Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanibek. We're here every day bringing
Speaker 1: you the latest news from the world to business and finance,
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Speaker 1: You can also listen to our radio show at two
Speaker 1: pm Eastern Time on Bloomberg Radio or watch us on
Speaker 1: YouTube search Bloomberg Global News. Well. Earlier this year, the
Speaker 1: World Economic Forum noting that in one alone, forty four
Speaker 1: billion dollars was raised globally in health innovation that's twice
Speaker 1: as much as and the acquisition of health and health
Speaker 1: heap companies rose fifty percent. Here's another fun fact, the
Speaker 1: World Economic Forum finding that up to eight percent of
Speaker 1: providers in the US are planning to invest in tech
Speaker 1: and technologies including digital health, AI, machine learning, as well
Speaker 1: as tools to support clinical staff and caregivers over the
Speaker 1: next five years. And I feel like Tim, that plays
Speaker 1: so much in to what we're going to get into
Speaker 1: with our next guest. Yea, our next guest Atman. L.
Speaker 1: Rocky is the CEO of color Health. I'vemen joining us
Speaker 1: this afternoon on the phone from San Francisco. Color Health
Speaker 1: is based in the Bay Area. It's a health tech company.
Speaker 1: It's focused on COVID nineteen testing and vaccine efforts for
Speaker 1: state governments, for local governments, particularly in California and Massachusetts. Atman,
Speaker 1: it's good to have you with us. How are you hello,
Speaker 1: good afteroon, Thanks for having me well, thanks so much
Speaker 1: for joining us. Characterized, how would you characterize what you've
Speaker 1: been doing over the last couple of years as the
Speaker 1: pandemic has well been ongoing. Yeah, it's been a really um,
Speaker 1: you know, interesting evolution I think, and across the entire space,
Speaker 1: and in fact, actually for us, it really predated the
Speaker 1: pandemic where we were working on a large population health
Speaker 1: programs UM even a few years ago. UM and even
Speaker 1: at the time, I think one of the things that
Speaker 1: was quite apparent is that aside from like discovering new
Speaker 1: therapeutics and you you know, diagnostics and so on, one
Speaker 1: of the things that still room does a big challenges
Speaker 1: making healthcare accessible, like often times. I think in the
Speaker 1: US there is health care that's available but not actually
Speaker 1: accessible to people. Question when you're talking about basic public health,
Speaker 1: and I think with the pandemic has really forced our
Speaker 1: entire industry too, you know, really shift hard to focus
Speaker 1: on how do you deliver basic and essential services to
Speaker 1: very large populations in a way that takes a lot
Speaker 1: of the friction out of their out of their experience.
Speaker 1: And and so we've seen that obviously through testing vaccines
Speaker 1: UM and even now as well through tested treat programs,
Speaker 1: and people are because they're getting diagnosed, making them able
Speaker 1: to receive access to care in a way that's as
Speaker 1: immediate as possible and takes away all the different bumps
Speaker 1: in the road that usually impede access for for every
Speaker 1: for people in their everyday lives. UM and take a
Speaker 1: step back, tell us exactly what you guys are doing
Speaker 1: specifically specificity sure so um so colors. So you know,
Speaker 1: as you mentioned, we're started off as a health tech company.
Speaker 1: We do today is that we run UM public health
Speaker 1: programs UM both for local state governments as well as
Speaker 1: large employers to UM make available for their populations either
Speaker 1: testing vaccinations or medication related services, whether in COVID or not.
Speaker 1: But so to make it give you a concrete example
Speaker 1: to Color today runs the biggest school testing programs in
Speaker 1: the country across um over a dozen states in the US.
Speaker 1: California is the largest one, but across all of our sites,
Speaker 1: we run over ten thousand different sites where people can
Speaker 1: receive access to test store vaccines in a way that's
Speaker 1: like extremely uh simple and direct, where the flad access
Speaker 1: to a simple online sign up flow when they go
Speaker 1: onto the sites. We handle all of the logistics and
Speaker 1: um all the aspects of delivering the service so that
Speaker 1: people can just literally show up and within a couple
Speaker 1: of minutes they show if they get the service, and
Speaker 1: then they can go about their day and so and
Speaker 1: that's where really what Color has been, um you know,
Speaker 1: our bread and butter has been to build the systems
Speaker 1: that make it possible to deliver these simple services in
Speaker 1: a way that actually simple in people's experience. Well, that's
Speaker 1: what I wanted to say, because I think there are
Speaker 1: simple services that many just take for granted and like yeah,
Speaker 1: I'm going to get my flu shot, no big, no, no,
Speaker 1: no big you know, no brainer, right, But for a
Speaker 1: lot of Americans, you're saying that's not so easy. So
Speaker 1: it's things like what flu shots is it for kids
Speaker 1: in there? You know, in schools their typical vaccines. I
Speaker 1: remember as a kid getting a lot of shots in schools.
Speaker 1: Um is like, what, what specifically are you talking about? Yeah? Yeah,
Speaker 1: so so vaccine is a great example. So actually, the
Speaker 1: state of Massachusetts is one of our very close partners
Speaker 1: and where we started off initially working with them to
Speaker 1: do COVID vaccinations, but over time they expanded our program
Speaker 1: to cover all public health immunizations and they're to your point.
Speaker 1: The experience for people is like, how do you make
Speaker 1: it possible to set up a vaccine in the in
Speaker 1: places where that are consistent with their lives. I think
Speaker 1: what we realize is that when you need to go
Speaker 1: out of ben for your life, out of your life
Speaker 1: to go get basic care, life gets in the way, right,
Speaker 1: Like you need to take time off work, you need
Speaker 1: to take you know, find find a clinician, so on. However,
Speaker 1: one vaccine site shows up in a church or in ah,
Speaker 1: in your children's school or at your workplace, that immediacy
Speaker 1: makes it that much of an easier decision to make. Hey, Adman,
Speaker 1: I want to get your thoughts on some of the
Speaker 1: other companies that you work with, because you've you're based
Speaker 1: in San Francisco, you're based in Silicon Valley. You've also
Speaker 1: advised and invested in a lot of companies that are
Speaker 1: not even in health tech, like Pinterest, Slack, instant cart.
Speaker 1: What's the temperature right now? We've done a lot of
Speaker 1: reporting over the last couple of weeks about some belt
Speaker 1: tightening happening in Silicon Valley. Give us your take. I
Speaker 1: think it's a broader than Silicon Valley. I think it's
Speaker 1: pretty pretty extensive right now. But I mean, you know,
Speaker 1: I've I've I've started and run when company through uh
Speaker 1: several downturns now through the dot com like downturn in
Speaker 1: two thousand now into the two thousand a uh and now.
Speaker 1: And you know, I think at times like this, you know,
Speaker 1: these always operating cycles, and on the upswing, the market
Speaker 1: really rewards and forgets that there's a discount rate on
Speaker 1: the future, and really rewards growth and rewards kind of
Speaker 1: just expansion. I think at times like this, what ends
Speaker 1: up happening is that I think these windows of time
Speaker 1: or once someone some of the best companies actually really
Speaker 1: come into their own where you have to focus on
Speaker 1: building a great business model and focus on actually, you know,
Speaker 1: making a this model long term profitable and viable UM.
Speaker 1: And we've color have been quite fortunate that, like we
Speaker 1: had actually had that focus for quite a while. So
Speaker 1: we're entering into this phase in a in a mode
Speaker 1: that actually UM where for us it enables us to
Speaker 1: kind of keep operating as we are. We've been profitable
Speaker 1: for quite a while. UM. But the I think what's
Speaker 1: challenging right now is if you know, for companies that
Speaker 1: are that came off momentum of last year with UM
Speaker 1: you know, a huge burn rate and also assuming that
Speaker 1: cash was going to remain cheap for a very long time,
Speaker 1: I think, you know, at times like this, everyone has
Speaker 1: to really focus on profitability and you know, making UM
Speaker 1: their models, you know, viable in the long term as
Speaker 1: opposed to just being funded by by the by investors.
Speaker 1: So true, I feel like that message is coming through
Speaker 1: loud and clear. I mean, you guys just signed are
Speaker 1: recently I guess a Series E financing and announced four
Speaker 1: point six billion dollar valuation. You said you were profitable
Speaker 1: at the Bloomberg New Economy in Panama talking with the
Speaker 1: CEO of oft d Local forgive Me, and also of Loft.
Speaker 1: I mean that was one of the things that came
Speaker 1: out is that those who are established, either startups with
Speaker 1: plenty of funding rounds and an established infrastructure or have
Speaker 1: gone public, they're going to do much better than some
Speaker 1: of the earlier startups, especially in what's going to be
Speaker 1: a tighter and less liquid environment. Ahman, thank you so much.
Speaker 1: I really appreciated Autman the Rocky. He's co founder and
Speaker 1: CEO of our Health. It's a health technology and clinical
Speaker 1: testing company. He was joining us on the phone in
Speaker 1: San Francisco. He's also co founder of mixer Labs, which
Speaker 1: was acquired by Twitter back into thousand nine. This is
Speaker 1: Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes
Speaker 1: Tim Stinovic on Bloomberg Radio. Well, we mentioned that we
Speaker 1: had to focus on today on health and life sciences.
Speaker 1: A lot of money going into that area. We mentioned
Speaker 1: also earlier from the World Economic Forum up to providers
Speaker 1: in the US are planning to invest in technologies including
Speaker 1: digital health, AI, machine learning, as well as tools to
Speaker 1: support clinical staff and caregivers over the next five years.
Speaker 1: Our next guest involved in this deal space. We're talking
Speaker 1: to use of Saban, managing partner at Acuity, joining us
Speaker 1: from London. Use Off, How are you good? How are
Speaker 1: you doing? We're doing pretty well. Thanks. We've really got
Speaker 1: a great healthcare theme with today's show, understanding biotech, especially
Speaker 1: investments in the space. We've reported a lot in recent weeks,
Speaker 1: and big thank you to our team and Silicon Valley
Speaker 1: about the belt tightening that we're seeing at startups, even
Speaker 1: major tech companies like Meta Platforms and PayPal and Twitter
Speaker 1: either announcing layoffs, freezing hirings, or in Twitter's off case,
Speaker 1: rescinding offers. What are you seeing from from your position?
Speaker 1: We get asked a lot if this downturn is different
Speaker 1: than than previous ones, and we believe it is, but
Speaker 1: so were all other previous ones, and the keys to
Speaker 1: focus what led to the recession right before it happened.
Speaker 1: There have been three recessions since in the last quarter
Speaker 1: of years, since eight and more than double dot number before.
Speaker 1: Only one lasted over a year. That was thirteen years
Speaker 1: ago in two thousand and eight, and and that was
Speaker 1: the only one that was remotely comparable to the current
Speaker 1: pull back. With respect to the VC industry, and and
Speaker 1: and since then things have evolved materially. Banks have stronger
Speaker 1: liquid teach LPs have hired dry powder, and the evolution
Speaker 1: of technology is much faster than it was, so I
Speaker 1: we personally believe that there will be a faster course
Speaker 1: correction um and and healthcare is fairly uncorrelated to the
Speaker 1: market as far as patient sickness, so we should see
Speaker 1: a more rapid recovering becoming boss. Is the space different
Speaker 1: than other traditional venture capital spaces because life sciences and
Speaker 1: Caroline talked a lot about this, the resilience of life sciences,
Speaker 1: especially in the context of real estate. Carol, because we've
Speaker 1: seen a lot of investment in real estate around the
Speaker 1: country when it comes to life sciences, because it's one
Speaker 1: area where that perhaps I mean that advocates would say
Speaker 1: is is recession proof. But you said, do you see
Speaker 1: it differently than than other areas where you where venture
Speaker 1: capitalists you invest. We do, indeed. And as far as
Speaker 1: your port on real estate, it is uh incredibly tough
Speaker 1: today to find lab space for interesting for the computes
Speaker 1: in that that we're looking at, especially in the Boston
Speaker 1: area where most of them are faced. UH, lab space
Speaker 1: is getting increasibly expensive to get increasing these cars and
Speaker 1: they have to get significantly out of Boston to to
Speaker 1: be able to find lab space. So yes, we see
Speaker 1: quite a few issues with really stayed. But looking at
Speaker 1: the broader VC industry, I mean, in the first quarter
Speaker 1: of two thousand twenty two, ten point four billion dollars
Speaker 1: was invested in globally tech startups, which is off from
Speaker 1: the previous quarter where we had a little over sixteen
Speaker 1: billion invested. And we saw huge health take deals that
Speaker 1: saw their their evaluation half quarter lobal quarter and and
Speaker 1: the Q one two mega round fundraising tally for healthcare
Speaker 1: what's much smaller than any single quarter going back to
Speaker 1: Q two twenty. So as far as health care, we
Speaker 1: believe that that mental health and telehealth segments will continue
Speaker 1: to generate strong demand and investor interest, but also as
Speaker 1: a defensive sector, pioneering therapeutics will rebound faster given the
Speaker 1: uncorrelated relationship between thickness and market sentiments. So, you know,
Speaker 1: it's interesting when I was looking at your website earlier
Speaker 1: on today and for our interview, you know, you guys
Speaker 1: talk about new science um and voids in the new
Speaker 1: science and tech space, what what are the voids in
Speaker 1: new science and tech space. You just talked a little
Speaker 1: bit about it, because I sometimes think when we're talking
Speaker 1: about disruption innovation in healthcare and and science in the
Speaker 1: science space, we're thinking like metavers is in the in
Speaker 1: the medical community, as we talked earlier. But when we
Speaker 1: talked earlier with the head the CEO of color right,
Speaker 1: you know this is about shots and vaccines and just
Speaker 1: something that sounds so basic, But that's innovation and disruption
Speaker 1: if you think about making sure it's all accessible. So
Speaker 1: how do you think about new science and the voids
Speaker 1: and new science and where you want to put your
Speaker 1: investment dollars. So for as ASPIS, we're concerned and less
Speaker 1: with the technology is truly disruptive. We believe that commercialization
Speaker 1: will continue to be challenging. We will see significantly reduced
Speaker 1: interest rate into ME two technologies that which is an
Speaker 1: area that we try to actively avoid. We look at
Speaker 1: health care from a much broader perspective than a pure
Speaker 1: life science is fund were focused on five subsectors, which
Speaker 1: are biopharma, devices and diagnostics, digital health, sensors and wearables,
Speaker 1: and consumer health. And so we look at healthcare not
Speaker 1: just as a way to try and find the last
Speaker 1: the latest UH biotech firm that will develop the latest
Speaker 1: f aproved drug that but more as a way to
Speaker 1: keep healthy people healthy, to improve health care access, to
Speaker 1: lower the cost of health care. And so those white
Speaker 1: spaces that you've seen on our website is something that
Speaker 1: we actively look for to to try and improve outcomes.
Speaker 1: And for instance, I'll give you the example of one
Speaker 1: of our portfolio companies, which is a Boston based company
Speaker 1: called just got about thirty seconds, go ahead, yeah, please, yes, yes,
Speaker 1: which is a company that has developed a new process,
Speaker 1: new design, and new pathway to reduce the cost of
Speaker 1: biologist manufacturing by over and so this is this is
Speaker 1: going to change the game as far as UM disrupting
Speaker 1: a three billion dollar industry that's dominated by the same
Speaker 1: four companies, and that's indicated for the last forty years.
Speaker 1: Those are the kind of like the paces that we
Speaker 1: look to to to film talked to a lot of
Speaker 1: Americans who are paying for the cost of drugs and
Speaker 1: they would argue that that is one here that has
Speaker 1: not been disrupted really and and could use it UM
Speaker 1: really fascinating. Look forward to catching up with you again.
Speaker 1: Usef Saban I, managing partner of Acuity, joining us on
Speaker 1: the phone in London. This is Bloomberg Business Week with
Speaker 1: Carol Masser and Bloomberg Quick Takes Tim Stenovic on Bloomberg Radio. Well,
Speaker 1: the summer Blockbusters season already underway thanks to the long
Speaker 1: waited sequel to Top Gun. We're talking about Top Gun.
Speaker 1: Maverick with Tom Cruise, hit the big screen this past weekend.
Speaker 1: Everyone here is the best there is. Who the hell
Speaker 1: are they going to get to teach us? Captain Pete
Speaker 1: Maverick Mitchell, let me be perfectly blocked. You are not
Speaker 1: my first choice. If you were here at the request
Speaker 1: of Admiral Kazanski a k a iceman. He seems to
Speaker 1: think that you have something left to offer the Navy,
Speaker 1: but that is I can't imagine you'll have do respects her.
Speaker 1: I'm not a teacher. I just want to manage the expectations. Yeah,
Speaker 1: that's what I would say to my bosses. I'm just
Speaker 1: trying to manage expectations. So't I'm just kidding. Get on
Speaker 1: your motorcycle and go a hundred. I just want a
Speaker 1: nickname like Maverick. I just gotta tell you a top
Speaker 1: Gun Maverick took in a hundred and twenty seven million.
Speaker 1: I think that was one of the latest numbers I saw.
Speaker 1: And it's three day opening and an estimated a hundred
Speaker 1: and fifty six million over the four day holiday weekend
Speaker 1: for a record Memorial Day take. It did well. It
Speaker 1: did well. Part of that had to do with Kelly
Speaker 1: gil Blam, our entertainment reporter here at Bloomberg News. She
Speaker 1: joins us on the phone from Los Angeles many times
Speaker 1: did she see She's seen it twice already, Kelly, how
Speaker 1: are you twice? Was that for work or just because
Speaker 1: you loved it? You know? Part of it is my
Speaker 1: you know, terrible task of work in which I have
Speaker 1: to see the greatest movies, um in the world. Uh.
Speaker 1: And then also just you know, I had to also
Speaker 1: see if my husband, the biggest top guns fan, you
Speaker 1: really enjoyed it. I gotta go see it. I'm waiting
Speaker 1: for my dad. We're going to see it this summer. Okay,
Speaker 1: So is it a good movie? First of all? Oh, yeah,
Speaker 1: it's really good. It's um, you know, a very classic blockbuster.
Speaker 1: You know, there's big stunt that you can only really
Speaker 1: get the full enjoyment of on the big screen and
Speaker 1: the uh classic Hollywood movie star and Tom Cruise, who
Speaker 1: is still in top form at nearly sixty years old.
Speaker 1: What's remarkable to me is, given how long his career
Speaker 1: has been, how well this film did, and how it
Speaker 1: blew his other records out of the water. I was
Speaker 1: surprised to see that his opening weekends haven't been as
Speaker 1: high as I thought they would be. Kelly, No, I
Speaker 1: think a lot of reporters, when they started to write
Speaker 1: their story is about this, looks through the old data
Speaker 1: and we're shocked that he's never had a hundred million
Speaker 1: dollar domestic opening. He's not even had close to one.
Speaker 1: The closest that he ever had was in two thousand
Speaker 1: five with More of the Worlds, which made sixty five
Speaker 1: million dollars, and this has doubled that, not even risky
Speaker 1: business going way back. So the one that made him star. Yeah,
Speaker 1: although you know there's some inflation that is working in
Speaker 1: the favor of top Gun Maverick too. Alright, so tell
Speaker 1: us you know, um this movie. First of all, I mean,
Speaker 1: how did it compare with other pre summer summer blockbuster
Speaker 1: openings pre pandemic. I guess I would say I think
Speaker 1: what you're seeing is something that's like what we would
Speaker 1: see before the pandemic. So I would say it is
Speaker 1: just comparable to that, which is great news because it's
Speaker 1: been a really long time, uh since we've seen a
Speaker 1: film that wasn't based on something to do with comic books. Uh. Really,
Speaker 1: you know, a cold of people's attention, get people to
Speaker 1: get off the Netflix and get off whatever streaming service,
Speaker 1: get out of the house and buy a movie ticket. Um.
Speaker 1: So this feels very much like and maybe even before
Speaker 1: that in terms of a start of summer movie going.
Speaker 1: Was that an Avengers diss that you just did not
Speaker 1: at all? But it's it's just we're so used to
Speaker 1: seeing those. Uh, you know, the Hulk is at your
Speaker 1: door as we speak, Kelly. I'm just going to tell you, Kelly,
Speaker 1: we have some interesting data from Bloomberg Intelligence about the figure.
Speaker 1: You know, the latest data, so a hundred sixty point
Speaker 1: five million dollars in the US and Canada from its
Speaker 1: opening day through Monday. That's what uh, Paramount Pictures, the
Speaker 1: producer said, So they just updated it. This is according
Speaker 1: to your latest story, this figure you write raises the
Speaker 1: prospects for the first real summer movie going season, and
Speaker 1: it suggests that the industry could actually recover to eight
Speaker 1: five of its previous high annual tickets, all more than
Speaker 1: eleven billion dollars. That's according to Bloomberg Intelligence, So we
Speaker 1: could eventually get back to what we saw pre pandemic,
Speaker 1: partly thanks to top Gun. The question is, does does
Speaker 1: this film after people see it, get people who've been
Speaker 1: avoiding theaters for two years back to see other films.
Speaker 1: I think it does. Um, you know, it's hard to
Speaker 1: say whether that's still going to be a very male
Speaker 1: dominated trend because it has been mostly men that have
Speaker 1: been going, uh, you know, through the past two years.
Speaker 1: And also for this movie. Um, and the word of
Speaker 1: mouth of this was so strong and people were so
Speaker 1: excited about it. I think, you know, in the demo
Speaker 1: that it was trying to reach. It definitely reminded them
Speaker 1: of why the theater is different from your home. And
Speaker 1: I do think they'll keep coming back. Um. You know,
Speaker 1: the actual theater stocks kind of didn't do that well today.
Speaker 1: You think they would have had a bigger boost. And
Speaker 1: I think there's still some question about other audiences because
Speaker 1: you know, as excited as we were after this weekend
Speaker 1: with the performance of Top Top Gun. You know, a
Speaker 1: week ago we were talking about a new film that
Speaker 1: came out down to Nabby, Uh, sequel to a pre
Speaker 1: pandemic movie that was kind of a surprise hit, and
Speaker 1: that was the primary demographics about as older women, and
Speaker 1: they did not turn out they were not really that interested. Um,
Speaker 1: so you know, can they have a really broad appeal
Speaker 1: because it's not just men that you know, we're going
Speaker 1: to the theater before the pandemic. It was families and
Speaker 1: women and people of all ages. Uh. That's kind of
Speaker 1: the question now that we need to answer, right, although
Speaker 1: I think I know in your stories is almost six
Speaker 1: percent The audience was male. Fans were over age fifty
Speaker 1: five likely meaning they called the they recalled the first
Speaker 1: Top Gun, so it was kind of nostalgia at playing.
Speaker 1: We got listened a minute, Kelly. Um, I am curious
Speaker 1: about the Taiwanese and Japanese flags. I mean they got
Speaker 1: politic call. Yeah, this was a fascinating wrinkle and um
Speaker 1: shout out to the Wall Street Journal for some of
Speaker 1: the reporting they did. Um kind of documenting. There was
Speaker 1: a breakdown. Initially had a big investor, ten Cent, which
Speaker 1: is a Chinese tech company that was like, yeah, this
Speaker 1: will be great for US. Um, you know, this is
Speaker 1: a sure fire hit. But as kind of relations between
Speaker 1: the US and China got more difficult. Um being a
Speaker 1: part of this really pro kind of US military or
Speaker 1: US power film caused him to have to pull out.
Speaker 1: And then you know this kind of thing about the
Speaker 1: flag on on Tom Cruise's bomber jacket erupted. So there
Speaker 1: was some interesting underpinnings here in the political world of
Speaker 1: between the US and China. A right, while the summer
Speaker 1: often running. Kelly, thank you so much, Kelly Gilblam. She
Speaker 1: is entertainment reporter at Bloomberg News, joining us on the
Speaker 1: phone from Los Angeles Journal. Yeah, but you let me drive?
Speaker 1: Oh no, no, no, no, who's all right? I'll do right, Gravels,
Speaker 1: I want to drive. It's a good question. Drive. This
Speaker 1: is the drive to the clob Well Don on Bluebird Radio. Right,
Speaker 1: TikTok everyone. Uh, We've got about ten minutes left in
Speaker 1: today's trading session. Bouncing around yet volatility is certainly the
Speaker 1: name of the game here in two we are off
Speaker 1: our highs and loads of this session. What does it
Speaker 1: mean on this last day of trading in May the
Speaker 1: NASDAC justest up about sixteen points down down seventy six.
Speaker 1: As you heard from Doug in the S and P,
Speaker 1: just down about seven and a half. Jack Murphy is
Speaker 1: co chief investment officer at Easterly Investment Partners. Jack joining
Speaker 1: us this afternoon on the phone from Beverly, Massachusetts. Jack,
Speaker 1: how are you. How are you today? Good? We're good.
Speaker 1: We're trying to make sense of kind of a wacky
Speaker 1: trade today. Is this all about end of the month rebalancing?
Speaker 1: Because because I don't know, well, i'd say that there's
Speaker 1: a there's a lot of noise all the time at
Speaker 1: the end of months, and there's been a lot of
Speaker 1: noise in the market the last few months overall. Uh,
Speaker 1: I'm not sure what people are focused on today. Uh,
Speaker 1: you know, we kind of take a little bit of
Speaker 1: a longer term view, um, and so you know, day
Speaker 1: to day events really don't overly affect this. But no,
Speaker 1: day to day might not. But what about YOURR to date?
Speaker 1: I mean, if you think about the trend line right? Uh.
Speaker 1: We were kidding at the top of our our broadcast, um,
Speaker 1: Jack about you know, selling may go away, and I
Speaker 1: feel like, well, we've already been selling this year, So
Speaker 1: I do wonder, you know, kind of what is the
Speaker 1: next next trend. We're trying to figure out bottom in stocks,
Speaker 1: We're trying to figure out the top and rates. We're
Speaker 1: trying to figure out peak inflation. Like there's just so
Speaker 1: many different questions and yet, you know, it doesn't feel
Speaker 1: like the financial crisis. It doesn't feel like necessarily two
Speaker 1: thousand one. How do you see this market environment and
Speaker 1: the opportunit unities or lack thereof. Yeah, I mean, we
Speaker 1: we take a very company specific bottoms of focus and
Speaker 1: the companies we get on the phone, and you know,
Speaker 1: we tend to focus on companies with pretty good balance
Speaker 1: sheets and uh, pretty good competitive positions. And I think
Speaker 1: most companies think, you know, business while they can see
Speaker 1: things slowing down over the horizon, uh, you know, they don't.
Speaker 1: They haven't seen that yet. And you know, most of
Speaker 1: the banks outside of mortgages haven't seen a lot of
Speaker 1: credit issues yet. But we suspect that might still come.
Speaker 1: You know, in the industrial space, if you have sort
Speaker 1: of a long cycle business, and we focus on a
Speaker 1: lot of companies with longer cycle businesses, you know, they're
Speaker 1: they're they feel really good about their cash flows or
Speaker 1: where their turnarounds or the opportunity of China reopens. And
Speaker 1: you know how much this Russian noises is noise to
Speaker 1: a lot of companies because it's not that big a
Speaker 1: component of most people's revenues. You mentioned longer cyclical businesses.
Speaker 1: Those are the companies that are among those that you
Speaker 1: focus on. So give us a couple of either more
Speaker 1: specific sectors or we would love some names. I know
Speaker 1: our our investment audience would love names. Yeah. One of
Speaker 1: the ones we've had been involved in for a couple
Speaker 1: of years now is invent, which was the company that
Speaker 1: spun out of Pentero a couple of year a few
Speaker 1: years ago. And you know, they're really involved with electrifying
Speaker 1: grids and hardening grids and thermal protection and grids. And
Speaker 1: you know, their orders have been good, their outlooks been good.
Speaker 1: I think the relative market shares are pretty strong. UM.
Speaker 1: So they have been yeah m VT UM. You know,
Speaker 1: so they're pricing to recover their rows and their orders
Speaker 1: have been good. Their balance she's pretty good. They've done
Speaker 1: a lot of really smart m and a UM and
Speaker 1: the evaluation is still compelling. You know, we value everything
Speaker 1: on free cash flow and it's still trades of the
Speaker 1: discount to most of the things in the industrial space.
Speaker 1: And I think they think they think business is great
Speaker 1: right now. Yeah this year, uh, and it's about a
Speaker 1: six billion dollar company. What's another one, Jack, you know,
Speaker 1: luckily our biggest positions Unilever um in interesting would say,
Speaker 1: you know, so you know we've been involved in stocks
Speaker 1: for trying is uh just kind of stuck their nose
Speaker 1: in the past, um, And I think you know that
Speaker 1: they proved to be an adult in the room in
Speaker 1: board discussions. I think you only ever probably has needed
Speaker 1: some of that over the last four or five years.
Speaker 1: It has not been a good stock for us a
Speaker 1: year to date, and we're involved from last year. So
Speaker 1: obviously it's you know, we're getting a little bit of
Speaker 1: payback today. But it's been tough, um, you know. But
Speaker 1: they are doing the right things there. They aren't emerging markets.
Speaker 1: They you know, with two thirds of their business and
Speaker 1: emerging markets. They do buy back their stock, They do
Speaker 1: pay a really healthy dividend yield. You know, the valuation
Speaker 1: is compelling. I think there's a lot of room uh
Speaker 1: for improvement here and you're you're getting it at a
Speaker 1: sort of this discount valuation. I think a lot of
Speaker 1: the you know, the people, a lot of people in
Speaker 1: Europe are probably saying, you know, we could ignore this thing,
Speaker 1: or we could be short this thing in the past,
Speaker 1: and and maybe with some positive direction at the board level,
Speaker 1: you can't take that position any longer. So I think,
Speaker 1: you Labor is a pretty good idea here. You know,
Speaker 1: it's interesting. I've talked with Allen the CEO. Certainly I
Speaker 1: did that during the pandemic, and it does feel like
Speaker 1: it's a company that is thinking about, you know, some
Speaker 1: of the things that can umers want, investors want in
Speaker 1: terms of sustainability and s G initiatives to some extent,
Speaker 1: and I think, yeah, we'll have to see where it goes.
Speaker 1: Is to mention, I mean the a d R that
Speaker 1: trades in the US is down about ten percent. Uh,
Speaker 1: and we will ultimately see where it goes. Um. What's
Speaker 1: another name that you like or that you hold? You
Speaker 1: don't leave your said is your biggest position? Yeah? Luckily? Um,
Speaker 1: luckily today, I guess you know, one of the there's
Speaker 1: another you know, And I think our take is, look,
Speaker 1: you know, growth stocks have come down a lot, but
Speaker 1: the value the valuations of growth stocks still trade above
Speaker 1: a twenty five year trend, and and value stocks have
Speaker 1: kind of done okay this year, but they're still be
Speaker 1: below with twenty five year trend. So we think this
Speaker 1: kind of rotation continues. Um. You know, but well that's
Speaker 1: what I do. Think you should take a less cyclical
Speaker 1: posture here. And we've got a bunch of stuff and
Speaker 1: consumer stables we like. You know, one of those is
Speaker 1: a weird company called c Board SEB is the ticker UM.
Speaker 1: This is sort of an agricultural conglomerate that's involved and
Speaker 1: you know, they have a big pork business. They have
Speaker 1: a big uh they own a fifty joint venture in
Speaker 1: a Turkey business. They do some shipping of commodities, they
Speaker 1: have a commodity million trading business. They're just are about
Speaker 1: to start a plant that's going to make renewable biodiesel.
Speaker 1: So they do a lot of interesting things. Uh. No
Speaker 1: one's ever heard of this company. Yeah, the volume is
Speaker 1: so low. It's stock though, so it's you know, you're
Speaker 1: you're you're getting that in the stock price, right um.
Speaker 1: And and you know it's controlled by one family that
Speaker 1: hasn't proven to be overlea shareholder friendly in the past.
Speaker 1: But I think if you do breakup value in the
Speaker 1: stock are normalized the margins for the different businesses. Um
Speaker 1: you get it, you can get a huge price target
Speaker 1: here relative to the to the current stock price. You know,
Speaker 1: we can value this thing as high as thirteen or
Speaker 1: fourteen thousand dollars a share, which would be a triple.
Speaker 1: You don't find many of those, I think in the
Speaker 1: consumer stable space, and so that's what we think. This
Speaker 1: one's really really interesting. Park Marine sigre in alcohol commodity trading,
Speaker 1: which is why you understand they're playing a lot revenues
Speaker 1: coming out of the Caribbean, Central and South America. Fascinating play.
Speaker 1: Makes me kind of want to get to get their
Speaker 1: CEO on and talk a little bit more about what
Speaker 1: they are doing. Hey, Jack, thanks for talking names with
Speaker 1: us and also giving some of your macro. But I
Speaker 1: love when we can dig and drill down deeper. As
Speaker 1: he said, bottoms up. They're looking at these companies. Jack Murphy,
Speaker 1: portfolio manager, co chief investment officer at Easterly Investment Partners.
Speaker 1: They've got some two point seven billion in assets under management,
Speaker 1: joining us on the phone from Beverly, Massachusetts. Thanks for
Speaker 1: listening to Bloomberg Business Week, download the podcast on iTunes, SoundCloud,
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