Intel, Unity vs Dutch Bros And More
Here’s the transcript from this week’s Live Q&A chat.
Q. Cody, you mentioned you were going to speak at a conference and present Intel as your best value play. Could you share that presentation here or a cliff notes version? Thank you!
A. I’m actually going to do the presentation over zoom this evening being joined with a brilliant friend of mine who also runs a hedge fund as he’s also a believer in INTC here. It’s a private event and it won’t be recorded, but here’s what I sent my friend by email last night with the subject line “Intel Bull Notes” and this is what I’ll work off of when we present it: *Could be taking market share for the first time in a decade. If so, will probably keep taking share for the next decade. *Trading at less than 7x 3 years out profits, less than 10x next year’s estimates. *Has a rock star CEO that nobody wants to respect. *Is the only company on the planet that can help the US and Europe try to create their own chip supply chains and if they don’t do it, the entire Western economy and perhaps civilization will collapse if China ever takes over TSM and shuts off the US access. The company will let governments pay for most of the fabs and they could be a monopoly in the West in the single most important supply chain for our economy — making chips. *Others?
Q. Cody – did your latest ratings cover Unity (U)? If not, where does that stand on the 1 – 10 scale, at present?
A. I might have forgotten to include my analysis on that one in the Latest Updates. Unity’s valuation is still a bit stretched as numbers will have to come down after yesterday’s slight guide down for 2022 revenues. I like the IS IronSource acquisition for U’s strategy (on the other hand, it’s sad that the people who invested in IS when it came out at $10 as a SPAC just about a year ago were told that it was a good long-term value at $10 and now the company is willing to sell out completely at $3 a year later? Metromile did something similar. Disgusting really, not just sad). I’d rate U a 7-/10 here.
Q. I don’t think Roku was included in the latest positions email. What would you rate Roku?
A. I’ve cooled a bit on ROKU, sold half at $105ish a few weeks ago. Sitting tight with a small position for now. 6+/10 rating for ROKU.
Q. Can you please provide your take on the latest Alibaba news? Any concerns?
A. Single biggest risk to the BABA and JD stocks we own is the fact that they are based in a communist country. This latest news is another reflection of that risk. BABA and JD are not big positions for me and I am sitting tight for now.
Q. Revolutionary” doesn’t really come to mind for this one, but growth ain’t bad… any thoughts on BROS?
A. I tried their coffee in Las Cruces a few months ago and it was a fine experience. Far from revolutionary though, you are correct. Here’s something I realized when I pulled up the fundamental analysis for BROS: BROS is trading at 7x next year’s sales estimates growing 30-40% topline per year. Unity U is trading for 5x next year’s sales estimates with a slightly slower growth rate. U has 80% gross margins vs BROS’ less than 30% gross margins. I just got more bullish on U, LOL.
Q. Cody, you are juggling SO much, especially knowing you before having a Family , …always amazed by your commitment …what do see as INTC time line getting its business going ? Also, everyone likes META ..almost invincible even with Oculus !
A. Thanks for the kind words. The Fab business will take a couple years to get ramped up and then it should quickly become a multi-billion dollar revenue stream within a couple years after that, I think.
Q. Cody, how safe would you feel about keeping crypto on platforms like Coinbase & Binance right now? Thanks.
A. Not safe at all.
Q. Your take on GLD?
A. Like bitcoin, gold failed to be a good hedge to inflation. I still think having a few gold coins is a good insurance policy for anyone on planet earth who might have to deal with a temporary solar flare-induced or otherwise-induced societal shut down. But for now, it sure seems like bitcoin and gold are like two not-so-great candidates on one side splitting the vote and subsequently both losing to inflation on the other side of the ballot.
Q. Cody, do you like SPOT here?
A. No, I’m canceling my SPOT subscription and moving to Tidal because in the Tesla I can download high fidelity, nearly lossless versions of music and the quality of the Tesla sound system is so good that I can tell a big difference between Tidal and Spotify. Even SiriusXM sounds better than Spotify in the Tesla. Meanwhile, Spotify was always supposed to be the Netflix of music/podcasts but that’s not even a selling point now.
Q. Cody, following up on the crypto storage question. What offline storage device would you recommend for crypto then? Thanks.
A. Like with gold, the safest place to store bitcoin is physically somewhere safe but accessible at any time. So on a hard drive is the safest place, in many ways (although you can lose the hard drive then!).
Q. Cody glad you and family are doing better what about RKLB ? FTF where is it in 2025 ?
A. Feet to fire, I think a big defense contractor or two will will buy Rocket Lab for like $12 a share if the stock isn’t back near those levels by 2025.
Q. What about DVAX?
A. Still a decent speculative biotech that I own a little bit of. Steady as she goes for now.
Have a great weekend everybody. I leave you all with a shot of our still young miniature bull (in gray) who has decided he should hang with the big bulls and cows. Check out the beautiful red bull he likes to pal around with.
