In short
The episode covers two main areas: oil market stress and the space economy. On oil, hosts discuss rising crude prices (~$110/bbl WTI and Brent) amid Strait of Hormuz disruption (about 20% of global oil flows). Key claim: oil futures show backwardation—front-month prices far higher than later 2026 prices—implying traders expect supply to normalize sooner than physical experts fear. They caution futures reflect hedging/speculation, not real-time physical supply. They also argue oil’s economic impact may be limited so far: jobs data is stronger than expected, though they still expect headwinds and possibly a mild 2026 recession if oil rises toward $140–$150.
Guests
Lou Whiteman and Dan Kaplinger (Motley Fool Money hosts). Dan Boyd (Behind the Glass) appears for “stocks on our radar.”
Notable examples
Korea/Japan price increases vs U.S.; Artemis II; SpaceX confidential IPO filing; York Space Systems’ modular manufacturing; McCormick/Unilever food deal.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOOil Markets and Price Dynamics
0:45 to 11:12
Discussion on the current state of oil prices, market perceptions, and economic implications.
“Space is going to be a big topic here today, but we do want to start with the oil markets.”
The Space Economy and SpaceX's IPO
12:22 to 14:00
Exploration of SpaceX's potential IPO and its implications for the market.
“They have apparently officially filed for a confidential public listing.”
Analyzing the SpaceX IPO and Investor Strategies
14:00 to 20:10
Discussion on the implications of the SpaceX IPO and investor exit strategies.
“who knows what they can get to if they squeeze enough.”
Drafting Stocks for a Mini Portfolio
20:45 to 28:00
Participants draft stocks for a mini portfolio, discussing market opportunities.
“In this segment, we like to have a little bit of fun, And so I thought today we could all draft a little mini portfolio.”
Investment Insights on Emerging Companies
28:00 to 28:34
Learn about lesser-known companies that are performing well in the market.
“but they are all over the place in student loans, servicing, payments, school software.”
Exploring Commodity Stocks: Freeport-McMoran
28:34 to 29:25
Discover the benefits of investing in Freeport-McMoran as an inflation hedge.
“So, I'm taking a page from Ray Dalio's playbook over at Bridgewater Associates and trying to incorporate some inflation hedge commodity exposure.”
The Current State of Disney: A Contrarian View
29:25 to 31:12
Evaluate why investing in Disney could be a smart move despite criticisms.
“so you don't have to deal with all those futures markets that we were talking about earlier in the show.”
Financial Picks in Uncertain Times
31:12 to 32:01
Get insights on Truist Financial and Rocket Lab as investment opportunities.
“We got two left for each of us in a couple of minutes.”
Tech Giants and Their Future: Microsoft and Berkshire Hathaway
32:01 to 33:58
Understand the investment potential of Microsoft and Berkshire Hathaway amid market fluctuations.
“Travis, my last two, I'm going with one, Microsoft.”
Analyzing Nike's Recent Earnings Report
36:02 to 37:46
Discuss the implications of Nike's earnings report and brand sustainability.
“As always, people on the program may have interests 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.”
Show all 11 chapters
Stocks on the Radar: York Space Systems and McCormick
37:46 to 41:28
Explore the new IPO York Space Systems and McCormick's merger with Unilever.
“As investors, there's a difference between the company is fine and I want to invest in it.”
Transcript
Automatic transcript. May contain errors.0:04Travis Hoium:Oil continues to climb, but is there any relief in sight? Motley Fool Money starts now.
0:25Everybody needs money. That's why they call it money. The best things in life are free, but you can give them to the birds and bees.
0:36Travis Hoium:From Fool Global Headquarters, this is Motley Fool Money. Welcome to Motley Fool Money. I'm Travis Hoyam, joined today by Lou Whiteman and Dan Kaplinger. And guys, we're going to get to space. Space is going to be a big topic here today, but we do want to start with the oil markets. This is kind of the thing that everybody in the market is thinking about, if not talking about. And Dan, I wanted to get your thoughts on what's going on because oil is not your typical market. It's a physical product. It's traded years out in the futures contracts. And we have this straight of Hormuz. It is more or less closed.
1:10Travis Hoium:20 % of the oil in the world goes through that straight. What are we seeing in oil markets? Because it seems like prices are up. We're at about$110 per barrel for both West Texas Intermediate and also Brent Crude right now. But it seems like people in the oil industry continue to be worried that things are going to get much worse, but they're not yet. So what's the real story here? Well, it's interesting because there are so many different perspectives to look at this from. From the perspective of the American consumer, things look pretty bad. I mean, gas prices where I live were around$2.80 a gallon in December.
1:48They're up about$1 per gallon, up around$3.80. I think that regardless of what the actual level is, that dollar increase is pretty consistent across the country. And it's interesting because a lot of folks have suggested that the U.S. is insulated from the impact of this because we don't necessarily depend directly on Persian Gulf oil. But when you look at some of the other countries that do depend more on Persian Gulf oil, they have not even seen the percentage price increases we have. Korea was up about 15%. Japan's up in the 15 % to 20 % area. We're up closer to 30 % to 35%. So, it's kind of interesting how the macroeconomics are playing out here.
2:37The other thing, and this threatens to get a little bit wonky about futures markets and things like that, but...
2:43Travis Hoium:No, let's get wonky. This is what I want to explain because it's, this is, you can spend your whole life just studying what the futures markets are. There was an entire class that I took in grad school doing the formulas of, of how you price things like, like oil. And it's, it's fascinating. It's a big reason that things are not higher than they are than they currently are. Yeah. So oil futures are in an unusual situation right now, just for those who aren't familiar with this, you can buy oil at a specific price at a specific point in time in the future. And the prices will be different depending on when you want it.
3:18If you want it at a high demand time, the price is going to be higher. If you want it at a lower demand time, the price is going to be lower. Right now, we have this huge disparity. We're at front month. The current month, if you want oil right now,$110 a barrel. If you are willing to wait until the end of 2026, much lower,$40 a barrel lower, still$70. Oil futures a year and a half out, they're only up$10 a barrel. Prices of the front month are up like$50 a barrel. So what this is telling folks, this is a situation that's called backwardation in the futures markets. And what this is telling people is that at least the financial folks trading these futures don't think that oil supply is going to be a problem for very long.
4:08They think that something's going to happen, supply is going to get restored, and prices are going to go back at least pretty close to where they were before all of this started, which is a little bit surprising because we've got some folks saying things like, well, the infrastructure is all messed up and it's going to take a long time for everything to get back to normal. And so there's kind of a disconnect between what these futures markets are saying and what you're hearing a lot of experts talking about as far as the physical production and movement of oil across the global market.
4:37Lou Whiteman:Just to underline that, the oil futures market does a lot of things. It reflects a lot of things. It reflects investor psychology. It reflects some form of speculation, but also immediate financial hedging is a big mover of markets here. It does not reflect the underlying physical supply or demand for oil at any given time. So, it's a tough thing to do right now, you know, to kind of look at it. I think we need to focus on supply and what is actually in the refineries and not on the price, but that's a lot harder to look at. So, that's why we look at price.
5:16Travis Hoium:Well, that seems to be the other piece is the difference between, we talked, I think, last week about crack spreads, which is the difference between the price of the refined products, so gasoline, and the price of oil itself. And that seems to be one of the challenges today is, hey, we can provide you gasoline, but we don't necessarily know, depending on where you are in the world, if we're going to have oil to actually refine in the future. And so there is this kind of delay too. The other thing is, the Strait of Hormuz, it's a couple of days to get to India, it's two weeks to get to the US. So there is this time lag difference too, Dan, that just seems to be kind of complicating things.
5:58Travis Hoium:But you're right. The market is typically smarter than any individual person. And the market is telling us that this is not going to be a big deal. So is it something we should just kind of look past in these kind of wonky pieces in the oil market or just going to kind of figure themselves out? I think it's too early to conclude that because you often will see these markets see major disruptions. They'll see major moves in one direction or another. They're very responsive to current events. You'll see$5,$10 barrel moves in a single day based on, okay, there was an attack, there was damage to a major facility, or there was progress in negotiations, there was some sort of deal.
6:39Starting to get European countries involved with that. Oil is fungible. It doesn't matter. Iran could say, we're never going to send oil to the U.S. again. But if it just continues to provide, if it opens markets back up, if it starts selling oil to European countries, to Asia Pacific countries back at their normal regular volumes, then the global markets are fine. It's just a matter of allocating what's in the global market between the U.S. and other providers. To me, it's too early to conclude that the futures market is right and all of the technical experts are wrong. Like Lou said, there's some financial wrangling going on with the futures markets.
7:23It doesn't always reflect what's actually happening in the physical world, what's happening at the individual oil well level, at the pipeline level, at the tanker level. You've got to look at all of that.
7:35Travis Hoium:Lou, the other piece that I'm ultimately more concerned about than specifically what's going to happen with oil is what happens to the economy. And one of the data points that we got before we started recording is that the jobs market is actually doing pretty well. Jobs were up. Unemployment was down slightly. I think everything was better than expected in that report, by and large. So it doesn't seem like this incremental step up in prices. And we're only a month or so into this, so maybe we wouldn't see some of that data yet. But is an economic impact something that we should at least be thinking about as investors?
8:12Because the market is at or near correction territory with the NASDAQ.
8:18Travis Hoium:So the market's starting to pull back a little bit if oil stays elevated and this backwardation that Dan is talking about doesn't stick. And we start to go to$140,$150 a barrel. It seems like that would impact the economy, but that's not actually what we're seeing.
8:33Lou Whiteman:Yeah. So, let's take a step back, because I think it helps answer this question about this whole, because we talk about a lot that the U.S. is a net exporter, and what Dan's talking about, like how insulated are we? We are a net exporter, but that can kind of be deceiving, because that is refined products, too. We export a lot of petroleum. We still import crude. So, we are actually still very dependent on the world for crude. We're not energy independent. Fortunately, less than 10 % of that comes through the Gulf. Again, the Saudi oil doesn't really mean, what's going on in Australia isn't too important for us.
9:10Lou Whiteman:That's a global story. But we still do need this idea that, well, since we have energy, we can just stop exports and shut it down and let the rest of the world have a problem. That really doesn't work. So, where does this leave us with the economy? Should we be watching it? Yes, absolutely. Does it lead to a recession? I mean, I hate to answer this way, but the answer is maybe. It's definitely a headwind. We definitely have headwinds already. Seems like the U.S. consumer is doing okay in aggregate. We've talked about that. Like the consumer, that's a tough thing to read. Jobs number is strong.
9:47Lou Whiteman:If I had to guess, I do think there's enough headwinds that we will end up in at least a mild recession in 2026 as all of this ripples in. As remember, we still have the tariffs rippling in. There's just so much going on. I don't know if I'm worried about a terrible recession. It's not a given. It's never a given. Yeah, I'm worried, if nothing else. It's funny, though, because we've been saying this for so long. There have been so many of these factors that have been like, oh, well, the consumer's got to give up now. Consumer sentiment is terrible right now. Nobody's certain about what's going on.
10:23And yet the economy just keeps plugging along. And so I agree with you a hundred percent, Lou, but I have agreed in the past with that sentiment and that sentiment has just been a hundred percent wrong, right? You know, in the past, in the recent past. Yeah.
10:39Travis Hoium:This is why I think, you know, as foolish investors, we talk about the longterm, what, what sort of investments are going to do well over the next five, 10, 20 years, because it's so hard to predict what's going to happen over the next six months, particularly with the economy. The other thing to throw into this is the dollar is getting stronger. So, you know, I don't know how that would complicate things from an economic perspective, but lots to think about as, you know, this conflict continues and oil prices are going to be something we're probably going to be talking about for quite a while here on the show.
11:07Travis Hoium:When we come back, we're going to talk about the space economy, the potential$2 trillion IPO. You're listening to Motley Fool Money. It's spring cleaning season and this year we decided it was time to clear out our old mattress and settle into a Legend Hybrid from Lisa. Like a lot of parents, getting a good night's sleep is critical for being refreshed when the chaos begins in the morning. And in the month I've been sleeping on the Lisa Legend Hybrid, I've fallen asleep faster and I'm sleeping deeper, which means I wake up more refreshed. We like the Lisa mattress because it's made in the USA, it ships with a 120-night sleep trial.
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12:22Lou Whiteman:Fly me to the moon. Let me play among the stars.
12:30Travis Hoium:Welcome back to Motley Fool Money. Space is hot and so is SpaceX. X. They have apparently officially filed for a confidential public listing. It doesn't really sound like it's that confidential if everybody knows that it happens. But they're looking at potentially, Lou, a$2 trillion valuation. That's a huge number. Can you help me make sense of this?
12:52Lou Whiteman:Well, see, I can't because the part that's confidential is all of the numbers, which is what we'd like to talk about. But look, let's talk about what's going on here because there's a lot of market dynamics going on here. Nothing illegal, nothing unfounded, but this is just how it works. SpaceX, as we all know, has a huge number of shares outstanding. All of its investors, employees, all of that. But they don't sell all of those shares in an IPO. They don't need to come up with$2 trillion. I think that's so important because we're talking about, oh, can the market support a$2 trillion IPO? They only need to come up with$80 billion or whatever they end up pricing, just that small sliver they're going to sell.
13:31Lou Whiteman:Given how hot space is, and given investor interest in Elon Musk, I don't think it's a surprise that they can raise$80 or $100 billion. That's a lot more reasonable sounding than the$2 trillion number. There's a lot of other levers here. I know Dan loves to talk about the index, just so we can get into that. But look, this is a very, very big company with a very large share count. All they need to do is sell this small amount. And gosh, there's interest. So yeah, I mean,$2 trillion,$3 trillion, who knows what they can get to if they squeeze enough.
14:06Travis Hoium:Eventually, that matters though, doesn't it? Because eventually the lockup period, you talked about all the investors. Those investors, this is what you would call an exit. And that means that they get to take their money out. And even if there's a three-month or a six-month lockup period, you would think that eventually the number of shares being sold in the public market, the float is going to increase pretty dramatically.
14:26Lou Whiteman:Absolutely. The better question is, can they sustain that valuation? Not the valuation they can get on the first day. I feel like we're re-debating Tesla. As people have been saying for years, we can't sustain that. I think I'd probably take the under on whether or not it's still over$2 trillion if it goes out of$2 trillion in six months. But I don't think it's going to fall dramatically. I think there is a lot of excitement, a lot of interest here. There is definitely market support for this IPO. It's big numbers, it matters and stuff, but we're almost talking semantics, whether or not, on what level can it support.
15:06Lou Whiteman:There is interest here, and that's what you need to do an IPO. Travis, I want to point out one thing about the exit that you talked about. It's true that the most obvious exit is just selling the shares outright, but recently, we've had more and more investor, more and more employees, high-level employees with big stock holdings, they never sell shares. Instead, they'll go to a broker, they'll make an arrangement, they will pledge shares as collateral, they will have a loan facility that lets them draw money out of it. The shares never get sold. It is, at that point, in everyone's best interest, the shareholder, the bank, the lending bank, to keep the share price as high as possible.
15:47And so, those shares never actually trade hands. Elon Musk has done that to great success over the course of his career. I suspect that his best employees have seen that and are willing to emulate it. I will be curious to what extent the investors that have gotten in on SpaceX pre-IPO decide to fully exit versus using one of these alternative strategies.
16:12Travis Hoium:The other thing a lot of these investors can do is just distribute the shares so that they can take their management fees for being a hedge fund or whatever sort of fund you're investing with. Lou, I wanted to ask you about the space economy, because this is ultimately what we're buying if we're going to be buying the SpaceX IPO. And just so people are aware, I believe the date now is they're looking at June as a potential IPO date. So sometime between now and June, we will get the full S1. That's where you get the information about the financials, how many shares are going to be sold, all of those kind of details.
16:46Travis Hoium:We'll, I'm sure, cover those on the show when they come out. But what is interesting about the space economy? Because that's really what we're buying, and I'm still a little bit confused of exactly what that's going to look like five or 10 years from now.
17:01Lou Whiteman:Chris Hillman, Travis, space is the final frontier. It's a chance to boldly, oh, sorry. There are estimates all over the place here. The most famous one is Morgan Stanley saying a trillion dollars in space revenue by 2040. That's the North Star. SpaceX, we don't know exactly, but it's maybe$16 billion today. They're not going to have half of that trillion, even if it comes, but there is at least a there there for growth. How's it going to grow? In theory, there are a lot of things you can do in space. I'm going to take the under on the databases in space, at least for the foreseeable future. A lot of the exotic things, but there are a lot of ways that companies can benefit from the data you can get from space, the incremental positives.
17:44Lou Whiteman:The government, militaries are increasingly interested there. There's a lot of revenue potential there. Just like every other market excitement, there are winners and losers here. Not everyone is going to make it. Valuations are all over the place, but they're mostly high. It's the Wild West. It's early days, just like all of these markets go, but there is a real path towards revenue growth on both the global government and commercial side. That is what SpaceX, as a leader here, and give them credit, they are a leader here, that's what they're leaning into with the IPO.
18:21Travis Hoium:Dan, the other piece of this is you have a social media and AI business attached to SpaceX. That seems like the new version of a conglomerate. Yeah, and the negative version of the conglomerate. Space stocks are hot, but boy, social media has taken it on the chin lately. Putting X Twitter in with SpaceX seems like the negative side of putting things together in a conglomerate. At the same time, you also have XAI, which I think that there's probably some investors who would have preferred that the AI side be a pure play and be divorced from the space stuff because they share lose confusion about, okay, well, what is the space economy?
19:05What is SpaceX really focused on? If you mix those two in was kind of like, well, AI is not just a space data center play AI is much more than that. And so the, the combination here, I'm not sure what Musk gets out of it. It seems to complicate things, but like Lou said, we have to wait for the paperwork before we actually know what this thing is going to look like for investors.
19:28Lou Whiteman:I'll just say, I'm pro just one ticker to invest in Elon Musk's vision. If anything, that's an argument. Just merge with Tesla, too. But I kid, we're not going to do that. Elon Musk doesn't need my advice. Not yet. Yeah. Every banker is already on this deal. But, Elon, I might say, we talked at the beginning, they're only selling a small number of shares to get a massive valuation. That's impressive on paper. Given the XAI need, maybe, though, get a lower valuation, sell more shares, and actually fill the cash coffers. I don't know. Just an idea. I know it wouldn't be as cool as$2 trillion, but maybe they're making the wrong move here, Travis.
Read the full transcript
20:06Travis Hoium:When we come back, we're going to talk about the stocks we like in the market right now. You're listening to Motley Fool Money.
20:15Lou Whiteman:In a world full of noise, long-term thinking stands out. On the Capital Ideas podcast, Capital Group leaders explore the decisions that matter most in investing, leadership, and life. It's a rare look inside a firm that's been helping people pursue their financial goals for more than 90 years. Listen to the Capital Ideas podcast from Capital Group, published by Capital Client Group, Inc.
20:45Travis Hoium:Welcome back to Motley Fool Money. In this segment, we like to have a little bit of fun, And so I thought today we could all draft a little mini portfolio. So we got a lot of concerns what's going on with the market dropping a little bit in 2026. We talked about oil and the economy. There's always opportunities in the market. So where are we seeing those opportunities? We're going to each pick five stocks. I'm even going to play along this week. Lou, you are up first. Who's the first stock you're putting in your little five stock portfolio?
21:13Lou Whiteman:So I'm going to play the hits here. I'm going to play my hits. I'm going to start out with one of my oldest investments, and I think it's just a great opportunity today. Transdine, ticker TDG, this aerospace parts manufacturer that somehow, over time, has managed 45 %-plus gross margins, and continuously. They do it in a neat way. This is a stock that's only up 2 ,360 % in the last two decades, Travis, so not bad. That's not bad. Not bad. They're right now trading near a 52-week low. They are not exposed to the right part of the cycle right now, which has been holding them back. But this has always been a private equity firm masked as an operating company.
21:55Lou Whiteman:They're very good at deal-making. They have$10 billion in M &A firepower at their disposal. Now, it's a reasonable valuation. I just hold this company as long as I can, and now looks like a good time to add. Dan? First up for me, Booking Holdings, ticker BKNG. This is the online travel agency that has the namesake booking. It has Priceline. It's got Kayak. It's got a whole bunch of different properties underlying there. And it has been sort of under attack lately because people are worried that artificial intelligence is going to get good enough that you're just going to ask your favorite chat bot to set you up with a trip with the hotel and the airfare and rental car, whatever else you need.
22:41and it's going to take care of everything for you. That, they say, is going to hurt booking, but I'm skeptical. I think that AI users are going to end up appreciating the customized AIs that these legacy companies have put together, booking, working hard to make sure that its AI capabilities are up to snuff. And I think that with proprietary data, they will be able to do a better job, then all purpose models will be able to do. Booking also about to do a stock split. Its shares have been over$4 ,000 a share. And that's going to change. I think that, you know, stock splits don't add any value, but they do attract investor attention.
23:23And that is why I am suggesting that as the first stock I'm talking about today.
23:28Travis Hoium:The forward price earnings multiple for booking is 15. That's, I don't remember ever seeing it that low. So I haven't looked at them in a while, but I like that. The growth has slowed, but not to the extent that you would expect a sub 20 forward PD for sure. Yeah. I'm going to kind of stick with the theme of AI is not going to disrupt the way that people actually use technology. Alphabet, look, this is an AI play in a lot of different ways. It's also a play on And when my wife uses AI, she's just using the Google search bar. That's the way that most people are going to use artificial intelligence in the future.
24:06Travis Hoium:I don't think that we're going to be wearing some sort of, you know, AI pin or anything like that. It's going to look a lot like it looked in the past. Guess what? The winners are going to keep winning. Alphabet is going to be the biggest of those. The CapEx numbers are insane right now, and I think they will eventually come down. But guess what? But if they come down, you get more cash flow from Alphabet. So I love where they're sitting. YouTube is undervalued. I think Waymo is probably hiding a ton of value in there. So this is the easy button in AI Alphabet, my first pick. Lou, you're up.
24:42Lou Whiteman:All right. So I'm contractually obligated to have at least one Brad Jacobs company, right? Because I got to do my stick. And the one I chose is QXO, the newest one. Jacobs, for those who don't know yet, is a serial entrepreneur behind United Rentals, United Waste, XPO, two of the three biggest winners in the Fortune 500 over the last decade. QXO is a roll-up of building product distributions. They just did their second acquisition, Kodiak, a distributor of construction supplies, lumber, windows. If I'm honest, it's fairly valued for what it is today. It's a$13 billion or so company. But their plan is to get to$50 billion in sales in a year to come.
25:24Lou Whiteman:Tons of risk, very much an M &A story, but no one is better at M &A. I like this as a growth story. Dan? Up No. 2 for me, Moderna, ticker MRNA. Everybody wrote this stock off. This is one stock, this is the one time that I have been successful in averaging down. I was a big loser on a small portion that I bought above$200 a share, it ended up getting down below almost to$20 a share at one point. Obviously, the company is famous for its COVID-19 vaccine, but I saw the COVID-19 vaccine not as a long-term producer in itself, but as a proof of concept for the mRNA technology, which the company would then apply to other diseases, other treatments.
26:11I think that that plan is on track, really. And investors are starting to see it. That stock price has gone up from$20 to, it was recently up to about$50 or so. I think there's more upside ahead. And the stock and the company have been unexpectedly resilient in the face of a hostile environment from the federal government at this point for the core COVID stuff. It just proves that I think the company is making big strides towards diversifying its portfolio and proving the value of its technology in being able to treat a wider variety of diseases and health conditions. Yeah.
26:54Travis Hoium:The stock is still in a 90 % drawdown from its peak during COVID, but it has almost doubled in just the past, I guess, four months or so. So, wild run here for over the last few years for Moderna. I am going to go with another easy button stock. That is Uber. Look, self-driving vehicles, particularly Tesla, were supposed to destroy businesses like Uber. I think we're seeing now with all of the announcements that they have, all of the companies that are putting fully autonomous vehicles, a lot of them still have safety drivers. We're starting to get to the point where they're pulling those safety drivers.
27:32Travis Hoium:Uber is going to be the app that we interact with, whether you're looking for a ride, whether you're looking for some food, or even to order physical products. I think you can buy a TV from Best Buy and get Uber to deliver it to your house. This is just one of those businesses I think is going to be much bigger a decade from now than it is today. So that's why it's number two on my list. Lou, you're up next.
27:55Lou Whiteman:All right. Next up, I'm going to go with Nelnet, a silly little company with a weird name, but they are all over the place in student loans, servicing, payments, school software. They have a venture capital arm, including Huddle, which is very, very popular among high school athletes, expanding its banking and financial services. This company has quietly beat the S &P 500 over the last five years and even longer. I think that they are just now hitting its stride, gaining momentum. I really, really like this company. I wish they'd rename it so maybe investors would get more interested. but a really, really solid under-the-radar overperformer.
28:33Dan, what do you got? So, I'm taking a page from Ray Dalio's playbook over at Bridgewater Associates and trying to incorporate some inflation hedge commodity exposure. My pick here, Freeport MacMoran, ticker FCX, major copper and gold producer, big copper producer. It has had its share of operational challenges. Its biggest copper mine in Indonesia has faced some operational issues. But we all know what the gold market has done over the past year or so. It has been an effective diversifier for portfolios. That's the whole Dalio approach, is basically put yourself in a situation where you can benefit from growth, but you're not overexposed to recessionary conditions.
29:19You can benefit from stable pricing, but you are able to fend off inflation. I think that Freeport-McMoran gives you that commodity exposure in the form of a stock, so you don't have to deal with all those futures markets that we were talking about earlier in the show. It counts a little bit as an allocation to gold, which a lot of people have been wondering, OK, well, how do you do that? Is that something that you should do? And the price has already gone up so much. I think it's a good balance with Freeport-McMoran because their big thing is more copper than it is gold. but you still get the gold exposure as kind of an icing on the cake.
29:58Travis Hoium:I'm going to go with another unloved company in the market. I like the contrarian plays, Disney. Disney gets a lot of flack right now, but shares are trading for 14 times earnings, basically on a forward and trailing basis. I was talking with a friend last night who was just at Disney World about the run that they've been on. We talk about not having original IP. In the last 13 years, we have Frozen, Moana, Encanto, Zootopia. is there actually a is there a better 13 year run for disney i i don't know you could maybe say you know the the 90s the 94 year run or so that they had in the 90s but for original ip this is actually kind of a boon for disney and they don't get credit for that they're investing six 60 billion dollars in the parks the parks alone are generating 10 billion dollars a year in operating income.
30:51Travis Hoium:And guess what? They're all under construction. So they're going to be bigger. They're going to be getting more people in. They're going to be charging more money in the future. I think this is, we're going to look back at this as, as one of those opportunities with Disney, just one of those companies that if you think about things are going to be disrupted by artificial intelligence, one thing that isn't is those real world experiences like going to Disney world. So Disney add it to your watch list. Let's, let's, let's rapid fire here. We got two left for each of us in a couple of minutes. So, Lou, why don't you drop two on us?
31:20Lou Whiteman:So, this is my, I'm just sticking with my weird name portfolio here, I guess. But two more real quick. Truist Financial, TFC. I mean, regional banks are out of favor. They might remain out of favor for a while. But you get Truist Financial, a good company in the Southeast and Mid-Atlantic, a decently run bank trading below book value and with almost a 5 % dividend yield. These are the times to ride through the headwinds and find good banks. Last one, we talked about space economy. I have to have my rocket ship. Rocket Lab is my pick for this space economy. I like it better than SpaceX, even if they're both public.
31:58Lou Whiteman:$38 billion today. I can't justify it today, but if they do what they hope to do,$38 billion is going to look cheap. High risk, high reward. Travis, my last two, I'm going with one, Microsoft. It's in the same category as you put Alphabet in. the beaten-down Mag7, unappreciated company. I had good experience with Alphabet when Alphabet was out of favor. Alphabet's now in favor, and Microsoft has moved out. People are concerned. I think concerned about OpenAI status in AI adoption, concerned about Microsoft's ability to get its users to use its co-pilot AI program. But I believe Satya Nadella has established himself as being able to recognize these cross-currents and navigate them and find a way through.
32:46So, I think that if you're looking at a MAG-7 stock, Microsoft's the one I'm looking at. And then Berkshire Hathaway, ticker BRK, it's the biggest holding in my portfolio. It never goes out of season. It has some energy exposure, which I like. And we have recently gotten word that there is sort of a Greg Abel put in the form of stock repurchases. The company said it started making stock repurchases earlier this quarter for the first time in quite a while. And so, that kind of reassured shareholders that the transition away from Warren Buffett as CEO may not have the price disruption in the stock that people were worried about.
33:27Travis Hoium:I'm going to throw out into it a couple of companies that I don't think are going to be disrupted by artificial intelligence in the way that a lot of investors currently do into it. We're going to have to do our taxes somewhere. Accounting has got to happen somewhere. I don't think we're just going to throw it into a chat bot. They're trading for 16 times forward earnings. Nobody likes paying that bill into it when you got to do your taxes. But in the next couple of weeks, a lot of us are going to be paying them a little bit of money to help file our taxes. The other one is Workday. Guess what?
33:56Travis Hoium:All these AI companies use Workday. So why not own Workday? 12 times forward earnings. I just think another one. Disruption, probably not on their horizon. Possible, but definitely like the pricing there. When we come back, we're going to get to the stocks on our radar. You're listening to Motley Fool Money.
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35:19Lou Whiteman:The best part is that their prices are 50 to 60 % less than similar brands. Quince works directly with ethical factories and cuts out the middlemen. So you're paying for quality, not brand markup. For me, the linen pants and the cotton chinos are the perfect transition items. Not only are they comfortable and breathable, but they look sharp and polished. Refresh your wardrobe with Quince. Go to quince.com slash motley for free shipping and 365 day returns. now available in Canada too. Go to quince.com slash motley for free shipping and 365 day returns. quince.com slash motley.
36:02Travis Hoium:As always, people on the program may have interests 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. All personal finance content follows The Motley Fool's editorial standards and is not approved by advertisers Advertisements are a sponsored concert and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. All right, I wanted to touch on brands a little bit here before we get to radar stocks. And the news this week was that Nike had a pretty weak earnings report.
36:31Travis Hoium:Their sales are down on a constant currency basis. Dan, are we at the point where these brands, Nike has been an outlier. You think about the rise and fall of Reebok, FUBU, Jerboe, if you go back to my youth. Was this just inevitable that Nike would hit this wall eventually? And this is just what happens to brands? It often happens. I don't think it's inevitable. You can find some outliers out there. I mean, chocolate bars are boring. So Hershey and Nestle went beyond that. They brought in Kit Kat. They got 8 ,000 different Kit Kat flavors. And now people care about it again. Yeah. You know, when you and I, when I was kids, when Lou and I were kids, you know, you got the Lego sets that you had to like build it yourself.
37:11You had to come up with what you were doing.
37:13Travis Hoium:Oh, we had the bucket. Now, it's like you buy the F1 car set, you charge$900 for it, there's sophisticated instructions and stuff. Some brands survive, but a lot aren't able to make that disruptive move.
37:28Lou Whiteman:Look, Nike is what it is. I don't find it an attractive investment, but this is still a massive company that is profitable and is kind of growing. At least, we're going to benefit the doubt. I think this is one of these cases, and I see it so much. I'll even be controversial and throw out Starbucks and Lululemon. As investors, there's a difference between the company is fine and I want to invest in it. I think Nike's just at the point that, yeah, there are better investments out there, at least to my eye. Yeah.
37:59Travis Hoium:We'll likely see their shoes for a long time to come. Doesn't necessarily mean it's going to be a great stock. All right. We like to end the show with stocks on our radar. We'll bring in Dan Boyd from Behind the Glass. Dan Kaplinger, you're up first. What's on your radar this week? All right, Dan. The stock I'm bringing to you today, York Space Systems, ticker YSS. It just went through its IPO in January. This is a company, it's a pure play in this new space economy. And what it's trying to be, it's trying to be sort of the cost-conscious provider of a lot of these services, satellite launches and things like that.
38:36They are using modular manufacturing to try to keep costs down. This is something that the Department of War has really liked to see, and it is gaining acceptance in the U.S. government and with other providers as well. The stock did lose half its value after its IPO, but it has started to bounce back. It's regained almost all of that. Artemis II's launch, they had a big day the day after that. I do think the SpaceX IPO is going to initially pull away capital from investors who are interested in these space stocks. But if it is helpful for space overall, York should benefit from it at some point eventually.
39:16Travis Hoium:Dan, what do you think about York Space Systems? I mean, it sounds like Mr. Kaffengler is telling us to get in on the ground floor here for York Space Systems. But such a recent IPO, I'm a little bit wary. Lou, what's on your radar this week?
39:32Lou Whiteman:So Dan, JMO couldn't make it, so I feel it's my responsibility to talk about McCormick, ticker MKC. It was a big week for our favorite spice maker. They delivered a top and bottom line quarterly beat, also announced a massive merger. McCormick is going to combine with the food assets of Unilever in a deal valued at more than$40 billion. Dan, finally, someone has the courage to combine Frank's Red Hot with mayonnaise. We've all wanted it, right? Yeah, I don't know. But look, the market didn't react well to this deal. It's huge and failed combinations like Kraft Heinz spring to mind. And I'll concede, McCormick Management has a full plate here.
40:11Lou Whiteman:You see what I did? JMO would like that. But I think scale matters in this business. And I think McCormick is better managed than Kraft Heinz. I am at least intrigued here, kind of watching this. A lot of risk, but a lot of potential rewards here as they kind of fill up the shopping cart.
40:27Travis Hoium:Dan we didn't make any spice must flow puns during the oil segment but what do you think about the spice flowing with McCormick you know mixing hot sauce and mayonnaise there Lou did I lose you no no it's a restaurant staple for decades at this point any like tangy spicy sauce that you're going to find next to your chicky tendies at the restaurant is probably just a mayonnaise and hot sauce mixture and mccormick's got them both the big ones to lula and frank's red hot which is saying something about their catalog all right dan which one is going on your watch list i like
41:02Lou Whiteman:it spicy today mr travis i'm gonna go mccormick there you go sorry dan next time there was a lot
41:10Travis Hoium:of space space uh stocks today so if you are interested in space hopefully we gave you some
41:14Lou Whiteman:some good ideas to research dan pro tip you might have done better with the york peppermint patty I know as well.
41:21Travis Hoium:I was thinking how we're talking. All right. Thanks to Lou and Dan and Dan Boyd behind the glass. I'm Travis William. We'll see you here next time.
From the publisher
Oil has soared to $110 per barrel, but hasn’t hit the economy yet. We discuss why and than get to the hottest IPO ever, SpaceX, and what the future of the space economy might look like.
Travis Hoium, Lou Whiteman, and Dan Caplinger discuss:
- Oil markets
- SpaceX’s $2 trillion IPO
- Our mini-portfolio
- Stocks on our radar
Companies discussed: TransDigm (TDG), Truist Financial (TFC), Rocket Lab (RKLB), QXO (QXO), Nelnet (NNI), Booking (BKNG), Moderna (MRNA), Freeport-McMoRan (FCX), Microsoft (MSFT), Berkshire Hathaway (BRK-B), Alphabet (GOOG), Uber (UBER), Intuit (INTU), Workday (WDAY), Disney (DIS), Nike (NKE), McCormick (MKC) York Space Systems (YSS).
Host: Travis Hoium
Guests: Lou Whiteman, Dan Caplinger
Engineer: Dan Boyd
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