Stocks Beyond Tech: Where Is the Market Actually Working Right Now?

**SPEAKER_1** (0:01)
This is InvestTalk from KPP Financial, helping investors make sense of the markets one day at a time. Here's your host, Justin Klein.

**Justin Klein** (0:17)
Good afternoon, fellow investors, and welcome back to InvestTalk. This is our Wednesday, July 22nd, 2026 edition of InvestTalk, a lot of moving parts of the markets. We are in the midst of earnings season, so we're going to get to a lot of that, and it's not just any earnings season. It's a very, very important one because we have a lot of Mag-7 names reporting, the market digesting, how their businesses are evolving. This is vital to the future of not just our market, but our economy as well, because it's so reliant on these names. We're going to dig into that and much, much more during this hour.
I know we get caught up in the weeds sometimes in these type of topics, but we also try to spend time to zoom out, give you broader concepts so that it's not about making a decision today and tomorrow or next week.
But it's about building the skills, the tool set so that you don't need to tune in. We love that you tune in to InvestTalk, but ideally at some point, you're doing one or two things. You're either so good on your own that you don't need to tune in here. Or B, maybe you hire us, right? And we're doing it for you. And that happens a lot as well. So either way, we are here to help you find one direction, a direction where you can consistently make good decisions with your money because you've embodied the principles, the smart principles of good decision making when it comes to your investment universe, your investment portfolio, your broader financial plan, making sure it is all aligned so that you are achieving your goal of financial freedom. That's a nebulous word or set of words.
But it means different things to different people. But once again, these principles are the same. Not using your emotions, focusing on the reality on the ground, not getting caught up in hype. Those are the things that help you avoid pitfalls and capitalize on opportunities. That's what this hour is about each and every weekday. Of course, we will be answering your finance and investment questions. I'll bring you data, I'll bring you topics. But in just a bit, we'll talk about today's marked performance and then we'll run down some topics. But as usual, we'll tackle this first caller question now.

**SPEAKER_3** (2:54)
The stock I'm asking about is JXN, Jackson Financial. I'd love to hear what you guys think about it. Thank you.

**Justin Klein** (3:02)
Looking at Jackson Financial, the operator holding company. It's a new service. It sells annuities to retail investors. Simple as that. Those have institutional products, but mainly it's an institutional sales company.
The business is good. Guess what? Shocking. If you're able to sell annuities, you're going to make a lot of money if you're either the insurance company or you're the salesperson. Earnings this year are, no, backtrack. It's usually not great for the buyer, the annuity, but that's new to hear. Now, this is about what the business of Jackson Financial is. $8.7 billion market cap, solid balance sheet, good free cash flow, about $5.2 billion. I like that.
Now, that has fallen, so that's in a bit of a decline.
Shares outstanding are going back up. That's interesting. It had been buying back shares since 2021, had 94 million shares outstanding. At the end of last year, it had about 67 million shares outstanding, roughly. Now, we're up over 70 million shares outstanding. What's going on here?
That worries me a little bit. The profitability metrics are pretty meager, even though the cash flow is strong. To me, I think you're getting caught up in those earnings. Now, the technicals are fine. The earnings numbers look good, but that raises a giant red flag. You're trading at 5PE. Earnings are growing 4% this year, 18% next year.
To me, there's a deeper story here.
This seems, this is my 25 years of doing this. I get alarm bells when I see things like this. There's something deeper going on here. I don't know what it is, but that's what a 5PE ratio is telling you. That's a 20% earnings yield, way too high. So I'm gonna pass on Jackson because it just doesn't pass the smell test to me. So we had a great show yesterday. We looked into this question. Can the Magnificent 7 earnings hold the market up? Talk about how an obscure volatility measure is pointing to a potential breakout or breakdown. We also answered a listener question on Danaher. Excuse me, I might just drop. On Danaher, if you happen to miss it, go check it out. The best way to get every show is to follow InvestTalk wherever you get your podcast. Now, we have a lot of ground to cover over the next 45 minutes.