Chit Chat Stocks - Portfolio Rankings: What Stocks Are We Buying and Selling?

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Starting point is 00:01:32 episode. Welcome into Chitchat Stocks. My name is Brett Schaefer, and I'm joined as always by my co-host Ryan Henderson. Today we have, as the title says, portfolio rankings. What stocks are we buying and selling? We're trying to mix things up in 2024, add some new types of episodes to the mix. So we're also doing our stock research episodes on Wednesdays. We're interviewing people, talking about investment legends and trying to learn essentially from all the different resources we have out there. But one thing we also want to do is talk about our own portfolios. so we've decided to rank our holdings. We'll talk about the details of that

Starting point is 00:02:16 and anything that matters on how we did that and how we're going to try to basically look at stuff on our watch list, look at holdings we have, look at what we like the most out of stuff we actually own, and then also look at stuff that is not our favorite. Spoiler alert, Match Group is quite low for me, for people that have been following how we've been discussing that company

Starting point is 00:02:36 and its struggles in 2024. Ryan, what? uh i guess what are your initial thoughts on this and are you excited to get into some i don't know if we're ever going to maybe we'll agree on everything here but some debates and try to critique our own portfolios some healthy debate potentially the so full disclosure brett and i used to run an investment partnership we ran it for three years and we would do this every other week we would just kind of give without kind of looking at uh without like just kind of a forced rankings raw feel and it wasn't you know we weren't necessarily trading on it or anything like that but

Starting point is 00:03:18 it would just kind of force us to to give a gut check of where each stock was in our portfolio and just have a sense of has it moved up hasn't moved down what's give what's caused it to kind of move down our rankings? Is it something with management? Is it something, is the valuation getting stretched? Whatever it is, we used to force rank our portfolio and the holdings in our portfolio. So we're kind of doing that today. We went through the same practice. However, now Brett and I have different portfolios. So we're going to go through some of our shared holdings and then we're also going to discuss, we'll alternate on ones maybe Brett's interested in that i don't care for or ones that i'm interested in that brett doesn't care for or for whatever

Starting point is 00:04:02 reason ones that we have that the other does not but how should we kick things off do we want to just show the pie chart of our holdings right off the bat sure those are a little small for the tickers there i will say there are some beautiful charts that will be if anyone's wanting to look at some of the visuals here we will be sending out a free newsletter the day that this releases so subscribe to that in the show notes. But yeah, I guess we can look at this. And as we're going through it, we can see that we're on fairly concentrated. We're still building on our portfolios over time. Maybe describe yours, Ryan. First, we got a large position in HRBR, Coupang, Philip Morris International, and Nelnet, and then smaller positions in Ally Financial.

Starting point is 00:04:43 Two home builders in D.R. Horton and DreamFinders Homes. Small position in Wise that I believe you just started small position in o'reilly and a small position in autodesk that i think has been around for a long time we're going to talk about that one as well because that's one on my watch list i believe or maybe it just didn't make the ranking to talk about today but it is one that i've been on my watch list for a while we want to look at mine uh have some overlap nelnet coupong iac match group gogo and hrbr i guess the overlaps would be hrbr harbor diversified and Nelnet and Coupang. So three ones that I don't own that I, excuse me, that I own that Ryan doesn't own with a match group, GoGo and IAC. And then I'll just, just a little context

Starting point is 00:05:27 on how we do these rankings. We essentially have a ranking of one through 25. So there's 25 slots, but not every stop makes it in there. So you could start your ranking at number five and put five as your high ranking. And number one is basically like, I want to make this my highest level cost basis allocation 20 to 25 is kind of like all right i'm thinking i should sell on 25 is like yeah it's pretty obvious i should sell this thing so that's how we do it and ryan any other context for just how we think about that because i like to if you have a 1 through 12 ranking the difference between 2 and 3 might be way bigger than 10 and 11 so it allows you a little bit of separation to think okay there's different groupings here

Starting point is 00:06:07 there's stuff that i really like stuff that's way worse than that and it gives you a lot more flexibility to i guess go through your thoughts yeah so just to kind of describe that a little further because it might confuse some listeners basically brett and i rarely hold more than 15 stocks usually it's less than 10 maybe as we grow older build out more positions over time that might change but that's why we have the 25 slots where it's 1 through 25 let's say my top holding is philip morris that might only rank number three like it only might fit into the third slot out of that 25 but still be my number one holding so uh that's just to say number one in the number one slot in there is you're screaming to buy it today number 25 is

Starting point is 00:06:57 this might be ready to sell and you can kind of scatter them in there sometimes things are probably pretty close together whereas sometimes maybe one stands out above the rest of the pack but i think we should go through some of our shared holdings here i want to start with basically the way i did this was those that ranked the highest for both of us that's the ones we should start with and so the two that were the highest ranking for both of us were Nelnet. And that was your number one ranking. And then now that was my number four ranking, I believe. So you have a, oh yeah, four, but eight on your one through 25. So yeah. Yeah. It's the fourth ranked portfolio or company in my portfolio. So why don't we start there?

Starting point is 00:07:46 Describe what Nelnet is briefly. We don't want to take too long on any one stock here, and then I can kind of provide some feedback. Yeah. So the downside of doing an episode like this is we have to go a little bit quicker. So if you want more details on what a company does, a lot of these companies we've covered on the podcast in full hour-long episodes. You want more details on that, go click on those on wherever you get your podcasts. You can search through and get that. So let me just go through it here. Nelnet is a diversified holding company. They own financial services. They're in student loans. They also do software payments for the education space. They're big into that and they've become a diversified conglomerate and they have

Starting point is 00:08:23 a pretty darn good track record, growing their book value per share. It's about 15% plus over the last two decades. And at $106 a share, which is where we're at about as we're recording this, I think now that is still a tremendous value. It makes up about a third of my portfolio. And if I was starting from scratch, I would definitely have this as my first stock to buy. There wouldn't be really any question. I think management keeps proving they can be trusted. Even though they made some mistakes in 2023, no management team is going to be perfect. And they admitted they made these mistakes and that they're fixing them. And it wasn't a big deal to the overall value equation for this company. I think they understand the concept of returning capital

Starting point is 00:09:01 to shareholders intelligently. Shares out extending have declined by about 2.5% each year since 2014. They buy back when the stock is cheap and they don't when it's more expensive. I mean, you can't like, that seems like a low bar, but not very management team, not very many management teams pass it uh dividend per share has grown at 11 since 2014 i see no reason why these two can't continue we have education software and payments uh it continues to grow and i guess maybe i can share a screen here of our chart from old fin chat with some of the kpis here which funny enough since ryan works at nelnet and it's kind of an under under discovered company he put in a request to get the kpis in there because it's so important

Starting point is 00:09:46 to both of us. So thank you. You said I work at Nelnet? I work at FinChat. Oh, sorry. You work at FinChat and they put in the KPIs for Nelnet. Correct. And everyone knew. That's a nice catered service their sponsor can do for people. So if you look at it, we see, and some of this was acquired. They do a little acquisitions here. We have total growth, cumulative 500% revenue growth since 2012. In that division, earnings have gone from about $15 million to $100 million. So it's highly profitable now as a market cap of, I still think below $4 billion with $100 million in annual earnings growing at a decent rate with

Starting point is 00:10:26 high cash conversion. I mean, I think that's just a ton of value to this business. And as we keep going, there's just a lot of ways they can reinvest and pour more capital back into things that into things I think can get good ROE or good returns on investment capital. They have the bank that they started. They have the solar tax equity investments. They have the education and payments. And they, look, are going to generate a lot of cash. And they're not afraid to let it stay and pile up on the balance sheet if their stock gets overvalued, if they don't believe that it's a good time to repurchase shares. But if it is a good time to repurchase shares, they're going to be smart about it. So I trust them. I think the

Starting point is 00:11:09 stock is cheap, but I think they have a long runway to reinvest. Really checks out all the three boxes. And for the multiple years I've owned it now, it's only further increased my trust in this management team. And that's why I would buy shares today. It is my largest position. I believe it's about a third of my portfolio. So I'm probably not going to be buying shares anytime soon. But if I buy some more stuff and it becomes a lower position, I wouldn't be afraid to add to Okay. So it's difficult to discuss any company in a few minutes, but it's even more difficult to discuss a conglomerate. So I know there was probably a lot there, but the basics of it, there's a giant loan portfolio. The cash is rolling off of that loan portfolio, and they're distributed into different sets of businesses, which we tend to think are pretty attractive. Now, you ranked this number one.

Starting point is 00:12:04 I ranked this number four. And I've owned Nelnet for quite a long time as well. I think we kind of bought it around the same time initially, probably around 2020. And there is a lot to like. Management seems very trustworthy. They seem like rational capital allocators. My concern, though, is that as this loan portfolio dissolves, I think there's a decent set of businesses, but I worry that what's left, the operating businesses themselves, aren't going to warrant that much higher of a valuation. Now, obviously, a lot can change with the cash flow that comes in from the loan portfolio, but I worry that it might not warrant that much higher of a valuation than what –

Starting point is 00:12:51 Now that currently has. Yeah, I could see that argument. One way I think I'd counter that is they're at 1.1 times price to book and this high cash generating probably $100 million in earnings or higher in cash earnings from the education software business is not really included in that book value, but they are valued. Book value is a decent measure because they're a kind of investment company at its core. I would say, yes, it's going to come off. But again, the book value is already low. And they've shown really strong performance in having a book value per share compound at 16%.

Starting point is 00:13:28 The big question is executing on the switch from the cash cow in the past, which was the highly regulated student loans that they can't do anymore. When they finally switch to all these new ones, is the book value per share growth going to be the same? I think that's the biggest question investors need to ask. But I don't know, at $106, Ryan, do you think it's really getting to a fair value? I think that's, for me, it's more probably 140, 150 bucks, given the, I know people hate this word, the sum of the parts that I think management can take advantage of by keep repurchasing stock. Yeah. See, what I worry about is that a lot of the cash that's rolling off the loan book. It's getting put into investments that don't show up in operating

Starting point is 00:14:17 earnings. If they're reinvesting into Huddle, they're boosting the... I mean, they are creating value, but it's hard to see it. And so, well, I guess I shouldn't say that because we don't know Huddle's financials for sure, but we think it's a pretty good investment that's a private company. It doesn't show up in the operating earnings, but it's just recorded as an asset for them. Same with some of the other venture investments. Same with the real estate stuff. Even some of the solar stuff, it's actually probably hurting operating earnings. So it's... I just worry that the operating earnings aren't going to look that good post-portfolio roll-off, but you might have this shell of various assets that you have to kind of guess at the value of.

Starting point is 00:15:04 Yeah. And I think it's where you trust the management. And as someone who doesn't need this to do well in a three-year time horizon i'm pretty comfortable with that all right we got to keep moving on second one here ryan it looks like you have coupon uh that's both in our rankings let me check your ranking we have that as the third one uh below ally and philip morris six on the one through 25 and then what did i have it as i had it as my second one uh the third on the one through 25 so about the same range here why why don't you go first on this one? It's a little simpler. Now that's a bit complicated one to start off, but maybe we'll get the hardest one out of the way first. What are your thoughts on

Starting point is 00:15:47 Coupang at the moment? Why did you have it as a high ranking in your list? Finchat.io is the complete stock research platform for fundamental investors. They have all the standard financial data on more than 100,000 stocks globally. And beyond that, they have company-specific segment and KPI data on more than 1,500 stocks. So to give some examples here. You want to see Netflix's average revenue per member over the last 10 years? They've got it. Do you like to track YouTube's advertising revenue? They've got that too. If you want to see Celsius's revenue that comes from Costco, how much of their revenue comes from Costco? They also have that. So the breadth of FinChat segment and KPI data truly is one of a kind. I use FinChat every

Starting point is 00:16:30 day to track and manage all my investments. I also use it to discover new investments. And if you want to get 15% off any paid plan, go to finchat.io slash chitchat. That's finchat.io slash chitchat to get 15% off any paid plan. The link will also be in our show notes. Be you, be you. Sound the alarms. We have a new sponsor alert. That's firmreturns.com.

Starting point is 00:16:57 It's a stock research blog. Our friend runs that and it covers companies from all around the globe, but it leans really more towards the UK as that's his home market and it gives him easier access to management and he provides ongoing updates on the companies that he's invested in, as well as an archive of longer form write-ups that you can access all for free. There is a paid tier, but there is tons of free content out there. And these reports are very thorough. To give you an example of just how thorough some of these are, at one point he was digging into a company's account and for one company he wrote up recently, he actually managed to find a material misstatement

Starting point is 00:17:32 that had been missed by the auditors and management reached out and confirmed the error to him. And these are companies of all different sizes from all different sectors and all different markets around the globe, both a focus on his home market in the United Kingdom.

Starting point is 00:17:48 If you want to check this out, firmreturns.com, like I said, tons of free content on the website. If you're interested in one of the paid plans, you can go to firmreturns.com slash chitchat. That's firmreturns.com slash chitchat and it'll get you 20% off. Yeah. So Coupang, certainly simpler than Nelnet. They are the leading e-commerce company in South

Starting point is 00:18:09 Korea. If you're a user or an active user, active customer of Coupang, you can buy pretty much anything on there from electronics to groceries, and it'll be delivered right to your door very quickly. South Korea, for anyone who doesn't know, it's a very dense population. So a lot of people live close to one another. And so Coupang, I believe the stat is they have a Coupang fulfillment or logistics center within seven miles of more than 70% of the population. So they are quite close to the majority of the country. And so it just allows them to deliver packages profitably and quickly. And they've invested a lot in logistics. I should mention that they have really, really built out the infrastructure behind the service. So I think that's probably

Starting point is 00:19:01 one of the reasons I like Coupang the most is because we've seen this story play out before. Now, it's not going to be apples to apples to Amazon necessarily, because Amazon's obviously had some other divisions that have certainly propelled that business. But we know the power that an infrastructure advantage can have. And you look at So for Amazon, we've already seen it. But with Coupang, when you have a logistics advantage over competitors, it affords you a lot of other opportunities. It helps you win on delivery times, which enables you to deliver more items. You can start to deliver things like groceries because they kind of have that short shelf life where it's not as easy to deliver. So being able to deliver more items more quickly, it allows you to add value accretive products like the RocketWow subscription, kind of similar to a Prime subscription, which helps you boost profitability, which helps you reinvest in the whole cycle all over again.

Starting point is 00:19:59 And it's just this very fortuitous, or sorry, very advantageous reinforcing cycle that they have. It's almost this, I know I've used this word a lot on recent shows, scale economy shared principle, which is kind of a fancy way of just saying it's a non-zero-sum business. When coupon wins, the customers win. And they're reinvesting a lot of the profits into furthering their advantage. I really like the setup here. The CEO and founder, Bombsuit Kim, owns a ton of the stock. And he seems very intelligent about the way he runs this business and invests for growth. So I really like it. It's my third largest holding. Actually,

Starting point is 00:20:39 maybe my second largest holding so um and it's actually one of the few winners for me which is nice uh i believe you own this one as well right i do own this one as well uh it is my second largest holding at the moment around 20 of the portfolio and yeah that has happened because it has appreciated a little i will add on to this that ryan was talking a lot of the good kind of anecdotes in the narrative bear the but the financials have backed up the thesis around the competitive advantage where they're outpacing retail growth in Korea. The margins are expanding and now they're very, very much self-funding. They're generating a lot of cash flow on a gap operating margin basis. They're just slightly getting to positive, but again, there's going

Starting point is 00:21:22 to be a lot of inflection here, hopefully as they scale, but they are reinvesting a lot. And I believe the number, look, they're generating plenty of operating cash flow and have plenty of firepower to reinvest into new capital expenditures in both South Korea and as they expand in Taiwan. If you want to listen to a full episode and we'll break down all of that, we have a full episode on Coupang

Starting point is 00:21:43 that you can listen to, I think two actually. The thing is, the stock still isn't that expensive if you kind of map out what margins could be like and just assume, honestly, a decent slowdown in revenue growth. So I think the stock is cheap. I think they have the competitive advantage that's showing up in the financial.

Starting point is 00:22:02 that matches up what you read about with the company and how smart the management team looks. And the last few earnings reports, I just have no complaints about this company, which you can't say about a lot of, especially consumer-facing companies around the globe at the moment. Yeah, totally agree.

Starting point is 00:22:22 I'm sharing a bunch of charts here of Coupang. The net revenue per active customer has grown very quickly over the last couple of years. And then you can see here, they track the total leased and owned fulfillment and logistics square footage so basically their logistics footprint and it's gone from 25 million square feet to 55 million square feet in three years so they like i said they invest a ton into their logistics and they also own the delivery network as well and that's becoming its own revenue driver because merchants are willing

Starting point is 00:22:59 to pay for fulfillment by coupon which has been profit or margin accretive as well okay next stock and i think i want to focus on this too with the rankings is when we first come to the company is what was our gut check when we looked at it so i look at your gut check on this next one here philip morris it was your highest one first of that you put on here third in the rankings which means like not i'm loading up the highest cost bases i've had but it's the first one you would buy if you're starting a new portfolio from scratch today. So what was your gut feel without first obviously checking the numbers to make sure they matched it? What was your first gut feel for Philip Morris here as we move on to our third stock? With Philip Morris, I look around in my

Starting point is 00:23:46 day-to-day life and I am blown away at the stickiness of one of its growing products, which is zen and people especially in the northwest here in the united states it is becoming such a common trend it is allowing them to grow so quickly too because people see other people that have it and it's like this free marketing it's almost it's it's literally like a network effect you almost your customers become your best salesman i'm sure you've witnessed it as well yes and i for the annoying listeners i want to correct ryan here i will correct him it's virality not network effect but i i think they understand and i understand sure so it it's one of those where i see it all the time and i just think

Starting point is 00:24:39 they've got their customers hooked for quite a while now probably quite literally because there is an addictive substance there but they've got their customers hooked people pay a lot for zen relative to some of the discounted competitors and i've asked people i'm like yeah hey would you ever go with some of the competitors like on and they're like what are you talking about small purchase price that's the beauty of it like a lot of people don't realize that zen's like one of a few um and then the ico seems to be going well also now i don't have quite as much experience with that because it's mostly popular in europe but basically you've got a business where everyone i talked to in the investment community when i mentioned philip morris they all think

Starting point is 00:25:25 first of all they asked what were the returns of the last 10 years which was a very different business 10 years ago than it is today and they say oh no cigarettes are a dying business and or they talk about forex ruining all your cigarette profits yeah and so people just tend to think that this is a legacy cigarettes business that's going to probably go nowhere for a while when in reality, I've got this quote here from we did five stocks we'd buy today episode a while back. And I said, it's somewhat ironic, but I think Philip Morris, which is one of the oldest publicly traded companies around will be one of the most surprising growth businesses of the next decade. I still believe that. I agree with you. Yeah. I think Icoast and the nicotine pouch

Starting point is 00:26:14 business can do quite well. Look, is it going to turn into a $10 billion earnings business and replace the profits from cigarettes tomorrow? No. But could I see that happening within seven years while the cigarette business is still there? I think that's possible. And if it doesn't reach that, then, well, you get a 5% dividend that hopefully can continue to grow. The big risk of course is foreign exchange for a united states investor but i think there's a lot to like and the cigarette business for them the tobacco business i guess not just cigarettes globally is a lot more attractive than the united states yeah and to kind of some things up here the cigarettes business people think of it as this like declining ice cube melting ice cube

Starting point is 00:26:59 whatever you want to call it last year or the most recent quarter cigarette volumes were flat year over year internationally for Philip Morris. So it's actually not declining that quickly abroad. It's certainly declining fast in the United States and revenue is up three and a half percent for combustible. So it's still for the moment, a slow growing business. Yeah. And the good thing about this company is that they have the replacement products for a lot of people that still like nicotine that are much healthier. Okay. With this one, I should say that I don't own the company, 0% position. But it was up there on my watch list, I guess, or excuse me, the ranking here. I had it as actually number nine in the 1 through 25 ranking

Starting point is 00:27:50 and behind two other stocks that I don't own, but above three stocks that I do own. So I think making this ranking, I may have some choices to make for portfolio changes. What do you think? Let me show the ranking here, Ryan, and see what you think. I think it's funny that you have all these companies that you rank so highly that you just don't own. Well, I would say, I mean, like, I don't have unlimited funds. And I was saving some of the decisions for this portfolio discussion. Plus, we just had earnings. So some of the stuff changed a little bit after this quarter.

Starting point is 00:28:34 if that makes sense true true i guess there are some companies that i've wanted to add that i've just been holding out on because yeah like you said not unlimited funds um yeah or maybe you just don't want to sell something for the taxes to fund something else yeah and i guess maybe we yeah yeah well no it's it's a it's a tax-free account so that that has nothing to do with it i i was i think i would have made the decision before this recording but i wanted to do it you know, for this episode, just for the listener, I don't think that the stock prices are going to change that much. I guess we probably need to go through some of these other companies first before we hit the discussion questions. But I just wanted to show

Starting point is 00:29:13 my ranking here for the video, which you can also find if you're a listener. Sorry, I know this is a little tougher for the audio here, but I think people still like the discussion. If you want the visuals and the charts and the rankings and the pie charts, subscribe to the sub stack that'll help out uh and that's all free okay next one ryan what do you got is this is the last one overracking one or we both own well i guess you don't own philip morris but this is the last one we both own so a shareholding i guess i'll just go through a quick summary on what it is and before i say that i should mention that this is super illiquid So it's kind of a crappy company. Maybe. I feel like I'm fairly comfortable saying that. And it's a company that doesn't really even want to be public. So there are some risks, huge risks. And so don't do your own due diligence, all that stuff.

Starting point is 00:30:08 with that said this this one that we both own it's harbor diversified it is the parent company of air wisconsin so it's just a regional air carrier that operates routes on behalf of i believe it's uh yeah american airlines it was previously united airlines and it's based the only reason that i own it and i assume brett you're probably in the same situation here it's trading, it's like a cigar butt. It's trading at a dirt cheap valuation in our opinion. And if it gets re-rated at some point, we think there's potentially some big upside. Now, I don't know if we need to go that in depth about the business because I don't think it's that important, but I'll put some numbers on it and then I'll throw this question over to you, Brett.

Starting point is 00:30:56 So the market cap right now, there's some, I think it's convertible debt where if that were converted, the fully diluted market cap would be $102 million. They have net cash of $106 million. So the enterprise value is quite literally negative 4 million. In their good years, so when things are operating normally, which is uncommon in the airline industry, it seems, they can generate $20 to $30 million in profits. At least that's what it was at the peak of their united deal so if things were progressing normally they were generating 20 to 30 million dollars in profits they would be trading at they'd have that negative four million dollar enterprise value they'd have tons of cash they could probably buy back 50 of

Starting point is 00:31:46 their stock and be totally fine so that's why we think there's a lot of upside however they have not filed their 10k for the year they announced that they needed to delay it because of some accounting problems where they're having a hard time reporting it on time and they delayed their 10Q. So I'm a little worried this is going to get delisted. Thoughts here, Brett? What are your concerns? What do you think? What are your updated thoughts on Harvard Diversified? Yeah. So one, I would say note on the accounting stuff, they had a dispute resolution with United and it's not like they basically said that their balance sheet is the cash is still there nothing was discrepancy on the cash but they have this receivable stuff that they were accounting for

Starting point is 00:32:34 and has to get restated in a lot of in a lot of their financials which doesn't affect the cash position so the business is operating the same but since they probably have a tiny accounting department as a micro cap it's just going to take them a while to do that and there is the concern about the delisting that's definitely the number one downside here i would say if you own it I still need to do this. I should do this now. I should honestly do this after this episode as you become a registered shareholder,

Starting point is 00:32:57 which DM me if you want to figure that out. But the upside there is high. They're buying back a lot of stock. I think they've reduced share count by what, like 20% maybe? I'm not concluding that preferred stock. Maybe it's closer to 10% to 15%, which I think is nice.

Starting point is 00:33:13 I'll check right now. Yeah, you do a little check. The EV is zero, and they can generate $20 to $30 million a year, return cash to shareholders. The debt is getting paid down. They actually had a weird thing where I don't know what was happening with the liquidity with their banking partner, but they had this debt and they had plenty of sizable net cash position, but the company called them out as being, what would it be, in violation of

Starting point is 00:33:39 one of the covenants of the debt. So they forced them to pay it back. It might've been because the bank was trying to be a little bit sleazy and they were having liquidity issues, but they paid that back. We're having essentially a really, really cleaned up balance sheet. And you have this just cash sitting there. It's going to earn interest income. They can buy back the stock if they start generating cash.

Starting point is 00:34:00 But the thing is, I don't know what the numbers were after September 2023. So it's tough. They have a Twitter account that tweets that they're still in business. They're still making their flights. I think the pilot shortage is getting better. so i think they're probably at least break even to hopefully slightly profitable american airlines is helping them hopefully to get a slight profitability i think the upside would be a three to five x if things work out here but the downside is what could get stuck and get

Starting point is 00:34:27 delisted you might just be stuck in this thing so that is why it is in my hold position it's going to be a small i had it as number 10 out of the 1 through 25 here and it's kind of like i'm not buying i'd like to keep this as a small position but i think it's a good one especially when at this moment a lot of the compounder stuff a lot of the big tech a lot of everything that we kind of looked at or have looked at doesn't seem that attractive to me when compared to this at the moment when valuations seem i know this might be hearsay because we're in an ai utopia but they might be a bit stretched for a lot of stuff out there earlier in the show you heard us talk about the investing platform, public.com. That's where you can trade options with no commissions

Starting point is 00:35:12 or per contract fees, and you get a rebate of up to 18 cents per contract. NerdWallet recently gave public five out of five stars for options trading. If you want to see why, go to public.com and start getting a rebate of up to 18 cents per contract traded. This is paid for by public investing. Options are not suitable for all investors and carry significant risk. Full disclosures are in the podcast description us members only yeah the uh it's one that's almost funny to own in a way because the problems that they have are something i've never experienced with other companies that i've owned like they literally don't have enough people or enough time in the day to fix their reporting in time for the sec deadline so it's you know

Starting point is 00:36:02 it's a resources issue. However, the incentives are there, right? The people that run this company own a lot of the stock. American Airlines doesn't want its regional air carrier to fail because that becomes an issue for them. Those routes are not economical. Customers are upset. It becomes difficult on them as well. So they have all the incentive in the world to help them out. and if things go well yeah this will turn out great but on the flip side your downside is not like oh revenue underperforms or something it's like you can't sell the stock because it's the investment group that controls this might take it private a dirt cheap cost or but the thing is i think from the upside is the investment group like you mentioned wants this

Starting point is 00:36:51 stock to do well and they seem to have the patience and they like to buy back and they seem to be doing a lot of good things from capital allocation perspective all right let's keep moving on here i will say we probably won't get to all of my rankings but i will tell you ryan just given our discussion questions i want to hit all the ones i own so i see magic and probably the two ones we definitely want to hit for me that were ranked higher than some of the stuff i own would have been portillo's and nintendo okay which is fairly short but i like i think those would be good discussions because i can compare them to those and maybe for you we can do some some whatever you want but depends we don't want this to be a two-hour episode you know yeah so we're

Starting point is 00:37:32 doing this on the fly i know you hate when i do this but i'm gonna do it anyways let's put the stop clock on and let's give each other two minutes and two and a half minutes for each each company to give your spiel pitch and i'll give you some feedback okay well what one do you want to go first what one's first on your list let's start with you want me to start or do you want to go we should go just tell me let's go iac okay since that's a large holding for you and then pull up on the notes got my clock here so everyone can see talking yeah let me okay when you start talking yeah this is one of the low-ranking stocks i owned i have it at uh number 14 on the 1 through 25 and there are multiple stocks that are above it i will say

Starting point is 00:38:24 cortello's nintendo and the aforementioned philtmore's international i could see myself deciding to sell this position if i see some of these other stocks and i kind of weigh them i think it's better look on the one hand positively i see trades in an enterprise value of about $1.27 billion if you net out its investment in MGM Resorts, Angie, and its net cash position. In theory, this is a discount to its Turo stake, Vivian stake, and the wholly owned businesses like dot dash Meredith and care.com. I want to like this thesis, but I worry that management is not really executing. It's had its eye off the ball for a while because the dot dash Meredith acquisition, or excuse me, the Meredith acquisition was bad.

Starting point is 00:39:03 Care.com is stagnated. Management is not repurchasing stock when they keep talking about some of the parts discount, which someone like Nelnet is actually doing. But IAC is like, well, we're just going to sit on this cash file, so I don't like that. I worry about the generative AI stuff

Starting point is 00:39:20 taking a lot of the share from DotDash Meredith and really hurting that business, which I think is a big clear competition for that. And I'm losing trust in this manager team. I have been losing trust for multiple years now. do I think the stock is undervalued? Yes. But would I rather own a stock where I trust the management team and I think it has a similar upside? Yes. Because one thing I think investors have to get, and I do this and Ryan does this, I know almost everyone does this, is you're so

Starting point is 00:39:49 afraid to sell something because you would hate to be the guy that's like, I sold IIC at 50 and then it's at 100. You have to think, do I like these two different stocks the same? You know what i mean you don't want to be that person you hate you hate envisioning yourself being that person and i think you try to understand you're going to have that bias and maybe try to ignore it as best as possible yeah so this is one where i maybe we've historically had some disagreements on ace i see a bit but it sounds like you still kind of have a similar thesis that the valuation could look really great but management's taking its eye off the ball. And so it sounds like maybe we share some similar

Starting point is 00:40:34 concerns now. When would you, like excluding opportunity costs, excluding, oh, something else came up, I need to sell this. What would cause you to sell IAC? Just in a vacuum, I would say, so this year they're showing some decent progress on dot dash Meredith, and they're supposed to have consolidated free cash flow again, and they can build up their cash position, hopefully look for target acquisition opportunities. And if that doesn't happen, that's a negative, and I would sell. And also monetizing the Turo stake. I do not know why Turo is not IPO-ing when markets are at all-time highs. It doesn't make any sense to me. And I would think that they'd want to take advantage of that, especially because if they could sell

Starting point is 00:41:22 a position, buy back a ton of stock, all that good stuff. That's the type of stuff they were historically known for and creating a lot of value for their shareholders doing that. That's why people used to call them the golden goose. But today, I'm just not seeing it. And I think there are some stocks on this list that I'd like better, but we'll have to discuss those as we get to them. All right. What do you want to hit, Ryan? I'll talk Ally, Ally Financial. This is 7% of my portfolio. And feel free to start the clock whenever or the mental clock here, Brett. I ranked it the second highest. It's probably interchangeable with Philip Morris for me, but Ally is a pretty simple thesis. It's a digital-only bank. And as with any bank,

Starting point is 00:42:06 there are two important things to look at. Where do they get their money and where do they put it? With Ally, they attract deposits from consumers by offering them a high rate on their savings accounts for anyone that doesn't kind of know the digital banking space. This is becoming more and more common now, but by not having physical branches everywhere, they save a lot on costs. They're able to pass through this cost in the form of higher savings rates to their customers. And that in turn attracts a lot of people because people want high yields, high interest on their savings accounts. So that's actually helped them attract, I think it's almost $150 billion in customer deposits.

Starting point is 00:42:48 The good thing about customer deposits is for one, it tends to be sticky because you get it's widespread. It's not unless you have like 10 customers that are all the same family members and they all think the same, you're going to have widespread assets. So no worries about like fleeing deposits all at once, like you might've had with Silicon Valley Bank. And then it's low cost. It's the lowest cost form of deposits, I believe, that can be pulled in as a bank.

Starting point is 00:43:14 So I like the deposit side of the balance sheet. On the flip side, they lend primarily in the consumer automotive industry. And even though it's been kind of a tough year because interest rates have risen and there's been some compression here and even default rates on auto loans has gone up a little bit, it's still a good place to lend, right? Cars, the duration on an auto loan is not very long. I believe the average is five to seven years. And so it gets paid back pretty quickly. The default rates are pretty low because you think about how important a car is to a person. It's one of the first things you're going to pay back because without a car, you can't get to work, without work, you can't pay your bills, all that stuff. So I like the loan book in general.

Starting point is 00:43:58 However, there's been some contraction in the net interest margins and that kind of hurt them in the short run, I think, moral of the story here, they can get back to earning their historical margins, which means it trades it around. If they get back to $7 in earnings per share, they're trading at like five to six times earnings for a growing business. Beautiful. That was almost exactly two minutes and 30 seconds. They're like two minutes and 25. Yeah. I think I forgot about this one, putting in the watch list. I think looking at your chart here, which we don't have to show now, but in the newsletter, the jump between 2019 and 2020 on those interest-bearing deposits,

Starting point is 00:44:32 and you wonder why we had inflation when we just injected money into everyone's bank account. But that's besides the point. I should have had this on my list. I kind of just forgot about it. I think it's more lower for me than a couple of the other stocks that I had higher. As people maybe remember,

Starting point is 00:44:48 I had three that were kind of higher that I don't own. It's, what, about $38 a share. I think I like it here at $25. I really liked it. But I think given the high dividend yield and the fact that they buy back a lot, $25 is a big difference between, or excuse me, $25 is a big difference to $38. Maybe I'm greedy, but there's some theory I have in my head that I want to buy this during a recession. But predicting that, I don't know. I don't know if that's going to happen.

Starting point is 00:45:24 I think that already kind of came and went. Oh, Ryan, don't jinx it. Don't jinx it. I mean, we did not have a recession, and the economy is absolutely booming. No, I mean, the concerns around a recession really impacted this stock for quite a while. Carmageddon certainly scared a lot of people out of this. Yeah, for sure. I mean, 25, I think we both would have had it in our top five, and we did back when we ran the partnership.

Starting point is 00:45:55 Okay. Let's talk about shared hatred for Match Group. What? I said, let's talk our shared hatred for Match Group. All right, yeah. I'll sum things up. We've done a lot of talking on this. This one was, I put it 17.

Starting point is 00:46:09 It was the last one I ranked of all the ones. I couldn't rank everything on my watch list, but 17 of the 25. That's close to considering selling in that range. Let me just kind of go through my notes. Essentially, they failed to stabilize Tinder. when I made the thesis, when we both made the similar thesis, we thought steady growth at Tinder, explosive growth at Hinge was supposed to deliver 15% to 20% revenue growth for the next few years. Well, that happened at Hinge, which is great, but not at Tinder. Tinder MAUs are declining

Starting point is 00:46:40 monthly active users. I should say management has not been able to fix the bleeding and I am uncertain of whether they can. Also, management is doing a lot of things that is maybe lowering their trust in them. Now, there's a lot of people that I think are very, they're quick to make a snap decision and say, just because management said one thing one time, they're the worst. They're the worst. And then when the stock price rises, they're like, oh no, it wasn't a big deal. So I don't think you should look at it this way. But there has been multiple times when I think management has said things about users, said things about payers, said things about all these KPIs that they're a little bit vague about that can mislead a bit. So they said something about

Starting point is 00:47:27 Tinder being the majority of their MAUs a couple of years ago, and then out of 100 million or something like that. So you would think like 80 million MAUs. But then they go around this week and start saying, no, their peak MAUs was 55 million. So it's hard for me to say, if you ask, is Tinder or is match groups management honest? I might say no. But on the other hand, stock's very cheap. Revenue is still growing. Cash flow is still there. EV to free cash flow is 12. They're buying back a lot of stock. I like it here. Obviously, I made a mistake buying it at like 60 to 80. But the question is, should I switch this out for another position? Is Philip Morris International an easier compounder? Not that mattress compounder anymore, but I know that

Starting point is 00:48:15 term gets co-opted ryan what are your thoughts my thoughts it's and our friend alex morris kind of brought this to my attention in his article they tend to speak in misleading generalities is maybe the way i'd say it here's his words so uh where should i start in my mind okay he says Last point is important. As discussed in Feeling the Heat, my sense is that management has its back against the wall and has struggled in the face of generally underwhelming short-term results. In my mind, that continues to show up in the way that they stretch the truth in optimistically presenting certain figures. Two examples from the most recent quarter. Tinder has, in quotes, just under 10 million payers when the actual figure is 9.7 million. And saying they repurchased roughly 6 million shares when the actual figure is 5.6 million shares. they yeah now everyone i feel like a lot of people do this but they round up to whatever figure is best for them and they said they had that we're almost hitting 100 million maus like three years ago and they made you think that like tinder was at probably 80 million when in reality

Starting point is 00:49:34 tinder was at 55 to 56 million it's just they give you the data they want to give you And that really irks me. I've actually sold out of this. I did own it for a while and I just grew frustrated with it. Yeah. I think like looking at this discussion question I had, I think there's other stocks I can own that are better risk rewards here. And maybe we can get into one of those next.

Starting point is 00:50:00 What do you want to talk first? I know we have, we might not get to go, go on this list. I would say, just listen to the stock research report. I have that. That is one of my positions.

Starting point is 00:50:09 Now I had a third, and it's one of the solid ones i have along with now that coupon gogo where i definitely add to my position we might not talk about that one but maybe we should talk about nintendo or pertil is what i want to do and talk about first here let me maybe discuss autodesk because this is kind of my one of my other holdings here and the same group of yeah same type of styles match group on my watch list as well and even though i didn't include that in my rankings but definitely it's on it's on my watch list as well that i track yeah so i own this i've actually it's a really small position i've owned it for a little while and i'm not sure what to do here honestly because

Starting point is 00:50:43 i kind of despise management more so than i despise match groups management because they seem to measure themselves by metrics that are completely irrelevant for minority shareholders because they don't understand capital allocation at all yes that's certainly what it seems like And I guess I'm holding out hope that an activist takes over or someone replaces the CEO and – or maybe even the CEO kind of finds religion and says, oh, I guess we don't have to grow costs faster than revenue since we're a completely scaled business and our incremental margins are super high. Maybe we don't need to waste all this money. Maybe we don't need to spend $500,000 on a Sphere ad. they it's frustrating to me and they don't take hard questions at investor days they are actually having like a bit of an accounting scandal right now and instead of delivering a

Starting point is 00:51:45 report describing what's going on they decided to buy out some ai company instead that's not that's not going to make the accounting more complicated yeah yeah yeah their capital allocation is amazing here's what my question would be on your ran is 2.9 percent of your portfolio it's been sitting there for a long time you haven't added to it clearly but you have other positions that are i'll list up all of them that are below seven percent ally dr horton o'reilly wise dream finders homes why not just take though that autodesk and put into a couple or one of those because those aren't going to turn into outsized positions because i i would think maybe a little shakedown trim in that position could help out because

Starting point is 00:52:28 so it's a small position i think i have like very few shares in there so it's not i'm kind of just going to let it ride and my thought process there is this product is so ingrained in the day-to-day workflow of architects and engineers that it's still going to be relevant in 10 years and maybe one day a ceo comes along and demonstrates that to shareholders so i'm just kind of hoping you might need to move back to go forward hopefully the share price collapses we get some activists in there yeah i guess i just i've been thinking about selling it every time the ceo speaks i just kind of think like i'm getting rid of this just out of spite but it's one of those where you want a business so good even an idiot can run it.

Starting point is 00:53:21 I hope that's the case here. Yeah, it should be the case. The revenue just keeps growing. It's going to grow whenever they want, and margins are great. But yeah, all right. What one do you want for me, Nintendo or Portillo's? I want your updated thoughts on Nintendo. All right, let's go through.

Starting point is 00:53:43 This is a bit of a weird company. where let me just trying to go through our notes here we got a lot here we'll say go subscribe to the newsletter to get the full stuff because i know sometimes it can be confusing i want to say that multiple times this episode so start the timer nintendo is an easy one for my watch list you have a stock trading in a market cap of 60 billion dollars about 60 to 70 billion dollars the yen gets a bit crazy uh so it can change rapidly in usd terms especially at the end appreciating so much recently and first up the company has a rock solid group of entertainment characters with durability among different generations in multiple places around the world

Starting point is 00:54:21 probably disney is the only one that can say that as long as the yen doesn't go to zero which i think i guess it's trying but who knows i think they can generate about five to six billion dollars in annual usd operating profits once this new console comes out management finally said it be coming out with a new one in around a year for a business with this much durability of say relevance and someone who's focusing on extending their life cycle over the long term i'm comfortable having this in my portfolio when i think the normalized earnings is uh about if you take out their net cash position it's about 10 times earnings and if you add in the movies and theme park upside which they are reinvesting in decent amount uh there's a lot to

Starting point is 00:55:04 like about Nintendo. Here's the thing I think investors need to think about, though, with Nintendo. You have to be patient. They make plans on a 10-year time horizon or longer. So you should too, if you own the stock, don't get impatient with this one. If you're an impatient investor, this is probably not for you. I think the stock probably outperforms in the next 5 to 10 years and can start returning tons of cash to shareholders, given they've built up their conservative balance sheet, which was their goal over the last few, basically the last 10 years. and they have started returning cash to shareholders with the repurchases and the dividends.

Starting point is 00:55:36 I think our friend at Best Anchor Stocks, Leandro, has said they've returned 70% of the earnings they've generated. I forget his number, but I'd have to confirm with him. That's just something I read from a tweet. And yeah, I think it's just a good risk-reward here with durability over the long term. So I showed a couple charts there for anyone who's not watching and basically it looks super cyclical right there's like throughout i think it was 2008

Starting point is 00:56:09 maybe it was 2009 revenue peaked with the wii and then it's since come down then it looks like peaked again in q3 of 2020 and has since come down however i think a lot of people look at this And they think, first of all, that's in USD terms, not in local currency. In the yen, it looks a lot better. I'll actually pull that up right now. It's growing year over year in the yen. One argument I make there for the people that have that pandemic affected this one, maybe even try to normalize that a bit.

Starting point is 00:56:43 And FX has been really tough for USD shareholders right now. Yeah, actually, if you strip out the pandemic boom, and you just look at it q or 2019 to 2023 you would think this is like a steadily growing business yeah you know this is in the end terms yeah now this year is going to be there they they they just announced like that usually there's usually all these rumors and people trying to predict it the management team announced that the new console is coming out within i think a year which they usually are good on that means it's probably almost ready they usually just take time on this thing. So this year, they're not going to have any big blockbuster games that come

Starting point is 00:57:21 out. Most likely, it's going to wait. So earnings will be down for a little bit, but they're still going to be positive. And before, they would go to zero for multiple years, and then they'd come out with a new thing. I think this time, it's going to smooth out the earnings cycle. The downside is not high, in my opinion, over a five to 10-year period. And I think there's a lot of upside if if the earnings uh can grow as i think they can do we want to discuss any more companies or do we want to hit the wrap-up questions well i really i mean i think portillo's is an important one to hit because it was the highest ranking stock i didn't own and yeah i can sum this up quickly we just did a show on them i don't own it right now but essentially how i look at it is

Starting point is 00:58:12 you know today they're at about just under ten dollars a share i'm seeing a fully diluted market cap uh 700 million dollars ev of 1.3 billion dollars even if we include this liability they have for tax receivable stuff um if i'm right about the union economics which i think are solid i'm right about the expansion plans and i think i think they can generate around 1.1 billion dollars in restaurant profits after accounting for their new built costs cumulatively through 2030 and i think that's an attractive place to be where you have a market cap of $700 million, EV 1.3 billion, and a lot of restaurant level profits flowing through. I think the stock is cheap simply because of that. And people are worried about a comp sale slowdown, which I believe is a macro

Starting point is 00:58:57 economic thing because I'm seeing it in a lot of restaurants. Portillo's is not specifically like we're hitting negative 1% comp sales and everyone else is hitting 5%. I like the management team. I think their experience in restaurant brands is good and I think they can get good volume and good ROIC that's stable. I don't see why this isn't a good risk reward of these prices. It would not be like a Nelnet position where I think it's diversified, low, low risk, low, low downside. But if I'm right, I think this is a 10 bagger. If I'm wrong, I think it can go down a good amount, but investors might be underwriting the upside at the moment. And I ask myself, of why shouldn't I own this?

Starting point is 00:59:35 Why do I not own this over IAC and Match Group when there's probably similar upside but less frustration with the management team? Sorry, I was on mute there. Yeah, I like it a lot. We did our show recently, and I came away fairly convinced it is at all-time lows here.

Starting point is 01:00:00 And it's a business where the actual stores themselves have such a fanatic following people love the food they have like the restaurants themselves do some of the highest average volume in terms of revenue of any fast food restaurants in the united states that tells you how much people like portillo's it's just really a matter of expanding and doing so somewhat cost-effectively I think the economics will be good everywhere. At least, like, maybe they won't be as good as they have been, but I think they'll still be okay. Yeah, still be positive.

Starting point is 01:00:42 ROC is high enough where it comes down a bit. We still do fine. Are there any stocks you want to hit in your list, Ryan, pertinent to this episode? I think one thing you'd probably agree with me listening to on this, when we do these type of things in the future, we should probably do one at a time because it's just too much for each person. uh stock wise or sorry yeah so if uh no one ranking like one person does the ranking you know like you would do the ranking we would talk through whole your whole portfolio for a full podcast and then you know what i mean because i think we could go two hours if we hit everything for each of ours but on this episode we're trying to cut things not too

Starting point is 01:01:20 long is there anything else you want to hit i'm okay i think we covered most of it let me go through my rankings here. It's going to take me a second to pull them up. But I will go through it here. Speak for a second so that I can put myself on mute and start typing to find this.

Starting point is 01:01:39 I'll do my list first. How about that? So remember, this is 1 through 25. And the 25 plus, I just include some extra ones that are on my watch list that I think are just a bit overvalued. So not every slot is going to get filled. So 1, Nelnet. 3, Coupang. 5, GoGo. 6,

Starting point is 01:01:55 tortillos 8 nintendo 9 philip morris international 10 hr beer harvard diversified 12 airbnb which i looking back i think i put that too high uh 14 iac 15 visa 16 american express 17 match group and then 25 plus other stuff i'm watching that i think is just too much like the price is just crazy right now sprouts farmers market add-in spotify alphabet and amazon ryan what does your list look like i'm just going to do them in terms of the actual companies because this i think the slots might confuse people so number one company just in terms of opportunity where i think the downside could be you know downside protection all that philip morris for me the second one and the third one are kind of interchangeable here in ally financial and coupon fourth one is

Starting point is 01:02:46 known that this one is dr horton which we didn't talk about too much today but i i really like them and they check a lot of boxes for me and i think it's a competitively advantaged business fifth or sorry this would be six is wise which i might have some recency bias there since i bought them uh fairly recently and then seven o'reilly automotive eight harbor diversified 10 dream finders homes or sorry here's nine dream fighters homes last one autodesk so this brings us to a wrap-up questions if you got new money into your portfolio today which of the companies would you add to which of the companies we discussed today would you most want to add to and then which of these are you not even close to adding to and this is including watch lists

Starting point is 01:03:34 not just ones i own yeah number one i do have some cash in here is portillos i think next one would be gogo even though we didn't talk about that but we did a full hour-long research report on them recently after that i think nintendo then phil morris international those are kind of the four i'm looking at to build out positions right now and then the opposite you know i guess we're mixing in a lot of these questions here i think it kind of i can kind of lead into the second one here if I was to sell something would I you know where would I find a new purchase I think honestly I like a portfolio of I'm trying to list it off my memory Nelnet, Coupang, GoGo, Nintendo, Philip Morris International, Harbor Diversified, Portillo's I think those are all

Starting point is 01:04:22 I'm trying to remember them by over the one I have right now with IAC and Match Group so i think i should sell those two i agree so i think i like those better um but don't let me give you just confirmation bias here i know i was i was thinking this before the episode and that's why i think that got feeling with those rankings were higher so i think those are the four i would add to one i already own but the three that i don't own are nintendo philip morris international and portillo's uh when the investment partnership we owned nintendo and phil morse international so i guess technically i have owned those in the past but portillo's would be the newest one i've hopefully discovered this year so we'll see

Starting point is 01:05:04 what about you what are your final thoughts i guess what would i add to all these discussion questions you have listed here the one i'd probably add to today is i mean there's times where i'm just building out a position just to like wise for example it's traded on the otc markets their adr is here so there's commission costs so sometimes i'm just like saving up cash to buy it in bulk so that i don't have to like the commissions don't take out like three percent of the cost of the purchase or whatever so i don't know there's some irregularities like that but i think if i just had blank check 10 grand what would be however much what would i want to throw it at. Philip Morris ranks the highest for me. I really do. I think they're going to be an

Starting point is 01:05:54 underappreciated growing business over the next decade. I could see them growing earnings per share by well north of 10% for quite a while and pay you out of 5% dividend yield in the process. So you feel like there's a low downside there and that helps you not be afraid to size up the position yeah absolutely i think that makes sense yeah other one i've been building out wise as a position a little bit lately but it's not it's probably not the highest ranking for me coupons kind of re-rated a little bit maybe i'm just kind of anchoring to what i bought it at but it's re-rated i think brian yeah i know i have my biases that you you call me out on your anchoring bias is a i think strong it's strong with this one the uh trying to think of other ones i like

Starting point is 01:06:50 o'reilly right now but the only bummer is shares cost a thousand dollars so it's a little like yeah if you have you know if you're adding like 500 in cash or something like that you just you kind of have to do it in lumps i guess which is i'm looking at the home builders Do you want to build that as a bigger position, or would you like that as kind of a 10% of your portfolio? I'm comfortable building out DR Horton. DreamFinders Homes I've soured on a little bit. There's just been some red flags since I did that episode.

Starting point is 01:07:21 Yeah, and I just kind of – there isn't a real competitive advantage for them in terms of building. They can't build cheaper than some of the big ones, Whereas D.R. Horton, they are basically just a manufacturing business, and they manufacture for cheaper than the other manufacturers. Right, lower downside. It's not really – D.R. Horton used to gamble on real estate just because they would buy the physical land. They don't do that as much anymore. 80% of their land is owned in land options.

Starting point is 01:07:55 So I would be very comfortable adding to D.R. Horton. It's probably up there for me. And it's only, I think, eight times EBIT. all right so not terrible you didn't do anything on your watch list i want to ask you what's number one on your watch list that excites you i'm like a sideline supporter of amazon every quarter yeah i still think it's a little cheap maybe i should just own some shares it still feels cheap to me but it's up 100 so it sucks yeah visa visa is one where every time i dig into a financial company i look at it and i think i should instead yeah you're helping visa

Starting point is 01:08:37 even with wise who has built out their own remittance network the wise card powered by visa i read an article the other day that's like targets building out the target red circle card or whatever for to avoid some of the fees and you look into it and you look into the fine print And it's still powered by Visa and MasterCard. Yeah. You cannot get around them if you want to connect to bank accounts globally. Yeah. I have some notes for the newsletter that I'll put on Visa, but essentially 30 times earnings, which right now I'm not really a big fan of, but 20 times earnings, it would be one of my favorite stocks.

Starting point is 01:09:12 All right. Anything else before we wrap up, Brian? Are we good? Are there any – last question here. Are there any stocks you have that you just don't monitor that closely? You have no plans of selling it anytime soon, so you get around to the quarterly report when you have some free time versus ones where you sit there and you're waiting for the release and you're kind of constantly on the fence about whether or not you want to own it. I think Nelnet would be that, except for on Twitter, it gets a lot of engagement because we're kind of known as one of the Nelnet people that tweet about it, so I like to be on that. But essentially, I don't really care what they even reported for Q1.

Starting point is 01:09:50 It was nice to see their commentary this time, but that would be the one where. set and forget it hopefully no hopefully an engine set okay let's let's wrap it let's wrap things up i will say this is a new concept we did so let us know one if you don't like this because we're testing out new stuff if you really didn't like this podcast it was a bad podcast tell us and we won't do it again second tell us ways to maybe improve this i was thinking that we have too many rankings we should do each person for a separate episode let us know if that's a good idea. And then give us reviews, Apple, Spotify, wherever you get your podcast as a free podcast. That is the number one way to support us and tell us thank you. We've gotten

Starting point is 01:10:32 quite a few, so I appreciate that, but it's really the best way to help us out. All right, disclosure. We are not financial advisors. Anything we say on this episode is not formal advice or recommendation. Ryan, I, or any guests on this podcast may hold securities disgust on the show may have held them in the past and may buy, sell, or hold them in the future. That is a very important one. On the portfolio episode, we may buy, sell, or hold any of these stocks in the future, but we typically, or excuse me, not typically, we always have a rule of not doing it within a couple of days before or after an episode launches. Even though we're a small podcast, we want to be as ethical as possible and act like we would if we were a bigger one.

Starting point is 01:11:11 All right. Thank you, everyone. And we'll see you next time. We'll see you next time.

Chit Chat Stocks - Portfolio Rankings: What Stocks Are We Buying and Selling?

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