may want to know. Stay right here. You're listening to Motley Fool Money. [MUSIC] Welcome back to Motley Fool Money. I'm Ricky Mulvey. More people are excited about investing right now. What's that mean for you? Earlier this week, I checked in with Motley Fool Canada's Jim Gillies to talk about speculation in the market and get some stock ideas that may represent growth at a reasonable price. Jim, I'm starting to get some feelings like it's 2021 again. While we're celebrating all time highs for the market, I feel that there's some easy money coming back in and wild returns happening.
Ricky Mulvey: You like throwing cold water on people having a good time because you're a realist, not a curmudgeon. Don't say you're a curmudgeon. But I wanted to ask you, do you think speculative mania is back in the market?
Jim Gillies: I'm a fan of people having a good time, so I'll put that out there. I think speculative mania is always in some form in a market. It's just how broad is it? In 1999, it's pretty broad. 2001, hard to find. Early 2020, very hard to find. 2021. Quite easy to find. I do think after a couple of really good years in the market, 2023, 2024, of course, 2022 was the pain that a lot of investors had to endure for the pleasure of 2021. But after a couple of really good years in the market in 2023, 2024, yeah, I think there's a few things that are getting a little frothy out there. Doesn't mean I think there's an imminent correction or crash or anything. It's just more of a be thoughtful of where you're going. Be thoughtful of what you're purchasing. Be thoughtful of the position size. There's nothing wrong with a lottery type pick or two but if you make them 10% of your investable capital, that might not be terribly smart. But yeah, I think that the longer we go and the rebound from the tariff Schmazel earlier this year I think a lot of people are very excited about investing right now. I somewhat counterintuitively pair back a little bit when I see that.
Ricky Mulvey: My concern is precisely that my lottery ticket positions are the ones that are doing really well. I'm like, Oh, no, this seems to be a time to get a little less excited about those. We're also seeing can't miss stocks coming back. I don't remember seeing these in late 2022, early 2023. But one of them right now is his and hers, and we were talking about that before the recording. Why should investors beware when they see a can't miss opportunity like that?
Jim Gillies: Well, I'm certainly not calling it Can't Miss. I do believe in the principle. If something is denoted as Can't Miss, you should probably be quite wary of it. You should probably step away slowly so as to not disturb it. Most Canadians, I have to do this, Ricky for nostalgia's sake. Most Canadians remember our biggest example of Can't Miss. That would be Nortel Networks in the great tech bubble. I went to zero, but it was for a time in the late 90s considered the most Can't Miss stock in certainly the Canadian market. There's inherently nothing wrong with the idea of a stock that could be cans. I'm going to call that a growth stock because we tend to really no one gets terribly excited about and they should, but they don't about stocks that are, say, growing at 1%-3% a year, but are improving their operations by, say, 5% a year, and they're run by good people who are excellent capital allocators, who are buying back 5%-10% of the stock per year, and they're also increasing the dividends.
People don't get terribly excited about that, but something with the promise of 20, 30, 50% annualized growth. People get real excited about that. When they work, Amazon from the late 90s, Shopify from the mid 20 teens, for example, when they MercadoLibre for the past 15 years, Chipotle since about 2007, when they work, they're beautiful things. You just got to make sure you size them appropriately. You got to go into. One thing I really like that I think the speculative excess misses is everyone claims to be a long term investor all the time. It's remarkable to me that in 2022, what happened in 2022, a lot of people in 2021, were claiming they were long term investors about everything they ever bought got real silent in 2022. I'm just here to point that out. When you are moving into a stock and you want to be that long term holder, make sure you're buying companies that are worthy of a long term hold, and make sure you're being brutal and honest with yourself as you assess things.
Because it's your money, no one cares about it more than you do. Don't worry about what other people think. go through your own process and assess, do I think this is reasonable? You talked a little bit about his and hers, and that's an interesting one. It's certainly one that's in the market right now. Go and look at it. Ask yourself, why do I own this? What do I expect out of it? How are they making money? What do I think is going to happen growth wise? One tool that I love because I am a valuation guy, and I like to say, all valuations are wrong at all times. Every DCF that's ever been done has been wrong because you do not have perfect foresight. You don't know what's actually going to happen. A tool that I like is what's called the reverse discounted cash flow or reverse DCF. That done reasonably well should give you an estimate of what growth a company needs to generate to justify today's price. Then you ask yourself, well, is this reasonable? Do I think this is reasonable? I actually did a quick little reverse DCF of his and hers, if you'd like me to opine on that. I got time. Oh, brilliant. Again, all DCFs are wrong. It's more a question of, is are my assumptions reasonable. For this real brief it took me five minutes, this is not this is just a sample. It's not you would do a lot more work. I would hope. But as I looked at his and hers, can I don't really know anything about the company, but I've seen them in the news a lot recently. I know they're tied to the GPT or the.
Ricky Mulvey: GPT GLP 1 Jim.
Jim Gillies: I was going to say all these acronyms, yeah I see, this is again, I'm the guy over in the corner who's looking at other things. Exactly. It's tied to I think a pretty good, reasonably long tailed, broad societal trend. I think that's.
Ricky Mulvey: That is personalized healthcare and also the ability to get medical treatment on your computer versus going into a doctor's office. Please continue.
Jim Gillies: Exactly. Yeah, I think that's reasonable. I went through and I looked at the Well, how much cash is this company generated? Because when you look at a company, like we talk about doing discounted cash flow analysis, which, of course, we have to then estimate what the cash flows are. The important thing is what they do with it, by the way. It's nice to estimate it, but if it all gets frittered away on new Jet for the CEO, it's maybe not the greatest use of capital. This capital allocation story. But I look at hymns. I'm like, Okay, I estimated the free cash flow they've done in the past year, last four quarters. Looked at their balance sheet. They got a bunch of cash. They got no debt. I went through, I said, Okay, I think most of my DCFs, I use an 11% discount rate. I don't go through all of the corporate finance stuff and Beta and whatever in CAP M because it's just like, You know what? If I could get 11% on the market, that's my opportunity cost what the S&P 500 has given us for 80 plus years. I like to use my opportunity cost, my perceived opportunity costs, 11% as my discount rate. I said, You know what? It's going to grow at whatever rate for the next decade and then tail off to about a 3% growth rate in what's called the terminal period. It's ten years out. From a discounted cash flow perspective, it doesn't really matter. Add the cash, deduct the debt. There's no debt. That's fine. At today's valuation, today's valuation, Hims and Hers has to grow at about 20% annualized for the next decade. I don't actually find that terribly unreasonable, given the broad trend we talk about. However, so I'm like, Yeah, there's now, OK, that employs a few assumptions, both good and bad.
Again, the likelihood of it going from 20% annualized growth to 3% annualized growth and precisely in 10 years, the likelihood of that is zero. It's just a mental construct or a model construct. They've got a lot of dilution, a lot of options, a lot of equity cookies. I haven't taken any of that into account because, again, this was a five minute DCF. But you would probably want to get an understanding of how much of this company is going to be hosed out to insiders in the future, because shares in their name dilute your holding. It probably would be more than zero, which is what I have it. But you can work through this and go, Okay, 20% for 10 years annualized. It's probably not that unreasonable, but I can tell you, Ricky, if I were to look at a few other story stocks out there right now. Actually, I'll even go back to the story stocks of the recent past. I looked at a couple Well, OK. We are currently conducting this interview via Zoom.
Zoom was a darling in 2021. I think it nearly topped out at $700 a share. Today, it's about it's below 100. What happened? Well, because at that time, and I remember saying this on various other foolish shows and probably being ignored by most, the growth was rapidly slowing what they were delivering. As people piled into the stock that was down 10, 20, 30% from what's all time high, because oh, well people were looking in the rear view, and Investing is about looking in the forward view. It's like, their growth is rolling over. I'm not sure how much more they're going to have. Even if they have a great business and they're run by a great founder with a meaningful stake in the company, the growth is rolling over, and people were buying it with implicit growth rates for the next decade of 40, 50, 60%. That's not going to happen, guys. In fact, it didn't happen, and a lot of people got whacked on that. It's about being mindful. It's about being thoughtful about what assumptions are based on the stocks that you own. Again, you can own lottery ticket type stocks. I own a bunch myself. But just understand what goes into it and understand what the actual payoff for most lottery ticket type stocks is. Most lottery tickets go to zero. We're not going to say. We're not going to speculate Him is going to zero, but you might not get the easy money you think you're getting in it.
Ricky Mulvey: One of the great pleasures of doing this show for a few years, Jim, has been getting to talk to you and look at companies I would not have otherwise looked at thinking of Winmark, Academy Sports and Outdoors, Orizia, even TKO Holdings, which I was like, oh, this looks expensive, and now it's a position I have. For my last show, just real quick, can you give me a stock or two that I should be looking at as I go into the Great Beyond?
Jim Gillies: I believe, as we were talking about beforehand, we were talking very specifically about in the Garp bucket, growth at a reasonable price. I'm going to give you five, if that's OK. Real quick.
Ricky Mulvey: Sure.
Jim Gillies: Well, because I care, Ricky, and I've really enjoyed doing this show with you. I wish you all the best going forward. I would say, Well, my first one would be Medpace Holdings, which we've talked about many times. It's a particular favorite company of mine, I recommended it multiple times. It's a small contract research organization run by a very foolish leader, trading at a very reasonable price right now. Although it's gone up the last couple of days, so maybe we're getting a little bit less reasonable because the market is assuming that recent bad news will continue into the forever future. It won't. Med Pace really like them.
Lululemon is interesting to me at this point. I really enjoyed the story from our record date. I came out yesterday that Lululemon is selling Costco for knock off yoga pants. It's always tough to see your children fighting. I will say that. I do, of course, like Costco a lot. But Lululemon is now trading. They make a lot of cash, great looking balance sheet. I've said before in multiple venues, they make clothing that makes people feel good about themselves. Do not dismiss that easily, trading at a decade low multiple. That's interesting to me. Simply Good Foods. It's a company I have been steadily wrong about. It's SMPL is their ticker. They are the company that owns the Atkins diet brand, as well as Quest and recently purchased something called Only What You Need which is a plant based protein shape style company. It's run by really good industry veterans who I think might be setting the company up to put it out for sale, too, in the near future. But they made the acquisition of only what you needed less than a year ago. All their numbers are going up, all their business numbers are going up, and the stock has been going down. Like I said, I have some evidence that suggests they might be priming it for a sale and the people running it have a history of selling companies.
The fourth one is Adtalem Global Education. It's a for profit education space. ATGE is their ticker. You may know them and may be disdainful of them. Their prior name was DeVry University, or are they were the company that owned DeVry University? That's long gone. It's been hived off, run by good leadership, make a lot of cash. They focus on medical education. Doctors, nurses, nurse practitioners, and veterinarians, as my vet friend says, real doctors treat more than one species. It's good price, good valuation, run by smart people.
The last ones one we've talked about before, Kontoor Brands, the parent company of Wrangler and Lee Jeans, and now of Helly Hansen. Run by SmartPo make a lot of cash. The Helly Hansen deal was done with all debt, which they have said, Hey, we're going to pay that off super fast. That's actually my favorite acquisition because as they pay off all that debt, the cash flows, the revenue, the earnings, the cash flows that came with Helly Hansen into the Greater Contour Empire, that goes across all of the pre existing shareholders once the debt's gone. Again, it's the opposite of when companies are doing dilutive actions that take away from you, this is a good thing. I hope those five find a way into your portfolio, and it's been a great pleasure, sir.
Ricky Mulvey: As always, appreciate your time and your insight, Jim.
Jim Gillies: Thank you.
Ricky Mulvey: As always, people on the program may have interests in the stocks they talk about in the Motley Fool may have formal recommendations for or against EHM Bersal stocks based solely on what you hear all personal finance content follows Motley Fool editorial standards and are not approved by advertisers, advertisements for sponsored content, provided for informational purposes only, see our full advertising disclosure. Please check out our show notes. Up next, radar stocks, stay right here. You're listening to Motley Fool Money.
Welcome back to Motley Fool Money. I'm Ricky Mulvey, joined again by Motley Fool Asset Management's Bill Mann and Motley Fool senior analyst Anthony Schiavone. Each week, we close out the show with a couple of Radar stocks that our guests are keeping an eye on and our man behind the glass. Dan Boyd will throw them a question concern or backhanded compliment. Bill Mann, what you looking at this week?
Bill Mann: My company is Alphabet, and there was a really interesting article that came out a few weeks ago in the Wall Street Journal, and it was talking about how generative AI is taking the place of Internet search, particularly those affiliate links and the things that make Google Search way less clean than it used to be. It's having a huge effect on the companies that use search engine optimization. But my question then became, well, if this is where Google makes most of its money, then how is this not something that is a massive risk to Google as well? Now, the Google folks are very smart and they are attempting to change their business fundamentally, but it is a fundamental change that they are going to have to try and stay ahead of. For that reason, Alphabet is the stock that I'm watching.
Ricky Mulvey: As a reminder, radar stocks, it's not always a good reason that our guests are keeping a close eye on those stocks. Dan Boyd, a question about Alphabet, the letters or the company.
Dan Boyd: Are we sure that Alphabet knows what they're doing? Because search in the past six months has really gone to the dogs, Bill.
Bill Mann: I love that question simply because it belies the thing that people are so annoyed about when it comes to Google Search, you get these clickbait glurge, you get search engine optimization links that have nothing to do with what you have gone after that you were looking for to start with. I actually think that they are in a little bit of trouble here.
Ricky Mulvey: Anthony Schiavone, what's the stock on your Radar?
Anthony Schiavone: Yeah, I'm taking a look at Target. Ticker simple TGT. Everybody knows Target, one of the largest retailers in the US, but they're currently in one of their largest stock price drawdowns in their history. Ricky I like dividends, and Target pays out more than 4% dividend, and they've grown that dividend for more than 50 consecutive years. I think the key question that I'm asking myself is is Target in a cyclical or secular decline? To me, considering Target has done a good job of shifting toward e-commerce, which is the biggest threat facing many retailers, I think this might be a cyclical decline and potentially a good investment opportunity for the long term. I also wonder if Target is it right for maybe an activist investor to come on board at some point, which could be a catalyst for the stop.
Ricky Mulvey: There's a lot going on there. Dan Boyd, which stock are you going to be putting on your watch list for this week?
Dan Boyd: I can't say I like going to Target, Ricky, but I do like a nice dividend. Let's go Target.
Ricky Mulvey: That's it for this week's Motley Fool Money radio show. I'm Ricky Mulvey. Thank you to Dan Boyd and thank you to our guests, Bill Mann and Anthony Shavon. For one final time, thanks for joining us, and the show will be back next time.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. JPMorgan Chase is an advertising partner of Motley Fool Money. Anthony Schiavone has positions in Academy Sports And Outdoors. Bill Mann has no position in any of the stocks mentioned. Dan Boyd has positions in Amazon, Chipotle Mexican Grill, and Costco Wholesale. Ricky Mulvey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Chipotle Mexican Grill, Costco Wholesale, JPMorgan Chase, Lululemon Athletica Inc., Medpace, MercadoLibre, Microsoft, Netflix, Nvidia, Palantir Technologies, Quest Diagnostics, Shopify, Target, Tesla, Winmark, and Zoom Communications. The Motley Fool recommends Academy Sports And Outdoors, Adtalem Global Education, Kontoor Brands, Simply Good Foods, and TKO Group Holdings and recommends the following options: long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short June 2025 $55 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
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