Unable Investment Club

 

 

December, 2025 Meeting Minutes

 

January 4, 2026

 

The monthly meeting of Unable Investment Club was held at LogOff Brewing Company in Rancho Cordova on Thursday, December 4, 2025.  The meeting commenced at 2:34 pm with KS presiding for FN. JL, PR, CX, DK and HT 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:

The Treasurer renewed Club’s Bivio subscription for 2026 in the amount of $349. Bivio manages the accounting for our investment club, prepares our annual tax returns and member tax forms.

Stock News:  

AMT               No news.

AAPL             Apple is one of the world's largest and most influential tech companies, but it's not an "AI company" or an "AI stock" in the same way as Oracle, Nvidia, Microsoft, or Alphabet is. That's because Apple's not spending nearly as much on AI as these other companies, and Apple's business model doesn't depend on the future promise of AI. In fact, earlier in 2025, Apple was widely criticized for not moving fast enough on AI and being "behind" on AI strategy. But Apple's patient approach to AI might turn out to be a good thing for Apple shareholders. Apple has managed to avoid getting dragged into a costly AI arms race. Instead of plowing billions of dollars into data centers, Apple has focused on its core business of selling phones and laptops. If you're worried that valuations of AI stocks have gone too high, but you don't want to give up on "Magnificent Seven" tech stocks, Apple could be a good choice. During the past six months, Apple stock is up roughly 33% while the S&P 500 is up 11%. Apple also outperformed major AI stocks like Nvidia and Oracle, and other AI-related tech stocks like Amazon, Meta, and Microsoft. The launch of the iPhone 17 in September 2025 was a huge success, generating blockbuster demand. Apple is expected to ship 247.4 million iPhones in 2025, a 6.1% year-over-year increase, according to IDC. On its most recent earnings call, in October, Apple announced record-breaking numbers. The company earned $416 billion of revenue in its fiscal year 2025 (an all-time record), and its fourth-quarter revenue of $102.5 billion was an 8% year-over-year increase. iPhone revenue was up 6% year over year and hit a new September-ended quarter record. Earnings per share (EPS) were $1.85, another September-ended quarter record, and up 13% year-over-year, excluding a one-time charge from 2024. Apple's services revenue was up 15% year over year in the quarter, which is an all-time record. Services have become a major profit engine for Apple because the margins on digital services are so high compared to physical products. Apple's gross margin for services was about 75% in its latest earnings report, compared to 36% for Apple products. And the services segment is becoming a bigger slice of Apple's overall revenue. In its Q3 earnings for fiscal year 2025, Apple made more sales from services ($28.75 billion) than it made from all of its non-iPhone products combined (Macs, iPads and Wearables made $24.69 billion of sales). And there are good reasons for investor optimism about Apple to continue into 2026. The company expects to see 10%-12% revenue growth in the first quarter of 2026, with double-digit iPhone revenue growth. That quarter is wrapping up now and includes the holiday selling period. Analysts have raised their estimate for Apple's earnings per share to $2.67 for the current quarter, up from $1.77 for Q4 of Apple's fiscal 2025. With a price-to-earnings ratio of 34, Apple stock is not cheap compared to where its P/E ratio has been in the past few years. But if investors continue to shy away from high-priced AI stocks, and if more signs of real-world return on investment from AI don't materialize fast enough, Apple could look like a better deal than tech stocks that have more AI exposure. Unless some new must-have device gets invented that can replace the iPhone, Apple seems well-positioned to stay highly profitable for a long time to come. No matter what happens next with the possible AI bubble, Apple should be a good stock to buy in 2026.

AMAT            No news.

BWXT            BWX Technologies stock, which manufactures components for nuclear power plants, jumped 3.5% through 2:45 p.m. ET Thursday, December 4. It's not hard to guess why. Yesterday, the U.S. Department of Energy announced it will award $400 million to the Tennessee Valley Authority to accelerate deployment of new advanced light-water small modular reactors (SMRs) at the Clinch River site in East Tennessee. Clinch River will see installation of America's first-ever "Gen III+ SMR." GE Vernova Hitachi will build the reactor, a BWRX-300 model, aiming to deploy additional units at a later date. Multiple other companies and organizations will assist with the effort. These include electric power utility Duke Energy, Oak Ridge Associated Universities, the Electric Power Research Institute, metals manufacturers Scot Forge and North American Forgemasters, Canadian construction company Aecon, and... BWX. Of particular note, the press release on the project notes Clich River will serve "as a national model for how to deploy SMRs safely, efficiently, and affordably". In other words, it's a pilot project -- and if all goes well, more contracts may follow. That probably relieves investors who've seen BWX's stock price slump 16% over the past month. But even at today's lower price, should you buy BWX stock on today's news? Much as I'd like to answer "yes," I'm honestly uncertain. BWX shares cost more than 52 times earnings after all, and most analysts who follow the stock don't see BWX growing earnings much faster than 12% annually over the next five years. That gives BWX stock a price-to-earnings ratio of more than 4.3 -- very expensive unless Clinch River generates significantly faster earnings growth than virtually anyone on Wall Street expects. From where I sit, BWX stock still looks too expensive to buy.

CNI                 No news.

COST              Costco has been a favorite stock among many investors for years, but over the past 12 months, the wholesale retailer's shares have declined 10%. Part of the reason for the drop may be fueled by investors reallocating their money to more high-growth areas of the market, such as artificial intelligence stocks, while others are worried about Costco's slipping renewal rates. What's happening with Costco stock right now, and is the latest share price pullback a good buying opportunity? Here's what you should know. Some investors have been concerned lately that Costco's growth hasn't been as impressive as in the past, and the company's (still fantastic) renewal rates for some members are slowing down more than they have traditionally. For example, one analyst at Roth Capital recently stated that Costco's membership sign-ups in the most recent quarter were only 400,000, compared to a typical membership sign-up of 1 million. Costco's management said on the first quarter earnings call that while membership sign-ups were lower, this was largely due to younger Costco shoppers who sign up for memberships online and tend to renew at a slower pace. That could persist for a few more quarters, according to Chief Financial Officer Gary Millerchip: "Our goal is to continue to improve renewal rates by improving engagement with members who signed up digitally. Although for the reasons previously shared, we may still see a slight decline in the overall renewal rate over the next few quarters." It's worth noting a few key facts from Costco's first quarter as a reminder of just how strong the company's performance was, despite the stock's underperformance. Here are some of the highlights: Costco reported earnings per share of $4.50, outpacing Wall Street's consensus estimate of $4.27. Revenue increased 8% to $67.3 billion, also beating the analyst's consensus estimate of $67.1 billion. Costco's Black Friday sales set a record of over $250 million in non-food orders. Those are all impressive results, and they indicate that many investors are missing the bigger picture: Costco is still growing at an impressive rate. In addition to all of the above, the company also increased its digital sales by 20.5% in the quarter, traffic on its site rose by 24%, and mobile app traffic jumped 48%. As I mentioned earlier, the company's membership renewal rates remain very impressive, even if they are slightly lower than in recent years. Costco has 81.4 million paid members, an increase of 5.2% from the year-ago quarter, and North American renewal rates were 92.2% -- down slightly from its average of 93%. It's a little surprising that some investors latched onto slightly lower renewal rates while overlooking the fact that renewal rates are still enviable by any measure and that the quarterly results are great on nearly every metric. While it's not great to see Costco's share price falling right now, the good news is that it's creating a new buying opportunity for investors who recognize that Costco is still successfully expanding its sales and earnings and continues to have strong customer loyalty. Even if the next few quarters are a bit volatile for Costco stock, nothing has fundamentally changed for the company over the past year that should cause serious concern about its continued growth. For long-term investors, Costco stock looks like a good buy at a discounted price.

EME                EMCOR Group has announced a significant increase in its quarterly dividend, raising it to $0.40 per share from the previous $0.25, starting in the first quarter of 2026. Additionally, the company's board has approved an extra $500 million for its stock repurchase program. These moves come as EMCOR adjusts its 2025 earnings per share guidance to a range of $25 to $25.75, while also revising its revenue projections due to strong growth in its RPO and strategic portfolio adjustments. EMCOR Group Inc is a specialty contractor in the United States and a provider of electrical and mechanical construction and facilities services, building services, and industrial services. Its services are provided to a broad range of commercial, technology, manufacturing, industrial, healthcare, utility, and institutional customers through approximately 100 operating subsidiaries. The company's operating subsidiaries are organized into reportable segments: United States mechanical construction and facilities services, which derives key revenue; United States electrical construction and facilities services; United States building services; United States industrial services; and United Kingdom building services. Geographically, its key revenue is derived from the United States. With a market capitalization of $26.7 billion, EMCOR Group operates within the Industrials sector, specifically in the Construction industry. The company is listed on the NYSE and has a beta of 1.34, indicating a higher volatility compared to the market. EMCOR Group has demonstrated impressive financial performance, with a three-year revenue growth rate of 19.5%. The company's operating margin stands at 9.41%, reflecting efficient cost management and operational effectiveness. Additionally, the net margin of 6.96% underscores its profitability. On the balance sheet front, EMCOR exhibits strong financial health with a debt-to-equity ratio of 0.13, indicating low leverage. The current ratio of 1.19 and quick ratio of 1.17 suggest adequate liquidity to meet short-term obligations. The Altman Z-Score of 6.52 further highlights the company's financial stability. However, insider activity reveals some cautionary signals, with recent insider selling transactions totaling 1,325 shares over the past three months. EMCOR's valuation metrics indicate a moderately overvalued position with a P/E ratio of 23.98, compared to its historical median of 19.36. The P/S ratio of 1.67 and P/B ratio of 8.01 also suggest a premium valuation relative to historical norms. Analyst sentiment remains positive, with a recommendation score of 1.9, indicating a "Buy" consensus. The target price is set at $707.03, suggesting potential upside from current levels. Technical indicators such as the RSI of 39.51 and moving averages indicate a neutral to slightly bearish sentiment in the short term. EMCOR Group's financial health is robust, as evidenced by its strong Altman Z-Score and low debt-to-equity ratio. However, the company's beta of 1.34 suggests higher volatility, which could pose risks in turbulent market conditions. Sector-specific risks include potential fluctuations in construction demand and regulatory changes impacting the industrial services sector. Additionally, the company's volatility of 36.6% indicates potential price swings. Overall, EMCOR Group's strategic initiatives, such as the dividend increase and stock repurchase program, reflect a strong commitment to shareholder value. However, investors should remain vigilant of market conditions and insider activity as potential risk factors.

GOOGL          Alphabet has made tremendous progress in artificial intelligence in 2025, and that should show up in continued financial strength in 2026. Its Google Cloud division saw revenue growth accelerate to 34% last quarter while its operating margin continued to expand, reaching 24%. Those trends should continue in 2026, as management reported a backlog of $155 billion at the end of the third quarter, up 46% year over year. Alphabet is seeing notably strong demand for its custom-built Tensor Processing Units (TPUs). The AI accelerator chips are a more cost-efficient alternative to Nvidia GPUs for AI training and inference. Anthropic plans to use TPUs for some of its workload starting in 2026, and Alphabet is reportedly in discussions with Meta Platforms to use the chips and port popular AI framework PyTorch to the hardware. The relative performance of TPUs to Nvidia's GPUs and other custom AI accelerators should continue to fuel growth for Google Cloud in 2026 with significant margin improvements. Meanwhile, Alphabet also saw strong relative performance for its large language models. Gemini 3.0, released in November, scored highly on most benchmark tests, outperforming top models from both Anthropic and OpenAI at the time. The release spurred OpenAI CEO Sam Altman to declare "code red," as the model performed better than GPT 5.1 and pushed more consumers to download Google's Gemini app, which had 650 million monthly active users as of November. Alphabet could have a big customer for its LLM next year as well, as Apple is reportedly going to use Gemini for some of its new AI-powered Siri features starting next spring. The iPhone maker will pay $1 billion per year to license the model. Apple will run the model on its own servers, so it would be practically all profit for Alphabet. Alphabet isn't just out-innovating the biggest competitors in the field; it's also able to use those innovations in its own business. As a large language model developer, it's able to take advantage of its massive cloud computing business and TPU development. But Alphabet's also using that large language model to improve its core search engine, which remains a cash cow for the business. It's also continuing to refine various machine learning algorithms, improving its advertisement placement and YouTube engagement. In search, features such as AI Overviews and AI Mode have increased the types and number of search queries users make. And with Google monetizing those searches at roughly the same rate as those without AI-powered results, it's been a net positive for revenue. Over the last two years, the company has drastically cut the cost of generating AI Overviews, improving profitability. Overall, Google Search revenue accelerated through the first three quarters of 2025, up 15% in the third quarter. YouTube, likewise, saw revenue growth accelerate, climbing 15% in the most recent quarter. AI features, such as tools that help edit videos and create thumbnails, as well as identify shoppable products in videos, have helped improve engagement and monetization. Alphabet's also seeing progress with Waymo, its self-driving car business, which is part of its Other Bets segment. The robotaxi service completed 14 million trips in 2025, more than triple the number of trips completed in the previous year. Management says it's on track to complete 1 million rides per week by the end of 2026 as it expands to 20 new cities. The business could be a key source of revenue growth as it scales next year. With growth across hardware, software, and its core businesses, Alphabet presents a diversified growth stock that trades at a good value. Investors can currently pick up shares for less than 30 times forward earnings expectations. By comparison, you'll pay over 40 times earnings for Nvidia shares. Alphabet should experience strong earnings growth as the cloud computing business scales and operating margin expands. It already generates tens of billions in cash every year, providing room to increase its share repurchase program, further boosting earnings per share. As a result, paying less than 30 times earnings could prove a bargain. Meanwhile, Nvidia may struggle to build on its gains in 2026, especially as Google's TPUs, competing GPUs, and other companies' custom AI accelerators make progress in eating into its market share. At its current price, it'll have to outperform already high expectations to produce returns like the last few years. It seems more likely that Alphabet will be the better-performing stock in the coming year.

LIN                 No news.

MSFT              Microsoft may not be the first name that comes to mind when thinking about cybersecurity since the multitrillion-dollar tech company is known for so many things. Yet, it is also one of the world's leading cybersecurity providers. Its Windows and Microsoft 365 are installed on millions of computers and devices worldwide, and within that is Microsoft Defender, its cybersecurity software. According to Security.org, Microsoft Defender is the market's leading antivirus software with an estimated market share of 23%. Cybersecurity isn't Microsoft's top focus, but its large market footprint demonstrates the benefits of having such a deeply entrenched and widespread customer base. The company's market share in this area has declined somewhat in recent years, but it's likely to remain a key player in cybersecurity for the foreseeable future. Perhaps the best thing about Microsoft is that it's a rare tech stock that you can buy and hold without losing sleep at night. It's as blue chip as a stock as can be. Analysts anticipate that the company's earnings will grow at an annualized rate of 13% to 14% over the long term, as AI and cloud computing continue to fuel growth. That makes the stock a steady producer and a no-brainer for buy-and-hold investors.

NU                  Nu Holdings is making waves in the fintech investment sector. Since the start of the year, the Latin American financial services company has surged 58%. The bank has done a stellar job of serving regions starved for quality, affordable banking services, leveraging its digital platform to connect with hundreds of millions of customers. The company's stock performance reflects investor optimism about Nu's growth trajectory and future prospects. The bank has a large customer base to sell to and is targeting other markets ripe for disruption. Here are three reasons to invest in Nu Holdings today. 1. Nu has seen tremendous growth in Brazil For many years, Brazilian consumers faced a concentrated and predatory banking system dominated by just five banks. The situation was so severe that credit card interest rates reached 160%, and former finance minister Paulo Guedes described it as a "cartel." Changes paved the way for Nu's neobank model. By operating a digital-only platform, Nu challenged the traditional banking model by offering free digital accounts and credit cards with no annual fees, attracting tens of millions of customers. Today, Nu serves more than 110 million customers in Brazil, or roughly 60% of the country's adult population. Nu currently holds multiple regulatory licenses, letting it offer products and services in payments, credit, financing, investments, and securities. However, Brazil has made regulatory changes restricting the use of the term "bank" by those without a banking license, so Nu is aiming to acquire a small bank in Brazil sometime next year. Being a fully licensed bank provides legitimacy with consumers, especially in a market where trust in financial institutions is paramount. This license could also make it easier for Nu to access markets reserved for banks, thereby lowering its cost of capital. 2. It has a huge customer base to cross-sell to Nu has a huge customer base of 127 million, and sees this as an opportunity to create value and cross-sell to those customers. It views this as a means to enhance the profitability and economics of its overall business. Nu offers a range of financial services, including lending, investments, and insurance. It also offers travel and cellular services, along with an integrated marketplace platform. One way to assess how effective Nu is at cross-selling is to look at its average revenue per active customer (ARPAC). As customers adopt more of its products, the revenue per active user climbs. In the third quarter, Nu's ARPAC was $13.40, a 20% year-over-year increase on a foreign-exchange-neutral basis. For Nu's long-term customers who have been on the platform for eight years or more, the ARPAC was $27.30 as of the second quarter. Nu's growing ARPAC demonstrates the long-term monetization potential as its customer base grows, matures, and adopts more of its products. This is a critical component that helps Nu grow efficiently and cost-effectively. 3. Positive trends should fuel future growth A positive trend for Nu is smartphone adoption, which is projected to reach 400 million users across Latin America. This digital-native population increasingly prefers mobile apps to physical bank branches, a trend Nu leverages through its low-cost, digital-first model. Nu's growth in Brazil has been excellent, and the company has begun its expansion into Mexico and Colombia. These are two of the largest regions in Latin America, with significant numbers of unbanked or underbanked consumers. In Mexico, Nu has over 13 million customers, representing about 14% of the country's adult population. It is also approaching nearly 4 million customers in Colombia. Nu Mexico has been approved to convert into a bank in Mexico and is currently completing the final steps. It previously operated as a Popular Financial Society (SOFIPO). Once fully authorized as a bank, it will be able to offer a broader product portfolio, including payroll accounts. It will also increase its deposit insurance coverage by 16-fold, allowing Nu to attract high-net-worth individuals. But that's not all. In September, Nu Holdings applied to the Office of the Comptroller of the Currency for a charter to establish a de novo national bank in the U.S. The charter would let the company offer a range of products, including deposit accounts, credit cards, loans, and potentially digital asset custody, under a single federal regulator. Nu has demonstrated excellent growth across Brazil and is making strides in Mexico and Colombia. The company is effectively leveraging its scale and cross-selling to drive efficient growth. If you're looking for an attractively priced growth stock, Nu Holdings, trading at 20 times next year's earnings, appears to be an excellent buy today.

NVDA            Nvidia is best known for its graphics processing units (GPUs), chips that speed up compute-intensive data center workloads like analytics and artificial intelligence (AI). But the company is truly formidable because it complements its GPUs with CPUs, networking platforms, and an unparalleled ecosystem of software tools that assist developers with building applications. Consequently, while custom AI accelerators developed by competitors like Broadcom are generally cheaper, Nvidia systems frequently have a lower total cost of ownership because the company can optimize performance across most facets of the data center computing stack. Additionally, custom chips lack pre-built software tools, which means they must be built from scratch. Morningstar analyst Brian Colello says Nvidia's vertically integrated business model that spans data center hardware and software affords the company a wide economic moat. "In the long run, we expect tech titans to strive to find second sources or in-house solutions to diversify away from Nvidia in AI, but these efforts will, at best, only chip away at Nvidia's AI dominance." Nvidia's adjusted earnings increased 60% in the third quarter, and Wall Street estimates earnings will increase at 67% annually through the fiscal year ending in January 2027. That makes the current valuation of 46 times earnings look cheap. Indeed, among 69 analysts, Nvidia has a median target price of $250 per share, implying 32% upside from its current share price of $189.

SPGI               No news.

TSM                Taiwan Semiconductor Manufacturing has been a top stock to own over the last few years, and 2025 was no exception. Its stock rose more than 50% in 2025, making it a top performer in its space. But after such a strong year, is the semiconductor foundry worth owning in 2026? Let's take a look at Taiwan Semiconductor's prospects and determine if it can continue its outperformance or if investors should move on from the stock. Taiwan Semiconductor is well-positioned to take advantage of all of the artificial intelligence spending that's ongoing. The company is a neutral party in the chip realm, as it makes chips for companies like Nvidia, Advanced Micro Devices, and Broadcom. These three are competing for computing market share, but source most of their chips from Taiwan Semiconductor. So, as long as the AI hyperscalers continue to spend heavily on data centers, it will be in a good spot. Fortunately for Taiwan Semiconductor, the AI computing market is massive. AMD believes that the global computer market will be worth around $1 trillion by 2030. Nvidia offered a similar projection for 2030, as it believes global data center capital expenditures (which include compute and other expenses) will reach $3 trillion to $4 trillion by 2030. Companies with the most knowledge about what's coming all project huge growth over the next few years, which bodes well for Taiwan Semiconductor. Wall Street analysts project that Taiwan Semiconductor's revenue growth in 2026 will be 21% in New Taiwan dollars. That growth rate could be higher or lower in U.S. dollars based on currency exchange rates, but projections that Taiwan Semiconductor's revenue will rise around 20% next year are a safe bet. That's impressive performance from any company, let alone one that has a market cap of nearly $1.6 trillion. If we compare Taiwan Semiconductor's stock to some other big tech companies, it's clear that it trades at a discount. At 24 times next year's earnings, Taiwan Semiconductor has the lowest valuation of the major tech companies outside of Meta Platforms. While this doesn't make Taiwan Semiconductor's stock necessarily cheap, I think it's reasonably valued. Because Taiwan Semiconductor's stock is at a fair price for its market position and performance, it looks like a great candidate to buy for 2026. Furthermore, because it is slated to grow at an above-market-average pace (the S&P 500 usually grows at a 10% rate), Taiwan Semiconductor is expected to outperform the market once again in 2026. As a result, this a stock that every investor should consider adding to their portfolio in 2026, as long as you're not already too exposed to the AI trade. There are multiple companies involved in this area, and it's easy to get overleveraged to this sector. However, it's also the primary place where the largest tech companies are spending their money, so having increased exposure to this sector isn't a bad thing either. I'd expect Taiwan Semiconductor to be one of the best-performing stocks from the cohort compared above in 2026. The only thing that may derail its performance is if the AI hyperscalers start to pull back on spending. I don't see that happening for many years, so I think Taiwan Semiconductor is both a safe investment and a strong one for 2026.

TTD                 The Trade Desk started 2025 strong. The buy-side platform for digital advertisers became increasingly popular as they turned to this platform to place and purchase ads across various formats. Unlike Amazon or Alphabet, The Trade Desk does not operate an ad platform, and that neutrality makes it easier to find the right audience for a given ad. However, the company missed its own revenue estimates in the fourth quarter of 2024, bringing about a huge sell-off in the stock. More recently, The Trade Desk has dealt with increasing worries about competing with large advertisers, such as Amazon, which have also weighed on the company. Additionally, with artificial intelligence (AI) engines bypassing digital ad platforms, the industry faces additional uncertainty. Nonetheless, for all the concerns, the company has returned consistent performance financially. Analysts forecast 18% revenue growth for 2025, and with revenue growing at 20% in the first nine months of 2025, it should not surprise investors if it defies analyst expectations. Investors should also remember that the stock has fallen by more than two-thirds, taking the stock price to levels it last saw in 2020. Admittedly, The Trade Desk stock was likely overvalued a year ago, but that does not seem to be the case today. Its trailing P/E is 43, down from the 200 level in late 2024. Also, with a forward P/E ratio of 21, the stock appears oversold, which could mean that any good news in 2026 could help spark a significant rebound.

V                     No news.

WM                 No news.

 

Stock Picks:

CX: Buy additional Boeing (BA).

KS: If we aren’t adding to our Palantir (PLTR) position; recommend a sell.

JL: Sell PLTR and buy additional BA.

HT: Buy additional BA.

PR: Buy additional NU, BA and/or BWXT.

 

On Friday, December 5, 2025 the following order(s) filled:

Sold 24 PLTR @ $179.6301/share; net $4311.12

Buy 50 BA @ $201.439/share; total $10,071.95

Buy 45 BWXT @ $178.373/share; total $8026.79

Buy 284 NU @ $17.6099/share; total $5001.21

 

Meeting adjourned at 3:05 PM.

 

 

Respectfully submitted by Ken Bauman.

 

 

Next Meeting:  Thursday, January 8, 2026 at 2:30 p.m. at:

 

El Dorado Saloon & Grill
879 Embarcadero Dr
El Dorado Hills, CA 95762
916-941-3600

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