Motley Fool Money - First Half Lookback

Episode Date: July 4, 2025

For once, the big tech giants are not driving the market’s returns. (00:21) Motley Fool Senior Analyst, Anthony Schiavone, and Motley Fool Asset Management’s Chief Investment Strategist, Bill Mann, join Ricky Mulvey to discuss: - American equity markets reaching all-time highs. - The surprising performance of dollar stores. - What the passage of The Big Beautiful Bill means for EV makers and the federal deficit. - Ricky’s goodbye to Motley Fool Money. Then, (19:11) Motley Fool Canada’s Jim Gillies joins Ricky to discuss speculation in the market and to shine a light on five stocks to keep an eye on. (35:26) Bill and Anthony discuss two radar stocks, Alphabet and Target. Companies discussed: MSFT, META, TSLA, DG, MEDP, LULU, SMPL, ATGE, KTB, TGT, GOOG, GOOGL Host: Ricky Mulvey Guests: Bill Mann, Anthony Schiavone, Jim Gillies Engineer: Dan Boyd Advertisements are sponsored content and provided for informational purposes only. The Motley Fool and its affiliates (collectively, "TMF") do not endorse, recommend, or verify the accuracy or completeness of the statements made within advertisements. TMF is not involved in the offer, sale, or solicitation of any securities advertised herein and makes no representations regarding the suitability, or risks associated with any investment opportunity presented. Investors should conduct their own due diligence and consult with legal, tax, and financial advisors before making any investment decisions. TMF assumes no responsibility for any losses or damages arising from this advertisement. Learn more about your ad choices. Visit megaphone.fm/adchoices

The market keeps roaring and you're listening to Motley Fool Money. That's why they call it money. The best thing. Cool global headquarters. This is Motley Fool Money Radio show. I'm Ricky Mulvey. I'm Ricky Mulvey, joined today by Motley Fool senior analysts Bill Mann and Anthony Chavone. Fools, good to have you both here.

Ricky, how you doing, man? Ricky, doing pretty well. We are airing this show on July 4th and we're recording a few days early. So we're going to look back on the first part of the year. Bill, I can give you plenty of reasons to be negative about the economy. Maybe a trade war coming up. We had some softer jobs data. But it really seems like investors want to buy American equities.

How about that? American exceptionalism. We have some of the best companies in the world located on our shores. As you look back on the first half of the year, any broad reflections on stocks and the market reaching record highs. Ricky, I would say that one of the most interesting things that's happened, in 2025 is that all of the asset classes within the, you know, the biggest asset classes in the U.S. have sort of congregated. I saw something really interesting the other day that showed that the

highest and lowest yield amongst the five major U.S. asset classes is now less than 1%. You know, so U.S. corporates are yielding about 5.2% all the way down to three-month Treasury bills that are about 4.3%. I don't want to say, I don't want to, I don't want to, I don't to dwell too much on things that have never happened before, but this has not happened before. And it really speaks to the fact that all of the asset classes in the U.S. seem to be focusing on what is going to happen with the statecraft in this country, that they are staying at a single point and wondering what's going to happen. So, yeah, the market is up a little bit. it's up a lot from where it was in the lowest points of April. And yet, the U.S. stock market has

underperformed most stock markets around the world for the first half of 2025. So you're not saying that this time is different, but merely that this has never happened before. Really clean way of couching that there, Bill. Anthony, how about you? Anything you want to add? Broad reflections on the market in the first half of the year. Yeah, for me, I mean, coming into this year, we knew that the SP 500 return roughly 25% each of the last two years and that the SP 500 was valued at roughly 23 times forward earnings coming into the year, which is well above its long-term average about 17 times. Now, at the beginning of the year, if I told you that during the first six months of 2025, we'd have global trade policy that would change dramatically.

Geopolitical tensions would increase. The SP 500 would experience a roughly 20% drawdown and gold will be up more than 20%. I don't think you would have predicted that the market would have returned roughly 6% in the first half of the year. So I think the takeaway, key takeaway for investors is to embrace the limits of your knowledge and to be comfortable knowing what you don't know. Because even with the perfect understanding of future events, the direction of the market is still going to be unpredictable. How about embracing this for the limits of your knowledge? Wall Street Journal has an article about the best performing stocks. what's driving the market, specifically from the previous high in February of this year.

So take a second and think of what that stock could be the best performer since February of this year. Maybe you're thinking of a big tech company, or how about Palantir, which has a frothy valuation right now, but it is not. And it's dollar general, up by 50%. And to be clear, long-term holders of this stock are still down quite a bit. But those who've picked up shares on this value play have done quite well this year. So dollar stores, these are the opposite of a growth story, but why are investors warming up to them? What's going on here? Yeah, I mean, this is probably one of the rare times in the last few years that so-called value is outperforming growth. So coming of the year, Dollar General was hated by the market. I think shares are down more than 70% off

their all-time high earlier this year. And I think investors started warming up the Dollar General earlier this year when there were growing concerns about the health and the consumer. And the economy. And, you know, Dollar General is a bit of a countercyclical business where middle and higher income consumers tend to trade down during challenging market environments. And if we go back to 2008 to the great financial crisis, Dollar General actually grew their same store sales by 9%, which is a large number during, you know, one of the biggest financial catastrophes we ever seen. And then, you know, you factor that in, and you think about on a recent earnings call, Dollar General CEO said that they're actually seeing the highest percentage of trade-down

customers they've seen in the last four years, and that Dollar General has been kind of an outlier in retail space because they actually raised their guidance in the first quarter at a time when many of their competitors and other companies were pooling guidance. So I think the combination of a beaten-down valuation and an improving business fundamentals is why Dollar General is suddenly loved again by the market. So don't pay attention to the bond market. Pay attention to the dollar stores. That's exactly what you just said, Anthony. Just kidding. You can pay attention to the bond market as well. Bill, man, the Mag 7 this year really hasn't done a whole lot. This is from James McIntosh in the Wall Street Journal. And this is a sentence I did not think I would say this year.

Big Tech isn't dominating the market's returns like it used to. Whoa. Big Tech used to dominate the market's returns. What's going on here? That's all we ever talked about for several years. I mean, when you look at the Mag 7, just looking at their price to earnings ratio, which is not a perfect way of measuring how expensive a stock is or what the expectations are. But it's good enough. Tesla is about 180 times earnings. And Netflix and Nvidia are 60 and 48. Microsoft is at 38. These are still far beyond the price to earnings ratio of the S&P 500 in general, which is about 28.

times. When you have situations like this, things that can't go on forever won't go on forever. The MAG 7 is now, I mean, each one of them is well over a trillion trillion dollars. I think Tesla actually has fallen back below that level. The fact is that these have become massive amounts of the percentage of the overall valuation of the stock market and huge as comparison to the size of both the U.S. economy and the global economy. So it is natural to see some reversion to the mean. Not only are these valuations loftier than the market average. And higher valuations can make sense for exceptional companies. One can think of Amazon and why an investor would pay a higher price to earnings multiple for Amazon. And let's say, I'm going to make fun of Target for a moment than

target. However, the other piece of this story bill is concentration. And the Mag 7, while it hasn't been driving returns, it still makes up more than one third of the S&P 500's market cap. A decade ago, it was closer to 12%. I know that's a boring story market concentration, but is that something investors should be paying attention to? It is definitely a risk factor. It's a risk factor that comes with a nice shine on it because these companies have absolutely, fantastic business models. These are cash flow generating machines of the likes. We have never seen in our lifetimes and probably will not see, again, the companies outside of this group. So, yes, it is very much the case that having such a large overall percentage of the S&P 500,

which is in some ways the overall stock market of the U.S., it's a risk factor for sure, because if anything happens to these companies. For example, some of them are actually in some ways being upended by AI. And that's something that would cause the market to take a look at these companies. And if they fall, I don't know, just a little bit being that large of a percentage of the overall market, it has an outsized impact on the market itself. The other big macro story I want to hit is that the United States Senate has narrowly passed the big, beautiful bill with a vote of 51 to 50. And to my constituents, I would like to tell them I did not read the entire bill.

But one thing I did notice is that this bill takes away the EV tax credits that I think it was $7,500 for a new car and then about $4,000 for used vehicles. I should have put that in my show notes. Anyway, this tax credit is a direct attack on my lease where I was able to get a brand new EV for $1,500 down in $100 a month for 24 months. And this was at the taxpayer's expense, but it was a great deal for me. And besides my personal feelings on this, what does this removal of the tax credit mean for the electric vehicle industry? Yeah, well, Ricky, I don't think it's a great development for the EV industry as a whole. I mean, if the bill passes, it would eliminate the $7,500 tax credit for purchasing or leasing a new EV. And that's problematic because according to Kelly Blue Book,

new EVs cost roughly $10,000 more than new combustible engine cars before subsidies. So, you know, at a time when consumer budgets are already stretched, you know, now EVs look like they're going to be even more expensive compared to the gas power cars within the next few months. So that's probably not a good development for EV manufacturers, but it might be a good development for some of the legacy automakers like GM and Ford. but I'm really having trouble seeing how this can be positive for the EV makers, at least in the long term. Maybe they get some pull forward of the next few months for people looking to purchase EVs ahead of that tax credit expiration.

But yeah, definitely not a good sign for the EV makers. It's difficult to tell what's impacting Tesla on any given day, whether it's President Donald Trump threatening to deport Elon Musk or the removal of the EV tax credit. Actually, it's the removal of the EV tax credit that means more for the business. Anyway, Bill, man, the bigger story here is that we have moved from the austerity of Doge to adding potentially $3 trillion to the deficit according to CBO estimates. What is that deficit spending for people like me? And is that important for investors to pay attention to? It's been important for investors to pay attention to for the last 30 years.

And yet we really haven't because ultimately a government deficit is something that the country that has the reserve currency should be able to handle. Now, we are at about $37 trillion in accumulated government deficit in the United States of America. And according to the scoring, the big beautiful bill will add $3 trillion to that deficit. What's a trillion or two if, you know, on top of 37 trillion at some point? It will start to matter. It has to start to matter. It is, is a massive burden. It's a claw forward. It does perhaps lead towards, you know, a reasonable argument that you should hold stores of assets, stores of value like gold. It also speaks to holding companies that have the capacity to withstand inflationary pressures, companies that have

pricing power. It's kind of the same thing. So that's actually where I would be more focused. After the break, we're taking a look at the biggest economic storylines for the second half of the year. Stay right here. You're listening to Motley Full Money. 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 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 to fine-tuned your vehicle for the roads ahead. The Range Rover event is on now. Explore enhance offers at Rangerover.com. Welcome back to Motleyful Money. I'm Ricky Mulvey, joined again by Motley Full Asset Management's Bill Mann,

Motley Full Senior analyst Anthony Chavone. Before we get back into the show, we do have two pieces of housekeeping. And first, Bill, you've got a new disclosure you've got to read. I do. I serve as chief investment strategist at Motley Full Asset Management, an affiliate of the Motley Fool. While affiliated, Motley Fool asset management is a separate and independently regulated entity. None of the investment decisions made at Motley Fool asset management involve individuals

from the Motley Fool's media or business operations. As you know, Ricky, all of Motley Fool asset management operates independently in this way. Thank you, Bill. For those who may not have listened to the show last week, this is my, final time hosting Motley Full Money and wanted to tell the listeners. About four years ago, I applied for a job as an associate producer at an internet company I had kind of heard of and discovered The Fool, a place that would become an important and good part of my life. Chris Hill and Dylan Lewis, they took a chance on me and few places would allow someone in their mid-20s to host

a top investing podcast. But the Motley Fool lets people learn by doing and gives employees the chance to do work that other places reserve for much more senior people. I'm lucky that I got the chance to work with Chris and Dylan, and luckier that I can call them mentors today. For those who don't know, Chris is laser-focused on valuing listeners' time, and Dylan's keen editorial sense made the show better for you. Both of them are managers who care deeply for the people around them.

Their good work ripples through today's program. I'm optimistic about the future, and the difficult part is saying goodbye to the hardworking kind people. Mary Long, Dan Boyd, Rick Engdall, and Tim Sparks, to name a few. The analysts you hear every day, and a special shout out to the Denver Fools, who showed up from time to time in person. It made it a better place. The good, decent people here are what made my choice to leave the organization difficult.

And for you listening, thank you for spending time with the show. I don't take that time for granted. What comes next? It's a little unclear. To be honest, I'm still figuring out what the path is. could be having coffees posting more on the internet, but I'm pretty sure about one thing. I'm not done podcasting. I'm not done making things. So if you want to keep in touch, I'll invite you to connect with me on LinkedIn where I'll be posting from time to time.

And now, back to the show. It's good working with you, Bill and Anthony. I'm glad to have you on my final episode of Motley Full Money. Ricky, it's been a pleasure working with you as well. And one thing I would say, although you are going to be very much missed, you are someone who brings curiosity every day into everything that you do. And so I can speak for Chris and for Dylan and saying very, very strongly, taking a chance on you was not the risk that you think it was. We knew from the outset that you were going to be a star and that is something that you have been. So I thank you as well for having the opportunity to work with you. I'll just like what Bill said. It's been a pleasure to work with the last three or four years. I have learned a ton from you, listening to you on the show.

And yeah, just wish you nothing but the best on your next adventure. All right. We don't have a ton of time left in this segment. For the first half of the show, we looked back on the storylines that drove the market to all-time highs. Let's look forward to the biggest economic storylines that y'all are paying attention to. Bill, we'll start with you. What is a business economic storyline that you're watching as we end the year? Or not end the year.

We still have six months, one in the second half of the year. It's over. There's a really interesting story in the Wall Street Journal about the housing market in the U.S. And when we say housing market in the United States, it's really important to make the point that there are thousands of little housing markets that only kind of barely interact with each other. Housing prices across the country are down. And no place more so than Cape Coral, Florida, which has seen a decline in average housing price. of 11%. This is really interesting because ever since COVID started, Florida has been the obvious winner. It's had a huge amount of population influx. And I think maybe now we may be seeing the

beginning. I don't know if I would call it buyer's remorse, but we are beginning to see recognitions of the things that make the Florida market special and maybe not in a great way. special because it's really hard to buy homeowners insurance there, Bill. And I'll ask you very quickly, one thing in 15 seconds that you're going to be watching in the second half of the year. From a market perspective, I'm looking at small caps. They've underperformed large caps each of the last four calendar years. And that's according to J.P. Morgan's most recent guide to the markets report they put out every quarter. And what I found interesting is that the first half of this year. Small caps are the only asset class with a negative return. Every other asset class,

JPMorgan, lists, has a positive return. So I'm looking for a bounce back in the second year. Maybe they could turn positive. Obviously, they struggled a lot over the past four years, but I'd be interesting to see if that tide eventually turns later this year. I really hope so. I own some small cap index funds. And previously on the show, I had a lot of fun talking about small cap companies with Mr. Bill Mann. All right, up next. Motley Full Canada's Jim Gillies joins me to shine a light on some less discussed stocks that you may want to know. Stay right here. You're listening to Motleyful Money. If you're early in your career and looking for insight, inspiration, and honest advice,

listen to the Capital Ideas podcast, hear from Capital Group professionals about leaning into the differences that make you unique, making decisions that last, and what it means to lead with purpose. The Capital Ideas Podcast from Capital Group, available wherever you listen, published by Capital Client Group, Inc. Welcome back to Motleyful Money. I'm Ricky Mulvey. More people are excited about investing right now. So what's that mean for you?

Earlier this week, I checked in with Motleyful candidates, Jim Gillies to talk about speculation in the market and get some stock ideas that may represent growth at a reasonable price. So, Jim, I'm starting to get some feelings like it's 2021 again. And while we're celebrating all-time highs for the market, I feel that there's some easy money coming back in and wild returns happening. You like throwing cold water on people having a good time because you're a realist, not a curmudgeon. Don't say you're a curmudgeon. But I wanted

to ask you, do you think speculative mania is back in the market? I'm a fan of people having a good time. So I'll put that out there. I think speculative mania is always in some form in a market. It's just how broad is it? You know, in 1999, it's pretty broad. 2001, hard to find. Early 2020, very hard to find. 2021, quite easy to find. So I do think after a couple of really good years in the market, 2023, 24, of course,

2022 was kind of the pain that a lot of investors had to endure for the pleasure of 2021. But after a couple of really good years in the market in 2023, 24. Yeah, I think there's a few things that are getting a little frothy out there. Doesn't mean I think there's an imminent correction or crash or anything. It's just more of a, be thoughtful of where you're going, be thoughtful of what you're purchasing, be thoughtful of the position size. You know, there's nothing wrong with like a lottery type pick or two. You know, but if you make them 10% of your investable capital, that might not be terribly smart. But yeah, I think that the longer we go and the rebound from the tariff Schmozzell earlier this year,

you know, I think a lot of people are very excited about investing right now. And I somewhat counterintuitively kind of pare back a little bit when I see that. My concern is precisely that my lottery ticket positions are the ones that are doing really well. And I'm like, oh, no, this seems to be a time to get a little less excited about those. also seeing sort of can't miss stocks coming back. I don't remember seeing these in late 2022, early 2023, but one of them right now is hymns and hers. And we were talking about that before the recording. Why should investors beware when they see a sort of can't miss opportunity like that? Well, I'm certainly not calling it can't miss. And I do believe in the

principle. If something is denoted as can't miss, you should probably be quite wary of it. you should probably step away slowly so as to not disturb it. Most Canadians, I have to do this, Ricky, you know, for nostalgia's sake. Most Canadians remember our biggest example of Can't Miss. That would be Nortel Networks in the great tech bubble. It went to zero, but it was for a time in the late 90s considered the most can't miss stock in certainly the Canadian market. But there's inherently nothing wrong with the idea of a stock that could be can't miss. I'm going to call that kind of a growth stock because we tend to really, no one gets terribly excited about, and they should, but they don't, about stocks that are, say, growing at 1 to 3%

a year, but are improving their operations by, say, 5% a year. And they're run by good people who are excellent capital allocators, who are buying back 5% to 10% of the stock per year and they're also increasing the dividends. People don't get terribly excited about that, but something with the promise of 20, 30, 50 percent annualized growth, people get real excited about that. And when they work, Amazon from the late 90s, Shopify from the mid 20 teens, for example, when they work, Mercado Libre for the past 15 years, Chipotle since about 2007, when they work, they're beautiful things. You just got to make sure

you size them appropriately. You've got to go into one thing I really like and that I think the speculative excess kind of misses is everyone claims to be a long-term investor all the time. It's kind of remarkable to me that in 2022, what happened

in 2022, a lot of people who in 2021 were claiming they were long-term investors about everything they ever bought. kind of got real silent in 2022. And I'm just here to point that out, okay? And so when you are moving into a stock, you know, and you want to be that long-term holder, make sure you're buying companies that are worthy of a long-term hold.

And make sure you're being brutal and honest with yourself as you assess things. Because it's your money. No one cares about it more than you do, okay? Don't worry about what other people think. Kind of go through your own process and assess, do I think this is reasonable? So you talked a little bit about him, hymns and hers.

And, you know, that's an interesting one. It's certainly one that's in the market right now. Kind of go and look at it. Ask yourself, why do I own this? What do I expect out of it? How are they making money? What do I think is going to happen growth-wise? One tool that I love,

because I am a valuation guy, and I like to say all valuations are wrong at all times. Every DCF that's ever been done is been wrong because you do not have perfect foresight. You don't know what's actually going to happen. A tool that I like is what's called the reverse discounted cash flow or reverse DCF. And that kind of done reasonably well should give you an estimate of what growth a company needs to generate to justify today's price. And then you ask yourself, well, is this reasonable? Do I think this is reasonable?

So I actually did a quick little reverse DCF of of Hems and Hers, if you'd like me to opine on that. I got time. Brilliant. Okay. So, you know, and again, all DCFs are wrong. It's more a question of, are my assumptions reasonable? Okay.

So for this real brief, like it took me five minutes, this is just a sample. It's not, you know, you would do a lot more work, I would hope. But as I looked at hymns and hers, again, I don't really know anything about the company. But, you know, I know I've seen them in the news a lot recently. And I know they're tied to the GPT or the LB. GLP1, Jim. I was going to say all these acronyms.

Yeah, you know, I see this is again. I'm the guy over in the corner who's looking at other things. Yeah, okay, you're right. Exactly. It's tied to, you know, I think a pretty good, reasonably long-tailed broad societal trend. I think that that's... And that is personalized health care and also the ability to get medical treatment on your computer versus going into a doctor's office.

Please continue. Exactly. Yeah. So, okay. So I think that's reasonable. And I went through and I looked at the... Well, how much cash is this company generated? Because when you look at a company, like, you know, we talk about, you know, doing discounted

of cash flow analysis, which we, of course, we have to then estimate what the cash flows are. The important thing is what they do with it, by the way. You know, it's nice to estimate it. But if it all gets frittered away on, you know, new jet for the CEO, that's maybe not the greatest use of capital. So there's a capital allocation story. But I look at Hims, I'm like, okay, I estimated the free cash flow they've done in the past year, the last four quarters, looked at their balance sheet.

They got a bunch of cash. They got no debt. You know, when I went through, I said, okay, I think an 11 percent. Most of my DCFs, I use an 11 percent discount rate. I don't go through all of the, you know, corporate finance stuff and beta and whatever in CAPM, because it's just like, you know what, if I could get 11% in the market, that's kind of my opportunity cost. You know, kind of what the S&P 500 has given us for 80 plus years. So I kind of like to use my opportunity cost, my perceived opportunity cost, 11% as my discount rate.

And I said, you know what, it's going to grow at whatever rate for the next decade and then tail off kind of about a 3% growth rate in what's called a terminal period. It's 10 years out from a discounted cash flow perspective. It doesn't really matter. Add the cash deducted debt. There's no debt. That's fine. At today's valuation, today's valuation, Hymns and hers has to grow at about 20% for the annualized for the next decade.

I don't actually find that terribly unreasonable, given the broad trend we talk about. However, so I'm like, yeah, now, okay, that employs a few assumptions both good and bad, you know, again, the likelihood of it going from 20% annual growth to 3% annualized growth in precisely in 10 years, the likelihood of that is zero. It's just a mental construct or a model construct. And, you know, they've got a lot of dilution, a lot of options, a lot of equity cookies. I haven't taken any of that into account, because again, this was a five-minute DCF. But you would probably want to get an understanding of how much of this company is going to be hosed out to insiders in the future because shares in their name dilutes your holding. So it

probably would be more than zero, which is what I haven't. But you can work through as a and go, okay, 20% for 10 years annualized, it's probably not that unreasonable. But I can tell you, Ricky, if I were to look at a few other story stocks out there right now. Or I'll even go back to the story stocks of the recent past. I looked at a couple, you know, well, okay. We are currently conducting this interview via Zoom. Zoom was a darling in 2021, okay? And I think it nearly topped out at $700 a share.

And today it's about, you know, it's below 100. And what happened? Well, because at that time, and I remember saying this on various other foolish shows and, you know, probably being ignored by most, the growth was rapidly slowing what they were delivering. And so as people piled into this stock that was, you know, down 10, 20, 30 percent from its all-time high, because, you know, oh, well, you know, people were looking in the rear view and investing is about

looking in the forward view. And it's like their growth is rolling over. I'm not sure how much more they're going to have. So even if they have a great business and they're run by a great founder with a meaningful stake in the company, the growth is rolling over and people were buying it with implicit growth rates for the next decade of 40, 50, 60 percent. That's not going to happen, guys. And in fact, it didn't happen. And a lot of people got whacked on that. So it's just, it's It's about being mindful. It's about being thoughtful about what assumptions are based on the stocks that you own. And again, you can own lottery ticket type stocks. I own a bunch myself, but just understand what goes into it and understand what the actual payoff for most

lottery ticket type stocks is. Most lottery tickets go to zero. So we're not going to say, we're not going to speculate hymns is going to zero, but you know, you might not get, you know, the easy money you think you're getting in it. So one of the great pleasures of doing this show for a few years, Jim, has been getting to talk to you and look at companies I would not have otherwise looked at, thinking of Winmark, Academy Sports and Outdoors, Eritzia, even TKO Holdings, which I was like, oh, this looks expensive, and now it's a position I have. So for my last show, just real quick, can you give me a stock or two that I should be looking at as I go into the Great Beyond? I believe, as we were talking about beforehand, we were talking very specifically about

kind of in the garb bucket, growth at a reasonable price. I'm going to give you five if that's okay, real quick. Sure. Well, because, you know, I care, Ricky, and I've really enjoyed doing this show with you. And so, you know, and I wish you all the best going forward. And so I would say, well, my first one would be MedPace Holdings, which we've talked about many times. It's a particular favorite company of mine, recommended it multiple times. It's a small contract research organization run by a very foolish leader, trading at a very reasonable price

right now, although it's gone up the last couple days, so maybe we're getting a little bit less reasonable, because the market is assuming that recent bad news will continue into the forever future, and it won't. So MedPace, really like them. Lulu Lemon is interesting to me at this point. I really enjoyed the story from our record date. It came out yesterday that Lulu Lemon is selling Costco for knockoff yoga pants. It's always tough to see your children fighting, I will say that. I do, of course, like Costco a lot. But Lulu Lemon is now trading.

They make a lot of cash, great-looking balance sheet. I've said before in multiple venues, they make clothing that makes people feel good about themselves. Do not dismiss that easily. trading at a decade-low multiple. That's interesting to me. Simply Good Foods. It's a company I have been steadily wrong about. It's an S-M-P-L is their ticker. They are the company that owns the Atkins diet brand as well as Quest and recently purchased something called Only What You Need, which is a plant-based protein shake-style company. It's run by really good industry veterans who I think might be setting the company up to put it out for sale, too, in the near future.

But they made the acquisition of only what you need less than a year ago. All their numbers are going up. All their business numbers are going up, and the stock has been going down. And like I said, I have some evidence that suggests they might be priming it for a sale, and the people running it have a history of selling companies. The fourth one is Atelman Global Education. It's a for-profit education space. ATGE is their ticker.

You may know them and may be disdainful of them. Their prior name was DeVry University, or they were the company that owned DeVry University. That's long gone. It's been hived off. Run by good leadership, make a lot of cash. They focus on medical education. So doctors, nurses, nurse practitioners, and veterinarians. As my vet friend says, real doctors treat more than one species.

And it's good price, good valuation, run by smart people. And the last one is one we've talked about before, contour brands, the parent company of Wrangler and Lee jeans, and now of Heli Hanson. Run by smart people make a lot of cash. They're currently, the Helly Hansen deal was done with all debt, which they've said, hey, we're going to pay that off super fast. And that's actually my favorite kind of acquisition, because as they pay off all that debt, the cash flows, the revenue, the earnings, the cash flows that came with Heli Hansen into the greater contour empire, that goes across all of the pre-existing shareholders once the debt's gone. Again, it's kind of the opposite of, you know, when companies are doing

dilutive actions that kind of take away from you, this is a good thing. So I hope those five find a way into your portfolio. And it's been a great pleasure, sir. As always, appreciate your time and your insight, Jim. Thank you. As always, people on the program may have interests in the stocks they talk about, and the Montiefel may have formal recommendations for or against them buy yourself stocks based on what you hear. All personal finance content follows Montleafel editorial standards and are not approved by advertisers, advertisements, or sponsor content provided for informational purposes only. See our full advertising disclosure. Please check out our show notes. Up next, radar stocks. Stay right here.

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Now available in Canada, too. Don't keep settling for clothes that don't last. Go to QINCE.com slash Motley for free shipping and 365-day returns. Quince.com slash Motley. Welcome back to Motleyful Money. I'm Ricky Mulvey, joined again by Motley Full Asset Management's Bill Mann and Motleyful Senior Analyst Anthony Chavone. Each week, we close out the show with a couple of radar stocks that our guests are

keeping an eye on and our man behind the glass. Dan Boyd will throw them a question, concern, or backhand. compliment. Bill Mann, what you're looking at this week? My company is Alphabet, and there was a really interesting article that came out a few weeks ago in the Wall Street Journal, and it was talking about how generative AI is taking the place of Internet search, particularly those affiliate links and the things that make Google search way less clean than it used to be. And so it's having a huge effect on the companies that use search engine optimization. But my question,

then became, well, if this is where Google makes most of its money, then how is this not something that is a massive risk to Google as well? Now, the Google folks are very smart, and they are attempting to change their business fundamentally, but it is a fundamental change that they are going to have to try and stay ahead of. So for that reason, Alphabet is the stock that I'm watching. As a reminder, radar stocks, it's not always a good reason that our guests are keeping a close eye on those stocks. Dan Boyd, a question about Alphabet, the letters or the company. Are we sure that Alphabet knows what they're doing? Because search in the past six months has really gone to the dogs, Bill. I love that question simply

because it belies the thing that people are so annoyed about when it comes to Google search. You get these clickbait, glurge. You get search engine. optimization links that have nothing to do with what you have gone after, which you were looking for to start with. So I actually think that they are in a little bit of trouble here. Anthony Schoven, what's the stock on your radar? Yeah, I'm taking a look at Target, ticker symbol TGT. Everybody knows Target, one of the largest retailers in the U.S., but they're currently in one of their largest stock price roll downs in their history. And Ricky, you know I like dividends and Target pays out a more than 4% dividend and they've grown

that dividend for more than 50 consecutive years. And I think the key question that I'm asking myself is, you know, is Target in a cyclical or secular decline? And, you know, to me, considering Target is done a good job of shifting towards e-commerce, which is the biggest threat facing many retailers, I think this might be a cyclical decline and potentially a good investment opportunity for the long term. And I also wonder if Target isn't ripe for maybe an activist investor to come on board at some point, which could be a catalyst for the stop. There's a lot going on there. Dan Boyd, which stock are you going to be putting on your watch list for this week? Well, I can't say I like going to Target, Ricky, but I do like a nice dividend. So let's go Target. That's it for this week's

Motley Full Money Radio show. I'm Ricky Mulvey. Thank you to Dan Boyd. And thank you to our guests, Bill Mann and Anthony Chavone. For one final time, thanks for joining us. And the show will be back next time.