New RMD Rules for Retirees in 2024!
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Good afternoon, fellow investors, and welcome back to invest doctors are monday no eighteen and twenty twenty four edition. And this monday we have a special show because luke is back with me. Usually we're doing the shows kind of switching off, and today we looks in the coast with me. So welcome back. Gone to be a fun hour.

Yeah, definitely. It's going to be back with you. This is now the first episode invest talk we've done together while .

I have a mustache. There we go and have a moustache. Was that two weeks ago I was, I was one burgandy for halloween, and so I had to keep the moustache for a little bit. Maybe i'll join you. You.

it's november. You're not supposed to shave this month, although I guess you now would need to shave everything but the mustache.

But still, I division ating the rules here.

violating the rules, the spirit of the rules.

spirit, the rules. Okay, okay, well, i'll see, see, I feel. But nonetheless, we are, we will Carry on mustache or beard, however, we are presented on of this hour. And for all of you out there, you can see us by heading over to our youtube channel and checking us out over there, see our charts, C R faces, C R facial hair, or lack there of.

And but if you're listing on podcast or radio, you can here are insights, and that's what we are here to do, which is give you some perspective and some data on your questions and also bring some topics the table that we think they're important to the process of making good decisions with your money well today and into the future. That's what this show is really about, is addressing what is on your mind. And you know what's on what on our on our mind is secondary.

So don't be afraid to pick up the phone and give us a call. Now just a bit, we are going to talk about today's market performance and run down the show topics, but as usual, will hit on our first color question. Now I .

just in in look, I was coming in to get your opinion on K, K, R financial, the symbolist K, K, R. What is your opinion on getting into this sector and what would be a good entry point? Thank you. And are listening to the and tell .

your paccar all right. Looking at K, K, R, this is one of the largest alternative alternative investment management companies out there and usually pitching their their funds to the national market and governments in such and uh their businesses is is is doing very well. Earning will be up thirty eight percent this year to four dollars and seventy two cents.

Now that is down from their all time higher earnings of seven hundred and thirty one cents and one. But the stock is at an all time. I look why don't you give give the audience your perspective kind of on this space as a whole.

I think we talked about this pretty frequently because we call him not necessarily about firms like K, K, R, but they may call him about black rocker or van garden. All these firms who essentially their business model is based upon the fees that they get right. So it's pretty clear understand that as a goes up, as flows are coming in, should your free level not change? That's how revenue growth.

But we've seen across the industry by I write this fee compression. And so this is something that cake our stuff as with as well. But even with that in mind, right from twenty twenty three until this year, this upcoming year through the end of this year, right fees management fees are supposed grow from three billion to three point four billion.

So that's certainly something that is impressive. I'm seeing their cash law has been improving consistently for the past four years. But the thing that I think that I see that may be a little that may cause me to hesitate, right, is taking a look at the for looking Price is twenty five times Price book, five and a half times as the upper end of their range. So maybe this is a situation where it's a company that's done well in industry that's done well, but maybe a little bit overvalued. What do you think?

Yeah, I worry about i've talked about this with love, the private investments that are out there, private rats, private a private debt vehicles sa there's not a lot of clarity into hobos have been structured and and the risks that are involved. And so well, things are are going well generally in the credit markets. I think this will continue to do do fine.

But if there is any upset, you know alarm, you know to see that member was the big Brookstone read that was that was cutting redemptions. That's something that was a kind of red flag, I think in the private read space. Now you haven't had a lot of those big headlines around a the private equity funds and a lot of what K, K, R deals with.

And so I think right now, that's fine, but I worry that there's been a lot of this location capital in that space and that will eventually come the light. Now that when I come the light for another you know year two, three, four years, who knows? And and the techniques are certainly fine on this.

So I think from the momentum perspective, it's fine. From earnings is perspective, like you said, their cash los improving, their businesses improving. I just think there's a very high risk at these Price levels.

I I wouldn't buy IT for the long term that maybe as a trade with a tight stop, probably at the hundred day moving average. Thanks for the call. Let's go vivid to a live call and talk to sit in north CarOlina and looking at uber.

I just think and look, thank you for taking my call. Yeah, I I have been reading some news on C. N, D, C.

Another thing is a good company overall in the view and each year and what is the entry point that you are looking at over? Looks like some of the numbers are quite okay, but I like to hear your opinion. Thank so much for your time.

We're right looking at uber and think we need to tell everybody what uber does. Now I will say from a technical perspective, this is somewhat the opposite of K K. R. I'm actually seeing a pretty barish move over the past six, seven weeks now and peaked out around eighty six dollars and change now were down to sixty nine and change. And this looks like it's rolling over after this long rally from the fall of our summer time of twenty twenty two, when I bowed around twenty dollars per share.

Now from an earnings perspective, look, IT looks like earnings just to be a dollars seven nine this year and two hundred and thirty seven cents next year, which would be an all time high. But seven dollars stock is IT worth thirteen times for looking earnings. What do you think .

why do want to start saying that is an impressive company in that, right? This last year was the first year that he was actually profitable, and a lot of people have been holding on for a long time, trying to get some profitability.

And there and soon soon, over the past five years, the cash alo has improved and the revenue has grown pretty significantly from eleven billion back in twenty eighteen project to be about forty three billion dollars this year in terms of of top line revenue. And as I mentioned, they're margins. Obviously, they are improving because now they are started going to make money.

They had negative net margin for about four years. Then they had five point one percent last year, projected to be about eight point eight percent this year. So the margin expansion is is something that I like as well. Potentially, maybe in the past couple days, there were some positive news that could have driven the stock Price higher.

Maybe see a drop off today related to the fact that a former executive was on the short of short list for the transportation department president, electricity announced somebody else, not the guy, a former lawmaker, rather than somebody out of uber. T that could have been related to some of the Price drop off today. But I do think, like you said, there are a little bit of risks out there for become being this expensive.

yeah. And I don't like the combination of companies that are treating high multiples and then or techniques, IT tells you that the market is starting to uh, rerate the the multiple lower. And i'd like to see this settle out um and earnings to become a little bit more consistent.

Um you I think the positive here is generally people are getting used to taking uber and doing uber eats a lot more. So from A A A consumer habit standpoint, I generally like this space because it's just becoming the norm. A and and uber, you IT tends to be kind of a winter take all type platform.

But I would be patient on this, and I have this come back in. This needs to probably get to around fifty. That's where a fun zoom ing in on weekly.

Try to zoom in out. Excuse me, on a weekly chart. Let me give you a major support level. Yeah somewhere around forty five dollars, forty five to fifty. I think that's where lines up uh from a technical perspective and a fundamental perspective for me to buy. But auto page on IT for now, they are going to short break on the side, will be previewing today's topics. And I talk about the today's market activity who's member that you can call anytime and leave your questions on the best of voice pink at eighty eight nine answer.

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The numbers are in investor now with more than sixty million downloads. Justin line and look ero are ready to answer your financing investment questions twenty four seven investor eight eight eight ninety nine chart.

We have a lot of ground to cover over the next forty five minutes or so, and our main focus point concerns this topic. New ARM d rules for retirees in twenty twenty four, and retirees will be impacted by significant changes to R M D rules in the coracle point o and the other stipulations in that act that we will cover as well. On top of that, we will touch a bit on the what what a trump administration will mean for bitcoin, bitcoin as surge.

But you know, does that really make sense based on the facts at hand? And then lastly, companies are really, really rushing to uh to get ahead of the chop ministration when IT comes to financing the themselves in the corporate plan market. So we will look at that story as well.

It's about that. We have other topics. One is a voice pink question on matter platforms and then some questions that came in if you have the comment section over on youtube as well.

And of course, we welcome your finance and of investing questions right now at eighty eight ninety nine chart. Now look, just take a quick look at the market today. IT was a decidedly positive day overall.

You had the S M P up about uh forty basis points, the mazda about six basis points. And what else do we have um what did you see? What do you see in markets .

we are small caps, only eleven basis points, not big movement on the bottom of the market there. I think generally speaking, IT was just a bounced from last week, which has had some pretty negative cell off towards the end of the week. If you were call right, the the S M P five hundred and the nas deck bulshed, you know, two, three percent.

And so you just can see this this bounce back as we entered this period of calm before the storm of changing federal policy, right? People just at this point time trying to interpret what moves may mean for administrative policy moving forward and what that effect that could have on on interest street cuts, the path of interest strates. And so this seems to me like we have more likelihood of positive tailwind, that headwinds heading into the year with positive seasonality with which share buybacks and all these things that could elevate valuations and elevate stock Prices headed into twenty five.

Yeah, agree there. There's not a whole lot of economic data with some CPI numbers coming out. I know we have obviously, the jobs number for november will be important to the policy path. And uh, we have video earnings. Is that tomorrow .

with the twenty seconds from not yeah taken coming .

up because in video, obviously ly a big part of the diseases. Now IT is and twenty, pretty much twenty. Okay, so day after tomorrow, so IT will be in video of all the of the large mega cap tech companies, I would say it's the most vote potentially um just because it's kind of new to the size and there's a lot of expected for earnings.

And if obviously market doesn't doesn't hit those market expectations, you could fall or continue to search higher and get have more short covering and and really have big movements. I think the markets pricing in a temporary that movement one way or the other, um I may move that much, but that the market kind of pricing in. So that will be big going forward.

And like you said, we're starting to get in to what what do we have a week from as a week from thursday is is thanksgiving. So you know once you get IT grew and thanksgiving, you get into that kind of a light holiday, uh, trading and markets tend to float up, especially in years when stocks are higher. People don't want to take profits until the first of the years.

Often they wait and so there's a lack of cellars and then you have kind of consistent buyers into your end. So that's kind of what we're seeing. A lot of market structural issues that are likely to keep the Marks moving positively through your end being to a break theyll to come on the pocket and radio show on im. For one, I will tackle more of your voice paying calls to get to the main focus point to stay with us, but give us a call at eight, eight, nine.

nine year.

You've got two for the Price of one just in kline. And look, kero are here and they're taking your financial investment questions now eighty eight ninety nine chart.

Now let's pip IT over to our main focus point, and that isn't regards to the secure act two point o and how IT is impacting R M S four twenty twenty four. And the original secure acts was past only five years ago, and IT moved the R M D age from seventy and a half to seventy two.

But a lot of lawmakers thought that what did not go far enough, and so they ended up proposing and passing the secret two point o um really the major change here is the move in the the R N S, the a, the required number distributions from iraq and four one case and not just moving IT to seventy two, but moving IT to seventy three of twenty twenty three. And then I will go all the way to seventy five in twenty thirty three so far. Now it's seventy three for R M. S.

yeah. Another change that makes us IT reduces the ARM d penalty to twenty five percent or ten percent if corrected within two years and also adjust the statute of limitations starting from the tax return due date rather than the filing date, which would potentially help some avoid penalties if the IOS assessments are delayed.

And from on the rough side, IT was always kind of odd that rough for one keys had R M D requirements. Because the point of R M D is that the government wants their money eventually they want attacks your money and arms our way to force money out of areas. And and have you paid that? Uh, where IT has rough, you've had been paid, so IT kind didn't make sense.

But the curfew point of allows rough, for one case, to not be subject to the R M. D. Rules before the count account holders passes away.

You know, another issue was complexity, right? So what this tries to do that tries to simplify R M D calculations for retirement accounts with the unities following distributions from both anuwa and non anuwa can't parts to be combined and also makes annuity more attractive by province specific payment adjustments and explaining the use of was called qualifying lung gefty annuity contracts, or q lax, raising the limit of two hundred thousand and eliminating the twenty five percent cap.

Yeah yeah. I think that was a, that was a gift to the the the chance industry, which obvious probably lobbed for that. And then, uh, another change was R M S for surviving spouses.

Now basically IT IT moves IT. So the cold lda dies before R M S are required and the surviving spouse is the beneficiary. R M S from the inherited account aren't required until the year the count the decease account holder would reach seventy two.

Now a tweak around security to point out is that IT moves that to the R M D age going forward. So that basically will move IT to seventy three because the decease, you know, it's based on the deceased can holders age that obviously twenty thirty three, that R M D over the seventy five. And then that will be the required age for M D four, who ever inherited that iron.

Now the last change is really around how qualified charitable distributions will effectively lower ARM d. So what IT does is IT adjust one hundred thousand dollar annual qcd limit for inflation, raising IT to one hundred five thousand for twenty twenty four and also of one time fifty thousand dollar Q C D to certain charitable trusts or gifted unities starting in twenty twenty four years that twenty.

twenty, twenty four yeah and yeah IT .

is a yeah uh so yeah .

that's what I I think beyond just moving the arm's up that I like the most I love when they index these things to inflation because you know you you said something in place and obviously inflation will kind of change the effectively of that rule over time. So kidding that that that link to inflation, I think we will be important as well. Now I take IT over to a question that came in via our youtube channel of the comment section or youtube.

Chanel C. G. M asks, hello and that talk what your thoughts on dealt? What is a good entry point now? Dell computer.

H, A company that went private and then went public again back in twenty eighteen. And it's been a big winner of one public ground. Twenty dollars per share.

Now said one hundred and thirty six dollars per share. Ah so pretty big. Uh, run. Look, what are you seeing on the valuation front right now?

Well, on evaluation front, you I think that taking a step back to him about casual and profitability while you see casual kind of being stagnant over the past five years because this is really going to form really how valuation looks relative to the improvement of the company. Well, there a Price earnings for looking Price is about fourteen. That's pretty low for what you to expect in terms of companies within the hardware, the computer hardware business Price to cash flow fifteen, that's near its five year a high. And so so generally speaking, right on every valuation metric we're looking at, you can see that it's at or below it's five year average.

That's kind of nice. That says even though it's rain, it's still a relatively cheap, right?

Yeah, that's always says. But I mean, you also to keep in mind that this is a five year average in a lot of different things happened within the past five years, right? Part of IT had to do the pandemic.

A lot of people are upgrading their tech, a lot of people upgrading their home offices, a lot of people are doing spending. And then you ve got to think about the cycle of of buying these types of things, right? Hardware advances until he reaches a point where software needs to improve in order for a new hardware to be generated. And so snicking buying a consumers cyclical purchases of is and what not also has an effect on that.

Yeah, i've been a good thing here is that even even though you're right to get that surgeon in demand for the pandemic, their profitability is now reached at all time high since they went public again in twenty eighteen. So I I like that although you obvious driven by A I investment servers in such are part of that big capex spend uh, from a lot of the big tech companies ah what I don't like though is the technicals are actually weakening.

IT peaked back in the may when I picked out around one hundred and fifty thousand per share, then fell rally since but still not broken above in any major supports. Our major is so you know, I still don't love IT technically, although I like the company longer term, I just don't think this is the time to jumping on the thanks for the call are running into a brick. I'm just climbing here. Book, go ready to take your calls at eighty eight, eight, nine 9 nine attended chicago。 Wait is black friday previous sales here early right now score of to seventy percent of everything home shop early like frideswide the way store at eza and line .

every style, every home. 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. Investor eighty eight ninety nine chart.

Now the next best stock will look into this question. Our incomes finally touching up to death. The death income ratio has declined sliding because average earnings have increased by six point two percent annually since the pandemic.

Look into that story tomorrow, but first we're going to pay IT over to another live call. Paul from dance is asking about a on A A O N and listening on our podcast paw. You look about you only on.

well, I have a small a stake that I bought about a year and a half ago and since then, they did a stocks split and then it's run up over the past month. And i'm wondering is what what would a good point me to increase my position in that?

Well, that's that's a it's a tough question. Uh, now first of all, give the positives for A N positives are is profitable, very profitable. And it's good return equity twenty five percent, return best capital twenty four percent and it's five year and medium return equity twenty three percent.

So it's consistently profitable and has pretty solidly positive free cash flow. That's good. No debt, pretty much of its baLance sheet, very little and those are the positives. But look, you're seeing some negatives on evaluation front, right?

Yeah right. Because it's it's more than just about finding good businesses. It's about finding good businesses at fair Prices.

And this thing is trading at pretty much the higher end of its five year range. And it's an age of that company trading at forty six times. It's for looking earnings. It's an age of vat company trading at thirteen point six times in Price to book forty five point six times. It's casual.

And the reason why it's doing that is, well, people are anticipating the growth streak over the past five years, which is twenty and one point nine percent on an annualized basis to continue. But for me, this looks to be one of those names that is certainly has earned the run up its head over the past year. But the growth projections to me just seem a little little little out of that field. I know what are your thoughts?

Yeah I I think the runner had is put this in a very overvalued position, a bottom in early twenty twenty two, around thirty two dollars per share and now it's all the way up to one hundred and thirty one dollars per share. So it's uh, what drip a since then.

And so I to see that as a evaluation that is at a wac here based on for looking earnings, if they earn nearly three dollars per share next year as we two ology and ninety four cents ah you're talking about a forty plus multiple foreign track company and the other growing. But is that is this growth going to be sustained? I don't really think so if you if you look at the free cash flow, it's only one hundred million dollars is which is good.

But that slipped out over the past couple of quarters. And you're talking about a free cash will yield based on enterprise value of one percent. That's not very good.

And you and Price either on thirty six percent or thirty six times Price sales around nine times for an h VC company. It's just out of wax. So um what what is a good Price to add to IT? No, fifty to sixty percent lower from here.

That's probably the only time I would actually I would actually be thinking about selling this more than I would be adding to IT at this point. You know it's it's surge. It's starting to weaken a little bit over the past couple of weeks. And to me, it's it's more of a cell than than by anytime.

Very good. Thank you. So, so much.

No problem. Pol, thanks for the call. Now when people take the time to lead in the best of podcast h of view on itunes cursy by getting to their questions quickly and from A Z says I have shares in U R.

I. I'm up on IT, want to take cell hold for train, uri is united or rentals and a name that has done very well as of late. It's coming off in all time.

I but earning us before three dollars to share this year, forty six dollars to try and change next year. And in eight hundred and thirty two dollars stock, what are you seeing? Look from the evaluation. And well.

their cash low has has improved pretty steadily since the end of twenty twenty one. One trend that I really like is they have consistently bought back shares over the past three years, down from over seventy five million shares outstanding in twenty twenty, just about sixty five million shares outstanding. Now they pay us seventy eight basis points given in yield, but the pair ratio is only about sixteen.

So they have a lot of room to run their terms of their debt. Well, fourteen billion debt on a fifty four billion dollar market cap company and I met that is trending higher. Their debt levels are up from about ten billion in the pandemic.

And so then with all of that said, what's IT looking like on of that relative valuation basis as well? It's again at the upper end of its change, which really a lot of companies are right now, right? Elevations are very elevated right now.

So it's trading IT about six point four times, prize the book about eleven times cafe. That is certainly on the upper end of its range here. So I think this seems like another company that may not necessarily be a cell on my end, but truly a hole right now at best.

Yeah, I would agree with that. You look technically, you are getting we call mac diversions mean it's making a new high on the weekly, but the matter is not. And so showing you that momentum is certainly winning.

And if you look at the earnings, earnings are uh, earnings growth is winning as well. And because a year ago plus were their earnings is growth was in the twenty years up and even the thirty thirty percent range ah in the fourth quarter twenty twenty two, first quarter twenty twenty three. But last quarter, earnings growth is only up one percent.

Sales growth is only six percent. And if you look going forward, sales growth is only projected to be around four percent next year and earnings only in the five or six percent range. Uh, that's that's not that great, especially like you said, look, uh, a trading at a kind of near all time high multiples.

So you line that up with the fundamentals with the change, excuse me, and that that growth waiting. I think this is ready for a multiple contraction. So I would I would be at least trimming IT here ah and I would have a tight stop on IT.

Let me give you the stop yeah honestly, if this broke below the the the the election night lows, which should be kind of write around seven hundred eight dollars for share, this would be A A A cell for me. I think the technicals would certainly be broken breaking at that point. Um and you wants to get you combine out the fundamental.

I just don't see a reason to a hold on to IT for very much longer unless the omentum just picks up to the upside. right? Thanks for the call.

Now look, let's talk a little bit about bitcoin. And bitcoin obviously surged after the election and it's at near and all time high. Let's what is the coin that .

now is IT twenty one thousand .

ninety one thousand, which is kind of near the all time high? Yeah, ninety thousand. Five ty, six right now, all time high was sometime last week, around twenty five recent. So you know it's obviously done very, very well since the pandemic. And a lot of enthusiast are uh excited about some changes that a new trump s administration would bring.

The first would be a change to the c gary games layer is not a big fan of crypto currency is crypto listings, exchanges, mining, eeta and all of that will could potentially change under a trump administration. So look, are you thinking do you think that the the community has this right? Or do you think they're overstepping their enthusiasm?

Why do these two parts to this? You see rumors flying around about a the travel administration wanting to have no capital gains taxes for us base project and a strategic stockpile of a bitcoin. And and so what the market seems to be pricing in the cypher market seems be pricing in, is this best case in area right now? IT has surged exponentially, sense the market broadly sense since the election.

And then so the question is, what is IT likely to get the best case? senario? The U. S. Federal government is an credibly unruly body that is difficult to turn. And so even if they do try and move towards that scenario, well, then that takes time as well. And so that may be a little bit of an overstep. The second part of IT is, is if you're listening, regulation that would inherently help new crypto currency, but bitcoin is not really one of those things that being attacked by the c right? So so I don't really see how to change in regulating relationship with the crypto to market necessarily benefits bitcoin so much as IT does some of the other projects.

Yeah if he gets the the I think that's the best argument here is that bitcoin is already treated as a commodity and IT avoids, which means that avoid a lot of a direct c oversight itself. IT has futures connected to IT. IT has obviously each E, S, connected to the Price of big coin.

It's kind of those other outcoached that would be treated with A A lighter touch a during a trump administration. And so outside of doge coin, if you if you look at the other out coins, they're under performing the move in bitcoin. And so net, you would imagine that there this would be more beneficial for those of coins itself.

But there's a few arguments that says maybe that's not true. Now the first would be that you know bitcoin is the is the the name brand and it's the biggest crypto. Therefore, if this is good for cypher, then if so, factor and obviously, there is no fundamental valuation of bickering and so are an encrypted.

And so IT depends purely on sentiment. And so sentiment drives buying a when people are excited about the space and that by bitcoin, what do you think of that argument? No.

I think that's entirely fair. But I think that the first argument that I made is, is kind of more the one that I lean on, which is we are we are pricing in within the the gypt of space mass adoption. And not only mass adoption, but government sponsored mass adoption.

And not only government sponsored mass adoption didn't, but essentially zero regulatory bodies and whatsoever. And I just think that the U. S. Government, again, is an entirely massive, unruly body to move, let alone move quickly. And so I just think is a little bit irrational and zubrin .

when speaking to that. Um the other argument for why bitcoin has surged over the outcoached that the trump campaign promised a strategic national bitcoin stockpile. Now as you said that that mayor may not happen due to the unruliness of a government bureaucracy. But you the big question is, where will these dollars come from?

Especially if trump and his, the doge, uh, a administration, the u elan and the deck are trying to cut spending and and try to streaming in the government, are they really going to divert american resources dollars that are could be used to bring down the debt in order to buy bitcoin? I think that's that's a big question here is what will those priorities be? Because as we know, we're in a tough fiscal situation and putting this at or near the top of a the list of priorities to get our fiscal house in order, I think would be hard cell.

Um and it's I know it's still hard to predict that what the new new administration would do. Now the third argument centered around bitcoin, bitcoin search is that bitcoin is an inflation hedge, and the market is pricing in a trap, ministration being more inflationary. The hard argument there is that historically, bit has actually been a poor inflation hedge.

And IT moves more close to the a specular socks like like the aztec. Then IT does inflation, which if you want to bet on that, you probably want to bet on gold. So what do you think of that?

Ah the certainly with you there, I ve never understood the argument that big because is an inflation head you can call IT a digital gold. IT does not make IT digital gold. There is no, as i'm aware, industrial use for bit going as there is for gold.

There are not countries that, that are stockpiling. Rather, they can use their stockpiles bit going to do anything other than transact on a payment network. So I I never fully understood the argument behind IT being an inflation hedge just because there's only twenty one million of them yeah forever will only ever be twenty one .

million of well, bitcoin. Either way, I think we all can agree the Prices built mainly on animal spirits more than any hard economic analysis. Now let's move things along and swim back to the best stock voice. Think you know the number is eighty eight and ninety nine year.

I guess this is Kevin calling from locker center californica. I was calling to ask about a company auto live or auto life picker is A L V, as in Victor, and they supply safety equipment like airbags and be built to a lot of different car companies from around the world. I know it's sensitive to economic conditions, but seems to be at A P E R O at or below.

It's like long term average and wondering if, uh, this is a good stock to pick up for long time. Hold preciate your daughter always. thanks.

Are you looking at auto live with the global leader and passive safety components insistence for the auto industry? Think, see belts, front airbags, side impact airbags, steering wheels and set up up. Now their largest customer is renewed.

Non my tub, I ten percent of sales still lantis accounts for ten percent as well. So little but smaller. But both wagon nine percent, okay, and thirty four percent comes from the us, from the america's, and then called by europe twenty seven china, twenty percent in the rest of world.

It's about a seven billion dollar market cap here. The technical though, are not that great. Picked out around one hundred twenty eight dollars per share back in may, and now it's down to ninety eight of the teches. I would say our poor. What are you seeing on the earnings evaluation front?

You want two of earnings where they have seen some earnings growth from forty five and twenty twenty two earnings per share. Forty five there to be eight fifteen this year, ten o six next year. Their margins are generally expanding from a low two and a half or two point five percent and twenty twenty six point two percent this year.

You know, technically you're right. IT does look poor. One thing i'm i'm interested in is given the exposure has to china and the role china has in EV market ah, how can that this company benefits the metrically from its competitors?

Yeah, think it's A A, A big question. Uh, I do like that they are buying back chairs. They do have, I think, reason about the dead in the baLance sheet.

Free cash flow is nice, around four hundred and ninety three million, which is near the high end of its ten year range, but it's a solid company with good profitability. I just worry about those technicals. IT remains weak and obviously and continue to rise, and that could hurt auto sales.

So I would pass on IT for now. Think of the fine company. I just want to see the tech to improve before I would just I was investigated and Justin client here today with the era. And we have one goal here each year, the weekend, and help you achieve your own version of financial freedom. And I work continues after this final bricks, which questions in now at eighty eight, ninety nine short.

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Here's another question from our best talk youtube channel. Randy, twenty three says, would love to hear your thoughts on T, D, G, trains time group. Thanks for all you do. Are you looking at trans dime or trans the gm, I would you say, look.

trains dime. Let's go at that one that sounds more professional.

That right? Well, the manufactures and service diverse set a specialized parts for the commercial and military aircraft industry, so they have three segments, power control, airframes and small and non aviation segments, mainly off road vehicles and mining equipment. Interesting here ah they are doing very well.

If you look at earnings, they were prety pandemic there eighteen dollars per share. Now this year suspect thirty seven knowledge per share and forty three dollars per share next year. But look, the sock has wrote LED over, picked out around fourteen hundred and fifty dollars now were at twelve hundred and fifty two dollars per share, although all the major moving averages, I definitely like the technical set up. What are you seeing in the phenomenal front?

Well, the revenue growth is pretty solid over the past five years on an idealized based about eight point seven percent in most, that is pretty evenly split. They did dip down in twenty twenty one during the pandemic, but there's been a pretty solid growth rate since then. There are margins pretty solid, about eighteen point seven percent nett margin as of this most recent fiscal year.

Have a lot of debt. They have got twenty four billion in dead on a seventy billion dollar market cap company in their interest coverage is going about two pots, eight, seven times, which is still fine, but probably little less breathing room than a lot of other companies would have. I think from a thematic perspective, right? IT looks like only two percent of the revenue comes from not aviation, fifty percent from power and control from those airplane systems and twenty eight percent we're rather forty eight percent from from air frames.

And and you know, I think over the next four, five years, you're probably going to see is air space defense companies doing particularly well as some countries in europe rearm. Certainly, air forces is a big part of that. And so I think thematically, they have IT, but I think I am worried about the debt levels here.

Well, if you're listening in the market, you look at like lucky. Lucky is actually doing very poorly since the election. So is the market actually pressed in the opposite that you know ah if say the trump ministration trying to do what they say, which is cut largest uh in in the government. Um I certainly think there's the military spending that could be cutting along with key part potentially but .

also if you look at transit, right, thirty thirty seven percent of its revenue is foreign. And so yes, if the us. Sizes cut military spending, which still stands to be seen, I could probably have a billion dollars in my pocket if I know called the bluff on every time a leader said they were cutting military spending, but know if the us.

Does cut military spending, they do cut foreign, who has to rearm, right? Countries that have generally been under the umbrella, us. protection.

And so thirty seven percent of the revenue is coming from outside the united states, from european markets, from asian markets like japan generally has been a little bit remilitarization. Post world war two, we demilitarized them. And so the growth are not necessarily sank comes from united. It's IT comes from the the foreign foreign markets.

Rather you yeah. And I definitely do that argument um but i'm looking evaluation to and IT looks looks pretty the Price sales nine times we know anything about ten is usually very, very extreme a as you know, usually those are reserved for tech companies and obviously the tech companies free cash flow about at two billion dollars on a eight nine billion dollar market enterprise value no, you're talking about about at two two bill two and half percent free cash four year and nothing crazy or exciting there, to be honest with you.

So Price in a privity there around twenty twenty three, which historically is near the highland of its longer term range, which ranges from about eight all the way up thirty. So you know, I don't like IT there and I don't like technical, so I just don't i'm not afraid of this. I I just don't like the trends and earnings as well for this year and next year.

Those are coming down. And so you're there's a lot of, uh, strong exception is built in that I just don't think this name is going to live up to. Uh, lastly, before we close, I want to get into a summit news around, oh, I got no time I type this. I don't time we are closing up.

I'm just in closing, along with look gero for this episode of the stock and we take your thing, we courage to tell your friends and family about a free podcast down, those which you can find any time at itunes, spotify to go play and be sure to written review on itunes as well. And remember, we can help you Better understand your portfolio dynamics and called that your investor rist number heading over to invest stock out, conflicting the portfolio review button and taking vantage of our free and confidential portfolio review. Now if you haven't optimize your four one k, we can help you there as well. And you can start by heading over to invest doc 点 com independent thinking should success。 S K.

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