Do You Know It All When It Comes to Nvidia?

In this Motley Fool Money podcast, host Dylan Lewis and analysts Ron Gross and Bill Mann discuss:

• How Nvidia stacks up to fellow titan Microsoft, and whether investors should be worried about how much of the market’s returns are being driven by just a few companies.
• A luxury fashion IPO that wasn’t in Italy.
• How AI is pushing Accenture through a slowdown in its core business and how Darden Restaurants‘ chains are holding up as pricing comes into focus for food.
• Two stocks worth watching: Old Dominion Freight Line and McCormick.

Also, Fawn Weaver, CEO of Uncle Nearest, the fastest-growing and most-awarded whiskey and bourbon brand of the past few years, tells one of the greatest stories in the alcohol business and offers up a cocktail to beat the heat this summer.

To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.

This video was recorded on June 21, 2024.

Dylan Lewis: It continues to be in Nvidia’s market, we’re all just living in it. This week’s Motley Fool Money radio show starts now.

It’s the Motley Fool Money radio show. I’m Dylan Lewis. Joining me over the airwaves, Motley Fool senior analysts, Bill Mann and Ron Gross. Fools, great to have you both here.

Ron Gross: How you doing, Dylan?

Bill Mann: Hey, Dylan.

Dylan Lewis: We’ve got one of the greatest stories of the alcohol business, straight talk on EVs from one of the legacy auto giants, and of course, stocks on our radar. We are kicking off though this week, looking at the market cap race. Ron, there was a moment where a new company was atop the market albeit briefly. This week, chip giant, Nvidia passed Microsoft to become the largest company in the world. As we tape Friday morning, they are neck and neck falling a little bit behind Microsoft. Let’s do a little side by side here. How does Nvidia stack up to Microsoft, Ron?

Ron Gross: Do you think most people heard of Nvidia until this year? I feel like it came out of nowhere.

Bill Mann: It’s a skin cream, right?

Ron Gross: That’s great. If you were a gamer, you knew it. Sophisticated chips for the video game market, and a very important part of that market, but here we are in the AI world, and they have now 80% of the market for AI chips and data centers, and it has been quite the year for them. Microsoft, I think we all know, cloud being a big part of their business over the last several years, but we certainly know the Windows and the Office software products, as well as gaming and the computer hardware. Microsoft has been a beneficiary of the AI boom, took a significant stake in OpenAI, integrating AI into their products. They’re actually one of the biggest buyers of Nvidia’s graphic processing units — GPUs, if you will.

It’s interesting. As you said, they’re both neck and neck around on $3.3 million in market cap, but in terms of operating metrics, they’re not very much alike with Microsoft being significantly larger for now, a few metrics. Nvidia, $80 billion in revenue, Microsoft, $237 billion in revenue. Operating income — Nvidia $48 billion, Microsoft more than double that at $107 billion.

Now, margins gets a little more interesting here with Nvidia overtaking Microsoft. Nvidia has 60% operating margins, Microsoft has 45%. Not too shabby, but Nvidia beats Microsoft out there. Similar disparity with profit margins. Growth rates, Nvidia not surprisingly, perhaps, is the leader, 32% growth expected over the next year, 14% growth for Microsoft, and this all shows up in the valuation multiples. You’ve got to pay 47 times forward earnings for Nvidia, you get away with 35 times for Microsoft — not as fast growing, but still obviously, one of the best companies that we have. I’ve been an owner for quite some time and have been very pleased. You see the same thing with other cash-flow multiples as well. You’ve got to pay up for Nvidia for sure, but Microsoft is the larger company.

Bill Mann: I like the fact right out of the gate that you actually said $3.3 million and not even billion in terms of [Nvidia’s market cap].

Ron Gross: Did I say million?

Bill Mann: You did.

Ron Gross: We’ll cut that out in post, Bill, no one will ever know. [laughs].

Bill Mann: These numbers are so big. Nvidia in the last year has added market cap that is equivalent to the GDP of Italy in a year. In two years, it’s gone from $400 billion — which, I don’t know if you guys know this, is a pretty big number — to $3.3 trillion.

Dylan Lewis: Is that billion or million, Bill?

Bill Mann: Did I get it right? [laughs] I feel like I got it right.

Ron Gross: I think you did. If you have any hopes for doubling your money in Nvidia, you’ve got to believe in a $6.6 trillion public company. Fascinating.

Dylan Lewis: A lot of very happy shareholders all around when it comes to the Nvidia and Microsoft conversation, Nvidia, in particular, I did see a piece earlier this June that year to date, Nvidia makes up about a third of the return of the total S&P 500 returns so far. Since that article published, the stock is up 15%, Bill. [laughs] When you see that, obviously, an incredible story, but does the concentration of returns in the market here concern you at all?

Bill Mann: We have never been at a point in time in which we have had more of the market concentrated in the top five names than we do now. Similarly, maybe even more importantly, we’ve never had a time in which those top five names were all in the same industry, and they are that concentrated. It is well over 25% with the top five names for the S&P 500, which means that they are essentially the same size as the bottom 400. It’s a bit of an unnerving market structure. I know we don’t spend a whole lot of time talking about market structure, but there is a very simple fact that if any of these, particularly the big three, sneeze, the entire market, as measured by the S&P, is going to get hit, and hit very, very hard.

Dylan Lewis: Ron, I see you nodding. What’s your take here?

Dylan Lewis: I would say if your goal is to beat the market in 2024, good luck if you don’t own Nvidia. As you said earlier, Nvidia, up around 175% this year, S&P is up 15%, Nvidia responsible for about one-third of the gains of the S&P 500. As a result, the average S&P 500 stock is trailing the index by almost 11%. That’s the worst underperformance since 1990. You better get on board, otherwise, we’ll look to 2025 in terms of beating the market.

Dylan Lewis: I got to say, I feel like there are a lot of fund managers out there that chose to benchmark to something that Nvidia is not in, feeling pretty good this year about their comps.

Ron Gross: Now, you’re right. Exactly. Now, you got to be careful because this hearkens back. This reminds me a lot of the dot-com telecommunications equipment bubble back before the dot-com bubble blew up, where Cisco overtook Microsoft actually to become the most valuable company at one point in time. This was back in March 2000, let’s say. In those days, Cisco was $77 per share — 24 years later, it’s $47 per share. You have a lost almost two-and-a-half decades on Cisco if you were a purchaser in March of 2000. By the way, I was a purchaser in February of 2000. [laughs] Shows you what I know.

Bill Mann: You did it. [laughs].

Ron Gross: But it’s a very interesting parallel, and I’ll take it one step further. I bought Nvidia last month, so very, very similar. I’m up now, but am I going to have a lost two-and-a-half decades? Time will tell.

Dylan Lewis: Ron, I want to stick with that for a second because I’m sure there are some folks out there that don’t own it in their portfolios and are asking that very question. Is this something I should be buying? Even given the growth that it’s gone on and the amazing status it has right now. If you’re thinking about that, how would you be looking at it?

Ron Gross: I’ll give you a non-professional answer. I didn’t want to miss it. I had FOMO. I didn’t want to risk my retirement, but I wanted to participate. I took what I consider to be a reasonable to low amount of money, so I could participate if this thing continues to be unbelievable. It is the burgeoning… it is the Internet back in the year 2000. It’s very, very interesting to me. I wanted to participate.

Bill Mann: I would like to speak on behalf of the passive investors out there and just remind people that if you do own an S&P 500 index fund, you already have a very, very large stake in Nvidia, Apple, and Microsoft, so congratulations on participating.

Dylan Lewis: There you go. You can choose your ticket to ride. You have a couple of different options there. Nvidia is certainly the name of the moment.

Europe was hoping to add a big name to its public markets this week. Shares of luxury sneaker maker Golden Goose, supposed to hit the public markets this week on the Italian Exchange in Milan. If you don’t know the name, maybe you’ve seen the star on the logos of shoes worn by Taylor Swift, that’s them. We had a Bloomberg piece reporting that the offering had priced an implied valuation of $1.7 billion. Shares were supposed to start trading today, Bill, and yet, they aren’t. What exactly happened here?

Bill Mann: I love the way that market commentators always talk about IPO markets being good or bad. If you are a buyer, you need to flip those words on their head. A good IPO market means that they’re able to sell at a high price, which means that you would have to buy at a high price. In this case, there’s a private equity firm called Permira, and they’ve specialized in this type of thing. They took Doc Martens public three years ago, so they’re trying to bring Golden Goose, which makes some form of used sneakers and sells them for 500 bucks a pop. If you need some used sneakers, I have some here at the house that I’d be willing to sell you for nearly that price. So when you see an IPO market where the promoters are pulling IPO listings, it should tell you that the market is offering some bargains, because they don’t think that they’re going to raise enough money. This gets me interested in looking again at similar companies that are trading in Italy and elsewhere in Europe.

Dylan Lewis: Bill, there’s an elephant in the room, joke wise, that I don’t know if I can sit on. I think I have to swing at this pitch. The company cited a lot of concerns over the macro environment in Europe and the political environment in Europe. Is Golden Goose killing its golden goose by delaying this IPO?

Bill Mann: That’s not good. I’m leaving. [laughs]

Ron Gross: It’s not even punny.

Dylan Lewis: I had to go for it, I had to go for it.

Bill Mann: You did. I appreciate a man who will swinging at a pitch that fat. No, I don’t think it does at all. Keep in mind that 99.9% of the people who are spending $500 on sneakers that look used are not really worried about whether this is a public or a private company. This is a fashion brand, and fashion brands have a great deal of risks that have nothing to do with the public markets. Now, to be fair, in an IPO market, they are trying to raise money. Companies are not publicly listed for our convenience. They are publicly listed for their convenience. All they’re telling you right now is they didn’t think they were going to be able to raise as much money in this environment. So the goose right now is not particularly golden, more bronze.

Dylan Lewis: I love it. Thank you for indulging me. Coming up after the break, we’ve got to check in on EVs and the tail end of earning season. Stay right here. You’re listening to Motley Fool Money.

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Dylan Lewis: Welcome back to Motley Fool Money. I’m Dylan Lewis, here on air with Bill Mann and Ron Gross. If you’re a follower of the EV space, you’ve gotten used to some waves. This month, Ford CEO signaling another one might be coming. Bill, you wanted to zoom in on some comments from Jim Farley this week. What jumped out to you?

Bill Mann: Jim Farley is the CEO of Ford, and Ford by some measures, they are somewhat agnostic as to the platform that their vehicles run on. They sell ICEs, they sell electric vehicles, they also sell hybrids. In the EV space, they’re losing, by some measures, about $100,000 for every car that they sell, which I don’t know if you know, this is a lot.

Dylan Lewis: A tough business model.

Bill Mann: It’s tough to make up on volume, too. Jim Farley came out and said that you need to be careful about pushing all the way to an electric vehicle future, because it may not be what everyone wants. He pointed to the fact that hybrids are selling much better and growing much faster in the market this year than EVs have been. We’ve all heard about the stall, but he put some numbers behind it. EVs grew 46% in 2023, but only 3% in the first quarter of 2024. Now, it’s just a quarter, I don’t want to extrapolate too much, but we do know for a fact that there are steps that need to be taken for more of the population to find EVs to be the most convenient vehicle, and the price point is still higher than the other two platforms.

Dylan Lewis: Bill, I like your reminder there that Ford operates in all the markets when it comes to cars. Maybe this is a reminder here that the companies that are more diversified are going to go where the money goes, and the innovation and the real push when it comes to EVs are going to be in the concentrated players that really have their livelihoods attached to it.

Bill Mann: Exactly right. You show me what you do, and I’ll show you what it is that you are trying to promote. In the case of Ford, they just want to be on the winning platform. They’re somewhat agnostic — I mean, $100,000 loss per EV, maybe it’s not that agnostic, but they just want to go where the winner is going to be. It may not turn out that there’s any winner at all, and Ford would like to be able to compete in all of those markets as well. I think really what he’s saying is, be careful from a legislative standpoint, from a policy standpoint, of thinking that the EV future is all of that.

Dylan Lewis: We’ve got the tail end of earning season wrapping up — results from Darden Restaurants and Accenture this week. Ron, shares of Darden Restaurants up 5% this week, helped by earnings that came in ahead of expectations on the bottom line. This is a business that’s known for “when you’re here, your family.” How’s the family of Darden businesses looking?

Ron Gross: You’re right that they beat expectations, but it was definitely a mixed report for me. Things are not firing on all cylinders here. There are some bright spots, but to look at a few of the metrics, you had net sales were up almost 7%. That’s OK. Driven by the acquisition of Ruth’s Chris Steak House and 37 other new locations. But overall, same-store sales were flat. Olive Garden, which we’ve talked about a lot on the show over the years, Steve Broido’s favorite dining establishment. Same-store sales down 1.5% for them. There fine-dining restaurants, Capital Grille, my favorite, by the way, Eddie V’s. Those same-store sales were down 2.6%. Not great metrics. LongHorn Steakhouse is their only segment that was up in terms of same-store sales, up 4%. They’ve got some work to do here. They’re seeing a pricing pressure game going on here that they don’t want to play in. Competition is lowering prices. They want to hold steady. Interestingly, fast-food prices are actually up. I think we have some fast-food restaurants that are going to try to combat that in the coming weeks. But there is a price war going on here. Only 16 times forward earnings for Darden. I own it. I’m happy to keep hanging onto it. 3.6% dividend yield as well, but they do have some work to do.

Dylan Lewis: We’ll wrap with a look at AI and tech spend. Results in from consulting firm Accenture. Bill, results came in slightly below expectations. Market didn’t seem to mind. Shares were up 7% on the report. Why was the market willing to look past the miss?

Bill Mann: Let’s start with a little bit of a trivia question. Which company has higher revenue: Nvidia or Accenture?

Dylan Lewis: Well, Ron did give us that rundown early.

Ron Gross: And are based in Ireland.

Dylan Lewis: I’m going to have to go with Accenture based on the premise of the question.

Bill Mann: Based on the setup, that was a bit of a giveaway. Yeah, $21.1 billion in revenues, an increase of 22% over the last quarter, 26% in local currency. Really importantly, they have grown their generative AI bookings from nowhere to over $900 million, so for $2 billion year to date in generative AI bookings. Things are going absolutely fine at Accenture. Obviously, it’s not a company that has the Lollapalooza expectations that a company like Nvidia does, but they have transformed themselves from a straight consulting company to being a really sneakily powerful AI-driven company.

Ron Gross: I think they actually do it quite well. I think it’s a very, very well-run company. You’ve got to pay 26 times forward earnings for it. It’s not the cheapest company in the world, but it’s also not a tech company. We’re not talking about tech multiples here. You can get into a little sneaky AI play here for 26 times; 1.7% dividend yield, they just raised that 15%. I like some of these metrics here, and I like the company.

Dylan Lewis: Bill, it’s an interesting time to check in on Accenture, because in general, the story has been corporate spend ramping down, budgets getting tighter, but they have this mega tailwind when it comes to AI consulting. Is the outlook here, “Hey, we know those budgets are coming back, we’ve got something that can buoy us in the meantime, this will be fine”?

Bill Mann: They feel like that they’ve got a really great position in digital space and cloud and generative AI, and in security, which is the other large growth area for corporates. You can hear with every single company that they are trying to figure out how to fit these things and how to implement better security and better artificial intelligence into their systems everywhere, and so Accenture as a consultancy should benefit.

Dylan Lewis: Bill Mann, Ron Gross, fellows, we’re going to see you guys a little bit later in the show. Up next, we’ve got the scoop behind the most decorated whiskey brand of the past few years. Stay right here. You’re listening to Motley Fool Money.

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Welcome back to Motley Fool Money. I’m Dylan Lewis. This week, the stock market was closed Wednesday in observance of Juneteenth, commemorating the end of slavery in the United States. June 19 was first a stock market holiday in 2022, a relatively new development in observance of a day Americans have celebrated for a long time.

That idea of recognition is central to our interview this week. I spoke with Fawn Weaver, CEO of Uncle Nearest, the fastest-growing and most-awarded whiskey and bourbon brand of the past few years. The company owes its name and legacy to Nathan “Nearest” Green, a distiller and formerly enslaved person that taught household name Jack Daniel how to make whiskey. Green was the first African-American master distiller in the United States on record, and thanks to Weaver and her team, his contribution to history is now recognized, and his legacy lives on at Uncle Nearest today. His great great granddaughter, Victoria Eady Butler, is the company’s master distiller. Weaver walked me through the history and her book, Love and Whiskey, and offered up a cocktail, if you want to beat the heat and raise a glass to Nearest Green this summer.

So you’ve written on love and you’ve written on relationships in the past. This book, Love and Whiskey, may seem a little bit different, but it is very much focused on a partnership, one between Nearest Green and Jack Daniel, and your process of learning about that partnership and then building the Uncle Nearest company. It starts with a New York Times story and ends with a whiskey brand in 50 states of distribution. At what point do you know where this is going and what it’s building to?

Fawn Weaver: It was actually very early on. It was early on because when I began doing the research in Lynchburg, it came up very early into the process. The serendipity of how this came to be is something that is absolutely made for TV, or as they would say, or made for a movie, which, of course, we’re already talking about that. When I arrived in Lynchburg to begin doing the research on this book, very early in, within hours, we connected with one of Jack’s eldest descendants. That wasn’t something that we were trying to do. So to the rest of the world, Jack Daniel is a person on a bottle. To me, he’s a human being, a really incredible human being who lived, who left an extraordinary legacy, and his descendants, they are still very much so in Lynchburg, Tennessee. The second-eldest living descendant showed up at the library where I was doing research. And in that very short window of time that we had a conversation and I told her what I was working on, she let me know that the farm that Jack Daniel grew up and Nearest Green was the master distiller for the person who had previously been credited with teaching Jack Daniel, a white preacher and distiller. Now, it has been proven that it was an enslaved man on that property that actually did do it. But that property, I had no idea that property was for sale. If you think about this, 313 acres, their original home, the original spring, where all of the Jack Daniel’s came from during the years that Nearest Green was the master distiller, all coming off this property.

We buy the property because she tells us it’s available, and her cousin then takes us as the realtor to go see the property, and not long after us making an offer on it, just from a real estate portfolio side. This is a piece of American history. We had no idea what we were going to do with it. If you saw the original drawings that the architect did, you would probably shoot us if we did that. We literally outfitted the whole house. We made the entire inside of the house modern. It was a white kitchen. It’s absolutely absurd to think we were going to do that. But when we first purchased it, we weren’t thinking about it being for a whiskey brand. We were looking at it as, this is a piece of American history. It’s incredible. Let’s turn it into a bed and breakfast. It’s a whole other thing.

But the realtor who we purchased the property from very early on in the process, said, “Hey, if you ever decide to honor Nearest with a bottle, I will come out of retirement to make sure you get it right.” Well, as it turns out, she had been in the family business her whole life, which is Jack Daniel’s. When she retired after 31 years, she retired as the head of whiskey operations. You’re looking at two different things that were not a part of the plan when I went down to research. That all happened in a matter of two days. Once that happened, of course, the trajectory of everything changed. We now own this property. What are we going to do with this property? It wasn’t cheap. So now what are we going to do with it? It has to make money when you spend that much. We certainly weren’t buying a vacation home. Then you have this other person who knew whiskey through and through. Truly, it was in her blood and her lineage. It was something that happened organically, but it was clearly meant to be.

Dylan Lewis: As I was reading through the book and really familiarizing myself with your story, with the story here, I was really overcome by the power of story, period. I think it’s something that you really hone in on and realize very quickly as you’re learning the history here. I hear you talk about bringing in a distiller to help you with this, and the power of that story being helpful in getting other people involved and in creating what this ultimately has become so far.

Fawn Weaver: The thing is is that we have a lot of stories in American history. When you’re talking about race, and you’re talking about relationships between blacks and whites, especially something that is in the 19th century, I would venture to say they are not going to be a whole lot of positive ones. I can’t personally name one off the top of my head. I think that our country was due for a great American story between people of different races, between black and white, a story of redemption, a story of hope. I think we are due for a story like this, and that I get to be the one to bring this forth is extraordinary to me. I am deeply honored to be able to do that, especially during a period of time where race seems to be a topic every single day. To be able to present a book, that is the origin story, but the pages of it are filled with so much hope because of how incredible Jack was as a human being. And Nearest Green. I love that this book truly has two heroes. I am currently reading it for the audio book, and I am so in love with this book, and it’s my book.

A lot of authors get to the end of writing a book, and they’re like, “Good riddance.” They’re ready for it to be over and to move on to writing a new book. This one, I’m like, I could read this 20 more times because it gives me so much hope for America every single time I read through it.

Dylan Lewis: I think when you last spoke with The Motley Fool, it was back in 2020. At that point, I remember, Uncle Nearest was literally flying off the shelves.

Fawn Weaver: Yes.

Dylan Lewis: I had heard that there was distribution near me in D.C., went to the store, and I was late. I was too late to get there. I think that was a common story because people loved the product so much and loved the story behind it. That growth, it seems, has continued, based on some of the numbers I’ve seen. I saw you guys were looking at about $100 million in revenue for 2024, and your sales have tripled since 2021. What do the next couple of years look like for you guys?

Fawn Weaver:: For us, we just acquired a vodka company. You’re looking at Uncle Nearest. If you think about Bacardi, and you go back to its origin, it was just Bacardi, rum. Now, in the industry, when we think about Bacardi, we don’t even think about their rum. We think about Petrone, their tequila. We think about all the different things: Gray Goose, their vodka. We think about D’Usse, their cognac. We think about pretty much everything but the rum [laughs]. With Uncle Nearest, I do think it’s different. I think that people will always be thinking about buying that bourbon, but we are now moving from being an individual brand company to a portfolio company. That’s the biggest difference, is you’re going to see our growth spread across different pillars, different categories, so it will not just be bourbon. You’ll also see vodka; you will also see cognac in 2025.

Dylan Lewis: You guys acquired Domaine Saint Martin in France?

Fawn Weaver: Yes, we did.

Dylan Lewis: You have the vodka acquisition; you have this cognac-oriented acquisition. When you’re looking out in the marketplace and you’re looking to build out that portfolio, what are you looking for in an acquisition?

Fawn Weaver: I’m looking for a story that is as good as Uncle Nearest. For us, the story behind it has to be so extraordinary because I am talking to folks about it every day. Our team is talking to folks every day, and I don’t want us to ever get to a place where we’re bored with sharing the same story.

When you have a story that is so unique, so different. Cognac is pretty incredible because you have a product that is 100% made in the Cognac region, but France only keeps 3% of it — 97% of it is exported. Then of that 97% that is exported, about 56% of that volume is sold in the United States. It’s exported here. Then you get to America, and 75% is sold to either black Americans or black Latinos. It’s astounding how one group of people essentially own a category, but they have never had a product delivered to them by anyone who looked like them. So we saw that as an opportunity, but also, I had to dig in to find out why we are such a large consumer of this particular spirit, and digging in the layers, sending people to Paris, to Brest, to New York, to San Antonio, all over to really dig into it. It was the same thing that we did with Uncle Nearest, and by the time we finished uncovering and bringing to life this story that I will be in France in seven days filming with Jeffrey Wright as he tells the story of cognac. I will say that I actually think that that story is more remarkable than the story we’re currently telling of Uncle Nearest, and I didn’t know that we would ever be able to find a story as incredible as Uncle Nearest. But if it’s not better, it’s definitely toe to toe. The story of cognac and why America, and specifically black Americans and black Latinos, fell in love with cognac, why we have literally been the category for so long, the story is remarkable.

Dylan Lewis: I’m excited to hear you tell it in full form. Can I get a little sneak peek?

Fawn Weaver: No. Because, let me tell you something. The big guys already know this, so I’m not telling you anything. I literally have over 20 different trademarks of cognac names, and every cognac name has a different story behind it. The reason I did that is so no one would have any idea which of those stories we are going to be telling because cognac has so many different stories that we could have grabbed from and that we could have told, but we essentially have four main pieces of our story, and no one will know what they are until the Jeffrey Wright film is released.

Dylan Lewis: I do want to get your take on a few things in the world and business of alcohol. We have seen recently alcoholic seltzers and ready-to-drink cocktails are absolutely exploding in popularity. Is that market interesting to you at all, as you think about the overall portfolio approach with Uncle Nearest?

Fawn Weaver: Not at all. It’s not interesting to me. As a matter of fact, when we purchased Square One [Organic Spirits], they have an RTD line that I’m killing. And the reason is that I believe it to be oversaturated. It’s new, it’s a shiny toy. But consumers are going to realize that they can make this stuff at home for less and it will taste better.

Dylan Lewis: That’s been my experience.

Fawn Weaver: When have you ever had an RTD that if you taste it next to something actually made, it’s even close?

Dylan Lewis: It’s wonderful if I’m heading to a picnic. That’s about it.

Fawn Weaver: Right. What you saw… so High Noon is doing extraordinary, but what you’re seeing is really a consolidation under High Noon of all the seltzers. If you look at White Claw, if you look at Truly, if you look at everyone else, they’re absolutely tanking. High Noon is eating their lunch. And so I do think that you’re going to have a single category leader in every single area. You’re going to have it in seltzer, you’re going to have it in RTDs. RTDs are still shifting a little bit. You had On The Rocks that was eating everyone’s lunch, and now that’s shifted, and I believe that will consolidate again. I’m not sure if it will consolidate under On The Rocks. They’ve had some challenges with the color of their product, the quality, all the rest of the stuff. But I do believe that RTDs will consolidate under a single major player that, if you think about it, when you’re talking about an RTD, there’s only so many cocktails that you can make and then taste pretty good. A single player can do all of them. There’s nothing unique about another… so I do think you’re going to see some major consolidation there, and everything is going back to — outside of those two consolidations — to spirits as it is. And we’ll continue to have a little bit of volleyball between is cognac on top? Is vodka on top? Is whiskey on top? That volleyball has been going forever, for a very long time. That’s not going to change.

Dylan Lewis: Fawn, I really appreciate your time. Before I let you go, I do have to get a drink rec from you, because I’m a fan of your stuff straight up, but we are heading into the warmer months here in Washington, D.C. I know some folks maybe prefer a cocktail rather than something straight up. Any cocktail recs for our listeners to incorporate the Uncle Nearest spirits?

Fawn Weaver: Listen, people love this elevated highball. I am not a highball person because I am a Uncle Nearest neat all day long. I want to taste my spirit, but what I am seeing as a trend across the country is people love this highball — adding tonic to it, putting a little squeeze of orange, and that thing is flying off the shelf everywhere. For something refreshing, I would probably say that.

Dylan Lewis: Listeners, you can get the full story on Nathan “Nearest” Green and the development of Uncle Nearest in Fawn Weaver’s book, Love & Whiskey, out now wherever you get books. You can find a shop near you carrying their award-winning whiskey at unclenearest.com. Coming up after the break, Bill Mann and Ron Gross return with a couple of stocks on their radar. Stay right here. You’re listening to Motley Fool Money.

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As always, people in the program may have interests in the stocks they talk about, and the Motley Fool may have formal recommendations for or against. Don’t buy or sell anything based solely on what you hear. I’m Dylan Lewis, joined again by Bill Mann and Ron Gross. Gents, we’re going to jump right into stocks on our radar this week. Our man behind the glass, as always, Dan Boyd, is going to hit you with a question. Ron, you’re up first. What are you looking at this week?

Ron Gross: Oh, Dan, I got a boring Ron Gross company for you. Old Dominion Freight Line (ODFL 1.89%). They’re a leader in less-than-truckload transportation — the business of hauling small amounts of freight for a number of customers in a single truck. They’re the nation’s second-largest LTL carrier: 57,000 tractors, 260 service centers. Old Dominion shares are up more than 30,000% since their 1991 IPO. It’s one that most people don’t know about, but it’s been a really wonderful performer. Return on invested capital, greater than 30%, operating margins, four times the industry average.

But I will say, not everything is perfect. They’ve struggled a little bit recently. Rising interest rates, the threat of a slowing economy has caused shipping companies to scale back a bit. That has softened demand, that has hurt pricing power. Revenue in 2023 was down 6%, the stock is down 24% from its 52-week high, but that does give us an opportunity to buy it at a little bit better valuation — 28 times, not that cheap, but better than where it was trading in the 30s.

Dylan Lewis: Dan, a Ron Gross classic. You got a question or a comment here?

Dan Boyd: Old Dominion, named after the state of Virginia, the nickname for Virginia, but they moved their headquarters out of Virginia to North Carolina in 1962, and for that, Ron, I will never forgive them.

Ron Gross: Wow, you did some research, Dan.

Dylan Lewis: Proud Virginian Dan Boyd.

Ron Gross: I like it.

Dylan Lewis: Sounds like you’ve got an easy case to make this week, Bill. What’s on your radar?

Bill Mann: Well, I’m from North Carolina, so I’m not sure that I do have an easy case [laughs]. So I love canary-in-the-coal-mine companies, and the one that’s coming up is reporting this week is McCormick (MKC 0.47%). We think of that as being the spices in our cabinets, but 40% of McCormick’s business is spices and spice palettes for restaurants. We have seen some restaurants reporting really good earnings, some restaurants reporting somewhat poor results. I don’t think that the market knows what to make of McCormick. They’re expecting earnings to be down about 2%, and revenues to be down about 2%, but, honestly, because of what’s happening in the restaurant space, could be anything. This is a company — it is a Jason Moser favorite, as we all know — I expect that the market is underestimating what McCormick is going to do.

Dylan Lewis: Dan, a question or comment about McCormick?

Dan Boyd: This is some Jason Moser stolen valor here, which I’m not too thrilled about. However, McCormick did start in Baltimore, Maryland, and is still located in Baltimore, Maryland. So I do appreciate that kind of regional loyalty.

Dylan Lewis: Dan, sounds like McCormick’s going on your list this week.

Dan Boyd: Let’s get spicy going.

Ron Gross: Hey.

Bill Mann: Wow.

Dylan Lewis: That’s going to do it for this week’s Motley Fool Money radio show. The show is mixed by Dan Boyd. I’m Dylan Lewis. Thanks for listening. We’ll see you next time.