Motley Fool Money - Stock Market Whip Lash

Episode Date: February 16, 2024

Economic data and earnings season combined for a volatile weak in the stock market. (00:21) Bill Mann and Jason Moser discuss: - The latest inflation numbers and what they mean for investors - Earnings wrap-up for Twilio, Lyft, Airbnb, Shopify and Trade Desk - Nvidia’s disclosure of its investments and how it impacted stocks (19:11) Corrado Russo shares some thoughts on the international real estate market. (34:09) Bill and Jason break down two stocks on their radar: Fresenius and Home Depot Stocks discussed: TWLO, LYFT, ABNB, SHOP, TTD, SHOP, NVDA, NNOX, ARM, HD, FMS Host: Ron Gross Guests: Bill Mann, Jason Moser, Corrado Russo Engineers: Dan Boyd Learn more about your ad choices. Visit megaphone.fm/adchoices

This episode is brought to you by Indeed. Stop waiting around for the perfect candidate. Instead, use Indeed sponsored jobs to find the right people with the right skills fast. It's a simple way to make sure your listing is the first candidate C. According to Indeed data, sponsor jobs have four times more applicants than non-sponsored jobs. So go build your dream team today with Indeed. Get a $75 sponsor job credit at Indeed.com slash podcast. Terms and conditions apply.

Did this week's stock market give you whiplash? Motley Fool Money starts now. That's why they call it money. The best thing. Global headquarters. This is Motley Fool Money Radio show. I'm Ron Gross sitting in for Dylan Lewis. Joining me today are senior analyst Jason Moser and Bill Mann, Fools.

How you doing? Hey, hey. Doing great, brother. Fool's earning season did not disappoint this week. lots of companies reporting and stocks moving around rather aggressively. Today, we're going to talk e-commerce and ride-sharing and even typos. But we begin with the big macro. Earlier in the week, consumer inflation data came in a bit hotter than expected, which may signal that the Fed will be in no hurry to cut interest rates. Later in the week, we saw retail sales come in worse than expected,

and then on Friday we got another hot wholesale inflation report. And needless to say, the stock market was all over the place for the week as investors reacted to the data. So, Bill, what do you take away from all of this data? And what should the everyday investor do about macroeconomic data? It doesn't matter. Are you exhausted from all this? No, no, we're good. Oh, okay, good, good, good.

So if you want to do something really funny, go into Google and type the words, Powell said the quiet part out loud. And I guarantee you there's like four pages worth. of articles that are entitled, Powell said the quiet part out loud. Because here's the thing. I don't think that the market has paid the first bit of attention to the fact that the Federal Reserve has been stating inconvenient truths for the last two years. Like, okay, now he's telling the truth. Right. So, yes, we have had a, you know, last year it was, while inflation is, you know, it's temporary. What was the word? Transitory. That was the word of the year. That was the 10-cent word of the year.

So the problem is that the Fed has been saying these things, and the market hasn't wanted to believe them. You know, they said last year, we are going to keep raising rates until we have tamed inflation. What does this tell you? Hasn't happened yet. So everyone is all geared up for rate cuts, which I don't know. I learned in math school happens when the economy is bad. What's math school? That's basically what I had to go through like sixth through eighth grade is remedial math. So you think the Fed is not there yet. They are going to need to see closer to their 2% target from an inflation perspective to even consider cutting.

Up until recently, traders had priced in March rate cuts. You know, at one point, it was almost like a gimmie. Now we're pushed out, obviously, later during the year, you think we're in for some waiting. I think you should be careful saying the quiet part out loud. Yeah, I mean, they basically have said that this was what they were focused upon, that they did not want to, and they were more afraid of stagflation than anything else. And so, yes, this is what they were going after. And they really haven't promised anything. The quiet part is the thing that they've been shouting the entire time that this is what we're going to be paying attention to. Jason, what's the average everyday investors supposed to do about all this? It's a lot to piece together, right? And I mean, we get this data. It becomes a little bit, you know, it seems a little good.

There are a lot of companies out there cutting jobs, right? It seems like every day we're getting announcements that, you know, the company XYZ, cutting the X percent of their workforce. it's become very commonplace. Something's not adding up here, I guess is what I'm saying, Ron. And then I don't know if you guys noticed me this week, they did make mention of the fact that the UK and Japan actually have slipped into recession. I think that Jay Powell is certainly very happy in that he did not feel pressured to go ahead and start cutting or even getting that language out there saying, oh yeah, cuts are just around the corner because this really does more or less substantiates the perspective he's taken along.

All right, guys, let's dig into some earnings. And there are plenty of them on Thursday, Twilio reported its first results since its longtime CEO stepped down due to pressure from activist investors. And, well, it didn't really go that well. Revenue guidance for the current quarter was weak. The stock fell almost 15%. So, Jason, was the quarter okay, and it was just the guidance that was weak? Or we have a little bit of a mess here?

I think it's the former. It wasn't a bad quarter of the guidance is a little weak. But I mean, I think it's safe to say. I mean, Twilio is a business in the middle of transition, right? You've got a new CEO here in Cozama Ship Chandler. You've got this segment acquisition that was made toward the end of 2020 that just clearly has not worked out like former CEO, Jeff Lawson, expected. Maybe that's why he's former CEO.

Yeah, I mean, there could be something to that. The thing is, too, that segment part of the business, it's still such a small part of the overall business. It's just not working out. Overall, the business did okay. Organic revenue was up 8% from a year ago. They saw non-gap operating income, $173 million. That was up from $39 million a year ago.

The core of this business is the communications segment, and that revenue, $1 billion for the quarter that was up 5%. Again, going back to that segment side, which is really the data and the applications, revenue of just $75 million. And I think that really is, that's the story of the quarter. And I think what we need to be waiting for with this business. come March, they're going to sort of lift the hood, so to speak, and tell us the conclusions that they've drawn from the strategic review of this segment business and what they may actually do with it.

Because as you mentioned at the top, their activists are starting to take hold of this business. It seems like a story of unfulfilled potential. Clearly now with a leadership transition, you've got to give Ship Chandler some time to try to execute the vision, right? Now, if you don't want to give him that time, that's fine. Don't own the stock. But, I mean, you have to be realistic about this understanding that it's going to take several quarters for him to try to be able to get this business going where he wants it to go. They did benefit from some seasonal strength there toward the end of the year. But no doubt, it looks like a slow start to 2024, and that has investors on the sidelines for now.

Activists and patience don't always go hand-in-hand. We will see. You get the activists you deserve, I believe. On Tuesday, Lyft reported solid results and share rose to a 52-week high. despite some bumps caused by a bit of a typo in the earnings release. So, Bill, let's get the typo out of the way and then tell us how the company is actually doing. A bit of a typo. A bit of a typo.

If you've ever wondered why companies report their earnings when the market isn't open, this was it. At 406 on Tuesday, Lyft came out with a report saying it was a great earnings report, but amongst other things, it said that they had a five, 500 basis point gain in EBIT margin expansion. In actuality, the number was 50, a 50 basis point. Now, first of all, I want to go on the record as saying, nobody should ever be quoting basis points at 5%. Right?

The problem is this. They had $741 million worth of shares trade in the aftermarket, in between time that they made that statement at 406, and when they corrected it at 552, and they said, oh, no, it's 50 basis points, and the stock had gone up 67-ish percent. Wow. This is a problem. How many basis points is that? That's a lot of basis.

Too many. That's right. Let me take my shoes off so I can count that on. 67,000 bases? Yeah, it went up several basis points. So it was a great report from Lyft. I mean, full stop, it was a great port, but it was not that good. It is only the fourth profitable quarter that they have reported since they've come public.

So, new CEO, David Risher, I know he's kicking himself for this, what they're calling a clerical error. I think it's a little bit more than that. I think maybe they may end up having some lawsuits coming their way based on the fact that $700 million worth of shares traded on bad data. but holy cow. Be careful about trading in the after-hours market. Absolutely. That's one lesson for sure. Absolutely. Yeah, there are a lot of the circuit breakers that are in place during market hours, which people sometimes don't like. This is why they are there. Coming up, we'll talk rooms for rent and we'll discuss how a 13 FSC filing took the market by storm.

You're listening to Motley Fool 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 and 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 atrange.com. Welcome back to Motley Fool Money. I'm Ron Gross here in studio with Jason Moser and Bill Mann. Friday night, Chipmaker and Vedia released its 13F SEC filing, listing the companies it has

investments in, and the market went bonkers. Bill, unpacked it for us. What do they own, and what happened? The mayhem ensued. How come? So, let's get into the documents and their requirements, because I know this is really the things that people are interested in. But if you own $100 million or more of publicly traded stock, you have to file something called a 13F, which Invidia has not had to do until Armholdings went public again. So now they're over that threshold. So they came out with their report, and they owned five companies, one of which in particular

is a microcap called NanoX, and they owned about $380,000 worth of NanoX. And the stock in the two days since this has been reported. reported, has gone up 134%. Wow. Just, and again, who knows why a $1.7 trillion company owns $380,000 worth of a stock, but it's an absolute nothing burger. In some ways, I feel like we're getting back into, like, the enthusiasm over SPACs. Like, hey, it's a bank account. Let's run it up in price. Well, yeah, shoot first, aim second, right?

I mean, that's when you get to those sort of manic stretches. That's what it feels like. Yeah, $400 million in increase in market capitalization at NanoX over a $380,000 investment. And one or two of the other stocks they own popped as well. Extraordinary. Jason, sticking with the 13F theme, everyone's always looking for Berkshire Hathaway's 13F to see what Mr. Buffett and his friends are buying and or selling. What stood out to you?

Yeah, I mean, it sounded like he put a little bit more than a lot. a billion dollars to work on shocker banks insurance companies and finance companies. It's bread and butter, so to speak. I think the big mystery is this company that he's asked regulators to keep his secret. I think it's for the second quarter of round. A lot of speculation out there is to the company. Who knows? Probably a bank, but I guess we will find out eventually.

I think it's interesting the focus that he sold Apple. A little bit. Here's the other side of that coin. He still owns over 900 million shares of Apple. So I don't know. Take that with a grain of salt, right? Big additions to his positions in Chevron and Occidental, 14% and 9% respectively. And I also thought it was interesting to see positions they exited fully. Stonecoe, Homebuilder, D.R. Horton, and a foolish favorite of ours, Markell Insurance.

Interesting. Hmm. All right. Earlier in the week, Airbnb reported better than expected results, with CEO Brian Chesky making optimistic comments about where the company is head. it, especially in international markets. Jason, shares initially traded down on concerns of moderating growth, but then we got a rebound. Any concerns here? Or does the near-term future look relatively bright? I think it looks good. The couple of things that stand out for a company like this,

there's that NIMBY risk, right? No, and on my backyard, we saw this play out in New York City. That risk, of course, is real. It's something that I think is going to exist, but I also think it's overplayed. I mean, there are going to be pockets of communities all around the world. that prefer to keep the Airbnb presence to a minimum. But I think in the context of the overall global opportunity here, it's nothing to worry about. And then the other thing, you hear a lot of people gripe about the costs affiliated with renting and being on Airbnb.

So they made this point on the call there in regard to affordability. By the end of the year, nearly 40% of their active listings didn't charge a cleaning fee at all. And so that work on their affordability is paying off, and they actually quantified it. In December, the average nightly price of a one-bedroom listing on Airbnb was $114 a night down 2% from the same period a year ago, while hotel prices rose 7% to $149 over the same period. So they're really doing a good job, I think, communicating the value proposition.

It's playing itself out in the numbers well. Revenue, $2.2 billion up 17%. Knight's experience is booked up 12% to 98.8 million. active listings now exceed $7.7 million, and they just approved a new share repurchase authorization of up to $6 billion. So hopefully we'll see that bring that share account down, though. They do rely on some stock-based compensation still, so something to keep an eye on. Man, there's so much mischief that hides in quoting averages.

Don't you think that perhaps the fact that they are ramping down in New York, one of the most expensive housing cities in the world. And it's not just New York. It's London. It's Tokyo. That may have something to do with the average room and stay price. Are you saying that they're just making the data say whatever they wanted to say? I didn't hear anything after the cleaning fees.

Right. Exactly. They're still cleaning the place, right? My eyes went red from that. I think that the risk of regulatory change is much higher than you might think. There are places around the world, Dubrovnik, for example, which is a beautiful city, fewer than 200 people live in the walled city because so much of the market has been given over to short-term rentals like Airbnb. It's not just Airbnb, but there are places around the world where this type of the intensity of the tourism is, I think is going to come to question.

So I'm not making a statement about Airbnb, but I am saying that there is a sensitivity that I think is out there and it is real. On Tuesday, Shopify reported better than expected results, but weak first quarter guidance driven by higher marketing and compensation expenses sent the stock down 13%. Bill, the stock wasn't cheap in the first place and the increased expenses. I think surprised investors. Management thinks the spend now will pay off down the road. What's your take? This stock has gone up like it's been shot out of a cannon over the last six months. So it's dropped 13% from its high before earnings, which is a number that it had only crossed in December.

Right. So we're back to December. We're back to December. I mean, how's that feel? Right? Like the nights are a little bit longer. You know, it was a great quarter for them. And I think that, and I think that this quarter showed just how anti-fragile Shopify is, coming because a lot of the area where they have been focused is with their larger enterprise customers, like On Holdings, for example, is a huge newer customer for them. So these are much more complex customers than, you know, remember where Shopify started. It's basically to help essentially Etsy people. Right. Mountap. Yeah. So now they have moved up to being able to help some of the companies that are doing things like competing with Nike. So it was a fantastic quarter for

them. I think that the story of the stock really has to do with the fact that it had run up so much. And as you said, it was not cheap. And so I think what was getting valued was not just the future, but also the ever after. And we've stepped back a little bit into reality. Trade desk shares were up big on Friday, as the company reported a 23% increase in revenue and a $700 million share buyback. Jason, report looks strong to me, but I want to know what's stood out to you. Yeah, I think the two themes that really stood out here, connected TV remains the fastest growing vertical for the company,

and then that I don't think is going to be changing anytime soon. And then, you know, the AI tailwinds, right? We talk a lot about AI. They're very quick to tell you that, listen, they've been embedding AI to their platforms in 2016, and they're using it to make their business better. So, I think it's just interesting to look at AI from that perspective, the companies that are using it to make their own operations better. The trade desk certainly stands out here.

But, I mean, the revenue numbers just continue to impress up 23% from a year ago. UID 2.0 continues to gain traction, guiding for about 25% top-line growth here in the current quarter. And they are going to see the inevitable tailwinds from the political spin that we, unfortunately, are going to be subject to here for the next several. months. All right, Fools, we will see you a little bit later in the show. Up next, a conversation with Corrado Russo, managing partner and head of global securities at Hazelview Investments for a look at the international real estate market. You're listening to Motley Fool Money. Come back to Motley Full Money. I'm Ron Gross. Motley Full Money's Deidra Woolard caught up with Corrado Russo, managing partner and head of global securities at Hazelview Investments for a discussion about how the

weak U.S. office sector is faring globally. And they discuss some REITs that investors may want to consider. So one of the reasons I like to talk to you is you've got more of the global perspective. I tend to mostly study U.S. REITs. And well, the United States was not the top performer last year, according to your data. So looking at this, at the high end, you have Germany, at the low end, you have Hong Kong and some of the things that have been happening in China in general. But tell us about some of the macro factors. behind those results? Yeah, so Germany was driven by the residential market.

There's a very large multifamily contingent on the real estate company side in Germany. And a bit of it was playing catch up from 2022. They significantly underperform in 2022 coming off of the uncertainty around the war, high inflation and high interest rates. And given that residential is a very stable, long-term, you know, cash flow and predictable cash flow, it tends to trade more like a bond. And obviously, as interest rates started to weigh on, you know, going up, that started to weigh on those stocks. So they had a poor 2022.

As we went into 2023, people realized that even though it's very stable cash flow, it does have the potential for growth. And there was tremendous amount of growth that we saw coming out of the residential space in Germany. So that really started to see a large sort of catch up, you know, in that space as well. And also, they have a bit higher leverage. so that would have, you know, led to a 2022 underperformance, which again reversed as we started to get to the end of 2023 when rates started to stabilize. Hong Kong a bit of a different situation. You know, Hong Kong is being driven to what we've seen in China.

Obviously, China's economy hasn't been as strong as you've seen in the U.S. and Europe. China sort of took a bit of a different tact when it came to COVID, rather than using excess stimulus measures to try to get the economy going. which obviously resulted in inflationary pressures, they took a more long-term duration lockdowns with minimal stimulus, and that's starting to have deflationary pressures, and that's putting some pressure on property values. And property values, if you know the Asian market,

especially in China and Hong Kong, it makes up a much bigger percentage of the average person's net worth. So as property comes under pressure, that can put that stock on the pressure. But what we'd like about Hong Kong going forward is you're sitting with certain sectors that have great fundamentals going forward that are actually trading at significantly larger discounts than anywhere else we're seeing in the world. Well, you mentioned Office earlier, certainly not a great year for Office in the U.S. What's it like globally? Yeah, it's interesting.

You're not seeing the same kind of negativity on office that you're seeing in North America in Europe or Asia. And it's for a couple different reasons. First off, in Europe, there tends to be a much greater culture around going to the office. Most of you sort of live, work, play is around the office. You go to the office. You have lunch with your colleagues. Your colleagues are your friends. You go to dinner afterwards and to the piazza and then, you know, home and do it all over again.

So culturally, what we've seen in throughout COVID is that as soon as people could go back to the office, they went back to the office. average utilization rates is much higher and the work from home trend is much less significant in Europe. And so that's driving better demand. And we're also seeing a lot more demand from private buyers of real estate to buy office properties. So that's keeping valuations higher relative to in North America where we're not seeing a lot of people interested in buying office properties right now.

Asia, a bit of a different situation. Again, culturally, there's a huge dynamic of FaceTime with the boss, especially in markets like Tokyo, for example. So there's a huge understanding from most of the workers that the way to climb that corporate ladder is you have to have that face time and show that you're working. So again, I think you're seeing less of a work from home trend. It also has to do with the average size of a home in Asia is much smaller than it is in North America. So when you're sitting in your 2,000, 3,000 square foot home and you have an office or a spare room that you can work from home and it's very comfortable, that's easy to do in North America. A lot more difficult when you're living in a 500 or square foot apartment and you've probably got your elderly parents living in you with as well. So again, a little less practical to see that work from home.

So yeah, we're seeing very different trends. certainly not escaping the overall decline, but certainly not as bad as what we're seeing in North America. Let's dive into some of the specific callouts you have in your report. So last year you chose, your choice for U.S. REIT was Rexford, which is an industrial reed. Certainly, industrial continues to be one of the growth sectors in commercial real estate. This year you've got American Tower. Now, it's one of the two big cell tower reeds. It's been a tough couple of years for Tower Reeds, especially because you had the big telecom companies consolidating. So that meant that there was fewer companies vying for the same space on these towers. So

what makes American Tower one to watch right now? Yeah. So, you know, the first thing is obviously, as you said, it's underperforming. And that typically is what, you know, peaks are interest in why we dive in and look at different opportunities. You know, American Tower is underperform for a couple of reasons. You mentioned one of them, the consolidation of the carriers, which is reduced capital spending. And, you know, for the audience, as carriers spend capital and put equipment on cell towers, the revenue for these cell towers go up and that benefits their long-term cash flow. So with that consolidation, they've sort of paused and slowed down their 5G spending to sort of integrate and consolidate what they have.

At the other side of the equation, you know, towers have very long-term contracts. So their duration for that cash flow stream is relatively long, and that makes them very sensitive to rise in interest rates. So that's also caused the underperformance over the last couple of years. As we move into 2024, our view is that that underperformance will, start to turn around and go the other way. One, we're seeing 5G network spending start to pick up, and that's expected to be a positive catalyst going into 2024 and 2025. As carriers, now that they receive a lot more 5G phones out there,

they need to provide that data and that backup on the network to catch up to what the demand is. And at the same time, as interest rates start to go the other way, we think that that can significantly impact the stock price for two reasons. One, the trading multiples should improve because it was one of the biggest factors that brought the multiple down, but also the cost of capital to continue to grow will improve. So as their cost of capital improves, they'll be able to continue their external growth, which is really how American Tower has grown over the last decade or so is by really consolidating

and buying other towers outside of the U.S. as well. How much is edge computing data centers rise of AI kind of factor into American Tower? I know they have a little bit of interest in that space. Yeah. So what you're seeing is a bit of convergence between cell towers and data centers. You know, there's, you know, edge of computing obviously helps in terms of, you know, trying to move into the data center space in terms of, you know, where AI and real-time computing power is necessary.

So whether it's throughput of different devices and data going through and also storage of different data. So I think that, you know, I think we're going to see a consolidation between where, you know, the cell tower ends in terms of carrying the signal versus the data centers where, you know, computing power ultimately rests and where data storage is done. and I think the edge is sort of their solution to sort of getting into that space as well. You know, happy to talk about it as well, but data centers is one of the key themes we have for 2024 as well. I'm curious about your Canadian choice, Chartwell's senior residences. I mean, I know the demographics are in our favor for senior living.

I've studied a little bit about, you know, the general aging of the population. But it hasn't, it's been a tough area to invest in so far, at least in the U.S. What makes Trottwella stand out? Yeah, great question. And to your point, the demographics are there. The stock should be performing very well, and it hasn't. It's had a tough time. And that tough time has been for a few reasons.

It really continues to stem from COVID. Obviously, the impact of COVID disease was very impactful on the elderly and the distancing and lockdown measures that were put in place to combat that, you know, led to, you know, not only the inability to have new move-ins, to have people, you know, take up the occupancy that was there and it disrupted leasing, but it also disrupted the labor force. There was very, you know, what we saw as an exodus of the labor force for senior housing and the inability to find staff. So that really meant that Chartwell had to spend an exorbitant amount of money on temporary

staff from agencies. So that led to, you know, you had negative occupancies because you couldn't move. people in and you had expenses going up because of cash flow. Underlying all of that, we saw a significant amount of supply. That's why the stock in the sector hasn't worked for so long is you've had so much supply. So those three factors together are sort of gone against this stock. So why do we like it now? One, the distancing and the COVID measures are obviously gone. A lot of the stigma with respect and moving into senior housing has dissipated, and you're starting to see that leasing activity pickup. We've seen it over the last two quarters, significant pickup in leasing activity.

One, two, the labor forces back to where it was, you know, kind of pre-COVID, so that expense management issue is starting to dissipate as well. We're seeing them get back to their full labor force levels where they were running before. But the most importantly, supply is completely turned off. With the higher cost of capital, the higher material cost to develop new, the increased regulatory environment, all of that has made it very, very difficult to build new senior housing. So, you know, as we see a ramp up in demand, we see a decline in expenses, we see a decline in competition from supply, we believe that that's going to lead to higher rents, higher occupancy, and ultimately boost overall cash flow down the road.

Is that a phenomenon you're seeing just in Canada? Are you seeing it in other places as well? We have seen it in the U.S. as well, but I think the U.S., I would say, was much quicker and a bit more balanced in terms of demand supply. So I think it's been a little quicker. So what I would say is you look at somebody like Well Tower and you see how well that stock did in the U.S. last year, it really had its recovery. So I would say that Chartwell is a bit of a lag, and we believe that it can sort of replicate the recovery and the benefit that we saw come out of the U.S. in 2023. Ah, that makes sense. Well, you didn't choose logistics for the U.S. this year, but you've got two European picks that focus on that space. You've got Monta and CTP. So what makes logistics

a growth area for Europe right now? Yeah, so the U.S. has extremely strong demand for industrial, but supply is starting to catch up. We are seeing increase in supply, so we're a little worried that that might put a ceiling on future rank growth. Europe effectively has the same strong demand trends that the U.S. has, but it doesn't have the same supply issue. Supply is relatively limited. The stock is a bit older than the U.S. They haven't built as much, so a lot of the old stock is obsolete. And so you really have an effort to sort of find, you know, those new logistics centers that are more efficient. And if you own them, which Monta and CTP do, the two companies that we outlined, they're seeing significant demand for their space.

If you look at Europe, there's a huge ongoing movement towards near-shoring, which means two things. You have European companies that want to keep more storage in Europe rather than rely on it to come from China or from Asia. And you also are seeing them bring home some of the manufacturing. So even though they might continue to source some from Asia, they still want a portion of their manufacturing done on the continent. So you're seeing that drive industrial and logistics as well. And then finally, you're seeing Asian suppliers that are setting up shop and Europe to be closer to their customer because their customers are demanding that. And that, again, is putting a lot more pressure for industrial and logistic space. So the demand is off the charts

in our view. Supply can't keep up. And we'll believe that Monta and CTP have the right kind of assets for the kinds of efficiencies and specs that tenants are looking for today. Coming up after the break, Bill Mann and Jason Bozer return with a couple of stocks on their radar. Stay right here. You're listening. to Motley Fool Money. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against. So don't buy yourself stocks based solely on what you hear. Welcome back to Motley Fool Money. Ron Gross here with Bill Man and Jason Moser. All right, fools, we have time for a quick story before we hit stocks on our

radar. According to industry experts, a certain 1970s TV show with a catchy theme song was responsible for a surge in the cruise industry, and it's being hailed as the greatest product placement of all time. Yes, fools, I'm talking about Princess Cruises and the Love Boat. I know we're all old enough to remember Isaac and Doc and good old Captain Steuben. So my simple question to both of you, thumbs up or down on actually taking a cruise and buy, sell or hold the cruise industry as an investment. Jason, you first. I've never taken a cruise, and I'm never taken a cruise, I'm going to try to fulfill the rest of my little ones without doing this. Okay.

So Norovirus down. Big, big fan of the show. I can't get the song out of my mind. I mean, just wonderful childhood memories. Unfortunately, I don't think the nostalgia is enough to sway me into the bowl camp on the cruise lines as an investment, though. Bill Mann has had to have taken a cruise or more than a cruise. I've got parents-in-law who live in Fort Lauderdale, Florida. Oh, it's the law.

It's the law down there. you have to take cruises. Yeah, and it's not really my choice of tourism, but as a way to get a multi-generational family together, they're wonderful, like full stop. And as an investment? Sure. Sure. Well, I mean, they just went through a near-death experience with the coronavirus, and they are still building massive ships and took some inventory that needed to be taken offline, offline.

They are in economically pretty good shape. All right, Fools, tight on time, but we have time for a couple of stocks on our radar, and I'll bring in our man, Dan Boyd, to ask some questions. Jason Moser, you're up first. What are you got? Yeah, well, speaking of economically good shape. I'm keeping an eye on Home Depot, ticker as HD. We've got earnings come out on February 20th before the market opens.

And just looking at the results from last quarter, you know, it was not that great of a quarter, at least on the surface, right? I mean, comps fell 3.5% earnings per share down, 10.1%. Transactions down, 2.4%. Average ticket was even down. And listen to this guidance, Ron. They're talking about guidance for a full year. Comp sales to decline between 3 and 4%. Targeting an operating margin between 14.2 and 14.1% down. Anticipating a decline of 9 to 11% in earnings per share. The stock is still up 20% since that release, Ron. I mean, Home Depot is just a behemoth. I think really, for me, I'm going to be fascinated to see what they have to say in the call in regard to inflation, because they did make

the point last quarter. They feel like the worst of inflation is behind us. Seems like we've gotten some language this week that might speak to the contrary. Should be an interesting report. Dan, question about Home Depot? I've got to get to Home Depot. I have so much your work to do. Can you pick me up something? It's ridiculous. That's more of a comment, but we'll take that. Bill, what do you got? Mine is Fressenius, which is a German company, and actually they are one of the largest dialysis companies in the world, but definitely in the U.S.

And what's really interesting thing about them is that they are square in the sites of the GLP agonists, the Ozympics, the Wagovis. So I'm really interested to see what's going to happen with the dialysis industry as, you know, as Fersenius is one of the drive. We have a Fresenius here in Alexandria, Virginia. But do you remember, Bill, what it used to be before it was a Fresenius? It's got to have been a frozen yogurt place. It was a Fuddruckers, the burger restaurant, if you remember that place.

When that thing closed down, oh, man, poor young Dan, very sad. Dan, I don't know where to go with that, but do you have a favorite for your watch list? Well, unfortunately, it's not Fudrackers. I got to go Home Depot. I can't get away from that place. I feel like I'm there almost every weekend in the spring. Makes too. All right.

Billman, Jason Moser, thanks for being here. That's going to do it for this week's Motley Full Money. Our engineer is Dan Boyd. I'm Ron Gross. Thanks for listening, and we'll see you next week.