Is Pre-IPO Investing Worth the Risk?
46:32 Share

On radio, on YouTube, streaming live on investtalk.com, and for our podcast subscribers, this is InvestTalk. Independent thinking, shared success. InvestTalk is made possible by KPP Financial, a registered investment advisor firm serving clients throughout the United States.

Here is KPP Financial Chief Executive Officer, Financial Advisor, Justin Klein. Good afternoon, fellow investors, and welcome back to InvestTalk. This is our February 28th, 2025 edition of InvestTalk. Appreciate you all tuning in. And yes, we are through two months of the year. Yes, February is a short month, but still.

this year's already going by pretty quick a lot is happening new administration and a lot of headlines and a lot of volatility and that's what we are here to help you guide you through there are a lot of once again headlines and some of it matters and some of it matters not at all

And a lot of in between, right? Matters just a little, but more than, you know, but people make up more than it really means. So, you know, our job is to kind of give you the perspective and the data so you can make good decisions with your money, not being swayed by your emotions, fear and greed, political affiliations, etc.,

So this is all about the reality on the ground so that you are capitalizing on opportunities and avoiding pitfalls. And we do this by answering your finance and investment questions. That is job number one for us each and every weekday.

Okay, so don't hesitate to give us a call. 888-99-CHART is how you get through. Now, in just a bit, we'll talk about today's market performance and run down some show topics. But first, we'll tackle this live call. Right now, Robert from Pleasanton looking at First Solar FSLR. Yes, hi, Justin. I'm looking at this. I don't currently own it.

But it has come down quite a bit. And I'm just wondering if you think there's some value to be had here now. Well, obviously, the new administration is not very friendly to the solar industry.

They're focusing on drill, baby, drill, maybe nuclear. But when it comes to green energy, solar really isn't in their wheelhouse, something that they are going to support. And if they're trying to cut spending and subsidies, this is in their crosshairs, clearly. And I think that is what you have to watch out for. And this peaked back in.

June of last year at around $300 per share. Now we're down to $136. And the technicals are just too poor for me to get excited about it. And I haven't seen a real spike in volatility that tells me capitulation is in.

And so that's my issue. And now the good thing here is that of the solar names for solar is historically one of the best run, the most profitable, most consistent businesses. However, free cash flow now on this name has been negative really since the pandemic and beyond. And it continues to be to be very negative.

and now they have a good balance sheet that's a positive not a lot of debt that's good so it's hard to go bankrupt when you when you don't have a lot of date that the issue is that they've been continuously issuing shares each year diluting shareholders and so I don't think they're if you look at earnings they look pretty cheap but I don't think that's very good earnings quality to be honest with you so because that cash flow is so negative and their profitability is just

headed lower so i will i it's on the watch list for okay if things turn around maybe subsidies are uh continued and and and the environment works out this is a good horse because of you know the fact that it is historically one of the best run solar names out there but i just think the environment the technicals all of it lines up where it's just

too weak for me. So I would pass on it. I think there's much better opportunities in this market. Okay, thank you. No problem. Thanks for the call. Now we have a lot of ground to cover over the next 45 minutes or so. And our main focus point is a topic I love. I think it's very interesting. Pre-IPO investing, is it worth the risk? So you might have opportunities to invest before a company goes public. And there are different stages in that. And there's a lot of

opportunity but for huge gains I'll tell you my story about uh pretty much my uh one pre-ipo investment and I got lucky it's working out really well um but yeah I guess I'll go into that uh but you know there are risks there's still risks that you have to uh you have to take in in account for okay um so we'll look into those hidden risks and shed some light on that topic

we also will touch on a few other topics as well one is in regards to i think it's curious that trump is no longer focusing on the stock market right very different performance in the stock market from inauguration day or excuse me uh election day 2016 and election day 2024. so we'll look at what that might mean for markets and policy ahead also in that vein

The market rotation right now is counterintuitive in many ways. If you were to read headlines and understand kind of where the first five, six weeks of this administration has gone, you would probably bet on a different leadership in from sector perspective as well as asset class perspective. So we'll look at that and what also those new trends might mean for markets.

We also have voice bank calls. One is in regards to Vertiv, VRT, and Airbus. And we also have some questions that came in via our comment section on our YouTube channel as well. And of course, we welcome your finance and investment questions right now at 888-99-CHART. Now we're going to a short break. And on the other side, I'll look at today's market activity and play more of your questions here on InvestTalk.

Okay, got to get serious with my finances. I've been working a long time and I know there's still got to be more that I can do to build my wealth quicker. I don't want to have to work forever. If you are not maximizing your employer-sponsored retirement plan, KPP Financial can help. With our professional oversight, you can potentially enhance your investment performance by an average of 3% annually. Hmm.

At KPP Financial, we provide a comprehensive 401k management program designed to optimize your retirement savings. Our approach includes creating custom investment allocations tailored to your goals and risk tolerance. That can make a big difference in your favor. Maybe it's time to tune up my retirement plan. For more information on how you can take control of your retirement savings, visit

visit our website, kppfinancial.com. KPP Financial. Sounds good. Let me touch on a topic that most listeners need to understand. I want to talk about creating a trust and a will.

Until recently, this has been a very slow and time-consuming process. Things have changed now because trust and will makes creating your will easy. And before I go further, let me pass along the news that you can get 10% off at trustandwill.com slash invest.

Listen, I know from personal experience that the peace of mind that comes from having one's wishes and assets secure is a good feeling. And once you get your trust and will squared away, you can focus on the other important tasks in your life, whether they are for business or fun. When you work with trust and will, each will or trust is state-specific, legally valid, and customized to your needs. Their simple step-by-step process guides you from start to finish, one question at a time.

You'll be able to keep your family prepared and protected by managing your will or trust online. Uncomplicate the process with Trust & Will. Protect what matters most in minutes at trustandwill.com slash invest and get 10% off plus free shipping. That's 10% off and free shipping at trustandwill.com slash invest.

2025 rolls on and you might have some fresh questions for Justin or Luke. Call InvestTalk 888-99-CHART.

Now let's go take a look at markets today. It was certainly a bounce back day after a very red week, really across the board S&P 500. If you head over to our YouTube channel, you'll see the S&P heat map that I have up on the screen. And, you know, NVIDIA was up about 4% today, Apple about 2%.

Tesla up for some nice bounces across the board, pretty much in every sector. S&P was up about 1.6%. Same with the NASDAQ and the Dow was up about 1.4% on the day. You have the dollar strong, a little bit stronger. But on the week, it was...

Certainly red, Nvidia down 11%, Tesla down 17%, Amazon down 5%, Microsoft down 5%, Meta down 4%, Google down 8%, Apple best performer of the Mag 7 only down 1.6% on the week, Broadcom down 11.6% on the week. So despite this nice bounce back and strong close into the end of the week,

you had a a bloody weekly candle uh at least shall we say for most stocks and that comes obviously near an all-time high in many instances on volume pounds here down 21 on the week obviously a bitcoin is below 90k as i said before i've said this for a little while i'm watching for bitcoin to break 90k that a sign that the liquidity dynamics in markets are starting to shift and

and now we're down around 80 000 i expect bitcoin probably to head into the low 70s that's probably where the best support is at least in the short term but would not shock me that this is the you know the 107 that bitcoin got to recently is the the high for you know the next 12 months would not shock me and we go into some sort of tougher liquidity environment and you know with tariffs

supposedly being implemented obviously that's tightening a policy we also have some economic news coming out the city surprise index continues to uh be weak uh but what's most interesting is the gdp now figure it's now showing this is from the atlanta fed showing expectations of a negative 1.5 percent gdp for q1 now i will say this is likely driven by

imports so i go back to this all the time how c plus i plus g plus x when you calculate gdp g and i talk about g all the time because government spending and austerity is is a negative for gdp growth just simple as that it's math but also a deeper deficit is also a drag on gdp and so what's happening here what's clearly happening here is that these

Companies that import from abroad, they're front-loading. They're saying, hey, tariffs are coming. I'm going to import more, fill up my inventory, and try to avoid a lot of these tariffs that may be coming down the pipe.

And sit on that and still maintain margins. Maybe I can be more competitive or my other competitors that didn't import a bunch of inventory, they're having to raise prices because it costs more. And now I can gain market share, et cetera. So in many ways, it could be strategic. And so there are companies doing this. And so it's it's widening, drastically widening our net exports and and our export our export deficit.

And so that's a big drag on GDP for Q1. Now, likely there's a bounce back in Q2, where especially if there's tariffs and people stop importing or companies stop importing, they have enough inventory. You know, maybe they're thinking about reshoring supply chains potentially, et cetera. And that is that that would probably boost GDP in Q2. So that's likely what you're going to see over the first half of this year. I'm still not seeing anything.

Credit markets fall out of bed. I'm not seeing indications that a recession is in the offing, right? That we're in one or close to one. Could we be inching towards another recession? Absolutely. Especially with this austerity. How far does Doge go? Talked about this many times. That would be extremely important to understand how much austerity is coming out of the government. I think we all want to get rid of fraud, waste and abuse, right?

But we all know it can go overboard. And especially when you're looking at it from an economic real standpoint, not just the effectiveness or efficiency standpoint. And so there's a fine line here that they're likely going to have to balance. And it's hard to know where they come out. And so...

That's why I continue to say back half the year is probably a little bit more risk. But, you know, that is where we are economically. You had the PC number came out. Core PC came at 0.3% month over month. That was in line with expectations. The odds of a Fed rate cut is between now and June is increasing after this report, as well as the market sell off. So I do think we'll get a rate cut there.

I don't think the next meeting, but maybe the meeting after that or in June. I think that's certainly a possibility.

And so I think that's likely. And then also balance sheet rundown ending, the QT ending. I think that's probably what they'll float for the next meeting and come with a plan as well as cuts in the following meeting. So that's likely what you're seeing. I do think the dollar will continue to roll over because of that. A more dovish Fed, I think, is in the offing, at least in the short term. Now, what happens when

Inflation reasserts itself to the upside in the back half of the year and into next year. I think that will be interesting, but that's kind of what I'm seeing for the short term. So that was markets today as we closed out the month of February 2025. Now let's actually we're going to head to a quick break. Still to come.

We'll get to my focus point. This is one of my favorites in a while. So hopefully you all enjoy it. And more answers to your voice bank questions. And if you have a question right now, whether you're listening after hours or during our live four to five Pacific time show, either way, give our number a call. Eight at eight 99 chart. We love your live calls. We love your recorded calls. We love your calls in general. So pick up the phone, ask whatever's on your mind.

InvestTalk is ready 24-7 for your finance and investment questions. I'm hoping you'll give me your take on Ormat Technologies, O-R-A. Is it a good idea to sell your losses in a Roth IRA and just use whatever you have left to reinvest into better stocks? Don't forget to call InvestTalk, 888-99-CHART. ♪♪♪

InvestTalk. Your questions are free. The answers are unbiased. Justin Klein is here now. 888-99-CHART. Let's go talk to a live caller. Arias from San Diego wants to talk about annuities. How are you doing, Arias? Pretty good, Justin. Quick question for you. Sure.

Your grandfather was not a big fan of annuities. Very true. And he gave his reasons why. And then when Steve Peasley came on board, may he rest in peace, he wasn't a fan of annuities either. With his background in insurance, he went into deeper details of why he wasn't a big fan of annuities. My question to you is, is there any time

where you can use annuities as part of your financial portfolio? And if so, why? And if not, why? Yeah, very simple. Fixed annuities are appropriate for some people that have very low risk tolerance and they want to create a guaranteed income stream that supplements them above Social Security, for example, and have that peace of mind that that

income is going to be there no matter what. And that can be a place for it. But as a long-term growth vehicle, they're almost always a bad idea. Okay, so you're talking about fixed index annuity. So that's a big difference. You might hear fixed and you think, oh, it's a fixed annuity. No, fixed index annuity is different than a fixed annuity. Okay, so not a fixed index annuity, index to some, you know,

index right so s p could be russell 3000 could be wilshire whatever that is right um so a straight up fixed annuity where it's okay i'm getting x payout guaranteed there's no growth there's no downside it's just straight up i'm getting this this payout and that can be a that can be good for certain people but it's very small slice and

Usually when you are... And the reason those aren't really sold is because the person selling it, the salesperson at the... And you have to watch out for this. I see this all the time. Oh, it's my advisor, financial advisor. No, if they work for an insurance company, it's their salesperson. And they usually don't push those because they don't earn a high commission on them. And so that's why most people don't get them. They get some sort of indexed annuity or variable annuity. And that's just...

you know, a poor use of capital, especially taxed. I see this all the time where they buy an annuity in an IRA, which is adding insult to injury. So, so yes, there are options or there, there are situations where fixed annuities can make sense, but almost never a variable or index annuity. Thank you. I appreciate it. No problem. Thanks for the call.

Now, I hope you've been telling your friends and family that you can find us over on our YouTube channel. And you can see my face. You can see my data that we're looking at when we're answering these questions. And we love the comments that come in over there as well. And let's answer one of those questions now. Adrian Vasquez says, I would like your thoughts on Brita Water Filters Company, Clorox. New study shows Americans drinking water has hazardous chemicals.

Yeah, I mean, I'm a big fan of filtered water. I try to never drink tap water myself. But, you know, I think your issue here is you're trying to play that by saying,

investing in a large company like Clorox that has a lot of different businesses and Brita water filters is just one of them. Okay. And I'd have to go into my deeper research to find out what percentage, but I would imagine it's very small. Now, Clorox is, you know, consumer staple. It's obviously doing very well right now because consumer staples are doing well. But, you know, business is,

a bit up and down last quarter. Revenues were down 15%. Earnings were down 28%. They were supposed to earn $7.19 this year after earning $6.17 last year. Obviously, 2021 was a bumper year for them in 2020 during COVID. And they're just climbing back to those levels. So I think

I like the earnings trajectory generally, and I like the company generally, the profitability here. But I wouldn't buy it just for Brita water filters.

That's not something that I think you want to pure play and find some smaller names that are in the water filtration business. I can't think of, is it water's one? There are ones out there that are more pure play on filtered water. And I think that's what I would go with. I would look for something like that as opposed to trying to play water as a small subsegment of Clorox. Even though I like Clorox, it's just not the way that I would play it.

or thanks for the question now on the next invest talk we'll look into the story america's economic paradox wealthy spending surge meets rising credit card debt the us economic growth is fueled by consumer spending with the top 10 of earners contributing to nearly half of those expenditures that story will be on monday but for now i'm justin klein i'm ready to take your calls at 8 8 99 chart

Justin Klein is here and ready to tackle your questions. I've heard you say multiple times that you prefer shorter duration treasury bonds. Can you explain to me why it is more advisable? Call InvestTalk. 888-99-CHART.

Every investor is working to build a secure financial future. The more you learn about how the market works, the better your chances for success. InvestTalk 888-99-CHART. Now, our main focus point today is about pre-IPO investing. And I love this topic. And this is an area that is ripe with opportunity.

as well as risks. And we're going to dig into those now. Now let's delineate between venture investing and pre-IPO investing. Okay. Now, venture investing, venture capital has to do with early seed investing in companies, meaning these companies have barely any business. It's more of an idea and they don't have infrastructure. They are,

hungry, they're trying to grow, they might have an innovative idea that could be huge, but more often than not, they fizzle out. Now, in venture investing, 90% of startups, this is startup investing, right? 90% of startups, they fail. Okay, so only 10% will make it to the next stage. That means if you invest in ventures, in startups, 90% of those investments go to zero.

But it's the 10% that hit that make up for the 90%. So it can work out, but it's also very volatile, right? That 90% is a general number. It could be 85% fail, depending on your portfolio. It could be 98% of them fail. And the 2% that work out aren't really that big to really make up for it. So it depends on the venture capital investor and how good they are.

OK, but that's what they throw money at a lot of different companies and hope just a handful hit and then they can make big money. Right. So, you know, they're looking for the lifts of the world, the DocuSign, Spotify, Pinterest, et cetera. These are companies that were were once startups and then they actually got into what is called pre IPO phase. So let's talk about pre IPO phase.

These are companies that they have a business. They have a real business. Now, they may not be profitable, but they have a real business there, and they are planning to go public probably in the next five years. Okay. And they usually have valuations in the hundreds of millions of dollars. No longer these little companies, right? They have probably dozens of hundreds of employees, and they're legitimate.

But there are risks because they're legitimate. It doesn't mean that it's without risks to those investments. OK, so they're safer. They're more likely to get to that IPO, that cash out phase or sell to private equity or something like that. But does not mean that they're without their risks. OK, so what are the risks or what are the appeal? Let's start with the appeal.

You get access before they hit IPO, right? I always talk about how mainly when companies go IPO, you're buying them at prices that are advantageous to those that invested in the venture phase, seed rounds, as well as the pre-IPO phase.

And so the advantage here is if they do hit, if they go from, you know, four or $500 million in valuation to four or $5 billion in valuation, you can be part of that. And you're not buying once it hits that multi-billion dollars in valuation. And it's a portfolio diversifier. You know, these are companies that they can, the volatility can be very different. It can, you know, when things are going south, maybe they're bucking the trend because they're of innovative products or services. Okay.

Now, what are the risks? First is liquidity. I'll tell you my main story. I invested in a company. This is more venture. Very early. $5 million valuation when I bought into it. And it's done extremely well. But I bought those shares in 2013. And I've had a little liquidity from it, but not the whole thing. And I could go sell it.

but it's more of a challenge, right? I can't just go on my brokerage statement and try to sell shares. And I probably take a discount to the true value if I do want to sell it. So that's number one, lack of liquidity. Then still uncertain, right? While I've done well so far, doesn't mean that it's actually going to, at the end of the day, I'm going to cash out as well as it looks like on paper today.

It can look like things are going well and the next year things could change dramatically. So it's difficult. And there is a due diligence hurdle here. How do you know? There's not as much regulation around disclosures and understanding the business that you get with a public company. Luckily for me, it's the leader of the company is somebody I'm good friends with. And so I knew who I was betting on.

That's the same thing in this space, whether it's venture or it's pre-IPO. You're less investing in the idea than the person. I've learned that. It's so true. I've looked at other opportunities and I've turned down a lot of them. And almost every single one I'm happy I turned down because I didn't believe in the person leading the company. So due diligence is hard. Then there's valuation risk. Yes, you could be investing in a company that actually gets the IPO.

But because of the uncertainty, valuations can fluctuate dramatically and you may overpay. The company I invested in, they've made other acquisitions and they've made some good ones. They actually made one bad one, but it was actually very small. And so it didn't really hurt them, but it could have been in their verse, right? Where they bought the one that was the one they spent a lot on was a bad acquisition or, you know, and that could have taken out, taken down the whole company. And so valuation in this space is,

is a big uncertainty and brings a lot of risk to not only the companies you're investing in, but you yourself, right? Are you paying too much? And maybe when the cash out comes, it's only a modest gain or could be negative.

And then there's regulatory uncertainty around privacy laws or technological standards change, economic downturns. That all can happen. I invested in that company in 2013. There's been a lot of volatility. You had COVID. You had tough markets in 2016, 2018. And luckily, they've gotten through it, but many companies have folded since then. And so that can happen as well. Now, how do you mitigate those risks?

You can invest through reputable platforms. There's equities and there's second market. Make sure you're doing that. Diversification as well. Okay. So don't just bet on one size, your investment appropriately for your total net worth, et cetera, and have a long-term perspective. You need to be in this for a decade, probably plus, and then it could potentially work out. If you think you're going to invest in and cash out in a couple of years, you know, the liquidity just isn't there. So,

There's a lot of upside, but be careful for those downsides. Let's keep things moving and play another caller question from 88899 Shark. Hi, Justin. Can you please take a look at Airbus versus BAE Systems? I'm looking for European defense exposure. Thank you guys for what you do. Have a nice day. Thanks. All right. Looking at Airbus versus what was the other one? EAD Systems. Okay.

There we go. Okay. So Airbus, one thing I like about Airbus, first off, is their main competitor is sucking wind and led by poor management. That's Boeing, right? And so Airbus just continues to take their market share. And then you have the defense side. Obviously, Europe is likely to spend more on defense due to geopolitical volatility. And there are some nice tailwinds there.

okay um now the other one pull that up here ba assistant bae systems okay uh this is a british defense company and it's a bit more volatile here um and so i would probably go with airbus

historically they just have more consistent profitability i like that tailwind on the commercial side as well as the defense side uh they have a good balance sheet uh so if i'm picking one or the other i'm definitely going with airbus now on fridays we generally make

Make time to fit another rundown, some quick key benchmarks for the week. So let's do that now. The two-year treasury yield right at about 4% on the close of the week. Last week was at 4.2%. That's showing you that almost a full cut is now priced in to the markets over the next two years.

in just one week. That's what a sell-off in markets can do. That's what the economic data being weak will do. That's what the inflation data being relatively tame will do. And so that's what was priced into markets this week. Almost one extra rate cut. The 10-year treasury yield, 4.24% at the close. That's down from 4.42% last week. So not quite as big of a drop on the 10-year, but pretty close.

Gold, $28.43 an ounce. That was down. The first down week in a while. Last week was at $2,941. And it's $2,843 this week. Silver, $3,103. Down from $3,276 last week. And once again, modest sell-off. No issues from a technical perspective in the precious metal market.

Oil, $70.09 per barrel. That is down 48 cents from last week. And then the national average for gasoline, regular gasoline, $3.11, down 5 cents from last week. Here in California, though, $4.79. We're still paying through nose, also down 5 cents for the week. And for comparison, Kansas. In Kansas, gas is $2.81 a gallon.

Now, let's briefly mention the KPP Premium Newsletter, which will be distributed tomorrow. Now, this week in the KPP Insights section, we discuss bank capital requirements. In the Stock Ideas section, we mentioned an organic grocery company and an electric company. And in the Portfolio Management section, we touched on investing during periods of market volatility. And if you are interested in learning more, just visit us at investtalk.com to subscribe. News that will come to your inbox every Saturday.

Now we've got time, so let's play another listener question. Hi, Justin or Lou. Thank you for the show. Calling today about Vertiv, ticker VRT. I've had this on my watch list, and it's pulled back. I'm waiting for a further pullback. I was just hoping to get some information on what you think is a good price to enter this position. Thank you very much. Have a good day. Bye.

All right, looking at Vertiv Holdings, and this is a company that benefited from the AI data center build out. And we know that that trade is unwinding to a degree. The question is, at what point is it gone too far? Now, right now, it's down about 39% from its 52 week high.

Historically, let me tell you kind of historic patterns. When you have these crazes around some sort of a narrative where names are drastically overpriced, overhyped, and then they come unwound. Typically, they drop anywhere from 60 to 80% from their high until capitulation happens.

Now, the magnitude usually depends on really how strong the company is underneath the surface and how much hype was in it. So there's a lot of factors here. So while 39% is a lot, there's still a potential for more downside, especially if there's credence to the idea that, yes, companies are pulling back to some degree from their AI data center spending.

Now, earnings expectations for this year continue to be strong, $3.59, but estimates for next year continue to come down, but still nice growth of 23%. But the P/E ratio is in the low 30s, and this company, pre-2023, never made a lot of money. Actually, they lost a lot of money in certain years. Like 2018, they lost $4 per share.

There's no guarantee that this name will stay in the relative valuation on $36 billion market cap. It's come a long way, right? Bottom around $8 per share. Now it recently peaked at $155 per share. Now at 95. Now let's take a look at the technicals here. Just want to see where major support might come in. Just want to run some analysis.

some simple technicals now there is some support here right 91 per share it bounced off this level but if it kind of chops here for a while it probably goes to the next level which is 75 and then big support would be right around 60 per share that would be major support around 60 per share we're at 95 now that feels to me like the correct area uh to get in that also is around the low in last august

Okay, so complete unwind of that final push higher is not unreasonable either. And it would put you, right, if you peak that at 155, $60 would put you right around that 60 to 70% drop. That's typical for these names. So that's the area that I would think about picking up, Vertiv, V-R-T. Let's try to squeeze in one more question. Adrian Vasquez says,

Oh no, nevermind. We are going to a break. We'll get to Adrian's question after this break. But this is InvestTalk. I'm Justin Klein. We have one goal here each and every weekday is to help you achieve your own version of financial freedom. So if you're going to call right now, if you're going to call, you want to do that right now. Sorry. It's been a long week. We moved offices this week. So it's been pretty crazy. But we're going to the final segment of the month of February. Give us a call now at 888-99-CHART.

Justin Klein is here and ready to tackle your questions. I've heard you say multiple times that you prefer shorter duration treasury bonds. Can you explain to me why it is more advisable? Call InvestTalk. 888-99-CHART.

The weekend is here or almost here, but you've got finance and investment questions. So step up and call in. InvestTalk 888-99-CHART. Let's go answer that listener question from our YouTube channel. And Adrian Vasquez says, with people striving to be healthier, what are your thoughts on FDP, Fresh Del Monte Produce?

yes, I think people have been striving to be healthier for a long time now. I actually think it's pretty interesting because obviously historically the

Democrats have been ones that are very focused on cleaning up health, cleaning up the food system, et cetera. And now RFK comes in on the right, right? Historically Democrat and pushing the right towards healthier food. And so I think it's something the whole country is now on board with. So certainly eating fresher foods, less processed foods will help.

will be a trend, but it's been a trend, at least here in Southern California, right? I've been that way for a long time. And, you know, I think that's becoming more nationwide. But yes, FTP is fresh Del Monte, about $1.5 billion market cap. So it's earned $2.70 this year, earned $2.42 last year. Those are in $2.96 next year. And so consistent growth, but not gangbusters growth. But if you go look underneath the hood,

i like it you have free cash flow about 130 million dollars on a enterprise value of 1.6 billion so you're talking about a roughly an eight percent free cash flow yield there return equity is not amazing around seven percent but you know solid dividend yield around three percent with plenty of room for that to go up with a pay ratio only around 33 percent they're not issuing shares

And I like the secular tailwinds here. And if you look at the chart, there's definitely support here on FDP, which trading right around the 200-day moving average actually bounced off that, I believe on earnings earlier this week and recovered nicely. And so I like this. This is an uptrend. I like the business. I like the secular tailwinds. So I'm going to give FDP a thumbs up. Now, lastly, let's touch a bit on

how President Trump has kind of gone quiet on the stock market. And I think it's a telling sign. And, you know, it's a shift in priorities. You know, in 2016, he was tweeting all about the stock market throughout his first administration. In fact, in his first term, he tweeted about the stock market 156 times, 156 times through the four years. And since the election, he's only tweeted about it once. Okay.

and it shows in the performance from election day 2016 to inauguration day I'm sorry through February of 2017 the SP was up 20 so far it's only about two and a half percent and it's down I think about five percent now from its highs so you're seeing a shift here and what it seems to me is they're actually more focused less in the stock market more in the treasury market

it's part of what doge is right trying to clean up spending and waste and trying to get us more in a fiscally conservative path which is detrimental to economic growth in the short term that's just once again just math it's not a political statement and i think that's weighing on it uh but it shows once again the priorities are not necessarily keeping equity prices higher it's okay how do we sustain the debt keep the debt bomb shall we say from unraveling

over the next four years and i think that's what they'll they'll be focused on and that may be at the detriment to the equity markets now i do think at some point there is still a a trump put meaning if things get bad enough you know he doesn't want to probably see a 30 40 slide in equities either you know 10 15 he's probably fine with so i still think there's

room for that room for stimulus coming out of this administration to support equity markets but it's clearly not top of mind top of the list as it was before you have other a different cast of characters in this administration that is focused on other things and equity markets uh clearly are not top of that list so it's something i i certainly take note of and that's why i do think

The knee-jerk reaction to, oh, this administration is going to be bullish for equities is a bit misguided based on the economic situation that we're in and the priorities of this administration. I'm Justin Klein. This completes another InvestTalk program, and we thank you for listening. We encourage you to tell your friends and family about our free podcast downloads, which they can find anytime at iTunes, Spotify, or Google Play. And be sure to rate and review at iTunes as well.

And if you need help understanding the risk in your portfolio, how that relates to your risk tolerance level and your financial goals, I encourage you to head over to investtalk.com and click on the portfolio review button and fill that out. We will get back to you quickly and get you on my calendar. Independent thinking, shared success. This is InvestTalk. Enjoy your weekend.

InvestTalk is a trademark of KPP Financial. Because of the nature of the interactive dialogue inherent in the format of this program, it's important for the listener to understand that not all comments made will apply to them. Specifically, nothing said shall be taken to be investment advice, or shall statements on this program be considered an offer to buy or sell security.

Thank you.

Thank you for listening, and your comments and questions are welcome on our 24-hour listener line at 888-99-CHART.