Party Like it’s 2027
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Why does February feel like the longest month?
Why does the shortest month of the year sometimes feel like the longest? You don't have to wake me up when February ends because Motley Fool Money starts now.
I'm Rick Nars, and today I'm joined by fellow analysts, Jason Hall and Travis Hoyum. We're going to take a look at the potential bidding war for PayPal and a new wrinkle in the Warner Brothers discovery buyout battle. But first, we all have a type. We all have the kind of stock that we gravitate to as an investing style or an industry. Sometimes we find ourselves falling for an unlikely, if not outright surprising investment. Maybe it's a stock that isn't actively followed by most of our fellow fools. It's okay to venture out of your comfort zone of your radar. This is a safe space, so it's time to fess up.
What unlikely stocks are the analysts willing to give up their Fool card for?
What are you willing to give up your Fool card for? Jason, let's start with you.
I will admit that over my 15 years as an investor and as a Fool, I've certainly become more Tom than David. That means that I might not have to give up my Fool card for this one, But the stock that I'm going to talk about is one that Tom actually sold out of almost all of his services in 2024, and that's Live Oak Bank shares.
What do you like about Live Oak?
It's a combination of specialization, but also extremely high-quality origination. This is a bank. It's a little bit anachronistic because they count on the people that give them capital, the depositors, to be a different group than they're lending to. Their depositors are basically online savers. They pay high yield in their online savings and CDs, but they lend to small businesses. But it's the combination of specialization and extremely high-quality origination that I really like. Lenders make mistakes by either going into markets they truly don't understand, or just staying at the table or staying on the dance floor while the music's playing, and then making bad loans as a result. Live Oak's founder and CEO, Chip Mahan, he's one of the OGs in online banking.
But it wasn't just building the tech and the platforms and moving banking out from behind the teller desk and moving it to the internet.
What is the potential buyout chatter surrounding PayPal?
It was also building lenders that don't make bad loans. For Live Oak, it lends to small businesses, but it just focuses on specific verticals. It actually builds out a team of in-house experts on those verticals before it starts to ramp up its lending. As a result, not only does it lend responsively, but it has another benefit, especially against community bankers and also against a lot of large bankers that don't really do the same thing. Let's say you're a vet, and you own a couple of vet clinics, and you want to borrow some money to improve your technology. There's a very good chance that your Live Oak banker has helped a dozen other vets do the same thing. That's a very important resource that's a value add that you get.
It's also one of the largest small business administration lenders. That's big value. It gives it an edge against a lot of small banks that just don't know the process the same way. And it's also great for investors, because the SBA loans are backstopped, and that reduces the risk.
What makes it different from the other stocks you've gone out with before?
It's interesting, because this is a big bank. It's a multi-billion-dollar valuation company, and they've got billions of dollars in assets under management.
How will the Warner Bros. Discovery love triangle play out?
But I've never really had a lot of exposure to small businesses. The combination of tariffs and trade pressures and inflation over the past year we've seen that that impacts small businesses in far outsized ways compared to enterprises. So, that exposure is something that I haven't gone through before. But here's the funny thing that's happened over the past year. Mahan and his team have shown their chops. Shares are up almost 20% over the past year. That's handily beating the market. And if we look at from the tariff tantrum lows, the stock is basically double the S&P 500. So, it's a business that's really delivering well in the tough environment.
What about you, Rick?
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Chapters
8 chapters
1
Why does February feel like the longest month?
0:05–0:53
2
What unlikely stocks are the analysts willing to give up their Fool card for?
0:53–2:22
3
What is the potential buyout chatter surrounding PayPal?
2:22–3:40
4
How will the Warner Bros. Discovery love triangle play out?
3:40–4:48
5
What makes Live Oak Bank an attractive investment?
4:48–5:57
6
What are the advantages of investing in Upbound (UPBD)?
5:57–7:11
7
What is the disruption story behind Hims and Hers?
7:11–8:20
8
What predictions do the analysts have for the market in 2027?
8:20–17:26