Introduction: Diving into Deep Value Stocks and Market-Shaping News
Welcome back, listeners, to the Joseph Carlson Show, where we unpack the latest in technology, economy, finance, and stock market trends with a sharp eye and a long-term perspective. Today, we’ve got a packed agenda, starting with an in-depth look at 10 deep value stocks highlighted by Barron’s, a trusted voice in financial analysis. We’ll also dive into major market news, including the Federal Reserve’s recent interest rate cut, groundbreaking safety data from Waymo’s robo-taxi network, and a surprising partnership shake-up in the ride-sharing space. Whether you’re a seasoned investor or just tuning in to make sense of the market noise, this episode will equip you with insights and actionable advice. So, grab your coffee, settle in, and let’s break it all down.
Market Impact: Fed Rate Cuts and the Bigger Picture
Let’s start with the headline that’s got everyone’s attention: the Federal Reserve’s decision to cut interest rates by 25 basis points, with signals of two more cuts before year-end. Now, if you’re wondering why the market didn’t skyrocket on this news, it’s because this move was largely anticipated—priced in at about 90% probability. Markets are forward-looking beasts, and investors had already adjusted their portfolios for this outcome. But here’s what’s critical: the Fed’s forward guidance. By signaling further cuts, they’re acknowledging concerns about the U.S. labor market while aiming to stimulate economic activity. Historically, rate cuts have been a boon for equities, as cheaper borrowing costs fuel corporate expansion and consumer spending. Think back to the post-2008 era—low rates propelled a decade-long bull market, though not without bubbles along the way.
Globally, this move aligns with a broader trend of central banks easing monetary policy to counter slowdown fears, especially in Europe and Asia. However, it’s not all sunshine. Lower rates mean diminished returns on cash holdings—those 5-6% yields on savings accounts are shrinking, pushing capital into riskier assets like stocks and real estate. For sectors like housing, this is a lifeline; for savers, it’s a nudge to rethink strategy. Keep an eye on inflation, though—historically, prolonged low rates have stoked price pressures, as seen in the 1970s. The Fed’s balancing act between growth and price stability will be the story to watch in 2025.
Sector Analysis: Deep Value Stocks, Autonomous Tech, and Ride-Sharing Dynamics
Now, let’s zoom into Barron’s 10 deep value stock picks. These aren’t your high-flying tech darlings; they’re companies trading at what Barron’s sees as bargain valuations with solid upside potential. Their track record isn’t flawless, but their call on Alphabet (Google) last year—predicting a 50% rise when it traded at a forward P/E of 19—was spot-on. Alphabet’s now near $250 per share, validating their thesis of undervaluation relative to peers like Amazon (P/E 34) or Nvidia (P/E 37). This sets a high bar for their latest picks, which span healthcare (Option Care Health), software (Twilio), moving services (U-Haul), beauty (E.L.F. Beauty), AI data services (InoData), and even pawn shops (First Cash). Each comes with a multi-pronged thesis—growing markets, unique positioning, and low valuations. For instance, Option Care Health taps into an 8.6% annual growth in at-home infusion therapy, while First Cash’s micro-lending model offers a niche no traditional bank can match.
Yet, I’ve got reservations. Healthcare stocks like Option Care carry regulatory and debt risks, as seen in past sector shake-ups like the 2010 Affordable Care Act fallout. Twilio’s consumption-based model is scalable until big clients like Uber build in-house solutions—a real margin threat. My favorite? First Cash. Their pawn shop dominance, paired with high-interest micro-loans, carves out a recession-resistant niche. At a forward P/E of 17, it’s a compelling deep value play, reminiscent of how offbeat picks like Texas Roadhouse have quietly compounded over decades.
Shifting gears to tech, Waymo’s safety data is a game-changer for autonomous vehicles. Their robo-taxis show a 91% reduction in serious crashes and 79% fewer airbag deployments compared to human drivers. Extrapolate this, and full adoption could slash U.S. mortality rates by 9%—a societal shift on par with major medical breakthroughs. This isn’t just about Waymo; it’s a signal to the auto and tech sectors that autonomy is the future. Investors should note Tesla’s Full Self-Driving ambitions and traditional automakers’ lag in this race. Meanwhile, Waymo’s dual partnerships with Uber and Lyft—evidenced by Lyft’s 13% stock pop and Uber’s 5% dip—show Alphabet’s dominance. They’re playing both sides, controlling the narrative while competitors scramble. This mirrors Microsoft’s platform strategy in the 1990s—own the tech, let others fight for scraps.
Investor Advice: Navigating Opportunities and Risks
So, what should you do with all this? First, on the Fed’s rate cuts: don’t sit on cash. With yields dropping, equities and real estate offer better returns, but be selective. Focus on sectors like technology and consumer discretionary that thrive in low-rate environments, as seen post-2009. However, hedge against inflation—consider commodities or TIPS (Treasury Inflation-Protected Securities) as a small portfolio slice.
For Barron’s deep value picks, approach with caution but don’t dismiss them outright. First Cash is my top choice for its unique business model and valuation. If you’re dipping into this, allocate no more than 5-10% of your portfolio to such speculative plays, and balance with blue-chip stalwarts like Alphabet, which still trades at a reasonable P/E of 25 compared to Twilio’s 21 with higher risks. Use tools like Qualtrim ($10/month) over pricier FactSet to track earnings beats and historical data—key for validating theses like Twilio’s consistent performance.
On Waymo and autonomous tech, it’s too early for most to bet big on pure-play robo-taxi stocks, but Alphabet remains a safe way to gain exposure. Their diversified revenue—ad tech, cloud, and now autonomy—offers downside protection. For ride-sharing, Uber’s competitive pressure makes it a hold, not a buy; Lyft’s upside is speculative given Waymo’s leverage over both. Long-term, autonomy will disrupt transportation—start researching adjacent sectors like EV charging or smart infrastructure for future opportunities.
Finally, diversify. The market’s reaction to expected news like rate cuts shows how quickly sentiment can shift. Keep 15-20% in defensive assets—think utilities or consumer staples—that weather volatility, as we saw during the 2020 crash. And always, do your homework. Barron’s picks are a starting point, not gospel. Cross-check valuations, debt levels, and industry tailwinds before committing capital.
Conclusion: Connecting the Dots for a Volatile Future
As we wrap up, let’s connect the dots. The Fed’s rate cuts signal a supportive environment for risk assets, but global uncertainties—labor market softness, geopolitical tensions—linger. Barron’s deep value stocks offer intriguing opportunities, especially in overlooked niches like pawn shops, but require a discerning eye given sector-specific risks. Waymo’s safety data and strategic partnerships underline why Alphabet remains a titan, reshaping transportation while others play catch-up. For investors, the message is clear: adapt to a lower-rate world, balance value hunting with stability, and stay ahead of transformative tech trends.
Thanks for tuning in, everyone. Drop your thoughts and questions in the comments—I’ll tackle them in our next episode. Whether it’s deep value picks or the future of robo-taxis, let’s keep this conversation going. Until then, stay curious, stay invested, and I’ll catch you on the next one.
Deep Value Meets Lower Rates: What Joseph Carlson’s Latest Show Signals for Investors Now
Why this matters: With the Federal Reserve cutting rates by 25 basis points and signaling two more cuts this year, the cost of capital is easing even as investors hunt for value away from crowded megacap names. In this episode, Joseph Carlson walks through 10 “deep value” ideas highlighted by Barren (as cited in the show), adds his own take, and ties in fresh data on Whimo’s robo-taxi safety and new partnerships. Timeframe: commentary references November 2024 through late 2025; currency: USD.
Quick Summary
- Fed cuts rates by 25 bps, signaling two more cuts before year-end; easing supports equities and credit-sensitive assets.
- Whimo safety report: 91% fewer serious-injury-or-worse crashes; 79% fewer airbag deployments vs humans.
- Alphabet call from Nov 2024: “sum of parts” worth $260/share vs current ~$250 (per show tool) — thesis largely validated.
- Option Care Health: trades at 16x P/E, 5.4% FCF yield; only 12% of 2024 revenue via direct government programs.
- Twilio: at least 20 straight sales beats; 21x P/E and 4.5% FCF yield (stock-based comp heavy).
- U-Haul: >50% moving share; 200k trucks, 137k trailers, 23k locations; 90% of U.S. within 5 miles.
- First Cash pawn: 3,300 stores; APRs can exceed 200%; forward P/E ~17 (2025) dropping to 14 (2026).
- JBS meat packer: trades at 7x 2025E EPS of $1.92; planning $1B/year in expansion for 5 years.
- Verdiv: adjusted operating margin guided to 20% in Q3 (vs 18.5% in Q2); 10 straight EPS beats.
- Whimo partners with Lyft for Nashville 2026; intraday reaction: Uber -5%, Lyft +13%.
Sentiment & Themes
Overall tone: Positive 60% / Neutral 25% / Negative 15%
Top themes:
- Deep value opportunities across diverse sectors
- Valuation discipline and margin trajectories
- AI infrastructure and data readiness
- Rate cuts and capital allocation shifts
- Autonomy safety data and platform power dynamics
The 10 Picks — What Stood Out
From Alphabet to 10 new “deep value” ideas
Carlson opens by crediting Barren’s November 2024 call on Alphabet, which used a sum-of-the-parts target of $260. With shares now around $250 (per his tool), the low-multiple thesis proved resilient versus peers trading well above Google’s prior 19x forward multiple.
Healthcare at home and usage-based software
Option Care Health: A scaled provider of infusion therapy at home and in 170+ clinics, with >5,000 clinicians. Barren likes secular tailwinds (aging population), diversified payers (12% direct government in 2024), and a 16x P/E with 5.4% FCF yield. Carlson flags debt and healthcare volatility as risks.
Twilio: At least 20 straight sales beats (FactSet cited). Usage-based pricing can scale with customer activity, but Carlson warns large customers may insource (example: Uber) and telecoms take margin. Valuation at ~21x P/E and 4.5% FCF yield; stock-based comp is a drag.
Physical networks as moats
U-Haul: Dominant share (>50%) with a vast fleet (200k trucks, 137k trailers) and 23k locations covering 90% of the U.S. within five miles. Earnings may rise as older trucks roll off depreciation; storage adds a second engine (footprint growing ~10% annually). Carlson passes but acknowledges the scale advantage.
First Cash (pawn): 3,300 stores built via roll-ups; a “mini bank” offering quick, nonrecourse collateral loans and reselling forfeited goods. Jewelry and high gold/silver prices enhance economics. Valuation compelling at ~17x 2025E EPS, 14x 2026E vs a 23x historical average. Carlson’s favorite of the list
— on unit returns, counter-cyclical demand, and pricing power tied to precious-metals collateral. He highlights regulatory visibility and store-level cash generation as offsets to reputational risk.
Protein cycle upside and disciplined operators
JBS: One of the world’s largest meat packers screens optically cheap at ~7x 2025E EPS of $1.92. Barren’s angle is the protein cycle: herd rebuilding, feed costs, and normalized export channels can support margin repair. The company plans roughly $1B/year in expansion for five years—aggressive, but Carlson cautions that capital intensity and commodity volatility can extend payback periods if pricing power fades.
Verdiv: Management guided adjusted operating margin to about 20% in Q3 (from 18.5% in Q2) with a track record of 10 straight EPS beats. The callout here is execution consistency—tight cost control, mix upgrades, and pricing discipline. Carlson notes that at this stage, incremental gains likely hinge on mix and operating leverage rather than easy cost cuts.
What didn’t make his buy list
Carlson is selective. He passes on U-Haul despite the moat, citing capex needs and the lumpiness of used-fleet pricing. Twilio’s usage model intrigues him, but concentration risks and telecom tolls cloud durable margin expansion. Two other industrial value names mentioned briefly were slotted to his watchlist pending cleaner visibility on pricing and order backlogs.
Autonomy, Platforms, and the Cost of Capital
Whimo’s latest safety report—91% fewer serious-injury-or-worse crashes and 79% fewer airbag deployments than human drivers—reshapes the autonomy narrative from “moonshot” to “operational proof.” The announced Lyft partnership for Nashville in 2026 sharpened the market’s read-through: Uber fell 5% intraday while Lyft popped 13%. Carlson frames it as platform optionality: if Whimo plugs into multiple ride-hailing networks, value accrues to the autonomy stack and the orchestrators that can route demand efficiently.
Why it matters now: a 25 bps Fed cut, with two more signaled, lowers discount rates and nudges capital toward long-duration bets—AI infrastructure, autonomy, and scaled software—while also lifting the tide for cash generators in “boring” value. Carlson’s through-line is to buy value with catalysts: operators that can self-fund, price rationally, and win share as the cost of capital eases.
Analysis & Insights
Growth & Mix
Option Care’s growth leans on home-infusion penetration and payer diversification; with only 12% of 2024 revenue from direct government programs, mix risk is moderated versus peers more exposed to Medicare rate resets. Verdiv’s targeted margin lift suggests a mix shift toward higher-value SKUs/services. JBS is a classic cycle play—volume normalization plus selective capacity adds—but mix is hostage to protein spreads.
Profitability & Efficiency
Verdiv’s margin trajectory (+150 bps sequential guide) points to operating discipline. Twilio’s 4.5% FCF yield is blunted by stock-based comp; the path to durable double-digit FCF margins likely requires lower carrier pass-throughs and reduced churn among large accounts. U-Haul’s embedded depreciation tailwind improves reported earnings as the fleet ages, but maintenance capex remains a floor.
Cash, Liquidity & Risk
First Cash’s pawn model converts inventory quickly and benefits from high collateral recovery values (jewelry), supporting cash returns through cycles. JBS’s expansion plan raises execution and leverage sensitivities into a still-uneven commodity tape. Rate cuts help refinancing math across the set, but FX and commodity shocks remain watchpoints for globally sourced businesses.
| Company | Valuation | FCF / Margin | Notable KPI |
|---|---|---|---|
| Option Care Health | P/E ~16x | FCF yield ~5.4% | 12% of 2024 revenue from direct gov’t |
| Twilio | P/E ~21x | FCF yield ~4.5% (SBC heavy) | ≥20 straight sales beats |
| U-Haul | Scale moat; depreciation tailwind | N/A | >50% moving share; 23k locations |
| First Cash | ~17x 2025E; 14x 2026E | High cash conversion | 3,300 stores; APRs can exceed 200% |
| JBS | ~7x 2025E EPS ($1.92) | Capex: ~$1B/yr planned | Protein cycle leverage |
| Verdiv | Quality re-rate case | Adj. op margin to ~20% (Q3 guide) | 10 straight EPS beats |
Quotes
“A sum of the parts worth $260 per share—Alphabet didn’t need AI heroics to work as a value story.”
“Usage-based pricing can scale with customers, but not if your biggest users insource.”
“Whimo’s 91% fewer severe crashes reframes autonomy as an operating advantage, not a science project.”
“Lower rates reward cash generators and operators with pricing power—those are the value names I want.”
Conclusion & Key Takeaways
- Rate relief plus discipline: easing policy favors cash-rich value names that can self-fund growth and re-rate on margins.
- Healthcare at home and pawn stand out: OC Health and First Cash pair defensibility with cash conversion and measured valuation.
- Cycle optionality in protein: JBS offers torque but demands strict risk controls on capex and leverage.
- Autonomy as a platform layer: Whimo-Lyft signals multi-network deployment; watch driver supply dynamics and take rates.
- Near-term catalysts: Verdiv’s Q3 margin print, Whimo partnership updates, and the Fed’s next two projected cuts.