Motley Fool Hidden Gems Investing - Big Tech's Banner 2023 Continues

Episode Date: May 26, 2023

Tech is leading the market higher in 2023, but a few giants are doing the heavy lifting. (00:21) Matt Argersinger and Jason Moser discuss: - Nvidia's AI-fueled earnings report and the company's historic pop. - Intuit's latest results and how proposed IRS free-file software could affect the company. - Zoom's post-pandemic slump - The signs retailers are fixing inventory problems, but high-end merchandise still isn't selling. (19:11) Motley Fool contributor Lou Whiteman talks with former United Airlines CEO Oscar Munoz about his approach to turning the airline around, dealing with personal setbacks, and the lessons in leadership from his book “Turnaround Time.” (34:14) Matt and Jason discuss Netflix's $7.99/month solution to password sharing and two stocks on their radar: Salesforce and Invitation Homes. Stocks discussed: NVDA, INTU, ZM, WSM, ULTA, COST, SPG, URBN, GPS, CRM, INVH Host: Dylan Lewis Guests: Jason Moser, Matt Argersinger, Oscar Munoz, Lou Whiteman Engineer: Dan Boyd, Tim Sparks Learn more about your ad choices. Visit megaphone.fm/adchoices

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Because we have your number. A truly legendary earnings report and a look inside Retail's Rally. Motley Fool Money starts now. Everybody needs money. That's why they call it money. The best things in life are free. But you can give them to the birds and bees. From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Fool Money radio show. I'm Dylan Lewis. Joining me in studio,

Motley Fool senior analysts Jason Moser and Matt Argersinger. Guys, great to have you here. Hey, Dylan. We've got brick and mortar putting up big results and lessons in leadership from a seasoned executive. But we're starting out today talking tech. We've got earnings from NVIDIA, Intuit, and Zoom. And we're kicking off this week talking about tech, because the sector is probably the biggest factor, Matt, in how investors are feeling so far this year. That's right, Dylan. And it's remarkable, the numbers I'm about to go through. Here we are, we're almost to the end of May. The QQQ, NASDAQ 100, up almost 30% year-to-date. That's a monster

year already. The S&P 500, by the way, up 9%, not a slouch there either. But here's where it gets interesting. If you look at the equal-weighted S&P 500, for example, as of Thursday's market close, that's negative. The average stock in the S&P 500 is actually negative for the year. The Dow Jones is also negative. The Russell 2000 small cap is basically flat for the year. If you're a dividend investor like I am, you're in trouble. For example, the Schwab U.S. dividend ETF, which is one of the more popular dividend ETFs, that's down 7%. Energy, the sector is down 7%. Don't get me started on banks, financials, or real estate. Forget about it. Tough, tough year so far. I guess the point is, traders would call this

breadth or the lack of breadth in the market. It's not a great sign. I just think, if you weren't in a lot of the big technology companies that we've been talking about, and I know we're going to talk about a huge one in just a minute, you're probably not feeling that great this year. You just have to wonder if leadership is so narrow in the market, does that mean that certain parts of the market have run too fast, and the other parts that have been left behind, are they looking maybe more compelling, and investors need to maybe shift their focus just a little bit? I think a lot of people probably holding mutual funds are very happy that the S&P 500 is a market cap-weighted index and not an

equal weighting index. Absolutely! Yeah, Big Tech has done a lot of the heavy lifting this year, and NVIDIA is certainly doing everything it can to help. Jason, the company posted one of the largest single-day market cap moves in history after reporting its first quarter results. The look backward was good. Revenue was down year-over-year at $7.2 billion, but ahead of expectations. Net income over $2 billion, up 26% year-over-year. But the story, really, to me, Jason, is shares spiking 25% because of the look forward. Yeah. Well, the big theme with NVIDIA, of course, is artificial intelligence, AI. We've been talking about it all earnings season

with virtually every company, from tech companies to restaurants. The market obviously likes NVIDIA's strategy, what it's doing. Data Center was the big beneficiary here with the company. It represents more than half of the overall business, so it is a very big deal. Looking at the overall numbers there, revenue $7.2 billion. It was down 13% from a year ago. Like you noted, some of those comparisons from a year ago, it didn't look like it was that great of a quarter, but it does come back to the guidance. That's what really, I think, has the excited. Management calling for $11 billion in revenue for the current quarter. That represents 64% growth from a year ago. That's thanks to a, quote-unquote, steep increase in demand

related to generative AI in large language models. Then they also noted in the call that demand has extended visibility in the data center segment. Again, a big deal because data center is such a big part of the business. But that demand has extended visibility in data center out a few quarters now. They've, quote-unquote, procured substantially higher supply for the second half of the year. All signs point to this not being just a one-off quarter, but I think what leadership was pointing to in the call, really just the early innings of a very, very large and important trend that's just underway. It's extraordinary to watch the evolution of this business, Jason. I was covering NVIDIA

for our stock advisor service more than 10 years ago. I remember back then, the business This was largely based on just its graphics cards. It was all about, how's the video game market looking? We have competition from AMD and others. We're losing pricing power. And now, this company is powering the next generation of computing and artificial intelligence. We were speaking before the show, it is the ultimate picks and shovels company for all of these major trends, whether it's data centers, supercomputing, crypto, and, of course, artificial intelligence. It goes to show you, businesses can change in a lot of ways, and if you don't follow closely enough, wow, you can miss. What was it up in market cap yesterday? $250 billion?

It was up like a Walmart in market cap. Yeah. That 25% gain, 25% or so, that's being mirrored today, Friday, by Marvell, which reported last night. Same general idea here. They're talking about AI and all of the tailwinds. The market is eating it up. you're really seeing this rising tide lifting a lot of boats. That speaks back to what you opened with, Matty. Maybe in the back half of the year, we start to see a little bit more parity here. Obviously, remains to be seen. But clearly, AI is going to be a big point of focus, not just for the coming quarters, but I feel like for the coming years. This week, we also saw earnings from Intuit, the company behind TurboTax, Credit Karma,

QuickBooks, and other cloud software offerings. Revenue grew 7% year over year, but fell short of expectations. Same for net income, which came in at $2 billion. Matt, tax prep was probably not at the top of people's lists when they were thinking about companies that benefited from pandemic activity. But from comments from Intuit's management team, it seems like they are settling into a new normal here. That's right. This was fascinating. This is the quarter for Intuit where their consumer group business, which, of course, is the TurboTax business, is obviously big because it includes the April 15th filing deadline, their third quarter. But I think what has investors concerned, or the market

concerned about Intuit, was they missed expectations, but it's because they're lowering their expectations for the overall number of IRS returns. They're now expecting a decline of 2% versus original expectations for growth of 1%. They're also expecting the DIY category share of IRS returns to decline more than they expected. And what's driving this? Well, get this, guys, it's because last year and the year before, more people filed their taxes in order to receive pandemic-related stimulus and tax credits. But because those weren't available this year, well, a lot of them elected just not to file taxes. I mean, that's extraordinary to me. But I think another thing, of course, we've got this overhang. We know a few weeks ago, the IRS is also planning

to launch a free government-provided direct tax filing program. So, they've got probably more competition coming their way in 2024. But the fact that this business is not just now a seasonal business for them, it's also potentially having a secular shift given what happened in the government. Matt, I wanted to talk to you about this company in particular because of that IRS announcement. This is a business that has a lot of different software offerings. I'd like to unpack a little bit exactly how important TurboTax is to Intuit's overall line here. I could see how that would maybe scare some shareholders. Big time. It's a big chunk

of their business. According to surveys done by the IRS, some 72% of American taxpayers said they were at least somewhat interested in using a free IRS tool to do their taxes. Just imagine what that could mean. If Intuit's already ratcheting down their expectations for IRS returns, what's that going to look like next year if the IRS actually has this tool out? I certainly understand that perspective. If I can get it for free, I'm happy to do so. Absolutely. We also had earnings from Zoom this week. The company beat expectations with its first quarter report, but posted its slowest quarterly growth rate at 3%. The company's enterprise segment continues to post double-digit growth,

but the company's revenue from smaller users declined year over year. Jason? Yeah, it's getting to be a little bit like a broken record now with Zoom. This is really about growth and where that's going to come from. They pulled forward a ton of users here over the last few years. A good thing, clearly. But that was fast. Now, it is going forward. How exactly do they continue to grow? It could be argued that the opportunity is more or less tapped at this point from a user's perspective. Now, to that point, while it's good news that they raised guidance for the year, which they did, that still only reflects top-line growth of around 2.5% or so. Again, where is this growth

going to come from? The numbers for the quarter were OK. Revenue $1.1 billion up 5%, excluding currency effects. We saw earnings per share of $1.16 up vs. $1.03 from a year ago. The enterprise segment revenue grew 13% with customers up 9%. The number of customers contributing more than $100,000 and trailing 12 months revenue grew approximately 23% from a year ago. The net dollar expansion rate for that enterprise segment was 112%. Those are good signs that they're doing right by their enterprise customers. But there are these two halves to this business. There's the online and there's the enterprise. The online is the higher margin because it's kind of automatic. That's just people signing up for Zoom online versus enterprise, where that

might be someone like us using Zoom as a service for our business. It does start to get a little bit more dicey here because we saw online representing just about 20% of the business before the pandemic, now post-pandemic, it's closer to half. If we start seeing that online segment drying up a little bit, then you start to ask yourself the question, where does that growth come from? That's when this company starts introducing things like Zoom Rooms, Zoom Phone. They did note Zoom Phone actually made up about 10% of overall revenue for the quarter, a good sign. The tough part is, they're competing against companies like Microsoft, which are offering these very same services. So, is Zuma utility at this point? I kind of lean

towards yes, and that's fine in that we all kind of use it because it's part of our daily job. But what kind of pricing power does that afford them? I don't know. That's still up for debate there, and that's why they continue to introduce these additional services. It just remains to be seen whether that'll really help the cause. After the break, we've got more earnings updates with a look at retail and the surprising names making big moves. Stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money. I'm Dylan Lewis, here in studio with Jason Moser and Matt Argersinger. We spent the first part of our show largely singing text praises,

but looking at results coming this quarter, I think the industry I'm most surprised by is retail this earnings season. I want to spend some time talking about all these traditional mall retailers that recently reported. We had results from Gap, Urban Outfitters, and Abercrombie. They all had really strong earnings results and market reactions. Jason, what's the theme here? Well, I think the theme, and this is picking up from something that we discussed a little bit last week, it's in regard to a lot of these retailers right-sizing their inventories, and ultimately, the impact that's having on their overall financials. We talked last week, companies like Target, TJX, Walmart, even Ross Stores, we saw their inventory levels coming down.

which is a good thing, ultimately, because when companies have those inflated inventory levels, they start having to resort to discounting. That impacts gross margins, which ultimately comes all the way down to the bottom line. And they're just not as profitable. This week, we saw a lot of the same here. You mentioned Urban Outfitters, Gap, even Kohl's. A very consistent theme here. Urban Outfitters, inventories down 6%. They saw a 260 basis point improvement in gross margin. Gap ended the first quarter with inventories almost 30% lower than a year ago. I saw a gross margin up 570 basis points. And then Kohl's inventory down 6%, gross margin up 67 basis points. And so, you start to ask yourself this question,

between the information we got this week, the information that we got from last week, are we starting to see a little bit of a light at the end of the tunnel in recovering from this post-COVID hangover? A lot of these companies, we dealt with a very abnormal three years. there was no real blueprint for it for a lot of it. It just put a lot of these companies into a little bit of a difficult situation. But it seems like they're coming out on the other side of it now. Matt, I can't help but look at the success of these names in particular and ask the question, is mall activity back? Is this what we're seeing? I think it is, guys. If you look at, for example, results from Simon Property Group,

biggest mall owner in the U.S., traffic to their stores is up. The occupancy rate of their properties was 94.4% at the end of Q1. That's up more than a percentage point from a year ago. Sales per square foot for their retail tenants up 3.3% over the past 12 months. And Simon raised its guidance for the year and its dividend. So, if the biggest owner of malls is doing all this and raising guidance, I think you can bet the retail story is pretty strong. People are getting out there and shopping in ways they really haven't since the pandemic. I'm not surprised to see a lot of these specialty mall retailers do so well. Sticking with brick and mortar, shares of Ulta down over 10% after the beauty retailer

reported earnings that were up year-over-year but missed expectations. Revenue hit $2.6 billion, up 14% year-over-year, but management shared that it was seeing stronger sales for its mass-market products than its higher-end brands. Matt, this seems to be sticking with a theme that we've been seeing in retail recently. That's right. If you look at the initial results, same-store sales up 9.3%. That includes both their online stores and stores open at least 14 months. That seems pretty good. Transactions were up 11%. A lot of retail companies would kill for that kind of growth. But again, it's that issue of the average transaction value or ticket that you're alluding to, Dylan, which is, that was down 1.5%. So, the higher-end

priced items are not selling as fast as the warrants were. For Ulta, you've also got a big surge in operating expenses, which brought down margins. It doesn't look like that trend is going to improve the rest of the year. They revised down their operating margin expectation. Mantra also hinted that sales growth is really going to moderate after two years of really lights out growth. It speaks to the idea that consumers are pulling back a bit on their spending, especially when it comes to higher-priced ticket items. I guess cosmetics would fall into that category. I'm not an expert there. Maybe Jason is. But that seems to be the theme for something like Ulta. Jason, you were checking in on earnings

from Williams-Sonoma, and it seemed like we were seeing that same story play out. Yeah. It's really interesting. We're seeing pockets of pressure that still exist for these higher-end brands. Certainly, Williams-Sonoma qualifies there. For all of the positives we were talking about with these companies like Urban and Gap and Kohl's, Williams-Sonoma is the other side of the coin there. Comp revenue declined 6%. While they did reiterate fiscal 2023 guidance, you look at things like inventory. Inventory up 28% over a year ago as they continue to deal with not only traffic, but just logistics issues. The gross margin, 38.6%. That's down 520 basis points from last year.

But we also were talking before production here, it's nice how these companies are doing a little bit of the work for us and saying, yeah, maybe the con versus last year isn't as great, but let's look at this compared to 2019. I think that is fair. We've talked about this a bit. These last three years were tricky. Let's look back to 2019. That gross margin, 38.6%. It's still 270 basis points higher than 2019. I'm not going to ding them for that. I do think looking back to 2019 is a reasonable exercise. But, yeah, something they've done here, they're introducing a new brand to their portfolio called GreenRow, something focused on sustainable materials, manufacturing practices that really hammer home on that green and sustainable movement.

I think that'll fit well in with their portfolio. One of the things I'm really curious about as we get this narrative from management teams of, look at this, don't necessarily look at this, let us be judging you on this, not necessarily that, when do you give management teams that benefit of a doubt? And when do you say, actually, no, I'm going to make you look at the year-over-year comps here? Well, honestly, as an exercise, I go back to 2019 in my head, and I ask myself, did I like this business in 2019? Because I can tell you, back in 2019, I was probably making fun of Urban Outfitters, maybe Gap or Kohl's. I only say that a little

bit tongue-in-cheek there. But I do go back to 2019 and ask myself, is this a business that I was really interested in back then? If it was, then I take it with a little bit more of a grain of salt, and I maybe dig in a little bit further. But oftentimes, yeah, you know that they're trying to make the day to say something in particular that speaks to, maybe this wasn't the greatest investment in the first place. As we wrap up retail discussion, we've got an update from Costco. The company reported earnings this week that were shy of analyst estimates, with revenue up to $53 billion and earnings per share coming in at $2.93 down year over year. Like many retailers this

earnings season, Matt, it seems like Costco is bitten a little bit by slowing spend on bulk items. That's it. That's what we've been talking about. Traffic was good, up 3.5%, but it's the average ticket down 3.5%. It's the big-ticket items, furniture, electronics, jewelry, hardware, and tools. I think this is just, consumers are spending less on physical items. We've seen this from Amazon, FedEx, UPS, Home Depot lows. It's all about going out there spending more on services, travel, and smaller-ticket items, discretionary items. I also thought it was interesting that Costco's e-commerce sales were down 9% on an adjusted basis in the quarter.

That seems sharp to me, but I guess it is, again, one of those things where, if you're ordering less heavy-ticket items, that's where that's going to show up, it's not going to show up in things like food. Putting a bow on almost everything that we're seeing here in retail, it seems like, whether it's cosmetics or big box retailers, the higher-end stuff is where we're seeing the pinch. More of the mass market, more affordable things are where we're still seeing consumer activity, Jason. That seems fair. I think with Home Depot and Lowe's, look for pro customers to re-accelerate business here down the road, but that certainly is play out on that big ticket item metric that

Matty quoted. Jason Moser, Matt Argersinger. Fellas, we will see you guys in a little bit. Up next, we've got tips from a turnaround specialist. Welcome back to Motley Fool Money. I'm Dylan Lewis. When he took the CEO role at United Airlines in 2015, Oscar Munoz was stepping into a difficult job at a difficult time. The company's recent merger with former competitor Continental was not going according to plan, and the business was facing operational and cultural challenges. Motley Fool contributor Lou Whiteman talked with Munoz about his approach to turning the airline around, dealing with personal setbacks, and the lessons in leadership from his book, Turnaround.

time. Let's dive into United. To set the stage and to push back if I'm going too far, but from my professional career, going back to the mid-90s, United has been a troubled company or a difficult situation, all the way back to the employee stock ownership plan. In 2015, you're coming in off of the board, you're a named CEO. We were a few years after the merger with Continental, which was a merger in name only. You very much still had two airlines functioning under one holding company and labor very much not on rowing together. There had just been a CEO controversy that you're stepping into as well. It's a tough job to take if you care about your career.

You step in here and a lot of the focus of the book is just how exactly you accomplished what you did. But so, what was the game plan? Day one, hit the ground running. How do you come into this quagmire and talk about the plan coming into it you've been kind in your assessment of the company and its culture and its performance uh so thank you for being gentle but i i often my first uh my first interview with the wall street journal when asked the question about how are you finding things and my answer was i think our entire workforce is uh is disillusioned disengaged and disenfranchised and as a board member i'm i'm embarrassed to say that i and we didn't see that earlier. And so your assessment of where it was, part of leadership is assessing

very quickly where you are and being really practical and real about it. Because I issued a full-page ad, in essence, apologizing to the world. It's like, mea culpa, we've let you down and we're going to make things better. And that was a lot of controversy there because you don't know what you're going to do. You don't know how you're going to do it. But you've got to set a North Star and a goal and then have everybody drive. Because one of my first ever speeches to the company, was we are wonderful at what we do, but we are wandering nomads in the desert, all headed in our own different direction without a North Star. And like it or not, we're going to provide one. And I'm going to take my time to do that. So to your question of how you

do something like this, I think the leadership lesson is, first of all, in a turnaround, a true turnaround, which this was, there's no shortage of places that are broken that need to be fixed. Determining which one of those is the one that you need to or want to start with is a really big and important component of doing a success story. And I had been personally involved in other turnarounds over the course of my career, so I've had some wonderful experience and wonderful allies along the way. So my instinct in this particular situation, when I met with employees, and there was always a lingering feeling when I, being embraced or taking pictures with folks where somebody almost screaming from inside, help me.

And it takes someone that's willing to engage at that human level to sense that. Because you can stand on a podium and give great speeches about, we're going to do this, and we're going to rule the world. And people are out there truly saying the same things, like, yeah, I've heard this stuff before. I took it a step further. I did not do pulpit speeches. I did not do massive work. I went in, literally into the crowd as often as I could at all hours of the night and really created an immediate, I think, bond that was just different than ever before. Because people would say, well, we've heard that. Fill in your expletive as you see fit. I've heard all this stuff before. My answer would always be, so let me get this straight. So yes, the CEO of the corporation

has been here at two o'clock in the morning, standing on a picnic bench in a hangar in Houston, Texas in this particular case, sitting there asking you questions about what he needs to, what I need to do next. And I need actionable items, emotion, get it out of your system. But I need something more solid because I can't act. I'm pissed. I hate you. You should fire everyone because that just doesn't make sense. And so, again, like you and I would debate an issue if we knew each other. Right. When you trust someone, when you trust in someone and they're asking you a question, you have to convey that you're willing to listen. And I think that was probably, I call it listen, learn, and only then can you lead. It's just, I've truncated to

that point. And people say, yeah, yeah, yeah, that's right. It is not easy to do. Listening, truly listening, learning, meaning you've heard things, parrot that back. Is this what I heard you say, Lou? And that takes time, it's effort, and it puts you in a very vulnerable place because you don't know everything. In our particular company, in that particular state of distress said it was, it was the right thing to do. And it proved to be successful. Now, that sounds all great on paper, but it also, it takes a lot of luck. And I think you kind of got into that into the book where, you know, you were doing this, you were going everywhere you could, going to the hubs, going to the main stations. You are the CEO talking to a lot of

frontline employees who've been burned before. You're not exactly going to say, oh, good, you're here. Here's, you know, a list. You tell, I think it's Amy's story, right? In the book, kind of just a little bit of, I don't know if you call it luck or right place, right time, but just kind of it's still with all of that. To me, the lesson was you got to do this a lot to find that person. You just have to stay with it. But I think Amy's story, that just sums up exactly what you're talking about here, if you could share that. Well, thank you for bringing that up because it is quite a subtle moment in the turnaround of United. Because as we've talked, I'm out there listening and I've told the world I'm going to spend time actually get to understand

and know from the people that actually touch you as a customer what truly is broken about us before I can do anything, because there was no shortage of things to do. As I said, you've got to pick the right thing. And so I'm flying back from Denver to Chicago one day, and I've been out on this tour, and I've listened a lot, and I've learned a ton, and I have 500 things. I'm just exaggerating, but a number of things that are wrong and that are all actionable, that all could be the first thing you start with. And so I'm thinking to myself, you know, like, okay, you put yourself in the situation. You've told everybody you're going to go out there. You're going to figure out this one thing. And I'm like, I have no clue at this point. I'm even more confused with

the amount of things. And so call it divine intervention, call it luck, call it fate, calling. I think I have a maternal grandmother looking at me. Sorry, I always get emotional when I think about looking at me from above. But so I go to the front galley and my style of interviewing is really, really super sophisticated. I walk up to you, say, hi, how's it going it's like you know i'm oscar you know i'm just trying um and you could see her resistance to have a conversation it's like out of i don't want to talk to you i don't care to talk to you there's nothing i'm you know there's nothing i'm going to say that you're going to even listen to our act right that's the disengaged and disenfranchised nature of our of

our employee culture at the time and so i kind of stood there for a moment and and i you know i i respected her desire not to talk but as i was leaving i just touched her gently on the arms She said, I'm just sitting right there if you care to share something. Well, as I touched her gently, she pulled away, and I could tell she was upset. And then she looked at me, and her face said it all. And she burst into an emotional, it was an emotional operative of tears and anger and suppressed. You just had to be there, really see the thing. And the words that she said that proved seminal in our turnaround was like,

she said, Oscar, I'm just tired of always having to say I'm sorry. and what that meant is i'm sorry the plane is late she had nothing to do with it i'm sorry our coffee socks she had nothing to do i'm sorry we don't have the food i'm sorry you can't sit with i'm so you know if you think about our airline industry because all the policies and procedures we have we kind of have to tell you know a lot but the way you tell someone no and over time just gets tiring and for someone of that level that every day is flying being told to be the brand, be the friendly skies, be all these things. I can only imagine what they're thinking. It's like, well, you know, it's just somebody at the corporate level would understand what we went

through and fix some of the things that we don't have a chance to fix. So for me, it became crystal clear. I got it. I know what this is going to be. We've lost our employees. And before we do anything else, we have to regain their trust. And so that was my underlying mission. So I felt better and more calm about it, I now had to prove this to my senior leadership team, to our board, eventually to investors and to customers. Because if you think about, what are you going to do first? We're going to get our employees back into the bus with us, which sounds like a good idea, but it sounds expensive. It sounds time-consuming. It doesn't sound like you're taking me into account as a customer or an investor. You can just imagine the thing. And I think one of the

leadership lessons, again, is whatever you do and however you do it, once you've done it, And you've got to have that conviction because everybody in the world is going to shoot at it. And the only way leaders lead is to get at that conviction, convince other people to get alongside of it. And I think that was the premise we made and the premise upon which we made it. And it proved to be useful because over time, regaining the trust of many, you know, 100,000 employees spread all over God's green earth who are all feeling the way they did in a world where, you know, you only see one or two or three or four at a time. We don't have a factory floor. There's a level of discretionary effort that's in all of us that has to be captured. And that is only captured through both heart and mind. Heart is hard because it's emotional. The mind is, you know, it's like, well, we're broken. We

need to fix this. And the math doesn't work. I get that. But why is that my problem? When you're a frontline employee, it was the heart. It's like, let's do this together. As you mentioned, the best laid plans, right? So you come up with maybe a concept. You need to sell that. I believe, what, 37 days in, 36 days in, you have a heart attack, and you end up in a medically induced coma for weeks with your family out of town, which is kind of just really the personal side of it, too, of the, dear God, this is a human being. You ended up not long after having a heart transplant, all while trying to run a major airline, all while trying to take very on, hopefully formulate a plan, and then you have to sell it to everyone. If nothing else, yes,

it's a great PSA for listen to your body and act quickly, because thank God you did. But just as a manager, for one thing, are you crazy for coming back? Why at that point wasn't that a sign? Like, all right, Oscar, maybe it's someone else. But also, it's hard to think of a bigger momentum stopper in a job that it seems like that, yes, you went out, you were trying to make a good impression, you were trying to hit the ground running with momentum. There's nothing like a medically induced coma to kind of blow momentum. I just, I don't know. There's a question in there somewhere, but how is it possible that you continued on from there, I guess? Or kind of how, am I overstating the difficult? You know, it was tough. I mean, not only I was coming back

from this medical event, we had a proxy battle brewing. We still had labor negotiations that were undone. I mean, I was only 37 days into the job before I went out. So everything was in front of us completely. So as I said to my, the doctor, the receiving doctor, as I was being wheeled into the emergency room after this nasty heart attack, I muttered enough and coherent enough to get names and numbers of, you know, people to call. But also I kept saying, I don't have time for this. I don't have time for this, which is so on brand for me. You know, your question on people and why I came back. It's a very touching story to me. And it's why, honestly, we wrote the book, because when I was down, these people, these tens of thousands of people spread all over the globe.

In the days that I went down, the outpouring of affection and support through letters and notes and cards and flowers and food that were being sent my way were overwhelming. It came to the point where there was so much mail that my children it would be received at my apartment my children read those every morning and there was always a new bag of things and it became such a ritual at the hospital that the doctors and nurses themselves would come in for the we dubbed the morning reading and in the reading of those notes and the outpouring of people again 37 days i've met certainly hundreds of people maybe a few thousand people in my walk but the word had spread back to what we talked earlier about the level of connection that I was very honored and

fortunate to be making with them. And the outpouring of infection was so strong that the decision or the conversation within my family about whether to return or not was never really had other than, Dad, you have to go back. You know, these people want you and need you, which is, you know, which was always my intent, by the way. I never had a single I never, I single doubt about coming back. I've been, people have shared with me excerpts from many of the talking heads over the course of my illness about he'll never come back. He'll never be the same. His mental acuity will be depressed. His energy, all these things, you know, the doomsday. And I see those people every once in a while when I'm in green rooms and there's a little

level of, oh, you love me now, right? But the reason to come back, there's just a point in story in the middle of the night in the hospital, which is probably the most saddest, most depressing time if you've ever been in the hospital. A nurse said, you know, I see a lot of people come through here, and I've labeled it, I've sectioned them off into two. It's about the why question. Some people ask in a defiant, angry way, like, why? Why did this happen to me? I'm a good person. I'm religious. I'm fit or whatever. How dare I get cancer or heart or whatever? And then there's the other person that say why they realize what's happened to them and ask the question more and why was i spared why am i still here what is left to me to do and she said wonderfully it's like you

you strike me as that second person and that combined with the letters and the outpouring of affection and the support of my family was why we came back there was a lot left to do and my why was we hadn't finished and i and i thought i was certain we had the magic potion to begin the turnaround at the airline. Coming up after the break, Jason Moser and Matt Argersinger return with a couple of stocks on their radar. Stay right here. You're listening to Motley Fool Money. As always, people on the program may have interests 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. I'm Dylan Lewis, joined again by Matt Argersinger and Jason Moser.

We have news that will devastate kids on college campuses and in-laws around the country. Netflix is finally beginning its crackdown on password sharing. The streamer began notifying subscribers in the U.S. that there would be an extra fee of $7.99 per month to share your Netflix account with someone outside your home. Jason, I know you have a kid going off to college soon. Are you paying that extra $8 a month? No, no, no, no, no. I am not. A couple of things. I think this is interesting from the perspective that they rolled this out in Canada earlier. They saw some initial pushback. It seemed like it got a little bit worse before it got better, but it did get better. I expect that same dynamic really to play out here domestically.

But this, I think, is partly to a greater strategy. We know that they're introducing their ad-supported model, much as Disney's doing the same. These companies are trying to push us to that ad subscription. And the main reason is because the economics are so outstanding. They make more money on that ad subscription. Even though the cost for the subscription is lower, the ads that they're serving up, really, the economics work out. So, you're going to see Disney, for example, raise the price of their ad-free offering in order to create a bit more delta, as they said in the call. They want to get the consumer's eyes on that lower price point. And I think there's going to be something to that. We're seeing Netflix do the same thing.

I mean, the numbers are the numbers. There's no free lunch. I think those days of ad-free, low-cost streaming are coming to an end. Matt, are the golden days over? Well, the golden days are definitely over for my in-laws. They love The Great British Breaking Show, and I know they use other people's passwords to get it. Sorry, mom and dad, in-law. Let's get to stocks on our radar. Our man behind the glass, Dan Boyd, is going to hit you with a question. Jason, you're up first. What are you looking at this week? Yeah, just keeping an eye on Salesforce. Ticker is CRM. This is a company that is in customer relationship management software. They have earnings coming out on Wednesday

after the market closes. The stock had an awful 2022. It's off to a good start here in 2023. Shares are up around 60% so far. But if you remember, too, at the beginning of the year, the companies were hit with an onslaught of activist investor interest, really wanting the company to focus on efficiencies and bringing more down to the bottom line. Makes a lot of sense. This is a pretty well-established business. They're making $27-28 billion a year in revenue. We expect some earnings, right, Dylan? They did guide for $8.16 billion of revenue for this quarter. They're getting ready to announce. That represents growth of approximately 10% to 12%. Also, just interested to see what the leadership situation is going

to be here now that Benioff is back on his own as CEO. Dan, a question about Salesforce? Less of a question, more of a comment. Dylan, Jason, you know a business is doing well when they have their own skyscraper in downtown San Francisco. Yeah, I guess so. That's just mostly a fact, Dan, I think. It's just a bold choice for Jason to choose one of the top 100 largest companies on the planet by market cap. Bold move, Jason. Keep the spice coming, Dan. Matt, what is on your radar? Hey, I'm looking at Invitation Homes, ticker INVH. It is the country's leading single-family

rental company. Not apartment buildings, single-family homes, of which they own about 83,000 as of the end of the first quarter. Since the pandemic, a lot of people who want to remain renters or are priced out of buying a home, but want more space, want a home office, don't want to share a roof or walls with others, I get it, it's a big trend. Most of their homes located in fast-growing Sunbelt states and cities. Results were fantastic in Q1. Same-store rent growth was up 8% on new leases. Average occupancy was almost 98%. I wouldn't call the shares cheap, but you are getting a 3.1% dividend yield, Dan, which is one of the highest yields Invitation shares have offered since they've been public.

Dan, a question about Invitation Homes. You guys are making this hard on me today. Both good companies with excellent financials and bright futures. It's hard. Matty, these are long-term rental homes, not short-term? Correct. These are general leases that go for a year or even longer with single-family rentals. Dan, which one's going on your watch list? You know I like a good skyscraper, Dylan, so I'm going to go Salesforce. Matt Argersinger, Jason Moser, thanks for joining me! Thank you! Thanks!

That's going to do it for this week's Motley Fool Money radio show. The show is mixed by Dan Boyd. I'm Dylan Lewis. Thanks for listening! We'll see you next time! We'll be right back.