Motley Fool Hidden Gems Investing - Can Chipotle Bounce Back?

Episode Date: December 11, 2015

Chipotle serves up some reassurance. Keurig Green Mountain perks up. And Kinder Morgan oils down its dividend. Our analysts discuss those stories and CNBC's Carl Quintanilla talks big banks, stock market surprises, and Star Wars.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Chris Hill. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Fool Money radio show. I'm Chris Hill. Joining me in studio this week from Million Dollar Portfolio, Jason Moser and Matt Argesinger. And from Motley Fool, deep value, Ron Gross. Good to see you, as always, gentlemen. Ron Gross. Hey, hey. How you doing? We will break down the latest headlines from Wall Street. CNBC host Carl Quintanilla is

our guest this week. And as always, we'll give you an inside look at the stocks on our radar. But we begin with the oil industry. The latest meeting of OPEC ended with seemingly no agreements in place over whether to cut production. And the price of oil, Matty, has fallen to its lowest point in seven years. Yeah, those OPEC guys. No, that is the reason. You can feel if there's something nefarious going on where the OPEC just essentially wants to squeeze out domestic producers here in the U.S. Well, they have succeeded, because by raising the ceiling, or at least not cutting production, they've caused rig counts to plummet. At the same time, the supply of oil is still

very high, and the price, as you said, is at a seven-year low. We see things happen like this to industries all the time. And right now, you have to say the energy sector is probably the most reviled segment of the market this year, certainly. And so, is it a time to get interested in this? Yes. I mean, there are predictions that oil could go a lot lower in the coming year, that OPEC continue producing. But now I'm starting to look, and we've made a lot of moves in million-dollar portfolios, Jason knows. But I think this is the time you have to start looking at some of the opportunities in this industry. I would agree. I don't have any direct exposure in my own portfolio, and I think it's time

to get serious about that. But it's interesting, if you work in the energy sector, times are tough. But theoretically, low energy prices are good for almost every other sector out there, including when you go to fill your car up every day. So, almost be careful what you wish for, because once we have those rising raw material prices, that will reverberate in a negative way through every other industry other than energy. Yeah, but if you're in the energy industry, man, you're hating those low prices, because ultimately, that's a lot of jobs that are getting cut. And we're seeing that, particularly States like Texas are obviously very oil-rich, but generally speaking, around the country,

that is great. I'd like to be able to fill my tank up for much less. But yeah, the unemployment picture certainly becomes a bit more dire, which then could have longer-reaching, farther-reaching economic implications. Well, of course, the cure for low oil prices is low oil prices, ultimately. I think at some point, even OPEC is going to realize, hey, the capital budgets are the way they we have to start cutting production as well. The prices are simply too low. And it's like that with all commodities. I mean, all commodities are getting crushed right now, partly as a response to the strong dollar, but there's other reasons as well.

And Economics 101 basically will tell you that it cures itself over time. The time is the problem, and predicting and getting these things right, you've got to be patient. That is the problem. Well, and you look at a company like Kinder Morgan, which is certainly, it's not ExxonMobil, but it is a multi-billion dollar company coming out this week and saying their path to getting much more stable on the balance sheet is to cut their dividend by 75%. Yes. It was a dramatic move, an expected move. Didn't quite think they were going to cut it that much. But in reality, we've talked about Kinder Morgan quite a bit on

the Million Dollar Portfolio team. We actually thought Paul Chee, who covers the energy sector for us, he thought he would like to see Kinder Morgan actually cut the dividend entirely. Just really rein in the spending, focus on preserving some of the cash flow, preserve that investment-grade debt rating, which is key. But yes, Kinder Morgan is a massive company. This is the largest natural gas pipeline operator in the country, the largest independent actually transporter of petroleum products in general, largest transporter of CO2, which is critical to many industries. This is a business that's not going away. These are assets that cannot be replaced. Kinder Morgan, about 96% of their cash flow this year is all fee-based. It has

nothing to do with the price of oil. It's just what's happening now in the future with capital budgets and going forward, and whether or not Kinder Morgan can grow its dividend. I just think, like a lot of companies, this company's just been really taken to the woodshed with the fall in energy prices across the board. I just think it's on our watch list in the million-dollar portfolio. It's one I think we're taking a very close look at. Shares of Chipotle down more than 20% in the past two months in the wake of the E. coli outbreak in the Pacific Northwest, and now norovirus in Boston. Chipotle founder Steve Ells gave a rare TV interview this week, saying he's deeply sorry and vowing to make

Chipotle the safest place to eat. I don't know, Jason. Somehow, it feels like we're still waiting for one more shoe to drop. Real quickly, around the table here, everybody here owns Chipotle shares, right? Yes, affirmatively. I do. I mean, as a shareholder, I look at this and I don't even bat an eye at it. I just think, keep on looking forward. I think that this is a business that has made it to at this point, 22 years, they're going through a very trying time right now. I think it ultimately is an opportunity to get better, and I think that's what they're going to do. I appreciate

Ells getting out there and saying what he said. It's quite plain that he's a listener of MarketFoolery, because we were talking about that the day before, Chris. The day before. I made the point, where is Steve Ells, where is Monty Moran? They need to be out in front on this. Clearly are a couple of our dozens of listeners. But I'm going to be really interested to see how they set expectations for 2016. I think that's what the market more or less is waiting for right now, because they've already slashed guidance for this quarter. And I mean slashed, that was a pretty big cut. I was really surprised to see the

stock hold up like it did. But I think when we get a good view on what 2016 holds, that I think will probably really be the test for the stock at that point. I would rather see them, just like Kinder Morgan, cutting that dividend. I'd like to see Chipotle just really go after it and say, listen, we really think this is going to be a bad year. It's going to be a recovery year. Because if they can do that, that brings that bar of expectations back down a little bit, because it just keeps on going up every year. They become victims of their own success, so to speak. But again, looking past something like this, it is the food industry. Stuff like this happens. Remember, Costco and Starbucks are going through a very

similar E. coli problem right now as we speak. It's not just Chipotle. This is a very quality business with management that has bought in, and I am excited to see where these shares will be 20 years from today. It's when we own a million-dollar portfolio, I think that if we have the opportunity to add in 2016, we certainly will. One thing I wish is that they were able to identify where the E. coli was coming from. That's a little bit odd, especially with such limited menu offerings. I wish you could identify that. Second, the norovirus thing is a little weird, because unless you're on a cruise ship, you almost never hear about it in relation to a restaurant. So that's

a little curious, but having said that, I do agree with your comments, and I think it's a powerful company, and it will remain so. I think, going back to what Jason said, I think the pain has not been totally felt. I think when they release guidance for 2016, I think it's going to be a lot lower. And I'm using a purely anecdotal experience that I have every night. I live right near Union Station, which is the main train station right in Washington, D.C. Chipotle is there, and I walk by at about 7 o'clock every night. A month ago, I'd walk by that every ... it doesn't matter what night of the week, there'd be a line out the door around 7 o'clock. Past

couple weeks, two or three people max every night. O' We've told our kids, no Chipotle for a while until they take it. Wow, really? O' Yeah, it has an amazing ... it's going to have a big effect. Man, I threw my family in the opposite direction. O' Who loves their family more? You know what, in a few months we're going to find out. You know, seriously, think about it. The one thing I think Chipotle does have

working in its favor here is, one of the things I love about Chipotle is you go in there and you see the entire process. You see them cooking the food, you see them making your food. It's very transparent, so to speak, versus something like your traditional fast food restaurant, which is obviously not. So, I think that is something that's definitely working in their favor. Perhaps they need to encourage their employees to wash their hands a little bit I don't know. It's kind of like that Seinfeld where Poppy was getting a little sloppy. Shares of Adobe Systems hitting an all-time high on Friday after fourth quarter profits came in higher than expected. Ninth quarter in a row they've beat on profit.

Getting it done. Really nice transition. As most software companies have found themselves needing to do, Adobe has made the nice transition to a subscription model, which has pros and cons, but the recurring revenue associated with the subscription model is very nice, and they've done it better than perhaps most. Their cloud business up 35% for the quarter, 833,000 new subscribers for the quarter. Their recurring revenue on an annualized basis up 13%, again, all wonderful ways to book profits year after year. Transition's been wonderful, 50% increase in profits. You can't complain with that. The stock's reflecting it up 26% so far this year. This week, Yahoo's board of directors

made it official. The company is dropping its plan to sell off its stake in Alibaba, and will instead look to spin off its core U.S. internet businesses. After delivering that news, CEO Marissa Meyer went to the hospital and delivered twin girls. Congratulations. Congratulations to Marissa Meyer and her family. Where do we go from here, Matty? It seems, if the comments coming out of Verizon are any indication, there are certainly some companies that would be interested in perhaps purchasing some of those core U.S. internet businesses. Probably. This is sticking with me. When Marissa Meyer took over Yahoo! in 2012,

came in from Google with much fanfare, Yahoo!'s trailing 12-month revenue, $4.9 billion. Any guesses as to what it was in the latest quarter? About the same? about the same. Exactly, $4.9 billion. This is after heavy investments in mobile, dozens of acquisitions, including $1 billion for Tumblr, the blogger site. I don't know where the business is going. If you're a shareholder who's obviously not going to be involved in any of these breakup things that are going on, it's hard to get excited about Yahoo. There was the Alibaba stake. If they're holding onto that, why not

just buy Alibaba? It's a public company now. You can avoid any potential tax issues that way, there's just no reason to get excited about Yahoo at all. No matter what happens, I'm kind of getting tired of the story about what assets they're going to spin off, what assets they're going to keep. It ultimately really doesn't matter anymore. It's interesting, though. You look at the stock, obviously not having a great year, but if you bought when she became CEO, that thing's more than doubled since then. That is one good point, yeah. Coming up, we will mix some chemicals and dig into the sexy world of auto parts.

Stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, Matt Argesinger, and Ron Gross. Big merger in the chemical industry this week. DuPont and Dow Chemical merged in an all-stock deal. Together, they form a $130 billion company that will be called Dow DuPont. How creative. I was going to say. It's better than Mondelez.

It is better than Mondelez. It's better than Quickster. Isn't the obvious move there just to go Dow Pond? I was going to say. Isn't Dow Pond the move? It's a huge deal. It's a huge deal, and yet both stocks down on the news. Does anybody like this deal? It seems to make sense, but I think because it's a little bit convoluted, it is pretty much a merger of equals, kind of, but for our purposes it is. And DuPont's CEO will

be CEO, the Dow's CEO will be executive chairman, they're splitting that up nicely. I think there's some confusion in the sense that they've stated already that they want to break up into three companies, probably a couple years down the road, probably will take a 2018-ish time frame. That might be confusing to people. The dreaded word synergies is all over this deal. They want to really create some synergies, create some increased profitability prior to breaking up into three companies. O' With an extra layer of synergies. With a double layer of synergies squared. It'll be an agricultural company, a material science company, and a special products company when all is said and done. It probably makes

sense to do this. It's not without antitrust concern here. I think the conventional wisdom is that it does get done, though. Shares of Costco falling this week after first quarter profits fell more than 3%, and Jason, membership still growing, but it is slowing down. Yeah, and I think you keyed in on it right there. I mean, you look at the top line and it was growth of 1%, really. That is not all that encouraging. But really, the big problem for Costco right now is growth in membership fees. It's hitting a wall, more or less. Growth in membership fees was about 1.9% for the quarter versus around 6% a year

ago. So, it starts to beg the question. We know their modus operandi, so to speak, is to get that membership fee and then keep prices really low for their members, and that's what they're going to do. But at some point, we have to wonder, can they get more members, or can they exercise any price increases on that membership fee? I was just going to say, are we going to see one of those in 2016? I wouldn't keep it off the table. It seems like they don't either. Every call I go through, quarter in, quarter out, they do bring it up. They talk about it. They never really say yes or no, but I think it's something they probably will look at in 2016. The question

is, how far can they go with it? They typically raise it by maybe $5 or something. Like Amazon Prime, it's a very compelling way to just live your life. It makes things a lot easier for a lot of people. I don't know, with the way the internet is just shaping this space, I'm not sure how compelling that offering still is. Right. We talk about Costco a lot, and kudos to Ron and his team, because they brought it to MDP, and it's been a wonderful winner for us. But we look at the business that's not really going to grow exceptionally over the next 5 to 10 years, and yet you're paying almost 30 times earnings for the business right now. Again, it is a great business,

great management team. I worry a little bit about the valuation. You're forgetting about the new slogan of eco-life-free since December 2015. There you go. That's going to make all the difference in the world. Big week in the auto parts industry. Shares of AutoZone on the rise after putting up a nice profit in the first quarter. And activist investor Carl Icahn back in the news, because it's only been a couple of weeks, of course. He made an $863 million takeover bid for Pep Boys. It's not a sexy industry, but there's a lot going on this week.

And Starboard Value is attacking advanced auto parts. So, we have the whole trifecta going on here. Sleepy little business categorized by, typically, a lot of real estate, which activists love to go after, because there's a lot of things you can do from sale leasebacks do outright sales, so you can create some value there. But to AutoZone, 37th consecutive quarter of double-digit earnings per share growth. Pretty amazing. The important part there is the words earning per share growth, per share, because they've done an unbelievable amount of repurchasing of stock. 160 million shares was what they had back in 1998. They now have only 30 million shares left. Brought back a ton of stock. But they are growing revenues. They are growing operating

income, just not as fast as that EPS number. So, the company's executing well. To Pep Boys, the Carl Icahn bid, really interesting, kind of usurping Bridgestone. Pep Boys had already accepted Bridgestone's offer. It kind of looks like they're going to renege and accept Carl Icahn, but Bridgestone does have the right to come in and top the offer, but time is really ticking on that deal. One more thing on AutoZone. That's another one of those companies that it hasn't split their stock in more than 20 years. So, it's also, if you're a new investor or a casual investor, that's one of those stocks that you look at, it's got a price tag, I don't know, around $800 a share? $770 right now, stock's up 25% year-to-date.

Again, we consistently say, don't look at the stock price, look at the market cap, what the company as a whole is trading at. It's fine to buy one share rather than 10 shares of a $70 stock. What fun is that? It actually is the same thing. What matters is the amount of capital you commit to an investment. The top-performing stock on the NASDAQ this week is Keurig Green Mountain. Shares up more than 70% on the news that it's being acquired by JAB Holding Company, a consumer products conglomerate based in Luxembourg. And the buyout price, $92 a share, Matty. How do you think they came up with that number?

Well, it is interesting. I was definitely one of the investors who was scratching my head and saying, wow, that is a massive premium. Why did they have to go that high? But then you look at the $92 per share buyout, and it's hard to get the exact number, but Coca-Cola's cost basis, Coca-Cola owns about 17% of Keurig's shares, their cost basis is right around $90 a share. So, I'm starting to think that they had to offer $92 just to get the deal through so that Coca-Cola would approve it. It's a bit of a bailout for Coke. I actually think it's a bigger bailout for shareholders. I think Keurig was really going to struggle this coming year. We talked about it a little while ago on the show. Earnings

have been terrible. Sales for the new Keurig 2.0 machines have not really panned out. It's a kludgy machine, as we talked about. And I think there are doubts about whether this Keurig cold machine, which Coca-Cola has invested heavily in, is really going to be a success on people's kitchen counters. I doubt it. And so, I think shareholders should take this cash and run. J.A.B. Holding has other coffee in their portfolio. They've got caribou, they've got pizza. I like the fact that they just went in with the Godfather offer. Because we saw with the beer industry recently, you have the whole back and forth. Probably smarter

that they just said, you know what, we want to get Coca-Cola to sign off immediately. There you go. There's going to be some synergies there. Ron, you've got a Keurig machine, don't you? Use it almost every day. Makes a weak but quick cup of coffee. A weak? It's relatively not strong coffee. Is it worth the trade-off there? I mean, I don't have a Keurig machine, but I feel like weak coffee, I'm just dumping it. I don't even want it.

We've got to get you some new pods. That's what we're going to do. That's going to be under the tree this year. Up next, we'll head to New York City and check in with CNBC's Carl Quintanilla. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. When the opening bell rings at the New York Stock Exchange, my guest, has a front row seat. Carl Cantania is the host of CNBC's Squawk on the Street, which you can catch every weekday morning at 9 a.m. Eastern. He joins me now from New York City. Carl, good to talk to you, my friend. Happy holidays, Chris. And to you as well. Before we get too deep into the holidays, let's look back a little bit over 2015.

Always big stories. Certainly, the Volkswagen recall probably makes anybody's short list of the big business stories of 2015. But what stands out to you when you think about this year? You know, I think using Volkswagen as a proxy, I think corporate America took some black eyes, whether it was food safety scares, or GM, or VW, or just corporate reputations, I think, took it on the chin. And there were a lot of apologies and full page apologies in the newspapers. and um it just i think dovetails with an over a general sense of cynicism politically and economically in this country we're in a low growth environment we're in a election season people are frustrated and um it's been tough to get good ink you know it's been tough to get

positive ink for corporate america and the fact that we had a flat stock market probably didn't help matters much. And the fact that oil is still at the price that it's hanging around at. And you think back to a year ago, and there were plenty of people, even with the fall in the price of oil that it experienced at the end of 2014. This time last year, you didn't have to look hard to find people saying, oh, no, it's going to bounce back in 2015. And you look around now, and I don't really see anyone saying that, that it's going to bounce back in 2016. No, I mean, problem is you got all these oil drillers, gas drillers. They've got big bills to pay. They've got, you know, a lot of debt to service. So they can't just shut off the spigot. They got to, you know, keep the cash

flow going to pay their debt. And so we're awash and crude. OPEC obviously has decided we're going to make, we're going to cause them some pain, twist the knife. We're not going to turn off the spigot. So it's weird. I mean, we did, we definitely crossed the line this year where cheap commodities, cheap gas, cheap oil went from being a quote positive for the economy to now a negative. And you can, there's a lot of charts floating around looking at that correlation, but we crossed that line. And so now people are hoping against hope that Somehow, supply matches demand sometime in 16, if not maybe 17. Do you get the sense that generally retail is in pretty good shape?

Obviously, you can cherry pick whether it's a specialty retailer or even a general retailer that's maybe not doing as well. But it seems like when you look at the numbers being put out by Walmart, Target, Amazon, etc. heading into the holidays, even though we don't really have the quote-unquote hot gadget this holiday season, it seems like generally retail's doing pretty well. I totally agree. Actually, I think that's spot on. For one thing, the companies you just mentioned, maybe with the exception of Walmart, but certainly Amazon and some others, even Netflix is included in some retail indices. Very large companies in that space are showing big growth. And that's

It soaks up a lot of consumer dollars. So, yeah, maybe they're not going to Gap. Maybe they're not going to J.Crew. They're certainly not going to Men's Warehouse or Joseph A. Bank. But they're spending online. They're spending on their cars. They're spending on their homes. That's been the dynamic all year long.

So I think the financial media has probably played up the weakness and apparel a little bit too much. Obviously, consumers, they're not going whole hog. They're saving a little bit more. But I do think we're going to come out of the holiday season and think, all right, it wasn't a moonshot, but the consumer did, they treated themselves a little bit more than we expected them to. When you and I talked this time last year, you said that automakers were the ones to watch in 2015. And right now, the automakers are on track to put up maybe their best year ever. It's looking like north of 17 million vehicles are going to be sold. I mean, are we going to top what we did in 2000?

Well, that's a tough target to get back to 20. But, you know, the problem with the automakers is they did sell a lot of cars this year. They sold the expensive kinds. They sold the SUVs and the trucks because of cheap gas. But China and Brazil, and even to some degree Europe, were troublesome. So all that strength in North America was having to offset just really tough environments overseas. So, I don't know. I mean, the stocks haven't been complete winners, even though the sales figures have been good.

I still think they're going to be interesting to watch more as we graduate to the Tesla generation, right? I mean, are the big three finally going to decide they're going to compete in that space? Is Tesla going to be able to deliver as many cars as they say they are? I think that's going to be the big question for the next couple of years. What do you think of the theories that are being floated now, not just with the rise of Tesla Motors, but with the rise of Uber, the eventuality of autonomous vehicles, that car ownership itself goes away for an entire generation? Well, it's kind of like the record player, right? I mean, vinyl died, and now it's a novelty. You're kind of hip if you have one.

I actually have one in my house. But, you know, it's definitely going to be, especially we all know the country is moving toward urban environments in general. I do think it's going to be not necessary. And Kalanick, who I noticed is now on the runner-up list, runner-up list on the Time Person of the Year, has a real pitch to spin now that imagine all the efficiencies you would get from not having a car, all the insurance bills you want to pay, all the parking garage bills you want to pay in New York

City. There's sort of this long-term utopia you can imagine where we can get around as efficiently as we want, and we don't have to pay that lease or that car payment month after month. I'm still waiting for teleportation to come along and get perfected. I'm trying to think of the name of what that company would be. Hill Teleportation Company, HTC. I like it. All right, after this interview, we'll get working on that. We'll get a website, specs, the whole thing.

We'll do a road show. The Federal Reserve is going to meet next week. Are we finally going to see a slight tick up in interest rates? Is this finally going to happen? Yeah, I think it's, I mean, look, the market's counting in 80% chance almost, even though some of the data has been a little soft this month. Everyone feels that we're sort of on track. And I think the thinking is, when we went to the lower bound,

when we went to emergency interest rates, that was the word, emergency. And I think it's gotten harder and harder over time to build a case that we are currently in an emergency environment. So it's going to be a tricky task for the Fed to communicate, look, we're hiking, we're going to take our time, but do people really believe the economy at this point deserves, like, red alert interest rates? I'm not sure. That case has been harder and harder to build over time. You're listening to Motley Fool Money, talking with Carl Quintanilla of CNBC. NBC. He's also a correspondent on Real Sports on HBO. Last time you were on the show, one of the things we talked about was the business of extreme sports. Let's talk general

sports business for a moment. Fortune magazine named Nike CEO Mark Parker as their business person of 2015. Next month marks 10 years he's been running that company. And when you look at how Nike has grown. You look at how that stock has returned nearly 10 times what the overall stock market has returned. I look at Mark Parker, and my question is, how has this guy flown under the radar for as long as he has? It's amazing. It really is amazing. He's a veteran, for one. He's been around forever, quietly, as you say. They've split. They've returned cash. um they've made literally groundbreaking deals this lebron deal is literally jaw-dropping and and they've kept a very aggressive competitor in under armor at bay it's um it's amazing you

know we just talked about the weakness and apparel you don't say that about footwear right now you don't say about you don't talk about chinese weakness right now when it comes to nike it's like they float above these other macro environments. And given all of that, it is, I think, not surprising at all that they're the top Dow stock of the year. It's amazing. You mentioned LeBron James. Nike gave him a lifetime contract. And I can see that, and I'm not a Nike shareholder, I can see that making sense for the next 10 years, maybe even the next 20. And I like LeBron James. I'm a fan. But what is 60-year-old LeBron James going to be doing for Nike? What is 70, 80-year-old LeBron James going to be doing for Nike other than

still cashing their checks? Yeah, I mean, it's, I was interesting. I mean, they didn't give complete transparency into the structure of the package. I mean, is he going to be a billionaire? we don't know uh we actually we know quite little about what jordan makes yet to this day uh over off air jordan but um clearly they've decided to make him above the ordinary universe of athletes and i'm talking even the kobe's and and jeter's of our time um there's just never been much anything like this especially on such a formal scale and um i don't know i guess i'm not enough of a basketball fan to know whether he is truly deserving, but Nike has done a lot more research into this than I have. You've got to take them out for their word. All right, two more

questions, and then I'll let you go. As you look ahead to 2016, what is an industry or a company or even a business person that you think is going to be pretty interesting to keep an eye on? Well, I mean, we talked a bit about autos. I think the one that keeps coming up more and more to us in the past few weeks are banks. I've seen a bunch of lists where either regional banks or, for instance, Citigroup ends up being the top pick for 16. Once rates start to go up, net interest margins go up. If the consumer hangs in there, fees, mortgages will help. Trading's been tough. But generally, when interest rates are rising, the banks are able to work that spread and do what banks do and collect that money.

So it's been a long time since anyone has recommended banks on a big scale. We all know why. But that could end up being a big surprise. And we'll know. We should know by summer whether that bet is really going to pay off. We are just days away from the opening of the next Star Wars film. is there any way it doesn't become the biggest grossing film of all time i don't think so i i mean i i think we've crossed the line maybe you agree with me here where

it better be really good because oh yeah the marketing has risen has lifted everyone's expectations um i happen to what i know about jj abrams believe he's going to be honest with the franchise he's going to be true to the franchise china is going to be a tough sell there's not the star wars mystique over there that we have and they buy a lot of movie tickets um but nobody i've seen some charts that looks at how disney is able to monetize especially consumer products against all their intellectual property and they do it better than any media company out there so uh i would say five percent chance it's a disappointment but i don't know about you i'm seeing it next week i'm definitely seeing it before the end of december absolutely

cnbc nbc hbo twitter he's everywhere carl cantineo have a great holiday my friend same to you man coming up we'll give an inside look at the stocks on our radar this is motley full 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 in studio, once again joining me, Jason Moser, Matt Argersinger, and Ron Gross. Before we get to the stocks on our radar, guys, let's dip into the Fool mailbag.

radioatfool.com is our email address. That's radioatfool.com. From Ed Murphy, who writes, what do you guys think of the Match Group? Also, is C-Drill about to sink? Should I jump ship or weather the storm? Two very different businesses. Ron, do you want to take a whack at the Match Group? Sure. I actually think Match has a fine business. Match, OkCupid, Tinder, and several others. They've made 25 acquisitions over the years. That's primarily how they've grown. The valuation was somewhat reasonable, 24 times last year's earnings. I like that they're profitable. Two things I really don't like is that it's spun out of IAC, and that company still controls Match because of their ownership of Class B shares. And all of the

proceeds of the IPO went to pay down IAC's debt. Do not like to see that. That's kind of just letting us hold the bag there. So, I'd never like to see use of proceeds used that way in an IPO. O'Reilly. Matty, what do you think about Cedril? Well, I don't follow Seadrill very closely. I do follow Atwood Oceanics, which is another offshore rig operator. If you think it's bad with the on-land drillers, it's really tough right now in the offshore because it's more expensive, it's much more complex. If oil prices are below $40 right now, just imagine what's happening to the offshore guys. Again,

I think there's probably better places to be investing in energy right now. These are going to be the more riskier, speculative ones. They'll probably be the ones that bounce back the fastest, though, if oil prices do rebound. So, it's a risk-reward thing, and I think you're taking a lot of risk by investing in the offshores. You might want to look elsewhere. O' See, Darrell, definitely a cheap stock, though. That thing is cheap in quotes. Right. And they did get rid of their dividend, and then pared back their spending a little bit, but it's going to be tough for a while. Alright, let's get to the stocks on our radar, and we'll bring in our man Steve

Broido from the other side of the glass to hit you with a question. Ron Gross, what are you looking at this week? I got something different, for me anyway. It's Priceline Group, PCLN. Really? Most recent recommendation from the Fool's inside value service. What? Shares are up more than 5,000% over the last 10 years. So what's better than that for a value guy? I was going to say, how is this a value stock?

I think people are mostly familiar with Priceline. Their booking.com site is really consolidating the fragmented European market. It is the world's leading online accommodation service. There's a powerful network effect here with Priceline. The more people they get, the more hotels they get, the more hotels they get, the more people they get. Growth will come from international expansion. My friends at Inside Value think the stock's worth $1,700 per share. That's 30% higher than we are right now. Steve, question about Priceline Group? Does Name Your Own Price have any legs? It seems like that model just doesn't work. You

go in there, you're like, $99. I'll do $99. Nobody's interested. $129? Nobody's interested. My friend Captain Kirk seems to think it's powerful, but I'm not so sure. Just go with a kayak, it seems like the same business model. Jason Moser, what are you looking at? Well, everybody likes to paint. Whether you rent or own a home, you've got to paint that place at some point. I don't know that everybody likes to paint. Well, maybe not. But you can like it if you invest in it and make money from it.

So that's what I've got this week. Sherwin-Williams, ticker SHW. This is a very, very high-quality business with a great leadership team. It's worth noting that Chris Conner, the CEO for many, many years, is stepping down at the beginning of 2016. The good news is that COO John Marikis is stepping in. He has also been with the company for a long, long time. This is sort of a Costco-esque leadership transition. Causes no concern, really. But I love their dominant market share here domestically. There is a global opportunity out there, certainly. got it on the watch list at MDP. We're going to try to do some work to establish the price where we feel like it's worth pouncing. But, great business.

Steve, question about Sherwin-Williams? Is paint a commodity for you, or do you feel an affinity toward Sherwin-Williams? Would you choose that over just going home, be gone, whatever they got? Benjamin Moore. Having painted a number of rooms and decks and whatnot in my life, I can vouch for the quality of paint. So, something like a Sherwin-Williams or a Benjamin Moore is going to be typically better than just run-of-the-mill Home Depot paint. O' Although Benjamin Moore does have the Green Monster paint.

It is pricey, too. It is pricey, but you get what you pay for. O' Matty, what are you looking at? I'm going with IMAX. The trend is certainly away from the theater. I know people are staying home more often than going to the movies, but I think they're still going to pay up to see a big blockbuster movie like Star Wars or The Avengers, and they're going pay up for an experience they can't get at home, and IMAX is that. Having a great year, growing like gangbusters in China. I love IMAX, especially with all the new Star Wars movies coming out.

O' Steve? Is there any way for IMAX to translate the experience to the home user? It seems like I have to drive 50 miles and put on glasses and go into a spaceship. They actually have a home theater setup that you can do, but of course it doesn't replicate the actual IMAX experience. O' You have to have a pretty big home. I know Steve does, but no way. Priceline Group, Sherwin-Williams, IMAX.

You got one you're interested in there? I do use Sherwin-Williams paint, so I'm going there. Hey, now. Are you going to see the new Star Wars movie when it comes out? And if so, are you going to see it on an IMAX screen? I will not see it on an IMAX screen. I mean, unless it's convenient. I will go see it, and I just don't know when.

I hope soon. All right. Jason Moser, Matt Argesinger, Ron Gross. Guys, thanks for being here. Thank you, Chris. Check out the Motley Fool Money podcast on iTunes and Stitcher. That's going to do it for this week's show. Our engineer is Steve Broido.

Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.