Transcript:
Speaker 1:
Here with the stocks he likes now and a couple he’s taking profits in is Dale Smothers CEO of des. Well for Dale. Welcome. Great to have you.
Speaker 2:
Good to be with you, Caroline. Always.
Speaker 1:
So, Dale, let’s get right into it with your first pick. And that’s Marvell already has had a huge move, although well off the highs. You’re calling it a buy. Why aren’t investors too late to Marvell?
Speaker 2:
Yeah, I think Marvell, as Jenson has said many times, is the next trillion dollar stock. It’s the next trillion dollar company. And at $1 trillion evaluation, I think that this particular stock currently is significantly underpriced. We can consider it a value position for the long term buy and hold type of investor. You know, one of the things we do here at Des Wealth Carolina is we have every dollar.
Speaker 2:
It has its own job, right? So we assign a dollar a job. And the dollars that are out there hunting long term, we think Marvell is a fantastic opportunity to be in that AI build out phase that is still yet producing more and more profits across the broader market as well. Marvell is a winner in our book.
Speaker 1:
How high can it go? What’s your price target on Marvell?
Speaker 3:
You know, you know we’re sitting somewhere mid two hundreds now you’re looking.
Speaker 2:
At, I would say 400 easy. At $400 a share is possible. You know, we’ve even put some, some recent call options on it at 380. Feel like that’s going to happen sooner rather than later. And what? One of the things we saw with the earnings report that came out, it actually it I had a beat on its earnings report, but it didn’t beat as well as what some investors had hoped.
Speaker 2:
And so a lot of these investors are wanting a short term fix, if you will. And so we saw a short position that built up in this name. A lot of people started shorting that name. And we think that it has opportunity for a potential short squeeze even based off of numbers. And you know that that ebbs and flows from day to day.
Speaker 2:
But we believe long term, if you like this name, now is a perfect time.
Speaker 3:
To purchase this particular stock.
Speaker 1:
Why own Marvell over a name like Broadcom or even Nvidia?
Speaker 2:
Yeah. You know, I think I think there’s room for both of them. So if you think about Nvidia specifically we like invidious. We are actually long term buyers and holders have been video will probably be a staple in our in our long term growth portfolio for quite some time. Because we look at invidious maybe the the the toll booth of the road that AI travels on.
Speaker 2:
Whatever happens in AI in video probably profits. But if you use a different analogy, Carolina like thinking about Nvidia’s building engines for for AI infrastructure, right? So if it’s building the engine, Marvell is actually a place that maybe comes in not always as a competitor. Perhaps it’s the place that makes a an improved carburetor, or an improved manifold or an improved spark plug that it’s specialized for an operation of a business.
Speaker 2:
So I think there’s room to own both of those names in a portfolio for sure. I don’t think that it’s one or the other in our book. Marvell is likely a benefactor of anything in vedere continues to do and climbs higher. And we think that as Marvell rises, as as that, that tide rises, a name like Nvidia will certainly rise with it.
Speaker 1:
So if you can only add one here, Marvell, Nvidia or Broadcom.
Speaker 2:
Here at this price I think Marvell is the add.
Speaker 1:
Okay. So sticking with Nvidia you actually are long term bullish as you said. But you recently took some profits. It did have a good run this summer. Why is now the time because it didn’t go back to those highs. And what’s your next entry point for Nvidia trading.
Speaker 2:
Those profit or trading for the profit for us was a little bit of a trim position that we positioned actually in a little bit of money market just for seasonality in general. Just September being a harsh month on us, pretty much until we get to mid October, we like to be a little bit more prepared for a financial winter weather that winter is really cold or it’s just kind of mild, that that changes from year to year.
Speaker 2:
But, historically, September and October tend to be months where you might want to take some profit leading into that. We did that with the name like in video trimming is not selling, though we didn’t change our thesis that we are long term buyers and holders of Nvidia. We just believe that there’s probably a better place to enter into that we don’t have a price per se at a time is probably more like what we’re looking for is sometime closer to beginning to middle of October, probably starting to reenter and see what markets have done from that point in time.
Speaker 2:
Again, this is more of a seasonal timing position for us and our clients, more so than fundamentals by any means. And vedere stay strong in our books. We we like it. We see all the fundamentals continuing to climb higher. And in videos earnings were blowout. You know, double beat in our opinion, maybe even a triple beat beating even expectations of the most bullish investors.
Speaker 1:
You’re also trimming your core. We’ve position core. We’ve has had a nice run but it’s still 40% off the highs. Why take profits now.
Speaker 2:
Yeah. So when when we send in those notes about trimming we’re actually trimming from the position of taking a little bit of an ad at 60. So 60 to 100 was a pretty good climb. We’ve seen a little bit of a pullback. And our trim is more or less to again rotate that money that we like in core.
Speaker 2:
We’ve for more of a short term play trading volatility, which there’s a ton of it in core. We’ve I’ll tell you why in just a second from our book. But we’re moving that profit to a name like nibs. Again that will probably happen sometime beginning of October. For the time being. We took that money to the broader market, RSP as an ETF, giving us exposure to the broader market.
Speaker 2:
The reason we think that there’s so much volatility in call is there’s potential in that name. Without a doubt, we still see a backing from a company like well in vedere specifically Bax core, we we see a lot of these larger companies that are saying, hey, core weaves the company we’re rolling with, but they’re spending so much money, Caroline, they have so much debt, they have such little cash flow.
Speaker 2:
We think a name that’s a little bit more lean nibs would be the alternative there. So I wouldn’t call it a a trim at 40% of a loss. We actually took that position around 6065. And now trading it in the mid 90s 200 is kind of where we’re starting to take those profits and move them elsewhere.
Speaker 1:
Let’s get back to your picks for right now. Apple, are you more or less bullish now that the foldable phone is coming out? You just need what, $2,300 to spend on it?
Speaker 2:
Yeah, just 2300 bucks. And and you know, maybe maybe you’ll get that $5,000 dividend check to to buy two of them from the US government. We’ll see what happens there. But I’ll, I’ll leave that one alone. Yeah. I’ll tell.
Speaker 1:
You on the midterm elections. Right.
Speaker 2:
That depends on a lot of things, probably midterms, plus a lot of other factors that are out of anyone’s control. But when we look at Apple specifically, I think third quarter, fourth quarter is a great time to own a name like Apple. They tend to do well with seasonality of holidays in itself. Long term we’re bullish on Apple.
Speaker 2:
We actually took a little bit of profit, just a little bit of profit from that particular name with its run up and hitting all time highs weeks back. And again, we’re doing this more of a getting ready for a financial winter or a financial fall, at the very least in September October when we see things start to kind of cool off with Labor Day and, you know, at the end of a season, summer’s over seasonally.
Speaker 2:
September is not very strong for us. And then you put that on top of a midterm election. There really was no need for us to continue holding what we think will probably trade pretty flat in Apple for the next couple of weeks. But that being said, a lot of momentum in this name with the iPhone. I think that they will sell out of those without a doubt, and we’ll see that reflected in Q3 and Q4 earnings as a positive thing for us to continue.
Speaker 2:
Again, long term thesis there. That name is up and to the right for sure.
Speaker 1:
Caroline. So you’re making some kind of strategic trades with trimming profits and waiting to get in for the everyday. Retail investor is now a good entry point for Apple if they’re not already in.
Speaker 2:
Absolutely. You know, if it were me talking to a brand new client that came over one of our advisors sitting down with a brand new client with money that’s not yet invested, you’re probably going to have a little bit of a better price point come late September, early October. But again, we’re not in the business of trying to time the market.
Speaker 2:
It’s about time in the market, and if you’ve got the time to stay in the market, Apple here is a good bye for long term. Specifically Apple in itself. It’s got the household naming power. It’s got the branding recognition. It’s got a great deal of integration across all of its platforms and continued innovation. And I don’t think that we’ve seen much of a fall off with the new CEO.
Speaker 2:
Based off of what we’ve seen, he’s kind of opening up Tim Cook’s playbook and reading line by line, which is a great thing. In our opinion. Apple is a buy. If you don’t have money exposed to the market, you might have a better entry point. You already have money exposed to the market. You’re trying to find the next place to put it.
Speaker 2:
Apple, I think, is a great place no matter what time you buy it. But if you’ve got ten years, now’s a great time. Apple’s a buy for sure.
Speaker 1:
When do we finally see the AI opportunity come to light, though? Because I you know, I have a MacBook here, I have my iPhone, I have my AirPods, like I use Apple, but I can’t count on Siri.
Speaker 2:
Yeah, you’re exactly right. Then that is a problem that they need to try and innovate. I don’t think that they’ve been hindered though by waiting till, till till now to really get serious about it. There was talk with OpenAI kind of running a little bit of their AI platform, I think Gemini, I’ve got an Apple Systems all across our entire firm runs on Apple.
Speaker 2:
And, you know, Google’s integration with Gemini makes it a little bit more simple and easy for us. But, finding out exactly when and how they’re going to roll out AI that is dependable and that is cutting edge will only be a tailwind for a name like Apple. I don’t think that an investor should wait and see on that, because by the time we see, that name will probably have moved so much that it’s no longer the value we find today.
Speaker 1:
Okay, you also like Microsoft, one of the mag seven laggards so far this year. It looks like you have a $600 price target. So more than $100 higher than where it’s currently trading. What gets it there.
Speaker 2:
Yeah we’ve been saying 600 price target since $100 a go. So so we believe Microsoft’s been been, you know, undervalued for quite a while. Almost a value name in itself. Microsoft. You talk about integration across all platforms. There’s not many places that do it better than Microsoft in terms of AI and integrating that across all digital platforms. I’ve got two young boys on my own.
Speaker 2:
They love the gaming side of Microsoft. Microsoft in itself with just the PC, environment is is great. Our our entire operation here at Des wealth runs on the cloud system with Microsoft. So we believe that Microsoft is so integrated in its current, you know, build out an infrastructure that, that you want to be a buyer of this name specifically just for a long term blue chip company name.
Speaker 2:
You know, it’s it’s a store of value, but we think that it’s got a lot of room to run simply because of its earnings, that it continues to grow its cash flow that we like, and we continue to see it innovate and then again, adopt more clients, more customers, if you will. With its AI build out, Microsoft is a strong by for us, and it’s one of the ones that we’ve seen a run up in since we took strong positions in.
Speaker 2:
But we have not taken profit for that because we believe that when it moves, it will move fast and 600 to the point in which we think we start looking for profits.
Speaker 1:
Okay, so Apple, Microsoft and Nvidia were on your list. No mention of Amazon, alphabet, Tesla, meta. Which of those would you actually avoid?
Speaker 2:
Tesla and Meta for us have been and this is probably Caroline as much a again every dollar has a job right. So from from a thesis of retirement planning and establishing a strong income portfolio, I would avoid a lot of the AI names. But if we were looking for consistent up into the right type of names, Tesla and meta for me, meta specifically, the the firm’s kind of taking the thesis that there’s not a ton of intrinsic value.
Speaker 2:
Their advertisements will certainly change. AD spend may change with the intent of AI and how it incorporates that. We’ve seen meta spend way too much money on things like the metaverse and their build out of AI. We just haven’t yet bought into their to their vision of what AI will be for their company. And then when you look at Tesla, you know, this is one that we’ve not owned.
Speaker 2:
It may be one that gets on our watch list sooner rather than later, especially if we start to hear mergers of space X and Tesla together. I think that’s a powerhouse. Another one that’s not on our list is space. I know you’re mentioning the mag seven there, but but I’m a big fan of the founder. I’m a big fan of the vision.
Speaker 2:
I’m just not a huge fan of a lot of the volatility that we see in that name. It’s a lot of speculation buying, not a ton of fundamental buying. We like to refrain from that if at all possible.
Speaker 1:
Okay, let’s move on and switch gears. Your final pick is Royal Caribbean, which is actually down on the year. What’s the opportunity there? And is that a a bet on the overall consumer?
Speaker 2:
Yeah, it is certainly a bet on the overall consumer. We’ve been a buyer of Royal Caribbean for quite some time. We got very heavy in Royal Caribbean back during Covid and it has handsomely rewarded our our clients from that position clearly continues to be up. And it’s one of the only real cruise line recoveries, if you will, that are worth mentioning from Covid.
Speaker 2:
But I think that Royal Caribbean not only does that experience the best, which is why we like that name, but currently at its valuation, we’ve got Royal Caribbean as a price target somewhere 350 or higher. I think it gets back to all time highs relatively soon. We are really watching interest rates because interest rates higher probably don’t help Royal Caribbean because of their debt load.
Speaker 2:
They’re buying back their own shares. They’re trying to trim their their balance sheets by by paying off debt. I like that as a as a thesis for this company. It pays a strong dividend. It’s got good upside potential. And here is the biggest piece of why we like Royal Caribbean for a long term play. Not only do we have some short time short term movement in the price in our opinion, but you’ve got long term stability in a name like Royal Caribbean, because it’s going to be really challenging for AI to replace experience.
Speaker 2:
And when you think about experiences, you think about how a dollar spends on a cruise versus just about any other vacation. It goes longer, it goes farther, more memories. Royal does it the best. And so when we think about the short term, we like the price action. When we think about long term, we think that it’s going to be hard to replace in this AI centric world.
Speaker 1:
But why Royal Caribbean over Carnival or in Norwegian? Because they’re technically on steeper sail this year.
Speaker 2:
They certainly are. We just don’t necessarily. From our perspective, we think that Royal Caribbean has a more upside in its innovation in its boat or its offerings per se. The boats are if you’ve ever if you’ve ever experienced them, they’re just a different experience altogether. Norwegians a little bit more on the luxury side. Carnival is a little bit more on the party side, if you will, where the Caribbean finds that happy medium.
Speaker 2:
It’s a family experience, family atmosphere. We like the upside for a Royal Caribbean over those two names, although as you mentioned, both of those names are on a steeper sail. We don’t think that we’ve seen the rebound that we would have liked to have seen. And I don’t think that that is coming anytime soon either.
Speaker 1:
Okay. So those are your picks. I do want to go back to your financial winter comment, though, and some of the seasonal changes that you’re making for the everyday retail investor. What should they do to prepare for this financial winter?
Speaker 2:
Yeah. You know, I want to be careful. I’m not I’m not Jon Snow on the the the the whatever it is that that show.
Speaker 1:
Is coming.
Speaker 2:
Winter is coming. I’m not saying Game of Thrones, that’s what it is. I’m not necessarily saying it’s it’s some sort of detrimental winter, but it’s a seasonal change. And, and I don’t think that investors should be concerned or scared out of the market simply because we see a 5 or 10% pullback in a September or October season, especially with the mid-term.
Speaker 2:
So for the retail investor, that’s at home, maybe watching a one day it’s down 1%, the next day it’s down another half a percent. And then we get a little a little you know 1010 basis point move up. But then another 1% down. You can start to maybe feel this wearing on you if you’re checking it every day.
Speaker 2:
September historically is not a good time to check it every day. So what we’re doing for our clients is a little bit more, you know, tactful management. We’re moving money here and there. And again, it’s not about timing the market, but we believe that some of these names are going to have a better time to buy. We’re taking profits at highs and and buying lows 101 of investing.
Speaker 2:
But when you think about the seasonal change of October of September and October, there are oftentimes really good sales right before earnings cranks up in October. And that’s what we’re banking on with this October as well. Again, because of the uncertainty of interest rates, all inflation, the seasonal change itself, and then you’ve got midterms on top of that.
Speaker 2:
A lot of reasons why the market may find itself 5 or 10% lower before it gets to our price target of 8000 on the S&P 500, we’re still bullish on the market. We just think now’s the time to perhaps take some profits.
Speaker 1:
Okay. So tell us what’s on your pullback shopping list. If we do get that correction that you’re you’re potentially looking for. What are you going to buy.
Speaker 2:
Yeah we’re right back into leadership with AI. I think artificial intelligence itself will take us higher through 2027 into 2028. Before we start to see maybe a little bit more of a broadening out with names that are being bought. But right now, leadership, Microsoft is one clearly we think is going higher. We might add to that position. As a matter of fact, we believe Apple is a good position.
Speaker 2:
Amazon, you mentioned it’s not on our list right now. It could easily become on our by list if we see a dip in that particular name. We like Amazon for multiple reasons. We’re keeping a close eye on Amazon. If we see a major drip in a major dip in Nvidia, we’re buying Nvidia as well. We continue to hold Marvell.
Speaker 2:
And then I’ll tell you realistically, if the overall index itself goes on a steep sale, a steep discount, just putting options around the index might make sense for a lot of our clients. So looking to just put some of that money that would would have in a cash position or in a safer position right now, putting it into just a little bit more of a risky position, but not taking full risk on buying the index itself, just more or less an options play against the index.
Speaker 1:
All right. I think this is a great time to pivot to our rapid fire round. Are you ready? It’s quick questions quick answers. No hedging.
Speaker 4:
Got it.
Speaker 1:
All right. Of all the stock picks that you mentioned in this interview, if you could only own one for the next five years, which one is it.
Speaker 2:
In video.
Speaker 1:
Which name would you cut first from the list?
Speaker 4:
Core weep.
Speaker 1:
What’s the first stock you’d buy on a pullback?
Speaker 4:
The first stock I would buy is probably Apple.
Speaker 1:
Which stock on the list doubles first.
Speaker 4:
Oh, Marvell.
Speaker 1:
Most resilient name. If the economy slows.
Speaker 4:
Up, the economy slowing. Probably Apple.
Speaker 1:
Most resilient name if the fed hikes rates.
Speaker 4:
Oh, goodness.
Speaker 4:
I didn’t mention HDB, did I?
Speaker 2:
It’s on my list.
Speaker 4:
I don’t think we talked about it. That would be an ETF.
Speaker 1:
We didn’t hit that one okay.
Speaker 2:
If the fed hikes rates the most resilient probably is still in video. And I’ll tell you why. But that’s not for this section. Next question.
Speaker 1:
But give us the give us the other pick the ETF that you like.
Speaker 2:
Yeah HDB I think HDV in itself is going to be benefited. You know, during that period of time we can look to 2022 is a great example market down 20% because of rising interest rates. HDB held its own up about 3% for that same year. HDB ETF that’s buying in the S&P 500. Blue chip company names strong dividends.
Speaker 2:
That’s my answer.
Speaker 1:
All right we appreciate extra picks and playing by the rules. So thank you for that. Which name on your list has the biggest competitive advantage over its rivals?
Speaker 2:
Speaker 2:
I would say in video.
Speaker 1:
And what’s the biggest risk to your stock picks?
Speaker 1:
That.
Speaker 2:
That, the AI, the AI by falls out of favor, which very easily could happen. Especially with what we’re hearing from places like anthropic of AI is going to kill us all. So if the tides turn and artificial intelligence falls out of favor, the stock picks that I’ve just made are probably going to need to be changed.
Speaker 1:
Okay, we’ll be sure to check in with you if we see any developments on that front. Dale Smothers, CEO, RT as well. Thank you so much for your picks and your insights.
Speaker 2:
Absolutely. It’s great being with you, Caroline. Always.
Speaker 1:
If you liked this video, check out my recent interview with David Wagner. He has four more stock picks for you covering tech, autos and power.
