Chit Chat Stocks - 10 Stocks Up More Than 100% This Year (Analyzing Winners)

Episode Date: September 2, 2026

On this episode of Chit Chat Stocks, we look at 10 stocks whose prices have risen by more than 100% so far this year. We discuss: (00:00) Introduction (05:05) Virtu Financial: Market making and high-frequency trading (12:46) Stock 2: Modular housing for remote projects (19:48) Stock 3: Genomics tools and AI applications (25:46) Stock 4: Unified communications and market dynamics (33:59) Stock 5: Semiconductor industry and AI prospects (40:01) Stock 6: Workforce solutions and cyclical challenges (49:14) Stock 7: Luxury cruises in remote locations (54:01) Stock 9: Semiconductor testing for AI hardware (59:10) Stock 10: Cloud services for developers and AI growth ***************************************************** Subscribe to our newsletter, Emerging Moats: emergingmoats.com  ********************************************************************* Chit Chat Stocks is presented by Interactive Brokers. Get professional pricing, global access, and premier technology with the best brokerage for investors today:  https://www.interactivebrokers.com/  Interactive Brokers is a member of SIPC.  ********************************************************************* Fiscal.ai is building the future of financial data. With custom charts, AI-generated research reports, and endless analytical tools, you can get up to speed on any stock around the globe. All for a reasonable price.  Use our LINK and get 15% off any premium plan: ⁠https://fiscal.ai/chitchat  ********************************************************************* Disclosure: Chit Chat Stocks hosts and guests are not financial advisors, and nothing they say on this show is formal advice or a recommendation. Learn more about your ad choices. Visit megaphone.fm/adchoices

For the past three years, Interactive Brokers' individual clients averaged 24.3% annually, beating the S&P 500. Lower costs and access to 170-plus global markets matter. Visit IBKR.com slash performance. Welcome to Chit Chat Stocks. On this show, hosts Ryan Henderson and Brett Schaefer analyze businesses and riff on the world of investing. As a quick reminder, Chitchat Stocks is a CCM Media Group podcast.

Anything discussed on Chitchat Stocks by Ryan, Brett, or any other podcast guest is not formal advice or recommendation. Now, please enjoy this episode. Welcome into the Chitchat Stocks podcast, a podcast to help you find your next great investment. I'm one of your hosts, Brett Schaefer, and I'm joined by my co-host, Ryan Henderson. Today, we are doing a fun episode. As you can see by the title, we are doing 10 different stocks as a quick hitter that are up more than 100% this year. We're going to cover them. Basically, the criteria is one, is the stock up more than 100% this year? And two, we're going to look into it, probably about five minutes each to make sure it's about an hour long

episode. And we're going to decide whether we kind of like the business, don't like it, if there's anything interesting here. And then as we always conclude, you know, are there any stocks on this list that could make it onto our watch list? We want to research further, something like that. But before we get started, housekeeping items, if you want to chat with me, Ryan, any of the other listeners of the show, subscribe to the free tier of the newsletter. It'll be in the show notes. You can join the sub stack chats. Emerging notes is the name, but it's for all intents and purposes, the Chit Chat Stocks podcast. And if you're listening to this show on Apple Podcasts or Spotify, please give us a five-star review. All right. More on the criteria, Ryan. I made

the filter here using our friends at fiscal.ai. Use our link. Get 15% off any paid plan. And the screener, the stock had to be at more than 100%. And I made it so the market cap had to be over $500 million. Didn't want anything that was kind of nonsense in there. And then really, Ryan and I had discretion to go through the list, look at anything that was interesting. We couldn't own any of the companies on here. It was kind of nice to see two stocks on the list. That was never a bad thing. We want to do something that are new. It's probably stocks that we've either rarely covered or never really covered before. And that's about it. Ryan, anything else before we get started no i it's a good distinction that we weren't allowed to do

any holdings i i think people listeners regular listeners are tired of us talking about remitly but it did qualify on this list and you also had oscar health qualify on this list i thought this was a fun prompt if we want to call it that a fun research task because Because so often, especially on this show, we talk about fallen angels because they're fun to talk about and they feel more actionable because you know you're starting with a reasonable valuation potentially. but there is something to be said for businesses with a lot of momentum like uh and i i want to specify that i am saying businesses with momentum not the stock with momentum and maybe they kind of go hand in hand but you i think i've kind of gotten a glimpse of this working at a smaller business where when you have success with a product success with uh go-to-market motion

And whatever it is, that success really does compound and you can start to replicate that and it has sort of permeates throughout the business. So I think wins kind of beget more wins with businesses. So sometimes a stock that's up a lot can be a reflection of that and a stock that's up 100% this year does not mean you've missed the boat. It could be signs that the business is valid and has a lot of momentum behind it. With all that said, I was looking at this list. I found about 100 when I did the screener, so similar to you. And it was, for the most part, AI infrastructure-related names, no surprise there, oil and gas names, and biotech companies or pharma companies. i tried to find ones that i thought were a little more unique maybe weren't exactly related to the

ai build out or anything commodity related so i think we found a pretty good list of 10 companies here brett you've got your first one what is it it is virtue financial uh the ticker actually i don't even know the ticker if it's maybe right you look that up while i'm talking here but It's V.I.R.T.U. Financial. They are a market maker and high frequency trader. They have two segments, one market making, which is principally and I'm just going to read off what they say here consists of market making in the cash futures and options markets across the global equities, fixed incomes, currencies, cryptocurrencies and commodities. The company commits capital on a principal basis by offering to buy securities from or sell securities to broker dealers, banks

and institutions? Well, I can sum it up for you. When you make a trade on Robinhood, interactive brokers, hopefully interactive brokers are a sponsor, or any one of the other brokerages out there, whatever type of asset, Virtue Financial is one of the companies that basically matches the spread and does the hyper-continuity paying for order flow. And then there's also this Execution Services, which is agency-based trading and trading venues offering execution services and global equities, options, bonds, blah, blah, blah, blah, blah. this is really the segment that they're doing it for other people so they're the first one is the market making segment is all kind of the same but they have the traditional market making segment

which is with their own capital with their own balance sheet and then they have one that's execution services on top of that they also provide proprietary technology and infrastructure workflow technology and trading analytics to third parties so they're kind of outsourcing some of their expertise to third parties, could be an investment bank, could be some other sort of fund, something like that. For anyone that doesn't actually know what Citadel does, this is a publicly traded company in a similar vein. So if you kind of hear the name Ken Griffin, you know, they're kind of the top dog within the sector, but Virtue is a bit smaller, but you know, still successful. In the market making statement, and then take your own capital, you want to match as

much buy and sells across the entire, you know, whatever liquidity you have. And the more buys and sells you do, the more fractions of a penny you can make by matching those and getting quick execution for someone on one of the brokerage platforms around the world, the more money you'd make. And as you might expect, along with the brokerages, for people that haven't been following that sector closely, they've done quite well during the bull market, Virtues Financial's business is extra lever to the market cycle. I'll take a little bit in the history here because when you look at their operating profit, I do have a chart of that here. You can look at it using our friends at Fiscal AI. I think it kind of tells most of the story here. The company

back in, they went public a little over a decade ago. They weren't growing too much, but in 2018, they saw their operating earnings jump from like it looks like 177 million ish uh something along those lines to 768 million dollars because of a merger with a competitor and the quote volmageddon of that year ryan are you aware of volmageddon when uh the people were short ball shorting the volatilities something something along those lines and then it all blew up it really helped the market makers i was not aware of volmageddon but it's a lovely you're also in college so yeah i wasn't paying too much attention at the time yeah and then in 2020 profits uh jumped unsurprising a lot of trading that year we saw the collapse in march during the pandemic

and then the 2020 2021 pandemic uh bull market but in 2023 profits at a low point so we've seen the pro cyclicality, the extra cyclicality on top of the bull and bear markets. And now, you know, over the last 12 months, it is close to reaching that 2020 high. What's really interesting here, and like a lot of cyclicals, it kind of, it tries to trap you in with that low multiple. You know, the company has been beating revenue, they've been beating earnings expectations, and they're also exploring a sale. That was quite fascinating. This might make this a little different than a traditional cyclical that you're trying to value here like a micron or what have you with a low earnings multiple, but they're

trying to explore a sale of the third-party agency business for upwards of $4 billion when the current market cap is $10 billion. And if you look at the PE, it is 11. So I know there are a lot of numbers out there, but essentially, you could be stripping out close to half of the market cap. the PE is 11. Yeah, this could be extreme bull market earnings. But for me, I'm going to ask you the same question here, Ryan. This is one to put on the watch list because I think these type of businesses, there's going to be a few that do well. And I think they're going to do well over the long term. It would be very, very hard for someone to step in and just start up all these relationships for example like a robin hood doesn't want a relationship with

a hundred different market makers they want good relationships the it would just make things way more complicated it's going i'm looking at ryan what were your thoughts first thoughts of this business yeah first thoughts it is a good business to be in and that it's extremely asset light And the hard part for me is that I don't really ever know when to own these businesses. I don't think it's one that you just buy and close your eyes and just hold it forever. It's very pro-cyclical, very high earnings when market volatility and I guess bull markets are in effect. But we've seen what can happen in 2023. Earnings collapsed by 70% from 2020 to 2023. So it's one that's kind of hard for me to get comfortable with. The one thing I do like about market makers, quants, anything that's Wall Street – a Wall Street-run public company, they tend to have a pretty good eye for capital allocation and they know that they need to treat shareholders right in order to be rewarded.

So they tend to do a pretty good job of that. Has Virtue – have they been capital returners? I'm seeing a dividend yielding 1.5%. For any listeners that know this company well, don't shoot the messenger if that's like a special dividend or anything, but maybe we could value it on there. I can look at Fiscal AI right now. We'll just check out total shares outstanding.

I didn't see much movement, but actually, well, I was looking at the, not the long-term chart, 2020. Their shares outstanding were 122, let's just call it million. And then they bought back down to, in 2024, $85 million. So not bad. But I'd be curious to see why from 2017 to 2020, shares outstanding kind of kept climbing. That would be something to explore for sure. And I think, yes, the capital returns are very, very important for something that can

be cyclical like this to help you create value as a long-term shareholder through the cycle. We need to keep moving. We're already past the 10-minute mark. Ryan, I'm always fascinated with these because you don't, well, we don't know anything. I don't know anything about this company going into the discussion. What is your stock number one? My first stock is Target Hospitality. This might be one of the most unique business models I've studied, honestly, maybe in years.

I'd never heard of this company up until I saw it in the screener. But they are a provider of modular housing or self-contained lodging communities typically designed for companies that need a place for their workforce to stay while working on remote projects. So, for example, let's say you're a large oil and gas exploration company, and you want to start a big project in West Texas, they would likely be deploying hundreds of technicians and engineers to that location. And oftentimes, those areas are so remote that they lack local accommodations. So instead of making workers drive hours to and from distant towns, they will book a dedicated network of Target's modular communities. When I say modular community, I think people are maybe picturing just like a mobile home, but they are – well, I guess they sort of are, but they're more fully equipped communities. They've got like sound dampened rooms. They've got on-site laundromats, high-speed internet. There's meal catering.

If you've ever watched the show Landman, and they've got that big crew camp where it's like a bunch of kind of cabins, cabin-looking things next to each other, that is what we're describing here. So if you're curious, look up Target Hospitality Modular Communities and go to images, and you'll see exactly what we're describing. anyways target has these long-standing relationships with a bunch of companies that require these services on an ongoing basis for a long time that has always been energy companies they that was you know they were the ones doing remote projects for the most part they've also had the government as a big customer so sometimes if there's like disaster relief they might need teams there for a long time uh and then lately and why the stock has been soaring is companies are building data centers in remote areas and it has been a big source of maybe not

revenue right now but at least contract value and bookings the contracts are typically project based and they serve unfortunately pretty much largely cyclical industries so it can kind of lead to lumpy results the the one nice thing i guess here is they are cyclical but there's minimum guarantees in these contracts they're usually big multi-year deals a lot of these projects take a long time and then they also have like you know maintenance and recurring services on top of them but in down years margins can kind of deteriorate because you've got potentially modular homes or communities sitting idle so looking at the business today company has a market cap of 1.9 billion enterprise value is pretty similar it's up 133 percent year to date

primarily because they booked some massive data center build out contracts one of them in particular was a 550 million dollar contract analysts currently expect them to generate around 161 million dollars in operating income in 2028 right now it's technically unprofitable on an operating profit basis i usually don't care that much about what analysts are projecting but given the timing around some of these agreements analysts are probably going to have a much better view as to like per year earnings if we take it at face value they traded an ev to 2028 operating income of 12 times not terrible but my issue here is it's 12 times 2028 operating operating income but what is 2030 operating income i have no clue they are very tied to

data center build outs now which is going to be lumpy probably even if you're a big believer in data centers there's no way the infrastructure and capex around it there's got to be a slowdown at some point and then oil and gas which is also quite quite lumpy there has been a lot of reshoring but right now it's it's still sort of a boon time for them so maybe i put here i'm not really interested but maybe this is the kind of thing where options make more sense or derivatives because from a risk reward standpoint you could get sort of a combination of very positive tailwinds from increased data center spending if you think data centers are going to continue to spend more or customers are going to spend more on data centers and there's going to be this reshoring

from some of the geopolitical concerns with like the Strait of Hormuz, for example. So oil and gas spend is going to increase domestically. This could be, they could be earning much more than 160 million in a few years. Yeah, this is one where, you know, kudos to anyone that saw it. I'm looking at the price chart here.

Even earlier this year, as Brian mentioned, it's up over 100% this year, but it hadn't really gone much of anywhere in the last few years. It wasn't considered an AI winner. And then if you saw that, you know, kudos to you, but I feel like a lot of the AI growth is priced in. It doesn't really get me out of bed in the morning to see 20, 28 earnings at what, 12 times or yeah, pretty much 12 times on something that if the buildout slows like a lot of those earnings could dry up yeah my rule of thumb that i try to stick to is do i think it trades at less than 10 times five year out earnings it very well could in this case but i if i can't forecast what if i can't accurately forecast at least not even accurately

If I can't directionally forecast where earnings will be that year, it's very tough. So, yeah, it's probably a pass from me, but I did think it was a fun business model to study. I didn't even think about the fact that all these projects need cabins, essentially. Yeah, this is something like the third or fourth order effect for people that try to find investing ideas from the AI builder. All right. My stock number two, and this is a name that I think investors and listeners can get excited about. The name is called 10X Genomics. Stock is up 263% year to date, although it's still down 70% from all time high. So this was one that was a massive loser coming out of the COVID-19 pandemic. We'll talk about the history there. But 10X Genomics is a provider of

products and services for biology research. Think drug research, research labs for academia, private research institutions. You know, there's stuff like the Chan and Zuckerberg Initiative, who actually I think I maybe mentioned here. I think I read that they were a customer or, you know, big pharmaceutical makers. It has two main product lines, one single cell analysis. It's tools, which are kind of sold in a razor, razor blade model, analyze a cell to get information about its genetic makeup, which can then be sent on to genome sequencers like Illumina. So it's one step above Illumina in that chain. There's also spatial biology. I did not know anything about this, but I tried to get the basics. And essentially, it makes sense. It

analyzes more specific tissues or something that is, it's not just a single cell. You kind of have maybe a bunch of tissues working together, all the sorts of things inside your body. And it analyzes to see how everything works together, like what genes are turned on and off and on, what is happening. This is very, very important for cancer research and things of that nature. Now, providers to, this is called biologics. I don't know the exact industry term, but essentially the providers of tools and services to the researchers and drug developers in the genomic space have cratered coming out of the COVID-19 pandemic boom. There was a huge drop in demand for products, which has taken years to normalize. And now it finally might be. So that's why 10X

Genomics stock has turned around. 10X Genomics also want to settle in its favor. Some patent lawsuits took out a competitor called NanoString Technologies, which was acquired out of bankruptcy by Brooker. And revenue has been fairly stagnant since 2021. I have the fiscal AI chart here. It growing, you know, pretty steadily. I mean, kind of until, you know, I have it till 2023 here, but then the last few years, it hasn't gone much of anywhere. And I think even though the trailing numbers don't look that great yet, the stock is going higher because it has a new spatial biology product called Atterra. It is apparently much better, more easy to use, and it has onboard computing power to translate raw data. Orders have been very strong for the system. I think

they already hit their year-end numbers. So they're already in a supply crunch where it demands outstripping their projected supply. And investors are taking note of this as a revenue acceleration potential. Investors now consider it an AI winner, which congrats. There you go. Because of its huge data set on tissues, genomics, et cetera, that can be used for virtual drug and cell development. It already has partnerships with many researchers regarding this already. I think that's where the Chan Zuckerberg initiative comes in, but that's not the only partner. There's many, many out there. And this has also seen a strong sector-wide rebound in the picks and shovels for biotech. You look at a lot of the players in this sector, and they've all rebounded in recent quarters. So

that has meant many, many rising tides. That has lifted 10x genomics. It ended 2025 with a market cap of around $2 billion, but now has a market cap of around $8 billion. It's never generated operating profit, but it's fairly close to break even. And what do we got for revenue here? It's like 600 something million. So it's not overly cheap, but there should be really, really strong margins over the long term if they can scale. The gross margins are there. Ryan, any interest in 10x genomics i probably already know your answer you hate deep tech but you research your investments you analyze markets you manage risk but have you researched your broker for the past three years interactive brokers individual clients averaged an annual return of 24.3

compared to 23.1 on the s&p 500 ibkr's lower trading costs competitive rates efficient execution and access to 170 plus global markets help investors keep more of what they earn and put more capital to work. Over time, the broker you choose matters. Interactive Brokers, member SIPC. If you care about performance, find out why the best informed investors choose Interactive Brokers at ibkr.com slash performance. Again, visit ibkr.com slash performance. Yeah, the answer is no. I guess I like when a stock has 10x in its name, but the it's out of my depth here uh not to mention 12 times revenue 12 times sales is not super inspiring to continue researching i i just for me it's i would have no way of knowing

whether or not something could come along that would displace them uh what what does the competitive set look like i really don't know i would have i would have had a hard time telling like could they win those lawsuits that they won you know if they don't that's a good point it's going to be hurtful for the business so yeah uh it's probably a pass for me what about you uh yeah i put it in the same category as the what med pace alumina there's others, Brooker, even Thermo Fisher and Danaher. When looking at, I think they all kind of are in the same area. Obviously, tennis, you know, this is much more high risk than some of those other players. But I go, yeah, I understand when people make a good thesis here, they write a good stock

pitch on it. The share prices have generally done well over the long term, but I agree with you. It's very, very hard for me to analyze that competitive landscape. Let's go to your second stock what do you have for us here that looks like i don't even know what this company is it's called ring central but not ring cameras no they do not put cameras on your home very different business uh they were one of the original pioneers of the ucas industry so unified communications as a service all that means is they were one of the early movers in shifting away from sort of physical on-premise work phones to modern day uh communications modern day workforce communication so i'll go into that a little more back in the day

the the older folks listening to this podcast are maybe laughing that i have to say back in the day for this but every desk had a desk phone with a copper phone line attached to it that would run through the walls and it would connect to basically a server cabinet in an it closet somewhere in the building so if an employee left their desk they basically couldn't work there or they couldn't answer the phone obviously today that's no longer how it works ring central converted these voice calls into digital data packets that could be sent over the internet to any device so if you're a customer service rep you could pick up your call on your laptop which would be the same place that you're logging into to provide any call notes, like when you call in to AT&T customer support

line, I don't know if they use RingCentral, they probably have their own solution here. They are not picking up a desk phone anymore. They have a headset that's connected to their computer, and it's all logged in there automatically in real time, the transcripts all in there too. For the last 15 years, this was a great business. From 2010 to 2024, revenue went from 50 million to 2.4 billion for ring central so more than i think it was almost a 30 percent revenue kegger for 14 years however the market has become a lot more competitive microsoft now has team's phone zoom and cisco have both pushed heavily into this industry and ai tools have also reduced some of the sort of contract value for ring central so

if there's less human capital need maybe there's less seats uh contract values potentially shrinking from existing customers towards the end of 2025 i think it kind of hit peak pessimism pessimism for ring central uh they the narrative was that ai was going to replace this full stop like every company was going to have their own customer support ai customer support that they could program on their own ring central wasn't going to be part of it that has not been the case uh maybe it has been at the you know on the margins but customers have stuck around for the most part and management has seemingly sort of found i don't want to say found religion but they've really reigned in expenses they cut stock-based compensation basically in half

they reduced the workforce they clamped down hard on marketing spending and they started buying back a lot of stock this year they will likely generate around 500 million dollars in gap operating income or 400 million dollars uh the stock has already bounced back pretty hard but at its lowest sort of peak or sort of the start of this year ring central was trading at an enterprise value of 3.4 billion and doing almost 600 million dollars in cash flow so it was trading at basically five times free cash flow this was pretty much a like this just the reason this talks up so much there when we were going through the screener list there's either ai oil and gas biotech or company had such horrendous expectations that it went from five times to ten times there was just a

pure valuation re-rating and this is one of those expectations were so bad for this business management has really increased margins fast i think today if i'm not mistaken it's trading at around seven billion dollar enterprise value so sort of high teens high teens earnings multiple assuming this year comes in around 400 million i don't think this business will grow very quickly but i could be wrong what are your thoughts any interest if i had ideas for ways to be anti like the ai trade or are betting on supposed ai losers for a comeback i don't know if i like this because i feel like long term they are an ai loser

yeah maybe they were i worry about that they were growing at pretty much 30 a year for like a decade and now next three four years analysts expect five percent revenue growth maybe it's so competitive there will be a lot more i think ai competition born out of ai even if it's not like straight up organic like companies replacing it doing it all in-house i can't imagine a world where this thing's growing more than double digits. And for me, you're paying potentially high team's earnings. I would want a little more growth. Yeah. Maybe at the start of this year, although hindsight, obviously, with all of these is 2020. If you look at the revenue,

average revenue growth, yeah, 10-year average revenue growth, 21%, three-year, only 5.5%. I think this is a lesson in what a lot of investors, I think, in the quality community, which I know a lot of listeners of the show are, misunderstand about deep value is that when you buy a bunch of stocks, 20 or something stocks that are similar to a RingCentral, where it's trading at five times free cash flow, and a lot of investors believe it's going to go out of business soon, and then that doesn't happen, you only need a couple of winners here to get solid returns. Because when the sentiment can flip and it turns out the business isn't dying, you get that multiple re-rating and the stock can go up more than 100%.

Even if you have a good amount of losers in your portfolio, as long as you don't ride those down to zero, that's how that works. I think what happens there is a lot of quote unquote mistakes get, say if someone's public about these types of things with deep value, you have a lot of public looking mistakes where you go oh that didn't work that didn't work that didn't work and people go yeah he's a bad they're a bad investor but the numbers were you just have a couple of you know high slug percentage hits that work out there um all right it's it's difficult with some of these to where you think it could be potentially an ai loser that kind of thing to time the bottom it really helps set a floor when management is committed to the buyback the and

And RingCentral, I think, created sort of a buoy for the stock because they freed up a lot of capital. They went from $200 million in cash flow to $600 million, and they were pouring all that money into buybacks. I think they even levered up to buyback stock. That helps set a floor. Yeah, the sweet spot for me, at least for putting something on the watch list, is buying back and adding in single-digit earnings multiple. Because if you're in that high teens, the buyback's not going to work too well if it's a deep value situation. Okay, my third stock is one that people will know. And I wanted to cover at least one of these on the show.

We could have done all AI or semiconductor. It is Intel Corporation. It is the only AI stock I think I have on this list. although as we've talked about here, some of the stocks we've covered are considered second or third order effect AI winners. Shares are up 126% this year, even if they have given back a lot of gains. It was up at one point over 200%. It is the last standing semiconductor manufacturer that is close to cutting edge for CPUs and GPUs in the United States. This is meant as a strategic priority to reinvigorate it by the United States government and the ecosystem of companies that

relying on its services, which is basically every mega cap company trading that isn't a semiconductor company itself. So there's a lot of support, both from a narrative basis and actually getting funding. I think NVIDIA even invested in them. I can't remember exactly. Until a year ago, though, Intel stock was not considered a part of the AI boom and probably was considered an AI a loser because of the shift in demand from Intel to NVIDIA. By this time last year, Intel shares had gone well below where they were during the pandemic and hadn't really gone up at all, like from the bottom of the bear market at the beginning of 2023. They're not recovered whatsoever. But over the last year or so, there have been many changes, both fundamentally and

from a narrative perspective that has caused, I think, the market, say Mr. Market, many investors to consider Intel an AI winner and more stable as a favorite company by the United States government and its allies. Because one, the United States government negotiated a stake in the business. I wish they would have actually given them money instead of just negotiating kind of a, I think it's a 9.9% stake for nothing, which has been unfortunate. But you go glass half full, it's good to have them on your side, especially if this is considered to strategic industry, similar to kind of like the defense industry.

There's also NVIDIA taking a stake at Intel. There's also the fact that CPUs are getting more usage because of inference for AI, which led to a theory of accelerating revenue growth for companies like Intel. And it has a narrative around powering the Terafab with Tesla and SpaceX. You remember this, Ryan?

Yes. Is this still happening? Yeah, they apparently asked you on next conference call for either of those companies, which are definitely not going to merge. Wink, wink. But for Intel, if they actually are the ones building this factory, there could be something promising here, but you never know with the smoke and mirror games that Elon tries to play sometimes. Intel itself has raised $20 billion in equity earlier this year. It had about $30 billion in cash on the balance sheet as of last quarter. So this gives it $50 billion to tackle its own foundry plans. Sorry for any people watching. There was

a fly in front of me. It also has first dibs here on the next generation EUV machines from ASML, so that can give it an edge over the next few years. But the interesting thing is the revenue rebound has not been strong so far. I have a chart here from Fiscal AI that it's up a little bit from the lows but we're still significantly below kind of the peak in the middle of the pandemic so we're going to need a lot of actual fundamental performance to happen here over the next few quarters before the stocks start working because we're still at a i mean market cap of almost 500 billion dollars something along those lines i think there's a ton of expectations ryan does this one interest you at all no it doesn't uh short answer but what i have a hard time

distinguishing between is how much of the positive positive things i guess that is that have happened intel are just optics versus will fundamentally impact the business long term fundamentally benefit the business long term u.s on your site that's great uh you're maybe powering terafab you're some partner in that equation that's cool nvidia taking a stake in intel that all of this fantastic optics we still haven't seen it in the top line that kind of shocks me like you have a world where micron you know a lot of the memory chip providers are seeing massive accelerations in revenue and intel isn't really budging so it's i just kind of if not now then when like yes there's maybe some long-term strategic advantages

with having like being early on the asmo order book but i just like prove it to me in your financials is i guess what i'm trying to say yeah or the products getting used there's no noise around the anything getting used it's all nvidia it's all some of these new startups it's all amazon and google's internal stuff where are they innovating it's hard to see them back at the cutting edge and just like 10x genomics i don't know how we as individual investors are going to have an edge ourselves in figuring out uh this before everyone else yeah this is not an industry where the competitive dynamics can turn on a dime like it takes so much capital investment to improve your own products uh i just i don't

know i kind of question i think five ten years from now we're going to look back and be like remember when everyone tried to prop intel up as much as they could and nothing happened that's kind of what it feels like but could be wrong let's move to my third stock for the day maybe one of the funniest names uh manpower group uh thoughts on the name school old school yeah i like it i like it i'm guessing they work in manpower basically maybe they need well they're not in 2026 we needed people power we got to be gender neutral right name change something like that esg investors uh all right continue yeah anyway uh manpower group people power is uh one of the largest workforce solutions and staffing companies so yeah that's kind of the name implied

imagine you're running an e-commerce warehouse and you need to hire a bunch of seasonal worker seasonal workers for the holiday season you would probably outsource to a company like manpower group these workers are manpower functions as the employer of record so uh the way the accounting would work is you as the warehouse operator would tell manpower that you'll pay say 30 an hour per person manpower books that as revenue then pays whatever their rate is to the employee so say they pay the employee 18 an hour manpower spread is 12 an hour so that that shows up as gross profit but it's more essentially the top line anyways this has been an extremely mediocre business for the last 10 years it is a fundamentally low margin

business and it's incredibly competitive so uh revenue's gone nowhere in fact it's actually declined since 2012 part of that is also that manpower specifically has a lot of european exposure and that entire continent in aggregate has seen in aggregate i get i know there's some countries that have seen more development than others the continent has seen lackluster growth relative to other regions so yes very underwhelming the last decade but the stock is up 109 percent year to date from what i can tell this is again almost entirely a function of just bad expectations coming into the year this comp for reference this company was generating 600 million dollars in earnings a few years ago they had an enterprise value of 2.4 billion earlier this year so like

four times earnings like old old earnings so again might not be totally indicative but if you want to call that earnings capacity it was sort of four times management guided for positive organic growth for the first time in a while so that's completely flipped expectations from analyst and it's getting sort of a ai beneficiary narrative to go along with it because some of these data centers and build outs require uh manpower or people power so it's probably still reasonably cheap especially if you think they can sustain this positive uh organic growth but i just simply have no business in this interest or no interest in this business whatsoever what about you brett yeah i don't i don't like it either there there's no room for any sort of competitive

advantage um it's crazy how you have made i'm guessing it was heavily shorted uh you just have a little change in organic revenue expectations and the stock goes up 100 negative like the positive one let's double the stock if you would like to play this game the deep value game is not for the faint of heart no i i don't have any interest in this one why would it be an ai winner staffing for data centers okay like building them or just kind of security I guess

security you know that that might be probably a range of jobs for it security is going to be a growth market I can't feel for data centers yeah they might have to double that stuff yeah honestly might be right let's

yeah I don't want to spend too much time on the ones who are less interested in so let's go to your fourth stock for the day don't you wish you could just hit skip on the worst parts of your life you know the same way you can skip an ad i get it i'm siaya and i live in ice cove i've made some questionable decisions that didn't end up the way i planned and today i'm still figuring it out somehow things usually get worse before they get better apparently that's how i roll so bundle up and come along for the bumpy ride stream a new episode of north of north Tuesdays on CBC Gem.

This one you might know. I think every listener in the United States knows this company. I'm very familiar. Yeah, the Cheesecake Factory. For any non-American listeners, just know that this is one of our great national inventions. We have a factory of cheesecake. This stock was a surprise to see on the list,

so I felt it would be fun to discuss. I guess the Ozempic risk is not impacting them at the moment. It also has a very funny ticker. cake c-a-k-e all-time ticker and for all our international listeners imagine a menu that just never ends you any item in the world it'll be on that menu it's it's a factory of cheesecake also we have a spaghetti factory which is a little similar but not as nationally well known uh the cheesecake factory stock all right all seriousness it's a restaurant with a large menu and a pretty gluttonous menu.

But you can kind of, it's somewhat, I wouldn't call it upscale. It's like kind of above what an Olive Garden is. You could take a family out there. It wouldn't be... Premium?

Yeah, premium. Premium, there you go. The Lululemon of dining. Something like that. Sure, yeah. I'm trying to give context for Europeans that have no idea what this,

can't even fathom what I'm talking about. The stock is up 108% this year. It operates over 300 restaurants in North America, of which 208 are the Cheesecake Factory brand. There are some smaller chains as well that are not really that important here.

But like with Chili's, the rising prices of fast and fast casual concepts has diners going for the sit-down restaurant chains as a more affordable option. If you have a family and it costs the same to go to the Cheesecake Factory, it doesn't go to Chipotle. I don't think that's exactly what we're at here,

but say it's like similar, then you might start transitioning there. And what seems to come down to is the Cheesecake Factory is accelerating comparable store sales growth off of a weak Q4 2025. So Q4 2025, they had same store sales down 2%. And now they're at a multi-year high of 5.8% last quarter. Management chalks it up to menu innovations, which is funny given the size of that menu and greater efficiencies. I struggle to find any reason why it's soaring besides this. Suck has actually been a decent long-term winner.

Now, we say we don't like restaurants that much, but it's posted at an 11% total return compound annual growth rate since 1992. Currently, though, trades at a P.E. ratio of 30 and an E.V. to sales of 1.9. A little expensive for a restaurant. Ryan, any interest here? And were you also shocked, along with me, that the stock has been such a good long-term winner? Yeah, I'm surprised by the long-term returns. the i still stand by the never rest never invest in restaurants this to me it feels like there are a couple of restaurant brands that have had just like an inexplicable rise in comp sales

like chili's there's something some things that you can point to but cheesecake factory it feels like consumers strong people are going out more and everyone's like why are comp sales so strong and cheesecake factories management team has to find a reason like well we uh we redesigned our menu it's like it may very well just be a good quarter like consumers went there more often whatever it is i i don't know how sustainable that is i i mean you can look at the comp sales for the last what is this decade no last 20 quarters

it's around 1% usually all of a sudden they get a 6% bump I can't imagine that that is sustainable I'm definitely not interested in a PE ratio of 30 I'm a supporter

I'm a fan of the gluttony that is Cheesecake Factory but yeah I'm probably passing on this one yeah i'm passing as well i we're nurturing the new rule of never invest in restaurants and you just kind of see the the danger looking lurking around the corner what happens next year if comp store sales are weak stock is going to get out of 10 times earnings it's down 60 like it's as easy as that yeah two quarters ago comps were negative two now they're positive six

Q4 is going to be an easy comp though Ryan Q4 is going to be an easy comp just playing that game is no fun and it's not what you want to do as a long term investor we have three more Ryan what is your fourth stock I know we've been dismissive of a couple of these early ones these next two for me are

the ones I'm probably the most excited about saving the best for last okay yep fourth stock for me is lindblad expeditions if that name means anything to you i'd be surprised but um yeah i had no idea what this was going into it so fascinating to research lindblad is a luxury cruise company that specializes in uh basically national geographic style trips and tours so they go to hard to reach places and they have like the antarctica boats yeah and they'll go on like land tours that are very like focused on the terrain and not necessarily research but they'll have like submarines or boats that you can take

around the water to go exploring so basically they own a fleet of smaller vessels that carry between 28 and 150 guests so this is not a carnival cruise competitor they've actually partnered with national geographic to provide these specialized excursions for guests for context a typical cost of going on one of these trips is anywhere from six thousand dollars to more than twenty thousand dollars per guest the business has really taken off following the pandemic and Actually, it was even doing well prior to the pandemic. They are operating at some of their highest occupancy rates ever. Their net yield per available guest night, which is basically gross profit per night, is hitting record highs.

It's more than $1,000 per night. And from the sort of limited research I've done, Lindblad has taken a lot of, I think, impressive operational and strategic steps to improve the business. One, they pivoted away from relying on travel agencies. So they've been prioritizing the direct-to-consumer channel, and it's working. They drastically improved their online booking platform. They've added loyalty programs. They even have this high-net-worth alumni network. I'm not really sure how that works.

And then they've ramped up a lot of their digital marketing. They've also cut their non-revenue days. uh non-revenue days is basically just they they drop off all their uh guests and then they gotta move the boat somewhere and it's uh empty the whole time so they've basically revamped their schedule and their uh different trips that they provide so that they're cutting down on those non-revenue days they've now had two quarters in a row of big beats and races and that's why the stock has jumped a bunch this so far year to date. I think the thing I mean, looking at revenue, it's grown from 192 million to 830 million over the last 10 years. So solid 11% revenue growth

rate. The thing I like is that they cater to a high net worth customer. So if there's a bit of economic slowdown maybe there's a hit to occupancy but it's not going to be as impacted as some of the more budget cruise lines the unfortunate part here i guess is that the stock trades at a two billion dollar enterprise value uh they currently generate just over 50 million in annual operating income analysts expect around almost 100 million in three years so about 20 times three-year out earnings it is expensive but this is a pretty high quality business for a sort of a small cap we could get margin expansion gross margin 46.6 percent eb to sales 2.5 so on that basis maybe there's some earnings potential here yeah i kind of like this business feels less cyclical since

you're catering to the high net worth clients i just wonder if there's an addressable market its ceiling um but i do like how they're getting more efficient at scale i would assume that if you have one boat or five boats operating it's much harder to manage kind of where the fleet is but you have if you have more than that you can kind of make sure everything's running almost all the time that's fascinating yeah yeah it's a business i didn't really know existed like i knew they offered i knew there were cruises that went to remote places but i didn't think it was run by a public company. Hey, that's what the screener's for. That is what the screener is for. All right. My fifth stock is Airtest Systems. The ticker is A-E-H-R. That is how it's spelled. It's

not A-I-R. It's A-E-H-R. Airtest Systems is a provider of products that, as the name might imply, test semiconductor systems. It originally was used for testing carbide chips in electric vehicles, but has made a nice transition to the AI market that investors are now rewarding it for. And that's the main reason the stock is up. Its system, such as the Fox X, or it's called Fox Dash P, the Fox P, it takes wafers, which is kind of the big, you know, semiconductor final product that comes out of a place like Taiwan Semiconductor. And they put them under extreme stress scenarios within this box. I don't know exactly what it is, but they make sure that they're ready to operate commercially. This means high heat, things like that, and that can be vital for the AI market.

There's good ROI here for the chip makers because if they package a defective chip, it can be incredibly costly because you go through the entire supply chain, everything gets screwed up, and now you got to give someone a new one for free. Errors, revenue, and profit figures on a trailing basis do not look strong. I mean, you can look at the numbers here. I think revenue is down pretty significantly over the past few years but the stock has soared because of very strong order books from its new focus on the ai market here's a quote from their latest earnings release quote this 22 million dollar follow-on order represents another significant expansion of wlbi capacity by our lead ai processor customer

and further validates the use of our fox xp platform and high volume production we are encouraged that the customer's current production plans to contemplate capacity beyond this order and that we continue to engage with additional semiconductor companies and hyperscalers following positive wafer lever benchmark results maybe that's nvidia that's the big customer i would guess that is uh it'd be interesting if they could go for those design um the vertical integrated chips that amazon and google make that would that would be fascinating as well i can understand the thesis here you know the complexity of chips grows uh they get extremely expensive to make and operate. You need to make sure that more and more of them work. You want

to get that, not cost control, not factor of safety, basically the margin, not the margin of safety, but you get it. The percentage of the ones that come out of the factory that work, you want them higher and higher and higher. And I think air systems will be useful for that. They have seen a revenue inflection in the last quarter. That revenue began to turn around. It's up to $18.8 million versus $14.1 million in the same period a year ago. And the main reason why the stock is up is the mention last quarter of a $100 million backlog and projected revenue growth this fiscal year, which I think ends next summer. So we're just starting that of 200% after years of declines. The market cap is now at $2.5 billion. And Ryan, unfortunately,

it trades at 50 times sales so it's going to grow 200 but trailing figures 50 times sales any interest yeah well i think the headline multiple is going to be misleading obviously you know you can already forecast what revenue is going to look like next year so forward probably more like 20 times sales 2025 still not cheap on its face but i think the beauty of some of the businesses like this is you've got a product that works and can scale and one or two single contracts can drastically change your business it can drastically change your financial statements um i'm i think this is one of those that if this is your style taking a flyer on a business like this making it maybe like a small position i would be comfortable with that

i wouldn't i wouldn't necessarily sell it just purely based on valuation especially while it's still a two and a half billion dollar market cap and the application here could be could have huge impacts for its customers and the customers are the biggest companies in the world so i yeah i think taking a flyer on it i wouldn't be against that it is it is a small revenue base today that could get significantly higher so that evd sales of 50 doesn't mean it's an obvious short by any means um all right last one ryan i have no idea what it is close this out here oh i've heard of this company this is a motley fool uh i have no idea if it's a recommendation don't quote me on that but i think it's a motley fool favorite yeah it's i mean and it's a good business

um i kind of say that with a little bit of a question mark but it is a good business the this is probably the one i the most interested in from today's list uh digital ocean it's also one of the only companies i somewhat knew about prior to this episode digital ocean is a cloud provider designed specifically for solo devs startups and small and medium-sized businesses so again i'm not i'm not a developer i'm definitely not an expert on the distinctions between cloud providers but from what i've read and from what i've heard from a number of developers is that the they digital ocean counter positions itself well to the big three hyperscalers and so i guess just for basic basics of the business model they provide the core sort of building

blocks for developers databases storage virtual machines which and and they have a very simple interface and importantly very simple pricing structure compared to the big cloud so apparently the hyperscalers are kind of famous for having these opaque billing structures that can often lead to bill shock especially for startups where all of a sudden you know if it's usage based or there's some part of the pricing structure that you weren't aware of, you can all of a sudden just get hit with this massive bill. DigitalOcean has intentionally counter-positioned themselves by offering flat-rate, transparent monthly pricing tiers.

Now, obviously, given who they cater to, DigitalOcean's churn is going to be a little higher than the big hyperscalers, but that doesn't mean the business can't work. In fact, the business has worked for the most part. Revenue growth has been exceptionally strong over the last six years, revenue CAGR of 24%. And we've seen this – DigitalOcean's growth rate has followed sort of the same path that you saw with the big hyperscalers. In 2023, there was a big slowdown in growth because the VC funding environment tightened up and interest rates rose. And it's easy. It's almost easy to forget now. But AWS, Google Cloud, Azure, they were seeing slowing revenue growth consistently heading into 2023. And then AI has been this massive reaccelerator. And it's the same for DigitalOcean. DigitalOcean's revenue growth bottomed in 2023 at 11%. It's since accelerated to 29% year over year.

they were kind of late to the ai party if you will because they didn't have enough gpu infrastructure but they bought a company called paper space to sort of plug their gpu deficit and they've been investing a lot in data centers and it's it's helped create a massive acceleration so been a wild journey for the stock it dropped by i think 80 percent and then this year over the last 12 months the stock has gone from $30 to $107 valuation is pretty steep $13.8

billion enterprise value they generate just over a billion in revenue today we have a pretty good idea of what clouds can earn given the data from AWS and Google Cloud they break out their operating earnings but

keep in mind it's different business and there's probably some overhead costs that don't get included for aws and google cloud but they they operate around 30 or higher operating margins i if you believe digital ocean can get there i do think there's a world where they could be earning almost a billion dollars in operating income in five years so let's say optimistically it's trading at 13 14 times five year out earnings it's expensive but this feels like a high-quality business

well counter-positioned to the big hyperscalers. Yeah, it's just tough betting on a company that's competing with the big three hyperscalers, and there's so much competition in the neocloud space today. I could see it, but at this valuation, not for me. We have 10 here now, Ryan, 10 stocks that we looked at. What ones, maybe one, two, or even three, interest you the most to research

further I will continue to monitor DigitalOcean I think the business is pretty interesting and it's one of the few legitimate ways to get exposure to a public cloud

the I don't know if any of them are actionable today I would be interested how the derivatives like call options or put options are priced on target hospitality just given how levered they are to two very cyclical industries that's that's they do the modular housing for data centers and oil and gas basically i'd be curious but that that's about it yeah i don't know if any really interests me today how about you yeah i guess digital ocean you know kind of lukewarm the

numbers look good but the two that i would definitely want to research further is what is it lind lindblad there's got to be a foreign company uh lindblad yeah lindblad expeditions yeah we need a rename there consult cheesecake factory and 10x genomics on that one uh i like that company it seems you know the numbers look good it's an interesting business model then virtue financial i think it's a good business that's probably my number one uh yeah that's anything else before we end this episode ryan no i i would encourage people to run the screener themselves again fiscal ai uh makes it pretty easy and just pour through this list because there are you're gonna find a lot that have i think probably overextended themselves a little

bit like just two stocks just bounce back kind of a momentum thing but there are probably some hidden gems that are i'm still very optimistic on remitley but i think you're optimistic on remitley and oscar health they're on that list people see the oh it's up 100 they feel like they missed the boat and it's you know if you do some digging i think there's a chance there are some gems in that list yeah it's a good point and in general if you're finding a struggle to find new ideas. Screeners can really help. Again, thank you to our sponsor, Fiscal.ai. Use our link, fiscal.ai slash chitchat. Get 15% off any paid plan. As a disclosure, we are not financial advisors. Anything we say on the show is not formal advice or recommendation. Ryan, I, or any

podcast guests may hold securities discussed in this podcast, may have held them in the past, and may buy, sell, or hold them in the future. Thank you, everyone, for listening. Thank you to our sponsors, and we'll see you next time.