Motley Fool Hidden Gems Investing - Big Tech, Huge Earnings

Episode Date: April 30, 2021

Alphabet, Amazon, and Apple report record earnings. Microsoft reports its biggest revenue growth in three years. Shopify rises on a strong quarter. Shares of Crocs, Facebook, and Waste Management hit all-time highs. Pinterest and Teladoc tumble. And Domino’s reports double-digit growth. Motley Fool analysts Ron Gross and Jason Moser discuss those stories and dig into earnings news from Starbucks, McDonald’s, and Visa. Plus, our analysts share a couple of stocks on their radar: Axon Enterprise and Skillz. Looking for more stocks for your radar? Get 50% off Stock Advisor by going to http://RadarStocks.fool.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Chris Hill, joining me this week, senior analyst Jason Moser and Ron Gross. Good to see you, as always, gentlemen, it is earningspalooza. There are so many big earnings stories to get to, we don't even have time for a guest this week. But as always, we've got a couple of stocks on our radar. Let's start with the behemoths of big tech. Alphabet's first quarter revenue came in north of $55 billion. Profits were much higher than expected for Google's parent company. And YouTube's revenue is starting to look a lot like Netflix's revenue. Jason Moser, where do you want to start with Alphabet? Well, I will say, I watch a lot more YouTube than I do Netflix, so it's nice to see that they're really capitalizing on that

opportunity. It was hard to imagine this not being a strong quarter, given the signs that we've seen in ad spending. Personally, I wasn't really surprised by this report. Very impressed, not surprised. Because when you look at the global digital ad market, spending is forecast to grow from around $265 billion in 2020 to around $425 billion in 2024. So, you're talking 12.5% annualized growth projected here over the next several years. Clearly, Alphabet and Google, they're going to be a part of capturing that. As to the numbers, revenue of $55.3 billion, it was up 32% in constant currency. That outpaced the total cost of revenue growth of 27%. Operating income, $16.4 billion. It was up 106%. Operating margin for this company was 30%.

To your point on YouTube, advertising revenues there with YouTube, $6 billion, up 49%. They noted an exceptional performance there in direct response, which was a challenge. That was ahead when they had been dealing with over the last year or so. Brand advertising, along with direct response, they're really hitting it with that one-two punch there. The cloud segment continues to perform well. Revenue $4 billion for the quarter, up 46%. Other bets, no surprise, big money loser, loss of $1.1 billion. But you can just sweep that under the rug when you have that Google engine at play here. They will continue to repurchase more shares. They announced an authorized repurchase of up to an additional

$50 billion in stock. This business, they're a believer in getting back to work. They are investing here in 2021, in the U.S. alone, they're going to invest $7 billion in offices and data centers and create at least 10,000 new full-time jobs. These guys, they seem like they're really ready to get back to work. When you're recording numbers like they just did, I certainly understand why. Shares of Amazon hitting an all-time high on Friday. Overall sales in the second quarter were $108 billion. Profits destroyed expectations and Amazon's got 200 million members in Prime. Ron, for all of Amazon's success, every now and then they put up a disappointing quarter. This was not one of them.

I was wondering where you're going to go with that. I'm going to call it a blowout quarter, and I just did. The numbers are awesome. Net sales up 44%, obviously benefiting from a surge in online shopping during the pandemic. They did get a $2 billion boost from favorable foreign exchange rate fluctuations, but even if you strip that out, net sales were still up an impressive 41%. As Bezos mentioned in the release, Prime Video turned 10 years old, streaming hours were up more than 70% year-over-year, again, aided by the pandemic. Amazon Web Services turned 15 years old, 32% growth year-over-year from that segment, now at a $54 billion annual run rate for AWS. As you said, more than 200 million paid Prime members

worldwide, and then ad and other sales was up 77%, not too shabby also. That all translated into an operating increase of 123% and earnings per share increase of over 200%, producing cash flow of $26 billion. These are really incredible numbers. The guidance was strong that sales expected to grow between 24% and 30% for the second quarter. Prime Day will take place in the second quarter this year, that should help their spring results. This should be the final full period for Amazon with founder Jeff Bezos at the helm. AWS CEO Andy Jassy will take over that lead role. That obviously has been expected with Bezos kicking himself up to the executive chairman role. But a blowout quarter, really impressive.

Apple had their own blowout results in the first quarter, and yet shares were flat this week. Overall sales were up 54%. Apple increased its dividend and announced a $90 billion dollar stock buyback program. Jason, the stock is flat. Are we not entertained? No, we're plenty entertained. We're plenty entertained. But I mean, this has also been a story of multiple expansion for several years now. So, I mean, you have to keep that in mind. We were certainly looking for a bit of a bounce back for Apple from a year ago. Boy, we certainly got it. Revenue reached a record $89.6 billion. That was 54% growth from a year ago. And that was thanks, Chris, to Strength in Everything. Literally everything Apple did,

they brought it. They really brought their A-game. It was the second quarter in a row with double-digit growth in all product categories. iPhone revenue up 65.5% from last year. Services revenue of just under $17 billion. That was up almost 27% from a year ago. I was really impressed to see the gross margin number they recorded, 42.5% company-wide gross margin. That was 38.4% a year ago. A lot of that, I think, can be attributed. They're able to realize some pricing on their products and whatnot, but also, the more that services revenue makes up the overall revenue, that's higher margin revenue. That's going to help Apple's margin picture down the line. I think that watching them pursue that services opportunity

makes a lot of sense. When I think about the big question for Apple going forward, we've seen some news out just here at the end of this week, it's how they're going to navigate this App Store debate. It's a phenomenal tollbooth model that they've benefited from for so long, but it is under some scrutiny now. I don't know that there's really a way for them to walk that back. There's going to be some kind of a negotiation here. That could be something in the near term that creates some questions. But again, we're talking about a $2 plus trillion business, and it is that big for very good reasons. This quarter was just another good example. Microsoft's third quarter featured the

company's biggest revenue growth in three years, but cloud revenue was flat and shares of Microsoft down 4% this week. Ron, I get that even with the drop, shares of Microsoft are up 40% over the past year. So maybe this was some profit-taking, but I really can't imagine owning Microsoft, looking at these results and saying, nah, I'm going to invest my money elsewhere. Exactly. They actually beat expectations, but it appears that investors wanted an even stronger beat, which is kind of funny. But I guess when you're a $1.9 trillion company, you've got a lot of expectations to live up to. But listen, results were strong. Total revenue up 19%. Revenue in that productivity and business process segment, which is the Microsoft Office and

LinkedIn, that was up 15%. Intelligent Cloud up 23%, driven by Azure, which was up 50%. More personal computing segment, which I always hated that name, more personal computing. That's terrible. That's the Windows and the Xbox segment. Those sales were up 19%. Operating margins widened, so you got an operating income of 31%, an increase there, and adjusted net income of 38% growth. Those are very, very strong numbers for a company of this size. They've returned $10 billion to shareholders in the form of share repurchases and dividends in the third quarter. I expect that will continue. Guidance was solid. You see the stock trading at around 32X forward earnings. That's not too bad for a company that is growing 30%, 35%, 40%. That's reasonable. If you don't own

Microsoft yet, I still think you can actually own it at a $1.9 trillion market cap. Jason, along those lines, we've just talked about these four behemoths. The smallest of these four companies is Alphabet. It's a $1.6 trillion company. What do you say to someone who looks at these and says, well, I get these are good businesses, but I feel like the salad days are over for investors? It's a very reasonable thought to have. I would just encourage you to think about the direction the world is headed, the tools that we're going to need to be able to do the things that we want to do. Recognize the fact that big tech, these are the companies that are really providing most of those tools,

both explicitly in the ones that we use and implicitly in the cloud infrastructure and stuff that we don't see day-to-day. Then just don't look at the market cap, look at the numbers, look at the revenue that these companies continue to chalk up, look at the earnings that these companies continue to chalk up. Because once you look at those numbers, then the valuations start to make a lot more sense. When you see the opportunity that's out in front of them, that really seals the deal for me. Coming up, we've got Facebook, Shopify, and a lot more. 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. One clarification

I should make. Ron, when you and I were talking about Microsoft and I referred to their cloud revenue being flat. I was referring quarter-over-quarter. Year-over-year, cloud revenue, looking pretty nice. Exactly. Sequentially, not as impressive. Facebook's revenue in the first quarter grew nearly 50%. Profits were higher than expected. Facebook says they're expecting headwinds from Apple's new operating system, but with the stock up 8% this week and hitting a new high, Jason, investors don't seem to be too worried. No, and I kind of feel like they probably shouldn't be. I think they're doing the diplomatic thing and expressing the concern over that privacy issue and potential headwinds.

To me, privacy makes for a great stance. People love to whine about it on social media, ironically. It's also a complicated issue that is becoming more and more difficult for consumers to understand and navigate. And when you compare that to convenience, well, convenience by its very nature is simple. So, I think the privacy thing is a bit overplayed. I think consumers, ultimately, at the end of the day, are going to opt for convenience. You're probably not going to see many of them saying, I don't want my phone to track my behavior or whatever. Maybe that's something that plays out. I will see. But when you look at the numbers that Facebook recorded for the quarter, it was just, again, really just amazing stuff. I mean, pricing power

with price per ad up 30%. The number of ads served up 12%. Their family average revenue per user up 28.5%. They have almost 3.5 billion monthly users of their family of apps. We're talking about Facebook, Instagram, WhatsApp, and all that other stuff that they own. They're able to bring expenses down a little bit. Operating margin was up 10 percentage points. The business just scales so well. I guess the biggest question for most is in regard to privacy. I just think the privacy thing is a little bit overplayed. To me, I'm a little bit more interested in what's next. I mean, this is still an advertising company. They're dealing with, I think, a lot of the pitfalls of social media. They are making a lot of investments in immersive technology, AR, VR,

stuff like that. We're not really seeing a lot of the fruits of that labor yet. So, over the coming decade, that's what I'd love to learn more. I'd love to see more of that stuff. But as it stands, again, like I said with Google, with Alphabet, they're pursuing just this massive market opportunity that is forecast to still continue growing here over the next several years. So, clearly, Facebook will be capturing some of that opportunity. Shopify's first quarter was a dream come true for shareholders. Profits and revenue were higher than expected, gross margins were up, and shares of Shopify rose 10% this week. Ron, this company is on fire in the best possible way.

They might deserve the firing on all cylinders category. Really impressive results. Total revenue up 110%. Subscription solutions up 71%. Merchant solutions up 137%. That monthly recurring revenue metric, the MER, as I like to call it, up 62% as more merchants join the platform and their POS Pro offering contribute its first full quarter of revenue, gross merchandise volume up 114%. These numbers are really impressive. If you exclude a $1.3 billion gain on its equity investment in Affirm, which resulted from Affirm's IPO in January of this year, their adjusted net income was $254 million compared with adjusted net income of only $22 million this time last year. $7.9 billion in cash

bolstered by a follow-on offering they did in the first quarter. Guidance was unchanged. They do expect to grow revenue rapidly in 2021, but at a lower rate than in 2020 as the economy opens up and more people return to traditional offline brick-and-mortar retail. But an incredible quarter and the growth continues. Visa's second quarter profits and revenue came in higher than expected. But shares of Visa were basically flat this week. And Jason, they put up some good numbers, but Visa is not offering any guidance. And I think that is, among other things, a little unsettling. Perhaps. I mean, they did note in the call, I mean, they were up front saying, hey, listen, it's just difficult to forecast in this point in time. And they're

assuming that if trends relative to fiscal year 2019 continue, then they see revenue growth in this third quarter in the high teens. We'll wait and see. They gave us a little bit of guidance, Chris. Let's not get too worked up here. I wasn't worked up at all. Seriously, though, I think the argument for Visa today, it's a singular point of contact and execution in a world where there seems to be a new fintech on the block every other day. It's becoming a very fragmented space and it's difficult to fully understand the value proposition they all bring. Having this massive global network already in place with Visa, oftentimes, it's seen as an essential partnership in many cases. I think it's helping to simplify

what is becoming a very fragmented space. There's the value proposition there. I think, as we see consumer spending come back, we're seeing Visa's numbers coming back, payments volume grew 11%, that was up seven percentage points from the previous quarter. Cross-border volume, Still some headwinds there due to pandemic issues, of course, but that is improving. Processed transactions grew 8%. That was up 4% from the previous quarter. When you look at the actual size of this business, we're talking about big tech, Visa is big in its own right. This is a $500 billion company. In the last two years alone, They've grown to 3.6 billion cards in the world in 70 million physical merchant locations.

I mean, this is a massive business with a few different avenues of growth here, given this shifting space as we see more fintechs and more ways for money to move around. So, again, yes, it's going to be a little bit difficult for them to forecast in the near term. Not going to really hold that against them. The stock is underperforming so far. year, but again, at $500 billion market cap today, still growing, a convincing position in the value chain there. This seems like a business that still has some reasons to be optimistic. Shares of Crocs rose more than 20% this week after a record first quarter in terms of sales.

In case anyone thought this was just a great few months, Ron, management raised guidance for the full fiscal year. This is an amazing run for a company that sells rubber shoes. Yeah, I was going to say, let's move away from tech and fintech and talk about Ugly Clogs for a minute. Ugly Clogs, whose stock is up 1,100% over the last five years. Really incredible. This was a great quarter. First quarter revenue up 64%. Direct-to-consumer up 93%. Wholesale up 50%. Digital represents 32% of revenue now. That's climbing slowly. It was 30% this time last year, but it's getting bigger. Asia was strong at double-digit growth with 26%. Sandals revenue increased 17%. It represents 17% now of footwear sales. They do

sell other things other than sandals and clogs. There's many other offerings over at Crocs. Adjusted gross margins widened 720 basis points. Really strong results. Expected revenue growth of 40% to 50% in 2021, selling it only 18 times. Not too late to get into Crocs as long as they put up these growth numbers in the future. Ron, I'm disappointed. I really thought you going to make the argument that Crocs is indeed a tech company. Not this time. Wash your hands and bring your appetite. Food and beverage is next as earnings palooza rolls on. This is Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here with Jason Moser and Ron Gross.

Second quarter profits for Starbucks came in higher than expected, but shares of the coffee giant down a bit this week over concerns about international sales. And Jason, when you consider that more than half of their locations are outside the United States, I get the concern. Well, Chris, maybe so, but let's just focus on domestic sales. I am not concerned because I am doing my part, let me assure you. Going back to something Ron was talking about with Microsoft just a minute ago, I thought that reminded me a little bit of Starbucks and what I was thinking with this business. I think the most interesting thing about Starbucks today is that even at its $130 billion market cap, it's absolutely still a stock worth buying and holding onto. I think

indefinitely. To me, it's hard to imagine 10 years from now looking back and seeing this one as a loser. It could happen, but as a shareholder myself, I'm definitely not betting on it. Looking at the numbers, consolidated net revenues, $6.7 billion. It was up 11% from the year ago. Global comps up 15%. That was driven by strong ticket growth there, 19% increase in average ticket there. That was offset by a small decline in transactions. But the U.S. comps up 9%. That That was driven by 21% increase in average ticket. There was a decline in comparable transactions there, a little bit more pronounced there at 10%. But this is just such a big, wide-reaching business now, basically looking at around 33,000 stores globally, a pretty

nice split there between company-operated and licensed. Mobile orders represented 26% of U.S. company-operated transactions in the quarter. That was up 18% from a year ago. I think every quarter, it seems like we're pretty critical of their rewards program and how it seems to be lagging on the member side. But I think they're starting to pick some ideas up there. 22.9 million members here domestically. Now you're looking at 16.3 million in China. Speaking of China, 91% comp growth there. Let's talk about tech companies. They they have an AI initiative, believe it or not, known as Deep Brew. I'm not kidding, their AI initiative is known as Deep Brew. This is taking customer data, it helps inform

product development, inventory orders, suggestions, even predictive models to understand better what's going on around specific locations. I think all in all, given the nature of what they sell, clearly they are thinking about the future, I think, the right way. This business still poised to grow for a number of years to come. Domino's Pizza keeps on rolling. First quarter profits and revenue came in higher than expected. Global same-store sales rose nearly 17%, Ron. I guess we shouldn't be surprised. This is a very strong quarter, but if you look at the stock, it appears that some were hoping for just a bit more, those greedy folks that want even more out of their Domino's

quarter. But if you're running this business, you've got to be happy with these results. U.S. same-store sales up 13%, international up almost 12%. I always like to bring these metrics in, 109th consecutive quarter of international same-store sales growth and the 40th consecutive quarter of U.S. same-store sales growth. So impressive. Total revenue up 12%, that was a result of net store growth of 175 stores, as well as those strong same-store sale results we just mentioned. margins widened just a bit and operating income was up 14%. Now, earnings per share were actually

down 2% and that was the result of significantly lower tax benefits. I think it's better to focus on the operating income growth of 14% or you lose the correct picture of how this business is doing. Total remaining authorized amount for share purchases are $1 billion. I expect them to continue to buy back stock. Shares trading at 31 times, I'm not going to call that cheap. It's not a cheap stock for a company that's putting up 14%, 15%, even 20% earnings growth. But I still think it's not grossly overvalued, certainly not compared to like Papa John's at 44 times or Chipotle at 56 times, but not screamingly cheap here. We'll keep an eye on the stock. Ron, you mentioned some investors out there wanting a little bit more. Someday,

that streak of international same-store sales growth, someday that streak is going to end. When that happens, a few of those people are going to lose their minds. McDonald's did not fare quite as well with international same-store sales growth in the first quarter, but here in the U.S., comps are up more than 13% and shares of McDonald's hitting an all-time high on Friday, Jason. Yeah, I think management put it well on the call, talking about where they shine and talking about themselves as one of the world's most global corporations with this global reach, but it's also very local. That's a benefit of that franchise model. They are franchises that are locally owned, locally

managed systems. They're rooted in the communities where they operate. They have a good understanding of what consumers are looking for wherever they may be around the world. That really is translating into just impressive numbers for the business. You look at the adjusted earnings per share, $1.92. That was up 27%, excluding currency effects. You noted strength in the U.S. Yes, absolutely. The U.S. is driving the results right now. International-operated markets, treading water, developmental markets, markets like China, for example, those are coming back as well, thankfully, as they continue to work their way through the pandemic as well. Lest you think that Omnichannel is just about retail, it is absolutely about restaurants.

If you look at a company like McDonald's over the last four years, they went from just over 3,000 restaurants offering delivery to now more than 30,000 restaurants, which essentially is 75% of that global footprint. And they noted they're doubling down on what they refer to as the three Ds, digital, delivery, and drive-thru. And in the first quarter, they had nearly $1.5 billion in digital sales. That includes app, kiosks, and delivery. Again, you talk about one of the bigger global restaurants out there, McDonald's stands out. I like the promotions, things like the chicken sandwich, that has them really excited. This new promotion with BTS, the Korean pop group. Listen, I'm not a member of the BTS Army, Chris, but apparently this thing is gaining

some traction. I suspect it's going to help boost that top line here in the next few quarters as well. Shares of waste management hitting a new high after a strong first quarter report. Ron, we've talked a lot about cloud computing, collaborative software, e-commerce. Waste management provides a nice reminder that the business of trash is alive and well. Alive and well and recovering as the economy recovers. This was a nice quarter. Organic revenue up 2%. Not going to knock cover off the ball, but we're building on something here. They saw solid pricing, there were improved recycling results, but that had to overcome some small volume declines still.

Organic revenue in the company's collection and disposal business fell $5 million, but they are continuing to improve sequentially as the economy opens. Acquisitions added $290 million of revenue. That was from the 2020 acquisition of Advanced Disposal for $4.6 billion, not a small acquisition by any means, but that is going well, the integration of that is going well. They were able to improve their operating margins as a result of some real strict cost-cutting efforts. The operating expenses as a percentage of sales improved 130 basis points, that's pretty good for a company like Waste Management. That resulted in adjusted operating EBITDA growth of about 14 percent and they produced $865 million of free cash flow.

Management increased their financial guidance that was provided in February for both the revenue, adjusted operating EBITDA, and free cash flow. That's partly a result of the acquisition of advanced disposal going really well. They think they can wring some additional savings out of it more than originally was expected. Management expects strong results as the commercial, industrial, and the landfill business continues to recover over the remainder of the year as more businesses get back and the economy opens up. I think this business is looking good for waste management this quarter, and I think we'll continue to see good things later in the year. It just occurred to me,

we talk sometimes about specific industries and the leaders within those industries and say, if you're looking at home improvement, you could do worse than to just buy shares of Home Depot and Lowe's or Visa and MasterCard. Between waste management and Republic Services, those are two businesses that collect roughly 50% of the trash in America. It seems like you could do worse than to just own a couple of shares of both of those. Yes, they absolutely, to a real extent, control the markets. Up next, we've got two radar stocks you'll want to take note of, and one company name change we're still trying to make sense of. Stay right here. You're listening to Motley Fool Money.

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 with Jason Moser and Ron Gross. A couple of high flyers losing altitude this week, guys. Teladoc's revenue in the first quarter was 150% higher than a year ago, but guidance had the stock falling. Jason, shares down about 5% this week, but Teladoc is more than 40% off of its high for the year. It's been a crazy past year. This was one stock that really stood out among others a year ago. It's not terribly surprising to

a little pullback. I think this is a great reminder for us to focus on the business and not the knee-jerk earnings reactions. We can try to explain those away when the two are at odds, but I care about what the business is doing. Really, when I go through this report and the call, Teladoc's business is doing very well. I think you just have to remember, there was a lot of growth pulled forward due to the pandemic. But to your point on the revenue, $454 million, that was up 151% from a year ago. Now, organic revenue, that excludes acquisitions, of course. That growth was 69%, still very impressive. At the end of the quarter with U.S. paid membership of 51.5 million members, that was up 20%. Visit fee-only access, they have 22 million members.

Now, I think with Teladoc, there are a lot of metrics that matter, but to me, one that slips under the radar for a lot is utilization. That ultimately is telling us people using the platform or not. Utilization was 19.6%. That was up 620 basis points from a year ago. Utilization is simply total visits divided by paid U.S. membership represented on an annualized basis. We'd like to see that number going up. For the record, that number was 10.9% for the same quarter back in 2018. Clearly, we're seeing people going to this platform and the services that they offer. I think in regard to the sell-off, it might have had a little something to do with guidance. I mean, they did raise guidance technically, but I think there was something,

it's really two things. I think there's some good old-fashioned profit-taking, not terribly surprising, short-timers getting out while they can. But there was a statement they made in the call that I think led to it as well. They said that they expect increased spending over the course of the year as they invest in the growth of the business, particularly in new product launches and expansions in a new market, the integration of Livongo, and they're developing an integrated data platform to let them do more with all of that data that they're bringing in. So, if you can take a step back and understand that the investments that they're making today are to ensure the sustainable long-term success of the business, then it seems a bit more reasonable

to hang on to these shares and be excited about the future. But yeah, it's seen quite the pullback, but we also have to remember, it had quite the tailwind over the past year or two. Shares of Pinterest down more than 10% this week, despite a strong first quarter report. I don't know, Ron, Pinterest is growing revenue, monthly active users are up. This seems a little bit like what we talked about with Domino's, where it was a good quarter, but not amazing. Yep, that's fair. Growth just wasn't where investors wanted to be. To me, that's more about valuation than it is about operating results, because you can't fault them for these operating results. They're quite strong. And we'll talk about valuation maybe after we

cover some of those metrics. But listen, first quarter revenue up 78%. Monthly active users rose by 30%. That was in contrast to 37% last quarter. And I think therein lies what investors are focusing on, that slowing in monthly active user growth, but still impressive at 30%. percent. Management said starting in mid-March, the easing of pandemic restrictions slowed U.S. monthly active user growth and lowered engagement year-over-year as people spent less time online. I don't think that should necessarily have been a surprise to anyone. I think we should know that things like that are coming as the economy opens up and as vaccines get into arms and people start going out again. The average revenue per user ARPU we talked about increased

34%. That's a very impressive number. The company lost $21.6 million for the quarter, but if we adjust for non-cash items, including stock-based compensation, which I'm actually not a fan of, but I'm going to do it just for our listeners so we get a sense of how the business is doing, they actually did generate positive EBITDA of about $84 million. Guidance was strong, 105% revenue growth for the second quarter predicted. Stock's trading at 22 times revenue, though. Therein lies this price to perfection. If you don't put up those growth numbers, your stock is going to get punished. That's just the way the game is played. Our e-mail address is radioatfool.com. You can send us questions or like long-time listeners,

Stuart Watson and Jason Free, you can send us a business story and say, have you seen this? This is the story that both of these gentlemen sent to us. It's about Standard Life Aberdeen, which is a fund management firm based in the U.K., market cap of $8 billion, so not a small business, they decided they wanted to come up with a new name. Instead of Standard Life Aberdeen, they came up with a single word which is spelled A-B-R-D-N. Again, Standard Life Aberdeen would now like you to call it Aberdeen. they're telling us abrdn is pronounced aberdeen and not as i first looked at it as a burden but i i don't know i feel like with truest and tronk and we talked recently about kindrel

it's almost like ron they're going out of their way to try and top one another this is getting out of control i'm not giving them a pass on this it's not acceptable let's pull it back there's shortage of E's out there? I mean, what's going on? I'd like to buy a vowel, please. Apparently, vowels are too expensive. We're going to save money on letterhead. Let's get to the stocks on our radar. Our man behind the glass, Dan Boyd, is going to hit you with a question. Jason Moser, you're up first. What are you looking at? Yeah, one that I have been looking at for augmented reality and beyond service over last several months, Axon Enterprise, ticker AXON. In a world where accountability matters now more

than ever before in regard to law enforcement, this to me is a company that really can help change things. You probably know them best for the Taser products that they produce and sell. They also have an interesting side of the business, the software and sensors side of the business on officer body cameras, in-car cameras, cloud-based digital evidence management software through its evidence.com platform. I feel like there are a lot of opportunities for a company like this to help our policing system evolve, to help it to keep up with the times. Of the 69 largest metropolitan area police departments in the U.S., at least 47 are actually on the Axon Network now. They've been around for a while. It's a familiar name. What has me really

interested in this business from the immersive technology side, they offer a suite of virtual reality training services for public safety. Ultimately, as they mentioned in their 10K, it's two obsolete bullets. They intend to drive training and adoption of best practices in modern policing through this virtual reality platform. I just think this is a neat business is looking to the future for solutions. And it's one that I'm going to be keeping an eye on next week as they have earnings coming out on May 6th. Dan, question about Axon Enterprise? Absolutely, Chris. So, Jason, I'm looking at the all-time stock price chart on this company right now, and it starts a strong exponential curve around 2019, the beginning of 2019. And I'm just

curious, are we going to see growth for a company of this size like this in the near future, or do you expect it to slow down? Like this, maybe not. I mean, it could be something where it slows down given the market share that they already hold today. I think that really they've become more and more a part of the conversation for obvious reasons, given what they do and given the state of things today. So there might be some enthusiasm from investors looking a little bit into the future that have caused that ramp up. But I do suspect we still have a company here that should see plenty of growth in the coming years. You've got a minute left, Ron. What are you looking at? Looking at skills. SKLZ came across my radar because it's a recent recommendation

in our stock advisor service. They provide a mobile game platform. They offer tournaments and other competitive events to millions of players worldwide. Obviously, mobile video gaming is a huge growth industry. The CEO has a substantial ownership stake here. They went public via a SPAC in December 2020. They did a following on offering in March. Stock has been real weak ever since that March offering. It's back down to around $17, $18 from the 24 where it did the follow on. 25 times sales, not profitable yet, but it's growing pretty darn quickly and I think it deserves some attention. Dan? Chris, am I asleep? Am I dreaming? Did Ron bring a video game stocks on our radar? Not tires or

minerals or trains, but video games? What is happening? The answer to your question is yes, I did. What do you want to add to your watch list, Dan? You know what? I am too plugged into the Stock Advisor pipeline here, and I'm looking at skills, honestly. I think it's a very interesting company. All right, Jason Moser, Ron Gross. Guys, we're out of time. That's it for this week's show. We will see you next week. I'll see you next time.