I got that right.
Michael, welcome to you.
Thanks.
Hi.
Happy to be here.
A lot of people don't have a lot of conviction
on Home Depot right now because we still see the
housing market overall in kind of this frozen state.
Yeah, well, we like it for 2025 because we do
think that rates are going to come down and Home
Depot does well in that kind of environment.
We think housing is is at least bouncing along the
bottoms and should get better.
Well, we also like it in the short term.
One of our calls is that retail typically does not
do well this time of the year.
In fact, in 10 of the last 14 years, the
XRT has underperformed the market from Black Friday to year
end.
There's just too much risk this time of year.
We call it the silly season, but there are some
names that actually do well this time of year in
our group, and it's the ones that have the least
holiday exposure.
That might sound counterintuitive, but in some ways it makes
sense.
The less risk you have, the better the stock typically
does this time of the year.
And so that's Home Depot and Lowe's, that's the auto
parts retailers, and that's Tractor Supply as names that hold
up well this time of the year.
See, that's so brilliant.
That makes perfect sense to me.
And I'm so glad that you pointed that out.
Of course, there's headline risk.
All of us turn into many retail analysts and every
time we get the MasterCard or they think, I thought
they're only up 3.1% of what?
What could this be every time, you know?
And so it just creates this.
Now, maybe volatility is good for certain traders, but for
investors, it must drive them crazy.
Listen, you did some channel checks this weekend.
I did a lot of channel checks at the mall
last week.
What were your big takeaways?
Oh, yeah.
And by the way, that's exactly why we call it
the silly season because the analysts get on.
They say, oh, I went to Best Buy this weekend.
It looked a little bit less crowded than last year
at the one store that I usually go to.
And all of a sudden, everybody panics.
So again, the less risk you have this holiday season,
the better the stock typically does.
That being said, yeah, we did go to Best Buy
and actually the the traffic was heavy.
Now, Best Buy is always the most crowded store that
we go to on Black Friday.
Everyone loves consumer electronics.
Big destination this time of year.
So not surprisingly, they were crowded.
Walmart actually was pretty crowded as well, particularly again, the
consumer electronics area in the toys area in Walmart looks
well shopped as well.
I didn't realize that build-a-bear was public.
I went in there for the first time the other
day and I was a little, I was a little
underwhelmed.
Well, not only the public, it's up 65% year to
date.
It's been a really good stock.
So we think it's worth taking a look at.
We think it's under followed, underappreciated.
Despite the fact that the stocks been up 65%, it's
still a low valuation.
In other words, most of that year to date stock
performance has come from increased earnings rather than multiple expansions.
So a name worth looking at.
All right, So give me who's going to be the
next Build-a-bear going into 2025.
Another smaller cap name that we like is Love SAC
that stocks up about 45%.
They'll do an analyst Day in in December, December 17th,
I believe in in New York City, they're going to
unveil their recliner chair more products coming next year.
We think that's another smaller cap name to own.
So that's among our favorite small cap names.
Again, on the big cap side, Home Depot, a top
idea and Dick's, Dick's.
We've called Dick's a best idea now two years in
a row.
In both years, it's outperformed, yet it's still only 14
times earnings.
As one of the previous guests said that the markets
trading about 28 times.
Dick's has been a really strong stock and still only
14 times earnings.
So we think there's a lot of room to go
on that one as well.
So surprising.
Michael, This is why we love talking with you.
Thanks for coming on.
We appreciate it.