Motley Fool Hidden Gems Investing - Amazon's Big Split, The Future of Work

Episode Date: March 11, 2022

Last month is was Alphabet. This week Amazon became the latest mega-cap company to announce a 20-for-1 stock split. (0:45) Ron Gross and Jason Moser discuss how Amazon, without changing their underlying businesses, has found a way to strengthen ties with one of their key stakeholders (employees), as well as: - DocuSign's strengthening business in the face of a declining share price - Enthusiasm for dating app Bumble - Ulta Beauty continuing to grow same-store sales - Chipotle and Jones Soda launching very different products - The latest from Oracle, Stitch Fix, and Marqeta (19:00) Tess Vigeland, host of The Wall Street Journal's new podcast "As We Work", talks about the changing dynamics of the workplace, the rise of pay transparency, and the challenge facing companies hoping to retain employees. (35:30) Ron and Jason share two stocks on their radar: Intellia Therapeutics and Apple. Stocks discussed: AMZN, DOCU, ORCL, SFIX, BMBL, MQ, ULTA, CMG, JSDA, NTLA, AAPL You'll find 15 stocks and 5 ETFs in our free Investing Starter Kit:  http://fool.com/StarterKit Investing questions? Email [e-mail] Host: Chris Hill Guests: Jason Moser, Ron Gross, Tess Vigeland Engineer: Rick Engdahl Learn more about your ad choices. Visit megaphone.fm/adchoices

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Because we have your number. Coming up, we've got the future of the workplace, the odds of a single product reviving a company on the ropes, the rationale behind Amazon's latest move, and a lot more. If you're an investor, you're in the right place. Motley Fool Money starts now. Chris Hill, and I'm joined by Motley Fool senior analysts, Jason Moser and Ron Gross. Good to see you as always, gentlemen. Hey, hey. How are you doing, Chris? We got the latest headlines from Wall Street. Tess Vigeland from The Wall Street Journal is our guest. As always,

we've got a couple of stocks on our radar, but we begin with big tech. For the second month in a row, a mega cap company is splitting its stock. In February, it was Alphabet, and on Thursday of this week, Amazon announced a 20-for-1 stock split and said it will buy back up to $10 billion worth of shares. Ron, I know this doesn't change the underlying business, and yet shares of Amazon were up 5% on Thursday because, let's face it, more is better. More is better. Yeah, as we've said many times, stock splits don't really change anything about the company. You just have more pieces of the exact same pie. But I do see three possible advantages. I think the lower price will probably be around $145, $150. That lower price will make it easier for investors that don't have

brokers that offer fractional share purchases. It'll allow them to buy the stock. I think it will likely allow Amazon to enter the Dow Jones Index, which will create demand from all the funds that mirror that index. And then, interestingly, it may make it easier for Amazon to offer equity to medium and lower paid employees, because previously one share of stock was likely too large a bonus to offer to some of those employees. But now they'll have more flexibility to use equity as a part of the compensation package. Jason, I know the price that someone pays for a single share of stock should not matter, but some people feel more invested when they have more shares. I mean, isn't that part of the attraction of penny stocks, even though they're

horrible idea? Well, I mean, let's be clear. First and foremost, Chris, I love it when we get to talk about stock splits, because that means we get to talk about pizza, right? Because that's the easiest example. That's the easiest way to explain the stock split. Same size pizza, just cut into more slices. And guess what I'm having for dinner tonight, Chris? Oh, yeah, it's pizza. But now back to Amazon. Yeah, I think you're right. There is an economic impact or lack of an economic impact from a stock split. And it's interesting to see how that plays with the psychological impact, because you're right. I think more is always better. At least most consumers will tell you that, even if they're essentially not getting more. But you are getting

more shares. And I think that for Amazon, it makes a lot of sense. I was a little surprised at this just because I did, there was something just, I felt like maybe that Jeff Bezos took some pride in that share price and kind of wanted to keep growing that thing out and sort of become more like the Berkshire Hathaway A-share. But I definitely understand the perspective here. And as Amazon stated, I mean, it is something that will help employees. They do use equity as a form of compensation. That becomes far more difficult to do as the share price climbs. times. I think the more interesting part here really is the $10 billion buyback because on paper it looks like a big number. It is, but when you do the math, it really boils

down to about 0.67 percent of the shares outstanding. It's not a whole heck of a lot there, but maybe it's a sign of things to come. Maybe it's the first step of many that they take here in the future in returning capital to shareholders. Ron, just back to the Dow Jones Industrial Average, they've had four changes in that index in the last four years. Do you think this is likely to be the next one? Yeah, I think the times they are changing. I think we'll slowly see that industrial index become less industrial over time as some technology companies start to be included more and more often. The Dow Jones doesn't change very often over the last 100 years plus,

but I think more recently we're seeing that change more often and that will continue. DocuSign's fourth quarter profits and revenue came in higher than expected, but guidance for the new fiscal year sent shares of DocuSign down more than 20% on Friday, Jason. I'm sure some probably feel like they bought the stock on Booking.com because we're looking a round trip here, Chris. Two years ago, the company chopped up $275 million for the quarter and $974 million for the year. Today, those numbers stand at $581 million for the quarter and $2.1 billion for the year, and the price is essentially the same today as it was then. Much as the stock was clearly beyond its skis at $200, I think we can all agree, today's price does

seem a little bit of a harsh reaction to the downside if you're able to take that three to five-year outlook, but it's worth remembering too. I mean, the NASDAQ just hit bear market territory, so tough times are being had by all these days. In regard to the company's quarter, yes, it was a good quarter. Management met the guidance that they set with revenue up 35%, billings growth up 25%. Still not GAAP profitable, but non-GAAP earnings per share grew 30%, and they added nearly 60,000 new customers. That puts them at over 1.17 million customers now in total. Net dollar retention rate, 119%. Now, that's down from 125% at the beginning of the year, but it's worth mentioning. I mean, that 125% was a record performance, and it wasn't normal.

The realistic range is in that 110% to 120% range. So, I think investors need to keep that in mind. I will give management some credit here for the past couple of years. They were thrown into the deep end as demand soared due to obvious reasons. They weren't fully prepared for that, but they did a good job of capturing that demand and bringing users in. But it took them away from the roadmap they were on in generating demand through growing relationships and cross-selling. It's understandable, but it's the fact of the matter. Now, if you believe as I do that we are indeed changing the way we're doing business and this digital transformation is real, then I still think DocuSign is still very much in a position to succeed, but management clearly has some work

to do in getting the narrative back on track. As you said, the guidance for the coming year, it's not bad, 24 percent revenue growth for the quarter, 18 percent for the year, but that's obviously a significant downslide from what we've seen the past couple of years. From one software company to another, Oracle's third quarter revenue came in at $10.5 billion, dollars, but overall results were brought down by a couple of the company's investments. That's one of the differences, Ron, between Oracle and DocuSign. Oracle is so big, they basically have an investment arm. Yeah, it's interesting. Profit was hurt by about $0.05 per share because of a stock price decline at a gene sequencing, easy for me to say,

company, Oxford Nanopore, that they have an investment in, and also an operating loss at Ampere, which is a maker of server chips. Not great, but perhaps muddying the waters a little bit. I think it's more important that we focus on the operating business to see how that's doing. In this particular case, I think results were a little bit disappointing, but the guidance was strong and typically investors will focus more on the future than the past. The stock is reacting relatively favorably. For the quarter, revenue was just up about 4%. Again, it is a very large company and it's not the high-growth company it perhaps once was, so 4% isn't out of the norm. Its cloud business was strong, up about 24%. For years, you've seen Oracle try to expand their

cloud business to steal share from Amazon, Microsoft, Google. They're on track to spend about $4 billion this year as they look to build out more data centers and improve their cloud services business. That's clearly a focus, not surprising. Sales from their enterprise resource planning tool division, their Fusion ERP and their NetSuite business rose 33% and 27% respectively, slower than in previous quarters. Demand leveled off from upgrades to that software. That software is used for things like accounting and procurement, so we're seeing less growth there. Adjusted earnings per share, when you boil it all down, went down about 3% from last year. Nothing to get too excited about there, but guidance was good. The CEO, Safra Katz said,

cloud revenue would exit the fiscal year growing at a percentage rate in the mid-20s, and the total revenue in the current quarter will gain as much as 5%. That's a strong outlook. Investors are waiting to see how they digest a large $28 billion acquisition of healthcare company Cerner. We'll see how that goes as Oracle looks to really increase their business in the healthcare sector. In a conference call with analysts this week, Stitch Fix CEO Elizabeth Spaulding made the case for her company's long-term strategy still being intact. But in the short-term, shares of Stitch Fix hit an all-time low after the company cut its full-year guidance. Jason, you got to believe that Spaulding and her

team feel a sense of urgency because the clock really is ticking for this business. Yeah, it definitely feels like it does, or it is rather. As the story with many companies is this day, and you mentioned it, really, it's a lot about the guidance going forward. But the problem for Stitch Fix is this is a problem quarter after quarter after quarter after quarter. It's becoming a vicious cycle that they can't really escape. Revenue for the quarter, $517 million. That was up only 3%. But it's worth noting revenue per active client topped $500 for the third quarter in a row, reaching $549. It was up 18%. So that's encouraging. Active clients now just to take over $4 million, and that's up 4% from a year ago as well. But the business is

really having trouble boosting that top line. They're having trouble ultimately converting that into revenue. And the freestyle offering, I think, is a big point of focus. And this is that sort of direct buy. It used to be known as shop, then it was direct buy, and now it's freestyle. And if there's any question as to whether this is important to the company, Chris, let me just say, freestyle, the word freestyle was used 103 times on the earnings call. So this is something that matters a lot, and it's underperforming. They're having challenges onboarding and converting current customers over. It is something they're going to really have to focus on here in the coming year. There are challenges that are leading them obviously

to guide down for the year revenue actually now declining, which is just what you can't see with a business like this. I guess the big question is, what do they do to stanch the bleeding? I look at this, this is a very different story than something like DocuSign. We've been talking about both of these businesses potentially benefiting from the tailwinds of the past couple of years. But you're seeing one business is getting stronger, one is not. Separate the business from the stock price and it's very clear one business is getting stronger, one is not. I'm not sure about how they really cement that longer-term relationship with the customer. They see signs that retention is improving, but until that translates back into top-line growth,

it's really going to be tough sledding. Coming up after the break, two companies are launching new products. Which one will do a better job of moving the stock higher? Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here with Jason Moser and Ron Gross. Shares of online dating app Bumble rose more than 40% on Wednesday after strong fourth quarter results. Bumble is still not profitable, Ron, but in terms of revenue and users, the numbers appear to be going in the right direction. Yes, they are. It's not been easy going. If you recall, this company went public about a year ago at $43 a share. We now

stand at $21 a share. Recent weakness, a result of concern over Bumble's exposure to Russia and Ukraine, which I'll talk about in a second. But the stock, as you mentioned, was very strong on earnings report. What really impressed investors again was forward guidance. We're seeing a bit of the steam come out of the stock on Friday, but still for the week, really, really strong. For the quarter, we saw revenue growth of almost 26%. The Bumble app revenue increased 42%. Bumble app paying users increased 29%. The Badoo app and other revenue were actually down 3.5%. percent. Badoo, if I'm pronouncing that correctly, is the Russian app, and that's part of the concern here. Total paying users increased almost 11% and adjusted EBITDA up 24%. Margin is slightly lower,

as you mentioned, still not profitable. Management guided for revenue growth of 34% to 36% in the upcoming year. They're discontinuing operations in Russia, removing the company's apps from the App Store and Google Play in Russia and Belarus. Full-year forecast includes a $20 million loss from those businesses. Combined sales from three countries, Russia, Ukraine, Belarus, is only 2.8 percent of Bumble's annual revenue. I think investors breathed a little sigh of relief at some of those metrics. Good fourth quarter results as well for Marketo. The card issuing platform ended its fiscal year with revenue coming in 76 higher than a year ago. Jason, it looks like their guidance for the current quarter isn't

quite that high, but still pretty strong. Yeah. Marquette is a cloud-based card issuing platform, very encouraging quarter revenue. $155 million grew 76% from a year ago. Of course, this is one of those businesses still on that path to profitability, which makes it anathema in today's market. But the total payment volume of $33 billion, that grew 76% as well. That's an important metric, just as much of their revenue comes from interchange. But they noted a strong holiday quarter, strong overall consumer spending, BNPL, buy now, pay later, digital banking verticals in particular, strong performance there. It's worth remembering with Marketo, there is a concentration there with Square or Block today. Now, that revenue

concentration has fallen from 68% a quarter ago down to 63%. But just worth keeping in mind too, the Afterpay acquisition, that is closed now. Block owns Afterpay. Afterpay is also a customer of Marketas. That concentration risk is still there just by virtue of that merger. But again, the business is performing very well. They're calling for 50% growth for the current quarter. It feels like there's a lot of opportunity on the table here for this founder-led business. Definitely want to keep an eye on and I'll just go ahead and get this out there. I do own shares in this business myself. Same-store sales for Ulta Beauty rose 21% in the fourth quarter. Ron, I know Ulta gets revenue from product sales, but you got to be

impressed that a beauty salon chain is delivering these results when you consider how many headwinds they are facing. Totally agree. It's a very strong report with sales up over 24% on strong consumer confidence and demand, fewer COVID-19 restrictions absolutely helping, as you said, really strong comp sales. Those were driven by a 10% increase in transactions and a 10% increase in average ticket. You combine those, it's a nice double whammy there. Gross margins were much wider on favorable mix, product mix, improvement in merchandise margins. Net income up almost 50%, really strong. Announced a $2 billion share of purchase authorization. Guidance was a bit meh for 2022 because they're lapping pretty exceptional

performance, sales growth guidance around 6%, com sales growth guidance of 3% to 4%. But still, the company continues to execute very, very well. Chipotle has been testing a new menu item, Pollo Asado, in Cincinnati and Sacramento. And I guess it passed the test because Pollo Asado is going to be rolling out nationwide in the U.S. and Canada. Jones Soda is launching a new line of cannabis-infused sodas under the brand name Mary Jones. This is going to start in California, but the company plans to offer this in states where cannabis is legal. So Jason, which product holds greater potential for the underlying business? And I'll remind you, the Chipotle's market cap is $42 billion,

and Jones Soda is a micro cap, $37 million. Yeah. I mean, if I'm looking at this practically, it feels like Jones needs the weed more than Chipotle needs the pollo asado. Now, with that said, I'm a little bit more excited about the pollo asado. So, I think that, yeah, I mean, Jones is obviously in a very challenged position, and hats off to them for trying something new. As far as Chipotle, I really like how they are starting to home in on these limited-time offerings, right? they're coming up with new recipes, but they aren't becoming standards. They're just becoming limited time. I think that really creates interest. It keeps that traffic coming back.

It's very encouraging to see. Ron? Yeah. I like what Chipotle is doing, some Latin flavors there. I think squeezed lime and cilantro are going to be the primary components there. We've talked about people not liking cilantro. I can't help them. That's the flavors. You either like it or you don't. Mary Jones, really interesting. Let's not forget, cannabis is still illegal at a federal level. We'll see how that works in terms of going across state lines. For now, we're going to focus on California and see what the sell-through looks like. Ron Gross, Jason Moser, guys, we'll see you later in the show. Up next, a conversation about the evolving workplace

with Tess Vigeland from The Wall Street Journal. Stay right here. You're listening to Motley Full Money. Welcome back to Motley Full Money. I'm Chris Hill. Since the earliest days of the pandemic, the workplace in all its forms has been in a constant state of changing dynamics as workers and employers reevaluate what life at work can or should be. This is the subject of The Wall Street Journal's new podcast, As We Work, and it is hosted by former Marketplace Radio anchor extraordinaire, Tess Vigeland, who joins me now. Good to see you. Hey, thanks, Chris, so much. It's great to be back with you. So last week on this show, we talked about big tech companies like Apple and Google

rolling out their plans to return to offices this spring. And it really seems like we're all about to learn how hybrid truly works. Yeah. I don't think anybody knows, Chris. Yeah. I was just going to say, the old saw of the market hates uncertainty. It's like, I got bad news for you. There's great uncertainty as to how this is all going to work and work effectively so that it benefits employers and it benefits employees too. Right. There's really no roadmap for this. We've been feeling our way through it for the last two years. Obviously, there are plenty of people who still had to go to the office, still had to be in those frontline worker jobs, and are not even dealing with this question of

going back to the office. But a lot of people are. And there is both fear involved, people still feeling very uncomfortable about being in enclosed spaces, where has the HVAC been cleaned up in the last two years? Is it safer now? And then there's also this kind of mushy, do I really want to go back? A lot of people have made work from home work for them and it's allowed them to spend more time with their families. Even if they're working, they're still around their families. And so there's this hesitation. And I think what companies are dealing with right now is that workers are feeling their oats because the labor market is so tight. Workers are feeling like they have the ability to say, you know what? I really don't want to come in. Sorry. Workers have had to

do what they've been told for time immemorial, but right now, because there are more jobs out there than people to take them. People are feeling empowered to say no. So it's going to be very, very interesting to see what percentage of the population decides, yeah, you know what, I'm going to go ahead and go back to work because I've been asked to, even if I don't want to. And what percentage really pushes back on the companies and CEOs and says, not going to do it. Yeah, I was going to say, it must be a nightmare to be a hiring manager right now, Um, because depending on the role, it can be pretty easy to leave one job and start a new one. Um, and one of the things you delved into, uh, in the first episode of the podcast is just sort of

the, um, aesthetics of getting back together in an office. Even if you get back together in office, do you shake hands with people? Do you high five? Like what, you know, um, how, how do you set boundaries so that everybody feels comfortable, but also productive. Because something that I think about a CEO like Satya Nadella at Microsoft, early in the pandemic, talking about how crucial unplanned collaboration is. And that's something that only happens when people are together in an office. Yeah, but at the same time, a lot of other things happen when you have a happy workforce, right um so i think ceos are really having to figure out what that balance is and also think about i mean if that's the only thing that kind of new ideas might come up in a meeting

is that worth losing people over this issue um i don't know i'm not a ceo i'm glad i don't have to make the call uh but you know yeah you were talking about the things that uh could be potentially awkward for people when they come back to the office uh particularly in these early days I don't know, can we say we're post-pandemic yet? I'm not sure. But yeah, do you, is the handshake dead? Are we all going to elbow bump? What about conference rooms where if you're going to have a meeting, is everybody going to go in the conference room? Is everybody going to feel comfortable with that? There are just all these questions that have really come to the forefront and I'm not sure some of the physical space aspects of it have been addressed by a majority

of companies. I know that architects are working on a lot of different ways to adjust the typical American workspace, but how long that's going to take and who's going to start that experiment and what workers are going to be comfortable with starting that experiment is, again, an open question, as is almost everything surrounding our workplaces and our work lives right now. You use the phrase happy employees. There have always been businesses that are willing to pay more than other businesses. They basically say to employees, we're going to pay you more than anybody else. You're not necessarily going to have fun while you're working here, but we're going to pay you more than anybody else. And I think back to a company like Google that 20 years

ago, basically said, we're going to make the workplace a lot of fun. We're not necessarily going to pay you as much as Goldman Sachs, but you're really going to love working here. How do companies recreate those perks, so many of which require in-person gathering? How do companies do that? Or is there no real way to do it? And the money that they allocated towards now needs to just go plow right back into bumping people's salaries up. Well, I think an even kind of more baseline question is, do workers care about those things at this point? Right? I mean, I don't know if you've been to the Google campus. I've been there. And I've been to the famous cafeteria where you can get cereal at all hours of the day. And

there are all kinds of benefits and kind of fun things all around the campus. But that doesn't really come into play if you're looking at workers who have decided that actually being in their homes is the thing that they want to do. And no amount of little work bennies at the workplace is going to replace that. So again, it is this sense of uncertainty, both about what your workers want. Do they want all that old stuff? Would that bring them back into the office? Or do they want not only just remote work, but a flexible schedule? Do they want to be able to work, you know, 10 hours a day, Monday to Thursday, and then have a three-day weekend? Do they want to work three days a week, Monday, Wednesday, Friday? So these are all

options that are being thrown around as possible ways to kind of bring workers back into the fold and want to come back in. But whether or not kind of all those Silicon Valley perks that we started hearing about a couple of decades ago are going to be the thing that brings people back. I don't know. This has been such a sea change, such a transformation in how people are thinking about the role of work in their lives that I just don't know if those are going to be the things to bring people back. The last time you were on this show was 2015. We were talking about the book you had just written, Leap, Leaving a Job with No Plan B to Find the Career and Life You Really Want. I feel like you were ahead of your time, Tess, because you were hosting one of the most popular

radio shows in America in 2012, and you just decided, no, I think I'm leaving. You were the precursor to the great resignation. Chris, I was a quitter before quitting was cool. so when when the great resignation narrative started last year uh really in earnest last year maybe it was like 2020 time is a flat circle it's all oh i have no idea what day or time it is um when that started um did you think to yourself oh people are going to learn what i learned or like what went through your mind when you saw that playing out because clearly some of the people who were walking away, maybe they were later in their careers and it was just like, I've run the numbers, I'm good, I'm retiring a couple of years earlier. A lot of them are younger.

Yeah. A lot of younger people were just saying, no, I'm not doing this right now, I'm walking away. Yeah. I think there is a generational difference in the reasons that people have made that decision over the last year and a half or so. I think the term The Great Resignation came in April or May of 2021, in the wake of what seemed to be an accelerating number of people quitting their jobs. I think one really big difference in the decade since I quit my job is that there's not as much of a stigma to it now. know if that was the case for the vanguard of people who started quitting during the pandemic,

but there really has been this sense of, look, I have a life too, and that life can turn on a dime, and it can all just stop for any reason at all. I'm going to take a second look at what work means to me and the role, again, the role I want it to play in my life. And because we were all going through this collective global trauma, he didn't like that decision didn't get that kind of look askance, um, that I certainly felt a decade ago when I did it, um, for all kinds of reasons. Like people were like, you're going to have a resume gap. How are you going to explain that? You're off-ramping and you're never going to be able to get back on again. And you don't hear that now.

And again, part of that is because of the labor market. People are feeling the freedom to leave, I think, for two reasons, both of them monetary. One is that they were able to save money during the pandemic because they weren't commuting. They weren't buying lunches every day. They weren't doing all the things that actually cost you money when you go to work. um and second they've found that because of the tight labor market companies are willing to pay them more so it's a really different scenario than the one that i leaped into but i would say that i'm heartened by the fact that there is now this sense that there's kind of nothing wrong with

it and that there's a freedom to do it without facing the massive consequences that everybody was worried about, you know, prior to 2020. Um, so it's, it's, it's a little weird to watch it happen because when I did it and when I wrote my book, it, it, it's, it seemed like crazy, frankly. Um, but now it is, it's a norm. It's just, it's happening. Who knows what happens when the economy, uh, is not going the way it is right now. If inflation keeps going and all of a sudden, you know, people don't have as much money and so they don't feel the freedom to leave their jobs. Um, maybe that all changes, but right now it is an opportunity for people to really take a look and say, is this what I want to do? Is this where I want to stay? And if not,

I'm going to go. And millennials have been teaching old folks like me from Gen X a lot about this, not just in the last two years, but really since the end of the workforce, because they even broke the mold of the notion that you should stay at a company for a few years. I mean, they started job hopping basically right out of college, which was again, was breaking a norm. So I think all of it's healthy. It's all change and it changes hard to adjust to both for workers and, and their employers. But I truly believe that work is just an element of your life. It's not the whole thing. And for that realization to have happened over the last two years, I think is personally fantastic.

last thing and then i'll let you go the first episode of the podcast has dropped i know you've got more to come um thinking about your journalism background what is uh give me a sneak preview of coming attractions what is coming up uh on the podcast that that you delved into and and found particularly enlightening so the next couple of episodes the first one we're going to be talking about pay transparency. As you know, there are cities and states that are passing laws that require more pay transparency on the part of companies. But the really interesting part is that there are workers all over the place who are posting their salaries publicly on social media and creating big firestorms around that from both people who think that it's totally inappropriate

and people who are like, yes, thank you. Let's keep going. So we're going to talk about that in episode two. Episode three, I'm really looking forward to one of the things that has been a question over the last couple of years is, you know, have we lost our ambition in the workplace? Have we lost that sense that we've got to keep climbing and keep pushing for, you know, that top level job in the corner office, that high salary, whatever it is. And so we're talking with two women of color, both of whom had top executive jobs. And during the pandemic made very different decisions about whether they wanted to continue climbing a ladder or step off it, around it, over to a different ladder. So we're really trying to delve into

some of the, I think, both psychological and philosophical aspects of what's been happening over the last couple of years, along with some practical advice for things like, what are you going to do when you get back in the office and say hi to somebody? so um mental health also on the docket we're also going to look at um how the relationships with your co-workers has changed and what that means for companies as a whole it's it's just weird out there right now everything is so weird and so we're tapping into that weirdness and uh trying to find a place for people to come and and talk about it and learn something the podcast is as we work new episodes published on tuesdays and you can find it wherever you get

your podcast. Tess Vigeland, great talking to you. Thanks for being here. Thanks so much, Chris. Appreciate it. Coming up after the break, Ron Gross and Jason Moser return. They got a couple of stocks on their radar. Stay right here. This is Motley Fool Money. Chris Hill. As always, people on the program may have interest in the stocks they talk about and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Welcome back to Motley Fool Money, Chris Hill here once again with Jason Moser and Ron Gross. Guys, time to get to the stocks on our radar.

Our man behind the glass, Rick Engdahl, is going to hit you with a question. Ron, you're up first. What are you looking at this week? Ron Gross. Big news, Chris, in the gene therapy sector, specifically impacting Intellia Therapeutics, NTLA. Last week, Intellia lost a longstanding patent dispute that basically said the Broad Institute of Harvard and MIT is the inventor of the CRISPR-Cas9 technology. Broad has exclusively licensed that technology to another biotech that I hold in my gene therapy basket, Editas, EDIT. So now, Intellia is left to scramble to appeal this decision or perhaps to license the technology from Editas. CRISPR Therapeutics is also in the same boat. They license the technology that now no longer holds

the patent. So a big shakeup here in this industry. I'm going to hold on to these three CRISPR stocks for now. I'm going to wait to see how it shakes out. They're making progress until you actually, at the same time, announce some positive results from a clinical trial. So again, I'm in these stocks because they're the future of medicine and I want to see what happens. Rick, question about Intellia Therapeutics? Geez, can't they all just get along? So, if I already own CRISPR and Editas, do I need Intellia also? Do I need a basket of gene editing stocks?

I think it's safer to own a basket, because if you put all your eggs in one basket, Rick, it could go very badly. Jason Moser, what are you looking at this week? Well, not to be forgotten, Apple did have an event this week, ticker AAPL. There wasn't anything really mind-bendingly new, but I like to say Apple's employing the $6 million man strategy here, Chris. Better, stronger, faster. That's ultimately what this was. It's fascinating to watch the evolution here of Apple. It was the iPod company, then it was the iPhone company, then we're talking about services. But really now,

it's becoming a chip company as well, that M1 Max and M1 Ultra chip. The M1 Ultra, they call the next giant leap for Apple Silicon. The Max Studio is a pretty amazing-looking desktop. Now, maybe not the biggest opportunity out there, the biggest market opportunity, but it's a nice flex. It shows you what they're capable of. And I think the new iPhone SE with 5G capability, they're able to incrementally bump that price up a little bit, which is nice. Dabbling in live sports now with MLB, and now we know MLB is set to continue. So, hey, you've got a stock here that's valued at 25 times full-year estimates, and that pegs earnings growing from about 10% last year. I think they'll beat that. They're

going to continue buying back at least $20 million in stock quarterly. So if you're looking for some stability in an inflationary environment, I think Apple should be at the top of the list. Rick, question about Apple? Yeah, I'm an Apple guy and I used to update my phone every year on their schedule and all that. I'm finding more and more that these things last. Are they too good? Are they too good? They are really good. I'm with you. I want to use this phone for as long as I can. And I think that's going to be one of the issues they run into perhaps down the road. But what we've seen to this point, they've been able to cope with it by becoming more things, the services revenue,

taking control of that chip dynamic, and so I wouldn't sweat it too much. What do you want to add to your watch list, Rick? I probably already have enough Apple, I better fill my basket. All right, guys, we're out of time. Everyone, thanks for listening. We'll see you next time. Thank you.