--- title: Friday Fast Five - 2/7/2025 description: We aim to help investors separate the news from the noise by providing our perspective. Every Friday the Hodges Capital research analysts list the five most interesting things they discovered that week. Subscribe to receive the Hodges Friday Fast Five in your inbox every Friday. image: https://blog.hodgescapital.com/hubfs/Hodges-FridayFastFive.jpg --- [![Hodges-Logo-1](https://blog.hodgescapital.com/hs-fs/hubfs/Hodges-Logo-1.png?width=215&height=98&name=Hodges-Logo-1.png "Hodges-Logo-1")](https://www.hodgescapital.com/) [![Connect With Us](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/9402040/5025aacb-6e9a-4ab0-8651-1dfa57e962c6.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/9402040/5025aacb-6e9a-4ab0-8651-1dfa57e962c6) ** ** [![](https://blog.hodgescapital.com/hs-fs/hubfs/Hodges-Logo-1.png?width=521&height=237&name=Hodges-Logo-1.png)](https://blog.hodgescapital.com/) [![Connect With Us](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/9402040/5025aacb-6e9a-4ab0-8651-1dfa57e962c6.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/9402040/5025aacb-6e9a-4ab0-8651-1dfa57e962c6) ** ** **Menu** ** ** ![Outside 1-1-2](https://blog.hodgescapital.com/hs-fs/hubfs/Outside%201-1-2.jpeg?width=4106&name=Outside%201-1-2.jpeg "Outside 1-1-2") # Hodges Friday Fast Five *"In the investment business, you go to school every day, but never graduate." - Don Hodges*   # Friday Fast Five - 2/7/2025 by [Hodges Investment Team](https://blog.hodgescapital.com/capital-fast-five/author/hodges-investment-team), on February 7, 2025 Five interesting things that Hodges Capital research analysts discovered this week... **#1 ****Getting High: **The S&P 500 now has a record 50 companies with an Enterprise Value to Sales ratio exceeding 10X. For historical context, before 2014, there were never more than 21 companies with this metric. While this may suggest that the market—particularly large-cap stocks—is overvalued, other factors should be considered. The composition of the S&P 500 has shifted toward high-growth technology companies, and overall profit margins remain at historically robust levels. **#2**** ****Uncle Sam on a Coin: **Stablecoins are gaining support. Simply put, a stablecoin is a type of cryptocurrency designed to maintain a stable value by pegging its worth to a reserve asset, such as a fiat currency like the U.S. dollar or a commodity. Stablecoins align with President Trump’s broader goals of fostering economic growth and maintaining U.S. financial leadership globally. Potential benefits of a policy shift include regulatory clarity, easier transfers, lower costs, an extended dominance of the U.S. dollar, and increased financial sector innovation. **#3 ****DeepSeek: **This past week, there was significant market discussion about the Chinese company DeepSeek’s introduction of a low-cost AI product. This news has revived a term from deep within economic theory that many may be unfamiliar with: the Jevons Paradox. In economics, the Jevons Paradox occurs when technological advancements improve resource efficiency, reducing the amount needed for a single application. However, as the cost of using the resource declines, overall demand increases, ultimately leading to higher total consumption. In 1865, English economist William Stanley Jevons observed that increased coal-use efficiency led to greater overall coal consumption across industries. He argued that, contrary to common intuition, technological progress alone cannot be relied upon to reduce fuel consumption. **#4 ****More Bad News for California: **Television station KTLA reports that State Farm, California’s largest insurer, has asked the state’s Department of Insurance to approve an emergency rate hike averaging 22%, citing a “dire” financial situation following the deadly and destructive L.A. County wildfires. This comes on top of several years of high inflation, which has significantly increased the cost of rebuilding materials. Insurers have struggled to recoup these costs through premium pricing. California’s strict regulations on insurance rates limit how much insurers can adjust premiums based on increased risks, leading some companies to stop offering policies altogether. Sympathy goes out to those affected by the recent wildfires, and the recovery process may be prolonged if insurance becomes unaffordable, or banks hesitate to lend on uninsured homes. **#5 ****Eating Out: **Price increases at restaurant chains slowed to 1.41% in the fourth quarter, according to Technomic, as the industry shifted to a more normalized rate of inflation. However, slower inflation does not mean menu prices will decline, which suggests that dining-out frequency may not see an increase. **** ** **    *HCM is an Investment Advisory Firm registered with the Securities and Exchange Commission (“SEC”), is a wholly owned subsidiary of Hodges Capital Holdings and serves as investment advisor to the Hodges Funds. HCM is affiliated with First Dallas Securities, Inc, a broker-dealer, and investment advisor registered with the SEC.* *This discussion is not intended to be a forecast of future events and should not be considered a recommendation to buy or sell any security. Past performance is not indicative of future results. Investing involves risk. Principal loss is possible. Investing in smaller companies involves additional risks such as limited liquidity and greater volatility. No current or prospective client should assume that information referenced in this communication is a recommendation to buy or sell any security or is a substitute for personalized investment advice from your individual advisor. HCM does not provide tax or legal advice. Consult your tax or legal advisor for any related questions.* *All information referenced herein is from sources believed to be reliable and is provided as general market commentary and does not constitute investment advice. This material was created for informational purposes only and the opinions expressed are solely those of HCM. HCM shall not in any way be liable for claims and makes no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information. The data and information are provided as of the date referenced and are subject to change without notice.* ### Hodges Friday Fast Five We aim to help investors separate the news from the noise by providing our perspective. Every Friday the Hodges Capital research analysts list the five most interesting things they discovered that week. 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