Motley Fool Money - EVs and Inside Elon Musk’s Mind

Episode Date: October 6, 2023

BYD is on Tesla’s heels, but we all know Elon Musk loves a challenge.  (00:21) Ron Gross and Bill Mann discuss: - The jobs report, and why they’re paying attention to mortgage rates, credit card delinquencies and inventory levels heading into earnings season. - Meta’s plans to offer a monthly subscription to users in the EU. - Cyberattacks hitting Clorox, MGM, and Caesar’s. - China’s BYD heating up the race in EVs. (19:11) Elon Musk’s biographer Walter Isaacson explains Musk’s fascination with X and how his fixation on mission fuels his innovative and entrepreneurial spirit. . (33:00) Bill and Ron break down two stocks on their radar: Chevron and Burford Capital. Stocks discussed: META, CLX, MGM, CZR, TSLA, KVUE, ASR Host: Dylan Lewis Guests: Bill Mann, Ron Gross, Ricky Mulvey, Walter Isaacson Engineers: Dan Boyd  Learn more about your ad choices. Visit megaphone.fm/adchoices

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We've got the inside scoop on Elon Musk and the story of an electric vehicle company vying for Tesla's crown. Motleyful Money starts now. That's why they call it money. Full Global headquarters. This is Motley Fool Money Radio show. I'm Dylan Lewis. Joining me in studio, Motley Fool's senior analysts, Bill Mann and Ron Gross. Gentlemen, great to have you both here.

How you doing, Dylan? So great to see you guys. It's awesome, right? We've got the stories of Elon Musk and AI, the real price of Facebook and stocks. on our radar, but we are kicking off this week looking at the big picture. Ron, we have a fresh jobs report in our hands as of Friday morning. What is the headline? The headline is that I'm a geek because I love a fresh jobs report. It's so sad. But this is an interesting one. Jobs are up $336,000 for the month, way better than the consensus of $170,000. So the labor market, very, very strong.

Interestingly, average hourly wages rose 0.2%. Now, that's a little bit less than expected. That's going to be important if you stick with me. Unemployment rate, 3.8% compared to 3.7% prior, let's call that flat. Leisure and hospitality led the growth as it has been on occasion over the last couple of years post-COVID. I'm thinking the Fed likes this report, even though the stock market was a little mixed on Friday, even a little confused on Friday. We have the job market remaining strong, which bodes well for the economy, but it's counterintuitive. to the thought that the Fed really needs the labor market to break if it's going to bring inflation down to its goal. But we do see that wage inflation number being lower than expected. So

wage inflation is coming down is a positive indicator. That's what I think the Fed probably likes to see. We do have 10-year treasury yields at 16-year highs, but I'm guessing we get one more rate hike, and then we'll have to see what we see. Bill, I saw you nodding your head there as he was talking about the Fed liking what they saw in this report. What stood out to you? It's so funny because we have spent about 12 years now during the zero interest rate environment. As far as the Fed has gone with rates, because I think that we all sort of like rates to be lower rather than higher. Generally, yeah. That feels good. But bad news has been good news and good news has been bad news. But I think that we've come to the end of that period of time. I mean, it's really funny how expensive an 8%

mortgage feels right now. Oh, yeah. And it just has to do with the path, and it's because of the fact that we're accustomed to be able to borrow really, really cheap money. But 3% rates, I mean, that has never happened before in history before 2009. So societies do really well when things are stable and they struggle when they are. And I think that we're in a period right now where the economy is doing really, really well. I think that's the bottom line and rates are coming up because of,

of that. And so I think we need to get used to the fact that higher rates are actually good news. All right. I want to take the jobs report and actually something you just mentioned there, that 8% rate number, specifically looking at mortgages and kind of get a bigger sense of the macro picture, putting all this stuff into perspective. I'm looking at all this. Just a couple headlines that I saw over the last couple weeks. Mortgage demand hits 27-year low because of 8% near-8% mortgages. Bond yields hitting 16-year highs. Or 16-year highs. I should say. Credit card delinquencies jumping past pre-pandemic levels. Ron, which one of those three do you want to zoom in on here? Help me make sense of it. Well, Dylan, as the husband of a realtor,

I'm going to say the mortgage story certainly hits close to home, but it obviously impacts lots of folks, right? Those who have homes with adjustable mortgages and most importantly, probably those looking to buy a home. And as you said, we're approaching 8% for mortgage rates, which was around. the same rate when I first entered the housing market, but, gosh, as Bill just said, I got used to 3% for a while. Back in the 20th century? It seems pretty severe. Exactly.

Literally. Bill can say that. I'm not allowed to. But, you know, the added cost. The late 1900s. I don't go with that fun. The added cost of financing a mortgage, along with rising home prices due to the fact that there is no inventory out there for homes, has made affordability for homes the lowest.

we've seen in decades. They're 20% behind last year in terms of a sales pace. And people are struggling in terms of what to do if I want to get into this housing market. And people are holding onto their houses longer than they have in the past, especially if you have 3% locked in for 30 years. You're in no hurry to really, that's good money right there, as Bill said. So, you know, these higher rates, are they going to the weak real estate market, the higher rates, are they going to jeopardize this soft landing the Fed is trying to engineer? Or as we said earlier, with the labor market remaining strong, the economy remaining strong, are we actually okay?

And this could turn out well. It's not an easy thing for the Fed to engineer, but I'm thinking we're close. We're plus or minus a little bit to getting that done. In our planning meeting for the show, Bill, you were kind of taking a different angle on the rate story, looking a little bit more at the debt side of it and what we're seeing with delinquencies. Yeah, Ron is taking the center of the curve, which he absolutely should take. But at the left tail, I think you're seeing a lot of distress for people. And a lot of it has to do with the fact that one of the things that you were encouraged to do, why rates were so low for so long, is they were trying to encourage spending. I mean, maybe they don't mention it. that way. Maybe they don't phrase it that way, but we have come accustomed to taking more and more credit as a percentage of our income because credit was so cheap. And so there is a lot of distress that's going on at certain levels. You see car payments under a multi-year high in delinquencies. Credit cards

are at a multi-year high for delinquencies. So we should not forget when we're talking about, hey, the economy is going great, that these types of changes add a huge amount of distress to the most vulnerable amongst us. One of the things I'm curious about with this adjustment in rate environment is we've gotten very used to, not only lower rates, but also a very quick intervention to get rates lower when things need to be propped up a little bit. Oh, yeah. Do you expect the Fed will adjust and maybe be a little bit less sensitive to something like that going forward? Well, they've only told us for the last 18 months, that they're not going to do that anymore. Higher for longer.

Higher for longer. Yeah. So if they're telling you, we should believe them. Yeah. Looking forward, we also have the earning season ramp up next week. And I'm curious, do any of these macro factors, Bill, play into what you are looking at for companies, or are you looking at other things as companies begin to report? So I think one of the biggest things, and I, for some reason, I think this has gone underappreciated. But you remember back in 2022 when we were hearing stories about people ordering new refrigerators. And because of supply chain issues, people were saying, well, your delivery window is sometimes between nine months from now and never.

Right. So companies did the very logical thing in that type of environment of taking on as much inventory as soon as they could just to make sure that they never had a sale that got missed because they didn't have inventory in because they didn't plan. So there is a backside to that, and that is if you take on a huge amount of inventory, that means that you've tied up a lot of capital. And if that inventory suddenly doesn't get used, that can create financial distress. And so you've got, and companies went out, and a lot of times they bought with cash, but they also financed a lot of that inventory. And so it has created a little bit of a macro bubble, if you will.

So it's something that I'm really interested in. And, you know, I think that we should, I mean, we should obviously always remember that, you know, there's individual incompetence everywhere. But systemically, that was a problem. Ron, he's looking at the balance sheet. Where are you zooming in? You know, earnings are, if you exclude energy sector, earnings for the third quarter are expected to be up around 3%. And it's supposed to be up pretty significantly in the fourth quarter. I'll believe that when I see it.

Wait and see. So I'm going to be looking at the retailers for many different reasons. Among them, I want some signals on the strength of the consumer, as Bill said. Savings accounts are coming down. Credit card balances are going up. I want to see how is this a consumer look in both the essential and the discretionary categories. I want to see if the retailers are inventoried properly. Do they have the right mix?

What has been their ability to raise prices in this inflationary environment? That does still persist. How are they positioned for the holiday season? I think the retail sector will inform me in a lot of different ways on what I can expect for the next six months. All right. Coming up after the break, we've got a new name about to take the lead in electric vehicles. Stay right here. This is Motleyful Money. Welcome back to Motleyful Money. I'm Bill Neuiss, joined in studio by Bill Mann and Ron Gross. Guys, social media users in Europe may finally face the decision, their data or their dollars.

Bill Mehta is reportedly planning to offer users in the EU. the option to pay $14 a month for Facebook or users will have to opt into letting the company use their personal data for ad targeting. Is this incentive or disincentive here by Facebook? It does seem like a very super specific number if this is just a rumor, right? Yeah, they seem pretty far away in the planning for this one. I feel like the Wall Street Journal got good information on this. And they're reporting, basically, that it's a choice based upon European regulations regarding personalized ads. So you as a consumer may not want to be tracked and have targeted ads sense to you, in which case they're giving you the choice to pay, simple enough.

And so I don't know about you. I have no illusions about my privacy. And as far as I'm concerned, I find it much more annoying when I get super untargeted ads than when I get targeted ones. But I actually like the fact that there may be a choice out there. Like, yeah, you can just pay. and the illusion that this is all free is no longer going to be the case. You mentioned the specificity of that number, and I looked at the recent calls for Facebook, parent meta, and if you look at Facebook's average revenue per user in Europe last quarter, $17.88. Now, I'm not a mathematician,

but three times 14 is more than $17.88. Ron, does this become something that's actually interesting as a moneymaker for Facebook? You know, I think they're going to, I think everyone is going to find out how much they can tolerate ads in a world where they're asked to shell out, $15 to $20. All of a sudden, targeted ads aren't going to seem so intrusive or creepy. And, you know, if Facebook knows that I love pizza, I'm okay with that. I point exactly on. You heard it here first. Target Ron Gross with pizza ads.

Outside of the economics of this bill, I think one of the things that's kind of interesting is we've consistently seen the EU lead the way with regulation. especially regulation towards big tech. And this looks like the space to watch to see kind of where this industry is going. I think it's really important to recognize the fact that there, in the United States, when it comes to regulating big tech, there is like a plus and a minus because we are talking about a bunch of massive American companies. And so if you mess with their economic model too much, there actually might be a downside in terms of market losses or things of that nature. And I mean stock market losses. The EU doesn't have that upside of not going in and being pretty sharp with these tech companies. I mean, I can't, can you name the largest European pure technology

company? I could, but we don't have time. It's down the list. Well handled there on it. I mean, that's my point. It is far down the list. So they have different interests in Europe. They are much less worried about the impact on consumers than they're much more worried about competition. I mean, that's how they regulate. But in this case, I think it really has to do with the fact that there's no bad news when it comes to Europe in terms of regulating big tech. Sticking with tech, Clorox is one of the latest companies to disclose details of a cyber attack. Ron, in a filing, the consumer goods company said it will be spending $25 million on digital forensics and legal work related to the hack, but it may pale in comparison to what they feel in

terms of the business impact due to disruptions. Yeah, it's a little scary out there right now. This is just one in a long list of cyber attacks. In this case, sales will be down 23 to 28% for the quarter as a result. They're going to end up with a loss for the quarter instead of $150 million in profit. It caused them to take some systems offline that led to product outages, processing delays. They've had to do some of it manually while they get their systems back up and running. It looks like the group called Scattered Spider is likely behind this, as well as those from MGM and Caesars. If you recall, Caesars paid the ransom.

I believe MGM chose not to. It's a difficult decision based on how impacted your business is, whether you want to give into those demands, the more we give into the demands, the more likely they will continue. you, but this is, like I said, a long list. Johnson Controls, Dole, Campbellsoup, Brunswick, and many, many more have been hit by cyber attacks. The Securities and Exchange Commission has come in with more stringent regulations of late, which is you must tell the public if you're hit with something significant so they don't just sweep these under the rug. That seems like a good baseline provision.

I think we can all be happy about that. Two votes. Bill, as someone who is looking at companies, owns companies in their portfolio, I feel like it's kind of hard to look at a pattern of this and say, oh, I might be a little bit more subject to one of my companies being targeted. Also, probably pretty hard to kick the tires and understand the cybersecurity measures that a company has in place. What is the investor angle on something like this? Well, let me ask you this. If you were to look at your portfolio, and let's just pretend this is your portfolio, if Clorox was in it, would you think that that was one of the more susceptible or less susceptible companies?

Naturally, I would think less. I would as well. I think you're going to start hearing about something over the next couple of years called code debt. And basically what code debt is, is when you think about what a company's entire code infrastructure looks like, a lot of companies have code that's written on top of machine language and Pascal, and they have millions and millions of lines of code that probably do the work of 300,000 lines of code today. And when we think of cyber attacks, we think of maybe someone coming in through the front door. But basically, if you think about a code stack, every single line is a potential front door.

So I think that you're going to start to see a lot more investment in lowering that code debt. And for me, I would be very comfortable holding a basket of the cybersecurity companies because I don't think that there is going to be one winner. and I also don't think that we are going to be more secure with a single winner. Yeah, they don't look cheap to me, those companies, but the growth probably will support the valuation to some extent. The crowd strikes, Octa, Z-scaler, Fastly, Fortinet, those types of companies, at least some of them would be probably wise to hold in your portfolio. All right, we're going to round out the news updates with a look at electric vehicles. Don't look now, but there's a new carmaker coming on Tesla's heels. China's B-YD is reportedly on pace to sell

1.8 million EVs by the end of 2023. Bill, that would bring it even with leader Tesla. Sounds unbelievable, doesn't it? Because there are functionally zero B-Y-D EVs on the roads in the United States. I was going to say, I've never seen one. Yeah. So it's a company that is owned 6% by Berkshire Hathaway. They bought it in 2008 for $225 million. Their stake is now worth $6 billion. Charlie Munger mostly, right? Yeah, exactly. So once again, those guys, I don't know if you've heard about them, I think it's going to be big someday. But kind of an unusual investment for them. It's an extremely unusual investment for them. It was far more speculative than they tend to, but they thought that the CEO was really, really remarkable. He's a guy who still flies coach

to this day is, you know, you would not go into their office and see any of the corporate trappings that you see anywhere else. Now, for the cars themselves, there is something very specific to keep in mind. They are exporting primarily to your Europe. The Chinese EV market is a bit of a mess at the moment. They're making a surplus of 10 million cars. So they have to go somewhere. The EU, as we talked about earlier, is actually investigating the Chinese EV industry for anti-competitive practices. But the bottom line at the end of the day is that EVs coming into the United States, the Chinese EVs pay a 27 percent tariff and they don't get the tax. credit. So it is something to watch, although here in the United States, you can't necessarily see it. Yeah, that's fascinating. And it's a totally different approach to the EV market than what we saw from Tesla. They famously started at the high end, brought things down to the low end over time to make a more budget-friendly vehicle. We're going to get a little bit more on Tesla later in the show,

but we're going to say goodbye to you guys briefly. Thanks for hopping in with the news updates. Up next, we've got Elon Musk's biographer Walter Isaacson and the inside scoop on Musk's Holy grail for AI and how it could wind up in cars. The old adage goes, it isn't what you say, it's how you say it, because to truly make an impact, you need to set an example and take the lead. You have to adapt to whatever comes your way. When you're that driven, you drive an equally determined vehicle, the Range Rover Sport. The Range Rover Sport blends power, poise, and performance. Its design is distinctions. It's designed is distinctly British and free from unnecessary details, allowing its raw agility to shine through.

It combines a dynamic sporting personality with elegance to deliver a truly instinctive drive. Inside, you'll find true modern luxury with the latest innovations in comfort. Use the cabin air purification system alongside active noise cancellation for all new levels of quality and quiet. Whether you prefer a choice of powerful engines or the plug-in hybrid with an estimated range of 53 miles, there's an option for you. With seven terrain modes to choose from, terrain response two fine-tuned your vehicle for the roads ahead. The Range Rover event is on now. Explore enhance offers at Rangerover.com. Welcome back to Motley Fool Money. I'm Dylan Lewis. One author is consistently the go-to for profiles on most innovative, brilliant, and complicated minds. And that's Walter Isaacson.

His latest work is a biography on Elon Musk built on countless hours spent with Musk and his friends, family, and colleagues. Motley Fool Money's Ricky Mulvey read the book, and this week spoke with Isaacson about Musk's fascination with the letter X and how his fixation on mission fuels his innovative and entrepreneurial spirit. One thing I didn't realize, and it is apparent throughout the way he names his kids, the way he names his company, is the letter X in just how important that letter is to Elon Musk. Walter, you are a man of letters, but I would doubt you have that type of preference for exactly one letter. Why is this letter so darn important to Elon Musk? Even as a kid, whether it be the X-Man comics or the mathematical concept of the unknown, the mystery that you have to hunt for

in an algebra problem. For example, it made him love X. It sounded as if it was risk-taking, if it's a hardcore, there's an adventuresome quality to it. And throughout his life, whether it was, you know, his eldest surviving child was named after his favorite comic book character in the X-Man Comics, Xavier, or his first company was called X.com, which morphed into PayPal, but he fought to keep the name X. And you see it over and over again with SpaceX or turning Twitter now into X, thinking he feels, you know, little tweets with blue birds and little blue check barks that are anointed to members of the elite is bullshit

and he needs a hardcore, somewhat more mysterious type of thing. And then X-A-I. So he, and of course, his three-year-old kid who's with him at all times has a name that sounds like an auto-generated druid password, but he calls him X. Yeah, and a lot of the arguments when Musk started with the founders of PayPal where he was pushing for X, his arguments seems to be getting the same ones now, right? X.com sounds a little seedy. People don't know what it is,

but he pushed through it similar to what he's pushing through now. And maybe Twitter really is the culmination of that dream in the 90s of what X.com could be. You got it right, Ricky. Nobody else seems to have captured that because it's, but it's part of the narrative, which is feeling burned that Peter Thiel and others ousted him from the company that he had called X.com 20-some odd years ago. And then they named it PayPal. And he thought PayPal was a sweet little name, like a friendly person who helps you get paid. And of course, it does have a more friendly feel to it, just as Little Bluebirds and Twitter has sort of a sweet and friendly feel. But nobody uses a phrase sweet and friendly to describe Elon Musk.

He's hardcore, he's all in, he's a risk taker for better or for worse. And when he was first buying up stock in Twitter, and we were at the gigafactory in Texas, even before it opened, and he told me he was going to go try to control Twitter, he said it will be the booster rocket, the accelerant, to make a payment system connected to a social network, connected to a place where things like the Motley Fool podcast can be posted and make money, people can do content and make money, he said, this will fulfill my dream of the original X.com. I'm looking at my time, and I know I have to focus on Tesla a bit. One of the things you've written about Tesla, and I think this is foundational to the business, quote,

Musk focused on the importance of the mission rather than the potential of the business, end quote. for a lot of short-term stock traders, that might not be the best course of outcome, but a lot of long-term investors have benefited well from that mentality. How does that drive Tesla's model? What do you think would have changed at Tesla if that were reversed, if the potential of the business was more important than the importance of the mission? You know, if he were driven mainly by money, you won't start a rocket company and you wouldn't start an electric vehicle company.

And he always has a mission in mind and then backfills with a, business plan. To take SpaceX first, his mission is getting to Mars, and then he realizes I can launch communication satellite. In fact, I'm the only person who can send up rockets, land them upright, and reuse them, so I will launch my own internet in low Earth orbit with Starlink. Now, you ask about Tesla, he decided by doing high-end vehicles like the Roadster. He could fund a factory because he thought it was ridiculous that America was outsource. its manufacturing, and that would make it so we didn't have a feel for innovation if we just sort of design things and let it be manufactured somewhere else. So he spent more time focusing

on not just the product, but what he called the machine that makes the machine, the assembly line, each station on the assembly line. And by insourcing everything is not the best short-term business model. If you're going to go for short-term profit, obviously your labor costs are better if you're having it manufactured, you know, in other places. But he said we have to look at the longer term. And it was a period in which I think more than 70% of the intellectual property that automakers produced in America, they were sending off shore to get produced. And he more and more than more decided to insource it. But it did finally mean that he has the two most productive factories around in Fremont, California, and Austin, Texas. And now he turned out already this year

a million Tesla's. And he's worth more than the next eight or nine car companies combined. And one of the things I sat in on a meeting, it wasn't public, but I put it in the book, he's now building the new assembly line that's going to create not just robotaxies, but a pretty cheap, $25,000 car, something to go up against a Corolla. And that will, because he's willing to price it cheaply, but then make up for it with huge manufacturing, that will take Tesla to the next level, along with autopilot when he finally gets full self-driving done. The last question I want to ask is about AI. He has a new company called X.aI. A lot of this seems to be driven from a conversation that he had with the Google co-founder, Larry Page,

where Musk is talking about the dangers of AI and Larry Page essentially accuses him of being a, what is, a speciesist, which is that if these computers can think and feel, don't they matter as much as we are, your book describes times where Elon Musk has stretched stories thinking in retrospect, forgetting what people say. Has anyone followed up with Larry Page about this? to dive into his thoughts about what it means to be a speciesist. Larry doesn't talk about it much because he used to be one of Elon's best friends. I mean, Elon Musk is the world's richest couch surfer.

He didn't have a house in Silicon Valley, so he would stay at Larry Page's house. And they'd spend nights and nights talking about the risk of artificial intelligence turning rogue on us and leaving humans behind, sort of the Asimov issue. And as you said, Larry Page thought that was nuts. You know, and like, no, and by the way, if we could get computers that could have consciousness, why isn't that just as good as human consciousness? And Musk says, yeah, I'm a species.

You know, I actually believe in the human species. I think it's a cool species. I'm more in favor of it. And I talked to, even one of those arguments was at a birthday party. Reed Hoffman is there. Many other people are there, Sam Altman, of course. And so these conversations happen over the years, including with Demis Hasibis, who is the founder of Deep Mind, and he's trying to throw himself in front of the train when Demis is selling Deep Mind to Larry Page. And so he's gathering, Musk is gathering people to try to stop that.

So this isn't just one conversation. about two years of him opposing Larry Page on this notion of we need more guardrails on AI. And now he's still that way. He believes that Sam Altman took Open AI, which Musk had co-founded with Sam Altman, from being a non-profit open source thing to now being a closed source in which it has a for-profit arm that has sold a large percentage to Microsoft. And it's Elon Musk's nightmare, in terms of AI, at least, that Microsoft and Google, without guardrails, are going to create AI.

So in some ways, one of the culminations of the book, besides the first launch of Starship, is must deciding that he has to get into AI himself, rather than having trusted open AI and other things. And near the end of the book, there's a whole scene. It's where we meet Chavon Zilis' their children for the first time. I'd spend a week or so with Musk and was just back here in New Orleans, rested and recuperating and maybe starting to write.

He said, no, you've got to come back. It's something we can't talk about on the phone. And we sat in the backyard of Chavon's house in Austin by the swimming pool with their two twins sitting on their lap. And he said, I'm going to have to start an AI company, XAI. And the interesting thing is it's not just about doing a chatbot. It's not just about large language model, generative, you know, predictive, transformer-based language intelligence, you know, chat bots like chatGBT. He feels that the Holy Grail is real world artificial intelligence.

real world artificial intelligence that doesn't just process language and search the, you know, billion documents on the internet so you can ask what are the five best popes or something, but something that can process video data, like the eight billion frames a week from Tesla cars and the cameras in a Tesla car, all being processed not just by NVIDIA GPUs, but by Dojo, this chip that he's doing that maximizes the ability to do video and oral things. And for that matter, Twitter feeds. Eventually, he wants to create cars that can drive themselves and robots that can walk around a factory floor or walk around Burning Man or walk around your house and have planning and have

intentionality and be able to do things. And that is going to be his name. next big thing is real-world AI. And I'll leave with this, which is having watched Sam Altman and Google and all doing machine learning based on processing of millions and millions of documents and words and everything else and being able to predict things. He makes a pivot at the end of the book from the full self-driving technology he has been using, which is a rules-based algorithm where FSD 11, for example, has hundreds of thousands of lines of code,

coded by real engineers and humans, that have simple things like when you see a red light stop or when you see a double yellow line, don't cross it, or when you see a bike lane and you're taking a left turn, here's what to do. And they show him that instead of doing, a rules-based algorithm, you could do what Chad GPD does with language and do it with navigating the real world, which is to look how millions and millions of drivers handle different situations.

And the machine learns what to do based on human imitation. So it is almost like ChatGPT for self-driving. Walter Isaacson's biography on Elon Musk is in bookstores and online. And if you want more of his insights on what motivates Musk and the unbelievable story of a knife thrower at a child's birthday, check out our full interview with Isaacson in Motleyful Money's podcast feed. The whole conversation will post this Saturday. Coming up after the break, Bill Mann and Ron Gross return with a couple stocks on their radar. Stay right here. You're listening to Motleyful Money.

There will come a payday. Hallelujah, what a payday. There will come a pay day. As always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against snowfire selling anything based solely on what you hear. I'm Dylan Lewis, joined again by Bill Mann and Ron Gross. We've got stocks on our radar coming up in a minute, but first, we talked earlier

about the arms race and electric vehicles. We're going to check in on an equally competitive space. Popeyes has officially taken over KFC to become the second largest chicken chain in the United States. Ron, it is a sad day for the Colonel. You know what? Both of those are fine, but they're not great. They pale in comparison to our favorite Chick-fil-A. The nation's favorite chicken flight. You get the number one, the original chicken sandwich with a combo fries and a drink. It's delicious. It's number one for a reason. And it has been taking market share from number two and number three. Not only is it cementing its number one spot,

But Bill, Chick-Fleight continues to take away market share from the others. I do want to talk about Popeyes and put a little respect on their name for a little bit, because Popeyes was a distant, distant, trailing competitor for a bunch of years until CEO came in named Cheryl Batchelder, and she completely revolutionized and rehabilitated the company. I mean, I don't know if you remember going into Popeyes in the 1990s, but you couldn't leave and not feel bad about yourself. She was very good at pretending to invent the chicken sandwich.

That's exactly. Yeah, that was a wonderful PR and marketing campaign a couple of years ago. I think we all bought into the taste test fever. I think one of my favorite Cheryl Batchelder moments is when someone was asking her about healthy options, she said nobody's coming into Popeye's for a salad. It's knowing your customer, and it's incredibly, incredibly important. Absolutely right. But it is a tale of customer service, and that is what Chick-fil-I excels in.

and it is also what Popeyes has gotten much, much better at. All right, let's get over to stocks on our radar. Our man behind the glass, Dan Boyd, is going to hit you with a question. Ron, you're up first. What are you looking at this week? This one comes from our very own Matt Argusinger over at Dividendant Investor. It's Kenview, KVUE, the former consumer health products business of Johnson and Johnson. Well-known products, Band-Aid, Tylenol, Listerine, Motra, Nutrigina, names we all know.

J&J completed a spinoff and IPO of Kenview earlier this year. J&J still owns about 9%, but it's mostly now been released to shareholders. It's the largest pure play consumer health company. Stocks down about 10% from the IPO. From a PE ratio perspective, an earnings ratio perspective, it's cheaper than competitors like Colgate and Procter & Gamble. 4% dividend yield for those who are interested in income, probably well-supported by the cash flow of this company will generate.

So I don't know if the stock's going to knock the cover off the ball, but you get 4% and you get probably some upside as well. Dan, a question about Kenbue and any interest in that 4% dividend yield. I mean, that's pretty juicy, not going to lie. But this company, Ron, I can't imagine it's going to be growing fast at all. It already has every big brand under the sun. Yeah, they're the leader, and they will continue to grow. at the rates of the economy, maybe a little bit better than that, and that's what we should expect.

If you can buy it at a discount, you might get some additional upside from that 4% yield. All right, Bill, what's on your radar this week? I'm going to talk about a company called Grupo Aeroportuera. Easy for you to say. Right, here we go. Rupo Aeroportuario del Sureste, also known as Essoor, which is a conglomeration of Mexican airports in the southeastern part of the country that includes Cozumel, Cancun, Merida, and a number of other places. Tough news for them earlier in the week when the Mexican regulator came in and said they were

going to change, and they haven't said how, but you can assume that it's bad news, how these operators of the airports are compensated on landings. They make a huge amount of money upwards of $30 per ticket for any person to land. the airport. So changes are coming, but these are still, I mean, Cancun Airport is, you know, is, is massive. You don't just build another airport next door and compete with it. So you're talking about a company that has an absolutely dominant position in a part of the market where there's more and more travel going to. It is a story of what happens when you have a single customer and the single customer is pretty powerful. And in this case, it's the Mexican government.

But it was cheap beforehand, and now it's even cheaper. Dan, I took French in high school, so I'm going to stick with the ticker on this one. A question about ASR. Bill, can we trust the Mexican regulators not to regulate this company out of existence? No. Back to you, Dan. I think it's true with every company that has generally government contracts, that the governments have the right to close out the contracts. I mean, absolute. But in this case, the Mexican stock exchange went down 3% yesterday as a result of this action. And that matters to the Mexican government as well. All right, Dan, which one is going on your watch list this week? I'm taking Kenview. They got Band-Aids. All right. Bill Mann, Ron Gross, thank you guys for being here and bringing your radar

stocks. Dan Boyd, appreciate you weighing in. That's going to do it for this week's Motleyful Money radio show. The show is mixed by Dan Boyd. I'm Dylan Lewis. Thanks for listening. We'll see you next time.