Motley Fool Money - Rich Signals from Berkshire

Episode Date: September 13, 2024

Normally people love reaching a milestone – but Berkshire Hathaway hitting $1T might’ve triggered a different kind of thinking for Warren Buffett and his lieutenants. (00:21) Jason Moser and Matt Argersinger discuss: - The signs execs at Berkshire Hathaway believe the market is rich – Ajit Jain reducing his Berkshire stake, and the company winding down its buyback activity. - Brian Niccol’s vision for returning to Starbucks’ roots as a third place. - Why the market was up on RH’s results, down on Adobe’s outlook, and still hoping a Kroger/Albertson’s deal will go through. (19:11) This week was Apple’s annual product event. Dan Barbera from MacRumors gives the scoop on the latest releases, one way the latest iPhones could fuel Vision Pro adoption, and what to expect from Apple in 2025.  (33:54) Jason and Matt break down two stocks on their radar: Top Golf Callaway and Oxford Industries. Stocks discussed: BRK, SBUX, RH, ADBE, KR, AAPL, DNUT, OXM, MODG. Host: Dylan Lewis Guests: Jason Moser, Matt Argersinger, Dan Barbera Engineers: Dan Boyd Learn more about your ad choices. Visit megaphone.fm/adchoices

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We've got swelling private valuations, and some signs insiders are putting cash on the side. Motley Fool Money starts now. That's why they call it money. The best thing. Full Global headquarters, this is Motley Fool Money Radio Show. I'm Dylan Lewis. Joining me over the Airwaves, Motley Fool's senior analyst Jason Mozer and Matt Argusinger. Fools, great to have you both here.

Hey, Helen. We've got the full download on Apple's new slate of devices. One stock the market is worrying about. when it comes to generative AI. And of course, stocks on our radar. We are going to kick off this week, looking at the big money, though. We like to keep an eye on what insiders are up to this week, Berkshire Hathaway's head of insurance and longtime Buffett right-hand, Ajit Jane, disclosing he'd sold roughly half

of his Berkshire shares, grossing almost 140 million on the sale. That is a big, big move, Jason. Anything to make of it? It is a big move. You're right. I mean, Peter Lynch says something to the extent of there. There are a lot of different reasons to sell and basically one reason to buy, right? So, I don't know that you make too much of this on its own.

I mean, he's 73 years old. You don't necessarily know how long he's going to be doing what he's doing. And I'm sure he had his reasons to go ahead and unload this. But it is a big sale, no question. I think it represented about 55% of his total stake. And when you look at the valuation of a company, I think that's probably. probably what makes the most sense of this. The business is now valued at about 1.6 times book value. And that's not cheap for a company like Berkshire. I mean, if you remember,

back in the day, Buffett and Munger had sort of targeted. They had these benchmarks of when they would actually buy back Berkshire shares, right? They said, well, at 1.1 times book value, that's when they considered it a worthwhile value to repurchase. They bumped that up to 1.2 times. And now it's basically a judgment call. But my point is, at 1.6 times, we can certainly see that Berkshire Hathaway has run pretty far here. And that's great to see. And ultimately, you do want to be able to realize some of those gains. And, you know, also remember that while there were some rumors a while back, there was at least consideration that Jane might be the one to lead this company once Buffett decides to step down, that actually isn't going to be the case that right. Greg Abel, I think, is going to

be taking over here when that time comes. And so, Jane's role of the company, who knows what that looks like five years from now, it's anyone's guess. I think when you consider the valuation, that's what makes the most sense of this move. I think a lot of people are looking at the valuation here, including the folks handling the repurchase program for Berkshire. If you look at the most recent quarter, Jason, firm bought back about 350 million in shares. In previous quarters, we'd seen that number in the billions. So not just a Ajit Jane here saying that the valuation has swelled a little bit, I'm going to put one more indicator out there for you to respond to it. In addition to the Berkshire buybacks, we've seen

the company clip down some of that Apple position. Do you feel like there is kind of an acknowledgement around Berkshire right now that things are a little richly valued in the market? It really does feel like that. I mean, not only the Apple, the Apple steak, but right, he's trimming the Bank of America steak, and building that balance sheet up considerably. And to me, the market is just one big disagreement at the end of the day, right? We're all making a call one way or the other. But he's got a pretty good track record. And I think it's at least reasonable to look at some of today's valuations and think,

hmm, maybe it doesn't seem like too bad of an idea to take a little bit off the table, build up that balance sheet, wait for some opportunities because it does, you know, we talk about it all the time with the consumer being stretched and won't there be a recession, and interest rates, all that stuff. I mean, it does feel like we're at a point where valuations today do seem a little, do seem a little stretch, so it makes some sense. And, you know, I'll just point out that BlackRock, you know, I think the biggest asset manager or money manager in the world, they trimmed the equity allocation in their model

portfolio. They trimmed it by a little bit, you know, probably not a huge signal. But it does seem like a lot of the big money, as Dylan put it, is kind of taking some chips off the table. Yeah. All right. this week, we also got an update on what the next couple years might look like for Starbucks. New CEO, Brian Nicol, has only been in the CEO's seat for a couple weeks, but we got a look

at what he's expecting for the company. He penned a letter laying out the priorities for the chain. And Matt, I think Nickel was kind of saying what a lot of us have been thinking for a while here. The in-store experience at Starbucks, not all that great. That's right, Dylan. I mean, I think, you know, his letter wasn't, it was short, it wasn't very detailed, But I thought it was well written. I think it struck the right tone. It wasn't prescriptive. It wasn't cocksure.

I mean, he didn't come across as, hey, this place is a wreck and I'm the guy with all the answers he's going to fix it. As you mentioned, the letter did point to two core problems that I think Starbucks is facing. I think on one end, you have bristas that have a really difficult time delivering in a timely manner, what has become an extremely large and a complex beverage menu. So Starbucks is losing the customer that comes in, wants to drink how they want it, and and wants it fast. And then to your point, there's also the customer who wants those same things, but also wants to spend 30 minutes, an hour, or even longer at a Starbucks store. And I think

the in-store experience has lost its appeal. It doesn't feel like that comfortable community gathering spot that it used to years ago. So it's like a barbell challenge. And I think both sides are very heavy challenges. And I think, I think Nickel will get the first challenge right. I think he'll streamline the menu. I think he'll develop a, you know, separate crafting stations for mobile and to-go orders. He did this incredibly well at Chipotle. So I think in short order, the order quality and efficiency will definitely improve. To me, the second part, your point is much more challenging. Can you improve order throughput and efficiency while also creating this wonderful, comfortable, and inviting coffee house environment? And can you do this across 87 markets in the

world in 38,000 stores? And does this approach even work for a place like China? I have confidence in nickel, but the market has supreme confidence because Starbucks stock is up almost 30% since the day it was announced he was going to be the CEO. That's about $25 billion in market cap. Now sitting on his shoulders, that is a little worrisome to me. I think that's probably a little too much too soon. But I like the letter, and I think it's the right direction. You know, Maddie, one thing I don't know the answer to this, but it's the question that kind of comes back to me in regard to Starbucks is that, you know, the third place idea. And a decade ago, that held a lot more weight, right? I think that was something that mattered to people more. They wanted that place where they could

go chill for an hour, have some coffee, log in and do some work or whatever. Do you feel like that's what people want these days? Do people still want a third place? Or is Starbucks really more about the beverage? Just give me what I want. Let me get on my way. And I guess it's kind of like real estate, right? It's location, location, location. It's going to be different everywhere you go, I suppose. But do you feel like people still want that third place? It's a great question, Jason.

I think the pandemic kind of muddled that thing a little bit. But I do think in this more work from home hybrid work world, Starbucks does have a place. I think people are looking for it. I just think Starbucks experience hasn't been that appealing. I still enjoy going to, I mean, my wife and son and I, we love going to coffee shops or places like that. spending some time. And just Starbucks hasn't been the top of our list in a while. And I just think, I think it can get back there. It'll be a challenge, but I think it can get back there. All right, bringing us home. The AI company of the moment continues to fly. Open AI,

apparently in talks to raise money at an $150 billion valuation in an upcoming round, up almost 75% from where it raised funds earlier this year. That valuation is hefty, Jason. We were just talking about Starbucks. If that valuation holds, the company would be worth more than the coffee chain. That is a lot of cabbage, as they say, Dylan. We've been talking obviously about AI over the last year plus nonstop. It's a big deal, right? It matters. We're still uncertain exactly how it's going to impact all of our lives and what it's going to ultimately do for us. That is a whopper of evaluation. I mean, the company's on pace for around $3.5 billion in revenue right now, in annual revenue. And that basically puts that valuation, puts this company in about 40 plus times sales.

Compare that to something like Nvidia. Invita is 30 times sales. And we know Nvidia is at least profitable. I mean, I would imagine that Open AI right now isn't probably bringing in a ton of free cash flow. Granted, I'm sure that'll come in time. But it makes sense to the extent that, I mean, this has been a hot topic. Just beware of those hot topics, right? I mean, has anyone heard from the Metaverse lately. Because I haven't. I mean, I feel like a couple of years ago, that's all we were all talking about. I mean, Meta changed its ticker, right? Facebook changed its ticker based on that concept. So I'm not saying AI is going that same way. Don't get me wrong, but let's just try to stay grounded here. I mean, Open AI is clearly a very important business,

doing a lot of important things. But there's a lot of stuff we still don't know. And there's a lot of enthusiasm behind the evaluation today. Jason, I think Mark Zuckerberg out there, just happy you remembered the Metaverse ever. You know? All right, coming up after the break, we've got one company feeling a pinch from generative AI. Stay right here. This is Motleyful Money.

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Welcome back to Motley Full Money. I'm Dylan Lewis here on air with Jason Moser and Matt Argersinger. Some big time earnings moves run through for the week. Kicking us off here, a big week for R.H. AKA Restoration Hardware shares up 18% this week. Matt, market seemed pretty darn happy with the report from this company. Pretty darn happy and so did CEO Gary Friedman on the conference call. It was a strong quarter, demand, which for RH is the dollar amount of customer orders that have yet to be fulfilled. That was up 7% in the quarter.

And that demand has actually increased each month of the quarter, even subsequent to the quarter. It was up 10% in July and 12% in August. So definitely trending in the right direction. Freiband also know that RH is gaining market share, outperforming the overall industry. Revenue was higher. Margins were higher. He also made references to Pablo Picasso.

And he talked extensively, guys, about the multi-million dollar new showroom, RH's building in Newport Beach, California, complete with a 260-foot rooftop restaurant with uninterrupted views of the coast, two wine and breista bars, massive showrooms, and the most expansive luxury outdoor furniture assortment in the industry. And by the way, he's talking about this when just a few minutes prior on the conference call, he was talking about how the housing market's terrible, interest rates are high, this is the most challenging environment in three decades. I'm not sure that's true, but either way, RH is definitely telling us that business for the high-end consumer is doing just fine. I think most well-heeled customers are finding plenty of room, obviously, in their budget to invest in their homes. And RH's results are reflecting that. I think in a decade of working at the Motley Fool, I have never heard a classical painter or any well-known artist being invoked when it came to a company conference call. I was paying attention to something slightly different in the conference call, Matt, and that was the fact that housing came up 13 times. You teased it a little bit there. We have been seeing

rates slide a little. How important is the rate outlook in home buying activity for RH? I think it's important just because we're sitting, the existing market, the existing housing market has been so stagnant for the better part of two years. Mortgage rates now are down about a percentage point year over year. They're down to 6.3%. I feel like if mortgage rates get into the 5% area, you're going to see a big pickup in activity. I think people have been waiting to buy or move up to a larger home might actually do that, and that's going to benefit RH. So I'm not surprised Gary Friedman brought up a lot during the conference call. On the flip side of earnings reactions, shares of Adobe down almost 10% this week following earnings results. Jason, the reported numbers

were pretty strong here, but it seems like the outlook was a little cloudy, and that's what the street really zoomed in on. Yeah, and I always take that with a grain of salt. I mean, I mean, I say it often. I care more about management hitting the targets that they set, right? I'm not as focused on the targets that analysts are setting, for example. And in this case, it's worth noting. I mean, the company performed very well. They met and exceeded all of their expectations that they set just a quarter ago. It may be a little bit of a glass-hat, empty tape there on the guidance for the coming quarter.

But, I mean, God, I remember. I mean, this is Adobe. I mean, they have many large platforms. and a lot of ways to make a ton of cash. And the Creative Cloud, the Document Cloud, this experience cloud, they continue to innovate and bring additional value. I'll say anecdotally, I hear from folks that use Adobe's tools and services often that just continue to rave about how useful, helpful it is.

And so I think when you're making your consumers happen, when you're making your customers happy, clearly you're doing something right. If we look at the numbers, revenue of $5.4 billion, it was up 11% from a year ago, And then earnings per share, $4.65 cents, that was up 14% from a year ago. And strong performance in those major platforms, right? Digital media, Creative Cloud, Document Club is up 18% from a year ago. They continue to repurchase shares. The share counts down a little over 7.5% over the last five years.

So when you look at this business today, I think it trades for around 50 times earnings. It's not a cheap stock by any means. I mean, by conventional metrics there. But, as I mentioned, this is a big business with a lot of very valuable platforms that continues to make its customers happy. And so I think when you consider that, you consider the investments that they continue to make in AI, for example, I'm not too worried about those near-term numbers because I think this is a business doing a lot of good things.

We were talking about AI a little bit earlier in the show, and it comes up here because generative AI is definitely a specter chasing Adobe a little bit. We've seen some upstarts like Mid-Journey start to steal some attention when it comes to generative images and generative video. How much of a risk do you think that is for this business? Well, that's a big question, right? Is Adobe the disruptor or is it being disrupted? And I think that's something we'll learn in time. It sure seems today like it is a company that is leading the way based on the numbers and based on the feedback that they're getting from their customers. But that is certainly something to keep an eye on in the coming

quarters in years. All right, bringing us home with earnings results. Also got an update from Kroger. Matt, what's going on in the grocery aisle? It was a mixed quarter for Kroger, which is the second largest grocery chain in the country. Identical sales grew 1.2%. That's kind of Kroger's version of same store sales. Digital sales, though, were up 11%. And I thought this was interesting. I'd never seen this metric before, but there was a 33% improvement in Kroger's perfect orders, which is an order where the customer gets 100% of what they wanted, and it was delivered within the expected window of time. I'm sure you guys have, we order online groceries a lot for either pickup or delivery, and almost always there's at least something gets substituted

or something doesn't show up in the order. So I don't think I've experienced many perfect orders. So nice to see that Kroger's order, perfect orders are up 33%. Gross margins also came in higher than expected. Cash flows continue to be strong for the business. And Kroger's a good job of kind of bringing down the leverage on its balance sheet. They recently raised the dividend 10%. But the elephant in the room, and this is brought up multiple times in the conference call, is that pending merger with Albertsons. As we know, the FTC is really pushing hard against it. CEO, Rodney McMullen, thinks Kroger's going to win this. And they kind of have to in a way, because if you look at the market share, this is data according to statistics,

Kroger has less than half of the market share of Walmart, which commands 23% of the grocery market. Even if they combine with Albertsons, they'd still trail Walmart by a wide margin. And grocery business is so low margin. You really have to have scale to win in this business. I think that's why it's so important for Kroger to close this deal. Putting the market dynamics on a side here for a second, just looking at the company and the growth outlook. I mean, the full-year outlook for this business is basically less than 1% growth. It's not particularly inspiring.

Do you feel like the acquisition closing coming together also just helps them kind of reinvigorate the growth engine and find something where results have not been particularly great recently? I think it gives them an opportunity to acquire stores in some markets where they think they can improve the operations. And so it's like an expansion, but also a potential divestment of stores that might be underperforming in certain areas. So I think that's how they look at it. It's a way of this merger, pushing it through its growth, but it's a way. also optimizing the storefront to some point where they can actually maybe improve that year-year sales trend as well, just beyond 1%. And, of course, bring margins up because that's the key for this business. Scale and margins, and they see both benefits with the merger.

All right, Matt, J-mo, we're going to see you guys a little bit later in the show. Up next, we've got a rundown on everything Apple unveiled at its latest product event earlier this week and what to expect next from Apple. Stay right here. You're listening to Motleyful Money. Welcome back to Motley Full Money. I'm Dylan Lewis. Earlier this week, Apple showcased its latest iDivises at its annual product event. So this week, I caught up with Dan Barbera from Mac Rumors. He's the host of their weekly podcast on All Things Apple, and Dan gave me the scoop on the latest releases. One way the latest iPhone could fuel Vision Pro adoption and a preview of what might be next for Apple in 2025. So this week, we saw some new things from Apple. We saw the iPhone 16, the 16 Pro,

the Apple Watch updates, the AirPods lines. In terms of what we saw from hardware updates, anything steal the show for you? In terms of hardware updates, honestly, and this is probably going to maybe be an out there answer, but I think the updates to the AirPods Pro with the hearing updates that you get. So basically, and you don't even have to, if you already have AirPods Pro, you don't even have to go out and buy like a new model. This will come as a software update later on. And I know this isn't crazy like, oh, the new iPhone.

But hear me out on this. No pun intended. There's literally hearing protection coming to the AirPods. So basically it turns them into a very expensive pair of earplugs, which is great. If you're going to a concert, you put them in your ears, and it will, you know, analyze and be able to adjust on the go the sound around you to make it so that you're not damaging your ears. And if you end up damaging your ears or you think you have an issue, there's hearing tests that are now with your iPhone that you can take. and it will analyze and you'll go through the test. I think it's like five minutes long.

And once you do that, it'll break down all of the information and let you know what exactly, you know, might be wrong with your ears or if everything's great. But if something is wrong, then the cream of the crop here, the best thing that I thought was just mind-blowing, it'll take that information

and it will basically make your AirPods a clinical-grade hearing aid over the counter. And so it'll read what you got. in the test and if it needs to amplify, I don't want to begin to express like I know how what's going to work exactly, but it'll take that information and make it a custom, you know, hearing aid for you. And then it'll take all of that information for your hearing aid and apply it to when you watch movies, when you listen to music across all of your devices. And that's, that's really cool. And I know an iPhone 16, an iPhone 16 pro sounds flashy and nice, but like in terms of like real

world functionality for every American, or everyone around the world, that's amazing. Yeah, that's fantastic. And I'm glad you brought up because I was actually kind of feeling like looking at the event and what we saw, a lot of iterative development in general and some stuff, I think on the software side with the iPhone, which we can get into kind of interesting, but that it hasn't been very inspiring looking at the movements of some of the hardware lines over the last couple years. Yeah. I think this year, you know, we talked about it ourselves just, you know, everyone in the tech community, we always kind of overanalyze. Like, we expect it to be major.

And it's just not going to be major for us because we upgrade every year. And these phones can no longer be super groundbreaking from year to year. There's only so much we can do. But when you're looking at it from a perspective of like, I've got an iPhone 13, maybe even an iPhone 14. I would say every two years, you can really start to like, all right, maybe this looks like a pretty decent upgrade for me. I'm going to go ahead and pull the trigger. But otherwise, if you're looking at it from a yearly, upgrade perspective and especially since this is kind of the the remember the s years from years past where

it used to be iF like those were kind of the iterative updates without really saying that they were the minor changes now they don't do that anymore with the naming but this is kind of one of those s years the 15 was a pretty big change and had some pretty good features and this one still adding you know camera control an entirely new button it's a little bit of a different form factor it's larger and so there are some pretty big changes but like you know year over over a year, it's not going to be as robust as what people might hope or think. As we tape, I'm sitting here with an iPhone 15, and I was looking at the updates that was coming with the 16 and the 16 Pro, and I said, you know, I think I'm going to wait a year, maybe two years based on what I'm seeing. The one thing that I think probably catches people's attention when it comes to the iPhone line, though, the updates when it comes to Apple Intelligence.

And so this is something that Apple has been teasing for a while. I think they brought it out at the Worldwide Developer Conference earlier this year. What jumped out to the world. to you with that? With Apple intelligence, I mean, so AI has really been, you know, obviously the major buzzword across the tech industry. Every company that is releasing a phone has some sort of suite of AI features, whether it be Samsung, Google just recently. And so Apple's finally dipping its toe. But of course, they won't call it AI. They'll call it Apple Intelligence, which is its own, you know, play on words, however you want to say. But like, what I've been using, I've been using it on the beta. Now there's some limited features. Not everything has been been released via a beta yet and more will come. But I think it's the less flashy features that

aren't available that I seem to really enjoy. Like being able to get notifications summarized for you, when you're in a massively popular group chat, let's say, and things are taken off. You ever come back to your phone? You're like, I'm just not going to read all of that. There's so many messages. I don't have time. Well, now you can look at one notification for your stack of many, and it'll summarize all of it. And it does a pretty good job. What we've generally seen, I think, with Apple, in general, with technology and with software, is a very clear, we want to nail this, and then we are going to continue to develop and release things that we are sure are going to be great for consumers. I've kind of approached a lot of their AI developments with that in mind,

saying, like, I know that there's nothing right away here that is absolutely groundbreaking, but I'm pretty sure the stuff that they are going to ship for people that have these iPhone 16s and 16 pluses is going to be pretty good. Yeah, it works. I mean, it seems to be working. from a beta perspective. I remember when we ran beta's years past, like, it's just not something you want to do on your main phone. People had secondary phones. I'm running it on my main phone. I have very little issues, if anything, at all. Things are pretty well, you know, optimized and it performs really well. And it's not just for those, by the way, that are going to get a new 16, but also on the 15 Pro and Pro Max, you'll be getting Apple Intelligence Features and any product with Apple Silicon Chip. So an M1 or M2 iPad Pro, any of the MacBooks and Macs, those will all get that. And I mean, you have some really convenient features like the summarize notifications,

but then also the new Siri is going to be huge. And we don't even have everything from this new Siri update, but like personal contextual awareness with Siri, knowing your calendar, knowing who you talk to, which all kind of sounds invasive. But it's super helpful when you're like, hey, what does my day look like? And it says your day. And then it says, you know, you can ask it follow-up questions without having to re-emphasize that you're talking about something specific.

And that's huge. And you can say, you know, when does my mom land? And it'll go through and be like, hey, I know that your mom, you talk to this, this is this person and here's their calendar. And you can continue follow-up questions based on what you're talking about. And not having to like re-emphasize every single time. It's just a huge advancement with Syria, in my opinion. And it's finally becoming a much better assistant than what it used to be when it was frustrating. back in the day. I was going to say, I think Siri was maybe due for an upgrade, right? I think there were a lot of frustrated iPhone users out there. And one of the best things is like,

you can ask Siri something, and you can make a mistake midway through your sentence, and you can correct yourself, and it's smart enough to know what you meant. So I can say, set a timer for eight, no, wait, set it for nine, and it'll just know, like, oh, okay, let's take a minute. Let's breathe before we, you know,

finish your request and figure out, exactly what they're asking for. And it can do that and it works really well. So the AI is so helpful in the new iPhone because of the access it has. I'm sure some people hear that and they have the privacy concerns related to that. And this is a battle that all companies as they are venturing further and further into AI are bumping into. How do you feel about how Apple's communicating that as a safe place and a place that really kind of values their user's privacy? Yeah. So Apple is probably one of, I mean, you know, you have to take their word for it, but in terms of what a company does and with being up front about privacy,

they are one of the best. And they are always telling you what is going on with your data. And it's pretty much nothing is happening to that data. It's either not being stored or it's encrypted. And it's just not being looked at by anyone else or Apple themselves. It's just, you know, something that is going to remain private and for your eyes only, which is great. And so that's, for those who are concerned about those requests that you might have or somebody seeing that in a lot, like, that's just not going to happen. And then if there is a point where Apple needs to maybe use chat GPT

for a command that it can't do, then it will ask you for your permission and let you know that this is no longer going to be something that's stored on Apple servers, that's encrypted, that's private, that's safe, and not saying that going out to chat GPT isn't safe, but now you're taking on a risk. But at least it's telling you, And it will tell you every single time you go to make a command or request

and it cannot prompt, like, figure out what it needs to do. Then it will ask if you want to use chat GPT and then you'll enable it. And it will happen every single time. So I think that's one of the ways that Apple, you know, kind of expresses its privacy and safety to you by just reiterating to you, like, hey, this is no longer going to be with us. It's no longer potentially safe. So you take that risk if you want to.

one of the product segments I was interested in seeing if we'd hear anything about was the Vision Pro. And we didn't get very much on the Vision Pro with this update. Were you surprised by that at all? Yes and no. Basically, the only thing that Vision Pro got a mention for was the fact that the iPhone 16, because last year the 15 Pro and Pro Max did have the ability to take spatial video and photos. And now this year, the standard 16 and 16 plus can now take spatial photos and videos because they rearranged the cameras to be in that vertical position so that when you turn it horizontal, I guess that's the way it's got to be. I don't know the whole engineering behind that, but that's what Apple needs.

Which is probably not going to make people want to rush out and buy a Vision Pro. However, I will say that is by far one of, if not the best features on the Vision Pro, is especially with Vision OS2, where now you can take even any photo that wasn't shot on an iPhone and that was capable of, you know, producing spatial photos, you can now turn it into a spatial photo. And it does an incredible job. And so reliving those memories and kind of this like 3D spatial surrounding kind of makes you feel like you're back in that memory.

And that could be a really good thing. Could be kind of a bad thing for some people. But it could be a really good thing. And it's just really, really good. And so that's one of the reasons if someone was like, why would I ever want to buy this as just a standard consumer? Like, that could be one of the reasons. if you're really into going back and watching old videos and photos for the memories,

that's a really good way to do it. It makes a lot of sense to me. And I think we've been observing that product line and the idea of AR and VR and VR and kind of wondering, is the developer community going to be there to support the use cases that the consumers will want? It's kind of a two-pronged thing. And if you put consumers in a spot where they can capture their own content, then maybe it spurs some more device adoption that probably wouldn't have necessarily happened either way.

I think it's paving the way because, you know, I don't expect anyone to buy a $700 to $1,000 phone depending on which one you get and then go out and drop another $3,500 on this headset. But in a year or two, three, whenever Apple decides to drop its lower, lower, you know, cost version of this, now you've already got a library of content going on. And hopefully a library of professional content that Apple or whomever partners with Apple, you know, has that ability to have that library available. because that's the other biggest thing is like, it's a really good content consumption device.

And right now, the library of content is very slim. So as that builds and as you have your own personal and then movies and TV shows that are professionally made, like now you're talking about something that could be really special for somebody. So it's getting there. It's just going to take some time. We just got to be patient.

We don't want to be patient, though. I am 100% with you. I do the same thing. On that note, I know we just got a lot of updates on Apple devices, and they will be in stores available for the holiday season. When you look out over the next year, anything you're following or paying attention to when it comes to the eyeline of products? I mean, what? So we have new Macs probably coming out this year.

I mean, those are just kind of the same thing when it comes to the phones, like iterative updates. I don't know how Apple does it, but somehow every year they make these amazing chips that can power, you know, large studios in a small Mac mini. these days. Like if you are a content creator, if you're a filmmaker, anyone can make something amazing with a Mac mini where, you know, back when I was a kid, that was just the only computer that we could afford. That was a Mac. So that was like our entry level. And now it's no longer like, so there, there's just so many good Macs out there for everyone. And they just keep making them better. I don't know. I mean, the iPhone SE is a pretty tempting one. We have some good rumors about

that. That should be coming out. It could be probably the lowest like entry point for a consumer to get into Apple intelligence. And they're finally going to redesign that and you'll no longer have the button. So it'll be more in line with how phones look now. So kind of that all screen, much more modern design, it'll have good performance, decent cameras, and the ability to do Apple intelligence features.

So like that would be the phone that I'd recommend at like, it's probably gonna be in that four to $500 price point. It's kind of hard to beat. I don't think there's any other phone out there that you can, you know, in that price point that could give you those features and beat it. Listeners, you can catch Dan on the Mac Rumors show, available wherever you get your podcast and on YouTube, and you can catch us after a short break. We'll be back with stocks on our radar in just a few minutes.

Stay right here. You're listening to Motley Fool Money. 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. Soapy-Barris' thing based solely of what you hear. I'm Dylan Lewis, joined again by Jason Moser and Matt Argersinger. Jens, as we tape, it is Friday the 13th. If you're superstitious, maybe put some good vibes. out into the world, which is exactly what donut maker Krispy Cream is looking to do.

They're getting in on the action offering a lucky 13th, 13 cent donut when people buy a dozen. Jason, this immediately got me thinking, how much do you think it actually costs to make a Krispy Kreme donut? That's a very good question. I will say, I am not superstitious in the words of Michael Scott. I'm a little stitious. I thought for me, you got to figure that once you cover those fixed costs, making these donuts, It's probably to cost much of anything.

But what I really took away from this article, I love how Krispy Kreme leans into the themes, right? I didn't realize that they rolled out themed donuts around Dolly Parton. I mean, I get the Paris Olympics. I understand fall. Dr. Pepper is interesting. But Dolly Parton. I mean, who knew? I didn't know that.

Matt, they're coming after what we know could be some Dunkin' Donuts territory there with some seasonal donuts. How do you feel about that? You know, as a heart in New Englander, I am a little bit, I'm a little worried about this. 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. Matt, you're up first. What are you looking at this week? All right.

Well, speaking of good vibes, Oxford Industries, so most investors probably don't know that despite its name, Oxford Industries, it's actually the owner of the Tommy Bahama brand, Lily Pulitzer, Southern Thai, Jack Rogers, and a few other. Fairly popular apparel brands. I think Dan would agree. So Oxford reported second quarter results this past week. Not great. Sales were mostly flat across the board. The company noted that a lot of consumers are just looking for deals at the moment, so not really paying full price. They're just looking for promotions or clearance events. That's not great for margins and earnings, which have come down. And Oxford did revise its guidance for sales and earnings per share

lower for the year. But I did see a couple positives. For one, inventory was down 14% year over year. That's inventory management's key for the apparel business. And the company were paid all of its outstanding long-term debt. They had taken on some debt in recent years to make some acquisitions. The company still generates excellent, healthy cash flows more than enough to support a 3% dividend right now. And even if you take the low end of their new earnings guidance for the year, the stock trades for just 12 times earnings with a 3% dividend. It looks kind of compelling to me from here, especially if those brands can rebound maybe next year. Dan, a question about Oxford Industries, ticker, OXM.

I'm going to open up to all of y'all, since we all work from home now, y'all buying clothes, specifically, you all buying fancy clothes? You know what? I will say, Dan, my dress shoes that are 10 years old just fell apart, and I need to buy a new pair because I have a wedding coming up. So I don't even know where to go. I'm that far out of the loop when it comes to buying clothes. Yeah, I do not spend a whole heck of a lot of money on clothes these days. I'm part of the problem.

I tend to go when there's clearance events, so there you go. Interesting. Yeah, something to note. Jason, what's on your radar this week? Yeah, I feel like maybe there's a little bit of a theme here with Maddie talking about Tommy Bahama. I've got Top Golf Callaway on my radar this week. That's ticker M-O-D-G. And I guess that's not going to be for long because Top-Golf Callaway has announced plans to separate into two independent companies, which is kind of fascinating, given that Top Golf Calloway just became Top Golf Galloway, not on that long ago, right? Calloway bought out the remaining interest of TopGolf before TopGolf could even go public,

thinking that the acquisition seemed like a compelling way to diversify Calloway's business, beyond just golf equipment while still kind of staying in its lane, but leadership believes that the difference was between the two businesses now. It makes more sense to operate as two independent companies, They are targeting the second half of 2025 for the completion of the spinoff. So we will stay tuned for more news. Dan, a question about Top Golf Calloway, ticker M-O-D-G. Maybe more of a comment here, but the Top Golf in Alexandria closed.

And that always kind of made me sad because that was a fun place to go. Have a couple drinks, hit a couple balls, maybe hang out with some friends. It's a good time. Dan, I'm going to venture a guess here that Top Golf Calloway is going on your watch list this week. I like Top Golf. it's a good thing. So we're going top goal. Appreciate you weighing in. Matt Jason, appreciate you bring the radar stocks. That's going to do it for this week's Mottiful Money Radio Show. Shows mixed by Dan Boyd. I'm Dylan Lewis. Thanks for listening.