Unable Investment
Club
September, 2025 Meeting Minutes
September 30, 2025
The monthly meeting of
Unable Investment Club was held Burning Barrel Brewing Company in Rancho
Cordova on Thursday, September 4, 2025.
The meeting commenced at 2:50 pm with KS presiding for FN. JL, PR, CX, HT
and DK were also in attendance.
Unable Investment Club has 1 opening.
The Valuation and Member
Status reports were reviewed and the checks were collected.
Late: None.
Old Business:
None.
New Business:
None.
Stock News:
AMT While 29% of Gen Z investors prefer to invest in real
estate, half of that group also indicated a preference for investing in
technology. American Tower sits at the intersection of both sectors. The
communications infrastructure REIT owns a global portfolio of more than 150,000
communication sites. It also owns several U.S. data center facilities. The
company's towers serve as the backbone infrastructure to the mobile networks
most Gen Zers can't live without. It supports the ability to send texts, post
to Instagram, and watch TikToks from almost anywhere. Meanwhile, American
Tower's data centers play a vital role in supporting streaming, cloud
computing, and AI. American Tower leases capacity on this infrastructure to
mobile carriers, technology companies, and other customers. Those leases
provide it with a stream of rental income, which it uses to pay dividends.
American Tower's dividend currently yields 3.5%, nearly triple the yield of the
S&P 500. With demand for its infrastructure only going to grow in the
future, American Tower's dividend payment should continue heading higher in the
coming years.
AAPL Iconic electronics titan Apple has faced considerable
criticism for its lackluster rollout of AI iOS features it had dubbed Apple
Intelligence. It was supposed to be an easy layup -- there are over 2.35
billion active iOS devices worldwide. Successfully bringing AI to Apple users
would have almost assured the company's place as a top AI company, where
next-generation technology would further enhance its already sticky ecosystem. Unfortunately,
Apple dropped the ball. The company has struggled to ship first-party AI
features and has since delayed its launch of an upgraded Siri, Apple's virtual
personal assistant, to a 2026 release date. But don't write Apple off just yet.
The company continues to specialize in bringing refined, quality hardware
products to market, allowing its iOS ecosystem to shine. Apple just launched
its latest iPhone models: the 17, 17 Pro, and Pro Max, as well as a new,
slim-design model, the iPhone Air. According to early indications, Apple may be
in for a strong hardware cycle. The CEO of T-Mobile recently noted that iPhone
sales are at an all-time high. Industry experts also pointed out strong demand
for the new iPhone lineup. While Apple must ultimately deliver a working and
compelling slate of AI features for its devices, it's clear that Apple's core
hardware products haven't lost their fastball. That should give the company
time to figure out AI and keep the stock on the radar of any investor looking
for some AI upside, but would rather stick with a blue-chip winner versus
rolling the dice on unproven or speculative AI stocks.
AMAT Applied Materials sold off after its own recent earnings
release. While Applied beat revenue and earnings estimates for its third
quarter, which ended July 27, management forecasted a slight revenue and
earnings decline in the current quarter. Management attributed the downturn to
"digestion" in China, as well as "uneven" ramps in
leading-edge logic. While that may seem worrisome, the reasons given seem
reasonable. Applied's results actually held up better than some peers during
the post-pandemic downturn in semiconductors, so it may make sense that there
is a little air pocket today. And while the leading-edge logic fab buildout may
be uneven, the rise of artificial intelligence should bolster growth over the
medium term. Oracle forecasts robust AI data center growth through 2030, and
all those data centers will need lots of chips. Applied is the most diverse
semiconductor equipment supplier, so it should get a solid piece of that
growing pie. Its equipment is concentrated in etch and deposition machines, which
should see better-than-average growth over the next few years as chipmakers
begin to implement new innovations such as gate-all-around transistors,
backside power, and 3D architectures for both DRAM and logic chips, all of
which are etch- and deposition-intensive. Applied now trades at just 20 times
earnings and 17 times next year's estimates, which are below-market multiples.
That seems absurdly cheap for a high-margin, cash-generating tech leader that
should benefit from AI growth. Fortunately, Applied has rewarded shareholders
with consistent share repurchases and a growing dividend, and that should
continue going forward, even if the company has an off quarter here and there.
BWXT BWX Technologies has secured a substantial contract
valued at $1.5 billion with the National Nuclear Security Administration, part
of the Department of Energy. This contract aims to establish a domestic uranium
enrichment capability for defense purposes. BWXT will be tasked with developing
the Domestic Uranium Enrichment Centrifuge Experiment pilot plant.
Responsibilities include designing the facility, securing necessary licenses,
acquiring essential equipment, preparing the site, and showcasing centrifuge
manufacturing readiness and operational capabilities. Located at BWXT’s Nuclear
Fuel Services site in Erwin, Tennessee, the plant will initially demonstrate
low-enriched uranium production for defense missions. Eventually, its purpose
will shift to producing highly enriched uranium for naval propulsion. A new
Centrifuge Manufacturing Development Facility is also underway, having
commenced construction in Oak Ridge, Tennessee, in June 2025. This initiative
is expected to provide approximately 100 specialized jobs, with further
employment expansion anticipated as the project progresses through its initial
phases and begins low-rate manufacturing demonstrations. The facility's
development signifies a significant advancement in BWXT's dedication to
establishing a fully domestic uranium enrichment capability for national
defense.
CNI Canadian National Railway Company has teamed up with
CSX Corporation to introduce a new intermodal service reaching Nashville,
Tennessee. This initiative aims to offer a seamless rail transport option for
international containers traveling from Canada's West Coast, passing through
Memphis, and directly arriving in Nashville. By substituting the current
trucking segment with a steel-wheel interchange, the collaboration between CN
and CSX is set to enhance the speed, reliability, and sustainability of supply
chain solutions. This development is expected to significantly benefit
customers by offering a more efficient transport alternative.
COST Shares of Costco were pulling back Friday, Sep 26, after
the warehouse retailer delivered solid fourth-quarter results, but they weren't
quite strong enough to push the stock up, given its lofty valuation. And
management's comments about weakening discretionary spending may have spooked
some investors. Costco is one of the steadiest businesses in retail, and it
showed that in its latest report. Same-store sales in the quarter rose 6.4%,
adjusting for fuel prices and currency exchange, which lifted revenue to $86.2
billion, up 8% from a year ago and topping estimates at $86.1 billion. The
company continued its strong membership growth with global renewal rates at
90%, and membership fee income jumped 14% to $1.72 billion, benefiting from a
fee hike in the quarter a year ago. On the bottom line, earnings per share rose
11% to $5.87, beating the consensus at $5.81. On the earnings call, management
did note that consumers were pulling back on discretionary spending, and it was
adjusting its assortment accordingly. That may have helped cool off the stock. While
Costco makes most of its revenue from staples like groceries, it tends to earn
a higher margin on discretionary items like electronics or furniture. Management
doesn't give guidance, but the company's results tend to be pretty stable from
quarter to quarter. Still, even a business like Costco can be vulnerable to an
economic downturn. For now, the business continues to look rock-solid, but its
price-to-earnings ratio around 50 will continue put pressure on the stock and
create high expectations around its earnings reports.
EME Besides data center construction projects, EMCOR
Group, Inc. is witnessing growing demand in the healthcare and pharma-related
projects. These trends are substantiated by the company’s performance in the
first half of 2025. During the first six months of 2025, the Healthcare market
sector contributed 10% (up from 7% from a year ago) to EMCOR’s United States
electrical construction and facilities services revenues and 9% (flat year over
year) to the United States mechanical construction and facilities services
revenues. During the said time frame, the Healthcare market sector’s revenues
under the electrical construction and facilities services segment grew 110%
year over year to $241.4 million, boosting this segment’s revenue contribution.
Additionally, as of June 30, 2025, the Healthcare market sector’s remaining
performance obligations (RPOs) totaled $1.4 billion, driven by strong market
demand patterns and expanded opportunities resulting from the Miller Electric
acquisition. Notably, healthcare offers EME a diversified revenue stream, which
is expected to balance out the instability caused by other sectors like data
centers, institutional and industrial, over time. With the recent Fed rate cut
by 0.25 percentage points, pulling down the benchmark to the range of
4.00-4.25%, and optimism surrounding the expectations of two more rate cuts in
2025, it bodes well for EMCOR as well. Although market risks, such as high input
costs, regulatory compliance, tariff-related uncertainties and competitive
pressures, will loom over EME, the positive attributes are expected to balance
them out. With the interest rates lowering and market trends for the healthcare
sector growing, the company is well-positioned to cash out from this sector in
the mid and long term.
GOOGL The primary tech investment trend is currently artificial
intelligence (AI). All of the AI hyperscalers are dumping billions of dollars
into building out AI computing capacity to push the limits of what's possible.
We're still in the early innings of learning what AI can do, and it will be
some time before there's enough computing capacity available to see AI's full
effect. Another trend that is on the horizon is quantum computing. Quantum
computing has the potential to unlock a new level of AI power that we haven't
experienced, but this technology is still being proven. Combining both of these
trends that will play out over the next decade in a single investment option
would be ideal, and fortunately for investors, there's a company that is doing
that: Alphabet (GOOG -1.02%) (GOOGL -1.02%). Alphabet is heavily investing in
both artificial intelligence and quantum computing, and looks like a strong
candidate in both of these important and emerging industries. Alphabet is
better known as the parent company of Google, although it owns many other
businesses. Alphabet has wisely used its impressive cash flows to invest in
many other businesses, and this has led to its widespread success today. In the
AI realm, many investors were worried that its cash cow, the Google Search
engine, may be replaced by generative AI. However, that isn't panning out, as
Google is still retaining a lot of its user base alongside most of the revenue
on the platform. In Q2, the Google Search segment delivered 12% year-over-year
growth. That doesn't sound like a declining business, and one feature is likely
to thank for its continued relevance. AI search overview incorporates a
generative AI summary at the top of each result, combining the form factor of a
traditional internet search engine with generative AI. This makes Google
Gemini, the large language model behind the feature, one of the most used in
the world, which is a huge advantage for training the model. Furthermore,
Gemini consistently ranks among the best-performing generative AI models,
making Alphabet a leader in this space. It's also actively pursuing quantum
computing technologies, and the combination of its AI leadership and a viable
quantum computing chip could make Alphabet an unstoppable business. Back in
December 2024, Alphabet created a mini quantum computing investment rush when
it announced that its Willow quantum computing chip had completed a task that
would have taken traditional computing methods 10 septillion (10 to the 25th
power) years. While this test was specifically created to test quantum
computing viability, it still proves that Alphabet is making progress in this
area. Alphabet is developing its own quantum computing chip for one primary
reason: It doesn't want to buy computing units from an external provider. To
power its AI ambitions, Alphabet buys graphics processing units (GPUs) from
Nvidia and custom AI accelerators from Broadcom. Both of these companies are
middlemen that drive the price of computing units up. However, if Alphabet can
develop its own quantum computer in-house, it can cut the middleman out and be
far more profitable. This makes integrating quantum computing into its existing
AI computing infrastructure easier, and also gives Alphabet an advantage in the
cloud computing space, as it could rent out quantum computing capabilities. Time
will tell if Alphabet develops a winning approach in the quantum computing
realm, but it's already an established leader in the AI world. With nearly
unlimited resources compared to some quantum computing pure plays, I'm
confident that Alphabet can develop a viable quantum computing chip that boosts
its AI capabilities and can be rented out via cloud computing offerings. This
makes Alphabet a genius stock pick to bridge the gap between AI and quantum
computing, and I think investors can be confident scooping up shares today with
the expectation that Alphabet will beat the market over the next decade.
LIN No news.
MSFT Microsoft has a multi-pronged approach to benefiting
from AI. Its early moves to integrate ChatGPT's platform into its suite of
services have already paid off, with millions of users now using the company's
Copilot AI services. That's helped increase Microsoft's total sales, which
jumped 18% in Q4 to $76 billion and helped non-GAAP earnings rise 24% to $3.65
per share. But the real long-term opportunity for Microsoft is likely its cloud
computing business, Azure, which already has 20% of the public cloud market. As
demand for AI services increases, companies need more powerful cloud computing
platforms. Azure is already benefiting -- generating $75 billion in fiscal
2024, a 34% increase from last year. And with global AI cloud computing revenue
estimated to reach $2 trillion by 2030, Microsoft should be able to tap this
market for years to come.
NU The S&P 500 Financials index has risen roughly
12% year to date, but its gains have underperformed the 13% or so increase for
the benchmark S&P 500 index across the year. Meanwhile, Nu Holdings stock
has managed to soar far higher than either index -- up 56% -- across this
year's trading. Despite the fact that Nu stock has substantially outperformed
the broader market and financials space, there are good reasons to think that
shares of the Brazil-based digital bank remain one of the best buys in the
sector. Here's why. In the second quarter, Nu Holdings posted year-over-year
sales growth of 42% on a currency-adjusted basis. The business added 4.1
million new customers in the period -- good enough to deliver year-over-year
growth of 17%. Nu continues to solidify its position as a leading fintech
services provider in Brazil and other Latin American markets, and it closed out
last quarter with 122.7 million users across its platform. Nu has an impressive
user base, and it continues to grow engagement at an impressive pace. With a
gross margin of 42.2%, Nu still has plenty of room for margin expansion going
forward. In between a strong sales growth outlook and the potential for substantial
profit-margin improvements, Nu Holdings is a stock that looks poised to
significantly outperform the financial sector.
NVDA Nvidia sits at the center of the artificial intelligence
(AI) boom -- but investors are split on whether this is still the early innings
or the final act of a bubble. The stock has surged 56% over the past six
months, yet slipped 2% in the last 30 days (as of Sept. 26, 2025), reflecting
growing unease. On the surface, the numbers leave little doubt. Q2 fiscal 2026
revenue jumped to $46.7 billion, with gross margins topping 72%. But warning
signs are flashing: capital spending at bubble-like levels, enterprises
questioning AI's return on investment, and competitors eager to chip away at
Nvidia's dominance. The truth likely falls between euphoria and collapse. Nvidia
remains the backbone of AI infrastructure, but the easy money may already be
behind it. The key question for October: Is the stock still a buy, or has the
market already priced in perfection? Nvidia's latest quarter didn't just meet
expectations -- it redefined them. Data center revenue soared to $41.1 billion,
nearly double the company's total revenue from just two years ago. Shareholders
were rewarded handsomely: $24.3 billion returned in the first half of fiscal
2026, with another $60 billion buyback locked and loaded. Those aren't
defensive moves; they're a declaration of confidence in a cash machine that
shows no signs of slowing. The strategy also stretches beyond GPUs. A recent $5
billion stake in Intel signals Nvidia's intent to shape entire computing
stacks, not just dominate acceleration. On the product front, the Blackwell
architecture is ramping quickly, while Rubin and Feynman -- the next-generation
chips already in the pipeline -- keep the roadmap full. And then there are the
customers. Microsoft, Amazon, and Alphabet can't build their AI ambitions
without Nvidia silicon. When every hyperscaler depends on your hardware,
pricing power follows. The 72% gross margins are the proof point -- not an
aspiration, but a fact. History suggests caution when capital spending reaches
current extremes. Tech infrastructure investment now echoes 1999 -- today, AI
replaces the internet as the narrative fuel, but the investment cycle looks
strikingly familiar. This circular validation creates dangerous echo-chamber
economics, where each player's investment props up the next without clear
evidence of end-user ROI. Microsoft invests in OpenAI, which buys Nvidia chips,
which Microsoft cites as proof of AI demand. Meanwhile, enterprises
experimenting with AI report mixed results. Many pilot projects fail to scale,
costs exceed budgets, and productivity gains prove elusive. If customers can't
monetize AI, they won't keep buying $40,000 GPUs indefinitely. Competition
looms larger than investors acknowledge. Advanced Micro Devices gains ground
with MI300 chips. Broadcom dominates custom silicon for hyperscalers. Amazon,
Alphabet, and Meta Platforms accelerate in-house chip development. Even Intel's
Gaudi processors show promise in this regard. Nvidia's moat remains formidable,
but 90% market share only moves in one direction from here -- down. The bear
case often stops at today's AI boom, but that misses Nvidia's bigger play. This
isn't a one-trick company riding a temporary surge -- it has built hedges that
extend its dominance into the next era of computing. Take quantum computing
research. The world's leading labs lean on Nvidia's CUDA platform and DGX
systems to simulate quantum algorithms long before the hardware exists. In
robotics, everything from warehouse automation to autonomous vehicles already
depends on Nvidia's edge-computing solutions. And in industrial automation --
whether it's drug discovery, climate modeling, or materials science -- the
workloads demand accelerated computing that only Nvidia can deliver at scale. So,
when AI training demand eventually cools, Nvidia won't be left scrambling.
Inference workloads alone could rival today's training revenue, and robotics or
scientific computing could add entirely new legs of growth. At $4.3 trillion,
the market may be pricing in perfection, but the company's portfolio hints at
multiple acts still to come. Nvidia's stock offers no easy answers heading into
October. Bulls see unstoppable AI adoption, 72% margins, and a stranglehold on
data center compute. Bears point to bubble-level valuations across the AI
landscape, shaky ROI for AI investments to date, and rivals eager to chip away
at Nvidia's dominance. Both sides have valid arguments. For traders, the setup
looks risky after a 56% six-month run -- even a small miss on Blackwell
shipments or hyperscaler demand could spark a 20% to 30% pullback. For
long-term investors, Nvidia remains the definitive picks-and-shovels play on
the future of computing, with exposure not just to AI but also quantum,
robotics, and industrial automation.
SPGI S&P Global provides financial data, credit rating,
and analytics services for all the Fortune 100 companies and most of the
Fortune 500 companies. Its top customers are big banks, insurance companies,
corporations, universities, and institutional investors that use its tools to
make their financial decisions. It's been rolling out new AI features --
including its Spark Assist generative AI co-pilot -- to optimize, accelerate,
and automate many of those tasks. S&P Global and its smaller competitor
Moody's hold a near-duopoly in this lucrative market. Its customers use its
services through both bull and bear markets, so it's often considered an
evergreen stock. However, higher interest rates temporarily curbed the growth
of its credit rating business in 2023 as companies issued less debt. In 2024,
its growth accelerated again as interest rates declined. From 2024 to 2027,
analysts expect its revenue and adjusted EBITDA to grow at CAGRs of 7% and 8%,
respectively. It still looks reasonably valued at 21 times next year's adjusted
EBITDA, and it's one of the easiest ways to profit from the upcoming interest
rate cuts.
TSM When investors think about powerhouses in the
semiconductor industry, the usual names that dominate the conversation are
Nvidia, Advanced Micro Devices, and Broadcom. These companies are responsible
for designing the high-performance chips and networking hardware powering
next-generation data centers at an unprecedented scale. Operating more quietly
in the background, however, is Taiwan Semiconductor Manufacturing. While TSMC
(as it is also known) is less flashy than its peers in the race for artificial
intelligence (AI) chips, the company's supporting role is nonetheless
mission-critical. As the world's largest chip foundry by revenue -- with almost
70% market share -- TSMC is the manufacturer behind many of the AI industry's
most advanced processors. Its dominance has left rivals like Intel struggling
to catch up, with meaningful market share gains appearing more like a pipe
dream than measurable reality. But in a surprising twist, Tesla CEO Elon Musk
recently highlighted a big break for one of those rivals, Samsung Electronics,
giving its investors some much-needed optimism. The announcement raises an
important question: Will Samsung's latest win usher in a new era of growth and
pose a serious challenge to TSMC's supremacy? In late July, Musk announced on X
that Tesla had signed a $16.5 billion agreement with Samsung to produce its
next-generation inference chip, known as the AI6. Samsung will be manufacturing
these chips at a new foundry in Texas, strategically positioning the company
closer to Tesla's headquarters and reinforcing its footprint beyond South
Korea. Tesla's upcoming innovations -- most notably its Robotaxi platform and
Optimus humanoid robot -- will demand highly sophisticated chip designs and
huge computing capacity to function. This makes securing advanced foundry
services essential for the company's ambitions in a rapidly evolving AI
landscape. At first glance, a deal of this magnitude might look like a major
setback for TSMC. The reality, however, is more nuanced. Musk clarified that
TSMC will manufacture the predecessor chip to the AI6 -- aptly called the AI5.
In other words, Tesla is deliberately engaging with multiple foundry partners
as a strategic, cautious hedge aimed at reducing supply chain risk and ensuring
redundancy. While Samsung's win provides a boost of credibility to its lagging
foundry business, analysts at Morgan Stanley said that the deal is unlikely to
meaningfully dent TSMC's dominance or serve as a material headwind to its
long-term revenue and earnings potential. Moreover, as TSMC continues to invest
in its own infrastructure here in the U.S., the company remains on secure
footing to deepen its ties with AI's biggest spenders even further. Samsung
investors have gained tangible proof that strengthens the company's long-term
prospects, but TSMC's durable technological position remains supported by
entrenched scale, advanced processor leadership, and deep customer
relationships. For now, this deal underscores that Samsung can still compete
for landmark contracts and carve out relevance in an industry where TSMC's
gold-standard reputation remains firmly intact. At a more macro level, the deal
also signals that as AI applications become increasingly more sophisticated,
leading enterprises like Tesla are keen on maintaining choice by diversifying
key manufacturing partners to ensure stability, flexibility, and supply chain
resilience. For investors, the larger takeaway is clear: Samsung's relationship
with Tesla illustrates that the company is capable of winning meaningful
battles. Nevertheless, TSMC is still ahead. Rather than a checkmate, this
development looks more like a fleeting stalemate at best -- a dynamic that will
continue to evolve as global demand for next-generation chip architectures
accelerates and further intensifies the foundry race.
TTD In 2025, it is not easy to find a large-cap stock
that has lost more positive sentiment in such a short period than The Trade
Desk. The programmatic advertising company's stock price is down 60% since the
beginning of the year. It plunged dramatically following earnings reports
released in February and in August. The severity of the drop probably changes
the investment thesis on the stock. As the leading independent self-service
platform for buying digital ad space, it offers a competitive advantage over
large advertisers like Alphabet or Amazon, which hold biases toward their
platforms. Given the pace of its growth and the severity of its stock decline,
investors have likely turned overly pessimistic on the stock, and here's why. This
year, The Trade Desk has become a tale of disappointing earnings reports. It
started in February, when the stock lost most of its value after missing its
own revenue estimate for the fourth quarter of fiscal 2024. The stock
plummeted, but a recovery accompanied by a favorable earnings
report the next quarter helped it recover some of its lost value. However, The
Trade Desk took another hit after announcing results for the second quarter of
fiscal 2025 in August. Concerns about tariffs pressuring large customers and
rising competition from the likes of Google and Amazon weighed on the stock. More
recently, investors have found growing dissatisfaction with The Trade Desk's
artificial intelligence (AI) platform, Kokai. A confusing interface and the
removal of popular features from the old platform Solimar disappointed both
users and investors. It was also unclear whether the company had forced users
to adopt Kokai or would still allow them to continue using Solimar, making it
more difficult for customers to do business with The Trade Desk. Fortunately,
The Trade Desk has moved to address this concern and has partially removed an
unpopular interface from Kokai. The company has also moved to address the
worries of investors, reporting that over 70% of client spend is now on Kokai
as of the second quarter of 2025. Nonetheless, the financials continue to point
to unappreciated strength in The Trade Desk, though revenue growth has
decelerated. In the first half of 2025, revenue of over $1.3 billion increased
by 22% compared to the same period in 2024. While still a robust growth rate,
the rise in revenue was down from the 27% increase it experienced in the
previous year. During that time, costs and expenses almost kept pace with
revenue growth. Additionally, a much higher income tax expense resulted in $141
million in net income for the first half of the year, rising 21% yearly. Indeed,
the projected revenue increase of 14% for Q3 is down from prior quarters and
could point to continued struggles with the platform. Nonetheless, analyst
estimates point to 17% revenue growth in both 2025 and 2026, indicating the
company has offered overly conservative guidance. Also, the aforementioned 60%
decline in the stock price likely prices in the slowing revenue growth. Still,
the lower stock price has probably helped abate prior concerns about The Trade
Desk's valuation. Although its 56 P/E ratio may seem high, it is down from 150
at the beginning of the year, placing its earnings multiple at a multiyear low.
Moreover, with rising earnings pushing its forward P/E ratio down to 26, one
could argue The Trade Desk is falling into value stock territory. Given The
Trade Desk's valuation and the opportunity in the digital ad market, the stock
looks increasingly like a buy. Admittedly, the market had likely overvalued The
Trade Desk stock at the beginning of the year. As a stock priced for
perfection, it had nowhere to go but down as it missed a revenue target in Q4
and dealt with customer dissatisfaction over the Kokai rollout. Nonetheless,
The Trade Desk still stands at the forefront of an opportunity in the digital
ad market. As it continues to address some of the competitive and operational
concerns, its low valuation and continued growth appear to have made this stock
a more compelling buy.
V Visa is the largest credit card company in the
world, and its performance tells the story of the economy to some degree.
Because it's a credit card network, its processed volume is a strong indication
of how people are spending. And because it targets a wide range of
demographics, its message is fairly universal. The purpose of cutting interest
rates is to boost the economy, and Visa is a major beneficiary of higher
spending. Visa's core business is providing the network, or infrastructure,
that moves money from a customer's partnering bank to a merchant, taking a
small cut of each transaction. Although it has branched out to other services,
they mostly center around different ways of moving money. More money flowing
means more money for Visa. It has been performing well despite the higher
interest rates. In the 2025 fiscal third quarter (ended June 30), revenue
increased 14% year over year, and payments volume was up 8%. It's highly
profitable, since it has a simple, low-cost model, and net income increased 8%
over last year in the quarter. Lower interest rates should further boost Visa's
earnings, benefiting this Warren Buffett-backed stock. Visa is a solid
long-term investment, offering value to most portfolios.
VLTO No news.
WM WM is a resilient franchise with pricing power and
predictable and highly reliable sales. Additionally, the company has been
putting up great business performance recently. WM's second-quarter revenue
rose to roughly $6.4 billion, up about 19% year over year, reflecting solid
performance in its core collection and disposal operations and contribution from
its recently acquired healthcare disposal operation. WM's legacy disposal
business saw revenue rise 7.1% year over year (highlighting good growth even
when excluding the impact of WM's recent acquisition). Operating profitability
expanded as well; management highlighted double-digit adjusted operating EBITDA
growth. Balance sheet strength and steady free cash flow remain central to the
case here. WM continued to convert revenue gains into higher operating EBITDA,
and management reiterated confidence in full-year cash generation.
Specifically, WM guided for full-year free cash flow to be between $2.8 billion
and $2.9 billion (up from $125 million from the initial full-year guidance the
company provided). That cash supports dividends and buybacks over time without
starving growth investments in recycling and renewable natural gas. Ultimately,
the company's scale, route density, and long-term contracts create a moat that
new entrants would struggle to breach. With a price-to-earnings ratio of 32 as
of this writing, shares aren't cheap. But investors are paying up for stability
and visibility. If growth accelerates (perhaps by successfully leveraging its
renewable natural gas or medical waste expansions), that could eventually make
today's stock price look like a great entry point in the rearview mirror. Of
course, for investors who do decide to own WM, one risk to watch will be
regulation. In some countries, waste disposal is far more regulated. If WM
faces increased regulation, this could weigh on costs and pricing.
Stock Picks:
HT:
Buy additional WM.
CX:
Buy JD.com Inc. (JD), a technology-driven E-commerce company, which engages in
the sale of electronics products and general merchandise products, including
audio, video products, and books. It operates in the following segments: JD
Retail, JD Logistics, and New Businesses. The JD Retail segment offers online
retail, online marketplace, and marketing services. The JD Logistics segment
includes internal and external logistics businesses. The New Businesses segment
is composed of JD Property, Jingxi, overseas businesses and technology
initiatives. The company was founded on June 18, 1998, by Qiang Dong Liu and is
headquartered in Beijing, China.
JL:
Buy Palantir Technologies Inc. (PLTR), engages in the business of building and
deploying software platforms that serve as the central operating systems for
its customers. It operates through the Commercial and Government segments. The
Commercial segment focuses on customers working in non-government industries.
The Government segment is involved in providing services to customers that are
the United States government and non-United States government agencies. Its
platforms are widely used in areas such as defense, intelligence, healthcare,
energy, and financial services, supporting data integration, large-scale analytics,
and operational decision-making.
PR:
Buy additional BWXT.
KS:
Buy additional BWXT.
On Friday, September 12, 2025
the following order(s) filled:
Buy
24 BWXT @ $169.21/share; total $4061.04
Buy
24 PLTR @ $170.9579/share; total $4102.99
Meeting adjourned at 3:18
PM.
Respectfully submitted by
Ken Bauman.
Next Meeting: Thursday,
October 2, 2025 at 2:30 p.m. at:
El Dorado Saloon & Grill
879 Embarcadero Dr
El Dorado Hills, CA 95762
916-941-3600