The Freight Recovery is in Sight
35:01 Share

I can say to my new Samsung Galaxy S25 Ultra, hey, find a keto-friendly restaurant nearby and text it to Beth and Steve. And it does without me lifting a finger. So I can get in more squats anywhere I can. One, two, three. Will that be cash or credit? Credit. Galaxy S25 Ultra, the AI companion that does the heavy lifting so you can do you. Get yours at Samsung.com. Compatible with select apps requires Google Gemini account results may vary based on input check responses for accuracy.

Now in '23, management teams and other industry experts start perpetuating the end of the downturn because a typical peak to trough is five to seven quarters. That's when you start to see the recovery. But it was a playbook from a different time. The boom was pretty much unprecedented. They needed so much money, truck drivers, that they weren't removing capacity when things started to turn negative.

Hello and welcome to the Barron Streetwise podcast. I'm Jack Howe, and the voice you just heard is Jonathan Chappell. He's a transport analyst with Evercore ISI. Transport is in freight, trains, trucks. There are signs that an unusually long downturn in freight profits is easing. But Jonathan says to be cautious about recent good news. We'll talk about that and hear about his favorite stocks.

Listening in is our audio producer, Jackson. Hi, Jackson. Hey, Jack.

Things are looking better. There's tremendous destruction out in LA, but in terms of the immediate danger from fire, things are looking better near your place. You've told me that's all I've heard about from the past week. People ask me, how's Jackson? How's Jackson? I could be stranded in a hot air balloon. Nobody's going to be asking questions about me, but you, uh, everybody's concerned about you. You're okay. You're back in LA now. You're doing all right. Right? Yeah. I'm okay. We're doing all right. Everybody's safe.

Are there a lot of contaminants in the air? What's the air like where you are? It's funny. I was just reading that you can't trust the, you know, on your phone. Do you ever have the weather app and it tells you how nice the air is? Apparently you can't air quality. Yeah. So I've been going off of that and it says their quality is fine. And so I went on a jog there.

the other day. And then right when I got back from the jog, I read an article about how you can't trust the air quality index because it doesn't pick up all the arsenic and whatever's in the air from the burned homes. So

You'll be okay. I have been warning about the dangers of jogging for years, but I'm sure you're going to be okay. Well, I'm glad to hear that the worst immediate danger has passed in your area. Let's say a few words about just the broad stock market and bond market. How confident are you feeling fresh into 2025 here about your returns for the year? You feel like it's going to be a good one?

I think it's going to be a good one. And you're basing that on? Nothing at all. Just general optimism. Hey, I feel optimism's paid for the last 20 plus years. It has, you're right. I need to look up the actual fact, but I read something that was like millennials who are invested in the stock market expect to get a return of like 20% a year or something.

Yeah, that's not normal, 20% a year. Although I did just see a report. This was from the investment committee at Bank of America. And they listed, I never know how to take these. They list 10 potential surprises for 2025. They call these plausible surprises. And one of them is the S&P 500 returns more than 20% for a third straight year. I mean, that would be good. But to call it a plausible surprise is kind of like saying it's probably not going to happen.

I feel like people have been a little anxious about their returns. I'm looking at the S&P 500 and at the time of this recording, it's up 1% and we're barely halfway through the month of January. That's pretty darn good. If it kept doing that throughout the year, you'd have a humdinger of a third year of stock market gains. But what has made people nervous is some recent volatility. Let me show you what I mean.

On January 10th, there was a jobs report. Everybody's watching now for some kind of clue about whether the Federal Reserve is going to continue to lower interest rates on the belief that those falling rates are what has been driving returns.

We don't know that it's falling rates that are driving the returns, but that's what people are into. So we got a jobs report that was very strong. And if job growth is strong, the economy is strong, the Fed might not have as much urgency to cut rates. And so the Dow Jones Industrial Average on this good news lost 697 points in a day.

And then five days later, we got an inflation reading. Now with inflation, if there's too much of it, the Fed is probably going to be cautious on cutting rates. But if inflation is falling, then the runway is clear for more rate cuts. And what we saw was the inflation rate actually rose. The one month price increase, it was 0.4%. That's for December. And that's up from a 0.3% increase in November.

So that sounds like bad news for investors who are hoping for more rate cuts. But what Wall Street tends to watch is an inflation measure that strips out energy and food prices, which can be volatile. And if you strip those out and you look at a full year measure, here's what you saw. Economists were predicting a 3.3% increase in prices through December. What we got was a 3.2% increase.

Woohoo! Hold your applause, please. But that was enough to send the Dow 703 points higher. If you go down 697, you go up 703. Let me see, where's my printing calculator? You're up a net six points on the Dow. You've had a wild ride. Think of it as a free thrill like the kind that a bungee jumper or a mechanical bull rider would pay good money for.

What's the going rate, Jackson, for riding a mechanical bull in a bar? There has to be a couple of those left somewhere, right? What's the going rate for riding one of those? I've actually never had the pleasure. Is there a price index out there that tracks the rate? I don't know. We're going to have to research that and get back to folks. Call your friends at the Los Angeles Honky Tonk Suds and Steers. Okay, back to that tenth of a point that saved the stock market.

You know, when they report these inflation numbers, they tend to use one decimal place, but when they calculate them, they get more. So the actual number for the month of December, and as I read this number, I want everyone to think back to the rounding rules on decimals that we all learned in like the fourth grade or whatever it was about when you round up and when you round down. The number was 3.248.

And that number, Jackson, you can check my math on this. That number gets rounded down to 3.2%. But it is two one thousandths of a percent away from being rounded up. If there were two one thousandths of a percent more inflation in everything except energy and food,

We would have turned that number into a 3.3% instead of a 3.2%. And then we would have met economists' expectations for inflation instead of beating them.

So they can thank the mechanical bull price index for going down a percent. You've been looking at this since I mentioned it. I can see that you're – what are you on right now on the internet? You can buy an inflatable electric bull riding bull ride machine for just over five grand. Inflatable meaning there's an inflatable surface in case you get thrown, but the actual bull –

You're not riding a balloon, right? Yeah, the bull is not inflatable. But I can buy one of these machines, and it looks like the price went down from $6,500 to just over $5,000. So maybe there's – It's a buyer's market. Buyer's market out there. There's our good inflation print there. What I need to know next is what the market will bear in terms of price per ride. In other words, how quickly could I earn my $5,000 back and –

While you're at it, I'm going to need to know local, like New York City statutes on setting one of these things up in midtown Manhattan. Is there a license? Is it the same agency that does the hot dog cart licenses? Who do I talk to about this? I think anything goes. We'll come back to it.

So the point on rounding decimals, I wouldn't bring up a topic like that if I didn't have to. The point here is that the stock market was saved actually by two one thousandths of a point.

And it makes you think that if that's all that saved the market, maybe we're in a precarious position here. That's what it feels like. But as we have discussed many times in the past, there is no reliable way to predict what the stock market is going to do in the short term. Valuations look a little stretched right now, but they also looked a little stretched well before the stock market had its big run last year.

It's really hard if you sell out of the stock market because you're worried about valuations or worried that we've just had a big run. If you sell out and you're not right about that decision immediately, it's really hard to buy back in. There's people who do that and then they sit out rip-roaring gains for years because they can't bring themselves to admit, oh, I made a mistake. I should have just

stayed where I was. I think one of the things people are concerned about are rising bond yields. The 10-year Treasury recently yielded 4.6%. That's up about a point from where it was last September or so.

But it's still more than a point below its average level of the past half century. Yields are still below average. Even mortgage rates are pretty close to their historical average. I know that won't be much comfort to anyone who's shopping for a home right now and regretting that they missed out on those 3% rates we were hearing about several years ago.

If you're worried about these recent swings we've seen in the stock market and you're thinking about making a change, try not to do anything drastic. I've always thought it's a good idea to create a range for yourself and your asset allocation. I mean, there might be a mix of stocks and bonds that's optimal for you, but you also have to live with your own urges and impulses and feel like sometimes you can do something. You can have some agency, right?

I think it's not a terrible idea if you create some bands for yourself or if you say, you know, I'm never going to be more than just plucking some numbers out of the air. I'm never going to be less than 50% in stocks, but I'm never going to be more than 85%. And I'm going to operate somewhere within there over the long term.

Doing that, I'm sure, is not the mathematically optimal approach, but it is a way to give yourself some bumpers on each side to prevent yourself from making a big mistake somewhere down the road. You might also want to look at your portfolio because stocks have done so well that your stock allocation might be higher than you'd like it to be.

It might have increased without you realizing it. In that case, selling some stocks isn't a bad idea. It'll bring you in line with where you wanted to be. Anyhow, we'll have more to say about the market in future episodes. I just wanted to point out, if you feel like we're off to a wobbly start in 2025, you're not wrong.

Let's shift to freight. I want to give a little context to set up my conversation with Jonathan Chappell. Jackson, you remember when we did that episode, this was during the pandemic. It was about the everything shortage. Yeah, that was May of 2021. And we spoke with the L.A. port and some home employees.

improvement businesses. They had all those ships lined up at the port that people were watching and everyone was having a hard time getting their hands on something. And they were looking at those ships and they were saying, that's where my something is, but we just can't get it into the ports. What's going on? And why are, you know, what's happening with the, with prices and so forth. And then we revisited that subject later that year. Have I got that right? Yeah.

Yeah, in October, we talked about why global shortages wouldn't ruin the holidays. And remember, we talked to the toy shop owner in Chicago who was ordering things early and making sure she had inventory. And there were some early signs that maybe some of the bottlenecks were starting to ease, but there was a lot of apprehension. Everybody was ordering plenty. Yeah, yeah, exactly. Yeah.

So Jonathan and I talked about how the recent freight downturn has been much longer than the typical one. And the reason is that conditions were so extreme coming out of the pandemic. All those shortages, all that extra ordering. Everyone has a story about overpaying for something. I told Jonathan that my something was chimney pipe. I think I talked about how I redid a couple of fireplaces.

If you've never done that, you have no idea how expensive chimney is like insulated chimney pipe. The data service from the St. Louis fed called Fred, they actually publish an index of chimney pipe.

And when I look at it, you know how they say, buy low, right? This thing makes a peak steeper than any mountain on earth. And I caught the top of it. I might've paid the world's highest price. I remember saying to the guy in the store, I said, this stuff's run up like crazy. I said, probably the price is going to come down, you know, real soon, right? He goes, oh no. He goes, that doesn't happen with this stuff. It only ever goes up.

I'm thinking, yeah, right. And right when you left, they broke into the chimney sweep dance from Mary Poppins. High fives all around. So let's pick up the conversation there when the world just started to get back to something that was more normal and what that meant for freight companies. Here's Evercore ISI transport analyst Jonathan Chappell.

Retailers had this very negative muscle memory of the holiday season of 2020, where you couldn't get all the goods you needed. There were supply chain issues. I'm sure you'd heard about the congestion at the ports. At one point, there was something like 100 ships waiting to unload boxes in L.A. and Long Beach. So their response to that was, we're going to order more than we need to make sure we get it.

And there was talk of double and triple ordering of the necessary SKUs for the holiday season of 21. We spoke to some middle managers in some of the biggest retailers in the country who were saying for certain items, they were buying 10X what they would typically buy for the holiday season of 21. Well, then the world starts opening up in 22. You already have all the Pelotons and desks and chimney pipes you need.

And the demand starts to falter. The pendulum shifts back aggressively from goods to services. And in the meantime, all these new trucks that had been ordered during this period of strength start delivering. Now in 23, management teams and other industry experts start perpetuating the end of the downturn because a typical peak to trough is five to seven quarters. That's when you start to see the recovery. But it was very, it was a playbook from a different time.

The boom that we were coming off of was pretty much unprecedented. The capacity made so much money, truck drivers, that they weren't removing capacity when things started to turn negative. And the downturn basically lasted until the fourth quarter of 24. So the premise of the title is in the fourth quarter of 24, there was this theme around normalization. Things aren't getting worse. Pricing's not going down anymore.

Capacity is coming out of the market and oh, by the way, now we have the Trump trade.

Tariffs are going to go into place. That's going to drive another big pull forward. There's going to be another big demand surge just when capacity is coming out. Just to make sure I understand, the tariffs, maybe they could negatively impact trade. But if you're looking forward to that, you're saying, "I better hurry and get some extra stuff faster than I would normally order it." That could be good for trade in the near term. Correct. It was a very short-term view thesis.

My, you know, if I had written this report two months earlier, you know, we basically would have said something along the lines of borrowing from Peter to pay Paul. You know, like it's, you're taking a year, maybe a year and a half of cyclical demand recovery. And the thesis was during the election period, you're going to jam that into six months, which would have been really good for the trucking industry. It would have broken it out of this prolonged downturn. But then I think there would have been another hangover, but yeah,

We think a lot of this happened already. A lot of the pull forward that people were hoping for to recover, help the trucking company recover from our import data, it's already happened. Supply chain managers weren't playing chicken with, oh, I don't think Trump's going to win and I don't think there's going to be tariffs. And by the way, there was this East Coast port strike that may or may not have happened, which thankfully didn't. You had this little uplift in 4Q24.

And I think things will get better. I mean, if you look at our estimates for 25 and 26, we have significant earnings growth. The problem is these stocks had ripped

on this thesis of the end of the recession and the Trump trade and the multiples were numbers we've never seen before. We had to change the Y-axis on our historical valuation models because some of these were trading at 40 to 50 times forward 12-month earnings on the hope of this spike recovery. So the title is, yeah, it's like the worst is behind us. It's going to get better, but it's not going to get good enough to justify these multiples. And it's certainly not going to be good enough to justify the hype that's

that was happening post-election. Thank you, Jonathan. We're going to hear more in a moment about some of the stocks. Let's just sum up what we're talking about. And Jonathan illustrated this with some charts in a recent report.

You have this long downturn in the freight business and pricing, and suddenly last fall you had a surge in imports. You can see all those containers coming in, but there are a couple of problems. One is that import growth is bucking the normal seasonal trends, and another is that it seems to have outpaced final demand. Retail sales, in other words. So that makes it look like a pull forward of demand.

And why would buyers be pulling forward demand? Well, one likelihood is that they're looking at the possibility of new tariffs under the Trump administration. And they're thinking we better buy extra before those tariffs hit. If that's the case, then what investors are seeing as a freight recovery could actually just be this demand pull forward that's going to be followed by a bit of a vacuum. That is what happened before an earlier round of tariffs, 2017, 2018. You had a surge and then a slump.

Now, this nuance wouldn't matter so much if we were talking about stocks that had been beaten down and were sitting at very low prices. But as Jonathan says, some of these stocks have moved well higher. There's been a Trump trade.

Some of them are trading at quite high multiples of what are depressed earnings for 2024. That's on the expectation that this freight recovery is going to lead to much higher earnings. What if the earnings disappoint? Then the shares might be left looking overpriced. So that's the concern, but Jonathan still sees some stock opportunities. We'll talk about those right after this quick break.

Exclusively on ESPN Plus, UFC 312, Saturday. Reigning middleweight champion, Drakus Duplessis, defends his title in a rematch against Shawn Strickland. And Zhongwei Li defends her strawweight title against undefeated Tatiana Suarez. UFC 312, Saturday at 10 p.m. Eastern. Buy it on ESPNPlus.com slash PPV. We serve!

With new McValue at McDonald's, you always get more than you expect every day. So even if gas prices go up, you can buy a double cheeseburger and add a McChicken for $1. Or before game time, you can get $5 meal deals for the group. And if breakfast is about to end, get deals in the app to save before the bell. The choice is yours, and the choice with McValue is always more. Prices and participation may vary. Valid for item of equal or lesser value must opt into rewards for app deals.

Chim, chiminy, chim, chiminy, chim, welcome back. That one stings, Jackson. That's going to stick with me for a while, the image of all those people at the store dancing. Thank you. My pleasure. We're speaking with Jonathan Chappell at Evercore ISI about freight stocks. Let's go back to that conversation. We'll hear about possible trends for 2025 and which stocks investors should favor.

I want to ask you where investors should position themselves. But before I do, you also have a report on some different trends or themes that you're looking at for 2025. Can you run through maybe the two or three that you think are most important for investors to be aware of or ones where you think that they might be caught by surprise? So the first one is one that I already spoke about, which is this pull forward thematic.

If imports stay robust through the first half of 25 and the consumer is not just resilient enough, we've heard about the consumer resilience, they really have to strengthen and they need to be buying a lot of this inventory that's building again. That could be a more cyclical recovery in this industry where demand is more consistent and you're not just playing for short term blips anymore.

The other important theme that we've spoken about or wrote about quite a bit is the manufacturing economy. I think people sometimes just look at imports as the proxy for demand or consumption in this country. And it's very important because we obviously import a lot of goods from China and Vietnam and even Mexico and Canada. But

the domestic production in the US and industrial production, manufacturing. We put another new slide in this report this month on the importance of that to freight transportation. So it can't just be an import-led type of recovery. It needs to be driven by manufacturing and industrial production in the US as well. That's the second one. And then the third one is pricing stability.

These are very, well, it depends on what segment we're looking at, but if we're talking about traditional trucking, it's a very fragmented business. The lowest cost provider is a price maker and the others have to follow suit. The rails and LTL and FedEx and UPS, they're much more consolidated. They have much more pricing power.

If they're able to push pricing above inflation, then that alone will start to drive EPS recovery at those segments of the industry. So those are the three themes that we're watching. I would say thus far this year, the import one has been favorable, but again, a bit misleading. The industrial production, the manufacturing recovery, we're not seeing it yet.

Housing market's going to be very important for that. And with mortgage rates still above 7%, I don't know. I mean, it's just not the macro backdrop, I think, to drive that industrial production recovery. And then the pricing one, the jury's still out. We'll see how 25 transpires and see how these different segments are able to price and if they can price above inflation to a level that drives margin expansion.

This sounds like a difficult backdrop for investors, is it? Like, I know you also have to take into consideration the valuations of these companies and their shares. Yeah. So what does it look like? Are there still opportunities here for investors and where should they look for them? It's a very perceptive read on your part because it is. When you have these stocks that are trading at recovery multiples, you know, again, going back to trucking.

where if you wanted to get back to like a mid-cycle valuation on some of these trucking companies on 26 earnings, you would have to underwrite 50 to 75% annual earnings growth in each of the next two years. That is...

In our view, that's a bridge too far. I think that's how we described it in the group. That's why things can get better, but they're not that good, we don't think. Rails have struggled with a lot of headwinds. Their service has gotten better. By most people's accounts, it's the best service they've had in 20 years.

Yet coal remains a headwind. Coal pricing remains a headwind. There's been all these weather events that have been wiping out tracks and creating cost problems for some of these rails. So they're not as obvious. We had this conversation a year ago. I would have told you the risk-reward on rails looks a lot better than it does for trucking. But we probably published our most cautious outlook on rails in five years. They made years of these improvements on efficiencies and these technology upgrades.

but you think maybe the low hanging fruit there is uh has been picked the low hanging fruit on cost has certainly been picked i started covering rails in the late 90s and at the time the margins were probably five percent mid-cycle and in downturns they were negative

Now, if you have a 40% margin, you know, you're ripe for an activist. I mean, they've taken a lot of costs out. This has to be a volume growth industry. And without that manufacturing recovery and without coal stabilizing, it's tough to see that volume growth, at least this year.

Okay, so if trucks don't look great and rails don't look great, do you have any buy ratings at the moment? Yeah, we do. So, you know, the phrase that I think is becoming maybe a bit overused, it was something that we used for one or two names in 24, FedEx specifically. And we're trying to really focus on this theme this year, which is called idiosyncratic.

which company has something that's more than just the cycle? Because if it's all just plugging your nose and hoping for the cyclical recovery, all the stocks are going to move in lockstep. So who has something that's either on the cost side, that's on the technology side, that's on the pricing side of the expansion side that kind of differentiates that company and that stock from the industry and from the cycle. And we do have a couple. So C.H. Robinson is one. Uh,

where they're in a cutthroat, super high competitive broker business. But a new management team has been in there. They've been implementing new technologies, new efficiencies, and they're seeing share gain and they're seeing share gain at a higher margin. So I think that's an idiosyncratic story for 2025. Continue to do earnings growth that is independent of the cycle. That's all kind of within their control.

And, you know, they trade at one of the lower multiples in the peer group. So really not getting credit for it because people think it's more a flash in the pan. SIA and XPO, two LTL trucking companies that have SIAs, had a lot of growth in 2024. They bought 28 terminals from Yellow. Yellow was the third largest LTL carrier in the country that went bankrupt and went through liquidation. 20.

28 terminals, a lot of costs bringing those terminals on. Not a lot of volume when you're bringing those terminals on. Now you transition to 25, you anniversary some of those costs, they're building volume in those networks. They can do much better top line growth and margin expansion than the industry in a status quo type of macro backdrop. For people who don't know LTL, the definition of that for people who aren't familiar.

LTL is less than truckload. So when you think of trucking, when you see trucks on the road, you see a Walmart truck, you see whatever the truck is, it's typically filled with one customer's freight. That's called truckload. That's the super competitive, low barrier to entry trucking business that I'm very cautious on. LTL is less than truckload, where you have this network of terminals. You take multiple companies' freight, you put it into one truck,

And then you have this milk run where you're going from your terminal to point A, B, C, and D with four different customers, business, and dropping it off. It tends to be more industrialized. It has much higher barriers to entry because it's not just about the truck or the driver. It's about the terminal network, the density, your ability to hit multiple drop-off points in one day and get your driver home. Got to be higher margin, right? If you can't fill a truck, you have to pay more as a customer, I would imagine, right? Yes, exactly.

Much higher margin, much stickier pricing. You have to go back to 2009 to have a year where pricing was down by more than 1% for a full year. So yeah, it's a better business, but it's still tied to the industrial economy. And it's still very much tied to manufacturing. And you were coming to XPO. Yeah, so XPO is, they had a lot of growth as well, but they also had a new management team that came in and kind of turned over the apple cart. They had bought a very...

frankly, terrible LTL business in 2015. And they had been trimming the fad and trying to turn that business around for years. And they finally brought in the former head of operations at Old Dominion, which is by anyone's definition,

the blue chip, gold standard in LTL. And he started to make some operational improvements where you're not seeing the top line growth you're seeing at SIA because they haven't grown to that extent, but you're seeing much more margin expansion. They're pricing better. They're being more efficient. They have more safe operations, lower claims ratios, and they have a big margin path

to kind of close the gap between those blue chips and gold standards in the industry. And again, that's a bit more of an idiosyncratic story in what I think is still an uncertain and choppy macro backdrop. You mentioned the delivery companies, you know, FedEx and UPS. How do they look now?

This it's becoming a bit of a lightning rod might be a strong term. Let's start with they were huge beneficiaries from that e-commerce boom. You took basically 10 years of e-commerce and growth and squeeze in 18 months. Huge beneficiary. They had to spend a lot of money on costs to meet that volume growth. They priced it very well.

And then they were dealing with the hangover as well. So, you know, UPS is 3% off a 52-week low. I mean, it's a stock that is really underperformed. They took a lot of efficiencies in 2020, 2021, and then they were really put to the sword by the Teamsters in 2023. The

The Teamsters got a 10% wage inflation in year one of a five-year contract, and they lost one and a half million packages a day as they went through those negotiations. Now, they're recovering from that. You've anniversary that 10% labor inflation. It's only going to be 1% in year two. They're winning some business back. Some people are starting to like it because it's been such an underperformer, but the macro headwinds remain pretty intense there.

And they're getting some pricing and they're getting some cost efficiencies again, but just the volume headwinds are difficult. And frankly, a lot of people don't want to... A lot of long-only investors who aren't just trading on a quarter, who are looking on a two to three to four-year time horizon...

feel that Amazon's build out of their infrastructure is a secular risk to FedEx and UPS, these legacy carriers. So the short term, you guys kind of like it on numbers have finally been de-risked and it's been such a massive underperformer and there's going to be some reversion here. The long term guys, they don't want to get involved in this industry. They see some big time, you know, long tailed threats.

We kind of sit on the more cautious side on UPS. Now, FedEx is different. FedEx is taking $4 billion of costs out of their business in two years. They're spinning off their LTL business to a separate entity to unlock some multiple financial engineering there. So we still like FedEx better than UPS, but a lot of the positive catalysts have played out there as well. So it's not as...

exciting, I think, a story as it was 12 months ago. But we still have a buy on FedEx and a neutral on UPS. Jonathan, you've delivered once again, and this was not less than a truckload. This was a full container full of information and mighty useful. Thanks so much for taking the time to speak with us. Thank you, Jack.

What do you think, Jackson? We've covered a lot of ground here. We've had some laughs, some tears. We've talked freight. We've talked mechanical bulls and chimneys. I think we've got it covered. I was thinking we could set up the mechanical bull in Times Square, but we might run into some problems with the naked cowboy. I was afraid you were going to say that. He's banned. Preemptive ban.

Jonathan was great, and I'm giving you and I four stars, Jackson. But it's actually a 3-5-1, and I'm rounding out...

I'll take it. Thank you all for listening. Jackson Cantrell is our producer. If you have a question you'd like us to answer in a podcast, just tape it on your phone. Use the voice memo app. Send it to jack.how. That's H-O-U-G-H at barons.com. You can subscribe to the podcast, Apple Podcasts, Spotify, wherever you listen. If you listen on Apple, go ahead and write us a review. Round any way you like. See you next week.