Motley Fool Hidden Gems Investing - Death, Taxes, Retail Membership Programs

Episode Date: March 8, 2024

Back on track with inventory, Target plans its next phase of growth with an industry mandate: the membership program. (00:21) Ron Gross and Jason Moser discuss: - Crowdstrike’s eye-popping quarter and the strength of cybersecurity spend. - Target’s rebound and how it might get back to growth. - The stories behind rough earnings from Foot Locker, Campbell’s, and Nordstrom. (19:11) Motley Fool Money’s go-to film critic Nell Minow provides an Oscars preview, update on the state of the movie biz and some of her favorite films from 2023. (34:41) Ron and Jason break down two stocks on their radar: UiPath and Titan. Stocks discussed: CRWD, TGT, TWLO, FL, CPB, JWN, TWI, PATH Host: Dylan Lewis Guests: Ron Gross, Jason Moser, Nell Minow Engineers: Dan Boyd Learn more about your ad choices. Visit megaphone.fm/adchoices

Cybersecurity keeps flying, and legacy retail continues to struggle. Motley Fool Money starts now. 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 Dylan Lewis. Joining me over the airwaves, Motley Fool senior analysts Ron Gross and Jason Moser.

Gentlemen, great to have you both here. How you doing, Dylan? We've got another strong sign for cybersecurity, a sneak peek at next week's Oscars, and of course, stocks on our radar. We're going to kick off, though, with a look at the continued great run for companies in the cybersecurity space. Jason, last week on the show, we talked through Okta's earnings and the strength of cybersecurity spend. Seeing that trend continue this week with results from CrowdStrike. Yeah. In the cybersecurity space, it sure

does seem like it's CrowdStrike's world these days, and everyone else is just living in it. We've talked about both Zscaler and Palo Alto recently. A lot of focus on the spending fatigue comment that came out of Paolo's call, specifically talking about adding incremental point products is not necessarily driving better security outcomes. It really doesn't seem like CrowdStrike is witnessing that same dynamic. Now, it's a little bit of a different model. They have this Falcon platform that ultimately offers these 27 modules, and customers can subscribe to those modules based on what they feel like they need. And to that point, 64% of CrowdStrike customers now have adopted at least five of those modules. 43% have adopted at least

six. 27% have adopted at least seven. And so altogether, we're just seeing this company continuing to sign new deals and then expanding the relationship that they have with those signed customers. We saw dollar-based net retention rate held steady from a quarter ago at 119%. And this really all resulted in strong revenue growth, 33% for the quarter in annual recurring revenue, which is really a number you want to focus on with these cybersecurity companies. That was up 34% to $3.44 billion. I think that's a big deal, particularly when you look at a competitor like Palo Alto in the space. They're clocking that in at around $4 billion right now, and see this ultimate market opportunity maybe to get that recurring revenue number up to $15

billion. So, it'll be interesting to see kind of where CrowdStrike sees that going. There's no question, and Ron, you're going to love this, CrowdStrike is absolutely a business that is firing on all cylinders. Jason, the market certainly liked the results. Shares were up over 20% following the company's update. One thing I wanted to check in on, I was a little curious to get your take on, is they announced that they were buying Flow Security in a cash and stock deal. This has generally been a period where we've been seeing a lot of businesses clamp things down, clamp down spending and focus a little bit more on optimizing. What do you make of them going out there and being acquisitive right now?

Well, it's a very competitive space. It makes a lot of sense when they see something out there that they feel like will be additive to the business. Their balance sheet is in terrific shape, somewhere in the neighborhood of $3.5 billion in cash versus just about $750 million in long-term debt. They have the financial means to do something like this. I think it has resulted in a lot of optimism for the stock. I think, really, to me, that's the biggest risk for investors interested in CrowdStrike today, it's just the valuation. This is a wonderful business, clearly. It's performing very well. But it's at 26X sales now, like 160X free cash flow. And that's after adjusting for stock-based compensation, of course. But still, it just

goes to show you that there is a lot of enthusiasm behind this company right now. But I think that as time goes on, we'll see the big players in the space continue to consolidate CrowdStrike absolutely being one of those. All right. After a year of inventory woes, it appears Target might be climbing its way out and getting back on track. Shares up over 10% this week and at a one-year high following the company's holiday quarter results, Ron. Yeah, still 33% off from its COVID high in mid-2021. But that's really where the problems kind of started, where they were dismerchandised, let's say. They did not have the right inventory on hand and it has taken quite some time for them to right-size into what people are looking for away from the big-ticket

items, away from the more expensive things. They're making progress, but we are not there yet. They did report higher holiday quarter earnings in this report on a smaller than expected sales decline. Okay, that's progress. It's like kind of a backhanded compliment, but progress is progress. Comp sales traffic trends improved sequentially for the second quarter in a row. I like that. Total comparable sales did decline 4.4%, and that's a result of store declines of 5.4%, and digital sales declined of 0.7%. So we're still seeing declines at both the store level and at the internet, the digital level. Doesn't sound great, but it is progress. Total revenue up a total of 1.7%. The bright spot, and this is a continuing trend, is same-day

services. In-store pickup, drive-up, and shipped, which they acquired several years back. Those represent more than 10% of sales, and they were up 13.6% in the quarter. So continuing investments in same-day services, I think, is definitely things that we're going to continue to see. operating and gross margins widened, less markdowns. That's good to see, which means inventory is coming down back to where they need it to be. Earnings benefited from a reduced tax rate, and earnings per share were actually up 58% as a result of all those things, despite a somewhat anemic report. So they're getting there. They've made some really interesting moves. We can talk about a loyalty program they're putting in place, store remodeling. This is one that I've said for

quite some months. It's a nice turnaround play, and it looked pretty inexpensive six months ago. I still think it has room to run. Yeah, Ron, you mentioned ship there and the focus on same-day delivery and logistics. They are highlighting that in their new membership program. They're adding more tiers, and they're refining a little bit of what members are going to be able to do. But they have Circle360. This is a paid membership program looking to compete with Amazon Prime and Walmart Plus. And I look at this and I say, this is probably one of their solutions to those inventory woes and some of those traffic flagging issues that they've been seeing. It's also a retail law that you must have a loyalty program. So they're just complying with

law. But no, I actually, I think it makes sense. Members will pay $99 a year. There'll be an introductory rate of $49 for anyone who joins relatively quickly. You'll receive free two-day shipping as well as unlimited free same-day delivery in as little as an hour, they claim, as long as orders are over $35. So more of this, I want it now kind of mentality. I think there will certainly be some takers. I do think we all have monthly fee fatigue, whether it's Netflix or Disney Plus or Apple or Amazon or Target. Monthly fee spending fatigue is a real thing, at least it is in my household. So, every time somebody hits me up with another one of these things, I say, hmm, but I do think it's going to be popular. So, you're saying death, taxes,

and retail membership programs, those are the constants in light. All inevitable. All inevitable. Perhaps death by retail program, it turns out, with that spending fatigue. All right, we're going to take a break from earnings and check in on Twilio. Jason, the cloud communications company reported back in February, but this week we have an update on their plans for its segment business, which has been in the crosshairs of a lot of shareholders over the last couple of months. Yeah, we've seen some activist interest here. We talked about this letter when we covered earnings a few weeks back. With this company, the focus has moved from growth no matter the cost to now making sure the company can grow with more fundamentally sound financials. As a shareholder,

I'm absolutely on board with that. I think if you want to hold these shares, you need to be patient and understand that with a new CEO in place, we're going to have to give Kazama Ship Chandler some time to try to execute this vision. But the big question really was with the segment section of the business, and that used to be the data and applications business, and they are going to keep that part of the business, right? There were some questions to whether they might try to spin it off. They feel like ultimately the juice wasn't worth the squeeze there. They believe that with their plan, they can get more out of it if they sell it. Time will absolutely tell there, but they're looking at it with just through a lens of more

operational rigor, trying to innovate a little bit more and incorporate it a little bit more into their communications business so that they work in tandem. And that really does make a lot of sense. But this kind of all really comes back to an acquisition that was made a few years back that just hasn't really worked out so well yet. Remember, folks, the segment accounted for only about 7.5% of the company's total revenue in 2024 and ultimately resulted in an operating loss for the year. So it's not like it's some big moneymaker. Understandable why activists might want to see them maybe get rid of it and focus on the core communications business. But management clearly thinks that there's still something there. And then worth also mentioning, they did announce

an additional $2 billion share repurchase authorization in addition to the original $1 billion authorization, which is almost completed. The target is to complete that buyback by the end of this year. They've got $4 billion in cash on the balance sheet, so they can afford it. Jason, I'm curious. This is a business that has generally had shares outstanding moving up and to the right. How do you feel about the management team being authorized to spend another $2 billion on repurchases? Well, that is absolutely something that has been a question for a lot of investors and analysts. And management has responded by making sure to commit to bringing that stock-based compensation number down. They are doing that. I

will give them credit for that. But you make a very good point there. These repurchases ultimately need to bring that share count down. But there's no doubt this is going to offset some of that stock-based compensation. All right, coming up after the break, we've got three companies with so-so outlooks. What does it mean for retail? Stay right here. This is Motley Fool Money. You just found out that your sales team is at risk of missing quota. Don't panic. Just ask Rippling AI. Since it's built on your real-time people and business data, Rippling AI can pull metrics from Rippling and Salesforce into a meeting-ready dashboard showing quota attainment, headcount plan, and monthly revenue to quota by region.

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or automated workflows with the right triggers, conditions, and approvals, Ready to rule your business? Head to rippling.ai slash fool to get the only AI built to give you full visibility and take complex actions across your entire organization. That's r-i-p-p-l-i-n-g dot a-i slash f-o-o-l. Sign up for exclusive access today, rippling.ai slash fool. Welcome back to Motley Fool Money. I'm Dylan Lewis here with Ron Gross and Jason Moser. we're going to check in on three household names that have the market down after earnings. Ron, let's start with Foot Locker. Shares down 25% after the quarter came in above expectations, but it didn't seem like outlook was too inspiring. No, the stock just got slammed. And that stock

has been a mess for a while now as they really try to reshape the business model. And things actually look like they might be on track, at least from a stock perspective, starting maybe around last September, but this is just another setback for a company that has had many setbacks for the last several years. The quarter in and of itself, as you say, wasn't actually that bad. Sales were up 2%, though comparable sales fell slightly, 0.7%. The Champs brand, for those familiar, remains the weak spot. What they're trying to do is reposition that brand towards athletes and away from fashion. They're not seeing traction there yet. That continues to be a weak spot. Gross margins were down significantly, 350 basis points as a result of higher markdowns

needed to clear inventory. Inventory is now down 8.2%, so that's a good thing, but it's at the cost of margin. If we adjust for some non-recurring charges, always a dicey thing to do, but earnings were down 60%. They've got some work to do. CEO Mary Dillon noted the company's fourth quarter results were above its own expectations, but things are pretty weak. She said they did see meaningfully accelerated sales trends relative to the third quarter. Guidance was relatively lackluster. I think investors did not like that. They ran for the doors. The company will be investing heavily in digital, the store experience, loyalty programs, brand building. Most importantly, they delayed by two years their EBIT margin guidance,

their operating margin guidance. So you have to wait another two years to get where you hoped they were going to be by 2026. So it's even later now. And that is not a good news for people who own the shares. Ron, we're about a year into Mary Dillon's time at Foot Locker. And she's someone who really had the magic touch over at Ulta, a lot of what you were getting at there with loyalty programs and those types of things to bring people into the mix was kind of her forte. How would you grade her time so far at Foot Locker? This is a tough business, so I don't want to put it all on her back. She was a star at Ulta. She was at McDonald's for five years before that, I believe. She's a top-notch CEO. This is a tough

business that was relying on brick and mortar and Nike for so long. They're trying to move to multi-channel, omni-channel. They're trying to move away from Nike. It's going to take some time. If anyone can do it, Mary Dillon can, but it's a tough business. All right, over to the grocery aisle. We've got an update from Campbell's this week. Not a name in any of our portfolios, but Jason, a company we look to for a sense of what's going on with the consumer. Yeah, exactly. I think this is an interesting one to look at, not because it's a great opportunity for investors. Let me be clear, It's not. I'm not trying to be mean here. Sorry, Campbell. But the fact of the matter is,

in five and 10 years, this thing has just woefully underperformed the market. Now, with that said, it is a low-margin business. We know grocery is very difficult, so I'm not really holding that all against them. But I do believe looking at this call, it gives you a glimpse into what the consumer is dealing with. And in that light, management said in the call, consumers continue to prioritize value, not terribly surprising. A lot of focus on home-cooked meals, purchasing food that helped them prepare what they call stretchable meals in smaller and less frequent shopping trips. It'll be interesting to see how that trickles through the grocery stores, for example. Organic revenue down 1%. Not terribly surprising there.

There are two interesting dynamics to this business that I think are worth keeping an eye on. Now, one is near and dear to my heart, and that is the snacks segment. We can't forget the value in snacks, Dylan. Ron, Dylan, I know you guys love snacks. You love them as much as I do. Can't skip snacks. No. And you've got brands like Lance and Snack Factory, late July, they reached five-year highs in volume share. This is basically half of their business, so it is material, it matters. When you just look at the overall snacks market, it's a big opportunity. Statista data says revenue in the U.S. snack food market is set to hit $114 billion this year

and grow about 4% annually through 2028. There's opportunity there. The other thing that I think is worth keeping an eye on, the acquisition of Sovos, which is going to bring the Rao's brand under their umbrella. I think a lot of people are familiar with that sauce and the restaurant concept and whatnot. Rao's, I think, is an opportunity. They just announced they had surpassed $1 billion in annual net sales. Those sales were up 16% from a year ago. For a company that's turning in such anemic growth, it's nice to see they're bringing in another little acquisition here in Sovos that could help boost that. I think that between the Snacks side of the business and this Rayo side of the business, there's the opportunity, at least

for them, to try to push those organic revenue numbers up here in the coming years. But I don't know that necessarily changes this into a buy or any kind of a compelling thesis. But again, you get a good window into the state of the consumer. I think they should change the slogan to Rao's is good food. Because it's quality sauce, in my opinion. If you're not going to make it at home, it's pretty good. I said snacks are close to my heart. So is that sauce. I've never had Rao's sauce, but we eat a lot of Italian food in this house. I make all of my sauce. But you've Convince me, Ron, I really do need to, with intention, go to the store and buy this Rao's sauce to at least try it. That could work in a pinch if you don't have enough time.

If you don't like it, I'll pay for it. Oh, good deal! We're talking Campbell's results, but we're talking a lot about snacks and Rao's here. It is not out of the realm of possibility that they revisit the company name at some point. We've seen a lot of businesses refocus on what has investors excited. We're going to wrap our earnings takes looking at Nordstrom. Footlocker, not alone, Ron, on the retail struggle bus. Shares of Nordstrom down over 15% this week. The struggle bus, yeah. They are also reversing some positive momentum they had been enjoying. It's not that the quarter was so bad, but the guidance is really what got investors

spooked. Though I think the share price decline seems a little bit of an overreaction to me. Over the quarter, sales grew only 2.2%, primarily due to the winding down of Canada operations, so not at fault here in the U.S. The Nordstrom branded stores were plus 3%. Growth was particularly strong at Nordstrom Rack, which is their off-price brand, where sales were up 14.6% or 8.8% if we exclude the extra week in the quarter. Interestingly, Macy's said they're going to focus on Bloomingdale's, their higher-end brand, whereas Nordstrom is seeing success with Nordstrom Rack, their off-price brand. Digital sales down 1.7%. That's not great. You don't want to see that. That's 38% of total sales during the quarter. Earnings per

share was up 11%. Guidance was fine, but not great. They seem to want to continue to be cautious as a result of the macro economy. All right. Ron Gross, Jason Moser, appreciate the earnings rundown. Fellas, we're going to see you guys a little bit later in the show. But up next, we've got tips for your ostrich pool and where to be putting your money. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Dylan Lewis. The Oscars are next week. Ahead of the awards and the red carpet, we caught up with Nell Minow, Motley Fool Money's go-to movie critic and corporate governance expert, for a look at the movie biz and some of her favorite films of 2023. Before we got into taping, you mentioned that you were fresh off of your Disney proxy vote.

And this is a company that has, I think, had kind of a rough year, maybe one of the easiest or simplest ways to put it. certainly there are a lot of opinions from shareholders on the direction of the company leadership and some of the major initiatives when you were thinking about disney and and looking at some of the issues there what was in your mind i voted in favor of the disney candidates uh yes there are a lot of concerns about disney but there are more concerns about the people who are challenging disney you know peltz keeps promising that he's going to come up with a detailed proposal about what he thinks the company should do, but his background has nothing in it to suggest that he understands this industry in any way. He is offering up, so far, kind of

financial engineering, and that's not what a company like Disney needs, a company that's in every industry. They're in the hospitality industry, they're, of course, in the entertainment industry. They're in television. That's an industry that requires a lot of creativity. They're not putting things out on a conveyor belt. He's just one step away from suggesting they move to AI. He has not persuaded me of anything whatsoever. I am cautiously optimistic that a vote in favor of the Disney insiders is the way to go. You mentioned AI there, so I'm going to take the bait. As we start looking at content companies, whether they're in the film industry or traditional publishing, thinking about using AI, how are you as a shareholder

looking at those types of decisions and the strategic direction that companies are looking to go with AI? Well, everybody is jumping on it, which always happens with fads. The question is, who is jumping on it in a thoughtful way? I think AI, I have to tell you, the very last thing I thought was going to be the first use of AI was plumbing through the footnotes on PhD dissertations to find out who has been citing everybody correctly, but apparently that's what people like Ackman are doing with it. I think that AI is going to be less important in content creation than it is in digging through a lot of data. I want to see pharma companies using AI. I want to see other kinds of companies improving their products through the use of AI. I think it's

a mistake to think that it's going to take over. Although I do note in the entertainment industry, although I do note that Tyler Perry has canceled his 800 million studio facility that he was going to build in Georgia after seeing a demonstration of AI filmmaking. Now, I suspect that what he'll do is he'll spend that 800 million on something a little bit more advanced, but he's not going to give up on the idea that scripts for the indefinite future will need to be written by people and performed by people. Have you seen any of the demos that have come out from companies like Pika or any of the AI companies that are really focused on basically using prompts to create video? I have, and they haven't quite licked it. I'm sure that when we talk to each

other before the 2025 Oscars, we'll see a lot of progress, but they still have these very odd things like, you know, six fingers on somebody's hand. And, you know, it reminds me, I was listening to a video on YouTube and I only realized that the narrator was a robot or AI because they didn't know the difference between read and read. And so there are some fine points that it's going to take. And Live and Live was another one that they got wrong. So it's going to take a little while before they sort that all out. But I think there are tremendous opportunities on companies that need to go through a ton of data for their products. So pharma is where I'm looking for right now. All right. The Oscars are coming up. And I think maybe more than any other regular

guest on Motley Fool Money, you watch more movies than pretty much anyone else that comes on the show. All right. So say I'm giving you $100 to put on any film, any actor, actress, any major category win. What are you putting it on? I think your surest bet there has got to be Divine Joy Randolph for The Holdovers as Best Supporting Actress. Normally, the supporting Oscars are the toughest to predict, but she has won every preliminary award. Lord knows she deserves the award. And she gave just a magnificent performance. She was so good also in Only Murders in the Building, in the Dolomite movie with Eddie Murphy. I think she is the surest bet of the night. And then after that, I would say Oppenheimer is probably a very good bet for Best Picture and Best Director.

And the reason for that is not because I think it should be. There are two reasons. One is that they don't give Oscars for the best movie. They give Oscars for the most movie, and that is the most movie. And Hollywood likes to portray themselves as serious, as dealing with serious issues, as having a serious role in the cultural conversation. So they like smart movies, and it is a smart movie. But more important than that, you have to remember that the Oscar votes are by the people in that category. So in other words, Best Director is only voted on by other directors.

And Christopher Nolan won the Director's Guild Award, which means the exact same people that could change their mind between one vote and the next. And I think that although the best picture is voted by the entire Academy, I have a feeling that Oppenheimer is going to make it. So knowing the history of how people like to vote, were you surprised at all to see Barbie in the Best Picture conversation? Not at all. It's impossible to ignore a movie that has broken so many records. It's done so well, and everybody agrees. Again, it's a very smart movie. It's a very entertaining movie. It's fun to look at. It's like eating candy, but there's a lot in it as well. I think that the surprise, even the Barbie people are surprised that it looks like I'm Just Ken is

going to win Best Song. And I have to tell you why I'm happy about that. I get annoyed every year by the Best Song because they have the worst rules about the nominees for Best Song. And they will allow you to have as Best Song some song that a pop star wrote that only plays during the credits. It has nothing to do with the movie. So I'm a big fan of a song that really plays an important role in the movie getting the award. And certainly that song does. Plus, I think it's very funny that in a movie that is entirely about Barbie and feminism, Ryan Gosling just did so brilliantly with that song that he's impossible to ignore. Well, I was right there in the theater tapping my foot a long time. Just absolutely loved it. I'm curious, are there any dark horses that you

feel like you wouldn't be too surprised to see have a pretty good night at the Oscars? Anatomy of a Fall kind of snuck its way into the best picture category, not just the best international picture. I think we will see it win best international, but you never know. I mean, we did have Parasite winning a couple of years ago, so that would be the dark horse, I think, to keep an eye on. Okay. And outside of the Oscar field, a movie from the last year that you feel like didn't get enough attention and maybe you'd recommend for people to watch? I guess I would say, this is actually from the year before, but I would recommend The Outside Story. It's a very small movie about a guy who gets locked

out of his house in Brooklyn. It's a first-time movie from a first-time director and writer with the wonderful Brian Terry Henry in the lead role. That's just one that I really loved and really stuck with me. I would recommend that to anybody. All right. Let's talk a little bit about the movie industry itself. 2023 felt like a pretty good year back at the box office. Barbie and Oppenheimer got a lot of headlines. Super Mario Brothers movie, right up there in terms of worldwide box office, over a billion. What I do see when I look at the worldwide box office, though, is a lot of franchise extensions, a lot of licensed IP. It seems like we are still in

this period with movies where stuff that is bankable is really what a lot of studios are putting their resources behind? I'm going to go with kind of a Dickensian best of times, worst of times response on that. I think you did not mention two key concerns. One is, of course, the strike really tied everything up last year. And we had hoped that the production would sort of hit the ground running and everybody would catch up, but that has not been the case. 60 percent of the people who are on strike still have not been employed and so that is a serious concern and related to that but separate from it is the constriction of the streaming services which for a while there were just what you know anybody could walk in the door and say

I want to make a 10-part series with a lot of CGI and they would go yeah sure that's fine those are concerns and that's one reason that this year is kind of off to a slow start until we just had um the surprise hit to me of one love the bob marley story which has done very very well internationally and in the u.s and of course dune which is gonna be number one for the next few weeks but i think as i have now that i've done the worst of times the best of times is that uh there are so many opportunities for people who for very little money create their own movies they go to the festivals and they get a nationwide release. And so I think outside the studio system, there are a ton of opportunities, but the fact is if you're going to spend a hundred million

dollars on a movie, your risk assessment is going to be very careful and you're going to want to build it. I'm saying this as somebody who's going to see Kung Fu Panda 4 tonight. So, so, so yeah, But I'm a big fangirl. I go to San Diego Comic-Con. I love superheroes. But look at how badly the superhero movies, the franchise movies have done lately. Madam Web was a disaster at the box office. The Marvels did not do very well. They spent a ton of money on those. Flash was a total failure. So it's not always the case that the IP pays off the way that they hope it will. do you think we're running into superhero fatigue? I don't think so. I think that we have perhaps not continued at the quality of movies that we had for a long time. Robert Downey Jr.,

who I think will get the Oscar also for Oppenheimer this weekend, was incredible as Tony Stark. They haven't found anybody in that category yet, and they're just going to have to work around it. Kevin Feige, who, of course, is in charge of all the Marvel movies, has been really great about bringing in unexpected directors and people who are not normally known for action. And that paid off for him for a long time, and it has not lately. And so he's got to rethink that. How would you characterize the overall state of the entertainment industry at this point? Because we are past the strikes, but we're also past the period of easy money for a lot of these businesses that had content budgets. And it seems like we are seeing a lot

of the streamers past the easy growth period of acquiring users and customers. It feels like for while we've figured out the labor side of things, there's still a lot of uncertainty brewing. There's no question about it. And partly it is because some of these big ticket movies have have really faltered at the box office. So I think we are in a time of kind of retrenchment, but fortunately, as I say, every January, when I talk about the movies that are coming out this year, my favorite thing to look forward to is that by the end of the year, there will be a writer, a director, a star I never heard of before, who is going to be my favorite by the end of the year. And you have somebody like Pedro Pascal or Paul Miskell, both of whom were not all

that well-known a couple of years ago and are now just really at the forefront. And so wait to see what happens with the Sundance films, which got great response in January, with Telluride, with the other festivals that are coming up. And you'll see there's a lot of really, really great stuff coming. One thing I wanted to get your take on, David Zaslav has been busy as the CEO of Warner Brothers Discovery. And as part of his leadership, they've decided to basically prevent several finished films from being released, notably Coyote vs. Acme, featuring John Cena, written by James Gunn, but also Batgirl, featuring Leslie Grace, Michael Keaton, Brendan Fraser. And it seems like there's been quite a bit of backlash from the creatives in the industry. What do you make of a

company that size and someone of that stature in the industry like Zaslav making those decisions? Zaslav is a nightmare. The only thing he's been busy at is counting his money because he has continuously been number one on the list of the most overpaid executives, meaning the worst ROI for every dollar you spend paying him. He knows nothing, as far as I'm concerned, about what it is to be a creative, what it is to create content that people want to see. And if he thinks that he can make more money killing these projects than releasing them, then he has no idea what his job is. He's not just getting the creatives mad at him. He's getting the audiences mad at him.

I think I'm hoping still that both of those movies will see the light of day at some point. You know, when I think about the terrible movies that I have to sit through, it's unthinkable to me that these movies, which have a lot of good people behind them and which I think are worth seeing, can't even go on streaming. Motley Fool Money listeners, what's your Oscars favorite? We want to hear from you. Write in at podcasts at fool.com. Coming up next, we've got stocks on our 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 anything based solely on what you hear. I'm Dylan Lewis, joined again by Jason Moser and Ron Gross. We're going to dive right into stocks on our radar. Our man behind the glass, Dan Boyd, is going to hit you with a question. Ron, you're up first. What are you looking at this week? Dan, I'm going back to an oldie but a mediocre-y one. Titan International, TWI, manufacturer of large wheels for farming and industrial applications, a long-term holding of mine, years and years and years. The reason I'm going back is that they just announced a

large acquisition for a company of its size. Prior to the acquisition, they were about a $1 billion company. They announced an acquisition of Carlstar Group for $296 million. So that's a pretty big acquisition for them to digest. Carlstar is a global manufacturer of specialty tires and wheels for a variety of end markets. It will get Titan into end markets that they're not really in, outdoor power equipment, power sports, high-speed trailers. So it's a way to diversify a bit. They paid only four times adjusted EBITDA, and the company has profitable EBITDA of about $73 million. So they expect it to be accretive or additive to earnings right away, which is fine. It's just that they only have $220 million in cash for Titan. They're going to use $127 million

of it for this acquisition. They've got $425 million of debt. I'd rather the balance sheet was a little bit stronger for an acquisition of this size. But hey, Titan's only trading at four times forward EBITDA, only 8.5 times earnings. I'm sticking with it for now. Dan, this sounds like a classic Ron company. Wheels. Yeah. Old economy Ron is back in action. Other analysts, they bring in robots and AI and biotech. Ron, he's still thinking about the wheel, Dylan. Let's see us all live without the wheel. Well, if you're hungering for AI, I think you might be getting it with your next stock. Jason, what's on your radar this week? Yeah, taking a closer look at UiPath, ticker is PATH. They have earnings coming up on March 13th

next week. This is one of the companies that's bringing automation and computer vision to enterprises everywhere. In this day of AI and machine learning and automation and whatnot, it's clearly pursuing something where there are some tailwinds there. They ultimately build and manage automations and computer vision technology. Does this through their UiPath business automation platform, which ultimately spans the full automation spectrum. They're trying to basically give their customers what they need in their automation and computer vision journey from soup to nuts. The whole kit and caboodle, as they say. Licenses and subscriptions make up the lion's share of revenue, both contributing fairly equally. They benefit from many of the

drivers that we're focused on today in tech. Connectivity, automation, artificial intelligence, machine learning. And they're playing a role, actually, even in the rollout of 5G technology. They're helping telecom providers handle real-time challenges and personalized offerings, ultimately, to get those 5G networks out and ultimately keeping customers happy, because that's what it's all about. The thing is, with this business, they've seen a lot of success, but it is one of those younger tech companies still working its way toward profitability and cash flow. It's valued at 10 times sales still, right? And the valuation is what really has me on the sideline here more than anything. I'd love to see some kind of a pullback of the stock.

Dan, a question about you, iPad. Yeah, I thought this was going to be one of those Jason MedTech stocks that has something to do with urinary tract infections, but I'm glad it's not. Wow. Dan, wheel cutting edge tech, which one's going on your watch list? I'm going wheel, baby. I love the old economy. Ron Gross, Jason Moser, thanks for joining me. That's going to do it for us. We'll catch you next time.