Nov 22, 2016|
Jason Moser (Motley Fool, ELLI, GOLF) by The Financial Exchange
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
We're joined now by Jason modes are from the Motley Fool here to talk. Couple stocks with us today Jason thank you for joining us. Thanksgiving week in a very happy Thanksgiving to you as well let's start first. With Ellie Mae incorporated. Talked a little bit about what this company does and whether you're bullish or bearish on the. Sure listeners to the she'll probably herb recall that Ellie Mae before. That they mortgage software or service providers essentially they are spelling all of that area. Component of the golf where. Two lenders around the country from boutique lenders too big institution like Wells Fargo. And they really I think took advantage. Housing crisis in the sense that adopt frank legislation introduced a lot of new mortgage regulations. That that honestly are aimed at at protecting home buyers and lenders that that we we don't. He encountered it type out the president again and so they have a lot of the barriers to entry in not only technology that regulatory as they. They have all of this all of the documentation altered documents are compliant with these new regulations. So it is the company were very bullish on here at school we own shares in million dollar portfolio it's an interesting story here and picture that stock is done pretty well about. 40% on the upside however. Pull back at that point 5% this election. And it'd basically because of two reasons beat the prospect of higher interest rates. Along with the fact that Donald Trump has made. Secret he at least is going to be putting dot frank legislation under the microscope in that there's some uncertainty perhaps there but but obviously we feel like. There is going to be. There's there's there's going to be regulations that are going. Have to be involved mortgage banking point four to protect wondered and empires and Ellie Ellie Mae's strength lies in net network in the regulations. That they built their system around. How how Long Will possibly be before investors have a sense of clarity on the regulatory side their mean that seems to be something. They could hang over them for the next year surges to these are quick fix is necessarily. Exactly I think it's gonna be very given his agenda it's gonna be interesting we're deeply dot rank it sort of sort of on his agenda doesn't seem to be top of mind right now. We don't really have a time line that important one I think we know it that interest rates. Of course will go up at one point they ask you want the benefits of Ellie Mae is it makes it makes revenue a couple of ways that makes it almost subscription side. As as it customer paid monthly subscription content to maintain the software as a service. And help them make money on the transaction but for every loan closes. And transactions occur. So the question is will they be able to make up of the volume as refinance activity slows down. And that is a bit of the question because they alphabet and purchased by the regardless. I would an economy like ours that enters so much around. The housing market Ellie may certainly plays a major part in virtually. Every step of the way there's we feel like all of all looking further out as we do you know long term investors are the point Ellie Ellie Mae's great competitive position. Is that even even near term and would like is we really the opportunity perhaps to build a position in any great business. Very good now let's turn to look at the company is my notes are right just IPO a few weeks back and that's a cushion at holdings with the ticker GO while up golf. Which used to be owned by adults and if that was the the ticket that they had but this one is the maker of titlist and foot joy I believe is that right. That's exactly right yet but this 1 where I am seeking war ended it on -- not bullish or bearish a candid sort of in a holding pattern right now. Now living good practice does. I I I was a golf professionally or at the club professional about seven years in and out. As a member of the PGA of very familiar with the business and understand. That's away in the power of the title would actually hold on the market that's really what piqued my interest here because the good at holding used to be around. By Fortune Brands. Other than Fortune Brands broke it off along with couple other parts of the business. And then a cushion it here eventually spun out and went public it still had the theory. Feel in Korea hold a big big portion of the shares outstanding but I'm very. Interested in sort of what the potential is for the company because of the brand that it had been title in Chile two very powerful brand in golf ball ball is in Winnipeg and Edwin certainly in the way. It is also global game and it's one where not only the US economy but really Japan and another big contributor to look at it failed and so for me it's really. All about understanding. How much growth can we honestly expect from a company like this but going forward given that we know golf is is somewhat of the unique game and not the thing that really is. For the match. Is that people whenever we see. You know big. Ran the big leaders and in industries. Like the it's one that did garner some of them attention anymore and we're gonna be speaking warranty. I like commitment I think there is some potential there but the problem what golf generally speaking. You are always had to become Opel the next big thing. In margins tend to be squeezed because there's not a lot of pricing power. I'm wondering in a big advocates possibly the title between may. Have a little pricing power or that term which could be a good thing for the bit. Very good Jason thank you for the time and enjoy Thanksgiving all right. Jason moser from the Motley Fool stickers on those companies are EL LIE and GO well.