In this episode of Best Stocks Now, Bill Gunderson and Barry Kite discuss the latest developments in the stock market as we step into May. The focus is on April’s record-breaking market trends, with the Dow surging and the S&P reaching new highs. Yet, beneath the surface, some sectors like chip stocks struggle. The episode delves into geopolitical risks affecting financial markets and the perception bias fueled by media agendas.
He’s been seen on CNBC, the Fox News Channel, and the Fox Business Channel. His articles can be found on MarketWatch, Seeking Alpha, TheStreet.com, and many other places. He’s the author of the weekly Best Stocks Now newsletter and the inventor of the Best Stocks Now app. He’s president of Gunderson Capital Management. Here is professional money manager Bill Gunderson.
SPEAKER 05 :
And welcome to the Friday. It is the May 1st. Welcome to May edition of the Best Stocks Now show with professional money manager Bill Gunderson of Gunderson Capital Management. And I’m here with Barry Kider, Charter Financial Analyst. It’s another update in the market so far, but it’s not as good underneath the surface as it might seem on the surface. At least so far, the Dow is up 330 points, however. to 49,983. The S&P is hitting a new all-time high today, up 55, after the best April in five years. The S&P is at 7,263. The NASDAQ is up 273 right now, 1.1%. I think a lot of that’s Apple. I got to look and see what’s driving that. The memory stocks and the chip stocks are not that strong today. The NASDAQ is at 25,162. That all-important light sweet crude commodity is down today. Let’s see. Brent crude is down 2.2. Crude is down 4% today. That’s good. That’s going to help the markets throughout the day. Crude is down to $100.74 per barrel. We’ve got gold down a little bit. No, it’s up 18 basis points, and the 10-year is sitting right now at 4.40. That’s elevated. It needs to come down. Welcome to today’s Best Stocks Now show with professional money manager Bill Gunderson, and I’m here with Barry Kite. our chartered financial analyst. And Barry, it’s another update in the market. How do you like that call that I made? On April the 8th, this was the best April in five years. Let’s put an exclamation point on that, huh?
SPEAKER 03 :
Yeah, no, that was great. I mean, it was a pretty remarkable call. I think the S&P was up over 10% in the month of April. And, of course, you wrote that they finally published that article on the 6th of April. And then, of course… The NASDAQ, I saw, was up over 15% in April. Wow. Just a blowout month that we haven’t seen, like you said, in over five years. I think it’s been 2021, I think, since we saw that. Wow. That’s the last time we made a big call.
SPEAKER 05 :
The market had a huge day yesterday. We had better than expected earnings reports and economic reports. It was the best month in five years. The Dow was up 1.6% yesterday. It’s good to see oil coming down. I’m not quite sure. I haven’t heard any news coming out of Iran. But oil is down to $100 per barrel right now. That’s encouraging.
SPEAKER 03 :
Yeah, the only thing I’ve seen on the Iran front was that they sent Pakistan its latest proposal for U.S. talk. So apparently Iran sent a proposal to Pakistan. So I don’t know how much of an impact that has, but that’s about the only headline I see in terms of the Iran conflict at the moment.
SPEAKER 05 :
Yes, and I have yet to see Iran deal in good faith. I’ve never seen it happen yet. But who knows? I mean, eventually that blockade gets to them. It’s going to snake them out and they’re going to have to cave at some point. But it does take time. And as I say, I have yet to see Iran a very, very stubborn and proud country or leadership. Let’s call it the leadership of Iran. I’ve yet to see them deal in good faith. In the meantime, do you know how many negative articles I continue to see and how many negative calls I continue to see? on the markets and I have to be honest most of the negative of people that they’re interviewing are coming on CNBC and CNBC has an agenda You can’t have an agenda in the market. Your agenda has to be earnings, earnings, earnings. I don’t care if Biden is president. I don’t care if Kamala Harris is president. Yes. I don’t care if Trump is president. I don’t care if J.D. Vance, Marco Rubio. It doesn’t matter. You cannot have an agenda, and CNBC carries an agenda, and they… They have people on all day long. The latest one, they have three on today or yesterday. This comes from Yoakum Clement, head of strategy at Panmur Liberum. Okay, Barry.
SPEAKER 03 :
I haven’t really heard of that one before. No, as a subject matter expert, what is that?
SPEAKER 05 :
I kind of look at it, it’s like A.I., You can find an expert out there to agree with what your agenda is, and it seems like CNBC will find somebody. I know they do. CNN does it. Fox does it. They all do it. He says equity markets are underpricing geopolitical risk, even as bond and commodity markets show signs of distress. Barry, do you see any distress right now?
SPEAKER 03 :
I mean, we had weekly jobless claims came in at, what, 189,000 yesterday?
SPEAKER 05 :
Really? I didn’t know that.
SPEAKER 03 :
Yeah, well, we had a lot of earnings news to deal with yesterday. But, yeah, I mean, you know, there’s a disconnect, and you’ve talked about it a lot lately, a disconnect between, you know, the nightly news, whichever version of it that someone wants to watch, and what’s happening in the markets. And, you know, I think a lot of that – bias seems to be coming into certain economic reports, whether it’s the University of Michigan Consumer Sentiment Survey, right? 45% of those people are mad that no matter what happens currently because of the administration and who’s in charge. And so that pessimism just kind of seems to be, I call it a veil of pessimism over the market. And if we’re going to surprise in one direction or the other, it’s likely going to be to the upside. But
SPEAKER 05 :
And it’s hard for people to admit when they’re wrong. It’s very difficult for people to admit when they’re wrong. It takes a big man or a big woman to admit when they are wrong. But this guy is wrong. He says, despite an ongoing war in the Middle East and oil prices recently spiking to $126 a barrel, This is just the backdrop behind his statement. The S&P and the NASDAQ posted their best monthly gains since 2020 in April. And here’s his comment on that. I think equity markets are too complacent. God, they look really complacent to me. He said in an interview with CNBC… If you look at bond markets and the movements in treasuries and guilt yields, don’t forget those, Barry. You can find anything. It’s the guilt, damn guilt yields that are going to bring us down. German bonds, et cetera, it looks a little bit more like their hair is on fire. Do you see that? And if you ask a commodity trader these days, their hair is definitely on fire. Well, okay. He says that investors are largely focused on the AI trade. Well, I would say that’s because there’s earnings behind the AI trade. He said the market should instead be focused on geopolitical concerns, which completely flies in the face of what I teach and what I’ve observed during my 25 years. You kind of have to ignore the headlines and the noise and the pundits and the CNBC and the analysts that have an agenda. and focus on the earnings so he’s exactly he’s he’s dead opposite the strategist okay he’s a strategist express caution about hyperscalers despite the ongoing tech rally the moment the cap x guidance explodes investors really don’t like it he said worrying that higher energy prices and memory chip costs will eventually catch up with these companies He sees better opportunities in the software space. That’s probably the worst sector in the market right now. Even the market. Oh, my gosh. And even the market leader, Palantir, is pretty weak stock right now. And he likes hardware focused companies like Apple that are less capital. In other words, they have no exposure to AI. They missed out. And regarding monetary policy, Clement remains confident that the Federal Reserve will cut interest rates in the second half of the year. Well, that’s a good thing. Kevin Warsh is expected to shift focus toward full employment, supporting the labor markets. So there’s pundit number one. Now, CNBC likes to line up several pundits to help back up their agenda. Because in the mouth of… Yeah, in the mouth of three false witnesses lies the truth. The next one we’ll talk about when we come back is somebody by the name of Oscar Lunkowski of Orion Research Partners. He’s worried about disruptions to sulfuric acid supplies. Here comes pundit number two. throwing the darts at the market as it powers to new all-time highs and has the best April, or has the best month in the market, not best April, the best month in the market over the last five years. This comes from Oscar Lanowski, CEO of Orion Resource Partners. He says the artificial intelligence boom faces a significant threat from an unlikely source. old-fashioned mining and materials production. Disruptions to sulfuric acid supplies caused by instability around the Strait of Hormuz could create downstream impacts on critical mineral production that will show up in company earnings reports by the fourth quarter, Lanuski said in an interview with CNBC. the guys to listen to CNBC, he’s blaming sulfuric acid, okay? Like I say, you know, you can line up any verbiage that you want to throw darts at things, but the bottom line is numbers, okay? The fact of the matter is, if you’ve been reading my newsletter, if you’ve been listening to my radio show, I haven’t heard one company warn that we’re going to have to lower guidance because sulfuric acid is not coming through the Straits of Hormuz right now. And that also is taking into account that the Strait of Hormuz is going to remain closed for a long, long time, Barry. Do you see that happening?
SPEAKER 03 :
Right. I mean, our take is that at some point it’s in the world’s best interest, right, for the street to be open. And, frankly, economics and money tends to win at some point, right? And my thought would be that it’s going to be open at some point in the future simply because it’s in the world’s best interest for it to happen. Right. It’s in China’s best interest, correct? A lot of them. A lot of the world’s best interests.
SPEAKER 05 :
Yeah, okay. He says that you have some of the oldest industries in the world, like mining and shipping, constraining some of the newest industries in the world. And that’s a dichotomy that has to yet fully be understood. That’s another thing these experts do. They use words like dichotomy. to make it sound like they’re really smart, right? You know, look, I just see through this. I see through it. Noting that data centers cannot be built without copper, aluminum, and cabling that all require mining. Unlike previous commodity cycles where high prices spurred new supply, the current environment presents unique challenges that will prevent a rapid production response. We need to add mining capacity, and we need it. Well, then we’ll buy the mining stocks, I guess. They should be doing well. Meanwhile, he says Western nations, yeah, Dr. Copper, find themselves approximately 25 years behind China in securing critical mineral supply chains. Have you been watching the rare earth stocks recently?
SPEAKER 03 :
They’re on fire. Yeah, you mentioned it, yeah.
SPEAKER 05 :
USA Rare Earth is the leading industrial stock in the entire market right now. The one from Greenland, Critical Minerals, has been on fire. That’s CRMO.
SPEAKER 03 :
We mentioned that one yesterday.
SPEAKER 05 :
Yes. And MP Materials, which is Mountain Pass, they’re just south of Las Vegas, has also been on fire. Here’s another one from CNBC. In the mouth of three witnesses, somewhere they’re going to scare somebody and blame it on Trump and try to convince us that this is a fake bull market. It’s a fake bull market. So who did they bring on? Berkshire Hathaway director. No, not Warren Buffett. Chris Davis. He is their director. He believes that the current… This is on CNBC again. That’s why I don’t watch CNBC. The current S&P 500 is in a peculiar distortion. Write that one down in your book, Barry. Peculiar distortion characterized by inflated valuations and increasingly narrow market leadership. Well, why not be invested in the increasingly narrow market leadership? And where do they say to turn? Financial stocks represent significantly undervalued opportunities. Financial stocks. How do you spell peculiar? You know, I’m pretty good at spelling. I would have done well in spelling. But you’ve got to add in peculiar distortion. Peculiar distortion. Now, Berkshire Hathaway, well, Davis Advisors, a firm that manages more than $31 billion in assets, sees the banking sector as positioned for a major revaluation over the coming decade. Okay, well, and here’s the next story. The next story is about the financial sector. global watchdog to focus on private credit risk for retail investors a task force that the financial stability board is looking into the potential risk that retail investors face in the rapidly growing 1.8 trillion private credit market according to a media report on friday The group’s task force on non-bank data. So, you know, that’s the thing. You’ve got the banks and you’ve got the non-banks lenders, but the banks are invested. They have a lot of exposure to the non-bank lenders. You know, we found out that JP Morgan is about 20% of the private credit. And I also read another giant, just a giant private credit fund has limited redemptions, you cannot get your money out of it because the redemptions are starting to hit alarming levels that are not sustainable. Relevant tickers under scrutiny right now include Apollo Global, Blue Owl Capital, Aries Management, Blackstone, BlackRock, Prospect Capital, Main Street Capital, Aries Capital, and mid-cap financial investments, and Hercules Capital. All of these come under intense scrutiny from a global watchdog. Well, the global watchdogs are usually going after Meta and Apple and Google and social media, but now they’re turning their watchful eye to the private credit markets. Well, you’d have to say that the big earnings report last night came from Apple. That was the big one. And right now, Apple is up. It’s up 5%. The chart’s not bad. And, you know, Apple is a favorite stock among the CNBC crowd. They love Apple.
SPEAKER 04 :
This is Bill Gunderson. Thank you for tuning in to today’s Best Stocks Now, Best Inverse Funds Now show. I put several hours of research in during the wee hours of the morning each day to bring you the very best cutting-edge stories that I can. To get two free weeks of my newsletter, go to GundersenCapital.com. To talk to us about our fee-based only money management services, call us at 855-611-BEST. Now, back to the second half of the show.
SPEAKER 05 :
On this first day of May 2026… They got a little mile and a quarter race going on tomorrow in Louisville, Barry. I have not followed it this year. I’ve been so busy making money in markets and doing radio shows and writing newsletters. I can’t even tell you who the favorite is. I know it’s going to be cold over there. That’s usually the way it is. The one year I went to the Derby with my father, it was pouring rain. And Unbridled won the race that year in the mud, in the slop. And that could very well be the case again this year. But that’s the first Saturday in May. Mark your calendar, which brings up another subject, Barry. Go away in May has always been the thing in the markets. No two years are alike. You know, I say go away when the earnings start to falter. If it’s May, if it’s December, if it’s a blue moon in August, you know, that’s when you go away. Okay, let’s put Apple under the microscope. And we’re kind of putting Tim Cook under the microscope here. I would say, at best, during the last 10 years, Apple has been a market performer, pretty much. You know, you look over the last 10 years, he’s actually outperformed. He had some early years there where they still had the old magic left. But that magic has been leaving the building. Not that they don’t make a good product. It’s innovation and it’s growth. Innovation shows up in growth, and Apple has not had the growth. The Apple stock has averaged 29% per year over the last 10 years. S&P is 25. So, okay, all right, that’s cool. But now let’s look at the last five years. It’s down to 15.9%, slowing down, decelerating considerably, pretty much in line with the S&P. And over the last three years, Apple has badly underperformed the S&P 500. And Barry, I give more weight to the last three years. But then I get to the last 10 years, correct?
SPEAKER 03 :
Well, yeah.
SPEAKER 05 :
That’s more pertinent.
SPEAKER 03 :
Certainly. And it’s a case of really – it’s kind of like they’ve been just resting on their laurels, right? They’ve built this ecosystem. They’ve built this cash cow. They’ve built this iPhone refresh cycle, essentially, where they kind of – Kind of you’re printing money, but like you’ve mentioned, there’s been no big innovation. There’s been no new exciting product. They’ve serious lagged way behind any other of your AI bots out there. So they’ve got to do something to increase that growth platform. Otherwise, they’re just going to be a market perform going forward essentially.
SPEAKER 05 :
At best. At best. I see them underperforming the market, and I’ll tell you why here in a minute. And the guy that they chose to succeed Tim Cook is a hardware guy. That’s not exactly innovative person, people that are in charge of the hardware design. Now, we go to valuation. So Even more than the last three years where Apple has underperformed the market by a wide margin, it’s even more important now to look at the next five years as far as valuation. Now we’re going up the ladder. The last 10 years, it’s good to know. The last five years is important, but the next five years is crucial because that’s what a person is investing in today. You’re investing in the future of Apple. Apple did guide higher. I have to look at what they’re, they guided higher on growth going forward. I want to say I saw 12 to 13% somewhere out there. But the consensus as of yesterday for the next 10 years is 10% per year going forward. And that’s what my valuation formula currently has baked into the cake. So when I take earnings estimates for next year of $9.36, which may be subject to change a little bit after this earnings report, and I extrapolate those earnings out at 10% growth over the next five years, and then I apply a multiple, I get a $417 target price, which represents 55.6% upside potential, which is a valuation grade of D-minus.
SPEAKER 03 :
And you’re talking about a stock that has a higher P.E. than the market, a 31.8 forward P.E. ratio, and with a 10% earnings growth rate, has a growth rate that’s less than the market. So, yeah, that would kind of lead to that idea that they would potentially underperform the market over that period.
SPEAKER 05 :
Yeah. And the numbers show that. The forward PE ratio is 29. The growth rate is 10. That means you’ve got a PEG ratio of 2.9. You’re trading at three times the growth rate. That is not growth at a reasonable price. It is GARP. It is GARP. I’ll give them that. It’s growth at a ridiculous price. That spells GARP, too. And there is a small dividend yield, like 40 basis points or something. So Apple doesn’t even come close. Now, having said that, I will look at the growth rate and their projections. I haven’t had time to really dig into it much. Maybe we raise that growth rate to 12 or 13 percent over the next five years, which I think is pretty optimistic. That’s going to move the needle a little bit, but I don’t think it’s going to get it up to 80% upside potential. You know, that area, that sweet spot that I like, and it currently has a D minus valuation rating. So, nope, not for me. The chart looks okay, but really, if you step back and look at it, it’s been a long sideways chart. For quite a long time. What was the best performing material stock in April? USA Rare Earth, which we own in our most aggressive portfolio of all, the emerging growth portfolio, USAR. USAR is up 82.5% over the last month. uh that’s pretty good uh mp materials is right up there too uh it also had a very good month let’s see u.s rare earth is up 82.5 in april mp materials the other one we own in that sector is up 44.9 and then it’s the aluminum stocks and the steel stocks kaiser aluminum up 49 percent And Nucor up 37%. You know, Barry, yesterday, I’m up in my seaside retreat this weekend, writing the newsletter, etc. And we go through Georgetown. Okay, now your son is at…
SPEAKER 03 :
Coastal Carolina, right? Right, yep. So we’ve got to go through a piece of Georgetown. Conway? What city is that? It’s in Conway, yeah. So when you kind of take that right in Georgetown, I kind of keep going straight. But we both passed that old steel mill right there.
SPEAKER 05 :
Yes. which they’re going to tear down and put in homes there. Oh, really? Yeah, I don’t know if I want to live on old iron ore.
SPEAKER 03 :
Check that groundwater.
SPEAKER 05 :
Your tomatoes might be misformed. Okay, but here’s my little story on this. A guy at church told me about a hamburger joint, and I’ve been known to chase down good hamburger joints, called Jeanette’s. In Georgetown, I go, man, I drive through Georgetown all the time going up north to Myrtle Beach and Pauley’s. I’ve never heard of Jeanette’s. Have you ever heard of it, Barry?
SPEAKER 03 :
No, I haven’t.
SPEAKER 05 :
I just wrote it down, by the way. Okay. You’ve got to take your son there, okay? So we find it. We go out to Jeanette’s. It’s been there forever. for 53 years it’s just in a little you have to almost bend down that the roof is so low this is five generations they they they their customers were the workers at the steel plant wow the workers at the paper mill the paper mill which is um International Paper, which, by the way, just shut down and is being torn down. And they’re going to build 5,000 houses where the paper mill was. And their third collection of workers and customers is all that’s left. There’s a big sawmill pretty nearby. And the railroad obviously goes through there. So I’m looking at the railroad and seeing how I could model that on my little layout, right? And they’re still hanging on, but the story there was the story of America. It was.
SPEAKER 03 :
Right.
SPEAKER 05 :
Right? Yeah. And there was a guy in there that had worked. I talk to anybody, right, just about. Barry, we’ve got to talk. Before I finish my story, well, let me finish the story first. Then we’ve got to talk about Minnesota, Minnetonka. Minnetonka, Minnesota and Mining Company. We had it out there. But my little story about Jeanette’s Burgers in a little town. Actually, Georgetown’s pretty decent. You know, during the Revolutionary War, George Washington made a track. They call it the King’s Highway. And he went from, you know, up north down to visit the Carolinas. And that’s that road that goes through Myrtle Beach called the King’s Highway, Barry. And he had a friend, I want to say, I can’t remember. He had a friend down here, a couple of friends, very good friends, wealthy Southerners that he came down to visit. Hence, you have the name Georgetown. And you have a lot of, you see all the George Washington references, Barry, as you take your son up to Coastal Carolina, right? uh college there’s a lot uh in this area we lose barry yeah i’m here okay a lot of revolutionary markets oh all along the way there’s revolution not civil they’re civil war markers too yeah there’s both there’s a lot of dead bodies uh laying in those rivers i think that’s why we have plus mud it’s It’s dead Brits and dead Confederates down there and a few blue crabs mixed in. But anyways, I took a picture of the chalkboard inside this little restaurant. And it said, we’re not a bunch of corporate CEOs getting rich off the latest merger. When you buy a hamburger here, you’re supporting baseball clothes for a little leaguer and all this stuff, dance lessons for little girls. And it’s a little family that runs this business. Fifth generation.
SPEAKER 03 :
That’s amazing.
SPEAKER 05 :
And they’ve seen the steel mill closed. They’ve seen the paper mill recently closed. Not only closed, but they’re being torn down. Remember the guy we met with in Sarasota that goes to places like that and hauls off all this equipment that’s worth a lot of money? But it has no use anymore, right?
SPEAKER 03 :
Right, yes. It basically salvages the business or salvages, go in where they’ve got these big warehouses and equipment. Yeah, they’re closing them down. Yeah.
SPEAKER 05 :
Yeah. So he told me that – so I’m talking to a guy in there at the table next to me. He’s by himself. I talked to him about the history of Georgetown and his history. He said that the Georgetown Steel was considered some of the best steel in the world. I didn’t know that. And now, you know, it’s this big empty shell. India came along, Liberty Steel came along and made a go at it, a run at it for a while. But now, you know, they went belly up. And what workers were left, they make steel coiled, coiled. which, you know, is good, but it’s not enough to keep the plant open. The plant is shut down. They’re going to tear it down. The paper mill, he worked there. They make specialty paper that goes into diapers and, like, women’s feminine hygiene products, you know, this kind of thing, absorbent. Yes, that’s what they specialize in.
SPEAKER 01 :
Yes.
SPEAKER 05 :
And, you know, that’s still a decent market, but they are consolidating all that business to a plant in Texas. And let’s not forget that the paper mill down our way on the Cooper River in Charleston between my house and the airport closed, what, a couple years ago? And they made paper. He says all the paper plants have left anymore is cardboard for Amazon. That’s it. That’s it. No more college roll paper, nothing. When’s the last time you bought a newspaper? You know, newsprint came on railroad cars, the newsprint. And I was a paper boy. My first job when I was growing up as a 13-year-old, I had a paper route, and those Sunday papers, they were heavy. There was a lot of paper in those things. And our church had a little thing where we recycled newspaper, you know, as kind of a little project to earn a little money for the church and whatnot. And we owned a paper recycling area plant little thing that made money off of that. Those days are long gone. Where’s USA Today? Where’s the San Diego Evening Tribune, the San Diego Union Tribune, Los Angeles Times in print? Gone, gone, gone. Digital, digital, digital. And that was the death of the paper industry. But, you know, look, progress, it marks the end of the horse and buggies. Henry Ford came along and Oh, man. And so that was really an interesting thing. Boots on the ground in Jeanette’s Burgers in a little town served by three factories, two of them closed, one left. And as you drive through the town, it’s just nothing but wasteland for the most part. There’s very little that’s left in the town. And the entire town of Georgetown, for the most part, is pretty distressed. Now, they want to make it into a big, like Hilton Head. I don’t see it. I mean, Georgetown does not have a beach. They’ve got a long history of dirty industries being there. They’re on the San Pete River, right? The San Pete River. They’re served by railroads. So I don’t see that as a big mecca where people are going to want to relocate and live in beautiful downtown bustling Georgetown. Myself, maybe that’s what becomes of all of that. Okay, last things. Minnesota is filling up. Edie warned me. You know, I say, Edie, it’s never full. It’s never full. If we have to add Friday, Bill Gunnarsson will stay on Friday and meet with folks. And if we have to expand that room where we’re doing the workshop, we’ll figure something out, okay? I say it ain’t full. It’s never full. But it’s full. If you want to reserve a seat to the workshop, I’ll give you an update on Monday about expanding the room. This is a good problem to have. And, of course, we can add. I’ll do two workshops. You know, the Grateful Dead, if they sold out a show, they did a second night. Back to back. I don’t have a problem with that. I love teaching in front of an audience. I am in all my glory standing in front of an audience. And we’ll do two back-to-back nights. Uh-oh, I hear the music. If you want to reserve a spot in Minnetonka, Minnesota at the Marriott, 855-611-BEST. 855-611-BEST. If you want to make an appointment with us while we’re there, I’ll stay through the weekend if I have to. 855-611-BEST. Sample the newsletter, the app, the live alerts. GundersenCapital.com. Have a great day, everybody.
SPEAKER 01 :
This show is not a solicitation to buy or sell any securities. Bill Gunderson or clients of Gunderson Capital Management may have long or short positions in stocks mentioned during the show. Past performance is not indicative of future performance. Gunderson Capital Management is a fee-based registered investment advisory firm. All accounts are held at Charles Schwab. Schwab is a member of SIBC and FINRA.
