Stock Market Whiplash

In this podcast, Motley Fool analysts Bill Mann, Ron Gross, and Jason Moser discuss:

• The latest inflation numbers and what they mean for investors.
• An earnings wrap-up for Twilio, Lyft, Airbnb, Shopify, and The Trade Desk.
• Nvidia's disclosure of its investments and how it impacted stocks.
• Two stocks worth watching: Fresenius and Home Depot.

Corrado Russo, managing partner and head of global securities at Hazelview Investments, shares some thoughts on the international real estate market.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.

This video was recorded on Feb. 16, 2024.

Ron Gross: Did this week's stock market give you a whiplash? Motley Fool Money starts now.

It's the Motley Fool Money radio show. I'm Ron Gross sitting in for Dylan Lewis. Joining me today our Senior Analysts, Jason Moser and Bill Mann. Fools, how you doing?

Jason Moser: Hey, doing great brother.

Ron Gross: Fools, earning season did not disappoint this week. Lots of companies reporting and stocks moving around rather aggressively. Today we're going to talk e-commerce, and ride sharing, and even typos. But we begin with the big macro. Earlier in the week, consumer inflation data came in a bit hotter than expected. Which may signal that the Fed will be in no hurry to cut interest rates. Later in the week, we saw retail sales coming worse than expected and then on Friday, we got another hot wholesale inflation report. Needless to say, the stock market was all over the place for the week as investors reacted to the data. Bill, what do you take away from all of this data and what should the everyday investor do about macroeconomic data? Does it matter?

Bill Mann: Are you exhausted from all this?

Ron Gross: No, we're good. Oh, good.

Bill Mann: If you want to do something really funny, go into Google and type the words 'Powell said the quiet part out loud.' And I guarantee you there's like four pages worth of articles that are entitled 'Powell said the quiet part out loud. ' Because here's the thing. I don't think that the market has paid the first bit of attention to the fact that the Federal Reserve has been stating inconvenient truths for the last two years. Like, now he's telling the truth. Yes, last year, it was, well, inflation is, it's temporary. What was the word, the transitory?

Ron Gross: Transitory. That was the word of the year.

Bill Mann: That was the 10 cent word of the year. The problem is that the Fed has been saying these things and the market hasn't wanted to believe them. They said last year we are going to keep raising rates until we have tamed inflation. What does this tell you? Hasn't happened yet. So everyone is all geared up for rate cuts, which I don't know. I learned in math school, happens when the economy is bad.

Ron Gross: What's math school?

Bill Mann: That's basically what I had to go through like sixth through eighth grade is remedial math.

Ron Gross: So you think the Fed is not there yet. They are going to need to see closer to their two target from an inflation perspective to even consider cutting up. Until recently traders had priced in March rate cuts at one point it was almost like a gimme, now we're pushed out. Obviously later in the year, you think we're in for some waiting.

Bill Mann: I think you should be careful saying the quiet part out loud. Yeah. They basically have said that this was what they were focused upon, that they did not want to, and they were more afraid of stagflation than anything else. So yes, this is what they were going after and they really haven't promised anything. The quiet part is the thing that they have been shouting the entire time that this is what we're going to be paying attention to.

Ron Gross: Jason. What's the average everyday investor supposed to do about all?

Jason Moser: It's a lot to piece together. We get this data and it becomes a little bit; it seems a little there are a lot of companies out there cutting jobs. It seems like every day we're getting announcements that, the company X, Y, Z, cutting the X percent of their work. For us, it's become very commonplace. Something's not adding up here. I guess is what I'm saying, Ron. And then I don't know if you guys noticed; this week they did make mention of the fact that the UK and Japan actually have slipped into recession. Yeah. I think that Jay Powell is certainly very happy that he did not feel pressured to go ahead and start cutting or even getting that language out there saying, oh yeah, cuts are just around the corner. Because this really does more or less substantiates the perspective he's taken along.

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

Jason Moser: I think it's the former. It on a bad quarter, the guidance is a little weak. But I think, it's safe to say mean Twilio is a business in the middle of transition. You've got a new CEO here in Khozema Shipchandler. You've got this segment acquisition that was made toward the end of 2020 that just clearly has not worked out like former CEO Jeff Lawson expected. Maybe that's why he's former CEO. Yeah. I maybe there could be something to bad. The thing is too, that segment part of the business; it's still such a small part of the overall business. It's just not working out. Overall the business did OK. Organic revenue was up 8% from a year ago. They saw non gap operating income $173 million. That was up from $39 million a year ago. The core of this business is the communications segment, and that revenue $1 billion for the quarter that was up 5%. Again, going back to that segment side, which is really the data in the applications revenue of just $75 million. And I think that's the story of the quarter, and I think what we need to be waiting for with this business. Come March, they're going to sort of lift the hood, so to speak, and tell us the conclusions that they've drawn from the strategic review of this segment business and what they may actually do with it. Because as you mentioned at the top there, activists are starting to take hold of this business. It seems like a story of unfulfilled potential. Clearly now with a leadership transition, you got to give ship chandler some time to try to execute the vision right. Now, if you don't want to give him that time, that's fine, don't own the stock. But you just you have to be realistic about this understanding that it's going to take several quarters for him to try to be able to get this business going where he wants it to go. They did benefit from some seasonal strength there toward the end of the year, but no doubt looks like a slow start to 2024 and that has investors on the sidelines for now.

Ron Gross: Activists and patients don't always go hand in hand. We will see.

Bill Mann: You get the activists you deserve if I believe.

Ron Gross: On Tuesday, lift reported solid results and share rose to a 52 week high despite some bumps caused by a bit of a typo in the earnings release. Bill, let's get the typo out of the way and then tell us how the company is actually.

Bill Mann: A bit of a typo.

Ron Gross: A bit of a typo.

Bill Mann: If you've ever wondered why companies report their earnings when the market isn't open. This was it. At 4:06 on Tuesday, lift came out with a report saying it was a great earnings report. But among other things, it said that they had a 500 basis point gain in EBITDA, margin expansion. In actuality, the number was 50, a 50 basis point. Now, now first of all, I want to go on the record as saying, nobody should ever be quoting basis points at 5%. The problem is this, they had $741 million worth of shares trade in the aftermarket. In between time that they made that statement at 4:06, and when they corrected it at 05:52 and they said, oh no, it's 50 basis points and the stock had gone up 67%.

Ron Gross: Wow, this is a problem. How many basis points is that?

Bill Mann: That's a lot of it. That's right. Let me take my shoes off so I can count that.

Ron Gross: A thousand basis point.

Bill Mann: Yeah. It went up several basis points, so it was a great report from lift. Full stop, It was a great report, but it was not that good. It is only the fourth profitable quarter that they have reported since they've come public. So, new CEO, David Risher; I know he's kicking himself for this. But they're calling a clerical error. I think it's a little bit more than that. I think maybe they may end up having some lawsuits coming their way based on the fact that $700 million worth of shares traded on bad data. But holy cow.

Ron Gross: Be careful about trading in the after hours market. Absolutely. One lesson for sure.

Bill Mann: Absolutely. Yeah. There are a lot of the circuit breakers that are in place during market hours which people sometimes don't like. This is why they are there.

Ron Gross: Coming up, we'll talk rooms for rent and we'll discuss how a 13F SEC filing took the market by storm. You are listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Ron Gross, here in studio with Jason Moser and Bill Mann. On Wednesday night, Chipmaker Nvidia released its 13F ACC filing, listing the companies it has investments in, and the market went bonkers. Bill unpack this for us, what do they own and what happened? The Mayhem ensued how come?

Bill Mann: Let's get into the documents and their requirements because I know this is really the things that people are interested in. But if you own a 100 million dollars or more of publicly traded stock, you have to file something called a 13F which Nvidia has not had to do until Arm Holdings went public again, so now they're over that threshold. They came out with their report and they own five companies, one of which in particular is a micro cap called Nano X. They owned about $380,000 worth of Nano X. The stock in the two days since this has been reported has gone up 134%. Again, who knows why a 1.7 trillion dollar company owns $380,000 worth of a stock, but it's an absolute nothing burger. In some ways I feel like we're getting back into the enthusiasm over SPACs. Hey, it's a bank account, let's run it up in price.

Jason Moser: Well, yes, shoot first, aim second. That's when you get to those manic stretches, that's what it feels like.

Bill Mann: Four hundred million dollars, an increase in market capitalization Nano X over a $380,000 investment.

Ron Gross: One or two of the other stocks they owe popped as well extraordinary. Jason, sticking with the 13F theme, everyone's always looking for Berkshire Hathaway's 13F to see what Mr. Buffett and his friends are buying and/or selling what stood out to you?

Jason Moser: It sounded like he put a little bit more than a billion dollar to work on Shocker banks, insurance companies, and finance companies it's bread butter so to speak. I think the big mystery is this company that he's asked regulators to keep his secret, I think it's for the second quarter in a row, a lot of speculation out there as to the company who knows probably a bank? But I guess we will find out eventually. I think it's interesting to focus that he sold Apple Ron.

Ron Gross: A little bit.

Jason Moser: Well, here's the other side of that coin, he still owns over 900 million shares of apples. I don't know. Take that with a grain of salt. Big additions to his positions in Chevron and Occidental 14% and 9% respectively. I also thought it was interesting to see positions they exited fully. StoneCo home builder, D.r Horton, in a foolish favorite of ours, mark health insurance.

Ron Gross: Interest. Earlier in the week, Airbnb reported better than expected results with CEO Brian Chesky making optimistic comments about where the company is headed, especially in international markets. Jason shares initially traded down on concerns of moderating growth, but then we got to rebound any concerns here, or does the near term future look relatively bright?

Jason Moser: I think it looks good. The couple of things that stand out for a company like this, there's that Nimby risk. No one on my backyard, so this play out in New York City. That risk, of course, is real. It's something that I think is going to exist, but I also think it's overplayed. There are going to be pockets of communities all around the world that prefer to keep the Airbnb presence to a minimum. But I think in the context of the overall global opportunity here, it's nothing to worry about. Then the other thing, you hear a lot of people gripe about the costs affiliated with renting and being on Airbnb. They made this point on the call there in regard to affordability, by the end of the year, nearly 40% of their active listings didn't charge a cleaning fee at all, and so that work on their affordability is paying off. They actually quantified it. In December the average nightly price of a one bedroom listing on Airbnb was $114 a night, down 2% from the same period a year ago, while hotel prices rose 7% to $149 over the same period. They're really doing a good job. I think communicating the value proposition, it's playing itself out in the numbers, while revenue, 2.2 billion dollar up 17%. Nights experience is booked up 12% to 98.8 million, active listings now exceed 7.7 million and they just approved a new share repurchase authorization of up to six billion dollars. Hopefully we'll see that, bring that share account down though they do rely on some stock based compensation still so something to keep an eye on.

Bill Mann: Man there's so much mischief that hides in quoting averages. Don't you think that perhaps the fact that they are ramping down in New York, one of the most expensive housing cities in the world? It's not just New York, it's London, it's Tokyo. That may have something to do with the average room and stay price.

Jason Moser: Are you saying that they're just making the data say whatever they wanted to say?

Ron Gross: I didn't hear anything after the cleaning fees.

Bill Mann: Exactly.

Ron Gross: But they're still cleaning the place. [laughs]

Bill Mann: My eyes went red from that. I think that the risk of regulatory change is much higher than you might think. There are places around the world, Dubrovnik, for example, which is a beautiful city, fewer than 200 people live in the walled city because so much of the market has been given over to short term rentals like Airbnb. It's not just Airbnb, but there are places around the world where this type of the intensity of the tourism, I think is going to come to question. I'm not making a statement about Airbnb, but I am saying that there is a sensitivity that I think is out there and it is real.

Ron Gross: On Tuesday, Shopify reported better than expected results, but weak first quarter guidance driven by higher marketing and compensation expenses sent the stock down 13%. Bill, the stock wasn't cheap in the first place, and the increased expenses, I think surprised investors, management thinks the spend now will pay off down the road. What's your take?

Bill Mann: This stock has gone up like it's been shot out of a cannon over the last six months, so it's dropped 13% from its high before earnings, which is a number that it had only crossed in December. [laughs]

Ron Gross: We're back to December.

Bill Mann: We're back to December. How's that feel? Like the nights are a little bit longer. It was a great quarter for them and I think that this quarter showed just how anti-fragile Shopify is becoming because a lot of the area where they have been focused is with their larger enterprise customers. Like On Holdings, for example, is a huge newer customer for them. These are much more complex customers. Remember where Shopify started? It's basically to help, essentially Etsy people.

Ron Gross: Right, modern part.

Bill Mann: Now they have moved up to being able to help some of the companies that are doing things like competing with Nike. It was a fantastic quarter for them. I think that the story of the stock really has to do with the fact that it had run up so much and as you said, it was not cheap. I think what was getting valued was not just the future, but also the ever after and we've stepped back a little bit into reality.

Ron Gross: Trade Desk shares were up big on Friday as the company reported a 23% increase in revenue and a $700 million share buyback. Jason's report looks strong to me, but I want to know what's stood out to you.

Jason Moser: I think the two themes that really stood out here connected TV, remains the fastest growing vertical for the company. I don't think it's going to be changing anytime soon. Then the AI tailwinds. We talk a lot about AI. They're very quick to tell you that, listen, they've been embedding AI in their platforms since 2016 and they're using it to make their business better. I think it's just interesting to look at AI from that perspective. The companies that are using it to make their own operations better. The Trade Desk certainly stands out here. But the revenue numbers just continue to impress up 23% from a year ago. UID2.0 continues to gain traction, guiding for about 25% top line growth here in the current quarter. They are going to see the inevitable tailwinds from the political spin that we unfortunately [laughs] aren't going to be subject to here for the next several months.

Ron Gross: All right fools. We will see you a little bit later in the show. Up next, a conversation with Corrado Russo, managing partner and head of Global Securities at Hazelview Investments for a look at the international real estate market. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Ron Gross. Motley Fool Money is Deidre Woollard caught up with Corrado Russo, Managing partner and head of Global Securities at Hazelview Investments for a discussion about how the weak US office sector is faring globally, and they discuss some rates that investors may want to consider.

Deidre Woollard: One of the reasons I'd like to talk to you is you've got more of the global perspective. I tend to mostly study US reads, and well, the United States was not the top performer last year according to your data, so, looking at this, at the high end you have Germany, at the low end you have Hong Kong, and some of the things that have been happening in China in general. But tell us about some of the macro factors behind those results.

Bill Mann: Germany was driven by the residential market. There's a very large multi family contingent on the real estate company side in Germany and a bit of it was playing catch up from 2022. They significantly underperformed in 2022, coming off of the uncertainty around the war, high inflation and high interest rates, and given that residential is a very stable long term cash flow and predictable cash flow, it tends to trade more like a bond. Obviously, as interest rates started to weigh on going up, that started to weigh on those stocks. They had a poor 2022 as we went into 2023, people realized that even though it's very stable cash flow, it does have the potential for growth, and there was a tremendous amount of growth that we saw coming out of the residential space in Germany, so that really started to see a large, catch up in that space as well. Also they have a bit higher leverage, so that would have led to a 2022 underperformance, which again reversed as we started to get to the end of 2023 when rates started to stabilize. Hong Kong a bit of a different situation. Hong Kong is being driven to what we've seen in China.

Obviously, China's economy hasn't been as strong as you've seen in the US and Europe. China took a bit of a different tact when it came to COVID, rather than using excess stimulus measures to try to get the economy going, which obviously resulted in inflationary pressures, they took a more long term duration lockdowns with minimal stimulus and that's turning to have deflationary pressures and that's putting some pressure on property values. Property values if the Asian market, especially in China and Hong Kong, it makes up a much bigger percentage of the average person's net worth. As property comes under pressure, that can put that stock under pressure. But what we'd like about Hong Kong going forward is you're sitting with certain sectors that have great fundamentals going forward that are actually trading at significantly in a larger discounts than anywhere else we're seeing in the world.

Deidre Woollard: Well, you mentioned office earlier, but certainly not a great year for office in the US. What's it like globally?

Bill Mann: Yeah, it's interesting you're not seeing the same negativity on office that you're seeing in North America, in Europe, or Asia. It's for a couple of different reasons. First off, in Europe, there tends to be a much greater culture around going to the office. Most of you live, work play is around the office. You go to the office, you have lunch with your colleagues, your colleagues are your friends. You go to dinner afterwards and to the Piazza, and then home and do it all over again. Culturally what we've seen in throughout COVID is that as soon as people could go back to the office, they went back to the office, the average utilization rates is much higher and the work from home trend is much less significant in Europe. That's driving better demand. We're also seeing a lot more demand from private buyers of real estate to buy office properties. That's keeping valuations higher relative to in North America where we're not seeing a lot of people interested in buying office properties right now. Asia, a bit of a different situation. Culturally there's a huge dynamic of face time with the boss, especially in markets like Tokyo, for example. There's a huge understanding from most of the workers that the way to climb that corporate ladder is you have to have that face time and show that you're working. I think you're seeing less of a work from home trend. It also has to do with the average size of a home in Asia is much smaller than it is in North America. When you're sitting in your 2000, 3,000 square foot home and you have an office or a spare room that you can work from home and it's very comfortable. That's easy to do in North America. A lot more difficult when you're living in a 500 or square foot apartment, and you've probably got here. Your elderly parents living with as well. A little less practical to see that work from home. We're seeing very different trends. Certainly not escaping the overall decline but certainly not as bad as what we're seeing in North America.

Deidre Woollard: Let's dive into some of the specific call outs you have in your report. Last year your choice for US read was Rexford which is an industrially, certainly industrial continues to be one of the growth sectors in commercial real estate. This year you've got American Tower. Now it's one of the two big cell tower wets. It's been a tough couple of years for tower wets, especially because you had the big telecom companies consolidating. That meant that there was fewer companies vying for the same space on these towers. What makes American Tower want to watch right now?

Bill Mann: The first thing is, obviously, as you said, it's underperformed. That typically is what piques our interest in why we dive in and look at different opportunities. American Tower is underperformed for a couple of reasons. You mentioned one of them the consolidation of the carriers, which is reduced capital spending, and for the audience, as carriers spend capital and put equipment on cell towers, the revenue for the cell towers go up and that benefits their long term cash flow. With that consolidation, they've sort of paused and slowed down their five G spending to sort of integrate and consolidate what they have. The other side of the equation, towers have very long term contracts, so their duration for that cash flow stream is relatively long and that makes them very sensitive to rise in interest rates. That's also caused the underperformance over the last couple years. As we move into 2024 our view is that that under performance will start to turn around and go the other way. One we're seeing five G network spending start to pick up and that's expected to be a positive catalyst going into 2024 and 2025 as carriers, now that they see a lot more five G phones out there, they need to provide that data and that back up on the network to catch up to what the demand is. At the same time as interest rates start to go the other way, and we think that that can significantly impact the stock price for two reasons. One, the trading multiple should improve because it was one of the biggest factors that brought the multiple down. But also the cost of capital to continue to grow will improve. As their cost of capital improves, they'll be able to continue their external growth which is really how American Tower has grown over the last decade or so, is by really consolidating and buying other towers outside of the US as well.

Deidre Woollard: How much is edge computing data centers rise of AI factor into American Tower? I know that they have a little bit of interest in that space.

Bill Mann: What you're seeing is a bit of convergence between cell towers and data centers. There's edge computing obviously helps in terms of trying to move into the data center space in terms of where AI and real time computing power is necessary. Whether it's throughput of different devices and data going through and also storage of different data. I think we're going to see a consolidation between where the cell tower ends in terms of carrying the signal versus the data centers where computing power ultimately rests and where data storage is done. I think the edge is their solution to getting into that space as well. Happy to talk about it as well, but data centers is one of the key themes we have for 2024 as well.

Deidre Woollard: I'm curious about your Canadian choice, Chartwell Senior Residences. I know the demographics are in our favor for senior living. I've studied a little bit about the general aging of the population, but it's been a tough area to invest in so far, at least in the US. What makes Chartwell stand out?

Bill Mann: Yeah. Great question. To your point, the demographics are there. The stock should be performing very well and it hasn't, it's had a tough time and that tough time has been for a few reasons. It really continues to stem from COVID. Obviously, the impact of COVID disease was very impact on the elderly and the distancing and lockdown measures that were put in place to combat that, led to not only the inability to have new move ins, to have people take up the occupancy that was there and it disrupted leasing, but it also disrupted the labor force. What we saw as an exodus of the labor force for senior housing and the inability to find staff. That really meant that Chartwell had to spend an exorbitant amount of money on temporary staff from agencies. That led to, you had negative occupancies because you couldn't move people in and you had expenses going up because of cash flow. Underlying all of that, we saw significant amount of supply. That's why the stock in the sector hasn't worked for so long, is you've had so much supply. Those three factors together has gone against this stock. Why do we like it now? One, the distancing and COVID measures are obviously gone. A lot of the stigma with respect to moving into senior housing has dissipated and you're starting to see that leasing activity pick up. We've seen it over the last two quarters, significant pick up in leasing Activity 1 to the labor force is back to where it was pre-COVID. That expense management issue is starting to dissipate as well and we're seeing them get back to their full labor force levels where they were running before. But most importantly, supply is completely turned off. With the higher cost of capital, the higher material cost to develop new, the increased regulatory environment, all of that has made it very difficult to build new senior housing. As we see a ramp up in demand, we see a decline in expenses, we see a decline in competition from supply. We believe that that's going to lead to higher rents, higher occupancy, and ultimately boost overall cash flow down the road.

Deidre Woollard: Is that a phenomenon you're seeing just in Canada or are you seeing it in other places as well?

Bill Mann: We have seen it in the US as well, but I think the US, I would say was much quicker and a bit more balanced in terms of demand supply. I think it's been a little quicker. What I would say is you look at somebody like Welltower and you see, how well that stock did in the US last year. It really had its recovery. I would say that Chartwell is bit of a leg and we believe that it can replicate the recovery and the benefit that we saw come out of the US in 2023.

Deidre Woollard: That makes sense. Well, you didn't choose logistics for the US this year, but you've got two European picks that focus on that space. You've got Montea and CTP. What makes logistics a growth area for Europe right now?

Bill Mann: The US has extremely strong demand for industrial, but supply is starting to catch up. We are seeing increase in supply. We're a little worried that that might put a ceiling on future rent growth. Europe effectively has the same strong demand trends that the US has, but it doesn't have the same supply issue. Supply is relatively limited. The stock is a bit older than the US. They haven't built as much. A lot of the old stock is obsolete and so we really have an effort to find those new logistics centers that are more efficient. If you own them, which Montea and CTP do, the two companies that we outlined, they're seeing significant demand for their space. If you look at Europe, there's a huge ongoing movement toward near shoring, which means two things. You have European companies that want to keep more storage in Europe rather than rely on it to come from China or from Asia and you're also seeing them bring home some of the manufacturing. Even though they might continue to source some from Asia, they still want a portion of their manufacturing done on the continent. You're seeing that drive industrial logistics as well. Then finally, you're seeing Asian suppliers that are setting up shop in Europe to be closer to their customer because their customers are demanding that and that again, is putting a lot more pressure for industrial logistic space. The demand is off the charts in our view, supply can't keep up and we believe that Montea and CTP have the right kind of assets for the kinds of efficiencies and specs that tenants are looking for today.

Ron Gross: Coming up after the break, Bill Mann and Jason Moser return with a couple of stocks on their radar. Stay right here, you're listening to Motley Fool Money. As always, people on the program may have interest in the stocks they talk about and the Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Welcome back to Motley Fool Money, Ron Gross here with Bill Mann and Jason Moser. All right, Fools we have time for a quick story before we hit stocks on our radar. According to industry experts, a certain 1970s TV show with a catchy theme song was responsible for a surge in the cruise industry and it's being hailed as the greatest product placement of all time. Yes Fools. I'm talking about Princess Cruises and The Love Boat. I know we're all old enough to remember Isaac and Doc, and good old Captain Stubing. My simple question to both of you, thumbs up or down on actually taking a cruise and buy, sell, or hold the cruise industry as an investment. Jason, you first.

Jason Moser: I've never taken a cruise and I'm going to try to fulfill the rest of my days. [laughs]

Ron Gross: Noroviru.. down.

Jason Moser: A big fan of the show. I can't get the song out of my mind. Just wonderful childhood memories. Unfortunately, I don't think the nostalgia is enough to sway me into the bull camp on the cruise lines as an investment though.

Ron Gross: Bill Mann has had to have taken a cruise or more than a cruise.

Bill Mann: I've got parents in law who live in Fort Lauderdale, Florida.

Ron Gross: It's the law.

Bill Mann: Worse, it's the law down there. You have to take cruises. It's not really my choice of tourism, but as a way to get a multi-generational family together, they're wonderful and full stop.

Ron Gross: As an investment.

Bill Mann: Sure.

Ron Gross: Sure.

Bill Mann: Well. They just went through a near death experience with the coronavirus and they are still building massive ships and took some inventory that needed to be taken offline. They are in economically pretty good shape.

Ron Gross: All right Fools, tight on time, but we have time for a couple of stocks on our radar and I'll bring in our man, Dan Boyd, to ask some questions. Jason Moser, you're up first. What do you got?

Jason Moser: We're speaking of economically good shape. I'm keeping an eye on Home Depot ticker as HD. We got earnings come out on February 20th before the market opens. Just looking at the results from last quarter, it was not that great of a quarter at least on the surface. Comps fell 3.5% earnings per share down, 10.1% transactions down, 2.4%. Average ticket was even down and listen to this guidance, Ron. They're talking about guidance for full year comp sales to decline between three and 4% targeting an operating margin between 14.2 and 14.1% down, anticipating a decline of 9-11% in earnings per share. The stock is still up 20% since that release Ron. Home Depot is just a behemoth. I think really for me, I'm going to be fascinated to see what they have to say in the call in regard to inflation because they did make the point last quarter, they feel like the worst of inflation is behind us. It seems like we've gotten some language this week that might speak to the contrary. Should be an interesting report.

Ron Gross: Dan, question about Home Depot.

Dan Boyd: I got to get to Home Depot [laughs] I have so much work to do.

Jason Moser: Can you pick me up something.

Dan Boyd: It's ridiculous.

Ron Gross: That's more of a comment, but we'll take that. Bill, what do you got?

Bill Mann: Mine is Fresenius, which is a German company, and actually they are one of the largest dialysis companies in the world, but definitely in the US. What's really interesting thing about them is that they are square in the sights of the GLP agonists, the Ozempics, the Wagovees. I'm really interested to see what's going to happen with the dialysis industry. As Fresenius is one of the drivers.

Ron Gross: Dan, we have a Fresenius here in Alexandria or Virginia. But do you remember, Bill, what it used to be before it was a Fresenius?

Bill Mann: It's got to have been like a frozen yogurt place.

Dan Boyd: It was a Fuddruckers.

Ron Gross: [laughs] How close?

Dan Boyd: The burger restaurant. If you remember that place when that thing closed down. Oh man. Poor young Dan, very sad.

Ron Gross: I don't know where to go with that. But do you have a favorite for your watch list?

Dan Boyd: Well, unfortunately it's not Fuddruckers. I got to go Home Depot. I can't get away from that place. I feel like I'm there almost every weekend in Spring.

Ron Gross: Makes difference.

Dan Boyd: All right.

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