Chit Chat Stocks - Is Big Lots a Deep Value Gem? With David Katunaric (Ticker: BIG)

Episode Date: January 26, 2023

Big Lots is a retail chain that sells a wide variety of discounted home goods. The company was founded in 1967 and is headquartered in Columbus, Ohio. Listen as Brett and Ryan ask questions about the company, its business model, and valuation. Enjoy the show! ***************************** This episode is sponsored by Stratosphere.io, a web-based terminal for financial data, KPIs, and more. Try it out for FREE or use code “CCM” for 15% off any paid plan. Sign up here: https://www.stratosphere.io/ ***************************** Want updates on future shows and projects? Follow us on Twitter: https://twitter.com/chitchatmoney  Subscribe to our Substack to receive free show notes and charts that go along with every episode: https://chitchatmoney.substack.com/ Interested to see more of David's work? Check out their Twitter here: https://twitter.com/david_katunaric Contact us: [e-mail] Timestamps Big Lots | (2:48) Why is the Stock Down 75%? | (17:45) Stock Buyback | (33:55) Disclosure: Chit Chat Money hosts and guests are not financial advisors, and nothing they say on this show is formal advice or a recommendation. Brett Schafer and Ryan Henderson are general partners and portfolio managers at Arch Capital. Arch Capital and its partners may hold securities discussed on this show. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to Chit Chat Money. My name is Ryan Henderson, and I'm joined by my co-host, Brett Schaefer. Today is our Thursday deep dive episode where we interview an analyst to discuss a single stock. And today we have on the show, David Katnarich to talk about Big Lots. David runs a sub stack called the Micro Cap. Cap is spelled with a K in the title, and that's where most of his investments are focused. It's in the small micro cap space and Big Lots was no exception. Big Lots has a roughly $500 million market cap, and I think it could be probably classified as higher risk, higher rewards. Keep that in mind as you're listening. David also mentioned that he was a regular listener to the show over the years, which is always rewarding

to hear. But anyways, before we get to the interview, today's episode is presented by Stratosphere, the best web-based research terminal for company-specific metrics like KPIs and segment revenues. Stratosphere has clean data for KPIs, segment data that is triple checked for accuracy and beautiful data visualizations, helping save you time and frustration of digging through SEC filings. We honestly use Stratosphere every day. It's our investing home screen. It's where we do base. I would say it's where we start our investing day and you can use it too for free. It's 100% free by going to stratosphere.io. That is stratosphere.io and the link is in our show description. If you're more interested in the platform, stick around after the episode for a

three-minute interview we did with Stratosphere founder, Brayden Dennis. But without further ado, here's our interview with David Kattenarich. Welcome to Chit Chat Money. On this show, host Ryan Henderson and Brett Schaefer interview industry experts and riff on the world of investing. As a quick reminder, Chit Chat Money is a CCM Media Group podcast. Ryan and Brett are also general partners at Arch Capital. And Arch Capital may have positions in the securities discussed in this podcast. Anything discussed on Chitchat Money by Ryan or Brett or any other podcast guests is not formal advice or recommendation. Now, please enjoy this episode. Okay. Today we are joined by David Kotnarich. I believe I'm saying that right. And David

David invests primarily in the small and micro cap space. You may know him as micro cap David on Twitter. He also has a sub stack and has been putting out a lot of good content. And one of those we kind of saw on the Twitter timeline or the Twitter sphere, and it was big lots. And so we're going to talk about that. Probably a name that listeners are familiar with just in terms of like brand, especially if you live in the US, but maybe not as an investment. So how did you come across this as an investment yeah hey guys thank you thank you for having me so uh maybe i should i should do a longer story because it wasn't that simple find i actually had the all this bargain outlet which the american audience audience is probably also familiar with i had it

on my watch list since like the second half of 2020 as a compounder wonderful type of business that I would once like to own when if the price is right and the facts don't change. But yeah, and so I was the price dropped from all this. I saw the recent developments. I read the 10K.

The setup seemed interesting because it was the lowest valuation based on price to sales multiple since their IPO. And it was not that easily screenable with like hedge fund analysts screamed the thing. It seemed expensive on PE basis or price to cash flow basis because they had a rough 2022 and 2021.

So I came across all these, read their 10K, and then I decided to get a better overlook of the industry. And one of their main competitors, if not the main competitor, was Big Lots. And as I was reading the 10K of Big Lots, and I also read some Sinking Alpha articles about the positive developments there. I came across the capital allocation strategy and I read that they bought back like 400 million shares. And naturally, I was wondering at what valuations, how much is the market cap?

And it turned out it was equal to today's market cap, which is insane. Also, I took a look at the balance sheet. It said that they have doubled the retained earnings of the current market cap, which means that so far, since the exemption, they managed to generate more profits than the whole market caps. And when you see a setup like that, it seems it's either really cheap or either it is going to zero. And I want to pursue those types of investments because they are usually very interesting. Yeah, that's the story. No, yeah. I'm sure when me and Ryan talk in the intro, we're going to say that this is a deep value investment, but this is a true deep value bargain basement investment. We're going to talk about the details. We're going to talk about what makes it maybe a little bit risky later on. But first, can you explain the Big Lots business model and who is their target customer that they refer to as, which I find kind of funny, Jennifer, on their conference calls and earnings releases?

Jennifer, sure. Big Lots is a discount retailer, mainly home discount retailer. They operate around 1,400 stores around the US. The average store is around 35,000 square feet. They do their merchandise in like seven different categories. The largest being the furniture, 27% of their merchandise or products. They also have the hard home category, which is like tabletops, toys, home maintenance products. they also have a soft home which is home decor bedding frames food they also have a seasonal

category which makes up of which makes up 15 percent of their merchandise or products in the store and it's mostly like holiday stuff and also they do have a consumables part of their store like beauty and cosmetics products paper chemicals and the last category is apparel electronics and another which is uh maybe self self-explanatory so as you can see uh furniture and home related stuff uh makes make up like 60 or 70 percent of their um total sales and also besides their brick and mortars uh they do they have an e-commerce platform that they started in 2016 and maybe how you should think about the unique economics or the like how does transaction look like so they source their merchandise their products in two different

ways the first one is like the simple one as other retailers do they they buy traditionally from the manufacturers or vendors that are usually either located in the US or located overseas. But the products that are located in the US are often manufactured from the materials overseas. So you could say that they buy stuff cheap from the overseas vendors.

And the other part of their sourcing, which is much more interesting, is referred to closeouts. Those closeouts they include product overruns, packaging changes

or something like that, the discounted products, liquidations. So maybe the best analogy to explain the closeout purchases from Big Lots is let's say you're having a Christmas dinner and your mother

needs to cook like a dinner for 10 people and there's no way she will predict exactly how much food she needs to make for the whole family and then at the end there's like some leftovers and that's where big locks steps in and buys those leftovers on the pennies on the dollars okay maybe not the pennies but really cheap and then they say they sell it at a premium and uh that closeouts are usually what which makes uh like their treasure hunt or bargain hunt products for their customers and like traditional sourcing uh is uh made out of their like private label brands that they acquired uh maybe the audience is familiar with uh broil hill which uh that does furniture uh yeah furniture sales and uh real living uh they sell patio or i don't know how

to pronounce it because i'm not native but that's what they do and when they buy those products they they go to their distribution centers and their forward distribution centers and from which are then they are shipped to the stores and put on the shelves and that's basically the overview of the business and jennifer uh that is the name of their core customer it was a brainchild from their ex-ceo actually uh which is also called david david campisi and they describe her as someone who is constantly looking for value uh she doesn't have much time to shop and often it's uh help uh during her trips to big big locks that's why they introduced the sales representative concept of for selling their furniture and the important

thing about jennifer maybe in the recent years is they see her as a like community customer and they they have a big focus on community on rural rural areas being the favorite location for people that go to discount stores in their small hometowns and yeah but if you listen to their conference posts it's really funny when they

refer to customer as she and yeah yeah that's kind of hilarious that they have like a tag name for their customer base so let's talk about sort of the revamp I guess you could call it that they

embarked on i think it was 2018 2019 time frame which was operation north star could you explain what that is and how it's played out so far yeah it's a bit cringy name but uh let's do it they are right they started it in 2019 um their new ceo bruce thorne he joined the company in 2019 and he started a strategic overhaul of the company and now i will go uh through some details which are presented in their 10K. They say that Operation Northstar has three primary objectives. The first one being drive profitable long-term growth. How will they achieve that growth?

By growing their store count, they found they can increase it by at least 15 net new stores in 2022. And after 2022, they could accelerate it by 80 or more per year, which is great. Also, they've been reducing their store counts for underperforming stores, or they were putting in an intervention program that boosted their same-store sales. Also, the focus is on, as I mentioned, sales productivity. they focused on growing their Broyhill brand

they want to grow it to 1 billion in sales it is in 700 million maybe a bit more also they are reliving products and also they included

two other stuff in their store layout which is the lot section which is focused on unique limited time exclusives which are primarily bargain hunt products and the queue line they put it in front of their stores for people to do like more more impulsive purchases under five dollars which then encourage the that bargain hunt experience also they are on their way to accelerate their e-commerce sale now now they're make they make up i believe 15 of of whole sales

i'm not sure actually okay let's now do the the second objective which is fund the journey how will they do it they will do it with their own money which is attractive by itself by expander their gross margin rate and increasing store efficiency. And also, the third and maybe the most important one for the shareholders is their objective is to create long-term shareholder value. I have a quote from D10K, which is maybe good to read. We continue

to optimize our capital allocation to support operation north our initiatives while returning capital to our shareholders through share repurchases and dividends when appropriate. So they give the excess liquidity back to you, which is attractive by itself. Also now, how did it go? It went below their predictions, below expectations, but also attractive for the shareholders. They did over-promise and under-deliver, but the progress was still attractive. I will give you first the good. The Mill Road Capital, which is a 5% owner, did a good overview, so I will just read you or tell you his stuff. They improved the company's merchandise assortment and sales

productivity. They also expanded the brands, which I mentioned. They achieved e-commerce sales penetration. They grew, which is important to mention, the Big Lots loyalty rewards program to 22 million members and those members make up like uh 60 to 70 percent of sales each year and those are the members that usually do like recurring purchases so you can be more confident that they just don't want will not uh like leave the company uh the next year and also uh one more More important thing, capital allocation-wise, they initially owned the distribution centers. And now they did a sale and leaseback activity, which is more simply explained. You sell your distribution center to somebody who is lesser, and then they lease it to you.

You pay a lease or a rent, but you don't own the distribution center anymore. And they did one transaction in 2020, which was $725 million. And what went wrong? Well, it was worse than expected store growth. They didn't manage to pull off the 50 locations open during the year, not even close. and they became too heavily reliant on their furniture type of items. Usually in history, Big Lots was much more like a bargain type of store. Now it's more like discretionary.

Also, their gross margin didn't improve so far. We'll see how it goes beyond this point. And it actually got worse. and also they timed the buybacks wrongly. Yeah, so that was the good and the bad about the Operation North Star. Yeah. All right.

Yeah, that's some good context. And we're going to get into, say, what you think about the business today. But one more question about, you know, when someone looks at the stock, they're going to see it's really declined by about 75% since it's 2021 high. what were the missteps here is it just kind of a gross margin deterioration has there been

a worry about say among the investment community of a huge cyclical cyclical downturn within the the furniture space what do you think has caused that and what was it management's fault or is it kind of just you know they got to ride some of the industry you know cyclicality sometimes as you know nobody likes cyclicals now and i would say that it was a management's fault maybe i should give you an overview of last three years 2020 happened a pandemic hit and everybody got their stimulus checks in the pocket and everybody wanted to improve their home so naturally the the first choice for people that look for cheap stuff is that they go to to big So they had a great 2020 and even 2019 before that.

And so the management assumed that there's going to be an even better 2021. So they prepared their shelf full of inventory. They bought like 20% more inventory than they did prior years. and then that is when the disaster hit, they weren't able to sell those inventories and they had a high level

so the holiday season was bad the spring after that was bad they had to do a lot of promotional activities also if you were following closely the supply chain disruptions and everything

the price of containers was was like um in 2020 and early 21 uh maybe 20x than it was before the pandemic so the freight costs were insane and also they did a strategic mis misstep in early 2022 that they locked in agreements with suppliers and the price didn't go up so those agreements were like um bad because they locked in a higher price and they didn't manage to pull off their 15 net new stores growth and they plowed money into capex by opening two additional forward distribution centers and the worst thing maybe is their balance sheet which was i have data here at the

end of Q2 of 2021, they had 293 million in cash and no debt. And now after Q3 of 2022, they have 60 million in cash and 450 million in long-term debt. So

they switched completely and it was a disaster, basically. Yeah, that is quite the inversion. So I guess then that kind of, it makes it sound sort of pessimistic or as if that might continue. Let's get kind of to your thesis, which is they get back to profitability, I'm assuming. Why do you think that's possible?

What would cause them to not generate any profits from here? Let's take one question at a time. Why do you believe that it was structural? I saw the industry peers, and as you can tell, if you are watching closely, everybody had the decline in the gross margin rate. Maybe not everyone, but especially their peers, all these bargain outlets, for example, they had a significant decline in gross margin. uh that's something that you really usually don't want to see because it usually indicates the lack of pricing power but like if you look at it from other point of view you can see that the company was in business i mean it was a public company since 1985 that's like 37 or 38 38 years of business and so far it has shown extremely stable gross margin rate i mean it never fluctuated under 39 or above 40.5 which indicates by itself that it is uh like um not impacted by uh competition

that it has some pricing power or or at least it is a low-cost producer and um out of those 37 or 35 years. They've been profitable every year except for three. Even in 2008 or 2009, they had positive cash flow from operations as

people were traded down from higher ticket purchases to more discounted stuff in big lots. What I assumed in the write-up, I said if they get back to 4.5%

free cash flow margin, then it is a great investment. Maybe the thing is the current valuation of Big Lots is below 0.1

price to sales. If you assume they're 4.5% free cash flow margin, that gets you to less than 2x normalized free cash flow. That by itself is really cheap. So So you do have bad management, which is kind of ruining the business in the recent years.

But if you assume that they are going to only generate 2.5% or like half the 4.5% free cash flow margin, that still gets you to like four times free cash flow. so um and i think this management is incentivized to do that as they have like operating profit targets eps profit targets um operating operating margin and sales so i think it's a short-term problem and only cyclical and so far they communicated it well And I do believe that it will get back on track. Yeah. If I'm looking at the stratosphere chart,

operating margins since the great financial crisis has been around 4%. So that's not say asking for them to get better. It's just asking them to get back to where they were. But then COVID threw a wrench into things. So I'm looking at the number of their operating margins shot up to what, like 14%. And then now we've kind of hit the brunt of that back to negative ones. But we'll talk about the valuation a bit later and their capital allocation.

I think the one thing... Oh, go ahead. I should tell you one more thing. The valuation is so low that after the bankruptcy of BetBet and Beyond that happened like two weeks ago, I watched the valuation of BetBet and Beyond, and it was like, at the time, higher than BigLot's valuation, which is pretty much insane. yeah and there are uh we'll talk about the buyback as well which has either been impressive or maybe aggressive we can hear your thoughts on that but the one thing i think people are

concerned about and they're always concerned about with a retailer is e-commerce competition you wrote in your write-up that so far they've been insulated from e-commerce competition and that that should continue what gives a discount retailer like this uh that installation okay um First, I will again mention the history. If you see a gross margin trend, that's all you need to look at. If it's extremely stable, it means it doesn't face competition issues. But also e-commerce and Amazon primarily in the US, it's there for 25 years. And so far, it only put out of business the traditional retailers, the mom and pop shops.

And there's not like a specific case where Amazon, at least that I'm not familiar with, that Amazon put a discount retailer out of business. Not Ollie's, not Big Lloyd's, nothing. And also why I think that is the case is that people usually either trade their time or their money for the goods that they are buying. When they buy on Amazon, they usually trade their money to get the convenience for the goods

to be delivered at their doorstep. But the customers, the Jennifer's that shop in big lots, they trade their time they make a half an hour drive to big lots and they see what's discounted how can take advantage of the opportunity or the the discounts and and if you look at the one guy i don't know what's his name made a great write-up on on the value investors club and he compared the prices in walmart and amazon compared to big lots and big lots has like 15% or 20%

advantage and also one thing about Amazon compared to Big Lots is Big Lots only generates 6 billion in sales which is 300 million in free cash flow

if you assume the 5% margin and 300 million in profits is nothing to Amazon and also Olis which is main competitor of Big Lots, doesn't even have an e-commerce platform, which by itself means that the discount retail environment

is not made for e-commerce, but it's made for actually brick and mortars. You can also see it at the five below that they do operate an e-commerce platform, but they get more profitability from their stores. And so it's just a different value proposition that Big Lots is offering and also now if e-commerce does

eat an app or anything, Big Lots does have an e-commerce platform which is I think the biggest brand out there. I'm not familiar with any other brand that does discounting stuff so that's why I think the

competition from e-commerce is over accentuated. Also, I imagine it's also a difficult thing to ship profitably. I believe you mentioned the majority of big lot sales are furniture. I saw a stat it was like 25% last quarter was from furniture. So I imagine that's tough to ship profitably and a lot of people probably want to see it in person. um but yeah i guess moving on the the other it sounds i guess you could say risky and i think you you you laid that out as to why um and you have a quote that said i'm confident that the stock will either crash to zero or be a five to ten dagger in a few years can you talk about why you think that is yeah sure but first uh i want to mention one more thing about the

The question that, you know, like I got a light bulb in my head. I don't know the expression, but the furniture thing, I agree with you. They do have like they're the only one of the retailers that have you can directly buy the furniture at the store. You don't have to wait for it to be shipped to your door. You can just buy it and pick it up, which is like a great thing for people that shop there. And concerning the valuation, yeah, it's a bold statement, but there are a few reasons why I think that. First, maybe we should take a look at the industry peers and the industry valuations. I will do it on the price-to-sales basis because I cannot normalize the earnings of each company,

so it's maybe best to compare it on a price-to-sale basis. and so we have a big lots first which is under 0.5 0.1 price to sales then we have dollar three which is 1.2 dollar general 1.4 five below 3.3.5 price to sales and all is 1.6 so except five below the other uh other retailers that are competing with big lots they have like 15x premium to Big Lots valuation and what I think is that Big Lots is not 15 times worse business than those other retailers are and also if at

0.1 times sales if your business goes in the perception from investors to if they say now they're probably saying it will go out of business the next year and maybe in three months they assume that it will only go under in five years you make a lot of money because the multiple must

re-rate and also why I think there is such a wide distribution of outcomes is I said either 5 to 10 beggar or 0 I explained the 5 to 10

but I didn't explain the 0 The zero is because they don't have an attractive balance sheet anymore. They destroyed it with their buybacks. And if a prolonged recession is to happen, I don't know if they would have survived. Because now their product mix is much more reliant on the furniture and discretionary type of purchases. and uh in 08 09 when they were profitable it was more like bargain type of um stuff so uh that's why zero is a possibility okay maybe not zero because um they have um inventory um i mean their

book value is at one times book so if you like don't look at it deeply you would assume that the downside is protected because of the book value if they could sell all the all their assets for the book it will be the whole market gap and you have the downside protected but the thing is they do have a lot of inventory on the balance sheet and if you mark it down by 50 let's assume that that would get you to only half the book so essentially your downside at the current moment is 50 in the worst case if they don't manage to if they manage to sell inventory for 50 discount and your upside is a multiple re-rate which is no one can say how much but i say five to ten better All right. Our next question here is about valuation, but you really covered a lot of

that. And I want to hit the buyback because one, it was a big negative, but if they continue at these current prices and they do it rationally, it could really, really help investors over the long haul. And if I'm looking at Stratosphere here, going back to say 2004, they had 117 million shares outstanding or maybe even 118 million and today we're below 30 million so i think that's about a 75 discount what are your thoughts on the buyback because you don't want this to be a bed bath and beyond but if they stay if things recover as they look like they might they could be highly accreted for shareholders yeah that's true um actually i have a few thoughts on their buybacks The first one, which a lot of investors that read my write-up don't agree on,

is the problem wasn't about the timing of their buybacks. They say, oh, they bought back at three times the current price. But that wasn't a problem because still at the three times the current price, their price to sales multiple was 0.3. So it wasn't value destructive. It was like value enhancing. But the problem with the buybacks was the sizing. They did so much buybacks, and so they left their balance sheet without cash.

And that was the main problem. And historically, maybe what to say about the buybacks is that they bought back 8% to 9% of the CAGR. CAGR was 8% to 9% annually. so what you do have here is like um shareholder friendly management that is willing to do it in terms of buyback and also in terms of dividend they've been paying it since 2015 now they they cut the dividend and the buybacks i agree with the decision because the i don't want the business to go under because of the dividend or the buybacks but um yeah that are my thoughts i don't know if i didn't dance for something that you know yeah that makes sense it sounds like

theoretically if the results didn't kind of deteriorate the way they did over the last two years that that buyback would have been great but kind of unfortunate timing considering that they added the debt and now they don't have the cash to do it at assuming that the if the company got back to profitability now would be the best time to do it obviously but that's what the sorry for interrupting ryan but let me tell you something we have a we have a saying in croatia it goes something like uh it's easy to be a general after battle i don't know if you have it in the us but it means like um if uh they um if their prediction turned out to be good everybody would praise them for their buybacks they did the most um the best thing ever they

bought back half their market cap or everything but it turns out that environment got to

them and they weren't able to do it but yeah all right I guess last question

you've kind of alluded to it throughout the show what would you mentioned the downside

what would cause that to happen how could an investment in the glass go poorly

well I have a few things about the downside that I don't like, but that's why you have to size it correctly. The first thing is when you listen to the conference calls

from the management, they do tend to overpromise and underdeliver. I usually stay away from those kinds of businesses. Also, what could happen is that these problems turn out to be structural. They don't turn out to be short-term, which

Also, there is a possibility of a dispute with China and they, as I said, source most of their products from China. So that would have a great impact on their profitability. Also mentioned, they mix their product shift to discretionary products, which we still have to see how they do in in recession because customers usually first trade down in their show shops that they buy stuff from they trade down to the lower ticket purchases and then they go to like shops like big lots and we'll see if that happens and also i have a concern if the management

is bumping their head into the wall and trying to reinvent the dying business instead of giving cash back to the shareholders and maybe the most important thing about

the downside is their leverage they do have 300 million in leases every year which is like a fixed cost they do I believe most of their leases are like one year contracts so they can have the option

not to renew them but still 300 million is a lot which is like operational leverage and it can have a bad effect in bad times and also they do still

have a big inventory build up and now the management says that those inventories are more like bargain type of stuff but still one cannot know how much will there be a promotional activity to be done with those inventories. And yeah, that's basically the downside covered.

Makes sense. Sounds like it may be a good time to be a shopper at Big Lots as well if we see any sort of liquidations on some of the inventory they have. Yeah, yeah, yeah. All right. I think that's all the questions we have. Brett, do you have any more? I'm getting the shake of the head. So that is going to do it. David, this was fun. Thank you for joining us. I'm sure we'll have to have you on again sometime. But let's close this out with a disclosure. Brett and I are not financial advisors. Anything we say or discuss here on Chitchat Money is not formal advice or recommendation. We are, however, general partners at Arch Capital, so clients may have positions in the securities discussed in this podcast. Thank you all for listening. Thank you, David, again, for coming on the show. We'll see you all next time. Okay, I'm welcomed by the founder of our exclusive sponsor, Stratosphere.io, Braden Dennis. Braden, welcome. I wanted to basically give listeners that are interested in Stratosphere more context around

what the platform is. So let's start there. What is Stratosphere? And then why did you decide to start it? Yeah. Thanks for having me. I appreciate it. And I'm glad to be sponsoring the podcast as a listener myself. I like the deep dives. I like the different guests, the different perspectives on some interesting companies. So I think it's a good concept for a podcast, which is kind of what led me down to making Stratosphere in the first place, which was I was making content online and frustrated with the tools that were available to me. So I started building a very scrappy version of the product just for free, just to figure out how can I overlay 10 years of financial side-by-side up to 35 years we have now,

and how can i actually build out a proper database of of company kpis that are not just revenue but like if you're looking at like costco like how many warehouses do they have how many paid members are are in like our costco members or you know if i want to do a comp against like the streaming like how many netflix subs versus uh hbo plus discovery plus no disney plus like how do i build out proper comps of those because those are the metrics that actually move the business those are the ones that actually move the needle more than any like gap financial metric you'll find and so it started off as just purely a passion project and i figured let's just make the leap into entrepreneurship and uh see where it goes and you know it brought brought us here today

yeah and like you mentioned it is the stuff that you can't find anywhere else at least not now i I mean, you could find it page by page on their financials. Exactly. You can go through 35 PDF filings and find it. Be my guest. And that's basically what we did for a long time. So what do, I guess, maybe describe the pricing model so people know, but you're going to say there's a free platform. What do free users get? Yeah, good thing.

Because our mission was to always build a free platform. And so we really kept true to our mission and give like an amazing platform for free, which gives you 10 years of financial statements on 40,000 global security. So we don't list you just to US securities. It's on global stocks. We give you a watch list, the screener, comparisons on competitors, fundamental charting up to 10 years, filings, transcripts. you can look at the press releases right inside the app, news, ETFs, funds, super investors, hedge fund letters, investor holdings, and financial calendars. Those are all the features you'll get on the free tier. Now, on the middle tier, the personal tier, you're going to unlock

up to 35 years of financials and just kind of like nice to have, like quality of life, like notifications being built in, price targets for building models, like business owner mode, where you can hide prices, like kind of like just that next level for individual investors who want to level up. And then the top tier is for like investment teams and professionals who want to unlock that KPI data and request KPI coverage as well. Like a firm will be like, here, we want these 10 names in our coverage and in your coverage. And then you'll have basically our entire universe that we're looking at, which is great, right? Because like earning season comes around and we have it updated within 15 minutes when Netflix comes out with their net subscriber

ads, like it's right there in one place, especially easy to handle around the peak of earning season that matters a lot for these people. And so we have a premium tier for that as well. That's the three plans that are available today. And now a perfect time to shameless plug our code. If you use CCM, you get 15% off any of the paid plans, but I think that covers it pretty well. If you're interested, please go ahead and check out stratosphere.io. We'll have a link in the description as well, but thank you, Brayden, for joining us. Ryan, keep it up. I really like what you and Brett are doing and I'll be listening along.