New Constructs' Live Podcast: Intelligent Capital Allocation - 6 October 2023

We've been talking about how much you have to work at this practice and that the only way that you're going to get better at investing is by doing the work and doing the investing. And I thought this particular quote was hilarious. Welcome to our live podcast, Intelligent Capital Allocation. Here with you today, as usual, you have myself and Hakan, David Trainer, and Kyle Guskey. Our special guest from the analyst team is Brenton Bussiere. Thanks for joining us. We're really happy to have you. He's got some interesting stuff to talk to us about later on in the agenda. I'll go over the agenda really quickly after these disclosures and disclaimers. Lots of research came out this week. Some zero rankings, which Kyle will be talking about later. The Dividend Growth Model portfolio for September, the featured stock for that came out this week. There's a zombie stock coming off the list. Most Attractive and Most Dangerous got updated for October and some interesting long ideas from Italo as well. The Danger Zone podcast also that David did last week is linked. That's always a brief, incisive, interesting thing to listen to.

Hey, there was one, there's one report I think you missed, Tam, believe it or not. We just published our 3rd quarter Where Street Earnings Are Too High and Who's Most Likely to Miss report. That's a really cool report. There's a really interesting stock on there, and it's a great little case study on where companies hide the data to juice the numbers. There's a lot of good examples of gains and acquisition stuff and things hidden in SG&A that you don't see in the income statement. It's a good example, great report.

That one is actually available to everyone.

If you're not a current client, then you can get Most Attractive and Most Dangerous at our shop online. If you have any questions about that, just give me an email at support@newconstructs.com. It's one of the most inexpensive and one of the most interesting Model portfolios, I think. We're going to do DCFs first because there's a bunch of stuff that we want to talk about there. And then David will do interesting headlines. Then Brendan will do the analyst update, which is the interesting changes that are going on with Kellogg. And then we're going to go out to society because we got some great questions there yesterday. And then we will end with stock picks.

As usual, when we were talking about what we, what we wanted to focus on this, this week, we were thinking about how the markets were looking, and we heard some chatter around maybe things are oversold and maybe we're kind of through the, the tough part and the market's going to start coming back at the end of the year. And we just wanted to take a second to point out just how much speculation remains in the market and how overvalued certain stocks are. And there's no better way to show that than to present the evidence and the math that helps us understand the future cash flows required to justify the stock price. And who's better to do that than Kyle Guskey II?

Thanks for that. We're going to do a deep dive on Rivian, and I'll also give some details on some other companies that some have fallen a little bit some this year, some have soared this year, but all of them Highly overvalued, especially with some of the current news items going on. Rivian being the first one. Obviously, we saw the news they're issuing debt right now, debt that they will need to simply operate the business. It's one of the reasons they were named a zombie stock back when we did probably over a year ago at this point. With that news, wanted to take a look. The stock dropped 20% on the news of them issuing more debt. Wanted to take a look at what that meant for the current valuation, what that means for possible downside, and put these quick charts together. We're gonna dive into the actual DCF here and what is behind these charts. But off the top, you can see that current valuation implies that they're selling as many vehicles as the F-150 sold in 2000. So there's optimism abound in the current valuation. So we look at the DCF, we've got our decision page here. The big one we're going to look at is current price of around $18 a share, and that'll be our optimistic scenario. In that scenario, and both scenarios for that matter, we're going to say they can get margins to 7.2%, which is equal to Toyota. That might not seem wild for someone who might not know Rivian's business, but their current Margin is negative 182% already in the current stock price. You've gotta go from negative 182% to positive 7% margins. While doing that, they would need to grow revenue. You can see here 146% in year 1, which is equal to consensus, and then above consensus going out 95%, 55%, 55%. It ends up being 58% compounded annually through 2030. We can see what that looks like on the DCF review page.

58% compounded annually.

For, for 8 years. Yeah. Not just for 2, 3 years. In that scenario, 58% compounded annually, revenue would be $65 billion, which is 70% of Tesla's revenue, 77% of Nissan's revenue, and NOPAT would be $4.7 billion or so. Fun analysis on companies like Rivian and Tesla that we've done is we can look at what that implies as production vehicles sold. We look at $65 billion in automotive revenue, take their average selling price, which in the TTM is actually extremely high at almost $97,000. But even at that high average selling price, which is likely to come down over time, their current stock price implies they're going to sell 672,000 vehicles in 2030. As I noted right at the top there, Ford sold 654,000 F-150s, which is the best-selling truck for, I think, 45 years in a row, maybe 46 years in a row. So right now at $18 a share, Rivian is priced to be the number one or to surpass the number one selling truck while also improving margins from negative $182 to positive $7.

That's, that's at the $97,000 price point.

Exactly.

They're gonna sell more trucks charging more for the truck than Ford, their best-selling truck.

Yep. And if we look at that selling price, if we say they can— competition prices come down— even if they can match Ford F-150's average selling price from last year, which was about $66,000, they'd have to sell 981,000 vehicles. So not probably 1.5 times what Ford sells as the best-selling truck. So optimism, go lower. I don't even know. It's pretty crazy at $18 a share, and that's after the 20% cut yesterday when they started issuing more debt. That begs the question, what's the downside risk? Obviously, with a zombie stock, downside risk is zero. You know, if they keep burning cash, it's going to create further dilution. If they don't fix the business model, that dilution ends up You know, diluting in the short term, and then you still lose all the value in the long term as they go to zero. But we wanted to put another scenario together. Still optimism around what they can grow. Their EV business is growing, EV market in general. We gave them credit for 7% margin, still 7.2% consensus revenue estimates in year 1 and 2, and then 30% revenue growth in the following years, 20% in years 6 through 10. It ends up being right around 42% compounded annually. So that scenario with, again, those 7% margins, 42% compounded annually revenue growth through 2030 instead of the 58% that is required in the current stock price. We're looking at downside of over 80%. That would be the shares would be worth $3.60 a share. And that would be on revenue of $27 billion. Still $1.9 billion in profits. And when we look at the implied production in this scenario, we're still looking at if they did average new truck price in 2022, they'd be selling 458,000 vehicles, which would be right around what the Ram pickup trucks sold in 2022. So we're still talking at even $3 a share. The implications are that they are the top 3 selling trucks in the US. While again, vastly improving margins. 2 combinations that are highly unlikely, which is exactly why Rivian has been on our zombie stock list. And you can see here the focus list short as well.

Let's talk for a second about that 20% drop on the announcement of raising money. Yeah, they were able to raise money, right? And so they were able to stay alive. And you think, is that good for me as a shareholder? Well, 20% drop says maybe the rest of the market doesn't think so. Just because they're able to find someone else to loan them money at probably prohibitively higher rates than what they were able to borrow money just a short time ago means that you can expect more of that. They're burning cash. Wasn't— I think Brendan said on our prep call, they're losing $30,000 per vehicle. Okay. That's not a recipe for success. And yeah, they may stay alive a little bit longer, but as Kyle's showing you here, I mean, in the trailing 12 months, They've already burned what they borrowed and a billion more than what they just borrowed. So yeah, it's just because they can borrow some money and someone's willing to throw more good money after bad, it doesn't mean that they're going to survive. There's some significant issues with the business model. And I think the other thing, we had to suspend the rating back in March because of weak internal controls. Not a good sign. Not a good sign that the auditors are like, hey, we can't really totally sign off on this because Their internal controls for measuring their own accounting or tracking their own accounting internally are not so good. Great example of a zombie stock. Great example of how speculation remains very high and rampant in the market.

And they're not the only one. I'm going to jump into the next one here. I'm not going to go into the whole model, but DoorDash is another zombie stock. They've been in the danger zone for quite some time. High expectations, low profitability matches all the zombie stock characteristics. You can see here in this chart, the current stock price implies they own 86% of their total addressable market. That's currently up from around 24%. In the current stock price of around $78 a share, it's up at that top blue line. They'd have to improve NOPAT margin to 10%, which is equal to UPS's margin in the TTM. There isn't a Another pure play, you know, food deliveries. We look at some of the other logistics providers. We recently saw Uber is going to start helping UPS and deliver packages to a UPS or a FedEx location. They're all intermingling there. But if DoorDash can get 10% margins compared to negative 14% last year and negative 11% in the trailing 12 months, and then it has to grow revenue by 31% compounded annually. to justify that $78 a share. In that scenario, revenues would be $55.6 billion, which would translate to around $437 billion in what they call marketplace gross order volume. Orders made on DoorDash, obviously they only get a percentage of that, but the total money spent on DoorDash would be upwards of $430 billion at 6% of the total addressable market. We still got Massive expectations in the current price, and that's where we want to quantify because if they can't do that, there are nothing but downside risk. We can see where that downside risk falls. Two scenarios: what would be worth 23, and then what could be worth 13 a share. But I'd say there's still some optimism baked into those stock prices as well. That 23% scenario, we assume Mopat margins get to 6%, equal to FedEx. Revenue grows by consensus in the next 2 years, and then 17% thereafter, which is a continuation of 2024 consensus estimates. So if we can get those margins up, worth $23 a share today. And that scenario still implies around 30% of their total addressable market, which we consider global online food delivery. They can grow that market share 24% to 39%, we're looking at $23 a share. And so then that $13 a share is Net margin is maybe not as high as FedEx. We assume 4% instead of that 6% revenue growth consensus, and then 10% in the years after the— from 2025 to 2030, which is the expected industry growth rate. So if they grow at consensus and then industry growth, that's where we see that implied share price of just $13 a share. But even in that scenario, it still translates to 27% of the total addressable market. So they're still taking market share in that scenario. downside of 13%, which is over 80% below the current stock price. So companies, Rivian, DoorDash, still have a lot of downside risk even with the volatile market that we've seen this year.

These implied market share gains are just, they're outrageous. And while improving margins, right? Oh, we're going to charge more and take market share. That's going to work out great. People are going to be really willing to pay more To use DoorDash and use them more because the prices have gone up. Great idea. You know, I think the, the one thing we put out in our, one of our original reports on DoorDash was the whole idea that, look, if food delivery really becomes that profitable and successful, don't you think the restaurants are gonna take it over? Like they're gonna say, oh, you're gonna make all this profit from my product? There's a lot to unpack there. DoorDash is, is so dependent upon another partner, another vendor supplier who will probably not look too kindly on those, that customer taking too much of their profit.

Yeah. And it's similar to what we just recently said with the Instacart IPO. If Instacart becomes too profitable, they're obviously a little different because they are profitable compared to DoorDash. But, you know, the grocery stores will step in and say, hey, we're going to take that business back. We could see a similar thing with DoorDash here. The Difference there being DoorDash is starting from unprofitable, the business model, whereas at least Instacart has some profits, even if they might not be as easy to sustain moving forward.

DoorDash is, do they make money, any money during the pandemic? Did they make a little bit? Did they ever get positive margin or are they never positive? I can look that up just as easily as you can.

Yes. I'm not sure. I don't think they did.

Nope. Nope.

Goodness gracious. The, the best they got was a negative 8.7% margin.

Okay.

So that's a big no. So they've never made any money and they're going to suddenly go from this unprofitable business to a super profitable business that's growing at high rates and taking huge amounts of market share. I'd say there's a little bit of speculation in there. To a question we got on Rivian, but I think you'd ask the same question to DoorDash. What are the lenders thinking? What do they really believe? I think Roger said, do they think the— they plan to convert to equity at a huge discount? Do they want to foreclose on the assets or are they just optimistic? And I think, you know, it's gotta be optimistic. I don't know. Or nutty. Who knows? I have no idea. It makes me wonder how a lot of these, how anybody invested in, in a lot of these businesses in general. And yeah. I'd say optimistic, Roger. Just really optimistic.

I have a question about that. I don't understand how these prices get so inflated, because if everybody can do this math, why are people paying more? This math seems like it has a lot of variables, but it's not hard. It's not super difficult math. So what's going on that people are willing to— and who is paying all of this money?

I think it's a great question, Tam. Thank you for asking it, because I think that's— I ask myself sometimes, how is this possible? What is going on? I can just tell a couple of stories. With WeWork, I think they announced they're going to be going public near the beginning of the year. This is in 2019. And it was maybe 4 or 5 months later, Kyle, 6 months even before they canned the IPO. And in that situation, I think our story had a chance to get out there. And people had a chance to say, oh my gosh, what's going on here? With these other stocks, these other IPOs in particular, we've seen since then that the amount of time between, between the time they file the S-1 and when they go public has shrunk from months to days in just a couple of weeks, usually on average. And in that amount of time, I don't know that enough investors get access to our perspective, Tim. I think what they're hearing is, The message from Wall Street and the message from CNBC and the message from the majority legacy status quo outlets and providers who are all very much aligned with making money on these IPOs. I mean, the IPO fees are hundreds of millions of dollars. Yeah. And for Instacart, probably that was a $20 or $30 million deal.

I don't know for sure.

I haven't looked at the numbers. It's a lot of money for each one. And the prevailing narrative is not ours. I don't think enough people know about what it is we do. It's hard to make a straight-faced argument to coming anywhere close to owning any of these stocks if you do this basic math. That's part of what New Constructs is for, is to make this information available to everybody to improve the integrity of the capital markets so people are not overly influenced by the misinformation machine that is so much of what goes on. And it's one of these things. It's fun doing this every year with a training class. It's, it's always fun working with new clients because they all have a little light bulb moment. It's like, whoa, wait a second. If we can do our analysis like this, why would you do it any other way? Why would you make an investment decision without understanding the expectations baked into the stock price, good or bad? Why would you want to ignore that?

It's hard for me to believe that they do ignore it. It comes across as almost like a multi-level marketing scheme. I mean, it comes across as folks that are cashing in. I can't believe that they don't know this. Do they not know?

You know, I don't know. I've wondered the same thing. So look, when I was on Wall Street during the tech bubble back in my Credit Suisse days, what I can tell you is that they in trouble with the SEC, a bunch— so did a bunch of Wall Street firms. In particular, at Credit Suisse, I believe that the regulators found emails from the stock analysts that were writing the glowing recommendations for the IPOs. They found emails from these analysts right after they wrote and published their glowing recommendations, Emails to their friends saying, "I can't believe anybody's stupid enough to invest in this piece of blank." So, for anybody who is not familiar with Wall Street, there are significant conflicts, significant huge conflicts. They make money selling stock. So what do you think they're going to do? Sell stock. That means they've got to write something and say something that's a little bit more positive. Because guess what? If one analyst isn't willing to do that, there's a line of 58 people behind them wanting to make a million bucks a year to do that. Why do I say that? I've seen it. And there was a $1.4 billion settlement after the tech bubble for, for 10 investment banks for just that reason. They paid that fine because they, they stepped over the line in terms of just being too conflicted. The equity analysts were getting directly paid. They're indirectly paid these days because equity analysts don't make money for the firm. The research departments at investment banks make no revenue or inconsequential amounts of revenue compared to the bankers. So if you're not making the bankers happy, what happens? And there are great examples of that over history. Look up Mike Mayo, one of the top bank analysts over the last 25 years. There are articles published, I think one's in Fortune and I don't remember where the other one is, but there are multiple articles talking about how he got fired because he was bearish. And the bankers didn't like it. And one of the reasons I say Mike is a great analyst is because he didn't change his call. He didn't succumb to the pressure to do what the bankers wanted. He stood by his guns. And I don't know any other analysts that have done that. That's what goes on on Wall Street, and that's where the incentives are for the business. As Garrett O'Grady, one of our analysts here, always likes to say, you want to understand behavior, follow the incentives. I think he credits Munger with that, but I'm crediting Garrett with that. So anyway, that's the answer. And you're right, Tam, it's hard to believe.

Yeah, it just seems this is a pretty reasonably well-thought-through math-based argument, and that if folks aren't using it, I'm not quite sure how you would make a decision or feel comfortable telling people What to do.

Exactly. I mean, one of the things we wrote a bunch of, of articles about fiduciary duties back when they were looking to elevate the fiduciary for advisors and registered investment advisors, because right now they're not held to the fiduciary standard. They're held to a lower standard, which means they got to make the right recommendation to that person in that moment. It's a much lower standard of care. Whereas the fiduciary duty of care means any recommendation, you've got to have done enough work to justify what a, a prudent person would do. And to my way of thinking, it's not prudent to make any investment recommendation without having done this work. And it's not just us saying this anymore. You've got Ernst Young, you've got Harvard Business School, MIT Sloan, the Journal of Financial Economics. What are they telling people? What are they publishing? That you can't trust the other numbers. They're missing important items. enough important items that quant firms can trade on this data and get idiosyncratic alpha. That's how important it is. So are you fulfilling your fiduciary duties of care if you don't use new constructs research? I don't know. What are you going to say when a client comes to you and says, hey, what are you doing to protect me from the footnotes? What's your answer? And hopefully someday everyone will be protected from the footnotes. Someday everyone will have an advisor who's done this kind of diligence. That's part of what we're going to be able to help provide, I think, with our, with our ETF products. That's going to really level the playing field and, and let more people benefit from this, this technology and intelligence for sure. Are you fulfilling your fiduciary duties if you're not checking the footnotes yourself? And if you're not doing it yourself, are you using New Constructs or someone else who does it? By the way, I don't know anyone else who does. And if you do, feel free to let us know. But yeah, I think it's a fiduciary duty of care thing, and that, that's what people deserve. They deserve this level of diligence.

I know Kyle has a few more companies that he was going to talk about. We've got about 15 more minutes left.

I can do Wayfair real quick.

Thank you.

Wayfair, another zombie stock. The implications in the current stock price for this one are Alarming as well. We've got a current stock price around $58 a share. What that implies is no-cut margins improved to 2.8%, which is the highest they've ever been in Wayfair's history, which also coincided with 2020. The current margins right now are negative 9%, and they'd have to grow revenue by 18% compounded annually for the next 10 years. What that implies on a revenue basis is basically $62 billion in revenue. Which is more than double the revenue of eBay, Williams-Sonoma, La-Z-Boy, Etsy, Overstock, and Haverty Furniture. Double the revenue of all those companies. They've got to be the stop for all home goods, furniture, and everything on the internet while also improving those margins from, again, negative 9 to positive, which has only been positive in one year of their entire history. Even if they did get margins to 2.8%, they're only able to grow revenue by 10% compounded annually. That's where that $20 a share scenario is. And even in that scenario, that would still imply $32 billion in revenue, which is 4 times the revenue of Williams-Sonoma, which is one of the most profitable e-commerce/brick-and-mortar furniture companies out there. And then lastly, that $3 a share is how low it could go. If it didn't hit zero, that implies NOPAT margin of 1. Growing revenue at consensus rates and for the first 3 years and then 15% each year thereafter through 2032. And that implies $38 billion in revenue and $680 million in NOPAT. And they've only had positive NOPAT that one year in their history. Massive expectations, doubling the revenue of 5 or 6. home goods and furniture peers, um, to reach that current price. And we see the downside could be much further here. With that, I think we'll jump over Carvana and we can go to the next stuff up.

Excellent. I'll go ahead and include the Carvana slide in the deck that I put out on Society, uh, so folks can take a peek at that there. David, interesting headlines.

Macro picture. It's clear interest rates are going to remain higher for longer. We're seeing a lot of volatility in the bond market. Rates, real rates are going up, and yet we're still seeing strong job numbers and growth. This is the price you pay for printing and pouring tons and tons of money into the economy for a long period of time. Even as rates have been falling, there's still been a lot of fiscal stimulus. that are very inflationary and are undermining the ability for the Fed to do their job, which is to try to slow down growth, slow down pricing increases, slow down inflation. It doesn't look like there's a lot of it there. I mean, the, the, the new job starts was a big number. I think what this means for us long-term, my perspective is that we're going to see rates higher for longer and for a really long time, like years. And in that time, Behavior will change because behavior needs to change. If we were to have a big flush and all the super speculative stocks got cut down to zero and the value stocks, the companies that were really allocating capital intelligently went up and we had a major correction, I don't think that would change behavior. I think the next day it would be buy the dip and we'd be right back where we are. The only real way that the Fed can, can keep inflation down for any meaningful period of time is to do it slowly and gradually. And that's what we're seeing. And that means that the music may have slowed a little bit for a lot of these super speculative stocks. We've seen them come down 15%, 20%, 80%, 90%, a lot of the zombie stocks, and they've made some bounce backs. The music is slowing, but it's going to stop. If you want to continue to risk it and play with those speculative stocks, do so, but do so at your own risk. You may be able to play the game for a little bit longer. But it will end. That doesn't mean certain zombie stocks don't come off the list. We did have to take one off the list. Someone played a, what do we call it, stupid money risk. Someone came in and bought a dying business. I think their business was dying too. So maybe they think 2 dying businesses equal maybe a not dying business. That zombie stock was down since we put it on the list. Kyle, what was the total there? Do you remember? 70, 80%.

Yeah, it outperformed, I think, by 85-90% as a short, even after the bounce.

So overall, great call. Yeah, stupid money risk, took that one off the list. For analyst updates, let's go to Brendan. Let's hear about Kellogg's.

I made a post in Circle about this, but for those of you guys that didn't see it, on October 2nd, Monday this week, Kellogg's announced that they're going to be doing a spin-off So for anyone that doesn't know, spinoff and IPO, 2 different processes. IPO is a previously private company going public, and then the spinoff also results in the creation of a new public entity, but it's from a preexisting public company. So Kellogg's obviously traded on their ticker K before, so this would just be a spinoff as opposed to an IPO. And as you can see here, they spun off into 2 Separate companies. They have WK Kellogg Co. now, and they have Kellanova. So if you go to the next slide, Tam, can talk about WK Kellogg Co. This is trading under the ticker KLG now, and this is pretty much Kellogg's cereal business—their entire North American cereal business. They said they want this to be all things cereal, to focus on their major you know legacy brands like Frosted Flakes. Froot Loops, Raisin Bran, Rice Krispies. I'm sure those are all names that we've heard before. They want to build their strong foundation of heritage and iconic brands. You can see this just even through the logos. WK Kellogg Co. kept that original Kellogg curves of lettering. They really want this to be that legacy brand, everything that they've built on. Dedicated to focus on North American cereal. The CEO said they want this company to be able to focus on their own strategy, have their own access to capital. Their own separate balance sheet from Kellanova. So Kellanova, this is still trading under their original ticker of K. So I guess this is still the parent company, and this is going to be focused on their snacks and international brands. So they see strong growth potential in snacking and then the Asia Pacific, Middle East, and Africa markets. They like this because they have highly differentiated products. in this sort of product suite. As you can see on the right there, all these brands, they have stuff from frozen breakfast foods like Eggo to their international cereals, all the way to crackers like Club Crackers and Rice Krispie Treats, which are a sweet dessert type treat. So they love how highly differentiated they are here. They think this is going to be great for their international growth. They've recently built new factories in Brazil and Thailand. And then their CEO said they have a very robust innovation pipeline. You can expect some good products to be coming out as well as he said they have a lot of dry powder for acquisitions and they're actively looking for some acquisitions. And this speaks to another point as to why they did this spinoff. Their CEO said that for a long time, they've been focused on building this growth portfolio. Back in 2012, they acquired Pringles. In 2019, they sold off Keebler. So they have their ideal portfolio right now, and now they want to focus on driving this growth portfolio. That's their next step, innovating their supply chains, building those international factories, and they're in a pretty good position to do it. 50% of their supply chains are domestic right now, and 50% are international. So that gives them great room to work with there. Their sales growth, 80% of that is coming from these international and emerging markets. Some real good potential for growth there. I personally think this was a good split for them. I like how they're keeping that WK Kellogg Co., that legacy foundations, and then Kilonova is more of this, this new wave of snacking and growth.

It's an interesting portfolio. I wouldn't say they're tapping into the new health trends here.

Yeah, they don't seem too worried about that.

Yeah. Pop-Tarts and Wheaties and Cocoa Pops. Is it even real food? Pringles taste great, but what, what, what are they made of?

Styrofoam.

Yeah.

Well, it's salty Styrofoam. Delicious.

We did have a few questions out in society that we were gonna touch on briefly, David, and then we'll go out to stock picks with Kyle.

We had a great question. On a particular company and one of, on an addition to our most attractive stocks list, TK Corporation and the spinoff stuff and all that's going on there. And we're going to take a deeper look into that. I think that's a great idea. Look, the shipping companies, and in particular, I know the Greek shipping companies don't have a great history in terms of the transparency and accuracy of their accounting. They have also been oftentimes set up to benefit the owners disproportionately in cases. So we always need to take a little bit of a closer look at these, some of these shipping companies. So thanks for pointing that out. We'll report back on what we find there. And we had a question about, is Chewy a zombie stock? And I'm not going to give out the answer, but I will tell you that in order to be a zombie stock, The definition of a zombie stock is a business that has less than 24 months of cash to sustain its cash burn. So it's burning so much cash that if it doesn't either raise new cash or find a way to slow down its burn, it's going to be out of money and bankrupt in 24 months or less. Typically, these businesses also are very competitively disadvantaged. We don't believe that they're ever going to make money. DoorDash is like, I don't, are they ever going to make money? They didn't make it during the pandemic. They've got a lot of competition. Again, you've got the owner of the food, the restaurant, unlikely to just give out profits to another third party for their product. Those are the main criteria. Competitively disadvantaged, burning cash, and don't have enough cash to keep them alive for more than 24 months. And that's what makes a zombie stock.

We do have the latest SumZero rankings, which we are very proud of and want to share when we get these each month. We're number 1 ranked in, I believe, 11 different categories. You can see there long, short, value, energy, consumer staples, number 2 in some, and then number 3. And this is all our top 10 rankings in this list here below. We've been ranked number 1 in different categories, multiple categories for over 2 years now. Dating back to May 2021. It's great to see what we believe in showing in these stock picking results as well from third parties here. SumZero is, I think they advertise up to 19,000 buy-side analysts at this point. So to rank number 1 there, we're extremely proud of that.

Yeah. And we've been that way for a long time.

I know how much work has to go into maintaining this level of excellence over time and to be able to Do it month in and month out for so long is really extraordinary. Thank you, Brenton, for joining us today. We appreciate that as well. We're gonna go ahead and wrap it up for today. If you do have questions, please hit us up on Society. If you have any questions about Society or anything else about New Constructs, please don't hesitate to reach out to us at support@newconstructs.com. Thank you. Have a good weekend, guys.