Enlightenment - A Herold & Lantern Investments Podcast
Enlightenment - A Herold & Lantern Investments Podcast
From Optimism to Strategy: Navigating Today's Financial Landscape
February 24, 2025 Season 7 | Episode 7
Leverage your market awareness with insights from today’s episode, focusing on the complex interplay between U.S. stock valuations and international market opportunities. As concerns about inflated U.S. equities grow, we dive deep into analyzing whether investors are too complacent amid significant global dynamics. Key themes include discussing historical valuation trends, the necessity of portfolio review based on risk tolerance, and the promising prospects in international markets that could reshape investment strategies.
Listeners will gain practical wisdom about adapting to changing financial landscapes. Discover how recent behavioral shifts among institutional investors are spurring a critical reassessment of holdings and what it might signal for the personal investment approach. As we journey through expert insights, we unearth specific global equities that are poised for recovery and growth, highlighting the shifting dynamics in Europe and elsewhere.
The conversation doesn’t just end with market valuations; we answer pressing questions about how to position your portfolio for potential downturns while keeping an eye on future growth. Enhance your financial literacy with actionable takeaways that translate into informed decision-making. Stay engaged and subscribe for continuous updates, and don't forget to share your perspectives on today’s market challenges!
** For informational and educational purposes only, not intended as investment advice. Views and opinions are subject to change without notice.
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And now introducing Mr Keith Lanton.
Keith Lanton:Good morning. Today is Monday, february 24th last Monday of February, so almost one-sixth of the year is almost already in the calendar, so the year is remaining to go quickly. A lot to talk about this morning. As usual, the geopolitical news and headlines and events in the financial markets remain dynamic and fluid and a lot of information to digest this Monday morning. Today I'm going to be talking a little bit about the bond market. Brad is unable to join this morning, so be covering both what's going on geopolitically domestically and a little bit in the fixed income markets this morning. So this morning we're going to talk about market valuations, in particular US valuations versus international markets, developed markets, a topic we've talked about before. We've heard a lot before in the past in lots of financial press that the US markets are historically expensive versus other markets and despite that the US markets have for years continued to move higher. But over the weekend this weekend after US markets have reached levels that are significant outliers to history there's been some more commentary about whether or not the US can sustain its relative outperformance versus other countries and we'll talk a little bit about that. Talk about, perhaps, where there's some opportunities overseas, things you may want to be thinking about for your portfolio, just from a diversification risk and a standpoint of perhaps thinking about the dividend income.
Keith Lanton:As markets have appreciated, it's gotten very easy to get complacent. Any sell-off has been met with a countervailing upswing in financial markets. One of the things that we frequently do here at Herald and Lantern Investments is we talk to our customers. We ask them questions regarding their comfort in terms of volatility for financial markets, what may happen if markets go down. How would you feel? And many participants have taken on a much more optimistic scenario when it comes to viewing their portfolios and coming to view their view of the future, which is terrific. Their view of the future, which is terrific. But you need to keep in mind, if markets were to drop 30% or 40% and you didn't know they were going to come back, because that's usually what happens when you get a drop off of that magnitude Markets aren't dropping 30% to 40% because everybody thinks they're coming back. If markets were to drop 30% to 40% not predicting that, but if they were would you be able to hold on to your current portfolio? Is your current portfolio the portfolio that you would own and be confident in holding in the event of a significant market sell-off. Keep that in mind, focus on that when you answer those questions to yourself. Be honest with yourself, be objective to yourself Is this portfolio able to withstand the sell-off and am I comfortable holding it in that downturn? And these are things we need to think about when we talk about how to position our portfolios and when we talk about where current markets are currently valued.
Keith Lanton:We will also talk this morning about the sell-off that took place at the end of last week. What we've got going on this morning in news both financial news and international news, and of course they all come together. What's going on this week? What do we got to keep our eyes on? And then we'll talk a little bit about Barron's. A couple of individual ideas from Barron's. Barron's headline story talked about President Trump's energy plans and where there may be opportunities there. Also talked about a couple of down-and-out stocks Comcast, cmcsa and Intel and give us some insights on their thoughts on those two stocks.
Keith Lanton:I'm going to start out this morning talking about the Wall Street Journal article. It's today's article heard on the street column saying that stocks have a big, expensive problem. Us stock market is the big dog of the global stock market Right now. It has historically been since World War I, but an even greater percentage currently than almost at any time in history. Right now the US stock market is two-thirds of the global market. Now a little perspective US economy is 25% of the world's GDP. Us market's two-thirds 66 and two-thirds percent versus 25%. If you're talking about population, us population is 4% of the world's population, 25% of the world's GDP, almost 70% of the world's equity market valuations.
Keith Lanton:So, despite the fact that we have seen US markets continue to move higher, there are some who are suggesting in this Wall Street Journal article that we could be approaching a signal and that we may be in store for weaker returns in the US relative to the rest of the world going forward. And what does the Wall Street Journal use to support this thesis? Well, they say analysts at a firm called DataTrack Research note that the usual correlation between the main US benchmark, the S&P 500, and the MSCI EAFE, which is an index of non-US developed stocks, has historically been very high, about 83%. So correlation between the US and international markets measured by this index of developed overseas markets. So this is not emerging markets 83%, but over the past 100 days it's just been 54% and that kind of differential is a lot bigger than it sounds. You say, oh, 83%, 54%, yeah, it's a difference, but what's the difference? But when you look at it statistically, this is something that occurs about 0.3% of the time. So three out of every 1,000 days is when you might see something like this, and we are seeing this right now. It is at a multi-decade low in terms of that correlation and some are saying that this is because we are at a very wide gap in valuations between the US and international markets and we are seeing some market pros start to purchase international developed stocks and perhaps sell US stocks or just be on a buyer strike here in the US.
Keith Lanton:So smaller investors and individual investors may want to take a look at what some of these institutional investors are doing. And if you're looking at history and you look at developed market large growth stocks, they are trading in a 98% valuation versus. In terms of their valuations, they're at a 98% percentile. 98% of the time markets are less expensive in the US than they are currently. And if you look at large cap value stocks, both domestically and internationally, they are at a 2%. They are at a 2% percentile, meaning that large cap value stocks, 98% of the time, are more expensive than they are currently in terms of PE ratios and other metrics. So growth stocks extremely high in developed markets like the US and valuation for value stocks a lot lower. What are some non-US markets that look cheap relative to their history? Well, brazil, hong Kong and Turkey. Brazil is at its ninth percentile relative to its historical valuation, hong Kong at about seven, and that's despite a big run-up recently, and Turkey's at about 22.
Keith Lanton:Staying with this theme, there was an article in Barron's this is from Dambisa Moyo, who's a member of the UK House of Lords, also a co-principal in a family investment office in the UK, and he published an article in Barron's in their commentary section talking about US stocks having trounced other markets and some risks not necessarily saying these risks will come to fruition, but risks to Barron's in their commentary section talking about US stocks having trounced other markets and some risks not necessarily saying these risks will come to fruition, but risks to American exceptionalism, and he points out that we well know that the US stands out as the place where investors have, over the past few years, generated the most attractive returns. In the past 12 months, s&p is up 24%. If you're looking at Europe, it's up about 12%, emerging markets up about 15%. And he also points out that the US now represents almost 70% of the world's equity market valuation. But he also points out that about 70% of the net investment flows have been going into the US as well. So we are seeing international investors joining American investors, purchasing US investments, and he says that this is one of the reasons that we are seeing US equities, of course, see near record valuations relative to what we are seeing in the rest of the world.
Keith Lanton:And he asked the question at what point do growth expectations and values get so large that investors could reassess their holdings? And he says a number of factors could prompt a retreat from American exceptionalism. One, of course, is we've talked about this just before is just current valuations. Is we've talked about this just before is just current valuations, us equities trading in almost the mid-20s in terms of P-E ratios, Historically we're looking at the high teen ratios. So we are seeing a P-E ratio here in the US very high by almost any metric and at some point he suggests that the market's P-E ratio at the very least, may reflect fully the positive expectations. So we we may not be able to expect a continuance of the appreciation of price-to-equity earnings ratios. That's one of the factors driving the markets higher. So, even if markets continue to do well, even if the US economy does well, we can't count on PE expansion at this point, given that we're already at almost 25 times earnings currently earnings currently.
Keith Lanton:Another factor here in the US, one we've talked about before and we know well of, is the risks to markets due to persistent inflation. The Trump administration is in the process of deporting undocumented immigrants, and this flow of workers that the US has seen could be reduced as these illegal immigrants are exiting here from the United States, but that may put some pressure on wages. We also may see increased prices due to tariffs recently announced tariffs on steel and energy and some others that have been floated. And a third potential trigger for market sell-offs is the elephant in the room the US government's worsening fiscal situation. Investors are honing in on the Trump administration's progress in reducing the federal budget deficit. Currently, it's 6.4% of GDP. Currently, it's 6.4% of GDP. Scott Besant, the new Treasury Secretary, said that his goal is to get the deficit down to 3% of GDP. I think something financial markets would welcome. Efforts by the Trump-authorized DOGI or Department of Government Efficiency to cut spending by $2 trillion could help move the deficit to GDP ratio as well. So we'll see how those efforts fare out. Of course, markets are also focused on areas that could be counterintuitive to these efforts to reduce the deficit, and that would be programs that would raise taxes. But the raising of those taxes is offset by tax cuts in other areas, and if we were to get more tax cuts than tax raises, then what we would see is the deficit expanding and some would be concerned about Now.
Keith Lanton:Despite all of these concerns, certainly, the US is very hard to bet against. It is the world's strongest economic block, producer of low-cost energy, we have a dynamic risk-taking culture here, we have deep capital markets and we have the greatest technological innovation taking place in the United States of America, which allows companies to grow and develop, and this potentially could put a floor on the US market. So even if we were to see a sell-off, we may not see a sell-off of the magnitude that we've seen in the past. So it's impossible to know how high US prices will go, but it does make a lot of sense to remain on alert. Look at these potential risks and factor them into your thinking.
Keith Lanton:Now let's take a look at, just very recently what's taken place in financial markets with respect to some of these concerns. Last week, we saw the volatility index, the VIX, take up, but to still very low levels. The volatility index since President Trump was elected was hovering at around 15. This is the volatility of US equities. At the end of last week, after the sell-off on Thursday and Friday, that number had ticked up to 18. Fixed income markets, which had been very volatile, especially under the Biden administration when inflation was increasing, has also seen a much more complacent mindset amongst traders, despite a daily barrage of policy initiatives from Washington and higher readings of economic policy uncertainty.
Keith Lanton:The move index, which is a metric of Treasury volatility, has what is being called the Mar-a-Lago Accord, and this is a trial balloon that was floated last week, which would have other countries purchase non-marketable 100-year zero-coupon Treasury bonds, and these purchases would be effectively payment for protection provided by American armed forces, while reducing the US debt burden. It's a seemingly far-fetched idea, but some macro hedge funds have already been contemplating what the effects of this program could be on financial markets. Whether other nations would accede to this type of structure is unknown, although some are saying it might be a deal they can't refuse, given that the US military is such an overpowering force and many of the other countries in the world have not invested in shoring up their defenses. But one knock-on effect, one factor that could play out here, is, if the US were to structure something like this, it may see even more assets flow out of the country as others become concerned about the US and their policies. And in the wake of freezing Russian assets, for example, which was done under the Biden administration, countries may fear that the US may not be as safe ofa place for their capital and therefore may not be as comfortable owning, for example, us treasuries.
Keith Lanton:We're seeing, for example, china continue to reduce their treasuries. Just recently they had about $1 trillion in treasuries and now they're down to about $750 billion. That trend continued last month and what we're seeing is an offset there, as countries are reducing their treasury holdings. One of the areas that they are increasing is their gold holdings. Gold is up about $8 an ounce this morning and last week Goldman Sachs came out, mentioned it on this meeting as well that Goldman up their target on gold to 3,100, but suggesting that gold could move meaningfully higher than that. So it's another thing you want to keep in mind.
Keith Lanton:Another concern of course this is one we've talked about as well is inflation expectations. But last week we got some more readings and they weren't so favorable with respect to inflation expectations. The latest sentiment survey from the University of Michigan found a surge in five-year inflation expectations to 3.5%. That is the highest number for a five-year inflation expectation since the mid-1990s. And these inflation expectations are also being corroborated by activity in the commodity index, which is on the cusp of a breakout. We are seeing higher commodity prices quietly for, of course, gold, which isn't so quiet, but quietly. Copper has been moving higher. Cocoa has been moving up. Lumber has been moving up. Copper has been moving higher. Cocoa has been moving up, lumber has been moving up. So commodity prices, which are kind of the inverse of the expectation on what inflation is going to do commodity prices tend to move up, obviously a commodity when inflation expectations are rising.
Keith Lanton:So where to go? What to do? Barron's suggesting over the weekend that perhaps European stocks are a place to go shopping. We talked about this just a couple of weeks ago. Europe is off to a very strong start, but Barron's suggesting there may be more to come Put some meat on the talk here. The Vanguard FTSE European ETF symbol VGK. That's the Vanguard large cap ETF tracking Europe has returned about 10% so far this year through Wednesday of last week. That's more than double the return of the S&P through that same period of time. And if you're looking at Germany, which just had elections, we'll talk a little bit about those. Germany through Wednesday was up 13%.
Sophie Cohhen:Bank of.
Keith Lanton:America survey last week found that fund managers were becoming more optimistic about European equities 12% now are overweight European stocks. That's the highest percentage in about nine months, and just a few weeks ago, 36% of respondents to the survey were underweight Europe. Now some are overweight, so we are seeing a meaningful shift here. Some are suggesting that perhaps one of the reasons that European stocks are performing well in a kind of ironic twist is the result of President Trump, and that he is possibly pushing Europe in the right direction economically, where they have to be more independent, invest more in their own defense, and that has led to a significant rally in some of the defense-related stocks that are European-based. Also, the prospect of an end to the Russian-Ukrainian war. One of the biggest beneficiaries of that would be Europe, of course. Natural gas prices skyrocketed after Russia's invasion of Ukraine, so the potential that there'd be some stability would be a big positive for Europe with respect to the energy markets. A couple of individual stocks that might be worth considering. One that's been mentioned on this call before Mercedes-Benz, a German company, was down last week after they warned of lower profit margins, but the stock is up about 20% year to date. Mercedes has $31 billion of cash on its balance sheet market capitalization of $57 billion. So cash over 50% of the market capitalization, dividend yield of about 6% and they are buying back their stock. They say they're going to buy back about 10% of their stock this year.
Keith Lanton:Financial stocks also leaders in the European rally. Financial stocks also leaders in the European rally. One stock favored by analyst David Harrow mentioned in this Barron's article BNP Paribas, which he calls one of the highest quality institutions. That ranks right up there with JPMorgan Chase. Trades at about seven times earnings, 70% of book value. Return on equity is 13% to 14%. Pays a dividend of 6.8%. Hero notes that JPMorgan trades for 2.3 times book value, 13 times earnings and less than one-third as much of a dividend as BNP Paribas.
Keith Lanton:All right, let's move on to financial markets this morning. Financial markets this morning. We are seeing futures rising as risk appetite is recovering following a sharp sell-off in the last week. Investors awaiting pivotal results from chip giant Nvidia and a key inflation report, which is the PCE coming out on Friday. Another catalyst coming from Europe, where German elections results put centrist parties on track to form a coalition that pushed German stocks and the European markets higher, although optimism there is tempered by potentially tricky negotiations over economic policy. Meanwhile, china and Hong Kong stocks fell, dragged down by weakness in tech and health care. Gold is hovering near a record high, supported by the weaker dollar. Oil prices steady as traders await progress on the push for the Ukraine peace deal.
Keith Lanton:Some specific companies in the news this morning Apple announcing they will spend more than $500 billion in the United States over the next four years and this is going to set up production servers in Houston, texas. President Trump acknowledged the $500 billion investment but made no mention of what he would do with regard to Apple's business and the effect from imposing tariffs on that business with respect to China. Microsoft in the news this morning. A couple of stories with respect to Microsoft, the biggest one making the way around the trading desks on Friday and just coming out in the broader markets this morning. An analyst at TD Cowen on Friday raised concerns that Microsoft was cutting AI data center spending and some suggesting that may have led to or been a big contributor to the sell-off in markets on Friday. Fears there about the sustainability of the artificial intelligence trade Analysts saying that investors are worried about what any pullback in spending by Microsoft may mean. Perhaps this is an early sign that AI demand is plateauing and that we are no longer in a computing shortage, also reports this morning that quantum claims are being questioned by physicists. This has to do with a quantum chip that Microsoft developed and announced last week, and some physicists are questioning some of the findings there. So one area, one news story, specifically affecting Microsoft, the other certainly having to do with Microsoft, but Microsoft being one of the big leaders in AI. If they are pulling back spending in any way, that is very noteworthy, but we will hear lots more this week because, as we mentioned, nvidia has earnings this week, so that is something that traders will be watching with lots of attention.
Keith Lanton:Alibaba, symbol B-A-B-A, chinese data security data center company obviously an online retailer as well saying that they're going to spend $53 billion on artificial intelligence. Domino's Pizza, dpz had earnings this morning. They missed by a penny. They missed on revenues. They did raise their dividend Stock's down about 20 points, which is about 4%.
Keith Lanton:Equity markets in Asia began the week on a lower note. Japanese markets closed for a holiday. The Hang Seng was down 0.6%. India down over 1%. China down 0.2%. Most European markets are higher. France is underperforming down slightly. French President Macron is in the US and is meeting with President Trump. German markets are up just under 1% on those election results. Other news this morning, speaking of the election results, new York Times talking about the fact that the Christian Democrats won the German parliamentary elections. Now the far-right party did come in second, uh, but uh, they came in a little bit weaker than uh some of the uh pollsters uh will were anticipating Frederick Murs will become chancellor. He has promised tougher immigration enforcement and lower taxes.
Keith Lanton:Ukrainian President Zelensky said he would resign the presidency if a peace deal is reached or if Ukraine gets NATO membership. That's according to NBC News. Ukraine is seriously considering a revised proposal where it would relinquish half of its revenues from natural resources. That's according to the United States and that story appearing in the New York Times. Wall Street Journal reporting that some House Republicans have concerns about the proposed Medicaid cuts in the reconciliation bill, while others have concerns about federal spending on the program. So we're seeing House Republicans completely on opposite ends here. It'll be interesting to see if they're able to get enough votes to get this reconciliation bill approved by the House, and the House is planning on voting on that bill tomorrow.
Keith Lanton:Bloomberg reporting that the EU is in discussions for a $20 billion euro aid package to the Ukraine. Bloomberg is also reporting the Pentagon is aiming to fire 8% of its civilian workforce. La Times is reporting that California is requesting $40 billion in federal aid for the wildfires. Elon Musk over the weekend said, consistent with President Trump's instructions, all federal employees will receive an email requesting to understand what they have done last week. Failure to respond will be taken as a resignation, he said. A large number of good responses, he said, have been already received and these are people who should be considered for promotion.
Keith Lanton:All right, moving on to this week, what's going on? I mentioned NVIDIA, so put a little meat on that announcement that's coming out on Wednesday. Nvidia stock is so far relatively flat this year, after having risen ninefold over the past two years, which added about $3 trillion to its market capitalization. Consensus estimates are for NVIDIA to earn $0.84 a share, $38.1 billion in sales. That would represent growth rates of 64% for earnings per share, 72% for revenue. Analysts are going to be paying careful attention to revenue. For the data center segment, which includes AI chips, that's expected to be about $33.5 billion. For 2025, analysts are penciling in earnings per share of $29, a share and sales of about $130 billion.
Keith Lanton:Then the next big event analysts will be watching this week is on Friday, when the Bureau of Economic Analysis releases the Personal Consumption Expenditures Price Index for January. Economists forecast a 2.5% year-over-year increase. That's one-tenth of a percent less than December. That's the 2.5% year-over-year increase. That's one-tenth of a percent less than December. Core PCE, which strips out volatile food and energy, expected to rise 2.6% compared with 2.8% previously. This report is getting even extra attention because the CPI came in hotter than expected. So all eyes now on the PCE report on Friday.
Keith Lanton:Barron's talking about one of the other catalysts that we haven't addressed yet, having to do with the sell-off that we saw on Thursday and Friday of last week, and that was the results and commentary from Walmart. So Walmart, after they reported their results, we saw markets sell off in response to that. Previously in the week, investors had shrugged off some concerns regarding initiation of tariffs, but the Walmart news proved to be just too much for the markets to bear. So Walmart spoiled the party, helping to sour sentiment. On Thursday, walmart spoiled the party, helping to sour sentiment. On Thursday, walmart had a strong holiday quarter, as anticipated, but did miss lofty expectations. For its full year forecast. Walmart now expects sales to grow 3% to 4%.
Keith Lanton:Analysts were expecting numbers to come in on the higher end of that range, so they were looking for us, even hoping for slightly more than 4%. Management reiterated that US shoppers were resilient, but the street was clearly hoping for more reassurance. And then things didn't improve much on Friday when we got data from the University of Michigan and they reported their consumer sentiment index for February. That came in at 64.7. Analysts were expecting 67.5. But this number represented a 10% decrease from January. All five index components fell for the month, which only added to the gloom. Also, existing home sales on Friday came in lower than expected, so markets disappointed there and also University of Michigan polls showed that the inflation expectations were ticking up.
Keith Lanton:But despite all this weakness that we saw at the end of last week, let's keep things in perspective. Financial markets for the year still up over 2 percent and we are seeing futures higher. This morning Dow futures up about 250. Nasdaq futures up. This morning, dow futures up about 250,. Nasdaq futures up about 100, and S&P futures up about 30 points.
Keith Lanton:One other thing that did take place over the weekend was Warren Buffett came out with his famous shareholder letter and in his letter to shareholders Warren Buffett defended Berkshire Hathaway's cash holdings, reiterated his preference for owning good businesses. He discussed the strong performance of Berkshire's insurance arm, which was responsible for a large portion of the firm's earnings last year, and he remained confident in the firm's Japanese holdings, which he said could increase in the coming year. The letter was accompanied by Berkshire Hathaway's financial results for 2024, which showed operating earnings rising to $47.4 billion, 27% increase from the previous year. And that's despite the fact that half of the company's operating businesses actually saw their earnings decline last year. Buffett, on his growing cash pile, said, despite what some commentators currently view as an extraordinary cash position, which he announced $334 billion, he told shareholders the great majority of your money remains in equities and that preference won't change. Buffett noted, while the firm's holdings and stocks fell last year, the value of its private holdings rose and remains far greater than the value of its public or marketable portfolio. On the investments in Japan, buffett said he expects Berkshire to continue holding his Japanese position for decades to come. Berkshire had previously agreed to limit its holdings to no more than 10% of the company's shares, but now saying that that could climb higher.
Keith Lanton:What Buffett did leave out, perhaps just as notable as his words of wisdom, for what he said is what he didn't say. He was tight-lipped on today's stock market conditions, although he did offer his lasting optimism on American earnings power over time, saying I have depended on the success of American businesses and I will continue to do so. He also noted that, at age 94, it won't be long before Greg Abel, the vice chairman of Berkshire's non-insurance operations, takes over as CEO. He noted that he is now walking with a cane and that he will be taking fewer shareholder questions at the upcoming Berkshire annual meeting. So clearly some indications that he is slowing down and see if the markets reflect that At 94,. Of course, slowing down is a relative term.
Keith Lanton:A couple of individual stocks in Barron's Barron's out talking about the two companies that have been out of favor. One is Comcast, the other Intel. Comcast Barron's viewing as a reasonable let's call it opportunity, saying that the stock presents a clear and simple opportunity. Moving to a pure play model could heighten interest in the complicated media giant stock, which is already trading at a discount. Again, the symbol for Comcast is Charlie Mary, charlie Sam, apple, cmcsa. It's valued at about eight times projected 2025 earnings Discount to its major cable and telecom peers and one of the lowest PE ratios in the S&P 500, which we've talked a lot about PEs this morning and the relative height, or dizzying heights, of that ratio for many companies, and here we're looking at one at a single digit PE 3.6% dividend yield, and last year they bought back about 5% of their stock. Analysts are expecting a similar amount of repurchases this year. Barron's mentions an analyst that is bullish, craig Moffitt of Moffitt Nathanson, and he has a price target of around $50 a share.
Keith Lanton:Despite all this attractive, arguable valuation, investors right now don't appear crazy about Comcast or their conglomerate model. But in February a Wolf Research analyst, peter Cipino, laid out what could become an activist playbook in an open letter to the Comcast CEO, brian Roberts, urging the company to split into three parts cable and broadband, nbcuniversal Sky and cable TV networks. One of the factors that has been weighing on the stock over the past few years is investor concerns about steady but modest subscriber losses in broadband, which accounts for about 80% of pre-tax cash flow, which accounts for about 80% of pre-tax cash flow. Those concerns accelerated after their fourth quarter earnings release in late January, which showed a decline of 139,000 subscribers. The street was looking for about 100,000. Stock fell 10% right after that disclosure, but it has recouped much of that loss since then. Also, at that time the company did not give 2025 guidance, but another comment by the president of Comcast that conditions remain intense, dynamic and varied, with no signs of this changing in the near term, also reflecting some of the concerns of investors.
Keith Lanton:But Barron's feels that the outlook currently is being discounted into the company's stock price. The analyst I mentioned before, craig Moffitt, remains bullish, arguing that broadband losses likely have peaked. He wrote that the stock looks cheap, valued at 10 times this year's projected cash flow and five times 2028 free cash flow. And the article concludes that Comcast is a rare big company with an inexpensive stock, ample capital returns and has what Wall Street terms optionality or several different ways that they could potentially win. One company Barron's mentioned that is another one that has soured in terms of investors' focus on this stock and that is Intel symbol INTC. No-transcript.
Keith Lanton:Intel's challenges, they go on to say, the flurry of news reports says at times contradicted each other Recent reports saying the Trump administration raised the idea of Taiwan Semi taking a controlling stake in Intel's CHEP factories, but another report coming out of the White House saying that President Trump would not likely support a deal like that. So the fact is, the prospects for a transformative Intel deal face two primary challenges that will be difficult to overcome. First, any major transaction for a purchase of Intel's product group would need approval from global regulators, and China blocked a much smaller acquisition by Intel in 2023 of Tower Semiconductor, suggesting that China isn't keen on any acquisition that would help the US chipmaking industry. Second, there isn't an easy way to separate Intel's chip manufacturing operations, and all this has taken place while Intel still does not have a permanent CEO after Pat Gesslinger retired in December. So Intel perhaps needs to get its house in order before it can start making decisions about what its future will in fact look like.
Keith Lanton:That's everything I've got.
Alan Eppers:Thank you for listening to Mr Keith Lanton. Look like that's everything I've got. Thank you for listening to Mr Keith Lantern. This podcast is available on most platforms, including Apple Podcasts, Spotify and Pandora. For more information, please visit our website at www. heraldlantern. com.
Sophie Cohhen:Opinions expressed herein are subject to change and not necessarily the opinion of the firm. Past performance is no guarantee of future results. The information presented herein is for informational purposes only and is not intended to provide personal investment advice. It is important that you consider your tolerance for risk and investment goals when making investment decisions. Investing in securities does involve risk and the potential of losing money. The material does not constitute research, investment advice or trade recommendations.