Latest news with #AndyCross
Yahoo
03-07-2025
- Business
- Yahoo
Nike is Back in the Race
In this podcast, Motley Fool Chief Investment Officer Andy Cross and contributor Jason Hall discuss: Why Nike stock rallied after its latest earnings report. Home Depot buying GMS for $5.5 billion. Will F1: the Movie drive Apple's stock? To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy. A full transcript is below. Before you buy stock in Nike, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nike wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $692,914!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $963,866!* Now, it's worth noting Stock Advisor's total average return is 1,050% — a market-crushing outperformance compared to 179% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 This podcast was recorded on June 30, 2025. Andy Cross: Nike is back in the race, Motley Fool Money starts now. Welcome to Motley Fool Money. I'm Andy Cross, joined here by Motley Fool contributor Jason Hall. On the docket today are earnings from Nike, Jason, Home Depot's latest acquisition, and we're lifting the hood on F1 The Movie and what it means for Apple. Jason, let's dive right into it. Nike's fourth quarter earnings were last week. The stock jumped 15% on that Friday after the footwear giant expressed confidence that it's turn around, that Elliott Hill, the CEO, who joined eight months ago, is moving along even though the quarter continues to show that challenge. Jason, is that investor enthusiasm warranted? Jason Hall: Honestly, I think I would have framed it in a different way. The stock jumped on earnings, but if you look over the past five years, Nike stock has fallen after earnings far more often than it's gone up. The stock's still down a quarter from where it was five years ago, and it's down almost 60% from the high. I don't think this is about enthusiasm as much as it is investors reframing and resetting their expectations, and seeing the company with those lower expectations and the fact that this turnaround is going to take a while, there are some signs that it's starting to work. Andy Cross: Jason, the sales down 12% year over year, still ahead of some estimates, earnings per share were down 86%, beating consensus a little bit. The big thing was on the gross margins down 440 basis points to 40%. If you look a few quarters ago, gross margins were around 45%. We're seeing this impact on the inventories for Nike. I think that's a big story that investors are focused on with this turnaround. Jason Hall: There's no doubt about it. One of the big parts of the Nike struggles over the past few years is trying to figure out their go-to-market strategy. They heavily prioritize their own digital channels, alienated a lot of the wholesale market, which is the retail channel, and they're having to come back around to that, a little bit with hat in hand, and they're starting to see a little bit of signs of improvement. We know that Dick's big acquisition that they're working on. With Foot Locker, that hopefully is going to be positive for Nike. Maybe the big thing is the e-commerce presence of finally accepting that they need to be part of the Amazon ecosystem. There's some limited release products that are going to be showing up there this fall. Those are things that the market wants to see. The company has to embrace customers wherever they are, and then try to have a little bit of exclusivity with its own e-commerce. I think that that's a successful formula. I think the market agrees too. Andy Cross: One thing, Jason, about their five "Win Now" principles, which is they're like, right now we are focused on Elliott Hill. Again, coming back in, he's a long term veteran, joined about eight months or so ago, trying to get the branding back for Nike Build Back, the Nike goodwill, focus on things like culture, product, marketing, the ground game being, as you were saying, where customers are on the ground, focusing in key sports, rightsizing those important brands that have those legacy brands. What I really like is they're restructuring the team and the whole focus back around sport chase, and they're focused back on cross-functional teams focused on specific sports. I think that is a really important focus for this Nike turnaround. While we're not seeing it in the earnings or the performance right now, I think that, what I consider enthusiasm, and I think the stock is actually pretty attractive here, even after that jump, I think the enthusiasm is warranted because of the way that Elliott Hill is going about refocusing the Nike brand, and importantly the Nike culture. Jason Hall: I think that's right. Focusing on the brand, I'll start there. I've talked to a ton of people across sports that say that a lot of Nike's success right now is selling things that they were selling 30 years ago. Obviously, it's not exactly the truth, but it feels that way. They've certainly lost their innovative edge against on running other brands that have taken share, and having that hyper focus back on the products for that individual performance for that particular sport, I think is something that Nike has not done as well with. If they can show that and say, "Look, we can still innovate. We can come out with products that are going to be better, not just the fit, but the performance," that's where Nike can reestablish itself as a leader. Andy Cross: It's interesting. They're going to do a little bit of surgical pricing, they mentioned, tied to Amazon a little bit later this fall. They do have a big tariff impact of about $1 billion because of all the sourcing they do overseas. Although they're trying to change that, they're going to move a little bit away from China, and they think as a percentage of sales that will drop going forward, but they do still have those impacts, and it's going to show up in the gross margin over the next quarter or two. But the expectations, Jason, is that it's going to improve throughout the year. Jason Hall: That's right. Andy, everybody in apparel and footwear is dealing with the impact of tariffs, the potential impact. That story is going to continue to be part of the background for some time to come. I'm taking all of that with a grain of salt, that I think the supply chain is probably going to look more like it did five years ago than change going forward, but the company does have to take some financial steps to make sure it's prepared for whatever happens there. Andy Cross: Jason, how about the stock here, about $71, $106 billion market cap. You get a little dividend, 2.2%. Hopefully, bottomy on the earnings side that you look going forward are going to be meaningfully higher. Do you find this stock attractive? Jason Hall: I do. I did a video for the Motley Fools website a couple of weeks ago, and I said that there were signs that the turnaround was working. We'd get more information once earnings came out, and they just did. Again, probably things are going to maybe take a little longer than we expected, but I think even with the stock up from where it was a couple of weeks ago, I think there are definitely signs that it's worth maybe starting a position, following things out in. It's not super cheap right now, but I think if the trend continues under Elliott's leadership, then this is going to work out to be a good price. Andy Cross: Certainly not on current earnings, but hopefully on the future earnings. Jason Hall: Exactly. Andy Cross: In agreement there, I think Nike looks attractive here. After the break, Home Depot go shopping. You're listening to Motley Fool Money. Specialty building products distributor GMS is up about 11% today after announcing that Home Depot had won the bidding battle to acquire the company for 5.5 billion. Jason, GMS has been on the auction block probably for the past month or so since QXO, another building products supplier and technology company, put out an offer for about $95 per share. Home Depot's paying $110 per share. Did Home Depot win the acquisition battle here but lose the capital allocation war? Jason Hall: I think that's the question that I have. Home Depot, about a year ago, got into the distribution business that I think dropped $18 billion to buy a distributor, and part of the long term strategy was, look, this is an area we can consolidate, and these are builders and customers that are not coming into Home Depot no matter how well we work with them. It's big distribution. The plan had been to do that. Now, at the same time, you mentioned QXO, so that's Brad Jacobs. Brad Jacobs is the M&A master. This is somebody that has build a career on multibagger businesses, that he's made a lot of people a lot of money finding industries that are ripe for consolidation, that are low tech, that a layer of technology can make a tremendous amount better. QXO fired the opening salvo, as you said, with an unsolicited offer to buy GMS. Then Home Depot, we hear is getting involved. The question that I'm going to continue to ponder is, did Home Depot win it, or did Brad Jacobs and team just walk away because it got too pricey for them? If you look at the numbers, I believe 10 or 11 times EBITDA. Not crazy expensive, but certainly more expensive than the discipline price you would see a Jacobs-run business want to pay. Andy Cross: Sorry, about one times sales, as you mentioned, 10 to 11 times EBITDA. EBITDA's been down a little bit for the past year or so, but also because of the housing market, we know. But GMS, which by the way stands for Gypsum Management and Supply, runs 320 distribution centers selling things, including things like wallboard and ceilings, steel framings. It runs about 100 tool sales, rental, and service centers. Together, you're going to put together 1,200 locations, 8,000 trucks, making tens of thousand deliveries to job sites every day. What I like, Jason, as you mentioned, is these acquisitions for distribution scale matters, and this is a very fragmented business. I see this acquisition by Home Depot, this is a 5.5 billion dollar acquisition by Home Depot. Home Depot is a massive company, so Home Depot has about 45 billion of debt on the balance sheet. It's not going to add a ton more debt to the account. They have a $1.5 billion of cash, almost. I think from a management perspective, it's fairly attractive to Home Depot, and I can see why GMS would choose Home Depot versus QXO, even with Brad Jacobs' intelligence. But it does see when I look at the ability for Home Depot get a little bit more from every distribution node. I think it's attractive, and that multiple, as you mentioned, for Home Depot, I think, is not all that high. I think they're getting a good deal here. Jason Hall: I think it probably works out so long as this remains a part of the strategy for Home Depot consolidating this fragmented distribution industry that's very different from its retail business. I will also make a prediction that Brad Jacobs and QXO made a big splash when they acquired Beacon Roofing as the first, looks like, $11 billion deal, so getting in the roofing business, one of the big roofing suppliers. My prediction is that we're going to see Home Depot and its distributor segment and Brad Jacobs' QXO going head to head on more acquisitions over the next 5-10 years, and probably both do well in consolidating because there's so much room to consolidate this market. Andy Cross: That's the thing. It's so fragmented, so I think they can both be winners here. Brad Jacobs, if you look at his acquisition or look at his history of running companies with XPO and others, have done very well over the years. Like you said, he has this down to a science, the Beacon Roofing acquisition. That SRS acquisition by Home Depot, as you mentioned, for a little bit more than $18 billion, got them back into the distribution game, and so they're trying to cobble up that together. Both of these companies are trying to serve the contractor market, which is, as we mentioned, very fragmented, trying to increase the value of that network. For Home Depot, I think it's a good acquisition, I think, at a reasonable price, and I think Brad Jacobs was like, "Listen, there's going to be other opportunities. I'll let this one go. Home Depot, you can take this, and I'll focus my attention elsewhere." I do have a question, Jason, which is, if you think about either Home Depot stock or QXO stock, obviously GMS is going to be, if it all goes through, part of Home Depot, is there anyone that stands out as more attractive to you? Jason Hall: There's my answer, and then there's the answer that people listening need to think about individually. For me, I think QXO is really attractive because I'm a big believer in Brad Jacobs and the track record, and the process when it comes to being disciplined and finding these industries to consolidate, starting from a really small size, this can be a massive compounder. Now, again, that's what I'm looking for. I think investors that are looking for maybe the higher floor of an industry dominant leader, like a Home Depot, that has a pretty solid dividend growth, and can continue to do well for investors over time, if you want something that's a little more stable, a little less volatile, then I think Home Depot's a pretty compelling investment right here. What about you? What do you think? Andy Cross: Well, QXO at $14 billion, I think the upside is a lot higher. I own Home Depot, it's a large position in my portfolio. The stock hasn't done all that well over the past year or so. I think this is a nice bolt-on acquisition for them. Doesn't add a ton more goodwill to the balance sheet, maybe 2.5 billion or so on top of their 20 billion they have. I think it's reasonable. I think it's a decent price. I think they'll be able to get more out of it and continue to grow the GMS side of the business tied to SRS. It's just that Home Depot, like you said, is probably the high single digit per year grow or not, one that's going to light anything on fire going forward, Home Depot that is. Jason Hall: Well, their leverage is there is going to be buying back shares. That's how you boost per share return there too. Andy Cross: A hundred percent. Coming up next on Motley Fool Money, will F1 The Movie drive Apple stock higher? You're listening to Motley Fool Money. Brad Pitt's new movie F1, made by Apple Original Films, hit the theaters this weekend to positive reviews and decent amount of money, Jason. But here's my question, why is a $3 trillion company like Apple focused so much on making a film like F1, even with Brad Pitt. Jason Hall: Because they can. They found the money on the couch cushions, and they saw it like a fun vanity project. Andy Cross: They don't want to buy back more stock, and they've got plenty of places to invest that capital. Jason Hall: In all seriousness, we're both being a little bit glib here, and it's Apple TV+, and their studios business has actually created some exceptionally high quality content. It's still a bit of an also ran, compared to the big players in the space, like the Netflixes of the world, but to me, I think it's a reminder that Apple is focusing on quality more necessarily than quantity as part of its strategy with streaming and media content real large. Andy Cross: Does that mean the other ones are focused more on the quantity side, less on the quality side, do you think? Jason Hall: I think a little bit both. I think all of them, there's a tension between the two, and it's where are you leveraging more toward. If you're a Netflix, for example, this is your entire business. You have to put out lots of content that's going to attract lots of people, and it's got to be very good quality. If you're an Apple, where does this fit in your entire ecosystem of things, and what you're looking to do maybe is a little bit different than say what Amazon is looking to do with Amazon Prime TV, or Amazon Prime Video, I should say. Where Apple does seem, if you look at the content that they've produced, certainly it doesn't have the volume that you see at some of these other large players, but what it does provide is an additional layer of stickiness to the platform. Andy Cross: Do you think that they will up the quantity game to be more competitive? I think about this with Apple, right? Stories and reports are surfacing, 200 million to 300 million more on the entire cost to make this film, and Apple financed a chunk of change of that. Are you saying they have exclusive rights once it hits Apple TV? They'll be there. They splash marketing budgets all over the place. They had it in Apple stores. They had it featured in Apple Music, Apple Maps app. They had a big marketing push toward it, obviously, to show that they can be competitive in this space. I'm thinking like this, Apple generates about $400 billion or so in revenue. They generate, gosh, $100 billion in profits. Almost about a quarter or so of their business is tied to services. When I think about Apple building out that ecosystem, Jason, and the glue that they're putting together, as you mentioned, things like streaming to be competitive against likes of not just Netflix, but also the likes of Amazon, and the likes of YouTube, for a company that has middling growing, that continued growth in the services side of the business is important. I think that's one reason why they are now recognizing that because they generate such great returns on their investment, this is a place they can splash some capital. Jason Hall: Netflix here, they want your eyes, they need you. They need as much as many people's time as they can get because this is their entire business. Amazon wants your wallet, and the bottom line is that nobody's going to cancel or subscribe to Amazon Prime just for prime video. It's a bolt-on thing that keeps you in the ecosystem and drives you there. Now, if you're Apple, think about some of the things they've done with content. One example is they own the rights to the Charlie Brown content. Think about Ted Lasso, shows like this. I think where Amazon wants your wallet and Netflix wants your eyes, Apple want your heart. They want you drawn to these things that you remember from your childhood. Brad Pitt headline products are very compelling. Ted Lasso, it's become a cultural touchstone. I think if they focus more on those, almost like the HBO model of the 2000s, of developing just a few really high quality contents that are strong enough to keep you attached, that's where this fits in with Apple, and where Apple can win with this. Whether this part of the business is necessarily profitable on its own basis, I think eventually they want to see that. But if it creates value for the entire ecosystem, I think that's the most important thing for Apple here. Andy Cross: Is Apple attractive from a stock perspective? Again, I mentioned before, the growth has slowed. The stock has not been a super performer here, and now it sells in that 27-28 times earnings perspective, is with a lot of share buybacks, as you mentioned, in exceptionally profitable ways to invest, but still playing catch-up on the AI side. Is Apple attractive to you right now? Jason Hall: Not at all. I love the business. I love the products. I'm a deep user of Apple products, and one of those people that signed up for Apple TV+ for Ted Lasso, and hasn't canceled it because there's so many other good unexpected programs that they have there. But the bigger concerns for me around a company like Apple's it's so fully valued, it's not growing. AI, I don't know that it's necessarily a concern right now, but at some point, they're trailing in that race for AI powered products, could potentially sneak up and hurt the company. They lack a real catalyst for the next leg of growth. Nothing is lined up to drive growth that would make 27, 28 times earnings or higher compelling to me. I think there's more risk of underperformance. I don't think investors are going to lose a ton of money here. There's a bigger risk of underperformance if you're making this a substantial portion of your portfolio. Andy Cross: I agree. I think it's probably more in the money making category than adding to here. I'm an owner of it, and I'm just sitting on my shares, but not one that jumps to the top of my buy list right now, Jason. I do want to see a little bit more innovation from them, yet to come. I like the movies, but I do want to see innovation into the product cycle. That's a wrap for us today here on Motley Fool Money. Jason Hall, thanks for being here. Jason Hall: Absolutely. This was fun. We'll do it again sometime soon. Andy Cross: Here at Motley Fool Money, we love hearing your feedback. To be part of that feedback or just to ask a question, email us here at podcast@ That's podcast@ 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 or sell stocks based solely on what we do. All personal finance content follows Motley Fool editorial standards and is not approved by advertiser. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. For all of us here at Motley Fool Money, thanks for listening. We'll see you tomorrow. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Andy Cross has positions in Amazon, Apple, and Home Depot. Jason Hall has positions in Qxo. The Motley Fool has positions in and recommends Amazon, Apple, Home Depot, and Nike. The Motley Fool has a disclosure policy. Nike is Back in the Race was originally published by The Motley Fool
Yahoo
25-06-2025
- Business
- Yahoo
Tesla's Robotaxi Rollout
In this podcast, Motley Fool Chief Investment Officer Andy Cross and contributors Jason Hall and Matt Frankel discuss: Fair Isaac Corp. to include buy now, pay later data. The importance of Tesla's robotaxi. Tesla's advantages and challenges in self-driving. Fiserv launches its own stablecoin. To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy. A full transcript is below. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $383,569!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $38,025!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $689,813!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of June 23, 2025 This podcast was recorded on June 23, 2025. Andy Cross: Tesla's Robotaxis get rolling. Motley Fool Money starts now. Welcome to Motley Fool Money. I'm Andy Cross, joined by Motley Fool contributors, Matt Frankel, and Jason Hall. Today, we're discussing Tesla's Robotaxi rollout and yet another stablecoin that's on the horizon. But first, let's get to our headlines for Monday, June 23. On Saturday, the US launched strikes on Iranian nuclear facilities triggering investor concerns about raising oil prices and the potential for geopolitical escalation. Yet in that nothing ever happens market to coin the popular investing meme. Investors look past the news to bid stocks higher. The S&P, NASDAQ, and Dow Jones are all up today. Moving to company news, Tesla rolled out its long awaited Robotaxis in Austin, Texas on Sunday. The initial rollout is limited in featuring a small fleet of 10-20 Model Ys operating within a geofenced area. The event was accessible on an invite only basis to well connected social influencers, and a Tesla safety monitor was present in each vehicle for rides it costs a flat $4.20. More on Tesla in a bit. Eli Lilly reported that its experimental anti obesity bill or full grip run helped diabetics lower weight and lower their blood sugar in a Phase III trial with results that were comparable to injectable GLP drugs like Ozempic and Mounjaro. Side effects were also similar, so the company is aiming to file for regulatory approval as a weight management pill later this year in a treatment for diabetes in 2026. The Wall Street Journal is reporting that Fair Isaac, the company behind FICO scoring system will, for the first time, introduce a new model that includes buy now, pay later loan data as a factor. It has been testing this model in a partnership with a firm on 500,000 buy now, pay later users. It actually found that its users with more than five buy now, pay later loans, saw scores increase or stay stable in the early testing. We'll talk a little bit more about FICO in a second. Finally, on a sad note, Fred Smith, the founder of FedEx, died this weekend. Mr. Smith was one of the great entrepreneurs and business leaders of the past 50 years. He started at FedEx in the early 1970s creating the overnight package delivery industry that is so ubiquitous today and so many of us rely on for our purchasing habits. Fools, we'll get to that Tesla news in a few minutes, but let's start with this reported FICO news because I think it's important. Matt, how important is the FICO News, and how important is it that BNPL loan data is factored into its algorithm? Matt Frankel: Well, it is important. A lot of consumers don't realize that they don't even have a FICA score. One of the requirements is you have to have an active loan account within the last six months. If all you have are buy now, pay later loans, you might not have that. On the other side, it's in testing phase right now. It's going to roll out later in the fall in a new version of the FICO Score 10 model. But it's really worth pointing out that the FICO Score 10 isn't even widely in use yet. In fact, the FICO Score 9 isn't even very widely in use beyond some parts of the personal loan industry. It's really the FICO Score 8 version that's still the most widely used by lenders in practice. It's really going to take some time before this actually helps anyone get a lower interest rate on a mortgage or helps anyone get a better credit card. Andy Cross: I think why I find it encouraging is at least they continue to innovate and they're adding new and new spots because, Jason, there's lots of competitive threats out there to the FICO scoring system, and I think this allows them, even though they're continuing to use maybe an older model, and we'll see how long this takes, it at least keeps them on the cutting edge. Jason Hall: It's interesting because I just got an email literally in the past 24 hours from Capital One, excited to tell me that they were moving over to FICO 8. [LAUGHTER] I think it's very much whoever the financial services business you have the relationship with it's dependent on because it's interesting as Capital One. It's one of the tech forward. They live on the Internet businesses, and here we are. But I think it's a reminder this is just a gigantic market, and we're going to see FICO need to continue to innovate and offer different things as consumer spending habits and the way people buy changes, and the way those things get categorized by the financial system. It's a reminder that there's a lot of opportunity out there, too. Andy Cross: in the BNPL space, it means if not now, will soon be $100 billion loan market, and it's really popular with some of the younger consumers. Matt, I think it does represent some positive news for FICO, which actually earlier this year, the stocks down eight or 10% this year today because of just some of the inclinations and some of the talk from the Federal Housing Finance Agency about, hey, we pay a lot of money for this FICO data. Do we need at all? Matt Frankel: FICO does need something to get people to adopt the newer versions of their scoring system, so this could be a kick-start. For example, there really wasn't that much difference between FICO Score 10 and FICO Score 9 that gets people to upgrade what they're paying FICO for. But at the same time, the Federal Housing Finance, they make a great point in that why do we need a separate score from three different credit bureaus? Why are there 10 active versions of the FICO Scores still in existence? Can't we have some consolidation? They have new products, but the direction is definitely toward lower fees and financial services. FICO really needs to differentiate its product, and this could be a positive step for that. Andy Cross: Well, it's a $44 billion business and a stock that has crushed the market over the past 1, 3, 5, and 10 years, but it's down, like I said before, 10% this year. What do you all think? Does FICO jump to your top of your list as a buying opportunity today? Matt Frankel: For me, it's not a stock that I own. I've never owned the stock. I do think the direction of fees is going to gravitate downward over time. Their product is very valuable. It's something that businesses rely on. But I do think that the FHFA is not the last one that's going to have an issue with paying too much for credit scoring. Andy Cross: Jason? Jason Hall: I agree with that then there's just valuation, too. There's a time to pay a premium for a business, and that's when it's young and it has the ability to grow and take market share. This is the giant. This is the gorilla in the space. Just on a sales metric, I know sometimes that's empty calories, but I think directionally, it's useful here. As much as the stock is down, it still trades for 25 times sales. Its 10-year average is closer to 11. That says to me, especially considering the potential for some over the long-term, a little bit of a squeeze compression on margins, then I'm a little less interested today. Now, they did raise prices six months ago, so in the near term, I think margins are going to go up, and the market's betting on that. But I think over the longer term, it's more likely we see the other trend. Andy Cross: Well, they had a very healthy quarter, but like you said, Jason, I think the reason we haven't featured it really as a top buy and stock advisor is because of that valuation. I'm continuing to watch it. I think it's a high quality business, but they do have these threats. I think I'm not really rushing in to buy it right now. When we come back more on Tesla's Robotaxi rollout. You're listening to Motley Fool Money. As we mentioned at the top of the show, Tesla launched its Robotaxis this weekend in Austin. Jason, how much is this launch a needle mover for this $1 trillion company? Jason Hall: I think it depends on how you define it. If you're just focused on just this one thing, this is small. By design, it's small. But if you step back, and you look at a 35,000 foot view. This is a huge step toward monetization of autonomous transportation. We have to remember that's one of the pillars of Tesla's future. It's supposed to be one of the cash cow businesses that it needs to pay for all of the other things we continue to see advancements in fields like robotics, energy. You got to remember Elon Musk has told us repeatedly that Tesla's future is an integrated energy and transportation business. Andy Cross: I think this is one part of that puzzle. I think it is a very important step, though, because when you look at the valuation for Tesla, a good chunk of it is obviously, as you mentioned, Jason, it is not just in their current car business, Matt. I think the future does depend on these kinds of innovations. I was very happy after a few delays, and Tesla's had a little bit of a struggle the past six months. I think it is a good sign that they got this out, and even though it was very well controlled, geofenced in and the cars monitored by a Tesla safety official. I think it is good news to at least get this started inside Austin because the competitive pressures are out there. Matt Frankel: The competitive pressures are out there. I don't really mind a delay. When you look at what happened with Cruise, that's a really good cautionary tale. It's not just that like a setback would be like, back to the drawing board, and we start this again. Cruise ran over one person, and it was a death sentence for the business. I don't mind the delays to get it right. I don't mind a smaller scale rollout than some competitors are doing to get it right. I do think this is definitely a step in the positive direction. There were a couple of minor issues reported, like breaking too hard for the situation, but nothing that's a big safety issue. It's a success, and the stocks up and rightfully so. Andy Cross: It is up nicely a little bit today. Let's handicap the field. What does this mean for Waymo, which is the driveless unit from Alphabet or from Google and Amazon Zoox, which is, I think a little smaller and lesser known. Where is Uber these days? How do you all see, Jason? How do you see the field of competitors when it comes to autonomous driving and robotaxis? Jason Hall: It's a massive market, so there's going to be lots of competitors. I expect potentially multiple winners in this area, potentially. We don't know how it's going to be regulated. Just in the US, there's 51 plus regimes, every state, the federal government, and then you're going to have local regulation as well that's going to play a role here, so we need to see how that's going to play out. I think looking across the space, if I were to handicap it, Waymo is the distant leader right now. It's not even close in terms of miles driven dedicated vehicles doing it. You have to remember, Tesla, this is not the cyber cap. This is just the the Model Y, I believe, that they're doing. They still don't even have the full commercial vehicle yet. Zoox is a commercial vehicle that's purpose built. Waymo is purpose built. Tesla has a long way to go here. But part of what Tesla is banking on is all of the billions of miles that Tesla's writ large have driven in the wild, so to speak. That's a big part of their strategy and the data that they've used to train their autonomous driving. They're going about it in a different way. I think putting it in the geofenced area where you can really get good measurable data, is going to be really important, and then they can maybe translate that over to other vehicles. The wildcard here is Uber, Andy, and I think Uber is still positioned to be a huge winner in autonomous driving. We have to remember, you go back five or six years ago, Uber had an autonomous driving R&D business that they sold off because there was this realization that the math was not favorable. The decision was made, hey, let's just build the best ride share platform, be a really good partner for drivers. Eventually, drivers are going to be companies with autonomous technology. They'll become partners with us, too, because they're going to come to us the same way that banks go to Visa. We have the platform and the customers, and they've done an extraordinary job with that. I think being able to share autonomous driving when it's road ready and profitable was a smart move for Uber. Andy Cross: Matt, do you have a key question on Tesla when you look forward whether it's driveless technology or other things that you're paying attention to? Matt Frankel: Really, it's how much of a competitive advantage they have over companies like Waymo. It's really tough to overcome a first mover advantage Tesla has the edge that they manufacture their own cars. That's a big one. The infrastructure they have set up already is something that would be really tough to replicate, even for an Amazon or an Alphabet. It's just how much of a competitive advantage is that when it comes to this race? Because Elon Musk said that this is the future of the company, and the stock reflects that. How much success will they actually have with Robotaxis? Andy Cross: What Waymo has, they're doing 250,000 miles, I think, or trips per week, and they have a fleet of cars across multiple cities. Making those cars at scale are far more complicated than, I think, making the Tesla that's an advantage for Tesla when it comes to scale. Jason, when you think about Tesla going forward, what are some key questions you want to answer? Jason Hall: I think the biggest thing is, how are you going to pay for everything. The one true success Tesla has had so far was coming to market with a very fast high performance car you could sell for a ton of money and commoditizing the batteries, instead of trying to build these aerospace grade batteries, commoditizing the batteries to drive cost out. That's Tesla's biggest innovation. Their second biggest innovation has been using tax incentives to raise substantial funds, energy credits. Those are the two things that Tesla has done well. So far, it hasn't really been successful in energy. It hasn't been successful in solar with the solar roofs. We need to see something start getting to the point where there's obvious commercial opportunity to generate revenue because the auto business is in a really tough space right now. Andy Cross: Well, I think they continue to like, think about that ecosystem, especially with Jason, as you mentioned, all the cars that are out there. Hopefully, at some point, again, this is part of the valuation is tied into the system to be able to have fully autonomous driving across their entire of the car fleet that's out there in operations. Jason Hall: Nobody else would be in the position if they start showing success to literally flip the switch and begin monetizing something without pouring billions into capital and taking months to years to build out the infrastructure to do it. The vehicles are there. Andy Cross: How about a prediction, guys? When you look out, at what point, what year will fully autonomous vehicles start to eclipse the number of human driven cars out there, Jason? Matt Frankel: 2045, and I think I'm probably being overly ambitious. Andy Cross: Matt? Matt Frankel: I'd say hit round then just because every setback would cost years. Hitting somebody with a car would add years to the timetable. Andy Cross: I'm in the 25-30 year period probably at that time, but I am excited. I have not yet ridden in a driverless, autonomous taxi, like a Waymo, but I think I would. I would even probably put my kids in there if I was out in San Francisco and had an opportunity to do it or one of the other cities. You guys doing that? Jason Hall: I would agree with that. I think the safety measures are there. They're so focused on safety right now. I do believe that those environments are probably safer than being in any other vehicle on the road right now. Matt Frankel: I've only done one in a very controlled situation in the Boring Company's tunnel in Vegas, with a safety driver sitting in the seat in the car. But I would try it. Andy Cross: After the break, Fintech juggernaut Fiserv turns toward stablecoins. Fiserv, the 90 billion market cap financial giant that runs the infrastructure behind today's financial networks is launching its own stablecoin in a new digital asset platform. Now, Matt, why should investors and consumers care about this news from Fiserv today? Matt Frankel: Well, a lot of people joke that stablecoins are solving problems that don't exist. But I don't really see it that way. If that were the case, it wouldn't cost so much money to send an international transfer, for example. No one's really figured out how to do that effectively with US dollars. That's really one of the situations where stable coins come in. Instant transfers are another thing that have proven more difficult than you would think without using some stablecoin. As far as investors, it really just helps Fiserv preserve what it does rather than create a new revenue stream. It helps keep it fee competitive long-term, where in all of the financial service industry, the direction of fees has been downward for 10 years and continues to be that way. I see it more of a defensive maneuver by both Fiserv and PayPal, but a necessary one. Andy Cross: PayPal, they're owning stablecoin, Jason. Stablecoins are just really starting. We saw a Circle go public, and that's the home of the USD stablecoin. We're just seeing more and more conversation go out this and we saw the Amazon and Walmart also starting to explore stablecoins because of those benefits for it. I think, do you see this as just maybe the beginning of us starting to move down the whole stablecoin direction? Jason Hall: It's the beginning of something. There's no doubt about that. I think the biggest news in all this was Shopify last week, partnering with Coinbase and Stripe to bring USDC, which is Circle's Coinbase has a big stake in to Shopify merchants. That's really big to me because that's when you actually start to see monetization happen in a very big scale. The question I have is that what we're hearing a lot of with Fiserv and others, is creating their own stablecoin. This hearkens back to the 1800s when banks had their own bank notes. There wasn't a US dollar. It was bank notes, so we're going through a weird phase like that where when I think it's really going to get interesting to me is when we start seeing those things consolidate down and go away and where we end up with just one or two. I don't know how long that's going to take and what's the value? I think at the end of the day, we're going to see the payment processors and the Visa and Mastercards. They're going to compete in this, too. They're not going to give just see share also the thing that I want to see the biggest question, I have around stablecin broadly in financial services. Everything that we're hearing is debit. It's talking about replacing debit. It's not talking about replacing credit. Credit, rewards programs, those are the things that really drive the fees structures out there for credit is those programs that we all love. Until somebody shows a crypto solution to that, then I think we're going to end up right back where we started. Maybe it's in 20 years. But that's the thing behind the fees that nobody wants to talk about. Andy Cross: There are exactly, Jason, there's so many advantages that consumers like with the credit transaction. There are those advantages with these stablecoins, scale, and distribution. Real time settlement is a big one. Those benefits are going to be coming over the next few years. I think we will see continued launching utilization of these, Matt. I do wonders they will become more mainstream similar to our question about Tesla. That's my question to you all. When do you think these tablecoins will start to become a little bit more mainstream and consumers will start to see them show up more? Matt Frankel: The more seamless they become to use, that's when you start seeing mass adoption of any technology when it becomes really easy for people to use. Right now if you told me PayPal stablecoin has been in existence for 2023, and I follow the company closely. If you ask me how to use it, I don't know. No matter how revolutionary a technology is, if it's not easy, people aren't going to adopt it on a mass scale. That's really going to be the iPhone moment with this is when you see it really become easy and seamless for people to use, like swiping a button on a phone. Andy Cross: Jason, are you going to be using stablecoin sometime in the next year or two? Jason Hall: In the right circumstance, I would. I have a significant interest in crypto. I'm definitely not somebody that's anti crypto here, but I would say my guess is that it's going to either happen within the next five years or it's not going to happen. One of those two. Andy Cross: Does this make either of you more excited to look at Fiserv as a potential investing opportunity? Matt Frankel: I would say maybe. I'm a PayPal investor already. They just announced a partnership where their two stablecoins are going to intercommunicate. I have a pretty big position in PayPal, and for that reason alone is why I probably wouldn't add Fiserv. But if I didn't already, it would be one that's worth a much closer look. Jason Hall: To a certain extent, it just feels like a defensive move. We're seeing a lot of these legacy tech companies in finance just do these sorts of things because they need to, to either move forward to retrench. It doesn't make me any more interested in Fiserv than I would have been a week ago. Andy Cross: Same with me. I'm with Matt. I'm a PayPal shareholder, and I think that's the one that I think I'm most excited about across the Fintech space right now. The Shopify news was great. Jason, I agree with that. I think that's a really more competitive position for Shopify. Their payments are so important to their business. I saw that as a natural segue for them. Matt Frankel: Andy, it's going to become table stakes, though. You're going to see the same thing across the industry, and it's not going to drive value. But it's a reminder of the mindset for Shopify's management that they're constantly going to be arming their merchants with these sorts of tools, and they're going to be ahead of the competition. But it becomes table stakes there. If you talk about upside, I agree PayPal is probably more set to profit and shareholders get rewarded from this thing. Andy Cross: Well, Jason, Matt, thanks for joining me here on Motley Fool Money to talk about Tesla, stablecoins, and a little bit of FICO. Here at the Motley Fool, we love hearing your feedback. To be part of that feedback or to ask a question, email us at podcasts@ That's podcasts@ 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. Don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool 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 shows. For Jason Hall, Matt Frankel, and the entire Motley Fool Money team, I'm Andy Cross. We'll see you tomorrow. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Andy Cross has positions in Alphabet, Amazon, Mastercard, PayPal, Shopify, and Tesla. Jason Hall has positions in Mastercard, Shopify, and Visa and has the following options: short January 2026 $175 calls on Shopify. Matt Frankel has positions in Amazon, Capital One Financial, FedEx, PayPal, and Shopify and has the following options: short January 2026 $135 calls on Shopify. The Motley Fool has positions in and recommends Alphabet, Amazon, FedEx, Mastercard, PayPal, Shopify, Tesla, Uber Technologies, Visa, and Walmart. The Motley Fool recommends Capital One Financial, Coinbase Global, and Fair Isaac and recommends the following options: long January 2027 $42.50 calls on PayPal and short June 2025 $77.50 calls on PayPal. The Motley Fool has a disclosure policy. Tesla's Robotaxi Rollout was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
18-06-2025
- Business
- Yahoo
HBO and CNN to Split
In this podcast, Motley Fool Chief Investment Officer Andy Cross and contributor Jason Hall discuss: Warner Bros. Discovery's plans to split up. Reddit vs. Claude. To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy. A full transcript is below. Before you buy stock in Warner Bros. Discovery, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Warner Bros. Discovery wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $660,821!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $886,880!* Now, it's worth noting Stock Advisor's total average return is 791% — a market-crushing outperformance compared to 174% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 This podcast was recorded on June 09, 2025. Andy Cross: Warner Brothers files for divorce. You're listening to Motley Fool Money. Welcome to Motley Fool Money. I'm Andy Cross, joined here by Jason Hall. Hey, Jason. Jason Hall: Hey, Andy. Andy Cross: Jason, let's jump right into the big news of the day. Warner Brothers Discovery is planning to split itself up into two distinct companies. Warner Brothers Global Networks, that's home to CNN, and Warner Brothers Streaming and Studios, that's home to HBO and other things, too. Jason, since the merger between Warner Media and Discovery that created this $25 billion media company in 2022, shares are down 60%. Now, they're up 7% today, so maybe investors have some hope that WBD is finally creating, maybe it's equivalent of Netflix. Is this good for shareholders? Jason Hall: I think that's the upside here is that we're finally seeing somebody make a true competitor to Netflix a stripped down streaming and content production company that's hyper-focused on that and not this legacy media giant that throws out a streaming brand, but still has all of its legacy businesses that are in transition it's having to navigate through. I think the response we're seeing with the stock price, Andy, is as much wanting to see change, just some positive change as maybe that bullishness Last week, we got an overwhelming rejection of management's pay package by shareholders at the annual meeting. More than 60% of voters voted against management's compensation package. Now, of course, that's a non-binding "advisory vote", but it's pretty clear that shareholders have not been happy about how things have gone. Andy Cross: Jason, it's interesting that legacy business, that's really the global networks. You're talking like CNN and Discovery, TLC, Food Network, that kind of thing. The streaming is the more exciting, by the way, that first part of the business is the bulk of the revenues, the bulk of the cash flows, and the bulk of the profits, also getting a bulk of the debt. The streaming one is much faster growing, profitability turning. That's home of Warner Brothers, DC Studios and television, and of course, HBO. Interesting, the Networks is going to own 20% of the streaming business. Jason Hall: Well, for good reason, it's going to be the larger business. It's taking on more financial risk with the debt that's going to be flowing over to it. I think that investors that are going to be looking at that legacy business, look, it's still in decline. It's going to take time for it needs to be financially managed well to milk that cash cow business as long as possible. There needs to be a little bit of a sweetener there for some growth and I think that's where it's happening. The interesting thing, too, if you look at how they're breaking up the business and who's going to run it, David Zaslav is going to remain the CEO of the growth oriented, really content focused business, which is more in his wheelhouse, and the CFO of the combined business now, where you want those combined skills of allocating capital and making smart financial management decisions to pay down that debt, take excess cash, buy back shares, maybe pay a nice dividend at some point along the lines. I think you can see the strategy of what they're trying to build already. Andy Cross: Jason, I think we've said that Netflix, in a lot of ways, has won the streaming battle. You have YouTube dominance in there as well. I see this as a good positive news, by the way. They had talked about focusing the businesses and separating them. This isn't a huge surprise. I think maybe the fact that it happened now is a little bit probably maybe more surprising. But the fact that they are now making this official taking this conglomerate and splitting it up into this, I think it is a reaction to the Netflix and YouTube success. Of course, we have Apple with its streaming service and Amazon with its streaming services, too, and then we can't forget about Disney. Jason Hall: That's right. I think to me, that's a big part of the story here is that if you look at what's happened across media, really since right before and then the pandemic it seemed a lot of things hit a critical mass, where so many more people were moving to streaming, Disney Plus was launched and had explosive growth. But at the same time, these legacy businesses still had all of their existing cash cows, which are the linear model, cable, all of that kind of thing. Of course, we've seen so much integration. They own the studios, too, and the movie industry is still well below where it was five or six years ago. It's how hard it is to get through that transition. You mentioned Netflix and YouTube. They didn't have any of those legacy things to have to navigate through transition. They were the new model of content directly for the Internet releasing it immediately. It's clear, I think that something had to happen from the structural side of the business, not just what you'd go to market with with your customer, like Peacock Plus and Disney Plus and that sort of thing. Hopefully, maybe that's what investors are going to get here. Andy Cross: Jason, Warner Brothers has now, I think the direct to consumer, streaming part is like 120 million subscribers. Netflix is more than 300 million. Netflix does about $17 in revenue per user here in the US, Warner Brothers does about 12. Netflix International is probably more around $10, and Warner Brothers is probably more around four. I think if investors are looking to this case to increase the profitability of the streaming side, this would help because they have to be more competitive against the likes of Netflix, which is clearly leading the way. Jason Hall: They have to. I think we're starting to get to this point where we've seen these legacy media companies have all shot their shots. They've made the attempt. They've launched the media the streaming products. But again, the combined businesses has been one of the challenge. Let's not even talk about the international market because these companies are going to make their first money in North America. Is the North American market big enough for all of these existing streaming services that they need to get 15 to $20 a month, and they need 80 million plus subscribers just to be sustainable. I don't think the market's big enough. This is a split up, but I think we're going to see some continued consolidation of content, maybe not where the businesses are combining, but licensing of content, maybe the old model that Netflix benefited from before. Jason Hall: I think we're heading back that direction. Andy Cross: I think that's right. I think the licensee side, you see this with Comcast now separating off some of its properties into the Versant company like USA Networks and CNBC, MSNBC, Golf Channel. They're keeping Embassy and Bravo and Peacock, that will stay with the parent company, but they're separating out, as well, trying to figure out the licensing deal, even between these two companies. How do the sports licensing as Netflix and others are going further into sports programming? The bulk of the sports side is going to be on the network side. How do they overlap there? Of course, there's an international distribution to between the two companies. Still a lot to understand how these two companies interact and what they actually look like post-spin off. That's why I'm finding it a little bit hard right now to be tremendously bullish on buying the stock right now and adding more to it, but I am more excited for them to be separate companies. Jason Hall: I think that's right. I'd like to talk a little bit about Disney and the Amazons and Apples of the world, too, because I think there is a little bit of compartmentalization that we're going to see in the industry. Number 1, think about Disney. I think Disney is going to be the one consolidated media company that makes all of it work. We've seen the transition with Disney Plus, where they're at the point now where I think they can make money. They're going to get better operating leverage there. But they've got so much content and the brand recognition is so big. I think that's one that can get to scale, and they can make it all work. But then you look at the Amazons of the world. This is a different business model. Amazon is an ecosystem. Nobody subscribes to Prime for Prime Video. Andy Cross: It's a bonus. Jason Hall: Exactly. It's part of the ecosystem to make it a little bit stickier. I think that's a thing to remember about Amazon. They're playing a little bit different game than really anybody else in this space. Apple, their model is a little more curated with their content. Maybe you could almost say like HBO was 15 or 20 years ago in the cable model, where they wanted to have one or two really big shows a year, and then run those shows for multiple years. I think maybe that's more Apple's model because they're focused upstream. Andy Cross: HBO has some of those great properties. This is one reason I think investors were somewhat encouraged by them coming together because of those properties with HBO shows like Secession and the Gilded Age, movies, the Upcoming Superman, Sinners, the Voice show. They have these great brands to be able to leverage and turn more into hopefully profits on both the streaming side and then the focus on the network side. Jason Hall: Andy, but this is the same company that also took HBO out of the name of their streaming product. Andy Cross: I just find that really head scratching. I don't know why. I'm glad that they brought it back, to some degree, because that mean HBO is the brand. Hopefully, I don't know the ultimate name of this company, but maybe it is something with HBO because it is the most well known brand. Although the studios business continues and Warner Brothers is a huge name, too. It's just that HBO is really the driver of the streaming. Jason Hall: No. That's exactly right. Having the max in there, even though you and I are old enough to remember Cinemax, which eventually got renamed Max. But HBO Max makes sense because it's HBO and then a bunch of other stuff. That makes sense. The corporate name, we'll see what they decide to do because they are still making all the studio content. A lot of value there. We got more stuff to talk about, though. Andy Cross: They got $38 billion of gross debt. Most of that's going to go to the network side, but they're going to have the cash flow to be able to pay that down. Again, like you said, the CFO going over there to manage that business. Joel Greenblatt, the great author investor who wrote, You Can Be a Stock Market Genius, talked about spin offs. Sometimes it's the ugly debt Level 1 that does actually better. My question before we get to our next story is, which one of these businesses are you most interested in and what are you thinking about the stock today? Jason Hall: It's funny because we were in our pre-planning, we were joking around about that. This is exactly the situation where depending on what happens with the split, the story of HBO unleashed almost, the idea of fully leveraging all of those resources without the legacy history, the story could cause that stock to do great things initially that hurts the long term performance. Everybody forgets about this legacy declining sleepy business. They could end up outperforming two or 300 percentage points over the next decade. I think we have to give this time to play out, see what the structures look like, give them a few quarters to stand-alone businesses, and then weigh in. Andy Cross: I'm going to wait and see mode, too, as it is right now, but information's changing every time, every day. Jason Hall: That's right. Andy Cross: After this, we're moving on to Reddit. Jason, moving on to another media story that actually is related, and we'll get to that in a second. Last week, the user community of hundreds of millions, Reddit, sued the owner of the Claude chatbot Anthropic for illegally scraping post. Reddit has licensing deals with Google and OpenAI already. It's very naturally protective of its IP, but it is not the only one who is trying to leverage AI based on the IP it has accrued over the years. Jason Hall: You remember Curiosity Stream, right, Andy? Andy Cross: I painfully remember Curiosity Stream, yes. Jason Hall: [laughs] For those that don't know, this is it's a media streaming business with fact-based content. Went public via SPAC, back in the SPAC craze 2020, 2021 area. You and I both owned some shares, Andy. You walked away sooner than I did. Andy Cross: Well, I walked away at a very large tax loss on it. I took a tax loss on it to offset some gains. I had hoped for better to be able to leverage the documentary assets curiosity has, and that did not work out in the time frame that I had owned this. Jason Hall: Well, you had good reason. The business was really struggling with weak growth, high expenses. It did look like it was going to get to scale and survive on its own balance sheet. The only reason I didn't sell Andy is because I owned it in a retirement account, so there was no tax loss harvesting. I wanted to see how John Hendricks new business was going to play out. John Hendricks, of course, the founder of Discovery Channel, taking us back to our first story. The stock bottomed at $0.45 a share February last year. It's a 13 bagger since then. It's now part of the Russell 2000, and, Andy, it pays a dividend. Andy Cross: How much of that is on the licensing deal? Jason Hall: That's the thing that ties us back together. If you look, they have these five pillars of growth. The first pillar of growth is licensing content to tech companies to use the audio and video to train AI models. Andy Cross: It's crazy. Jason, just today, we saw the British Film Institute put out a report that claimed that 130,000 titles had now been scraped for their AI purposes. Now they were worried and complaining about it for the institute, but that is going to be somewhat of a model, somehow of a business model for some of these content creators like perhaps, WBD. Jason Hall: I think that's exactly right. It's a reminder that this technology is pervasive and the smart companies and the law of unintended consequences, right, Andy? Winners from technological disruption can come out of surprising places. Andy Cross: Well, we'll see how it all unfolds. Thanks so much for joining me today, Jason. Jason Hall: This was great. Good to be on. See you next time, Andy. Andy Cross: That does it here for us at The Motley Fool. 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 stocks or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our Fool advertising disclosure, please check out our show notes. For Jason Hall, our producer Dan Boyd, and the Motley Fool team, I'm Andy Cross. Thanks for listening and Fool-on. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Andy Cross has positions in Amazon, Apple, Comcast, Netflix, Walt Disney, and Warner Bros. Discovery. Jason Hall has positions in Walt Disney. The Motley Fool has positions in and recommends Amazon, Apple, Netflix, Walt Disney, and Warner Bros. Discovery. The Motley Fool recommends Comcast. The Motley Fool has a disclosure policy. HBO and CNN to Split was originally published by The Motley Fool
Yahoo
29-05-2025
- Business
- Yahoo
Walmart's Warning; Money Tips for 2025 Grads
In this podcast, Motley Fool analysts David Meier and Andy Cross join host Dylan Lewis to discuss: The market cheering a short-term solution to trade tensions between the U.S. and China. Walmart signalling that prices on the shelves are going up anyway. Cava's "new factor" helping it continue to put up strong growth and comps numbers in a really tough market for restaurants. Dick's Sporting Goods' head-scratching $2 billion buy of Foot Locker, and the lesson to take away from one of athleisure's best performers: On Holdings. Two stocks worth watching: Evolv Technology and Booz Allen Hamilton. Motley Fool personal finance expert Robert Brokamp offers his money tips and financial commencement speech for the class of 2025. To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy. A full transcript is below. Before you buy stock in Walmart, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Walmart wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor's total average return is 957% — a market-crushing outperformance compared to 167% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 This podcast was recorded on May 16, 2025. Advertisement... Dylan Lewis: We've got a short-term trade agreement and a head-scratching acquisition. This week's Motley Fool Money Radio show starts now. It's the Motley Fool Money radio show. I'm Dylan Lewis. Joining me over the airwaves. Motley Fool senior analyst David Meier and our Chief Investment Officer, Andy Cross. Fools, wonderful to have you both here. Andy Cross: Hey, Dylan. David Meier: Hello, Dylan. Dylan Lewis: This week, we've got the money commencement speech for this graduation season one retailer shopping in the bargain bin and, of course, the stocks on our radar this week, we're going to kick off talking trade. How could we not? We're not going to quite call it a trade deal yet, Andy, but the Trump administration striking a short-term agreement with China. This follows the announcement on terms with the UK. Market obviously happy to see anything that brings tariffs down. What is a long-term investor to do with a short-term trade? Andy Cross: That's exactly right, Dylan. It is short-term. It's 90 days. It drops those imports on Chinese imports from 145 to about 30% more or less, and tariffs on US goods from 125% 10% back into China. It's sensible, right? It makes sense. The market was looking for this. We obviously saw that relief rally across the board. We've seen in tech, tech was up 8% this week alone. We saw some retail excitement around that, too. It is temporary. It's 90 days. Hopefully, we see better spirits reveal for a longer trade agreement. We saw Goldman lower the recession risk down a little bit from 45% down to 35%. But listen Dylan all on how the companies manage this. The best companies will be able to continue to thrive through this, but it does increase the cost of goods sold and the cost structure of many companies, and we're going to have to hear from them to see what they believe they can either pass on or absorb. Dylan Lewis: I think maybe optimists in the market, David look and say, we have one deal or the agreement in principle here for a deal. We have what happened with the UK as well, earlier this month. Ideally, these stack and start to build some certainty over time that businesses can operate on and that maybe other negotiations can build on too. David Meier: I completely agree with what you just said, which is we're looking for certainty. It's still not here yet. First of all, this 145% escalation was ridiculous. Clearly, markets love the pause. But a 30% tariff in place is significantly higher than anything that we've seen almost in history and certainly modern history. Yes, companies are looking for certainty and interestingly, if we go to what companies have been saying recently in their earnings, all they are doing is commenting on uncertainty. In fact, some companies have even pulled their guidance. Long term, yes, we need more clarification. We need a resolution because this 90 day pause, this could just revert right back. But I think as a long term analyst, what I'm looking to do is to look over the next few quarters and see how the commentary from companies change, because again, either customers are going to pay higher prices or company margins are going to contract. Neither one of those are good, but it's probably most likely going to be a little of both. Dylan Lewis: Early in the week, we had that announcement. Later in the week, we had commentary and earnings out from Walmart, they gave us a guide both for what to expect in terms of their business, but also what to expect on shelves and they made no bones about it. They expect prices to go up this summer for consumers. David Meier: Yes, we need to seriously think about this. Walmart, the king of low prices, has just said it is going to have to raise some prices on some of its goods. Seriously, think about that. Walmart is one of the most powerful buyers of goods in the world. It can literally almost get any deal that it wants. That's known as a monopsony. It has ultimate buying power, and it could not force suppliers to reduce their prices in the wake of these tariffs. Again, Walmart executives basically repeated what we talked a little bit about above. The tariff policies do not help our economy at all. This company has the best data about the health of the consumers across a wide variety of income levels. Again, I don't want to sound too alarmist, but this is an astounding statement from somebody who prides itself on being a low-cost provider to consumers. Andy Cross: CEO Doug McMillon Dylan said the cost pressure from all the tariff impacted markets started in late April and it accelerated into May. To Dave's point, we're going to see this through the summer. This is hitting everybody, and this is the big daddy, the big gorilla out there when it comes to supply, but they get so much of their product from China that it is impactful to see how they navigate that. That said, it was still a pretty good quarter they put up. David Meier: It was. Dylan Lewis: What's interesting to me about this is they are putting those signposts out there and those warning signs, but they are also saying, Andy, we're reiterating our guidance of 3%-4% net sales growth. They expect it to co down to the consumer on a price level and what they see on the shelves, but they aren't necessarily forecasting a hit to the business and what they've laid out financially for investors. Andy Cross: I think so. I think they can eat some of that, but they're going to have to figure out the pricing around that. They have so many skews. They sell so many things, don't forget their e-commerce sales were up 22% this quarter, which was an acceleration from not just last year, but from just the quarter we saw in December, their total sales up 2.5% and 4% on a constant currency basis. A pretty healthy performance on the comp sale. Like we talked about, this is really the giant, and we see continued increasing in their membership income was up almost 15%. Their advertising business up 50% so they have that really breadth, even though they are known predominantly on the retail side in the Walmart stores. They have that breadth that allows them the flexibility that others just don't have. David Meier: One of the things that executives commented about was, even if there's less buying from lower income cohorts, actually, folks at the higher end are trading down. They're coming to Walmart a little more so that's an interesting paradox that the company is seeing. Andy Cross: Yeah, you're seeing the higher income shoppers more at Walmart. As a percentage of traffic going through, I think you're seeing those higher income stepping foot and they're saying, like, Wash, there are prices in there that I can get at Walmart that I can't get elsewhere, and I need to be able to save money myself. Dylan Lewis: Alright, CAVA also out this week with some new numbers for the market to digest. David generally strong results for the Mediterranean fast casual chain, but also taken in part with the other ones that we have seen from restaurants so far this quarter, confusing look at what's going on with the American eater right now. David Meier: Yes, very clear that CAVA is growing fast and executing well in an environment where consumer confidence is still waning. The metric that stood out to me the most was a 10.8% increase in same store sales, and that was powered by a 7.5% increase in visits. That's to your point, that's very different than what we heard earlier in the month from Chipotle and Domino's, who saw visits to their stores or amount of traffic decrease. I think one of the things to remember here is CAVA is earlier in its growth cycle, and opening stores and having younger stores actually really helps right now from a same store sales perspective. I would be remiss if I sorry, I didn't say one other thing, I am impressed, but this company has just reached the billion dollar sales mark over the last 12 months. That is impressive. Andy Cross: Interesting deal in their food beverage and packaging costs increased to 29.3% of sales. That was an increase of 110 basis points or 1.1%. They added a steak. Steaks more expensive. They're diversifying the menu, adding that in there, that increased their beverage costs. Their average store revenue went up to 2.9 million from 2.6 million a year ago. That's an increase of 11%, and as Dave mentioned, the same store. The guidance was pretty strong at 68%, and store margin around 25%, which is pretty much what they've been delivering. The question is, is that worth the price that you're paying today? I think if you close your eyes and hold CAVA stock for the next few years, you're going to do OK, but I think in between now and then, it's going to be pretty lumpy. Dylan Lewis: Andy you brought up the steak there, and that came up on the conference call. Their team talking about how consumers are into premium items, steak being one, pita chips being another. They are not seeing that order value go down very different than what we've been seeing with comps declining at Chipotle. Some of that being traffic driven, but some of that being price sensitivity, as well. Domino's saying the lower income consumers aren't spending as much as well. When you see all this together, are you parsing this and saying, the newer concept experience, the growth story is what's helping a lot of consumers look past this, or is there something else going on here? Andy Cross: They increase prices 1.7% in January. They're not going to increase prices the rest of the year, which I found that very interesting. They got a little price bump in January, not going to get that. They're testing out Chicken Shawarma in Dallas and Florida, which I hope they come to DC, or if I visit Dallas and Florida, I'm excited to test that out because I think you're right, Dylan. I think customers are willing to try that new experience, and when they try a new experience, be able to explore a little bit into other offerings like they're offering at CAVA. David Meier: One of the other things that management commented on, and I took a few data points to try to verify if this is correct, and I think it is, is basically their price increases have been less than the rate of inflation, which is not something others have been doing. The commentary from management is in today's environment, we offer a great value proposition, and the numbers back that up. Dylan Lewis: Coming up after the break, we've got a two billion dollar buy. We're struggling to understand. Stay right here. This is mount full money. Hey, fools, we'retaking a quick break for a word from our sponsor for today's episode. Real estate. It's been the cornerstone of wealth building for generations, but it's also often been a major headache for investors with 3:00 A.M. Maintenance calls, tenant disputes, and property taxes. Enter Fundrises Flagship Fund, a $1.1 billion real estate portfolio with more than 4,000 single family homes in the Sunbelt communities, 3.3 million square feet of in demand industrial facilities, all professionally managed by an experienced team. The flagship fund taps into some of real estate's most attractive qualities, long term appreciation potential, a hedge against inflation, and diversification beyond the stock market. Check, check, and check. All without the complex paperwork, massive down payments, and soul sucking landlord duties. Visit to explore the portfolio, check out historical returns, and see just how much easier investing in real estate can be. Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise Flagship Fund before investing. This and other information can be found in the funds prospectus at This is a paid advertisement. Welcome back to Mot Fool Money. I'm Dylan Lewis here on air with David Meier and Andy Cross. Fools, we've got a deal to discuss. Dick's Sporting Goods is buying Foot Locker for 2.4 billion and the market reaction pretty clear here, Dick's shareholders not loving the deal. Shares down 10% this week on the news. David, what did you think of it? David Meier: I don't get it. I think it's pretty clear that the market didn't like the idea, too, based on where you talked about Dick's Sporting Goods stock being on Thursday, May 15. Look, Foot Locker has been struggling for years, and I think it's because buying patterns are changing. Within the deal structure, for management at Dick's to come out and say that they are going to operate Foot Locker as an independent entity, pretty much communicates that this is all about turning Foot Locker around frankly, I don't see that. Sales have been contracting. The cash flow generated from this business has been trending down. I don't see the return on investment. Again, if we go back to where customers are buying their shoes from, it's not necessarily as much in the mall anymore. The direct to consumer channel is becoming more and more important. Big product makers like Nike and Skechers, On Holdings, name your favorite shoe provider. I like to market, and I'm skeptical that this is a good deal. Andy Cross: It does give them an international presence. Dick's is not internationally at all Foot Locker is 30% international, so it gives a little bit of that presence. What I was really interested, you guys, to hear them talk about Nike, Dave you mentioned that. Nike was mentioned 21 times on the conference call. Ed Stack said, I think it Elliott Hill at Nike and his team are doing a great job, and we were pretty excited about what's going on with Nike. This is the move back into wholesale or retail as opposed to direct to consumer. Foot Locker is going to be a beneficiary of that move back to a wholesale standpoint. They're clearly seeing benefits from Nike's turnaround that Elliott Hill is doing and what they're trying to do at Foot Locker. They're only paying about 30% above book value for Foot Locker. Dick's is not very inquisitive, so they don't have a lot of goodwill on the balance sheet, so I can see this playing out. David Meier: That is a very good point, Andy, because the new CEO, his specialty was taking care of the different channels so to bring him back, right, that could very well be a catalyst that helps Foot Locker along the way, and perhaps Dick is getting a bigger benefit by having more opportunities for Nike to get in its doors. Dylan Lewis: Speaking of direct consumer and sticking in the world of sporting goods, sneaker maker On Holding is out with their earnings this week. Andy, this is one of the fastest companies in Athlesia at the moment, and they seem to be continuing to set a very brisk pace. Andy Cross: Fastest in performance, as well as in just the fastest on the track because On Holdings has really truly become this performance brand when it comes to running. I think there were some concerns. Certainly, I was like, Oh, my gosh the consumers slow down. What's tariffs going to do On Holding, which has a big chunk of their business in Americas, although they're very global as well. But overall, it was a really strong quarter. Revenues were up 43%, direct to consumer was up 45%. Wholesale was up 42% these are growth numbers very strong on the top line direct to consumer is now 38% of sales. That was a little bit of an increase. They raised their sales guidance for the year to 28% from 27%. They tighten up the operating profit margin because of some of those costs, but their sales by region team is what I found so impressive. Americas was up 33%, about 28%, 29% on a constant currency, because of the strong Swiss franc, which On Holdings reports into. Europe, Middle East and Africa was up almost 34%, but here's the kicker. Asia was up 130%, 129% on a constant currency basis. Now Asia is just slightly smaller than Europe, Middle East and Africa next to the big behemoth, which is America On Holding is a global brand that is speaking and performing very well. Shoes were up 40%. That's the real bulk of their growth. Apparel doubled, but apparel is a very small part of their base. They're really known for their shoe technology finally, inventories was down almost 5%. They talked a lot about this on the call, managing inventories, really focusing on the brand, and focusing on that wholesale network, which is so important, as we saw with the acquisition of Foot Locker by Dick's. Dylan Lewis: For On Holdings, revenue tripled over the last four years. The company solidly profitable. Margins have expanded. David, Andy just painted a pretty rosy picture of this business. I did, too. Looking at the report and just looking at the outlook, is there anything you'd be concerned about here? David Meier: I have to be concerned about where future tariffs go. One of the reasons that On is getting a little bit of benefit within the markets is 90% of its shoes are sourced from Vietnam and Indonesia so basically, less product coming from China, which has less impact. If we remember after the tariff was announced, one of the most interesting things that happened in the market that day was apparently Vietnam got on the call or at least got a message to President Trump that they wanted to talk, and President Trump tweeted out, Hey, Vietnam wants to talk, maybe we'll see what we can do there and all of the barrel companies and shoe companies that have a lot of business in Vietnam basically shot up. That is the main thing that they have to manage. To counter that point, also what management talked about is they're going to be passing along price increases let's think about that. Again, this is a company that we know is continuing to grow quickly, and on the back of this really surprisingly good report, I think we can say the On brand is really here to stay. In fact, it's giving them permission to raise prices in this environment and that's huge. Because what that does is that allows them to one, still be able to meet customer demand and two, be able to protect their margin structure just a little bit let's not forget, this is a global business, and all this is happening because consumers around the world want its products. That is a phenomenal accomplishment, considering the struggles that Nike and Under Armour have seen recently. On is just not going away. Andy Cross: Putting these all together, Dylan, with the Dick's and Foot Locker news Nike is like 30-40% share in the US. They're probably 50% share in Foot Locker alone then at Dick's, they're probably maybe like a quarter of the shelf space so, you think about On Holding now competing against Foot Locker Dick's combination as I mentioned, they really are focused on that wholesaler, the wholesale distribution network. They're very I wouldn't say cautious. They're very careful on expanding their own footprint, their own store footprint. They're very successful here in the US, but they are taking a little bit more cautious approach it will be interesting to see how the Dick's Foot Locker relationship impacts the likes of On, not just Nike. Dylan Lewis: Taking a step back here. It seems like you guys, if we're looking at the race metaphor here, are putting On Holdings in the gold medal position, maybe putting Nike in a silver medal position, and putting Dick's and Foot Locker in the bronze when it comes to this race. Sounds about right to me. Andy Cross: I think that's about right. It'll be interesting Dick's reports next week, so it'll be very interesting to see what they report with their Hoka business and how they talk about the whole Dick's Foot Locker acquisition. Dylan Lewis: Andy, David, we're going to hear from you guys a little bit later in the show. Up next, Robert Brokamp steps to the lectern and gives his financial tips for 2025 grads. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool money. I'm Dylan Lewis. Spring semester is over, and college students are back home for the summer or taking the stage for graduation and starting their careers. Joining me to talk money tips for recent grads and drop some sage life advice, Motley Fool's financial planning expert Robert Brokamp. Bro, thanks for joining me. Robert Brokamp: Thank you, Dylan for having me. Such a pleasure to be here. Dylan Lewis: I have to ask. We're going to talk postgrad plans, how to set yourself up financially? What was your first job out of college? Robert Brokamp: I was actually an elementary school teacher at a school called Holy Trinity, which was associated with Holy Trinity Church, and I point that out because if you ever saw the movie The Exorcist, you've seen it because it's right on the same street as the Exorcist steps, and one of the scenes from the exorcist was filmed in the church. I was a sixth and seventh grade language arts teacher and religion teacher, not making a lot of money and living in a very expensive city. Dylan Lewis: You said not making a lot of money. Were you particularly financially aware at that point, or, at what point did you start getting on it now being a financial planning expert? Robert Brokamp: That was it. I was making not much money, already had a kid, and I figured, boy, I need to make the most of the little money that I make. I used a relatively new thing back then called the Internet to find what was then a relatively new company called The Motley Fool and that's when I started learning about money. In fact, I met Tom and David Gardner at a book signing in 1997, two years before I actually joined the company as an employee. Dylan Lewis: I think there's a little bit of inspiration there. You don't have to start out on the financial journey. You can find the financial journey. The Internet, I think, has become even more ubiquitous since then. Robert, is that right? Robert Brokamp: Most people know about it, yeah. Dylan Lewis: My financial awakening was at the Fool, too. I had studied finance and had dabbled a little bit here and there, but had done the bare bones of, I have a Roth IRA because my parents made me set one up as soon as I was tax paying age. Robert Brokamp: Good for them. Dylan Lewis: I got lucky in that I was starting off on a strong foot, but that was because of their savvy, not because of my own. For our summer interns or for our fresh grads that are starting out there, what is the checklist? What is the advice for beginning that process? Robert Brokamp: Well, I'll start with the summer interns. Or anyone with any kind of a summer job it's related to what you just said. Once you have an earned income, you can contribute to a Roth IRA. Because you do need income to contribute to the retirement account. The great thing about it is it grows tax free as long as you follow the rules. The rules being that you have to leave the earnings in there till you're age 59.5. Now for the younger folks out there them, I don't want to leave my money alone that long, but the good thing about the Roth IRA is you can take the contributions out tax and penalty free anytime. If you contribute $2,000 and it grows to 3,000, you can take out that 2000 and just leave that thousand alone until you retire boy, by the time you retire, it'll be worth a good bit so that's important to think about. If you are on an internship and ideally you're working in an internship related to what field you may want to work in, it's important, really just to understand the day to day of that job to see, is that the type of industry you want to work in? Take advantage of all the opportunities you might have to see what goes on in the company, talk to anyone who will sit down and talk to you, whether it's a newer person or even as high up as a CEO, if you can get access to that person, because you want to make those types of connections. You also want to make a good impression because once you do graduate from college, you might want to rely on someone from that internship to give you a recommendation, or you might want a job with that company there have been many situations here at The Motley Fool, back when we had an internship program, someone was an intern, they graduated from college, and then they started their career here at The Motley Fool. Dylan Lewis: One of the things I'll throw out there on the topic of interns, sometimes, depending on the structure, you're 401(k) eligible. Sometimes you're not 401(k) eligible, which gives you that first early introduction, Bro to the rollover and being prepared for that and just being aware that your financial life will move with your professional life. Robert Brokamp: One of the things I talked about is leaving the money in the Roth IRA. If you take that earnings out before age 59.5, you're going to pay taxes and a penalty. Same with a 401(k). This will happen if you're at an internship at a company that auto enrolls people. You're putting money in the 401(k). You're getting a tax break. The body gross tax deferred. But when you leave that company, you should roll it over to an IRA or to a 401(k) to you job if that's the situation. If you don't you will pay taxes and a penalty. In some cases, what companies will do when you don't have a lot of money in there, usually like less than five hod $7,000, they'll just send you a check and you're like, Hey, great, I got a check. I'm going to cash that check. That's what's going to get tax penalties. You got to get that check into an IRA within 60 days. Dylan Lewis: Depending on where you look, the number varies, but there are estimates out there for graduates and the average student loan debt. We're going to be talking to people here who maybe are very interested in putting money to work, but also have the reality of loan payments beginning. How do you think about what to save, what to invest and what that checklist looks like, the hierarchy for that? Robert Brokamp: I would say, first of all, it starts a little bit with just how you feel about debt. Does that create a sort of a psychological burden for you? Do you feel uncomfortable having debt? If that is the case, I am inclined to say pay that off as soon as possible, unless you're in a situation where you are eligible for 401(k) in which you receive a match, which is basically free money. You should at least get that match before you direct any money to paying off the debt. Now, if you feel like I'm comfortable with debt, and it's a low interest rate low single digits. I think you could be comfortable stringing out that debt longer, and then saving more. Historically, the stock market has returned 10% a year on average. You hardly ever see 10% in an actual year. You'll see many great years, many less great years, but over the long term, you ideally should be earning something that exceeds the typical interest rate on student loans. Dylan Lewis: I know for the last couple of years, the student loan environment has been a bit of wait and see, and the factors affecting whether people are going to make repayments have been changing a little bit. Anything that people should have on their outlook for that? Robert Brokamp: I would say that the days of hoping to have your student loans forgiven are at least temporarily over. I'm sure there are people that have been putting it off hoping that loans will be forgiven, and then now they are now talking about garnishing wages, maybe garnishing Social Security for student loans. I think it's just best to pay it off, at least pay the minimum payment. Now, there are situations, jobs, companies that will help you pay it off in some situations, you have to stay with the company for a certain amount of time. If you're part of that type of program, I think it makes sense to participate and only pay as little but I would not count on a great forgiveness in the future. Dylan Lewis: We fit IRAs, we hit 401Ks, we fit student loan debt, anything else on the financial checklist. Robert Brokamp: Just some rules of thumb that I think people should consider once they entering the job force. First of all, there's a good budgeting rule of thumb that is basically you devote 50% of your after tax income to necessities, things like mortgage, healthcare, groceries, 30% to discretionary purchases, like entertainment, dining out, vacations, and then 20% to savings. Then underneath that, once you graduate from college and you're getting a paycheck, like, well, how much can I afford to spend on housing, which is going to be the biggest item in your budget. A good rule of thumb is to keep it to less than 30% of your budget, if you can. I know that's harder in some more expensive cities. Then the next biggest item on most people's budgets is transportation. And that basically comes down to buying a car. A good rule of thumb there is the 2410 rule, which is basically put 20% down. Do not extend payments for more than four years and keep your monthly payment to 10% or less of your monthly gross income. Also keep a car for ten years, if you can. You pay it off in four years, and then that money you were sending to pay off the car, get into a high year old savings account, keep saving that money over the next six years. By the time you need to buy another car, you already have the cash waiting to be spent. Dylan Lewis: It's like you're staring at my driveway. I've got a 2014 Subaru hanging out. Robert Brokamp: Outstanding. Dylan Lewis: Well past the decade and thriving. To bring us home here, I'm asking you to indulge me a little bit. You've prepped a mini commencement speech. What do you have for us and for the graduating class of 2025? Robert Brokamp: Dear graduates of 2025. This may be one of the few times in your life that you'll be encouraged to be Foolish. Motley Fool was founded more than 30 years ago by brothers Tom and David Gardner and their friend Erik Rydholm. What started out as basically a project in a backyard shed is now a website with millions of visitors every month, and they chose the name the Motley Fool to stand out to be different, maybe even rebellious, little counter cultural. The name comes from Shakespeare, and the message was and is that you can manage money on your own and have some fun along the way, without the help of Wall Street, who back then were and to some extent, still are the kings of the wealth management industry, but not particularly benevolent kings. They're often charging high fees from mediocre results. I'm here to tell you to take control and maybe be rebellious, to be foolish with your money, because if you do just what the average American does, you will struggle to accomplish the financial goals that I'm sure you have. Let's start with investing. According to a Schwab survey, the older generations, the boomers, the G-Texers like me, didn't start investing until their 30s. But you can start right now with very little money as little as 25 bucks. You could open an account with a discount broker, buy even one share of stock, or even better if you're just starting out by one share of the Vanguard Total Stock Market Index Fund, you'll then be a legitimate part owner of every publicly traded company in America. If you start saving $100 a month at the age of 22 and earn 10% a year, which is the long term average of the stock market, you'll have almost $750,000 by the time you're 65. What if you put it off for a decade and don't start investing until you're 32, you'd have less than $300,000. Investing right now at such a young age and eventually accumulating that money would put you in the minority of people in America. In other words, you'll be a bit countercultural and very foolish. Of course, to invest, you first have to save currently in the US, the average household saves less than 4% of their income. Yet studies show that people should be saving 10%-15% just for retirement, let alone for things like a house and a car. Do all you can to sack away at least 20% of your income. I know it may not be possible at all times, but make it your goal. Even if you can get most of the way there, you'll be doing better than most other Americans, and more importantly, you'll eventually be financially independent doing what you want and when you want. One of the biggest decisions you're going to make is whether you will get married and to whom. It'll be a huge factor, perhaps the biggest in your day to day happiness. Unfortunately, more than 40% of marriages end in divorce, and one of the biggest causes of divorce is money, and that's because many couples didn't talk about their beliefs about saving, investing, debt, or about their priorities before they tied the knot. Before you get married, make sure you and your fiance are on the same page about money. You can start by doing an online search for something we call the Fooley web game, which features questions you and your partner can answer together to see how much you're financially aligned. I'll end here by citing the graduation speech of one of the world's great Rebels, and that is Steve Jobs, who co-founded Apple in his bedroom in his parents' house when he was 21. He dropped out of college, but he still kept attending classes, including a calligraphy class that influenced the future type face and fonts of Apple products. He also spent time just wandering around India seeking enlightenment. A commencement speech he gave at Stanford in 2005, he said that he learned at the age of 17 to live each day as if it were his last. Job said, "your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma, which is living with the results of other people's thinking. Don't let the noise of others' opinions dry out your inner voice." Of course, one day was Steve Jobs' last. He died in 2011 at the way too young age of 56. While it's important to save money for your future, it's also important to not save everything for your future. Save enough to fund your goals, but please have plenty of adventures along the way. I'll close with the final two sentences of Job speech, which you got from a countercultural magazine called The Whole Earth Catalog those sentences are stay hungry, stay foolish. Thank you. Dylan Lewis: Robert Brokamp, I tip my cap to you. Wise words, as always, and a pleasure as always. Thanks for joining me today. Robert Brokamp: Thanks, Dylan. Dylan Lewis: Listeners, that's advice you can take to the bank, but it's not all we've got for you this week. After the break, David Meier and Andy Cross come back with me to talk about the stocks on their radar this week. Stay right here. Listening to Motley Fool money. As always, people on program may have interest in the stocks they talk about and fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motif editorial standards. It is not approved by advertisers. Advertisements are sponsored content, provided for informational purposes only. To see our full advertising and disclosure. You're listening to the podcast version of this week's radio show, check out our show notes. I'm Dylan Lewis, joined again by Andy Cross and David Meier. Fool's last segment, I asked our colleague Robert Brokamp, for his money tips for college grads, and he dropped the Banger Financial Commencement speech we all probably needed to hear when we were in our early 20s. I want to know going over to you, Andy, best piece of non-financial advice for someone donning the cap and gown this May. Andy Cross: I would say, like, if you have a chance to experience as much as you possibly can as early as you can after graduation, in school and after school, try it. Try all different kinds of experiences, and don't be afraid to fail. That's just a big thing. Like, go out there. You fail, you fail with some friends, you go on to the next thing. Dylan Lewis: David similar? Are you going to say, go for it, fail or are you going to say. No, Andy's wrong. Succeed. You have to succeed all the time. David Meier: No, Andy is spot on. What I told my daughter and what I told her friends when they asked me, do not be afraid to take risks when you're young. That's when you should be taking risks to try things. Try things. Now, don't let it kill you. Don't let it be catastrophic, but do not be afraid to take risks now. It gets harder when you get older. Dylan Lewis: We tend to be financially minded here on the show, and there is the classic advice. The dollars you invest early are worth more. I'm going to caveat that with some non-financial advice. Fun costs less when you are young. It is easier to have a good time for less money when you're younger. You got to balance that lifetime value and figure out where it makes sense for you. Don't be afraid to spend a little bit and enjoy it, as well. Let's get over to stocks on our radar this week. Our man behind the glass, Dan Boyd is going to hit you with a question. David, you're up first. What are you looking at this week? David Meier: I am looking at a company called Evolv Technology and the ticker symbol is EVLV. This is a $750 million small cap that's changing the way public and private buildings manage their security. The company sells security, hardware and software that scan people as they enter buildings. As you might imagine, its biggest customers are sports venues. One cool thing is that AI is actually an incredible catalyst for the company going forward given how much data its systems collect. 2024 was an absolutely terrible year for the company. It was investigated by the FTC on how it markets its technology, and that resulted in the CEO being replaced. But with that in the past and new CEO John Kezerski at the helm, I look forward to hearing how the company will grow from $100 million in revenue in 2024 up to some much bigger number in the future. Dylan Lewis: Dan, this name is a new one to me, Evolv Technology ticker EVLV. You got a question? Dan Boyd: Yeah. I mean, with a small market cap of less than 1 billion in a recent FTC investigation, my question for David is, what are you doing, man? What is this? What are you bringing me? David Meier: I'm actually bringing you a company whose hardware is different than the typical metal scanners that are outside of venues, and I'm also bringing you a company whose customers love it. One, throughput times are faster, which means people get in, to get a good experience before they even get in the door, and it still provides plenty of safety. Yes, there was an issue in terms of how they market, but you cannot argue with the product and the software that this company delivers to its customers. They love them. Dylan Lewis: Andy, David's showing off his engineering background there, getting into the gears on the product. You got a tall order this week. What's on your watch list? Andy Cross: Well, I'm not a consultant and have never been a consultant, but I'm looking at another consultant, Booz Allen Hamilton symbol BAH. The consultants have really been just hammered over the past few months, including Booz Allen Hamilton because of their ties to the federal government. Booz Allen business is almost all tied to the government. They're a consultant that provides management and tech services to the federal government. It's one of the largest AI providers inside the federal government and has one of the largest cybersecurity operations globally. But with all the activity and all the conversation around doge and worries about cutbacks, especially in defense in civil agencies like Homeland Security and justice and others that booze Hamilton this is 100 year company has long called a client, and then the Secretary of Defense signing a memo of five billion in defense contract cutbacks. Things are not looking particularly bright for the likes of Booz Allen Hamilton and other consultants. Yet, they still have a very large backlog of 39 billion. They have a book to bill ratio of 1.4. That's the highest we've seen in six years. They have an expanded partnership in AWS. The stocks rebounded a little bit. They report earnings next week, team, I'm excited to hear what they have to say about those cutbacks and about their client interest in more demand for Booz Allen services. Dylan Lewis: Dan, a question about Booz Allen Hamilton ticker BAH. Dan Boyd: Not really a question, Dylan, more of a recollection. Back in the old days when I was dating, I ended up dating a few women who worked at Booz Allen Hamilton, and unfortunately, it didn't work out with any of them. I don't know. Is that a black mark against them? Could be. Dylan Lewis: It's not. You get a little dividend yield. They've increased 16% per year for the last five years, Dan. Wow. Dan, I don't know if the dividend yield is going to be enough to overcome your dating experience. Is Evolv Technology the one going on your watch list this week? Dan Boyd: It is, Dylan. Dylan Lewis: Dan, appreciate you and David, appreciate you bringing your stocks. That's going to do it for this week's spot for my radio show. Show is [inaudible] by Dan Boyd. I'm Dylan Lewis. Thanks for listening. We'll see you next time. Andy Cross has positions in Apple and Chipotle Mexican Grill. Dan Boyd has positions in Chipotle Mexican Grill. David Meier has no position in any of the stocks mentioned. Dylan Lewis has no position in any of the stocks mentioned. Robert Brokamp has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Chipotle Mexican Grill, Domino's Pizza, Nike, and Walmart. The Motley Fool recommends Booz Allen Hamilton, Cava Group, On Holding, Skechers U.s.a., and Under Armour and recommends the following options: short June 2025 $55 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy. Walmart's Warning; Money Tips for 2025 Grads was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CBS News
06-05-2025
- Politics
- CBS News
Bill would upend Colorado's 80-year-old Labor Peace Act
The state legislature in Colorado is on the verge of passing a bill that upends the 80-year-old Colorado Labor Peace Act. It's unclear if Gov. Jared Polis will sign it into law. Andy Cross/MediaNews Group/The Denver Post via Getty Images The bill makes it easier for a union to collect fees from non-union workers. Right now, organizers need to hold two elections. The first election determines whether employees want to unionize. It takes a simple majority to pass that. The second election determines whether non-union workers need to pay fees, and that needs 75% support in order to pass. The bill passed through Colorado's Senate and got initial approval in the state House today. "There is nothing in this bill that is requiring anything other than to be allowed to collectively bargain. And that is a decision and a choice that employees can make and then that is a decision and choice that everyone in that workplace can bargain over," said state Rep. Jennifer Bacon, a Democrat from Denver. "I don't think 25% of any group should make the determination for the other 75%. I don't believe that is democratic. I don't believe that is necessarily representative. I think the other individuals should have opportunity to weigh in," said state Rep. Ken DeGraaf, a Republican from Colorado Springs. A spokesperson for the governor says his office tried to bridge the gap on the issue and, "hopes both sides find a way forward in the future that reflects our shared goals of prosperity, fairness, and opportunities for workers."
