3-Stock Lunch: Tesla, McDonald's and Birkenstock

Time for today's the three stock lunch. We're taking a look at some of the top calls of the day to kick off the week here with our trades is Jerry Castellini. He's president and CIO of Castle Arc management. It's good to see you, Jerry. Let's start with Tesla on a big 7% pop today. Wells Fargo is still sticking with its underweight on the stock, but they added it to its tactical ideas list for the third quarter. Are you a fan of Tesla here, Jerry? So I'm yes, long term, the short term game here I still think is going to be dominated by this interplay between all the capacity for pure E VS that are coming on in the United States versus the much longer term and much more encouraging story that Tesla has. And if you think about it today, it's big move is both short covering and good numbers in China. I don't think the market's paying much of anything for China numbers because they're, they're too volatile. And quite frankly, I, I just don't see today you're going to be able to solve the equation of all of this new capacity that's hitting the market in the pure EV market in the US. So I, I would be a seller here on that premise. At the same time, don't give up on this name. When you think about it, at some point you're going to be able to put a, an intelligence advanced computing, a a variety of different ideas on Tesla that isn't being captured today. And is it going to be dependent on EV sales that's coming? I think that's in the next nine months. Basically, think of it as GM doesn't have an LLM that they're trying to construct. They're not building out data centers that's going to pay us all as Tesla long term shareholders. But today I wouldn't, I wouldn't be chasing this at all. All right, let's move with up next to Wells Fargo, sticking with an overweight on McDonald's as the firm sees potential upside for the fast food chain in the second-half. Shares down more than 15% year to date. Your take on McDonald's? Yeah, I think for McDonald's to come in 15% in a, in a more benign economic and consumer spending outlook, this should be enough. Big, dominant, great company. Think about the way they're positioning themselves strategically. I mean, I, I use the analogy, Walmart has been very successful in its history of leaning into tougher consumer times with their with their pricing model. And in a way this is really with the value menu. This is what McDonald's is doing right now as well. They've paid for that by people pulling their estimates over the next few quarters because they're they're giving it back in margin. But if you go back over time, you'll see that the big dominant players in most businesses tend to outperform after you get through these cyclical hiccups. And you really have to call this a much tougher economic environment going forward, which we do not for, for this not to be a great entry point for McDonald's. All right, McDonald's leaving it there. And the final name is Birkenstock, whose shares are rising earlier. They're slightly higher now. But UBS, this was the call today. They upgraded the stock to buy from neutral, hiked the price target to 85 from 52, citing their success in their expansion strategy. A lot more love for Burke these days. Are you among them? So Full disclosure, I do not own a pair nor do I intend to anytime in the near future. Me either, but I know. Pardon me either. Tyler, you probably have a couple pairs. No, I got ugly toes. Same. That's all pairs to it. That said, the way generally investors succeed with fashion names is you let you let the time run out of the clock on their fashion. These guys have hit it very well since they've come public. They're now in a very desirable place where the market is giving them credit for the direct to consumer side. And I think we should let that let that clock run. I know I appreciate the fact that it's very well captured in a really fat healthy 40 multiple. But at the same time, you know, we don't know how big this market can be. And when you see success like this and it's and it's not athleisure, right? If they're not shopping at Nike for gym shoes, maybe these funny things on your feet or what everybody wants to wear. All right, there you go. He likes the stock leaving the shoes. Jerry Castellini, thanks so much for joining us today. We appreciate your time.