Deckers Outdoor Faces Pressure on Sales Guidance and Brand Diversity
"This is Decker's Outdoor. It's DEK down as much as 12%. Really taking a hit to who this company is, they're the owner of Hoka running shoes, the UGG boots that are all over my house. But it was a miss on sales guidance. So, remember we were just talking about Proctor and Gamble, right? People spent on their goods, but they kind of held back on the footwear, the pricey footwear. Maybe, you know what, I'll hold on to those UGG boots another year, you know, and I won't buy another one this year. Bloomberg Intelligence is saying their forecast could be kind of conservative if the momentum continues. They said Hoka has some room to grow into a multi-billion dollar brand. But for UGG, they said for long-term success, they need more product diversity. They need a better seasonal mix. They kind of need to shake things up. And you saw it when they came out with the UGG sneakers. Everybody went crazy."
Deckers Outdoor (DEK) is under pressure with shares down 12% following a miss on sales guidance. The commentary contrasts consumer spending trends on essentials versus discretionary footwear, noting concerns over product diversity and the need for a refreshed seasonal mix in brands like UGG. Bloomberg Intelligence suggests cautious potential for growth if momentum builds in certain segments.
Valuation Attraction at 15x Free Cash Flow Amid Caution
"Now if we look at where this business is trading at, it's trading at 15 times cash flow. This is almost a value investment. I've seen articles saying that Salesforce right now is a value stock. Maybe it's not a value investment, but it's getting cheap, guys. I mean, 15 times cash flow for Salesforce is really crazy. It used to trade at 55 times a few years ago and a few months ago it was around 22-25 times. At 15 times, to me this is very interesting. Assuming they hit a 10% revenue growth, the free cash flow yield of around 6% could translate to a 15 to 16% annual return, with potential for a multiple reversion to 18-20 times."
The speaker notes that Salesforce is now trading at an attractive 15 times free cash flow, a significant reduction from previous multiples. Despite his reservations about management, he outlines a scenario where sustained organic growth and potential multiple expansion could deliver substantial annual returns, though he remains cautious due to historical performance issues.
Doubts on Salesforce 2030 Guidance and Management Track Record
"But the stock is finally going up because the company has issued 2030 guidance. Now, back in 2022 they issued guidance for 2026 and here we are in 2026 guiding for 41 billion. We are nowhere close to the guidance they gave back in 2022. So, if they could not meet their 2022 guidance for 2026, not even get close to it, why should we trust the 2030 guidance? I I'm personally not going for it. I I'm not trusting it. Maybe this time is different. But again, it's hard to trust the management team that has disappointed over and over and over again."
The speaker expresses skepticism about Salesforce's 2030 guidance given its history of missing previous targets. He highlights that despite recent positive movements, the management's track record makes him reluctant to invest, suggesting that he will avoid adding to his position in CRM.
Salesforce rebounds with strong fundamentals despite trust issues
"Salesforce stock is going up. When I look at Salesforce, we can look at it in my portfolio. It's now down $1,800, down 3%. At one point I was down around $10,000 in Salesforce, but we're almost moving back up into the green. They laid out a very bold vision at Dreamforce and provided guidance that is very positive, suggesting that the fundamentals are moving upwards."
The speaker notes a recent rebound in Salesforce (CRM), citing strong earnings guidance and a bold vision from their Dreamforce conference, despite lingering trust issues and past underperformance. The turnaround in portfolio performance is emphasized as a positive signal.
Company Commentary on Salesforce
"Now, another company that I'm focused on, but I haven't bought today, is Salesforce. Salesforce just had their Dreamforce convention where they outlined aggressive plans to reacelerate organic growth back to over 10%. They also showcased a slide indicating operating margins could double from 17% to 34% and free cash flow could jump from $4 billion to $14 billion by 2025, with 99% returned to shareholders via buybacks or dividends. Even though this has been my worst performer, I'm still going to hold it because I believe there is far more upside than downside in this company, and I could see it easily moving into the $330 range."
The host provides a detailed commentary on Salesforce, noting its impressive forward-looking metrics such as margin expansion and free cash flow growth. Despite underperformance, he remains committed by holding the stock, anticipating that upcoming growth catalysts could drive the share price into the higher range.
Salesforce Partnership Backfires
"Now, moving on, we get to the news. And this is somewhat comical, Id say disappointing, but also comical news about Salesforce. This stock is so hated by the market. As noted by this latest news, Salesforce is expanding its AI partnership with OpenAI and Anthropic, integrating their latest models into Agent Force 360, including deeper ChatGPT and cloud integrations to accelerate AI agent adoption. In this case, after Salesforce announced this partnership with OpenAI, the stock went down. How does a stock go down after you partner with OpenAI? Thats almost impossible. I should be giving them an award for accomplishing the impossible. This should be considered one of the fail of the weeks."
The speaker highlights an anomaly with Salesforce, noting that despite expanding its AI partnerships—a typically positive catalyst—the stock dropped. He underscores that the market sentiment toward Salesforce is extremely negative, describing the move as a "fail of the week."
Avoid Salesforce Amid Weak AI Partnership Sentiment
"Salesforce announced that they were partnering with ChatGPT and bringing OpenAI's frontier models into unified experiences through their Agent Force 360. This is one of the first few times I have seen an OpenAI partnership coincide with the stock dropping, which makes it seem like the aggressive confidence previously projected by Salesforce was unwarranted. They still need to come back and execute a compelling AI strategy, and honestly, it makes Salesforce appear more like a white flag than a value opportunity. Personally, I don’t want to own Salesforce anytime soon."
The speaker expresses skepticism regarding Salesforce following its new partnership with ChatGPT, noting that instead of boosting investor confidence, the move has led to market weakness. This casts doubt on Salesforce’s ability to lead in the AI space, leading to a recommendation to avoid the stock.
Huge Buy Opportunity on Salesforce Amid Short-Term Weakness
"Salesforce continues to be weak in the short term. That one's a huge buy in my opinion. I love that stock. I would love to buy every share in sight for the next, I would say, 6 months on Salesforce. I'm just going to continue to load low."
The speaker gives an explicit trade call on Salesforce, stating it is a huge buy despite short-term weakness. He plans to continue buying shares over the next six months, signaling strong conviction and a buying opportunity in a cautious market environment.
LVMH Unexpected Sales Growth Boosts Luxury Sector
"LVMH surging almost 14% higher in Paris now and a wider rally too in the luxury sector. Tell us more. Indeed. Yeah. So essentially this is an unexpected return to sales growth. They had their third quarter results this morning. Stronger than expected performance across the board and essentially analysts are saying this is an encouraging trend. So um you know it it's a it's an improvement in relation to the wider sector. They're suggesting that it's a return to growth could be possible next year. they're citing quite a confident tone for 2026 and notably um as part of these kind of encouraging trends notably in China which is which is a key market for LVMH and as you say it led to peers also surging so the likes of Burberry caring also far higher um across the board so shares in LVMH rising on that unexpected positive news a step in the right direction."
The speaker highlights LVMH's unexpected sales growth as a catalyst for a rally in the luxury sector, noting strong Q3 results and growth potential driven by key markets like China, suggesting a positive outlook for next year.
Buy Salesforce (CRM) as an AI-Enabled Growth Stock at 22% Discount
"For companies that can utilize AI, Salesforce is a four star rated stock trading at a 22% discount, with a wide economic moat based on switching costs and network effect."
Salesforce is highlighted as a strong buy for investors seeking companies that benefit from AI integration into core products. With a 22% discount to fair value, a four-star rating, and strong competitive moats, it represents an attractive long-term investment.