The 7investing Podcast

Investors are continually looking for a good deal in the stock market. But how exactly should we define value?

Quantitatively, publicly-traded companies should serve as compounding machines for their investors. They raise capital -- either through debt or by issuing stock -- then put it to work into projects. If the after-tax profits they generate are greater than their associated costs, they're creating value for us as the owners of the business (i.e. as the investors).

But the investing world is also extremely complex. Markets are changing and being disrupted by new technologies every year. CEOs and leadership teams are continually trying to balance between their desire to be visionary and their need to be efficient. Underinvesting in growth could put a company several steps behind its competitors. Yet going "all-in" on an acquisition that turns out badly could very quickly light their shareholders' capital on fire.

So what are we as the investors to do?

Are there specific metrics we should look at, to determine if a company is using our money responsibly? How should we figure out what the right price is to pay for a stock? And are their any specific stocks out there right now, which might be significantly undervalued and could represent a great bargain for us as investors?

As part of our Best Stocks of 2024 Contest, we're narrowing down the picks that will be the start of 7investing's entry into our contest! Between now and March 1, 2025, we'll see which stocks will catapult one of our lucky fans to victory, free subscriptions, and a $1000 Amazon gift card.

Of course, we'll analyze some great companies along way, like Celsius (CELH), Novo Nordisk (NVO), Uber (UBER), and Rocket Lab (RKLB).

Tune in to hear our breakdowns of these companies and to learn more about how you ca win our Best Stocks of 2024 Contest!

The Fed's rampant rate increases have wreaked havoc on stocks in recent years. Yet we're perhaps finally seeing a light emerge at the end of the tunnel.

Projections released by the Fed suggest that America's central bank will reduce its Fed Funds target rate multiple times during 2024. The Fed ultimately wants to reach a median target rate of 4.6% by the end of this year.

Falling interest rates are generally good for business. It allows them to raise capital and more attractive rates and to begin reinvesting in growth projects once again.

For investors in those businesses, falling interest rates translate into lower discount rates. This is the metric that institutional investors on Wall Street use to discount a company's future profits to the present in their discounted cash flow models. When a discount rate falls (which typically happens when the Fed reduces the Fed Funds rate), future cash flows get discounted at a lower rate. And you ultimately end up with a greater present valuation and a higher stock price.

It's not a matter of if, it's a matter of when.

If you've never been the victim of a cyberattack or a data breach, the chances are that you will be soon.

Ranging from simple phishing emails to elaborate and highly-coordinated campaigns to steal government secrets, the severity of cyberattacks all across the globe is intensifying.

And the need to for best-in-class security vendors -- to proactively protect you before an "oh shoot" moment occurs -- has never been greater.

Yet how do we know who to trust? There are also thousands of cybersecurity providers who offer services to protect against cybercrime.

That ranges from small startups with a clever idea, to independent corporations like CrowdStrike (Nasdaq: CRWD) or SentinelOne (NYSE: S) who leaders in their niche, to consolidated behemoths like Microsoft  (Nasdaq: MSFT) and Palo Alto Networks (Nasdaq: PANW) with a full suite of products.

There's an massive pool of vendors to choose from. According to research from Cisco (Nasdaq: CSC), 13% of companies are working with at least 20 different vendors for cybersecurity alone.

So how should companies differentiate themselves in this crowded field? What dangerous security vulnerabilities still aren't yet adequately protected against? And how should investors figure out which publicly-traded companies to put their money behind?

Earlier this week, Compass Point downgraded the shares of Affirm Holdings (Nasdaq: AFRM) to sell and issued a price target of $13.00. The downgrade appears to have triggered a short-term selloff of the stock, but should long-term investors be worried?

Simon Erickson says the Buy Now, Pay Later leader could still be a "Buy Now, Profit Later" for investors. In today's podcast, he breaks down why we think Affirm is still a buy even after the recent downgrade.

NextEra is North America’s largest electric utility. It generates 58 GW of power every year and distributes it to 13 million people through its Florida Power & Light (FP&L) company in Florida. At a recent stock price of $54, it has a market capitalization of $110 billion. That puts it squarely in the “boring, mega-cap utility” sector of an investor’s portfolio allocation bucket.

One of the technologies that got a lot of attention at ClimateTech is small modular reactors. These mini-nuclear power plants are still largely in development — but they would provide reliable, emission-free power that could be dispatched on a 24-hour basis wherever it is needed.

Nuclear today accounts for around 20% of America’s overall power supply. There are 54 total nuclear power plants in 28 states, and on average they are quite large and are 42 years old.

Small Modular Reactors are a new development in the nuclear engineering world. SMRs would be about one-third of the size and cost of traditional nuclear power plants and would also produce around one-third as much power. Their lower costs and faster construction times could make them a viable solution in America’s energy future, which is heavily geared toward deploying new renewable energy technologies.

In this podcast, Simon Erickson and JT Street discuss the future of SMRs, the potential investing opportunities, and how "nuclear" could become a part of the puzzle of moving past fossil fuels.

For more insights on nuclear energy as well as our monthly stock recommendations, join 7investing today for just $1 for your first week.

Last week, Simon Erickson attended MIT’s ClimateTech 2023 conference. It was outstanding; full of positive energy from a room full of technical folk who were ready to make a global impact.

In this week's podcast, Simon sits down with JT Street from the 7investing marketing team to go over the highlights of the conference, and what they mean for long-term investors.

The tech world moves fast, and it requires companies to constantly be innovating in order to keep up. Investors, too, should always be looking forward when it comes to new trends that are re-shaping the tech landscape.

There are thousands of publicly-traded companies for investors to choose from on any given day. What's the best way to evaluate them -- and to separate the cream from the crop?

The music industry is innovating, and it's making billionaires out of those who grace the global stage.

Larger-than-life personalities -- from Jay-Z and Kayne to Beyonce and T-Swift -- are not only selling out shows, but are now reaching their fans in entirely new ways. Digital streaming, generative AI, and NFTs are all helping to turn the music industry's amps up to "11."

Behind the scenes is an extremely profitable and thriving supporting cast of businesses. Music labels, streaming platforms, and live events promoters are all generating billions of dollars for artists and are receiving a standing ovation from their investors.

So how should investors best plug-in to the music industry?

To answer that question, we've brought in an expert. 7investing CEO Simon Erickson recently spoke with David Schulhof, the founder and CEO of MUSQ, LLC. MUSQ is the world's first pure-play global music industry ETF, giving investors a way to align their portfolios with the best opportunities of the music industry.

In the first part of their conversation, Simon asks David to describe his background and why he created the thematic ETF. David describes how the music industry is growing, and why he's structured it into streaming services, music labels, and live events.

The two then discuss how artificial intelligence and generative AI is driving more of a need for labels and curators. With more than 120,000 new songs being uploaded every day due to generative AI and digitization tools, there's more of a need than ever for sorting and finding the highest-quality new music. Labels are becoming more important as ways to create playlists or to offer legal protections against piracy or copyright infringements.

David then explains that streaming platforms like Spotify, Apple Music, Amazon, and YouTube are surging in popularity, with tens or hundreds of millions of users. They make distribution seamless between artists and listeners, and modest price increases this year are falling extremely quickly to their bottom line.

In the second part of the program, Simon and David discuss the continued demand for live events and why companies like Live Nation will continue to profit handsomely. New digital approaches using cryptocurrencies or NFTs could be opportunities for progressive artists or marketers to make the pie even larger with the world's most passionate music fans.

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Publicly-traded companies mentioned in this podcast include Alphabet, Amazon, Apple, Live Nation, Sony, Spotify, Universal Music Group, and Warner Music Group. 7investing’s advisors and/or its guests may have positions in the companies that are mentioned.

There's certainly no shortage of news and headlines about the American economy these days. This morning's announcement of 3.2% inflation in July is sending stocks higher across-the-boards. Investors are excited that the Fed's aggressive rate hikes from the past eighteen months may finally be showing signs of getting inflation back in-check. If the Fed were to see the progress it needs to see and take a more dovish stance toward the economy, it could lead to economic growth and stock market appreciation. But the United States is also just one country, and "investing" spans across the entire globe. How is the rest of the world handling their own fiscal and monetary policies? Are other countries similarly increasing rates in attempts to tame inflation? Are there specific regions we should be more closely watching, which might provide superior economic growth or investing opportunities? 

For those new to investing, the stock market might seem like a huge, complex, and intimidating place. What's the best way to get started?

Climate change has been a hot topic for several decades (and yes, pun intended). But are companies and their investors taking it as seriously as they should be?

There's a possibility that corporations, investors, banks, and insurers haven't sufficiently been addressing the climate-related risks that lurk within their balance sheets and business models.

That goes firstly for physical risks. There are climate-related wildfires, floods, or droughts that could cause significant damage to facilities or antiquated equipment.

There's also market-based risks associated with transitions in technology. An example is staying on top of the transition from internal combustion engines to electric vehicles. New vehicle fan belts and spark plugs aren't selling quite as well as they used to.

And finally, there are potential litigation risks. There are financial penalties associated with failing to comply with regulations.

All of these are risks that face companies every year. How should forward-thinking investors react to them?

For risk-tolerant investors who love a good thrill, there are few industries more exciting than biotechnology.

He Jiankui shocked the world in 2018 by announcing he'd genetically modified twins born in China. Two years later, Jennifer Doudna and Emmanuelle Charpentier shared the Nobel prize for developing CRISPR, and a globally-coordinated effort was embracing Moderna's innovative new mRNA approach to develop a COVID vaccine and make it universally available. Gene editing found its way into the clinic, enabling a new wave of checkpoint inhibitors to help the body proactively find and detect cancer. A more comprehensive understanding of the human genome - made possible by the cost of sequencing falling bellow $500 - has unlocked a new field of diagnostics to proactively screen patients. NVIDIA's recent investment in Recursion is the latest move to introduce AI into health care.

Yet there are also several challenges that face this industry's extreme pace of innovation. Patent infringements are common, as the courtroom is continually used to determine who owns the most cutting-edge IP. Payments are still largely in the hands of insurers, who are still figuring out how to reimburse for proactive treatments. Patient privacy and regulations are polarizing topics that have kept several tech companies at bay. And several of the industry's most important players are undergoing leadership changes, which could result in consequences that impact both their customers and the system at-large.

How should investors approach this roller-coaster that we call the biotech industry? Are there exciting new trends and scientific breakthroughs that demand our attention? Are there larger companies who capitalize on those trends by providing the picks and shovels to enable them? Are there smaller, 'off the radar' companies who are risky but also offer enormous potential upside?

To help us answer those questions, we've brought in Manisha Samy, who has spent her career in health care and seen it from several different angles.

7investing CEO Simon Erickson begins by asking Manisha what she's most excited about in health care today. Manisha explains that AI is finding its way into new opportunities and that NVIDIA's recent $50 million investment in Recursion could be a good sign that AI is becoming more prevalent in drug development. Genomic sequencing leader Illumina has unlocked quite a bit of information about the human genome. This will help not only for designing new drugs, but could also unlock new breakthroughs in computing as well.

The two then dive deeper into Illumina, whose short-read sequencing approach has reduced the cost of sequencing the human genome from $3 billion to less than $500 over the past two decades. Yet Illumina's spin-off and then attempted re-acquisition of its GRAIL subsidiary is facing scrutiny from customers, investors, and regulators. The FTC is demanding Illumina divest GRAIL due to antitrust concerns, the EU is slapping Illumina with fines for violating its process, and activist Carl Icahn has gotten a seat on the Board while Francis DeSouza has resigned as CEO. Is Illumina still a good company to invest in?

Simon and Manisha then turn to Invitae, who is an adopter of Illumina's sequencing technology to provide diagnostics to screen for genomic variants or even cancers. After years of aggressively making acquisitions to support its top-line growth, Invitae is now undergoing a turnaround to fix several of the financial issues it's gotten itself into. Manisha discusses her thoughts on the company and it's bigger-picture vision and strategy.

In the final segment, Manisha introduces three small-cap biotechnologies companies that she believes should be on the radar of interested investors: Nanostring Technologies, Ginkgo Bioworks and Caribou Biosciences.

We are on a quest to find the best current stock opportunity for investors. All month we are pairing popular stocks from both “growth” and “income” style investing up in matchups to determine which will provide the greater upcoming five-year return. We’ve included a voting poll at the bottom of this article: help us determine which of these stock represents the better opportunity for investors!

In this “Growth Style, Round 1, Matchup 3” bracket, our #4-ranked Latin American e-commerce platform MercadoLibre (Nasdaq: MELI) squares up against our #5-ranked digital banking provider SoFi Technologies (Nasdaq: SOFI).

Which of these two stocks will provide the better investment return over the next five years?

We are on a quest to find the best current stock opportunity for investors. All month we are pairing popular stocks from both “growth” and “income” style investing up in matchups to determine which will provide the greater upcoming five-year return.

Our Summer Stock Challenge is here — to discover the very best current opportunity for investors.

During the next two weeks, we’ll explore 14 total companies — many of which (but not all) are active 7investing recommendations.

We’ll size each of them up as investments; discussing their business models, their leadership, and how they allocate their profit streams.

Then, we’ll host a daily poll for YOU to vote on which company in each matchup is the better investment for the next five years.

At the end, the votes will determine which company outshines the rest and ultimately becomes our tournament’s winner.

Grab an iced beverage and a pair of sunglasses. This competition is just getting warmed up!

To follow along with each tournament matchup, click here:

You could think of the internet as a gigantic digital Monopoly board. Those who invest in and develop the right properties can reap incredible real estate gains over time.

But how should a potential investor even begin his or her search? Just as physical homes are priced based upon the neighborhood and the beauty of the kitchen counters, are there similar things to look for in a digital property? And is advertising still the primary money-maker rfor internet sites -- or has it transitioned to other income streams such as subscriptions or affiliate marketing?

There is an upcoming disruption of the food systems industry, and investors today can get in ahead of an exciting new S-Curve that's developing.

Elysabeth Alfano is the CEO of VegTech Invest, and also advisor to the EATV ETF. EATV is the world’s only Plant-based Innovation & Climate ETF. 7investing CEO Simon Erickson recently interviewed Elysabeth for our 7investing podcast.

In the first part of the conversation, Elysabeth describes how she got interest in food systems transformation and why it is important to solving issues like climate change, biodiversity loss, food insecurity, and human health care. The global food supply system hasn't changed much in the past 1,000 years and it could be ripe for disruption.

Elysabeth goes on to describe the limitations of our traditional supply chain. Animal husbandry isn't really innovating any more, whereas the plant-based innovation curve is just getting started. She explains that our current system isn't economical and is often bad for the environment. Beyond Meat has published research that says animal agriculture accounts for about 15% of the world's greenhouse gas emissions; with two thirds of those coming directly from cows. Consumers, governments, and businesses are all stakeholders who are interested in making food systems more efficient.

Simon then asks what parts of the supply chain will require the most investment, in order to create a $290 billion new industry by 2035. Elysabeth says it will be investment from businesses into their processes and supply chains. Perhaps with support from their governments.

In the final segment, Simon asks what the most common criticisms have been from people who are opposed to change in food products. Elysabeth also describes the investing methodology that she uses for her index.

Publicly-traded companies mentioned in this podcast include Beyond Meat, Cargill, ConAgra, Costco, Dannon, Nestle, and YUM Brands. 7investing's advisors and/or its guests may have positions in the companies that are mentioned.

Investors love dividends. There's something special about receiving cold hard cash into your brokerage account every quarter, which you can use to pay for expenses or reinvest and buy more stock. Over time, reinvesting dividends can compound your returns.

But how do dividend-paying stocks compare against other segments of the market? Have they been impacted by the tricky macro of the past year? Are dividends more attractive in rising-rate environments? And what factors should investors consider before buying dividend stocks?

To answer those questions, we've brought in an expert. James Early is the Chief Investment Officer of BBAE, and formerly the Advisor of Motley Fool's Income Investor. 7investing CEO Simon Erickson recently spoke with James about dividends and dividend-paying stocks.

In the first part of the conversation, James describes what got him into dividend investing and the "3M" factors -- "management, moat, and money situation management" -- that investors should look for. He describes how dividends are a good way to keep management teams responsible in their capital allocation decisions. He also describes how dividend-paying stocks perform through different market environments.

Simon then asks James to describe the tradeoff between dividend yield and dividend growth. Is it more advantages for investors to look for higher yields upfront? Or should we patiently wait for dividends to grow over time?

In the final segment, James describes two of his favorite dividend-paying companies: Diageo (NYSE: DEO) and Unilever (NYSE: UL).

Publicly-traded companies mentioned in this podcast include Diageo, and Unilever. 7investing's advisors and/or its guests may have positions in the companies that are mentioned.