Motley Fool Money - Our Pulse On the Stock Market Today

Episode Date: May 15, 2026

A look back on what we learned from earnings season, what is hot (and what is not) in the market, and a debate over whether or not inflation can halt the rally. Travis Hoium, Jason Moser, and Lou Whiteman discuss: - What worked (and what didn’t work) this earnings season - What’s wrong with restaurant and apparel stocks? - Should inflation talk worry investors? - Plus, the stocks on our radar Companies discussed:.  CBRS, NKE, CHRW, SBUX, DRI, CAVA, DECK, ONON, ISRG, GEH Host: Travis Hoium Guests: Jason Moser, Lou Whiteman Engineer: Dan Boyd Disclosure: 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. We’re committed to transparency: All personal opinions in advertisements from Fools are their own. The product advertised in this episode was loaned to TMF and was returned after a test period or the product advertised in this episode was purchased by TMF. Advertiser has paid for the sponsorship of this episode. Learn more about your ad choices. Visit ⁠⁠⁠⁠⁠⁠⁠⁠megaphone.fm/adchoices⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

IPOs are hot again. Welcome to Motley Fool Hidden Gems Investing. Welcome to Motley Fool Hidden Gems Investing. I'm Travis Hoym, joined today by Jason Moser and Lou Whiteman. And guys, there is a lot going on in the market. We are through earnings season, so we don't have quite as many numbers to talk about. But we've gotten inflation data. We've got the market going absolutely crazy. So, Lou, I wanted to start with you. When you look at where we are in this market, there's so many pieces. that seemed to kind of be pulling in different directions. Inflation data was really high this week.

We saw interest rates jump. That seems bad. But at the same time, earnings are relatively strong. We have this AI trade that is going absolutely crazy. So where are you seeing opportunities and threats and just kind of what's your pulse of the market right now? So it's amazing. For all the time we spend talking about so many different things like inflation, like jobs numbers, all of this, GDP, the market has blinders.

And the market really only cares about earnings, right? And earnings has done very well despite all of it. S&P 500 earnings were up 28% year over year on average. That's the six consecutive quarter of double-digit profit growth. That's margin growth. It's partially AI efficiency, but the real story here is that pricing power that we first, that companies first started exploring during the pandemic, has been sticky. And companies had a lot more pricing power than they might have realized.

That is what. the market is focused on. All of this other stuff could come into play at some point. We have to watch it. But look, even among the non-tech, the other 493, we are seeing just really strong results. And as long as we see earnings grow, you're always going to be amazed at the market's ability to kind of just look past everything else going on. Yeah, Jason, it does seem like the numbers have been really good, at least in segments of the market. We're going to talk about some of those areas of weakness, you know, companies in shoes and apparel and restaurants.

But are you seeing that same strength and then some of these data points, you know, like we're seeing with some weak consumer spending, with inflation, you know, gas prices are starting to really hit people's pocketbooks? Is that something that, well, maybe that will impact the second quarter, the third quarter, the fourth quarter, but we're not seeing that yet,

or is it just kind of noise in the system? I think it's, I guess the easiest answer is a little bit of both, right? I think we're seeing prices generally right now, inflation is being driven by energy. So there is certainly the potential where this energy situation becomes resolved sooner rather than later, let's hope so. I mean, I think to lose point, even look at the other 493, I mean, all told, I mean, this quarter, quarter one of this year was really a blowout earnings-wise. And yet basically, 85% of the S&P 500 has beaten earnings per share. estimates. That's the highest rate since the second quarter of 2021. And we're seeing that companies

reporting earnings better than 18% above estimates, which is well above the five-year average of 7.3%. So, yeah, we're having these conversations about these headwinds, whether it's inflation or whether it's interest rates or energy or what have you. But by the same token, I mean, in lieu reference the AI trade that just keeps sending things to ever higher levels, there's just still a lot of enthusiasm, and I think a lot of that is because these companies really are bringing it down to the bottom line. Lou, that bottom line improvement is undeniable when you look at the numbers and some of the AI trends also undeniable. What I keep wondering is what is sustainable. I like to look at the S&P 500 heat map and just look at, you know, where are stocks going this year?

And you look at hardware related to chips, you know, memory stocks, anything, energy. related is up dramatically. A lot of that is downstream of these massive spending numbers around AI that we've talked about. I think we're at about $700 billion that's going to be spent this year on CAPEX from just the biggest handful of companies in technology. That can drive earnings long term, or at least short term. But eventually that money, and they're spending their cash flow and they're starting to take out debt, that growth in that spending that's driving a lot of these companies in the S&P 500, that can't go up anymore, at least in theory. It has so far. Does that worry you about the future? Or are we at some sort of local maximum where everything is just going

so crazy and everything is so compute-constrained that it's, okay, I will pay whatever it takes for energy. I will pay whatever it takes for chips or memory. It doesn't seem like that's where we're will be forever. Eventually, it's doing a lot of heavy lifting in that, though, right? Because yes, you were right. Nothing can go up forever, and this will not sustain forever, but the devil is in figuring out when it ends. And like, if just taking the companies at their word, I was actually curious this earning season guy that I was wrong. I was expecting some sort of a, like telegraphed flinch, like, you know, from somebody's big hyperscaleers, like just some sort of preview of like, hey, maybe we don't want to spend everything we said just because it is so much. And we did

not get it. We got all in. So, no, it can't last forever. Isn't that partly Microsoft did that, I think, for one quarter, and they were just punished for it? Yeah. Yeah. Oh, yeah. It's one of these, it's a standoff right now. I still sort of think that every CFO and every one of these hyperscalers would love to collectively, like, talk it down. But if it's only going to be one, The implication is our stuff isn't as good and everybody else's it is. So, yeah, no, I mean, I think it's going to take more. Can it continue? It can.

We still have all of the spending going on. We still have a critical mass of consumers who are spending. But look, yeah, household purchasing power is flat. Energy's up. We're trading it more than 20 times forward earnings. I am definitely on guard for the fact that it may not, that at some point it will end, and it could be sooner than we think. But for now, all we can look is the actual data and the actual data does not suggest we are driving towards a cliff.

Well, and I think it's going to be really interesting to pay attention over these next few quarters and start looking for the guidance from these big hyperscalers and how they intend to spend in 2027 because it sounds like they're not ready to take their foot off the gas anytime soon, right? And I mean, from Nvidia to Amazon, Microsoft to Alphabet, I mean, Meda, I mean, these companies are spending money hand over fist. And if that remains the case, and I think that can go on longer than maybe we assume because these are such successful businesses with so many resources at their disposal, if that narrative continues, well, I mean, that spending goes somewhere and we're likely to see this enthusiasm continue. That's the thing. It doesn't really even have to go up, right? It doesn't have to keep growing at the level it is. If they just sustain at these levels, that's pretty good for the economy. And I think we have seen that sort of with some of the reactions from, say, Nvidia's quarter and things like that is. The market is maybe pricing in, okay, maybe it won't continue to grow at the rate it is. But just if we can just plateau at this level for a long time, that is a lot of spending going into the economy. It does. I will say that the word, plateau always makes me think of the spending that went into the fiber buildout during the late 90s and 2000s. What we talk about is the bursting of the dot-com bubble or the telecom buildout bubble actually happened to win that spending plateaued. It didn't really go down.

It just flatlined. So these companies went from growth to no growth and then the cost structure didn't quite work. Well, Travis, that's your word eventually again. Yes. Do it a lot of work, a lot of work. I wanted to get to the IPO market. You know, Jason, this week we saw Cerebris IPO.

I would say it was, in the words of the market, a successful IPO. It's weird how we talk about this. The stock jumped for people who were able to get in on the IPO, but it was actually down during trading yesterday. Yeah. We're hearing about, you know, SpaceX is likely coming next month, I think. We could get open AI. It's possible we get Anthropic.

When you see these kinds of huge IPOs, I think Cerebris is trading for 200 times sales at at least one point. How do you think about that? Because if I go back to 2020, 2020, that was kind of a sign of the top of the market, a frothy point in the market. We could go back to the 90s and it was kind of the same thing. But is there something to be concerned about? Is this something to just watch? How do you think of what IPO is in today's market? I mean, it was a good IPO for the company. I mean, obviously able to raise a healthy amount of money, bad IPO for retail investors who bought shares at $385. They're now sitting underwater.

So it always is, it's perspective there. But I think the key is because there's obviously a lot of enthusiasm in that IPO, and you're talking about some of these IPOs that likely will be coming up soon with just these massive valuations, that's one of those things that kind of makes me wonder how over the top is the enthusiasm. right? When insiders and VCs who know their companies better than anyone, really, when they're choosing to sell to the public at these stretched valuations, I mean, that historically is a pretty darn reliable bubble indicator. And so it's just going to be more paying attention. And we're at a point where they don't have to raise money from the public the way that they used to. If you go back to the 90s, there was no, you know, $10 billion round that Amazon could have raised that money didn't exist. You had to go public. Yep. And that's exactly right. They don't.

need to do it. So the fact that they are doing it, I think, is just something to keep in mind. Definitely agree. It has to be noted. But the other thing, the other side of it is, is that the FOMO is strong, right? If you look at the eagerness to get in, the market still thinks that AI is a thing. And we've, you know, all valuations are up. So you got to get in whenever you can when something new is coming. I hate to come back to it. But eventually, that will likely come back to bias, I just don't know if it's going to be anytime soon. I just don't want this to be a market timing call because those tend to be really, really hard to get right. Eventually seems to be the word of the day. When we come back, we're going to talk about what's going on at restaurants and

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Find technology built for the way you work at Dell.com slash Dell PCs, built for you. Welcome back to Monte Poole, Hidden Gems, Investing. One of the interesting spaces, we talked about some areas of strength in the market around EIA trade technology. But one of the interesting areas has been restaurants, because that's something where you're seeing where are consumers spending their money. It flows down to a lot of people work at restaurants. Lou, there was a period after the pandemic where these were really, really, recovering really rapidly. And now that seems like that has all evaporated. And almost every restaurant stock has really struggled over the past year. There have been negative comps at companies that I didn't

think we'd see negative comps for a very long time. What's going on here? Is this the Wagovi effect? Is this, you know, population numbers or maybe down in certain areas? What is going on? Because there's also higher prices, so they're having margin pressure. It just seems like a lot of headwinds facing the restaurant industry today. Yeah. So I think this is a lot of high wins facing the restaurant industry today. Yeah, so I think this is a lot of factors. And probably what I want to talk about isn't the most important one, but I have a pet theory on this. That like, look, when we were growing up, or when I was growing up, Travis, you're young,

but fast casual did not exist. You either went out to the steakhouse for a big, you know, family event, sit down, or you grab McDonald's in your way to practice. And there was no in between. Entrepreneurs realized that there was a huge, huge hole in this market for like fast casual, something that's a little nice. are maybe a little more expensive, but you don't have to sit down. They ran into that market. We have now overbuilt that market. And we have too much, I mean, that market wasn't going to

take 100% of restaurant spending. We've reached a critical mass here where we have just so many choices and they're all suffering because of it. This is kind of just how economics works and it will even out over time. But this is my little pet theory on a lot of these names that we love to watch is that it's nothing really wrong with them, but there's all of these macro factors, plus the fact that you just have a ton of choices. And I don't know about you guys, but I only eat so many meals a day. And I think it's just coming out to bite, coming back to bite them a little. Does that make sense, Jason? I think that's right. I mean, I think Luce is correct. And it is a lot of things kind of all at

once. I mean, it does feel like a market that is over saturated with options. And that certainly can hurt all of them at once. It probably is some Wagovi effect, as you mentioned there. I think it's just interesting data there that today, about one in every eight U.S. adults is currently taking a GLP1 drug. J.P. Morgan estimates that by 2030, more than 30 million Americans could be on a GLP drug up from roughly 10 million today. Now, the interesting thing is, Bloomberg Intelligence Survey found that 54% of those on those drugs said they dined out significantly less or less frequently since starting the medication. So, I mean, there is an impact there. I think policy and immigration, that's definitely

something that is playing out as well. I think if you look back in 2025, we had a National Guard deployment here in Washington, D.C. Open table data showed a 24% drop in reservations in just a single week in August 2025, with reservations remaining mostly negative for the rest of the And then you add to that, food prices are up 37% since 2020. I mean, it's a lot of things at once. It's not helping their cause. Yeah, it seems like that has to have an effect when you have such success with Eli Lili and Novo Nordisk in particular with these prescriptions.

And then you have Red of Trutad, which is coming next. That has been talked about as a potentially a trillion-dollar drug. Seems like it's got to be at least part of the equation. but a lot of factors going into restaurants. The other thing I think was interesting from earning season, Jason, you brought up the fact that, you know, Nike is struggling. And I just wanted to pull some of the numbers here. Nike sales about flat year over year in the quarter. Under Armour, negative, about 4%.

Lululemon over the past years only up about 5%. So that's no longer a big growth stock. What's going on with these shoe and apparel companies? Because that would be another indicator of what consumers are spending their money on if they're not going out to eat as much. much, they're also not spending that money on shoes and clothing. Yeah, I mean, in regard to China, like, you know, that article that we were reading about Nike and China, I mean, competition, I think, is the main, is the main factor there. Like, there is just more competition there in that, in that market that is certainly going to play out on the business in the near term.

Now, I do like Nike's brand power. I mean, that's not really a competitive boat or anything like that, but I do think there's some brand equity there that ultimately serves it well. But, yeah, I mean, when you look at it across the board, I mean, over the last year, on holding is down 36%. Nike's down 30%. Underarmers down 17%. I mean, none of these companies is having a really good stretch here. It is partly due to competition, certainly to China market is a very important one, especially for Nike.

But I think you're also seeing the consumer has to be a little bit more thoughtful these days about where they spend their dollars. and it's impacting all of these businesses. I do think, yeah, the consumer, the consumer has to be saying something here. This has to be telling us something about the consumer. But look, there's a lot of different things going on here. On holdings, yeah, they're down, but they're still, what, a double, I think, since the beginning of 2023. Well, and their comps are a little bit different than these other companies were that are negative, yeah.

And with Lulu, too, I mean, the problem with retail and the problem with being a hot brand is it is really, really hard to sustain the hot part. And then you have to deal with it. The other thing too here is, and I do, again, I think, you know, love the company, not the stock. If you think back, again, I'm just like with restaurants, I'm going to talk about my age. The age when Nike had to spend a couple million dollars and Sonny Vaccario had to go gym to gym to kind of build a brand. Today, you can do that on Instagram with one good influence. And I think just the barriers of entry and the economics of the business has changed to the point where I don't think anyone is going to dominate or have the massive success that you did years ago. I think that it's great for on holdings and the next

on holdings or whoever that is. But just, I think we have to stop thinking about Nike as the Nike of the 80s. Their goal now should be to carve out its their own niche and just be a profitable company. But I don't think they're ever going to be the dominant company that they were just because the barrier of entry are so low. now. So maybe we should be looking at these as free cash flow stocks, as value stocks. Is that the right way to think about it? I think that's fair. I mean, I own Nike, but I own it primarily for the dividend, right? I didn't think there's like any major capital appreciating. I think the share price probably recovers from these lows eventually. But I mean, I own it primarily for the

dividend because, I mean, that's going to be, I think, reliable for the foreseeable future. Makes sense to me. When we come back, we're going to get to which one of these are their favorite at Stacks. You're listening to Motley Fool, Hidden Gems, Investing. It was a beautiful sunbeat down. I had the radio. I was driving. The Madamy Holmes bike for Brain Health

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Gems Investing. We talked about some of the stocks that have been beaten up recently in the last segment, but I want to get an idea where there's actually value in the market. So we're going to call this, what are the best of the rest? Let's start with restaurants, Lou. I know you are at least doing your two, three meals a day. So when you're looking at restaurants, when you're looking at restaurant stocks. What ones look attractive? I'm going to throw out five ideas for each of these that potentially could be long-term values. Darden, Texas Roadhouse, Blooming Cheesecake Factory, and Denny's. We even talked about Denny's. I feel like this is an overlook coming. Maybe. I will continue to overlook at them. You don't love yourself a good moon's over Miami.

Well, I don't know. I don't know if I've ever been in, okay? But, you know, look, I little behind scenes for everyone at home that JMO actually did his homework here and I didn't. So I know what JMO is going to say and it's what I agree with. So I am going to go off script and go Kava instead of any of those five. Not being down as- So you think the growth story is going to continue for Kava. So here's the big thing. If you look at Kava's restaurants, they are mostly on the two coasts. And there is the kind of the stereotypical, like this Mediterranean play in flyover country, right? I think it does. And I think there's a lot of opportunities.

to grow, and I think at the end of the day, Wall Street pays for growth. So, I do think, and part of this is for some of these companies, saturation. So I'm going to lean into something that I'm biased. It's the only one of these that I personally like to eat at. So I'm probably totally biased on that. But I do think that it's a better growth story than somebody's better saturated ones. Otherwise, on the list, I'll just let JMO take over because I think I agree with him on which of these five. I just think it's funny that Lou made a compelling argument. argument, that this entire, you know, fast casual space is just completely oversaturated. Right.

And then the stock he's picking is the company is trying to grow into that space. Because, Travis, it's my favorite of them. And I'm just blinded like every other person to what you like. All right, J-mo, what do you think? I do, I get it, Lou. I mean, I'm a cob of fan as well. So it's hard to argue against that. I've still never had it.

Maybe I need to do a research trip and come in that you guys. It's good. It's tasty. It's tasty. You know what the other thing, though, is it's fairly relevant. In other words, I make a lot of Kava at home. Once you learn the ingredients that you like, you can make your own kind of Kava bowl, really, whenever you want, and you usually do it for a little bit less money. But it's just, you know, you wonder how much competition

is going to get out there to try to replicate that concept. I'm sure there's already some. Denny's, listen, I mean, the moon's over my hamming. I've had more than once. It's good. It's nostalgia. But I think for me, I've got to look at Darden as probably the one. that I like the most, and I think primarily it's just because of the breadth of this portfolio. I mean, we're talking about restaurants that include Olive Garden, Longhorn Steakhouse, Shedd Scratch Kitchen, Chewis. You ever been to Chewies? Chewis is good stuff. I like it. Yard House, Ruth's Chris, the Capitol Grill, Seasons 52, Eddie V's Prime Seafood, Bahama Breeze, the Capital Burger. I mean, that's a lot of restaurants and a lot of ways for them to win.

and a lot of value points for the consumer as well, right? I mean, they're not all just one price, right? You get some higher end, something like Eddie V's. Whereas you're going to get a more affordable meal if you get something like a shooy. So I just like the breadth of their portfolio and think that it probably sets it up for success over the longer haul. It does seem like there's got to be some sort of opportunities here. Restaurants, even if people are taking GLP ones, even if the economy is a little weak, it's kind of the one central place that you can go out and hang out with people,

whether it's friends or family and maybe Lou is right that were oversupplied in certain segments of the market. But it just seems like there's got to be some sort of opportunity over the long term. All right. The next one gets to something we talked about earlier with Nike shoes and apparel companies. I got a few numbers here that I want to add in because as I was looking at these, some of the price earnings multiples just seem crazy to me. Nike, pretty normal price earnings multiple on a forward basis.

These will all be forward basis 23 times. Under Armour, 5.4 times. You got to buy a company that has negative sales growth, but 5.4 times. Lula Lemon, 9.6. Decker's 14 times forward earnings and onholding 22 times forward earnings. So you look at that list or you can add your own Lou. Where's your head go at for the best of those shoe and apparel companies? So, I'm going to just be controversial here, and I know especially some of my colleagues will yell

at me for this, but Under Armour and yes, Lulu Lemon, I'm just not convinced they can ever get the Mojo back. I mean, the Lulu Lemon, as soon as they complain that Costco has too good of a competitor for them, I think that's a really good. That's like complaining about weather in your earnings? Well, it's a Streisand effect. It's like, hey, everyone, the Costco pants are very, very good. I don't know. Some of these brands are just, you know, you catch the magic, you catch the genie in the bottle, and it's really hard to get that back once it's gone. I like Nike here for some of the reasons that Jamie talked about just as a dividend play. But anything, I'll probably take Decker's because they

have a combination of brands. I know, like, Hoka is beloved by people who seriously run. I just think that they have shown nimbleness before and an ability to kind of reinvent. So maybe, maybe. there's more of a chance there versus asking Under Armour to reinvent or come up with something new or even Lulu Lemon. So I'd probably lean here, but if I'm honest with you, I'm probably avoiding this whole category as an investor. Jason? Yeah, maybe the easiest answer is just to own Amazon and you get your stake in Zappos, right? I mean, like you own Zappos by owning Amazon. It's kind of like owning Google or Alphabet. You have a nice little stake in SpaceX as it goes. But yeah, I think, You know, Under Armour is a funny one. I've owned Under Armour forever now. I sold a ton of it back in the day and actually did well with the investment.

And it maintained just a small position just as a core sort of, I just thought, you know, maybe one day they would kind of get their mojo back. And I think really what we've seen there is just a failure on the part of leadership. Right? Kevin Plank, I think, is really just, he is really struggled in. He seems like one of those seats. We typically want to buy companies that are run by founders. but he seems like one of those founders that had a brilliant idea, built it into a really big business, and then should have handed it off to somebody else. And it's just so interesting. GoPro is another example.

They're looking for strategic alternatives this week. You know, another example of a company where the founder got it to this really, really impressive point and then just kind of went, I can't do the next thing. Yeah. Well, I think you're right. There were some bad acquisitions that he made back when they were trying to kind of get into, like, e-fitness and whatnot with those apps. Yeah.

And so I think it's a combination of things that really has hurt the company. By most accounts, he doesn't sound like he's really that great of a leader at the end of the day. It's kind of his way or the highway, and he doesn't seem to be open to constructive criticism and other viewpoints. And I think the company has just certainly suffered from that. It's weird because I think Under Armour makes good stuff. I mean, I do like their gear.

I wear their pants every day. They're terrific. The shorts are great. I mean, it's golf equipment. I mean, good stuff on the golf course for a guy like me. But, yeah, I don't know that I see them figuring it out. I think ultimately, this is probably a situation where he's got to figure out a way just to sell this company off. I mean, something's going to happen there.

But, yeah, I go back to Nike. I just think they're a competition notwithstanding. And I think we're not seeing something necessarily. fundamental with Nike. I think the space is really difficult right now. You mentioned the Ford earnings multiple there, which I don't think that doesn't make it a no-brainer. That's not like screaming value play. It's also not screaming value trap. Again, I own shares for the dividend primarily, and I've thought perhaps about adding a little bit to it on this week, is I think it's very interesting to see some relatively meaningful insider purchases from CEO Elliott Hill and even

board member Tim Cook, that speaks something to me and should to investors. It's a relevant business. I think it'll see better days. I've got to make the case for onholding, apparently, because this was, not only is it the fastest growing out of these companies that we've talked about, they are leaning into pricing power. They made a long-term goal of getting into a 60% gross margin, which is far higher than any of these other companies. They're at almost 65%. So the consumer is weak, and they're saying, you know what, we're raising prices. So I just think here's in another idea would be, I think when you mentioned, just sort of either avoiding it or play a different way to play like Amazon,

Dick's sporting goods trading for about 15 times forward earnings. So that's a, their stores have gotten more impressive over the years as well. All right, let's get to, I want to get your ideas on some of these medical companies. This is an area where I think there's innovation, growth. You have more tailwinds than some of the restaurant and shoe and apparel spaces. Jason, intuitive surgical, transmitting. By the way, all these stocks are down pretty significantly this year. So this is why they're kind of on my radar.

Abbott Labs, Boston Scientific, and GE Healthcare. You've got to pick one of those. Where does your head go? Well, I picked Intuitive Surgical back in 2019. I recommended it in our immersive technology service. And its shares have done well. I mean, they're up about 150%. Now, it also is an underperformer at this point.

And that really kind of is thanks to the recent pullback in shares. But I still, at the end of the day, this is just a very innovative business. They've done so well with the Da Vinci system to this point. And now this ion bronchoscopy machine, which I think is just offers them another avenue of growth here. I mean, it clearly is a very competitive business. I mean, they're not the only ones focused on robotic surgery. You have a lot of big companies out there that are investing lots into this space as well, Medtronic, for example, and more. But I do love the innovative nature of the business.

It is just this massive install base already with Da Vinci, and Ion is certainly gaining some traction as well. So I think I'm going to go with the intuitive. Luke? I think that makes sense. And I agree. I think what's going with them is more just it's a bad time for hospital budgeting. So they're only getting the razor blades, not the razors right now.

But that won't last. Look, I feel pretty good about all of these. Maybe Transmetic is the wildcard just because. I really want them to succeed. Incredibly volatile stock. It's been on my radar for a long time, but I can't get my head around it. What they do is really, really hard, and what they want to do is really, really hard. And then you throw in the logistics side of it, which is just a ton of expense.

I don't believe they would have taken that on unless they felt they had to. So, yeah, just for, I want them to succeed, but they're the ones maybe I'd question. If not intuitive, maybe GE Healthcare would be the one I'd look at here just because I think, think, look, they're a little more commoditized than what Intuitive does, but the advanced medical device is intelligent diagnostic tools. This is sort of, I think, the future of medicine more than just AI replacing your doctor. So I think, look, maybe it's not going to be an amazing 5x 30x, but I just have no doubt that there will be demand for their products well into the future. Hopefully it gives you some ideas of where there might be some values in, because it looks like

Many segments of the market are getting pretty frothy, but these ones maybe a little bit more opportunistic for investors. When we come back, I want to get Jason and Lou's thoughts about the state of inflation, and also we'll touch them the stocks on our radar. You're listening to Motley Fool, Hidden Gems Investing. I took my love, took it down. Climbed a mountain and I turned around. And I saw my reflection in snow covered hills to the land. As always, people on the program may have interest in the stocks they talk about in the Motley Fool may have formal recommendations for or against, so don't buy our sell stocks based solely on what

you hear. All personal finance content follows the Motley Fool's editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. Jason, one other topic that we touched on briefly early on, but I think deserves a little bit more attention, and that's the inflation data that came out this week. We got a CPI reading, the consumer price index, was up 3.8% from a year ago. PPI producer price index, so this is going to be what manufacturers and companies like that are paying up 6% from a year ago.

Energy is a big piece of the story, but the other context I want to bring in is interest rates are going up because of this. And this was a precursor in 2021 to the big market downturn and the rapid rise in interest rates. So how do you wrap your head around what we're hearing about inflation today? Yeah, I think, you know, we've talked before. I mean, this is primarily driven by energy prices, but that's not all of it. I mean, the tariff impacts have absolutely played a part of this as well, right? Even with, we're going through like this refund stage now, but like we think about just the chaos of the last year. Every day, it was a new headline on tariffs.

They're going to be this much. Now they're going to be that much. companies had no idea what to do something. We're seeing those costs play out as well. And ultimately, I think the interesting thing to keep in mind is just what this does for interest rates. The argument for cutting rates was that, well, inflation is back in check or getting there, and so we could afford to do that. Well, that obviously isn't the case.

and we have a new Fed chair coming in, and while the White House is certainly going to turn up the pressure to cut rates, it's going to be very, very, like, you know, the Fed chair doesn't make that decision. They still vote. And my suspicion is that they're going to look at this and say, you know what, just logically speaking, it doesn't make sense to cut rates in the face of a rising inflation number. So, you know, it's going to be, it's going to be an interesting rest of the year. I mean, we're seeing all the big banks now. I mean, Goldman Sachs now expect the new, the next two Fed cuts to come in December,

2026 and March, 27, J.P. Morgan. And guessing that far out is, is. Right. I mean, that's just projected. Almost always inaccurate. Right. They're just projecting. But, I mean, it's just, it's interesting to think we were talking early on in the

year and late last year, like the cuts were coming. And now I don't think that's going to be the case. The interesting thing here is, what does it mean for the market? Because at the end of the day, we're investors, this investing show, right? And I don't, warning, I'm going to go a little dark here, guys, but I do think just kind of to look at it, U.S. wealth inequality is at a 100-year high. Going back to the roaring 20s, okay, the top 50% of U.S. households hold 97% of household wealth. Why does this matter?

That tells me that consumer spending can sustain because there is a critical mass of people who can still afford to spend. Now, there are all sorts of issues here, too, and we can remember the roaring 20s ended up with the 1930s, so we need to be very, very careful. But for now, does all of these headwinds, all of this inflation, will that sink stocks? I don't know if I think it will. Again, not to dismiss it, but it's just a weird time right now. Yeah, it's that K-shaped recovery we talk about, right?

I mean, there are plenty of people out there that, yes, costs are higher, but, you know, many of us can still deal with the burden of that. But lower earners are finding it more and more difficult. And I think that's going to be somebody to keep an eye on. All right. Let's get to the stock center radar and bring in Dan Boyd from behind the glass. Jason, what do you got this week? I'm sure have all heard of Starbucks, ticker SBUX. It's a company that I've owned for a number of years. The good news, right, is that Brian Nickel took over in September of 2024, September 9th, I think it was. The stock has returned 20% since then. So not a bad start. The bad news, guys, is that the market is up 40% over that same

stretch. So it is an underperformer. And we just saw news today that they announced another round of layoffs. This is the third round of layoffs since Nickel took over. And if you look back to February 2025, they were cutting 1,100 jobs and not filling several hundred, several hundred other open positions. And then seven months later, another 900 jobs cut as part of a $1 billion restructuring plan. So keep in mind, these are mostly corporate jobs, right? And keep in mind, Starbucks employs 381,000 people globally. It takes a lot to run those stores. But it definitely makes sense for the company to want to be as efficient as possible. The thing is, the stock is still over 40 times full year estimates today, which I just think is really optimistic. So, yeah,

I'm keeping my shares, but I don't know that I think it's a tremendous buying opportunity today. Dan, is Starbucks where you get your coffee? No, it is, well, okay, yes and no. If my wife wants coffee, then yes, we'll go to Starbucks, but me. So the answer is yes, I don't think you have a vote in this. It's hard to argue with coffee, and it's hard to argue with my wife. What's on your radar this week? So, nothing as interesting as coffee, unfortunately, but Dan, I am watching C.H.

Robinson, ticker C.R.W. So Robinson is an asset-light shipping broker. Basically, they are the middleman that connects companies that need to move something, to the trucks that can do it. The stock was down this week after the Supreme Court ruled that brokers can be held liable for doing business with unsafe trucking companies. It was previously assumed that brokers wouldn't be held at fault, so this kind of hit the stocks. This will raise insurance costs. It will raise other costs for brokers like Robinson, but I think it will also benefit well-capitalized best-to-breed companies, and that's what C.H. Robinson is. I think it could

actually help them gain share because they are already to kind of fill this need. Stock has been on a roll until this ruling. I think any pullback could be a huge buying opportunity. I'm watching this one closely. Dan, what do you think about logistics? I love logistics, pal. Stuff's got to get places, right? All right, Dan, which stock is going on your watch list this week? I mean, they're both pretty good, right? It's hard to argue with coffee, and, again, stuff's got to get places. But I think C.H. Robinson has a little less expensive for what it is. So I'm going to go see you with Robinson this time around. That's all the time we have on Molly Fool Money. Thanks for listening.

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