Selling car parts, buying back stock – Autozone | Summer Series

Bryce: [00:00:16] Welcome to the Equity Mates Summer series, proudly brought to you by CommSec, the home of investing. Over the last 11 episodes, we've been diving into some of the most exciting, interesting and well-known companies from around the world. And today it is the 12th and final episode. Each episode we've been unpacking one company with one expert. We've learnt about their process and why they like the company. My name is Bryce and as always, I'm joined by my equity buddy, Ren. How are you? 

Alec: [00:00:44] I'm very good, Bryce. It's sad. Don't cry because it's over small. Because it happened. That's the sentiment in the studio this morning as we get to the final of our summer series episodes. And now the countdown begins until next summer. We've just got to get through a whole year. 

Bryce: [00:01:02] Oh, we could throw in a winter.

Alec: [00:01:03] Winter series.

Bryce: [00:01:04] Yeah, true. Spring. 

Alec: [00:01:05] European summer series. Yeah. Maybe we'll take a break. Say, if Commbank wants to come back and sponsor us. 

Bryce: [00:01:10] Yeah, I mean, Commbank has 13 international markets if they want to send us to each one to do a company preach.

Alec: [00:01:18] Actually, in the very first episode of this summer series, I asked if you could name a Norwegian stock because Commbank does offer access to the Norwegian stock market. 

Bryce: [00:01:26] Yeah. 

Alec: [00:01:27] We might have to go over and investigate what stocks are saying. 

Bryce: [00:01:30] But look, I'm not going to research any from Australian land. I'll do the research over there. 

Alec: [00:01:35] Fair enough. Well, before we get to that, let's talk about US stock. That is the topic of conversation today. It is an Auto Zone. And the expert that is joining us to talk about it is a returning favourite Anthony Doyle. He is the head of investment strategy at fire trial. 

Bryce: [00:01:53] Now a huge thank you to CommSec the home of investing, for partnering up with us for the Equity Mates Summer series. Often we get frustrated with the lack of access to international markets, particularly when there are so many great opportunities outside of Australia. However, with CommSec, those opportunities are a reality, with access to 13 international markets from the US to Norway, Germany and Japan. Invest in shares on the US market from just $5 USD brokerage. Download the CommSec app today or visit CommSec.com.au. CommSec T&Cs and other fees and charges apply. Investing in overseas markets exposes you to additional risk. 

Alec: [00:02:29] Now, before we get into it, we need to remind you that while we are licensed, were not aware of your personal financial circumstances. Any information on this show is for education and entertainment purposes only. Any advice is general. So before we speak to Anthony Doyle from Fire Trial about AutoZone, let's unpack it. Let's get into Zion with AutoZone. AutoZone is a car parts giant. 

Bryce: [00:02:55] Yes, Americans love cars. They love trucks. And AutoZone is right in the middle of it. They're the largest retailer of automotive parts and accessories, aftermarket automotive parts and accessories in the United States. 

Alec: [00:03:09] And what you mean by that is it's not a OEM. It's not like it's not a Mazda or a Toyota or someone that is making cars. Yes, they sell parts. 

Bryce: [00:03:18] Awesome. Yeah. 

Alec: [00:03:19] Like Mazda, they sell a lot of parts for Mazda cars. 

Bryce: [00:03:22] Yes. Yeah. They're the equivalent of the, the auto autoban in Australia.

Alec: [00:03:29] No, that's the road in Germany. 

Bryce: [00:03:30] No no no no no auto.

Alec: [00:03:32] I don't know, bro. I don't have a car.

Bryce: [00:03:34] Oh no. Yeah. Autoban online auto and car parts store or Retro. Retro. 

Alec: [00:03:39] All right. O'reilly 

Bryce: [00:03:41] Retro. Yeah. I pictured in Waga. It's a massive store. Anyway, there's a let's just say there's equivalents to this 

Alec: [00:03:49] Yeah. Okay. Repco. 

Bryce: [00:03:53] Repco. Nice. Nice. Repco and auto and autobahn. 

Alec: [00:03:56] Oh, we're so ready to talk about this company. So a little bit of history. Founded in 1979, first opened in Forest City, Arkansas. Now, here's a question. So AutoZone is its name. Now, do you think it should have kept its original name Auto Shack? 

Bryce: [00:04:14] Yes, I like it.

Alec: [00:04:15] You like it, I can, it gives a sort of rundown untrustworthy feel, I think. But it also gives a cheap feel like, you know, you're going to get the cheapest muffler in the game if you go to Auto Shack, I think maybe I don't know. And Radio Shack came along in the US, but there might have been a bit of competitive tension there. So it grew really quickly. 194 stores in the first five years. This whole story is just a reminder of how much bigger the US market is than Australia, but we'll get there. In 1987, it changed its name to AutoZone. Grew up a little bit, got serious by then. So within eight years after it launched, it almost had 500 stores. For context, Kohl's has about 850 supermarkets, and it's been around for a lot more than eight years. It lists, in 1991, in the US, and since its 1991 listing, its share price is up 36,000%. 

Bryce: [00:05:10] Incredible. 

Alec: [00:05:10] You were born. In 1991, bro. 

Bryce: [00:05:12] I know in my portfolio. 

Alec: [00:05:13] If you would invest $100 in AutoZone when you were born. 

Bryce: [00:05:19] It'd be worth a lot. Well, since then, right, it's going to 7140 stores, not just across the United States, which is the primary market, but some stores in Mexico, Puerto Rico, Brazil and the US Virgin Islands. And yeah, $45 billion market cap. 

Alec: [00:05:35] Now, this is a simple company, and that's not set in a pejorative way, but when you're analysing it as an investment opportunity, it's an auto parts retailer. It is tied to the number of cars on the road in the US, how the US consumer is going against its competitors, because there are a number of other auto parts retailers that are big, not quite as big, but they're pretty big. And then it's just a pretty conventional retail store in terms of what it's paying for goods, what it's selling those goods for, what its costs are, how it's growing all those year over year. And I think that that's most exemplified, if you look at what the company says its future plans are, you could store you could almost put this up against any good retailer globally. Three points, more stores, higher same store sales. So sell more in each store. And then private labels. 

Bryce: [00:06:32] Nice. Okay. And for the, the non-retail is the benefit of private label. What that means is if I'm selling a steering wheel cover made by Mazda in my store, I can actually go out and make my own steering wheel cover from some other manufacturer and, and slap on the auto's own brand, or create your own brand for it. And, could be able to control the margins a lot better in that and effectively sell it at a higher profit margin. 

Alec: [00:07:03] Yeah. I mean, the deep, dark secret of a lot of big retailers with a lot of market power is it's not like they're substituting out the Mazda branded steering wheel cover for a one made in China. It's often that they. 

Bryce: [00:07:17] Tell the secret. 

Alec: [00:07:18] They're going to Mazda. Yeah, this isn't a good example because Mazda has a lot of power, but they're going to the manufacturer and saying, we want to do private labelling and we want you to make it for us. 

Bryce: [00:07:27] Yes. Rice crackers, nuts. I can think of many labels. I mean. 

Alec: [00:07:31] The best example is SPC, the fruit canning company that grew volume massively on the back of doing private label for Coles and woollies. But then I think Woollies and then Coles pulled the private label. 

Bryce: [00:07:43] Business. 

Alec: [00:07:43] They struggled. 

Bryce: [00:07:44] Yeah. So anyway. That's a private label. 

Alec: [00:07:48] I think. I think to get back to my point, it's a stock standard retailer that you can analyse like a lot of retailers and a lot of retail metrics make sense. Like this business isn't conceptually difficult, but it is just an incredibly good executer. And then the second part of the business is it's an incredibly good financial manager. And we were speaking to an expert investor about AutoZone as we were prepping this, and he said, oh, AutoZone, the buyback kick. 

Bryce: [00:08:18] Yes. So we'll ask Anthony about that. But I think, what what did he say that they bought back almost 90% of the share register the shares on offer. In their life lifespan, which is obviously going to provide some pretty good returns for the shareholders. 

Alec: [00:08:34] For people who just mainly invest in Australia, buybacks are less familiar. They're becoming more and more part of the market, but they're really popular in the US. And the reason they're more popular in the US than in Australia is because we have a certain tax treatment of dividends that the US doesn't. That's franking credits. So it's more tax efficient to return profits to shareholders by buying back stock rather than paying dividends. And essentially when a company buys back stock, it buys shares on the open market and then destroys those shares. So every remaining shareholder owns a slightly larger portion of the company. And that means, they have a slightly larger entitlement to the profits and stuff like that. So, for AutoZone, if they've bought and destroyed 90% of the shares, that means the original shareholders have a lot more of the company, and they've done nothing to get. 

Bryce: [00:09:30] Love to say it. Now, before we speak with Anthony, CommSec is the home of investing. And if you want to start small, you can through the Commbank app, you can invest with as little as $50. Consistent small amounts can add up to meaningful returns. Visit commbank accommodate you for more CommSec, Taison says, and other fees and charges apply. 

Alec: [00:09:49] We'll be right back with Anthony after this short break. 

Bryce: [00:10:02] We're here with Anthony Doyle. Anthony, welcome back to equity mates.

Anthony: [00:10:05] Gents. Thanks for having me back.

Bryce: [00:10:07] Always a pleasure. Now to start with, can you tell us what AutoZone does? 

Anthony: [00:10:13] So AutoZone very simply is an auto parts retailer. Now what's really great about AutoZone is that they are the number one auto parts retailer in the United States, they have a market capitalisation of around $47 billion, 120,000 employees and over 7000 stores. Most of those stores are in the US, but they also have a presence in Mexico and Brazil. Now AutoZone being the dominant player, the number one player in the US. What's really important is that they have 14 distribution centres in various locations around the US. So they stock the greatest range of products and because of their scale, they can compete very aggressively on price as well.

Alec: [00:11:00] Now when we were doing some research on AutoZone, I think conceptually it's not a difficult company like people can understand physical retail. I thought it was funny. I looked at their latest shareholder presentation 11 slides. I was like this is a like a simple to understand company. But there's some really interesting, I guess, financial aspects to it, which we'll get to amid the most interesting financial aspect is since it listed in 1991, it's up 36,000%. 

Anthony: [00:11:28] Amazing isn't it?

Alec: [00:11:29] Nothing to be upset about that. 

Anthony: [00:11:30] Amazing. Yeah. 

Alec: [00:11:31] Before we get into the, you know, the financials and the bull and the bear case, let's just talk about how you approach it as an investor. So you come across AutoZone. What are you looking at? What are the metrics that you're looking at to say how the business is performing? How are you analysing it? 

Anthony: [00:11:45] Yeah. So we've conducted a deep dive analysis on AutoZone, as you would expect before it's even proposed at our investment committee as an addition to the five Charles three Global Opportunities portfolio. So that process involves over 200 hours of research. So that involves meeting company management, meeting their competitors, meeting industry experts, talking to clients, talking to customers, and of course, all the necessary financial modelling that you would expect and balance sheet forensic analysis. So after we conduct this 200 hours of research, what we like to do at Fire trial is really get a great understanding of what the earnings profile might be for, for the company, for AutoZone, and drill down into the one or 2 or 3 things that matter for that earnings outlook. And we describe this as what matters. So I mean you can make a DCF model do whatever and say whatever you want it to say. But ultimately we want to get a really good handle on what earnings the earnings trajectories over the next 3 to 5 years. And importantly, where do we differ versus the consensus, and where might the consensus be wrong in terms of their expectations for growth going forward? 

Bryce: [00:13:03] Well what is the earnings profile for this company? And like what do you expect to see over the next few years from an earnings point of view? 

Anthony: [00:13:11] Yeah. So as Alec mentioned, the company presentations are pretty simple to digest. Probably why we love it so much. It was one of our top holdings. But the management give guidance as to what they expect their earnings growth profile to be. And they say 3 to 5% over the medium term. Now the market and consensus are at the lower end of that 3 to 5% growth profile. And we're at the upper end. So why are we different to consensus? Well, as we know not sure if you guys know, but the last few years have been pretty crazy. In terms of the retailing environment, with lockdowns and subsequent, reopening of economies around the world and the US is no different. And so, there's a big focus from the consensus on the last clean year of earnings for AutoZone, which was 2017, 2018. And that year, the earnings mix was, and the earnings results were, well, lower than what we've come to expect from AutoZone. And there's a few reasons for that. One is that there was a low number of cars sold seven years earlier during the GFC, as you would expect, given the decline in the US economy. And that was important for AutoZone as its target addressable market. Cars that are seven years or older. And that have fallen out of their warranty, with the OEMs, with the manufacturers. So there was a lower number of cars coming into their target addressable market, you know, cars that need mechanical repairs. Secondly, in terms of the weather, weather had an impact on miles driven for the auto fleet of the US. So it was unusually. A really wet summer. And so there were a few miles driven.

Alec: [00:15:06] Which is interesting because you think people drive more when it rains? 

Anthony: [00:15:08] Yeah, but their holiday is less true. 

Alec: [00:15:11] I guess maybe these days I work from home more. 

Anthony: [00:15:14] Yeah, yeah. Well, exactly. Yes. And actually getting the taxi over here, the taxi driver told me if it's great this far more traffic on the roads in Sydney. As people think it's going to, going to rain save on drives to work. So yeah there was a bit of traffic coming over. 

Alec: [00:15:30] We appreciate you making the trek. Yeah. 

Anthony: [00:15:33] Oh, good. Yeah. So, and then we believe that the consensus are underestimating the gains that AutoZone have made in their mix of clients. So traditionally, they've been great exposure to the retail consumer. But during Covid, they made substantial gains in the commercial market. So mechanics and fleet owners and the like. And we believe the market's underestimating that more resilient mix, at the moment. So our forecasts are for more of the upper end of that guidance. In terms of 4.5% earnings growth. And that's where we differ from consensus. 

Alec: [00:16:11] So that's I guess, a key part of the bull case, the investment thesis that you have, which is that you think that it's going to perform better than the market does. What are the other aspects for the bull case for AutoZone? 

Anthony: [00:16:23] Yeah. So it is all about scale for AutoZone. So they're in replication mode now. They implement a business model and a business plan that they've utilised for 30 years. So they aim to grow stores by 200 stores per year. For the next decade. And what's really interesting is when they open a new store, the return on incremental capital is over 25%. So huge gains from investing capital in opening up new stores. And so they continue to consolidate the market from the small independents. So if you're a mechanic and you need a repair done to a car, or you're looking for a spot for a car because AutoZone has the greatest breadth of product, typically you will go there and they're very well known. Allow Bunnings style for their employees being experts. So they're called Auto Zoners. And so the customer experience far surpasses that which you will get at a small independent style store. So in terms of a mechanic, what matters to a mechanic's business is that they can turn over vehicles quickly and efficiently so that they can do more repairs and subsequently generate higher earnings as a small mechanic. Now AutoZone, because of their distribution framework, they make four deliveries a day to commercial customers. So this mitigates the risk of, say, an Amazon, for example. You can order something online, but it might be the wrong part, and you might not necessarily get that same customer experience that you would from attending an AutoZone store. Now, those four deliveries a day, Fred, our analyst, was actually over in the States at a store, at a distribution centre, and they have a red light on the ceiling. After ten minutes, if the order isn't fulfilled and within ten minutes a red light starts flashing and the store manager goes out and delivers the product to where it needs to go, for example. So, it's all built on the customer experience. It's built on this scale. It's built on the economies of scale that they can deliver. And what's really important is they will actually take stock on consignment before even paying the suppliers of the stock, and they warehouse the stock. So they don't actually pay their suppliers of stock until they've sold the product. And the reason they can do that is because of their scale and because of their investment grade credit rating. So essentially there's net negative, working capital. And it is extremely rare to find a retailer that can operate in that type of environment. And that just means more efficient use of stock as well.

Bryce: [00:19:03] So I guess one question is that, you mentioned 200 stores a year. Is that just in the US? 

Anthony: [00:19:11] Just in the US. Yeah. So they, as I mentioned, a smaller presence in Brazil and Mexico, but rolling out 6300 stores in the US and rolling out 200. 

Alec: [00:19:21] I think it's okay for people in Australia who don't work in retail. They might not get a sense of that scale. Coles has about 850 supermarkets across Australia. Woollies is what a scratch over a thousand. So if you're doing 200 stores a year for ten years, you're doubling Woolworths footprint just in new stores in the next ten years. Like, yeah, the scale in the US is just not nuts. 

Anthony: [00:19:44] So the auto parts market grows at 1 to 2% above the rate of GDP every year. And there's some structural tailwinds behind that. One is the growth in miles driven. The other is that the US car fleet is expected to continue to expand. So to put some. Context around it. We have 25 million people in Australia. The US car fleet is around 300 million vehicles. 

Alec: [00:20:09] That kind of makes sense. I would have thought you're about a car, a person. Yeah, like a lot of two car households and. 

Anthony: [00:20:14] Yeah, well, even that high if you think about, you know, the proportion of the population that's under. Yeah. Driving age. 

Alec: [00:20:21] It's just like, every time you go to America, you're reminded how car focussed the, the streets are and everything. Like, you can't walk anywhere. Yeah. It's, except for New York. Yeah. 

Anthony: [00:20:34] So that's miles driven by the fleet and the fleet is ageing. So it's coming right into the sweet spot for those repairs. And more cyclically at this point in time, there's less new car sales and people are driving their existing cars for longer, given the high rate of interest for car loans at the moment as well. And people obviously with an emphasis on cost reduction, they may seek not me, but they may seek to undertake car repairs themselves. 

Alec: [00:21:03] Now, this might be jumping ahead to the bear case, but it feels like the right time to bring it into the conversation. When we're talking about the growing number of cars in America, how do you think about car mix? Because the one thing about electric vehicles compared to internal combustion engines is that there's less moving parts in the engine, they break down less. And the thesis is they're going to need less repairs. How do you think about that? How does that factor into your thinking around AutoZone? 

Anthony: [00:21:29] Yeah. You nailed it. I like that that's the bare case. You're absolutely right. In terms of, some of those things you mentioned in terms of less moving parts, less frequent repairs. So how as an analyst, has Fred gone about trying to understand those risks to Autozone's revenues? Well, he did a bottom up analysis of AutoZones product mix to see which products that they sell and would be impacted by an environment where 100% of the US car fleet were electric vehicles. And what he found was that it would have an impact on AutoZones revenues of between 20 and 40%. So significant, highly significant. And so it's a 20 to 40% impact on AutoZone's revenues. And what he highlighted was that motor oil, ignition parts, etc. would not be required in that world. However, some parts would actually increase in terms of demand because generally electric vehicles are heavier, and heavier cars lead to more usage of brake pads, more stress on the chassis, and more stress on suspension. So it would have a big impact 20 to 40% revenues and a significant increase in some other of the products that they sell. Now there's also increasing complexity around EVs. So in order to drive energy within an EV, the process is different. Obviously, you know, you're not burning fossil fuel. And so in some EVs, they actually each have engines on each wheel. And that engine costs around $1,500. And so they necessarily have moving parts. So that's in the 100% EV world. So the next step that Fred took is right okay. That would be pretty detrimental to AutoZones revenues. And you know for us share prices for low earnings. So that would have a big impact obviously on the share price. So what is the likelihood of this occurring? And so for us in conducting that bottom up analysis, what we found was that there is still a considerable amount of time before that trend towards EVs would have a significant impact on AutoZone. So, for example, in 2022, 5% of new vehicle sales in the US were EVs. Joe Biden wants that to be 50% by 2030. And in that scenario, if the US were to make that, where 50% of new car sales were EVs by 2030, Autozone's market is still growing by 1% per annum in 2032, which is where our model finished. Now, is the US likely to reach that 50% level? We think it's unlikely. The reason being a lack of charging infrastructure. The grid can't actually handle that much additional demand. The electricity grid. And of course in terms of rural America, there's still concerns over range, in terms of EVs. So if the 50% isn't met, the target addressable market for AutoZone and they are taking market share, it will continue to grow until the mid 2040s. And remember our investment thesis, we're looking at 3 to 5 years. So again in terms of what the market may be missing. They may be too punitive on the outlook for AutoZone given the increasing penetration of electric vehicles, but the likelihood of some of those scenarios occurring in our estimations are low. And so AutoZone can continue to replicate the very successful model that they have done over the course of the last 30 years. 

Alec: [00:25:21] Yeah. So we I know I jumped ahead to the bear case. But, I want to go back to the bull case because I feel like we haven't touched on what's perhaps the most interesting part about AutoZone. And it's less about selling car parts and good retailing, and it's more about capital management and the financial side of it. We were speaking to someone I can't remember who, and we said we were going to talk about AutoZone and their response was on the buyback king. Yeah. Give us the story and tell us about how they manage their capital. 

Anthony: [00:25:53] Yeah, I think they've bought back 90% of their shares since listing and say the share price is up around $2,400 I think today. And they are just outstanding in business and management. Typically 75% of management have come through the ranks and generally have been there of a very long tenure. So over 15 to 20 years, in terms of management of AutoZone. And they are extremely disciplined at deploying capital. So as I mentioned, in terms of those 200 stores, there's a 25% return on incremental invested capital. If they can't reach that hurdle, then they won't start the store up. And so margins at the stores are very high in terms of their ability to wear increasing costs, whether that's labour costs. But typically the industry has been very disciplined around passing through higher rates of input costs to the end consumer. So that's where I wouldn't say it's an inflation hedge, but there's some inflation protection built in. Now if and after that, investment in new stores and rollout of stores, that 200 store rollout, any excess capital is returned to shareholders in the form of share buybacks. And that obviously has an influence and an impact on the direction of share prices over the long term. So Australia is very much income focussed, dividend focussed in the US, the types of companies that we like for the S3 Global Opportunities Fund are those companies that have that very strong capital discipline. And typically what we're seeing at the moment is that and this is more general in nature, but companies that are exCapEx, in terms of their investment plans, they stand to perform very well over the course of the next 3 to 5 years, because if you're trying to get anything built today, it's a lot more expensive than it has been. So anyone that can bring on new supply to the market is likely to win. And the return hurdle rights are much higher than they have been given the increase in interest rates. So the returns on cash, obviously competition to new investments and where we're engaging with company management, including AutoZone, is if the capital investment, the CapEx doesn't make sense, then return the capital to shareholders. And often buybacks are the best way to do that. 

Alec: [00:28:22] Buying back 90% of this stock, like, is there a limit to how I like? I guess there's not theoretically, as long as there's liquidity in the market. 

Anthony: [00:28:32] So yeah. Outstanding. Really outstanding performance over a long period of time. And I think the last five years they've generated a 477% returns, for investors Covid winner. And through that, as I said, they've made substantial ground on the commercial space. And we expect that that will continue to support earnings growth in the next 3 to 5 years.

Alec: [00:28:53] Nice. 

Bryce: [00:28:55] Well Anthony, to close out. We always like asking our experts what the company is. If the company can execute on 200 stores a year for the next ten years, it can I guess survive any uptick in EVs. What will it look like in ten years? 

Anthony: [00:29:12] Yeah. So the longer term plans, roll out 200 stores for the next decade. They want to grow above the industry growth rate of 3 to 4%. And we think they can continue to consolidate and take market share off the independents and grow above that. And they're going to return excess cash to shareholders. And so plan an outstanding business in replication mode. Nice and simple. You're not making assumptions around, you know, weight loss drugs or anything like that. 

Bryce: [00:29:39] True

Anthony: [00:29:40] And hence why it's a top three position in our fund in our portfolio today. 

Alec: [00:29:45] Less pressure on car seat but less pressure on car seats.

Anthony: [00:29:50] Better fuel economy. 

Alec: [00:29:51] Better. Yeah. Let's wear and tear. That's right. Suspension. 

Bryce: [00:29:56] People walking more as well, not needing to just drive full stop because they're feeling better about themselves. 

Alec: [00:30:00] Yeah. You guys better go back to your mom's.

Anthony: [00:30:05] I'm sure Fred has. I'll come up with an update for you. 

Alec: [00:30:10] Well, Anthony, thank you for joining us. We always love having you on the show. And until next time. 

Anthony: [00:30:15] Cheers, guys. Thanks for having me.

Bryce: [00:30:16] Thanks, Anthony.

Alec: [00:30:17] Now, before we go, and for the final time of this summer series, we want to say a huge thank you to our summer series partner, CommSec, the home of invest. If you're looking for more support and resources to build confidence in the market, if you want to carry on the momentum that you've started building with this Summer series, head to CommSec Content Hub. Otherwise, you can get $0 brokerage on your first ten trades for Australian markets. When you join, you can get brokerage on US stocks from just five U.S. dollars, and you can invest from as little as $50 through the Commbank app. Download the Commbank out today or visit commbank.com.au. CommSec, T&Cs and other fees and charges apply. Investing in overseas markets exposes you to additional risk.

Bryce: [00:31:01] Now that brings us to the end of the series. But stick around because next week we're back into regular programming with our bold predictions. 

Alec: [00:31:09] And our stocks of the year 2024. 

Bryce: [00:31:10] And stocks of the year. Oh, here we go.