Companies I saw at the Consumer Electronics Show yesterday; The latest from Bill Ackman
I flew back to the East Coast last night after 15 hours on the ground in Las Vegas for my annual visit to the Consumer Electronics Show, checking out all of the latest technologies!
(I usually spend two days at the event, but this year could only squeeze in one because of the ICR conference on Monday and Tuesday in Orlando and an editors' meeting at Stansberry Research in Baltimore today and tomorrow.)
In today's e-mail, I'll share some photos of the companies I saw, with my brief comments on each...
1) I hate paying $30 to $50 for breakfast – the going rate at most of the rip-off restaurants on the Las Vegas Strip – so instead I met a friend at Denny's (DENN) and enjoyed a delicious Grand Slam breakfast for half that price:
As for the stock, I analyzed it in yesterday's e-mail, in which I concluded:
So is Denny's a buy?
No. I love franchise businesses... But if I'm going to pay 20 times earnings, I need to believe there's going to be growth – both in units and same-store sales.
That said, the stock will likely do fine – just as Warren Buffett has no doubt done well with his Dairy Queen acquisition.
2) I enjoyed checking the latest hardware and software from Alphabet's (GOOGL) Google at the company's pavilion:
I was particularly impressed with two folding phones I saw for the first time, the OnePlus Open and the Google Pixel Fold.
Longtime readers may recall that "I'm in love" with my Samsung Galaxy Fold 4 phone, which I covered in my January 9, 2023 e-mail. But one beef I have with it – and it's a big one – is that the front/cover screen is a bit too narrow for typing accurately, yet the inner screen is too wide.
The OnePlus Open is slightly wider and the Pixel Fold is even more so, and both get good reviews from Tom's Guide, which rates the OnePlus Open best overall, followed by the Samsung Galaxy Fold 5 (I have the nearly identical 4), and then the Pixel Fold.
When I upgrade from my Samsung, I'll definitely take a close look at these two options...
As for the stock, Alphabet is my favorite right now among the tech giants.
3) I also still like Meta Platforms (META), the parent company of Facebook, Instagram, and WhatsApp – and agree with NYU marketing professor Scott Galloway's prediction (covered in Monday's e-mail) that this is the year Meta will really start to monetize WhatsApp.
I was reminded of Meta when I saw this display of the sunglasses it has developed with Ray-Ban (website here) that play music, take photos and video, and can livestream directly to Facebook and Instagram:
I like the concept, but not enough to spend $299...
4) Deere (DE) had a big display with this futuristic-looking version of its iconic green tractor:
My team and I recommended Deere in the April 2022 issue of my former Empire Stock Investor newsletter as a way to play the ongoing agricultural boom. Here's an excerpt:
Deere – the maker of the iconic green John Deere tractor – is in the enviable position of being the dominant player, by far.
With 1,600 agricultural stores – 40% more than its closest peer, Kubota – Deere boasts more than 50% share in tractors and 60% share in combine harvesters. (We estimate that these two pieces of equipment account for 65% to 70% of Deere's agriculture-related sales.)
This is why Deere's green tractor is synonymous with tractors in the U.S. – the company is that dominant.
But Deere doesn't just reign supreme domestically because it offers farmers the closest access to repairs... Farmers also continue to choose Deere over its competitors because it makes some of the most advanced and reliable equipment in the industry.
Being on the technological cutting edge has long been part of Deere's DNA.
The stock is roughly flat since we recommended it, as you can see in this 10-year chart:
I continue to think Deere looks like a buy.
5) Brunswick (BC) had two of its Sea Ray boats with Mercury Marine outboard engines on display. This one sells for about $1.2 million:
As for the stock, it has been a decent performer over the past decade:
Brunswick has a roughly $6.1 billion market cap, $8.4 billion enterprise value, and trades at 1.3 times revenues, 7.1 times EBITDA, and 12.7 times trailing earnings per share.
It was pitched on the blog Value Investors Club last April around its current price. Here's a summary:
We recommend a BUY of BC with a price target of $149.12 (12.6% 5 Year IRR). First, we are bullish about Brunswick's best-in-class Boat and Propulsion segments. Notably, we believe that Brunswick's expansive boat dealer network represents a wide economic moat that allows Boat and Propulsion to maintain their market leading positions and share of new boat and engine sales.
More crucially, our assumptions do not depend strongly on new boat buildout. Boats and marine engines require high levels of maintenance, and Brunswick has created an extremely sticky aftermarket for itself. Thus, we believe that their Parts and Accessories segment will generate stable, recurring cash flows across the multi-decade lifespan of each engine and boat in their wide install base. Additionally, the most visible risk for Brunswick is a newbuild boat downturn in an adverse economic environment; however, we believe that these fears create an opportunity for entry because the sticky profits generated in Propulsion and P&A are largely resilient to economic slowdowns.
One of these days, I'll get around to taking a closer look at it...
6) I took another ride in a Tesla (TSLA) car in a tunnel drilled by Elon Musk's Boring Company – I wrote about it here a year ago.
7) I also stopped by the booth of a private company, EcoFlow, which makes battery packs:
I had a nice chat with Brian Essenmacher, the company's head of business development... He was delighted to hear that I've purchased many EcoFlows for Ukrainian soldiers, who use them to power their Starlinks, drones, laptops, tablets, and phones:
8) Lastly, for those of you following the latest adventures of my college buddy Bill Ackman...
I think there's a pretty good chance that he bankrupts Business Insider (as Peter Thiel did with Gawker – see this New York Times DealBook article: Peter Thiel, Tech Billionaire, Reveals Secret War With Gawker) for recklessly and maliciously defaming his wife.
Check out Bill's latest (and as usual, very in-depth) posts on X, formerly Twitter, right here. As he begins:
By the way, I hope Business Insider doesn't go bankrupt, as it has done some excellent journalism over the years – in particular Linette Lopez's exposés on Elon Musk.
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.