Earnings Watch Party: Apple, KLA Corp, Exxon Mobil, Chevron, and Quantum Corp

Hello everybody. Thanks for joining today. We are excited to do our second earnings watch. The last one was such a success and we got so much great feedback from clients and the audience that we wanted to do some more of these. So let's dive into it. We got a big slate today. We got a lot of really interesting stocks to talk about. And some big news, and I think it's gonna be really cool to sort of give you our perspective on what we think matters in the morass of incredible amounts of information inundating us all day, sort of every day. As always, if you got questions, comments, criticisms, put them in the chat, put them in the Q&A. You can ask me anything. We're here to share. We're here to be honest. We're gonna be candid. And that's what we're going to do. So we want the same from you. Let us know what you think. So I put together a portfolio today of the stocks we want to talk about, and we don't have anything really sexy to say about Apple. I don't know that their conference call or their earnings release was all that sexy. I think it was kind of a big yawn. You know, things aren't going as well in China. It's not growing profits as much as it used to. Look, this has been a super profitable company. not such a good stock, right? That's what this rating system says here. Good company, not good stock. And by that, what we mean is that even though it's really profitable, the valuation's high. The valuation's expensive. We show it's going to take more than 100 years of profit growth to justify the current price if you're assuming consensus estimates and existing margins. So, you've got to believe in a pretty radically better future than what has happened in the past in order to think that Apple is a smart investment at this point in time. That's the takeaway. That's the takeaway. Not to say it hasn't been a great investment up to this point, and not to say that it's a bad company. It's not. It's a terrific company, terrifically profitable company. We look at returns on invested capital for this business, you know, you can see going back over time, it's been super high. Way high. If we open our model on this company, we'd actually go back over into more history and you'll see return on invested capital of 100%, 200%, 300%. Now, I predicted a long time ago that that was not sustainable. We've been right about that. But I want to make it really clear, 79% return on invested capital is awesome. It's unbelievable, especially for a company of this size. And what it speaks to is the incredible competitive advantages that it retains to this day. Now, it's all priced in, I would say, but it is in no way a knock on how amazing this company is. Truly amazing company that has some great technology and great marketing and just a great relationship with its customers. I think one of the best relationships with customers that we've seen in a long time. Let's see here. What I wanted to show next here is on Apple. Also what you see is a really good sign here. We got a question about market implied growth appreciation period, but a really good sign here when economic earnings are greater than accounting earnings. That's awesome. Like, that doesn't happen very, very often. In fact, we've run some special, special deals where we will reveal in our database a few companies that meet the criteria. That criteria, they have been extremely good outperformers. We've got a lot of great model portfolios out there, but The stocks that have this, this relate— this relationship where economic earnings are greater than accounting earnings can do extremely well. We've actually did a stock bundle on that a few months ago. It's done extremely well. And if I were you, I'd be on the lookout for something like that in the near future. Economic earnings greater than accounting earnings is something that a lot of the really smart investors out there talk about. It's very rare. It's hard to get economic earnings right. We do that better than anyone else. But that's a really impressive stat, really impressive performance. You can see it's not happened before with Apple, just now got better. That's a really powerful signal for us when paired with other things, normally a cheap valuation. When, yeah, when you see market implied growth appreciation period, we just got a question on this a second ago. When you see it get up to the red, that's a bad sign. That's a bad sign. Conversely, we found that when it's down here in the green, kind of doesn't matter what else is going on. It's a— it can be a really good sign when it's— when this is in the green, even if this part doesn't look so good. So yeah, I think when we're talking about, about Apple and the headlines here, you know, I, I, I loved what— I think there was a great, great, great article here on, on MarketWatch just talking about what Tim, Tim Cook is emphasizing. And look, they're not going to give away their secrets on conference calls. Right. Part of the reasons we're doing these earnings watch parties is because, to be honest, I got, I got, I got tired of, of listening to conference calls. And they have become, since Reg FD back in 2000, conference calls have been nothing more than commercials to sell stock. It's commercial to sell stock, just like almost every Wall Street conference is just a commercial to sell you stock. And the reason we're doing these earnings watch parties is because we want to give you an alternative to that, an alternative to the prevailing narrative, which is buy, buy, buy almost always, right? Something like 60% of all stocks on Wall Street are rated buy. We recently covered that in a training. We did a deep dive on the percentage of Wall Street analysts' ratings. Almost all buy, almost all buy and hold, almost no sells ever. We're very different about that, and I think we can be candid, you know. And for us, you know, does Apple get a great rating? No, it does not. But has it been an amazing company, and is it still an amazing company? Yes. I told you about the return on invested capital for Apple. If we open up our model here, we go to the metrics page, you'll see we've got data going all the way back to 1998. So if we're looking at return on invested capital, we're happy about it being in the, you know, I said close to So that where it's at 79 or 80, you can see here in the past, 2008, 2009, 3 up over 300% for a long period of time. You know, for many years you got, you know, dip down to 188, 85%, about 200% there again, 300%. I mean, we're talking incredibly profitable business. Why? Because it's a super popular product. People love it and it works and it's consistent and it's really touched on what people need. And, and they communicate that well. And it's not just the phone, it's the, it's the music, it's the photos, it's the whole system. It's the network. And there's real value in that. And look, when it comes to AI and when it comes to fancy other new features on phones, Apple has an incredible competitive advantage. They can wait. They don't need to rush out to provide you the new greatest thing ever. They haven't had to do that for a long time because guess what? You're already using it and you like it. And they can wait until they're sure that the AI is gonna be helpful. Because I don't know that all the other AI out there is helpful. There's a lot of fancy whiz-bang stuff out there, but look, what did DeepSeek tell us? It's not hard to build something comparable to what all the people have been raving about for much cheaper and much quicker. Why? Because it's not that great. So they can wait. Right? They can also wait to create foldables and other kinds of things that are now kind of gimmicky and exciting. But when Apple rolls it out, I think everyone will believe, hey, this is going to work, it's going to be awesome, and, and they'll buy it. And again, I think my takeaway is that's what's priced into the stock already. So nothing really, really crazy or wild revealed from the earnings call. I think a similar thing that we've, we've seen in the past, which is Tim Cook saying, you know, be patient. We're in a good position. China's going to be a headwind. I think so. I mean, I think China, look, they want to sell their stuff and they're going to make sure that their stuff sells. But I don't think that that means in any way that Apple is going out of business. It's a terrible company. I don't think there's as much upside as there is in stocks that we would recommend. So Apple would not be one that we recommend. We are going to recommend to our clients stocks that we have a lot of confidence in going up a lot in the short to medium and long term. Because the expectations baked into those stocks are— the stocks we like are very low. And with Apple, you've got really high expectations. This in the red is a red flag. Yeah, another good point here from the audience here. Yeah, you know what? Apple, we trust our privacy with Apple. That's a big deal. And I think that's another great thing, and I'm glad this is brought up, that Apple does it. That they go out of their way to prove that you can trust them. I love that because that's what New Constructs is about. I think you need, you know, you need a source of research you can trust in the market. Look, we're overwhelmed with these narratives all the time that we know to be false, whether it's about COVID whether it's about elections, whether it's about Russian interference, whether it's about China. Like, you know, I think we can all acknowledge that there are enemies of the state that are trying to divide us and misinform us. And I think they do the same thing in the stock market. Same thing in the stock market. They want our capital markets, our stock market to be inefficient because the stock market has been the single greatest driver of economic strength for the United States for the past 200 years. It's the reason we're the strongest country in the world. It's the reason we have the greatest defense. We can afford the greatest defense in the world because our stock market has been very successful in helping us allocate capital to its highest and best use. And to the extent that our enemies can undermine that by encouraging people to put stocks in, to put money into meme stocks, to meme coins, and to super overvalued stocks, they hurt our ability to innovate and to grow wealth. That ultimately could be our demise. I'm not saying that investing in Apple is hurting our ability to grow wealth. I think Apple's a great example of how a lot of capital went into a great company, and they did a lot of great things for Many, many, many years, you know, and it's topped out. Buffett started to sell a little bit too. It's topped out. You know, it's, it's— there's a difference between a good company and a good stock. And I think Apple is a great company, but maybe not such a great stock anymore. Yeah, some great stats here in the, in the chat from Matt and Jay. Good stuff. All right, let's go to the next one in our portfolio here. we're going to talk about today. I want to talk about KLAC, $742 a share. Guess what? We talked about buying this stock when it was at $90. This is a great example, great example of New Constructs has been really early on a lot of stocks. Like, you know, we, we liked Nvidia when it was at $0.57. Do we like it now? Not so much. At some point, we have to cry uncle. The stock price fully reflects the great prospects for the business. Now, does that mean it's not going to keep going up? Does that mean that there are forces out there that can benefit from pushing stocks way past their underlying economics and their economic potential? Absolutely. It's a way for certain forces to disproportionately enrich certain people and constituents while ultimately hurting the country. But anyway, KALAC, yeah, we, uh, we wrote about this stock a long time ago. Uh, we made a great point about how this was a grower. It was profitable, very similar to our, our call on Nvidia. Very profitable business and, and in a great spot. We— this is one of our pick and shovel plays. At one point we wrote a couple of reports on this one, and, and this is, uh, you know, a pick and shovel play to benefit from trends such as artificial intelligence, autonomous driving, and the Internet of Things. Uh, we wrote that back in August of 2017. So, you know, some people might say that, hey, fundamental stuff, that's sleepy, it's boring, it's backward-looking. No, it's very forward-looking. It's just forward-looking with some poise. We're not just telling you to buy, buy, buy whatever looks popular. We're going to do so with some real analytical rigor, which is why our stock picks do so well. If you guys haven't heard, we're been ranked number 1 in multiple stock picking categories for 43 straight months on SumZero. You know, that's a professional buy-side-only community, so we're not competing with Wall Street ratings, which aren't always so good. So KLAC, let's go in some detail here on KLAC. Again, you can see similar situation— good company, not such a good stock, expensive. Economic earnings aren't quite as good as where Apple is. Still positive, still doing well. Return on capital, good. Not as great as Apple, but still super strong. Look, 45%, man, that is nothing to discredit. That's awesome. That's a really amazing return on capital. And you want there to be lots of capital given to companies that have high returns on capital. When I say the purpose of the capital markets is to take is to put capital to its highest and best use, the best way to measure how well a company is using its capital is return on invested capital. That's it. Because it says, hey, it starts with how much capital has gone into this business over its life, and then it divides that into the cash flows it makes. And this is a universal metric. We calculate return on invested capital on everything. We calculate on portfolios, on ETFs, mutual funds, and then, of course, stocks. Because we think it's the ultimate measure of how well a group of companies or a company is utilizing shareholder capital, right? Cash flows divided by amount of capital that's gone into the business. It's the same way you think about a money manager, right? If a money manager makes you a million bucks, well, that's terrible if they've got a billion dollars. But if they only have $2 million, that's great. The denominator matters. How often do you think Wall Street talks about the denominator? Or why don't someone make a comment? How often have you heard Wall Street talk about balance sheets? You never do. They want balance sheets to be as big as possible. They're in the business of selling balance sheets, right? They sell debt, they sell equity. So they want people to raise as much as they can. They don't want you thinking about the balance sheet, but the balance sheet is incredibly important. And when you're earning $0.45 every year for every dollar of capital invested with you, that's awesome. That's awesome. You're, you're in a few— in, in less than 3 years, you are, you are returning all the capital given to you and creating more value. That's tremendous. That's what we want to invest in as a country— companies that do that and are going to do that up to a point. Now, there can be too much capital in that business, and that's measured by the stock price being expensive. Whenever the stock price is implying that for example, returns on capital are going to go to 200% and they're already at 45%, well, maybe it's time to give that capital to another company. And I'm not saying the company already has to have a high return on capital in order to be worthy of investment, but it does have— you do have to believe that its return on capital will be greater than what it is today. That's the whole idea. You want to buy stocks with low expectations sell them with high expectations. So you want to buy stocks where expectations for return on invested capital and profit growth are low and they're going to get better. Then you're funding the future of America. Then you're funding the future of business, the future of innovation by putting money in those stocks where the, where the valuations are cheap and the performance of the company is going to be better than what's embedded in the stock price. Now, I'm not saying it's easy to find those, but that's how, that's how capital markets are supposed to work. And that's how you really create wealth for yourself in the long term. 100%, full stop. That's how it's done. So yeah, with KALAC, good company, not such a great stock. Great credit rating here. I mean, I think I would lend money to this company all day long. They're going to be able to pay it back. I mean, this is like, if you're going to buy debt, you know, you buy debt in a business like this because it's— the default risk is like next to nothing. That's what you see here with the stock rating. Let's take a look quick quickly here and how economic earnings and accounting earnings have trended very similar. We tend to see that with really good companies, you know, economic earnings and accounting earnings like they're the same. They're not they're not fudging the numbers. They're not trying. They don't don't have to play. They don't have to play with any accounting rules to make the business look any better than it is because it's such a darn good business. See returns on capital steadily strong and high. What was our return on capital back? 2017. Yeah, 54%. So, you know, it stayed high. It's been a consistently high return on capital business for a long time. Let's see, what did the pundits say? KLA rises after earnings results draw praise from analysts. So when you see credit rating like this, when you see economics of a business like this. I'm not the only one saying I'd buy debt from this company or I'd lend money at this company anytime. Wall Street would too. Wall Street wants them to sell more stock, wants them— or buy stock or do M&A, right? So are we surprised to hear praise from analysts? No. Do you think Wall Street investment banks get business from companies whom their analysts insult? Or don't say positive things. I don't need to be an insult. If you're not a cheerleader, investment bankers got a hard time getting a meeting with the company. So as I've said many times in a lot of my trainings, I've got good friends on Wall Street who were fired because they were not positive enough about the company, about certain companies that the bankers wanted to get business from. So yeah, good stuff. Strong market position. All this stuff is great and true. Bottom line is already priced in. Already priced in. All right, let's talk about another company, Exxon. I believe this is actually in my own personal portfolio. Attractive rating. Now it's got a big acquisition imminent, so we think the economics of the business might change, which is why we suspend. Uh, there's a lot of reasons why we suspend stocks, right? All of you who have access Whether you're a— our lowest-level client or a highest-level client, you get access to these analyst notes. You can see all the reasons why we suspend. Professional clients have that reported, which one is the reason this time, but you— all the reasons are always listed and clear for people to see. You know, some are bigger, some are bigger deal than others, like our required cash assumption was updated. We'll point that out. Risk of fraud, that's a bad one. Weak internal controls, that's a bad one. We flagged that for Supermicro back in August. And that was super helpful to clients. Suspended the stock, flagged it for weakened internal controls, and guess what? It blew up. So we will share these reasons for everybody. Only pro clients see why it's suspended. But look, Exxon, you know, when I think about these narratives out there and look, bad actors, you know, who want to undermine the efficiency of our markets, and that's forcing us to or encouraging us to push a lot of money into the overvalued stocks. where we want to be putting that money into companies that are innovating and making real value. And, you know, Exxon is one of those. That's why I've owned it personally in my own portfolio. This is cheap. This is— this 1.0, this green right here, price to economic book value, that's telling us that the stock price is saying Exxon will never grow profits from current levels. I'm not here to advocate for fossil fuels. I believe in climate change. I'm not a climate change extremist. I believe that we need to be good stewards of our planet. I believe that we are all, as humans, really compelled to be good stewards of everything. Wasteful activities are not healthy to everybody or anybody. And I think people that are wasteful in their own personal assets are probably not going to be good for, you know, to be friends or to be in a relationship with, because if they don't take care of themselves, how can they take care of others? So, I genuinely believe in that. And that's part of why I started New Constructs to support the integrity of the capital markets, the efficiency of the capital markets. help our country be better stewards of our capital, help our citizens be better stewards of their own capital. So anyway, I believe in that. And what I'm telling you is that Exxon's a really good steward of capital, really good steward of capital. Now, do they have a high-flying tech return on capital type level? No, it's an energy company. It's tougher. Has it been better in the past? Yeah, I think returns on capital have been better in the past. It's a cyclical business, but these guys generate enormous amounts of economic earnings. When you have a huge capital base like an Exxon, you're generating enormous amounts of wealth for our country, for the company, and for investors. And I think they're going to continue to grow. They're not just about pulling oil from the ground. They've got distribution. They're into other types of energy as well. And they're going to be one of the greatest benefactors of alternative sources of energy as well. They'll be in the process, they'll be in the business of distributing and serving that also. You know, you don't have to believe that, you know, people are extremely evil or extremely good, right? That's what the bad actors, that's what China and Russia want us to believe, that, you know, if you're a Democrat, all Republicans are evil, and if you're Republican, all Democrats are evil. They don't want us to be able to have civil discourse. We, I think, can all acknowledge they don't want us to have civil discourse about anything, including stocks. And that's what these earnings watches are about. We're trying to bring back some civil discourse to stocks, and I hope that you enjoy it, and I hope you feel compelled to let me know where we're getting off track, or you know, compliment us in in the chat or in in the Q&A. Yes, we have some of the smartest and best engineers in the world. In the United States to pull energy from the ground and to allow us to operate with a low source of energy. One of the biggest advantages of being in the United States is we get to live our lives and our companies and our industry gets to run our run its lives, our lives with a low cost of energy. If energy were twice or three times expensive, would our economy and our standard of would our economy be nearly as strong? No. our standards of, standards of living be nearly as good? No. One of my, 2 of my sons spent, you know, several weeks in Spain over the summers over the last few years, and they're like, Dad, like, there's no air conditioning. We can't, they don't even, one of the kids almost got sent home because he snuck a fan into his room and ran it all night, and that used too much electricity, and this host family got really mad, right? Like, that's, that's kind of nutty. I'm not saying air conditioning isn't, isn't necessary, you know, for a vibrant country, But, you know, having air conditioning definitely improves my standard of living. And I think it also probably has a meaningful impact on the countries or the companies that want to do business in Spain. Look, if the cost of energy is that high, you're in trouble. So look, we want to give capital to businesses that, that produce good things, produce real profits, and, and that are cheap. So we like Exxon. We like Exxon. And let's, let's see, how did their— how'd the earnings report for Exxon— what's the latest here on Exxon report? As you guys can see, I'm not watching this stuff minute by minute. After earnings beat forecasts. So let's see. You know, that's another— that's a great comment, you know, in terms of if you want to really make money in AI, do you want to be in AI or do you want to be in the energy that, that supports AI? I think that's a great point. It's a great point. So yeah, Exxon's getting hurt today. Earnings beat, but they still fell. Uncertainties about tariffs and other political pressures. Oil from Canada. U.S. refiners import lots of oil, the biggest. So yeah, you know, this is— I agree with the CEO, a lot of noise and speculation. I don't think that our administration wants to hurt American companies. I think they want to hurt countries that aren't really being good partners. So I think there's potentially a disconnect that tariffs are going to do a lot of bad to GM, to Exxon. I don't think that that's the case. I think honestly that Trump is going to probably be doing more to, to onshore more, including domestic oil production, because we're not going to be taking it and we're going to try and decrease our reliance on oil from our potential enemies, China and Russia. I think that's ultimately pretty bullish for our domestic energy companies. I think that it's important that we don't subsidize people who are out to try and get us. So yeah, that's another thing I often forget to talk about here is like, you know, we've got dividend here, dividend yields here. Yeah, that's not a bad yield to wait on Exxon. And again, I think there are good things to come, but I think You know, when I, when I read what people are saying about Exxon here and what's happening to the stock, it's just hard for me to reconcile that with Tesla missing huge on the top and bottom line and still yet to deliver on so many things that have been promised, and the stock goes up. And it's— and the valuation there is like so far absurd. If you haven't heard about that, check out any of our articles on Tesla. I think most of them are free by now. Yeah. We've done the numbers, we've done the math. The current stock price for Tesla implies that they're going to produce more companies— I'm sorry, more cars than the entire market share for expected vehicles by 2031. So that's a bad thing. That's a bad thing. We, we don't think that that's, that's going to happen. We don't think that Tesla is going to have 100% market share. So when I see shares for a stock like that going way up and a stock like Exxon going down, that's when I have a hard time, like, just like, you know, and I hate to put my tinfoil hat on here, but like, people are moving these stocks in the wrong directions for a reason. They want to undermine the efficiency of our capital markets the same way they want to undermine our elections, the same way they want to undermine our ability to be technological leaders, the same way they want to undermine our ability to have influence in the East. Or in Europe, they want to undermine our influence in the capital markets. In fact, that's probably the best place to hit us. That's punching America right in the nose. That's that's that's hurting the heart of American innovation. So yeah, I would definitely think that Exxon is a better place to make investments than a Tesla, and I think it's you know it's a head scratcher. It's a head scratcher. This terror stuff is not new news. It's not. not new news, and yet the stock's going down even though we saw a beat. All right. Chevron. So I think we saw in this write-up on Exxon that Chevron is also down quite a bit today. It's also got a great dividend. What does our model say about Chevron? More of a neutral. So not quite as cheap as Exxon. It's also in the business. dealing with a large acquisition so that it's suspended. But you know, this one's closer. It's neutral, so not as cheap. 1.1 price to economic book value. Maybe that's because of the Buffett news of being in Chevron, so it's been bid up a little bit more. We would've liked this stock at a much cheaper price when we featured it in this report. When we featured it in— whoops, that's not what we want. CVX. Yes. When we featured Chevron in this report, I'm betting that the price-to-economic book value is much lower. Yeah, 0.7. That's when you want to be in a stock, right? When the stock market is implying profits will permanently decline by 30%. A price-to-economic book value ratio of 0.7 means the market cap is only 70% of the no-growth value of the business. So a great example of when to buy. If we had a 0.7 price-to-economic book value for Chevron right now, I'm guessing that the rating would probably be attractive. Not a great return on capital, right? But again, these guys are cyclical. These dudes make tons of money. The free cash flow stats— oh, we got to look at free cash flow for Exxon. Look, $26 billion, $10 billion, $29 billion, $23 billion. Probably did an acquisition this year, so we're down one, but $19 billion. I mean, just tons and tons of money. While the free cash flow yield is good and strong here, I want to look at Exxon's free cash flow. I bet it's just— all right, so they got the acquisition in this year, which is why it's bad. But you got $32 billion, $54 billion, $37 billion, $6 billion, $2.6 billion. Really pretty amazing. Let's open a model on this one. We'll go back and look at the full history of free cash flow for Exxon. I'm, I'm guessing that it's pretty amazing. But back to Chevron, again, you know, not necessarily a great company and not necessarily great stock, so neutral. One of the benefits of, of our technology at New Constructs is that we're covering like 3,400 stocks, I think maybe 3,300, 3,350. We're going to start covering a whole lot more. Most of those are going to be small cap. We pretty much cover all, cover all the S&P 500 always, all the top S&P 1500 stocks. We're covering the most, we're covering all of the actively traded large stocks for sure. I think we're going to, we're going to like meaningfully expand here in the next few months a lot of the smaller cap stocks. Then we're going to go global in our coverage because our technology can now parse most filings almost 100% automatically. So that's like super efficient for us. But the point— my point being is, look, you don't have to push a bad hand. You don't have to invest in Apple just because, oh, it's so popular, such a good company, when it gets that expensive. We have a lot of other stocks in our system. We can screen the entire universe of our stocks. We got a screening tool here at New Constructs. You can in a second screen any sector or the entire market to find all of the very attractive stocks, all the attractive stocks in a heartbeat. We have a model portfolio called the Most Attractive Stocks. We have a bunch of model portfolios that focus on attractive-rated stocks. You know, we got some that have like growing dividends, safe dividends, executive compensation aligned with return on invested capital. So these model portfolios all start with very attractive stocks. And you know, that's— there's a lot of them. And that's where we think you can focus because you can go in and you can buy— that's a company buy companies where you got good company and good stock. You know, I'm not saying you need to speculate on a company that doesn't have a great return on capital yet but is cheap. You— we have plenty of companies that are just mispriced. Why? Hard to say. Are there people out there that want to— want more of our capital markets to push capital in these overly expensive, crazy stocks, right? Does China want Tesla stock to be really expensive? Do they want it to have all the capital? I don't know. It's hard to say no. Who knows? It was— there's definitely a, a strong relationship there between Tesla and China. And so you got to be mindful of that. You got to be mindful of that, especially when you see so many good stocks out there. Now, are there as many good stocks in our system as there used to be? No, they're getting harder and harder to find as the markets just push everything up. But there are plenty still. Yeah, great question about Canadian coverage. We're working on that. That will be one of the first countries we expand into. All right, let's see. Let's go to the last one here. We're up here for— we're here for a while. Let's look at Quantum Co. So I put Q— Quantum Corp. I put this on the list today because I actually have done a reverse DCF on this company, and I wanted to talk about this stock for a second because It's a great example of, you know, kind of ridiculousness. A stock that has gone, been kind of nowhere and jumped up on a bunch of hype. Whoops, that's not the right one. I was like, that's not the chart I remember. All right. Okay. It's pretty good. Oh, tech. Oh, look, what was this? What's this? Oh, the tech bubble. This guy's been around for a long time and it crashed and it stayed down. And guess what? We're seeing a little bump here recently, right? You know what they're hoping for? People fall for the same trick twice. So I'm saying this is a bad company, bad stock. Bad company, bad stock. Negative, highly negative economic earnings, highly negative return on capital. You can see here. Been very negative as of late. Margins negative, headed down. Right? Let's talk about what kind of future is embedded in this stock. And actually, I just did a, a blog post on my reverse DCF model for Quantum Corp, which, by the way, doesn't really even build quantum computers. It's, it's, it's like a support kind. It's like a completely different Business versus quantum computers. What do they say they do? Data storage management and protection company that provides technology to store, manage, archive, and protect video and unstructured data throughout the data lifecycle. Okay, is that quantum computing? No, but it's in the name, just like people used to put blockchain in the name or put AI in the name and poof, right? So I think, you know, what you get at new constructs is research is just going to cut through all of that. You type in a ticker You're like, oh, quantum computing stock, that must be great. No. Okay, move on, move on. Nothing to see here unless you want to have another experience. Like, the stock was as high as $5,000, $4,775 a share, and now it's at $22. Yeah, 95% people lost 95%. And I think we are headed towards something like that similar with a lot of other stocks. They're meaningfully overvalued. We've been pumping the economy with excess liquidity for years. And I think as people— as soon as people start to wake up to the fact that there are narratives pushing stocks for the wrong reason, that they do not have your best interest in mind— Wall Street's not giving you the truth. We know that dark pool trading has eclipsed Exchange trading, like more trading goes on in private now than does than happens on exchange. Wall Street's doing stuff behind your back. They have for years. There are narratives out there pushing stocks. There are a lot of people that benefit. Few people that benefit, right? Stock market can be a mechanism for taking the money from the pockets of many and putting in the hands of few. I think that's what Quantum Corp is. We can take a look at the model here for a second. This one should open pretty quickly. While we're waiting for that to open, let's go take a look at free cash flow for Exxon over time. $11 billion, $17 billion, $22 billion, $20 billion acquisition, $30 billion, $35 billion, $27 billion, $32 billion, $20 billion, $9, $5, $14, $16, back to 1999. So like the cumulative free cash flow of this business Is really pretty incredible, incredible. So what I did here, maybe it was for under a different login. When you look at the implied cash flows for this business, 39% revenue growth. We can do this quickly. This is this this is nothing. So we can look at that. Why don't we see what that means? So this is a summary of our reverse discounted cash flow model. You can see to justify 22% or $22 a share, they've got to grow revenues by 39% compounded annually for 8 years. So a tremendous turnaround from a business that's seen revenues tanking pretty strongly and return on capital and margins improve dramatically. What exactly does that mean? So let's take a look at revenue. Revenue is going to go from $285 million to $4.4 billion. In eight years, what does this mean for return on invested capital? It's going to go from kind of all over the place, pretty low right now, up to seven percent. What does that mean for margins? Get back to maybe where it was in the past. So the point is, good news is priced into this stock. Right? I think to simultaneously grow revenues at such a high level while also improving margins, probably highly unlikely. Again, nothing to see here. We recommend avoiding. Unattractive. So I kind of— I think, I think that's a super valuable capability, right? Like, there's a lot of hype, there's a lot of news. Type in a ticker, get an answer, 2 seconds. Quantum Corp, move on. Nothing to see. All right, everybody. Well, thanks very much. We went pretty long today for 40 minutes. We're going to be doing 3 more earnings watches next week: Wednesday, Thursday, Friday, covering the biggest stocks. Stay tuned to your email. We'll be letting you know about it. Thank you again for joining me today, and I hope you guys have a great weekend.