How Much Life Insurance Do You Need?

On radio, on YouTube, streaming live on investtalk.com and for our podcast subscribers, this is Invest Talk. Independent thinking, shared success. Invest Talk is made possible by KPP Financial, a registered investment advisor firm serving clients throughout the United States. Here is KPP Financial Portfolio Manager, Luke Guerrero.

Good afternoon fellow investors and welcome back to invest talk. My name is Luke Guerrero and it is Friday, November 22nd, 2024. Before we start this show today, I think it's important to note that each day of the year hat carries with it a history.

And today's date, November 22, is infamous for a tragedy that occurred 61 years ago today, also notably on a Friday, and that tragedy was the assassination of President Kennedy in Dallas, Texas. Now, anyone who lived through that event certainly I was not around during those times, but I have heard from my parents, anyone who lived through that event most certainly knows the impact that it had on the American psyche and where they were when news broke the assassination.

I think this is important because even though 61 years have now gone by, there are still many people who doubt the findings of the Warren Commission report, and that is similar to the distrust with institutions that we have today. And today we're inundated with information. And it becomes difficult to sort through what is true, what is factual, what is important. And so with that in mind,

That's why we come here each and every day to try and find the signals in the noise. What is important? What can help us become better and more informed investors? And because of this,

Because we all want to be better and more informed investors, we bring to the table some educational items, some actionable items and stories, some market trends, some things that are affecting individual stocks, all companies, bonds, all sorts of things that we think is important for you to know. But most importantly, you bring your finance and investment questions live or via voicemail or through our invest talking YouTube channel, because you drive the conversation and you help us be better at our jobs, be better at helping you.

Now, just a bit, we're going to talk about today's market performance and run down the show topics. But first, let's tackle this color question. Hey, I'm interested to buy shares of this stock. Can I have your opinion? The stock is R-I-O. Thank you so much.

So RIO Rio Tinto is a minor that we get questions about a lot. It's a global mining and materials company that produces iron or copper, aluminum, lithium, and other critical minerals. Now, in terms of its revenue, its geographic segments, 60% comes from China, 14% from the United States, 24% from elsewhere.

Iron ore makes up most of its business, about 57% of it, 22% aluminum and 12% copper. And so with any mining company, the current price, the estimation of future cash flows and therefore the current price of a company is going to be a mining company is being incredibly tied to the commodity that it mines.

Now it's important to note that they do more than mine. They also have some refining as well, and that separates them from some other miners. But one other thing that separates them from other miners is how much controversy there has been. The price is down because the demand for the commodities is down. But even a couple of days ago, there was a report

about a pro but internal probe into sexual harassment and assault in their operating minds. And so this is not the first controversy with this company.

Right? This is not the first controversy with Rio Tinto with mines all over the world. And so I've always said that, you know, if you want to invest in a miner that is going to be exposed to the commodities, but may be able to smooth the investment experience versus investing in the commodities, invest in one of the less baggage. This one's got a lot of baggage. I think there are better mining companies elsewhere, certainly ones that are not being constantly investigated for wrongdoing. Thanks for the call.

And we got a lot of ground to cover it in the next 45 minutes or so. And here's some of what we have a planned time permitting. My main focus point concerns this question. How much life insurance do you need? The amount of coverage you need depends on various factors, including your annual income or outstanding debts, future expenses. What is your family need? So we'll talk about all of that and how you can potentially estimate what is right for you. We'll also touch on strange partners.

In Donald Trump and Bernie Sanders, they're trying to tackle credit card interest. But is that what you should really be tackling? And what are some of the bigger issues?

with a credit card industry that maybe they should focus more on. We'll also touch on how turkey prices are easing this year compared to last year, but it doesn't mean that everything for Thanksgiving dinner is cheaper. And should we have time at the end of the show? We'll talk about a Fed survey and how it finds that inflation is moving towards the back burner in favor of the risks of debt and the risks of trade wars.

We also have some voicemail questions ready to play, including one on return on equity versus return on assets and one on CF, which is CF Industries Holdings, Inc. We also have some questions that came in from the comment section of the invest talk YouTube channel. And of course, I welcome your finance and investment questions now or anytime throughout the show.

Now we're going to do a break. And on the other side, we'll talk about today's market activity and take your questions on the anytime listener line. You know the number 888-99 chart.

Invest Talk is made better when listeners add their voices. This is Nick from Seattle, A, to Steve at a Charleston, South Carolina. Could you comment on Barrett's goals, G-O-L-B? And Justin Klein and Luke Guerrero are always ready to provide unbiased answers. Be patient. Don't rush into anything, understand what you own. I would probably trim here. But I don't see any reason why you'd want to sell out of it.

Voice Bank calls are very important. But so are the spontaneous questions that come in during the Invest Talk live stream. Those pivot over to a live call. We love those. It's like we got our first live call. I love live calls. If you've never called, what are you waiting for? Let's go take another live call. Tell your friends, live a little, live a little. It's like we got a live call. Call Invest Talk weekdays from 4 to 5 p.m. Pacific time. Does that make sense?

Yeah, sure does. I appreciate the advice. 888-99. Chart. Your questions are free. The answers are unbiased. Luke Guerrero is here now. Ready to take your calls? Live. Invest talk. 888-99. Chart.

Let's dig into the market today and sum up the weak U.S. stocks and at higher today, locking in some pretty solid weekly gains. The Dow up 97 basis points today. S&P 500 large caps up 35 basis points in Aztec up 16 basis points and Russell 2000 leading the way. Small caps up 1.8%.

From a sector perspective, that performance included retail, apparel, banks, small caps, as I said, auto suppliers, oil services, credit cards. Underperformers included semis, semi-cap names, hospitals, China tech, managed care, and MedTech. Dollar index up 50 basis points set for an eighth straight weekly gain. Goals finished up 1.4%. WTI crude oil settled up 1.6% as well, and really near best levels of the day.

The rotation was the big story again today with Trump-themed small capsicles among the standouts while big tech was notably lagging.

The latter part really big text lag was mostly just a function of a recent ramp up in regulatory headwinds. The big news on the week being Google. Pretty quiet elsewhere. It looks like though the macro surprise momentum and focus with November flash composite PMIs highest since April of 2022 services. The big driver of that number though the release noted rising optimism and renewed strength and hiring in manufacturing. Also from the

From the Michigan consumer sentiment number, it was revised down in the final November reading while one year inflation expectations remain unchanged.

Some of the week on the bullish side, NVIDIA had another big beat while underwhelming guidance chalked up to supply constraints. But still, AI commentary was pretty positive. Walmart beat and raised guidance. Trump reportedly focused on a treasury secretary pick who was just announced that will certainly make the markets happy. So we may talk about that a little bit later on. Services PMI again, highest since April 2022.

Initial claims also fell to the lowest levels since April, while the four-week moving average the lowest since May. On the bare side, difficult regulatory backdrop, as I mentioned, Spirit Airlines filed for bankruptcy after the planned acquisition by JetBlue was blocked. Target had a notable Q3 miss and Q4 guidance downward, which we talked about earlier in the week.

Listen or call or question, Lowe's flag continued affordability challenges from inflation and rates. Geopolitical tensions certainly ratcheted higher as Ukraine carried out first strike in Russian territory with US supplied missiles. We also saw more companies talking about how they plan to raise prices in response to tariffs which would play into some of the recent scrutiny surrounding the Trump 2.0 agenda.

Looking ahead to next week, it is a holiday shortened calendar and it looks fairly uneventful. New home sales, Richmond Fed manufacturing on Tuesday, GDP, initial claims, dribble goods orders, PC and pending home sales on Wednesday and Chicago PMI on Friday. Also keeping in mind, the FOMC minutes are out on Tuesday.

Let's shift gears back to the invest talk, sorry, the invest talk YouTube comment section question bank, because when you head over to our YouTube channel and you watch instead of listening, and if you have a question, well, you don't really have to call in, you could just leave it right there in the comment section, and we look at those each and every day, and we like to get to those as soon as we possibly can. So let's tackle one right now.

This question is about EXLS, that is, EXL services holdings. And it says, hi, happy movember, really appreciate that. Could you share your thoughts on EXL services? EXLS, sorry, thanks for the podcast. Now, EXL services is a company that provides data analytics, digital operations, and solutions to global companies across various industries.

And so data analytics is really one of the big parts that has been driving it. They serve as insurance, healthcare, banking, travel, leisure, so pretty well diversified there. Their analytics division is about 45% of their total revenue, insurance about 32, and emerging businesses 16% of their revenue.

In terms of growth, it looks pretty solid, 13% year over year on an annualized basis, net income, also growing as well from 57 million back in 2018 to 198 million is where they're projected to be this year. They don't have much debt for a $7.3 billion market cap company, only $426 million in debt. That's a million with an M, not billion with a B. And in the past five years, they've been buying back shares. Now, if you're looking for a dividend, this is the wrong company because they do not pay one.

Their cash flow, generally positive growth over the past five years expanding with their profitability. Again, bottom line earnings per share has grown from just 67 cents in 2021 to a dollar 10 cents last year projected to be 163 this year and then forward more to 190 next year.

And so, take a look at this company. It looks like it has some pretty solid growth. Price appreciation, also nothing to shake a stick out. Up 49% year to date, up 64% on the 52 weeks. So with all this in mind, with all this growth, certainly there, with doing it not overly levered and being able to buy back shares, with cashflow improving, with profit margins expanding,

How's the valuation? Well, trading at 24 and a half times, which is a little bit above its five-year average, but nothing too crazy. Price to book about eight times. That is in the upper end of its range. Price to cash for 30 times. That is a giant, giant number there. Price to sale is only about four times, though. Very reasonable, in my opinion.

Interestingly enough, let's take a look at geographically where this revenue comes from. 84% from the United States, 11% from the United Kingdom, none from India, five from other places around here. You know, honestly, I really do like the way this company looks from a technical perspective. It looks very solid as well. It's risen from under $40 to about 45 in the past.

Month or so its relative strength looks solid its cash flows improving their buying back shares profitability is expanding revenue growth is is a little bit Backloaded but still looks pretty solid right they're growing from 1.6 billion last year project to be 1.8 billion this year Honestly not a lot to not like so on EX LS even though it's a little expensive Little expensive

Price to sales though, pretty reasonable. So I'm going to have to give this one a thumbs up that is EXLS. Excel service. Holdings Inc.

Now, I want to briefly mention, before we head to our first break, the newest KPP premium newsletter, which will be distributed tomorrow. This week in the KPP Insight section, we're going to talk about the interplay between the Treasury Department, the Fed, the Commerce Department, what a second Trump administration is likely to look like, given that we now know who is going to be holding the head of each of those positions. The stock idea section, we mentioned an electric company and a tech company, and in the portfolio management section, we touched on 401K management.

If you're interested in learning more, visit us at investhawk.com. The newsletter will come to subscriber inboxes Saturday mornings. Now we're headed into a break and still to come. My main focus point, more answers to your questions, both voicemail, YouTube, and hopefully live. So give me a call at 888-99-chart.

Luke Guerrero is here and ready to tackle your questions. I wanted to pick your brain about apples. What did you think about their earnings call? Is this a good time to add to my position? Call Invest Talk 888-99 chart.

Invest are now with more than 60 million downloads. Justin Klein and Luke Guerrero are ready to answer your finance and investment questions 24 7 8 8 8 99 chart. Let's dive right into our main focus point today, which is about life insurance and more specifically how much you need.

Now live insurance is a critical tool to ensure that your loved ones are financially secure if you are no longer there. But figuring out how much coverage you need can really feel overwhelming. So let's break it down into a couple of simple steps and explore some of the methods to estimate the right amount for your situation. First we want to start by looking at your financial obligations and the assets you already have that can help cover those.

A straightforward way is to calculate financial obligations minus liquid assets, which includes replacing your income, paying off a mortgage, covering debts, future expenses like college, and even childcare costs if you're a stay-at-home parent. Now you want to take away your savings, your current life insurance, or college funds to really start to find the gap, right? Insurance is about filling the gap between what your assets can cover and what they cannot.

There are also some quick estimation methods. Now they aren't perfect, but they should give you a general guess.

of what you may need. For instance, want us to multiply your income by 10. While simple, it doesn't really account for specific needs like education costs or existing savings. Using the dime formula, dime, D-I-M-E, which stands for debt, income, mortgage, and education, you can do a more detailed book. You're going to want to add some additional bets there, funeral expenses, income replacement for your family, mortgage balances, education costs for really a well-rounded view.

Another thing you could do is you could replace your income with a cushion. It's a simple estimation of what you may need. In order to do that, you want to divide your income by maybe a safer turn rate, like 5%. So if you're earning $50,000 a year, then dividing that by 5% tells you that a million dollar policy could generate enough interest to replace your income.

For stay-at-home parents, maybe you want to factor in the cost of services that you're providing like childcare and apply the same type of formulas that we've already discussed. Remember, life insurance is part of a bigger financial plan. You need to think about your future expenses, how costs may rise, how income may grow over time. But most importantly, you want to talk to your family. You need to talk to your family about these numbers to ensure that the policy aligns with their needs.

You can also mix certain policies. A 30-year term policy might cover your spouse until retirement, while adding on a 20-year policy could be focused on supporting your kids until they're independent. And while term life insurance covers specific periods, whole life insurance provides lifelong coverage, making it ideal for final expenses like burial costs. Ultimately, life insurance is not about guessing, right? It's about planning. It's about figuring out what you actually need.

by assessing your financial picture and exploring your options, you can secure peace of mind for you and your loved ones. And this is something that comes up with our clients all the time. It's something that we help to advise, right? That's part of our relationship with our clients is beyond investments. We do advising. And so as always, if you think it is important, if your situation is more complex or if you just need help, I recommend reaching out to a financial advisor who can help you beyond investments and the broader financial plan

any of which should include life insurance. Now on Fridays, we generally make time to fit in a quick rundown of key benchmark numbers. So let me hit you with that list right now. The junior treasure yield was at 4.373% today for perspective last week that was 4.299, 16 weeks back it was 3.882, 54 weeks ago it was 5.05 and close to three years ago it was 0.64%.

The 10-year treasury yield was at 4.414 today. Last week, that was 4.434.12 weeks ago, it was 3.921. And 54 weeks back, it was at 4.63%. Gold was priced at $2,708 per ounce today. Last week, that was $2,562.54. It was $1,935. 142 weeks ago, it was $1,806.06.

Silver today was priced at $31.24 per ounce. Last week, that was $30.32. 40 weeks ago, it was $22.80. And 135 weeks ago, it was $23.94. Oil was selling for $71.28 per barrel today. Last week, that number was $67.27. Eight weeks back, it was $67.79 and 50 weeks ago, it was $74.30.

The national average for a gallon of regular gasoline is $3.05 today, a three cent decrease from last week, 77 weeks ago, that number was $3.56. 125 weeks ago, that was $4.25 and 145, oh, so that was 125 weeks ago, 145 weeks ago, that was $3.57.

In California, it was averaging $4.44 per gallon, a 3 cent decrease from last week, 56 weeks ago, that number was 532. And 132 weeks back, it was 587. For comparison, the state of Alabama gas was averaging $2.77 per gallon today, that is $1.67 less per gallon than gas in California. Now, we want to have time to tackle this one, but we can tease it heading into this next break.

And this question coming in from the Invest Talk YouTube channel. Remember, as I mentioned earlier, you can go over there, search Invest Talk with two T's, and you can watch us. You can see the charts we're looking at. You can see all of the data that helps us answer your questions. When we come back, we'll answer one of those questions. On the next Invest Talk, we'll look into this topic, how to celebrate Thanksgiving without overspending.

With prices for Thanksgiving expenses up by 19%, you'll want practical tips for celebrating affordably. That's on Monday, but for now, I'm Lou Guerrero, and I'm ready to take your calls at 888 99 Chart.

The weekend is here or almost here, but you've got finance and investment questions, so step up and call in. Invest Talk 88899. Chart.

Now we got time to drop another question from our investor on YouTube channel. This one from our friend Jim Leahy, about international and emerging market stocks. It says, as a general rule of thumb, what percentage would you recommend to allocate to international and emerging market stocks? And this is a good question because given the recent performance of the US stock market versus international and emerging markets,

You tend to see investors exhibit more and more something that we refer to in the US, if you're a US investor, as home bias, meaning you tend to overweight your home country stocks more than what you'd expect in a well-diversified portfolio.

Now, as of early 2024, the US stock market was about 45, 42 to 45% of the overall market. But a lot of people in the US have 100% of their stock exposure in the United States. So generally, again, it depends because the reason why the expected return of international emerging stocks is different in the US is because the risks are different. Emerging markets tend to be the most risky. And so if you are a risk-averse investor, well, maybe you don't want anything in there.

But generally, I think 5 to 10% is good. For international stocks, well, those returns tend to be more similar to the US market is in the developed market. And so maybe you want a 20 to 30% allocation to that. But I think it's important because just because in the recent past, the US has outperformed doesn't mean that will continue forever. And that is the benefit of diversification. You diversify across companies, you diversify across sectors. It's even a good idea to diversify across

market type. But as always, this doesn't fit every investor. It's important to take into consideration your risk tolerance, your investment horizon, and what your ultimate goals are. This is an invest talk, and we're going to get to one of my next hockey points after we play another caller question.

Hey, guys, this is Brian of Florida. Again, just wanted to call and get your take on CF industries. I know you guys were a fan of it for a period of time, and it was kind of a play on natural gas prices. I'm just curious, you know, where you see this going, you know, is it a good entry price at this point? Looking forward to the notes, you know, probably somewhat lever to natural gas. So just wanted to get your take on it. Yep. Let me know. I'll be with someone. Thank you.

So CF Industries is a global manufacturer of hydrogen and nitrogen products for a bunch of things, for clean energy, for fertilizer, and for emissions abatement.

From a revenue perspective, growth looks pretty solid, though it is set to drop off really from 2022, right? You go back to 2018, well, you had 4.4 billion in revenue, and this year you have 5.8 billion. But it really peaked out in 2022, where revenue is about 11.1 billion.

Taking a look at their cashflow. Their cashflow has been following a little bit since 2022. The relative strength looks kind of weak right now. They've got 3.2 billion in debt on a $15 billion market cap company. But over the past three years, they've been buying back shares, right? They went from about 210 million shares outstanding to about 180 million, as of the most recent quarter.

The earnings for share growth, again, has kind of moved around with their revenue. Now, taking a look at their margins, their margins have been pretty solid, even though 2021 or 2022 was the peak. It hasn't dropped off that much, right? The peak was about 29% net margin down to 23% last year, projected to be about 19% this year. And so with profitability falling,

with cash flow falling with revenue falling as well. The relative valuation is near its average about 15 times for looking price earnings about 13 is where its average was three times price to book. It's below its average 6.9 times price to cash flow. And so even with all of this in mind, it's important to note that

The price of this company is essentially going where the market for fertilizer has gone, right? CF Industries is the leader in ammonium production, and it's a solid company. It's financially healthy. Again, it only has $3.2 billion in debt on a $15.7 billion market cap company. There's not a lot of short interest out there. Pays a solid dividend that has been expanding from $1.20 to $2. Now a lot of that will be helped out by the share buyback, but the math tells me that that dividend is still expanding.

My pantry issue is also only about 20. And so they have a lot of breathing room there. And so I think this is a situation where, again, you have a good company that is dealing with secular tailwinds.

but could certainly be a good time to pick up for the long term when the cyclical issues that it is facing within its specific industry starts to abate. And so even though we have maybe a shift in environmental regulations within the US, it doesn't necessarily mean that a company that is focusing on an environmental and agricultural side could not continue to do well. It's still up 12% year to date, underperforming the market, but still up.

Up 13% over the past three months, we still do hold it for some clients in one of our strategies. And so for CF Industries, I would still wait to see what happens on a technical basis, because it does look a little weak right now, though. It is on an uptrend in the short term. But let's see if that continues for the next couple of months. For now, we're still holding on to it for clients, but it may be a wait and see to see some medium-term, longer-term trends hold. Thanks for the call.

I don't know if you knew this, but there was an election recently, and Donald Trump and Bernie Sanders don't necessarily see eye to eye on much. But they did find rare common ground in that both say that they support capping credit card interest rates at 10%.

Now, while the idea may sound appealing, it's important to note that such policy could really backfire. Caps on interest rates could lead credit card issuers to limit access to less reliable borrowers, leaving many without needed credit while failing to address deeper issues in the credit card system. One of the biggest overlooked problems, ultra-generous credit card reward programs that, full disclosure, I certainly love. In the US, credit card rewards are far more lavish than in much of the world.

From cashback to travel points, these perks are funded by largely having higher fees on merchants on every transaction. It's called an interchange fee. And in the US, it's usually 2%.

How does that compare to Europe? Well, in Europe, it's about 30 basis points, and so these costs are passed on all consumers through higher prices, meaning even those without credit card subs subsidize these rewards. Moreover, rewards programs disproportionately benefit the well off. Wealthier households use credit cards more often in sophisticated consumers who optimize reward strategies, sometimes called churners reap the biggest benefits.

Meanwhile, lower income households and those with less financial knowledge are left footing the bill. And so research has shown that American credit card rewards programs shift about $15 billion annually from less savvy to more sophisticated consumers with poor and high school graduates and minorities often losing out the most. And so what can be done? Well, some point to the European Union, they had a 2015 decision to cap interchange fees, while controversial at the time, the move has reportedly passed significant savings onto consumers through lower prices.

adopting a similar policy in the US could disrupt the current reward heavy system lowering costs for everybody. However, such a measure would definitely face pushback from banks, from credit card companies, and consumers who enjoy those pork perks. And so for now America's credit card system remains deeply unequal, rewarding the savvy and wealthy at the expense of the rest. And so it'll be interesting to see

given who some of the appointments are within Treasury, within Commerce, to the economic advisors, if this potential cap on credit card interest moves forward. But I think that if they want to truly tackle an issue, right, the number one issue in the election was cost of living. You want to tackle cost of living? A great way to bring it down is to reduce these interchange fees, which affect everybody.

Now let's keep things moving forward and pivot back to the Invest Talk Voice Bank, 888-99 chart. I'm wondering what the difference between return on equity and return on assets is and if I'm evaluating an equity company, I'm not a read, which one is more appropriate for use. I love the show. Thanks for all the health guys.

So return on assets ROA, as it is commonly abbreviated, essentially measures profitability relative to the total assets of a company. So it shows how efficiently a company is converting its asset base into revenue. Now return on equity, which is ROE, it measures profitability relative to shareholder equity. So it is essentially saying what returns are generated for equity investors.

So again, the key difference here is ROA focuses on asset efficiency, whereas ROE really emphasizes shareholder returns. And so if you are trying to be an equity investor, well, generally, you're probably more concerned with return on equity, right? How is it efficiently and directly relating to investors, shareholders?

But as we try to stress, as I try to stress all the time, there is no one metric that tells you if a company is good, right? If a company is the right company, they're all sorts of things you need to see. And so just because you're an equity shareholder, certainly does not mean you should be ignoring growth in return on assets of the company as a whole. Now, we got plenty of time. So let's see if we can get to another caller question now.

My name is David from Portland. I was calling in today to get your take on Warner Brothers Discovery. Unfortunately, I have this stock ever since the AT&T has been off or what have you. And this stock's really done nothing but go down and I should have sold it immediately. But I didn't. Anyway, I'd like your take on that. If you think Warner Brothers Discovery stock will ever turn around and be worth something.

or should I just tell my losses? Thanks for your input. Okay, so let's take a look at Warner Brothers Discovery as these things start to pull up. And for those of you who cannot glean from the name, Warner Brothers Discovery is a media company. It was a spinoff. And so,

The question is, is it beneficial to the shareholders that are left holding the spun-off company? Now, if you take a look at its relative strength, that would tell you certainly in the past four years, no, right? It started to fall off a cliff back in 2021.

Things have not gotten much better since relative strength is down over the past five years. Cat flu is improving though, but profitability looks pretty negative, right? You had, you were making money back in 2021 and then you started losing a bunch of money as a lot of streaming services did. And in 2022, negative 21% net margin, the negative 7%, projected to be negative 27% this year. Again, I think this is an example of a company that has a lot more debt than it can handle, right? Its debt is 40 billion.

on a $25 billion market cap company. It's interest coverage ratio is 0.61, meaning the interest before earnings and taxes can't even cover the interest expense for this company. And so the balance sheet is too levered. It's not healthy. Its debt levels have improved. They had $52 billion in 2022. They're projected to have $40 billion, or rather they had $40 billion at the end of the most recent quarter.

I would love to tell you that things are improving, though they tend to look like they are with cash flow positive, but investing is about more than just looking at a company in isolation, right? It's about the opportunity cost of investing in another company. And this one has a lot of room. It still has to work through before I would consider it a buy, namely, it has to bring in more money than it costs to service its debt. And it certainly has not been doing that for quite some time. Thanks with a call.

Can we play three in a row? Let's try.

Well, Nick from Seattle, thank you for calling in. Let's take a look at GE Healthcare. That is ticker, G-E-H-C. GE Healthcare is a company that specializes in precision care and advanced healthcare technologies, right? HealthTech, MedTech, software and IT, patient monitoring, medical imaging, drug discovery, anesthesia delivery.

And so they started trading when they were spun off at the end of 2022. It is a $25 billion. Sorry, this is not loading over here. Give me one moment.

The $37 billion market cap company whose revenue growth has been pretty slow but still positive from $16.6 billion, the division back in 2019, projected to be about $19.6 billion this year. Unlike Warner Brothers Discovery, they didn't spin off and have a bunch of debt. They only had $10 billion in debt on a $37 billion market cap company. The cash flow is not really growing that much, but it is still growing.

still trending in the correct direction. Margins, however, have slipped since a peak in 2021.

They look to be kind of slowing down or rather compressing even more aggressively in the past couple years. Now, they do pay a dividend. Their dividend deal is currently 20 basis points, but again, they just started trading more recently. So there's not a long-term track record of a dividend being paid, but their pay ratio is three, right? They have a lot of room to run there.

And so, you know, MedTech HealthTech has not been doing particularly well recently. I think there is a lot of uncertainty within the healthcare space about generally cost structures and what insurance may look like in the next administration. But even with that in mind, I think this is a company that, you know, has not been issuing a lot of shares. They have

find a fine balance sheet, their cash flows trending in the right direction. But either way, I think there's still a lot of uncertainty for me. And so we're still waiting to see who is appointed to various positions within the healthcare apparatus of the next administration. And so until then, I would tend to want to stay away from some of these healthcare tech companies, because honestly, we just don't know what to expect yet. This is Invest Talk. I'm Lou Guerrero and we have one goal here that is to help you achieve your financial freedom.

Our work continues after this break, our final break. So get your questions in now at 888 99 chart.

Luke Guerrero is here and ready to tackle your questions. I would like to know more about a company which I've been tracking for some time. Quick question on a very risky play. It is a company that caught my attention because the ROE is like close to 100%. Invest Talk is ready 24-7.

And I was just wondering, are there any investment accounts with different banks that you would recommend? Something that may offer good resources.

Invest Talk. Tell your friends they can listen live, download the free podcast, or watch Invest Talk on our YouTube channel, and they can leave their finance and investment questions anytime on 888-99 chart. Hello, this is Jeff from Woodland, California. I have a question about IEP, the icon stock. I have quite a large position.

You know, it's been declined greatly in value on paper. So I was wondering what how safe is the dividend with IEP icon enterprises. Thank you.

Well, let's take a look at IEP that is Icon Enterprises. And Icon Enterprises is a holding firm, right? It's a diversified holding company that is run by Carl Icon that has various investments in various portfolio companies. More recently, they had a lawsuit against them that I think was dismissed pretty recently, maybe a couple months ago.

And so you did see the price roll over a little bit in September when that was announced. But since then, after peeking out at about November, right, early November, it has started to trickle down again. Now my issue with this company is generally trades at a premium to its nav, which for value investors such as myself is not something you want to see. But regardless of the lawsuit being dismissed, it just has poor performance, right? The issue, a bunch of shares, they have a bunch of debt,

Their cash flow is not improving. Their net income is negative. And so for me, this is a clear indication of a company that even though the lawsuit, the cloud of the lawsuit seems to be gone, I still wouldn't want to be here. The dividend yield is 31% right now. And dividends are not set in stone. They can be cut. And this is a situation where I think you have a company that is under threat of that. So for I,

EP icon enterprises going to have to pass.

We head off our focus point on Monday's about Thanksgiving, but I wanted to talk about Thanksgiving as well. That is because there's good news for Thanksgiving hosts this year, and that's because the cost of the centerpiece turkey is expected to drop for the second year in a row. According to the American Farm Bureau Federation, the average price for a turkey is projected to fall by 6.1% down to $25.67 or $1.68 per pound.

This comes just by challenges in poultry production caused by bird flu, which has drastically reduced the American turkey flock to its smallest size since 1985. Now what turkey prices are down thanks to reduced demand and lower feed costs, the story isn't rosy for many favorite side dishes. Prices for potatoes are key ingredient in mashed potatoes. Really the only major ingredient in mashed potatoes are up 7.6% due to a smaller North American crop and changing consumer demand.

processed foods like stuffing mix and dinner rolls have also risen by over 8%. And for dessert, pecan pie lovers, I am one of them. We'll definitely feel the pinch with the cost of pecans driving an 8% increase in pie prices despite cheaper sugar and butter.

Overall, the Farmview estimates that the cost of a Thanksgiving meal for 10 people will average $58.08 down 5% from last year and 9% from the record high $64.06 set in 2022. Bone and Ham's remain a more affordable protein alternative, with wholesale prices around half that of Turkey, despite an 11% increase from last year.

shoppers looking to save on their holiday feast might find less relief in store brand items this year. While name-brand turkeys are down 2%, store-brand turkeys are up 5%. Similar trends apply to other staples like cranberries and pumpkin pies, where the price gap between name-brand and store-brand items is narrowing. Inflation remains a factor. Food prices have risen 2.1% over the past year, according to the Bureau of Labor Statistics, but that hasn't stopped 79% of Americans from planning traditional thanksgivings.

30 consumers say they expect to spend more on groceries this year, though they're unlikely to cut back on their holiday purchases. For those planning their Thanksgiving menus, the key to savings may lie in comparing prices and finding alternatives. And so on Monday, when we come back, we will talk about some of the ways that you as someone who is planning a Thanksgiving feast can look to save on those dishes.

Now I already mentioned it once, but I want to mention it again. And that is we send out a KPP premium newsletter every Saturday morning that is composed of three sections, insights, stock ideas and portfolio management. It can help you get a guide to what is going on in the markets, maybe give you some ideas for companies that should be in your portfolio and overall help you manage towards your financial goals.

I'm Luke Guerrero and this completes another invest talk program. We thank you for listening. We encourage you to tell your friends and family members about our free podcast downloads. You can get yours anytime at iTunes, Google Play and Spotify. Please be sure if you go over to iTunes to leave us a rate. We really appreciate that.

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