Motley Fool Hidden Gems Investing - Google's Perfect Timing

Episode Date: October 14, 2016

Samsung pulls the plug on the Galaxy Note 7. Wells Fargo's CEO steps down. And Snapchat's parent company prepares to go public. Plus, Motley Fool Asset Management's Bill Mann talks stocks, bonds, and investing overseas. Thanks to Tommy John for supporting The Motley Fool. Go to tommyjohn.com/fool and use the promo code 20% off your 1st order!  Learn more about your ad choices. Visit megaphone.fm/adchoices

This episode of Motley Fool Money is brought to you by Tommy John. Tommy John makes underwear that keeps everything in place, whichever way a man moves. For 20% off your first purchase, go to TommyJohn.com slash fool and use the promo code fool. That's TommyJohn.com slash fool and use the promo code fool. 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. From MDP and Supernova, Simon Erickson. And from Motley Fool Pro and Options, Jeff Fischer. Good to see you, as always, gentlemen. Hello, Chris. We've got the latest headlines from Wall Street. We will dip into the Fool mailbag, and as always, we'll give you an inside look at the stocks on our radar. But we begin this week with the mobile phone wars. Samsung announced it is killing the Galaxy Note 7, which is good since the phone appears to have a nasty habit of exploding, Simon. A lot of threads to get to here, including what this means for Apple and Google. But first, how bad is this for Samsung? This is

the star, was the star in their portfolio, wasn't it? Well, I'm glad that you're starting with such a smoking hot story like this one. It's just a good one. But very bad for Samsung. They recalled the Galaxy Note 7 line. Of course, now, every time you get on an airplane, it's terrible marketing when they're saying, you have to put this away or take it off of the airplane. But they're recalling the line. They pulled 2.5 million phones. But I think bigger picture, just the entire development in the smartphone race right now is very bad for Samsung. Historically, this has been a two-horse race, right? You've had the iPhone and then the Samsung Galaxy line at the highest end of the market, which is where everyone's

making all of their money. And if you wanted to get that Android operating system with all of the Google software, you had to go with Samsung. Now you've got the Google Pixel coming out, and I think that that's going to be a Samsung killer because of the software side of this. Yeah, Google's timing on this one, Jason, could not have worked out any better. I mean, it really couldn't have. I think that, to me, is probably the most interesting part of the story. Samsung obviously was working hard to push this phone out, working hard really to make it as affordable as possible. The thing that struck me when Google came out with the Pixel, the pricing on the Pixel, it seemed like it was really high. I don't

think Google has really ever warranted any kind of device loyalty. They haven't necessarily been so successful on the hardware side. I think this could potentially change that simply because of the timing here. It is a good-looking device, looks like it's obviously very capable. You don't have that switching cost and having to learn a new operating system. So, people like Jeff and me who use iPhones, for example, we may not want to necessarily consider switching over to an Android device. But I think anybody who's on an Android device, particularly a Samsung, they can now actually consider making a leap over to that Google with relative ease. Yeah, and this might be one instance where they consider going to Apple. I think

Apple will benefit least of all, as you guys are talking about. Samsung has other phones that it can sell. The S7, the S7 Edge are still out there, viable phones. Hot commodities, Jeff. But Google, Motorola, LG even stand to benefit most of all, and then Apple after that, perhaps. Isn't Samsung in a position now where just the ... I hate to use this word, but the optics of this are so bad, I almost feel like they're not going to come out with a new phone next year or the year after and actually say, oh, and by the way, it doesn't explode. But I think if you're a tech reporter, that's probably the first question you're asking is about the testing that they've

done, the safety factor. It is very bad. But again, I think it's also very good for Google. If you look at all of the shipments of smartphones globally every year, 88% of them have the Android operating system installed on them. Most of the phones are still just lower-end phones. Only about 22% of those are actually Samsung. And Google knows it's not going to go install artificial intelligence to try to get more searches done on those lower-end smartphones. But this is still an advertising company, and the way that it's going to get those searches to happen is at the high end of the market, hence the Pixel coming out this year. Yeah, and I think it's worth also remembering these phones aren't burritos. And what I mean

by that is, to draw the parallel here with Chipotle, it's obviously gone through a big crisis here with E. coli. I think timing is going to be terribly important here for Samsung, because there is going to be an awful lot of time that goes by here when people aren't really going to be buying another phone. I mean, you may give Chipotle a couple of months and then go back and try a burrito again, but once you get that phone, you've got that phone for a while. So, I have to believe that Google is looking at this and thinking, man, they really need to capitalize on this with a massive push, advertising, marketing, whatnot, the Pixel, because they can really, I think, sway a lot of buyers. And if they do that,

Samsung is going to lose a lot of time in really trying to repair that brand. And if you look at the message from those advertising campaigns they've done, you look at the commercials for the Google phone, it's not about a phone at all. It's about, hey, what is this? Let's ask Google. Let's get it through that core advertising business. It's what that phone can do for you. It's all tremendous hardware. It's just phenomenal now how it impacts so many parts of our lives. Yeah, and it's important for Google to get more users on that high-end phone, because as Simon mentioned, all these phones that are running Android, but most of them are

running old software that Google can't monetize the traffic, really. This week, John Stumpf, the embattled chairman and CEO of Wells Fargo, announced he is stepping down effective immediately, taking his place as Timothy Sloan, who has been at Wells Fargo for nearly 30 years, most recently as the chief operating officer, where, Jeff, he oversaw the Community Banking Unit, which is where the 2 million fake accounts were created. This guy? This is the fresh face who's going to lead Wells Fargo into the future? Yes, but one line I saw said that he wasn't at the same bank where it actually started, so he was in a different region. It's easy to be cynical about Wells Fargo right now,

and we should be, even while remembering almost every, or perhaps every, major bank in the U.S. has had scandals like this. This one hasn't cost customers money. It actually lost Wells Fargo money. It was incentives gone wrong. What's shocking about it is that Wells Fargo didn't protect themselves and announce it when they first discovered it as early as 2011. Definitely by 2013, they knew this was going on. The LA Times reported about it in 2013. They started firing employees, though, as early as 2011. Definitely by 2013. So, they've known about it for a long time, and they didn't make a filing. They didn't tell shareholders. They They went about it every wrong way possible, right up to the testimony that the ex-CEO

gave recently, where he just came off completely thick-skulled about this whole event. So Wells Fargo's stock is down again today, after earnings, and even with a new CEO who is maybe the same as the old CEO. We still don't know for certain how much these leaders knew, but the bottom line is, it's very hard to trust Wells Fargo, and with a financial the company, you need at least a respectable amount of trust if you're going to believe in the stock. Yeah, Jeff was talking about the stock being down after earnings being released here. That's interesting to note, because the earnings report was actually fairly decent. It exceeded expectations, still a very tremendous mortgage

operation going in there with originations up, applications and pipeline are also up. I think an interesting number for us to keep an eye on here in the coming quarters is going to be total average deposits, because that's really going to give us some clue as to whether customers have made the ultimate move of closing accounts and moving to other banks. As it stands for this quarter, those total average deposits are actually up 2%. But again, I think looking over the course of the next three, four, even six quarters, that'll be a real telltale sign as to how consumers are really reacting to this. Yeah, the banking industry, of course, is so competitive now. You have JPMorgan Chase,

all the big investment houses are banks as well now, of course. So, you can't make an error like this and then expect your new accounts to grow. Why would you go to Wells Fargo right now when you can go anywhere else? But the existing accounts, as Jason said, are very sticky, because a lot of us have auto-debit or it's connected to our mortgage or what have you. So, they have that going for them, as well as their mortgage business, quite sticky there, too. But as far as new account growth, this should be a headwind against Wells Fargo for some time to come, sadly. They've really damaged the brand, much like Chipotle.

And I think they've got a lot to lose from it, too. Half of the money that Wells has coming in is from non-interest income, and 25% of that is from fees on the debit and credit cards. So, there is a lot to lose from this. It was just stupid. It just shows you how important incentives are. If you're incentivized to open new accounts, and you see a way to open them without actually opening them, and then that spreads like wildfire through the employees, not good. Verizon's chief counsel said this week that Yahoo's massive data hack in 2014 may have been enough for Verizon to renegotiate the terms of their deal. Verizon agreed to pay

$4.8 million for Yahoo's core assets. What do you think, Jason? Do you think they're going to maybe knock a couple hundred thousand off that price tag? Well, I think there is no downside from Verizon pursuing this, at least, at the very least. I think they got a big bargaining chip out of this, potentially. The burden of proof, most certainly, is going to be on Yahoo to establish the fact that this breach doesn't have what's called a material impact on the business. That is something that could certainly affect the financial value of Yahoo, and therefore, Verizon's acquisition of Yahoo. When you look at the size of this breach, and you compare it to other breaches in recent

history. The Yahoo breach was $500 million. MySpace at $360 million. Going down that line, the Ashley Madison one that really got a lot of headlines, that was actually only $39 million. That just gives you an idea of really how big this breach was. I think they're going to have a really tough time establishing that this didn't have a material impact. And yeah, I think Verizon should try to get a little bit knocked off that price tag. Shares of Illumina down more than 25% this week after the biotech company lowered their revenue guidance. How much did they lower it, Simon? That's a hell of a fall off the cliff. Well, they cut their revenue guidance by 3%, and the stock ended up falling 25%.

So, it is a bit of an overreaction, you might say, from the market. But it turns out, Chris, that when you're buying a $10 million piece of machinery, that's a pretty big deal for most companies. Yeah, I would think so. So, these sales cycles, they take a long time, and sometimes you're going to see lumpiness for Illumina's machines. These are genomic sequencing machines. These are really big deals. The other thing that's interesting in the report is that the utilization and the consumables from the installed base was as they expected it to be. So, my takeaway from this is, expect some volatility in a stock like this, as you see those quarter-over-quarter lumpiness from the orders

placing or not placing. But long-term, this is a really big deal, and this is one we definitely got to keep our eyes on. Coming up, we've got an early frontrunner for the hottest IPO of 2017. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, Simon Erickson, and Jeff Fisher. Amazon announced this week it plans to hire 120,000 seasonal workers for the holidays. That is a 20% increase over last year. A little surprising, Jason, given that we've recently talked about Target, UPS, Macy's. They're doing their seasonal hiring, but it's basically flat year over year. This is a pretty big jump.

Yeah, and I think it makes a bit more sense when we look at the overall retail picture, we look at the role that e-commerce plays in that picture, and the fact that it's still a relatively small overall percentage, but it's growing very quickly. And so, this isn't terribly surprising. If we look at the actual projections for Amazon's revenue in the holiday quarter. They're pegged at around $45 billion in sales during the holiday quarter, which is about 25% growth over the same quarter last year. So, the expectations are there that Amazon is going to continue growing at these massive double-digit rates for the foreseeable future. And I think that probably is right, as they continue to build out this Prime relationship. All of the offerings that

go with Prime, we know that the Amazon Echo is really taking off as well. So, there are a lot of different sort of pokers in the fire there for Amazon that can really spur a lot of this growth along. And so, I think that the boost in hiring only makes perfect sense in order for them to really fall in line with that mission of being so customer-centric in the first place. Snap Inc., the parent company of Snapchat, is one step closer to going public. Snap announced that Goldman Sachs and Morgan Stanley will be the lead bankers on the IPO coming sometime early 2017, Jeff. You want to get a look at the S-1 filing?

Possibly March, as soon as March. Yes, I would, Chris. The S-1 filing is what every company has to file with the SEC before they go public. It shows so much information about the past financials, the business strategy, the plans. It's really one of the most exciting things to read about a new company. That said, the word exciting is not something you want to use too much around IPOs. Although, most of my best long-term investments have been recent IPOs, whether it was Google or Amazon or Starbucks, so maybe Snap, Facebook, another one. Snap is worth looking at. They've raised about $2.5 billion so far in six rounds of equity funding. Their current valuation is around $18 billion, and word is they might

go public at around $25 billion. Now, the valuation that they hit the market at might be much higher than that, depending on the said excitement around the stock. But it's a business that, you know, social media is everything right now online. It's the most popular social media site among teenagers, just a hair more popular than Instagram, but still, it's the leading one. And reportedly, they're charging as a minimum $750,000 a day to advertise on the site, and you just pay per day, not per click or per view. And they have buyers like Samsung, speaking of Samsung, McDonald's, Comcast, Macy's, giant companies willing to pay that, given the 100 million daily users, roughly, on Snapchat right now.

What we need to see, though, are the financials, how profitable the company is, or presumably will become, and then go from there. But it's certainly an interesting one that we're going to hear a lot about between now and March. Our email address is radio at fool.com from Sean Taylor in Limehouse, Ontario. My daughter and I were discussing the move to electric vehicles and everything powered by lithium-ion batteries. We wondered where the raw materials come from. Mr. Google says it's extracted from saltwater lakes in South America and China, which seems like a pretty limited or finite resource, and therefore may present an investment opportunity. Who are the main manufacturers? Are they listed? And how would

we go about building a small portfolio of lithium stocks and hold for the future? Sean's daughter is a student at Dalhousie University in Halifax, Nova Scotia. Go Tigers. Simon, what do you think? Yeah, it's a good question, Sean. And I mean, one that we should be considering as the Gigafactory comes online, there's going to be a huge demand for lithium out there for the production of lithium-ion batteries. The problem is that Tesla is such a concentrated buyer of those, and it's still just a commodity you can't do a whole lot with other than mining it, that you're probably not going to be able to set any kind of pricing for the material itself. I do think that the downstream of that question, that is also a good question to ask, is after

you have these lithium ion batteries at a significantly lower price than we did before, what can you use them for? We know that they're being used in smartphones and cars and home battery storage and stuff like this right now, but the technology is far from optimized today. And there's going to be a lot of R&D application work that's going to have to go into this, which is an input material of a battery into an output product, which is a much higher of value. And I think you're going to see a lot of companies that are into that. To answer the question, though, I don't think a lot of those companies exist, because it's still R&D-funded,

and a lot of this is tech work. We're going to have to stay tuned to see companies popping up. Castle Cheese is a private company based in Pennsylvania. This week, Michelle Murder, the company's president, received three years probation, a $5,000 fine, and 200 hours of community service after pleading guilty to the crime of food adulteration. The company was selling what it claimed was 100% Parmesan cheese when it was actually doctored with other substitute ingredients, including cellulose, an additive derived from, wait for it, wood pulp. Here's my question, guys. How is this company executive not doing hard time for this crime?

It seems like she should. It seems like food adulteration sounds like one of those things that would make a movie rated NC-17. I'm not really on board with that. I mean, messing with the cheese supply. And poisoning your customers, in a sense. It's terrible. How frequently does this happen and we don't know about it? That's not something I want to think about. At least wood pulp is organic? Simon, I was looking at the price. You're looking for wood pulp in your Parmesan cheese?

As someone who does all the cooking in the house and cooks quite a bit of Italian, I take umbrage with this. I mean, I wouldn't mind seeing even a day or two of hard time, just lesson learned. Don't mess with our food. You can't do that. I'm sure that if you're a U.S. attorney in Pennsylvania, there are days on the job that are very difficult. This seems like it was probably a fun case to work on. I don't know. I could be wrong, but this just seems like one of those cases that might be a little fun. And let's go to our man behind the glass, Steve Broido. Steve, any thoughts on this horrible tampering with the Parmesan supply in America?

Is nothing sacred? How much Parmesan are you loading up with when you go to your beloved Olive Garden? You know, when they come around, I usually ask them to be quite generous. They lose all their margins on that with Steve. All right. Keep the emails coming. Radio at Fool.com. We love the investing questions, and clearly, we also love the food stories like Castle Cheese. All right, Jason Moser, Jeff Fischer, Simon Erickson, guys, we will see you a little bit later in the show. Coming up next, though, conversation with Motley Fool Funds Portfolio

Manager Bill Mann. Stay right here. You're listening to Motley Fool Money. Motley Fool Money All right, before we get to my interview with Bill Mann, I've got to give a shout-out to our friends at Tommy John, the revolution in men's underwear that focuses on fit, fabric, and function, shirts that stay tucked, socks that stay up, and underwear that keeps everything in place, whichever way a man moves. Tommy John stuff is incredibly comfortable. It comes in a wide selection of styles, options, and colors.

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How are you? I'm doing well. How are we, we as an investing public, as we kick off earnings season, where are we now with stocks? Where are stocks? Well, are we, to use the dreaded B word, are we feeling a little bubblicious? Are we bubblicious? I will say this. I think if you have a value bent at all, and by value, I don't mean you're looking for things that are trading below a 7 PE or whatever. I mean, from a value bet, you're looking to buy things that are at a price that's cheaper than you think that they're worth. It's really, really hard to find things in the U.S. market right now.

So from that standpoint, if you have that type of discipline, it is really, really hard. And some of the areas where you would traditionally find stocks that are trading at a value are really expensive, like utilities and materials, because those are dividend payers. What we've really seen over the last year is, people have just given up on getting yield from the bond market, and they're looking to do it with dividend-paying stocks instead. So, it sounds like bonds are not on your radar at all. No, no, they're not at all. It's really hard to make a definitive case because usually in the bond market or any type of debt market, you have exploding levels of debt, which by and large is

not present. But $13 trillion in sovereign debt right now is trading below at a rate in which you have to pay to hold it, which not only is that unprecedented, nobody had ever even thought of that as being possible even five years ago. $13 trillion, which basically means that the people who are holding the $13 trillion worth of debt, none of them are holding it for yield. They're all holding it either because they have to, or they're thinking that there's going to be a greater fool out there. So yeah, I mean, there's so much bleed over that's come from central bank decisions. So much of the market right now is being driven by that. If you do believe that stocks are little pieces of businesses, it's a really, really hard market in order

to apply your trade right now. One of the things that you wrote recently for Motley Fool Funds was about how you and your team of analysts are focused on avoiding, and I'm using your words here, catastrophic permanent losses. Those are great words, don't you think? The best words. That's a pretty clear ... You do want to avoid catastrophe. You absolutely do. How do you do that? Because I think there are some investors out there who would say, you know how you avoid that? You invest in bonds. Yeah. You could certainly do that.

I think that when we're looking to invest, you have to understand that every dollar that you put into the stock market, the bond market as well, is risk capital. You're not looking to take no risk. You're looking to take risks that you believe are reasonable. Everything that you're doing in the stock market is dependent on things that haven't happened yet. It's like a dirty little secret. I mean, people say, well, something that's an 8PE company is cheap. Not necessarily. Not if the doors are going to fall off tomorrow. I mean, that happened with Lehman Brothers. Lehman Brothers was trading at a 3 PE and then dropped all of 100% in 2008. You have to be very careful about that sort of thing. So when we're thinking about avoiding permanent catastrophic

loss, basically we're thinking about where any portfolio loses its edge is if it gives up losses of 70% or more for companies that simply aren't coming back. And that requires that you think about the company before you think about the stock, and think about what the company is going to look like five, six years out. And it's very hard to do, because the stock market is made up of a bunch of short-term. Let's talk about oil for a second, because OPEC recently announced it was going to cut production. We saw the price of oil pop on that news. But of course, OPEC said, we're going to work out all the actual details at our meeting in November, and now we see …

It was like the Obamacare legislation of the oil business. We're going to do this, but you're going to find out about what's in it later. Yeah. And now it's later, and we see Iran is backing out of the meeting next month. So is Iraq. And call me crazy, but I'm a little skeptical that this is actually going to happen. Well, if you think about it, when did they get the most teeth was this last week. Russia said that it would also abide by production limitations, which they won't do. But let's just

say that they abide roughly with these limitations. I still think that long-term, OPEC is absolutely cooked as the price setter of the petroleum markets globally. And it really has to do with the fact that they have lost their edge, and they've lost their edge as the nominal barrel because of technological advances, particularly in the United States. But globally, we have the ability at certain prices to get really as much oil as is required, as the market will bear. And that has everything to do with drilling technologies, has everything to do with tight oil, with non-conventional oil supplies. There's just no longer a place for the cartel. They just don't control enough anymore. So, if you're an investor looking at the

energy industry, and in particular, oil and gas, and all of the industries dependent on that, you mentioned drillers. I mean, we're talking about such a huge market opportunity. Maybe. I think that's my question. Is the opportunity there, or do you sort of sit back and say there are better ponds to fish in if you're an investor? Because the price of oil, we're getting close to starting our third year of the price of oil being significantly lower than it has been. Let me put my bona fides on the table for the oil industry. I have a 15-year investing history of being spectacularly wrong about the oil and gas industry and all parts of it.

So, listeners out there, whatever I say, do the exact opposite, even if I sound really smart. To me, one of the hardest things to do is to predict commodity prices. And this is ultimately driven by the price of the commodity. And it has to do with one very, very simple thing that I think that people forget whenever oil, whenever prices of any commodity, but oil, because it is so strategic and such a large part of the global economy might be central, which is this. supplies are dependent on price, right? If oil is at $40, there is a certain level of supply that's economic. If oil is at $80, the level of supply that's out there is much, much larger because suddenly a lot more oil is suddenly worthwhile to pump out of the ground at $120, even more so. And at $120, what ends up happening is that it really creates the incentive for those, you know, for the producers and for, you know, and for the industries that support them

to innovate, right? And, you know, at $40, you know, at $40 a barrel, there's no need for innovation, just, you know, throw your old Derek in the backyard and whatever comes up, that's great. But at $120, finally, you know, you've got dot com people, you've got Silicon Valley people who are thinking about, you know, who are thinking about the oil industry. And so I, you know, for me, any industry in which the commodity itself can by itself define winners and losers and can create a situation where 100% of the participants are losers is one that I just find very, very hard to call. You're listening to Motley Fool Money, talking with Bill Mann, the portfolio manager at Motley Fool Funds. You and your team look outside the United States for investments. Is there an

international market that's particularly intriguing to you at the moment as we head towards the end of 2016? You know, people might not be aware of what's happened in the markets worldwide, because the U.S. has had a pretty good year. But you know who's had a really, really good year, finally? Our emerging markets. Emerging markets are up three to five times what the developed markets are. And the United States is the best performing of the developed markets this year. A lot of the developed markets, Europe, Japan in particular, Japan's been a dumpster fire this year, have been down. Every emerging market, with the exception really of China, has had a really great year. And

they've had a really great year, not because the news coming out of emerging markets has been all that great, but because they've had such bad years over the last five on a relative basis. They were dirt, dirt, dirt cheap. Some of them are still really cheap. And there are markets like India, that we are finding things now difficult to buy, even for us. We have institutional access to that market. There are ETFs that track India. Brazil is another one, and I've spoken about that a lot here on the show over the last year or so. Brazil is the best performing major market of all this year. But think about what the beginning of the year looked like for Brazil. They were losing their president. The Olympics were coming

and they hadn't figured out how to actually pay for building the rest of their stuff. Brazil, the headlines at the beginning of this year were uniformly, not just bad on a, right now they're bad, they were hopeless. And it's the best performing major market in the world this year. Is that a, I guess not a red flag, Is that a green flag for you as an investor when you're thinking about international markets? If you start seeing not bad business news, just bad news, period, do you start getting more curious about investing opportunities in that country? Absolutely, because so many people sell and buy thematically.

I can give you a really good example. Russia, not exactly a market that has created much confidence for people, but we've done really, really well investing in Russia, because Russia isn't a thing. If you're investing in stocks, you're still investing in companies. And some really good companies happen to be based in places like Russia. So, our job is actually to go out and find those companies. So, just so the market itself doesn't implode, and by market, I mean both the stock market and the economic market itself, you can find some real value, and then you just have to be patient. Speaking of patience, I don't want to get into politics per se, but we do have a presidential

election coming up in a month. Do you expect, I'm starting to see more of these types of stories that, for example, mergers and acquisitions are on hold until after the election. Company investment is on hold until after the election. As investors, should we, regardless of the outcome of the election. Should we expect mid-November to the end of the calendar year to be a lot busier in the business world than it is typically? I think that's a really great question. I think every year, if you remember in 2000, it was the same. In 2004, it was the same. When it looked like Obama was going to be elected, it was very much the same. People didn't know, and he really is perhaps the most progressive president that we've had in the last 40 years. People had no

idea what he was going to do. But what they did do was extrapolate very, very much too far. And I think it bears remembering that even in a really weird year like this one, where it really does seem possible that one of the two major parties might implode, Donald Trump seems like he's going to lose. And really, the question right now is, is he going to take down enough of the Republican Party with him, that the Democrats literally have, you know, they have control of all of all of the houses. So that's, I think, you know, as you know, that's, that's what's on the table. But it still bears remembering that whoever is in the executive office, whoever is in the White House. The U.S. has one of the weakest offices of the presidency or of any

developed country. So, I think every time that someone goes into that office, people give them a little too much credit what they can and cannot do. Last question, then I'll let you go. We've talked about markets. We've talked about oil. I'm curious about technology. And it can be a particular technology, it could be an innovation in an existing industry, but what's something that's on your radar right now in that vein? You mean, besides remote-controlled vacuums? Big data, I think, is at the center of where we think about. I think that some of the companies that are out there that are figuring out ways to use data that has not been compiled in advance. I mean, that's the way that

we've been able to use data in the past is it has to be tagged in a certain way. But now certain companies have figured out ways to chew up data and come out with observations for data that has no structure to start with. And some of the implications that come out from that are really really incredible. I think that's an area that we've been spending the most time. That and drone deliveries. Particularly if it involves burritos. Yeah, drone burrito delivery, I think, is at the top of the list. If you want to read more from Bill Mann and his colleagues, you can go to foolfunds.com and sign up for declarations. It's the free monthly newsletter that they produce. You

can find it all at foolfunds.com. Bill Mann, thanks for being here. Thanks for having me, Chris. Coming up next, we'll give you an inside look at the stocks on our radar. This is Motley Fool Money. As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Welcome back to Motley Fool Money. Chris Hill here in studio once again with Jason Moser, Simon Erickson and Jeff Fischer. You can check out past episodes of Motley Fool Money and all of our podcasts by going to podcasts.fool.com. Also, next Friday, the latest issue of our

flagship service, Stock Advisor, will release its new stock recommendations from Tom and David Gardner. If you want to check it out, you can go to podcasts.fool.com and sign up and learn about their latest picks. And remember, with Stock Advisor, you get a full 30 days to test drive the service to decide if it's right for you. Alright, let's get to the stocks on our radar this week. Simon Erickson, you're up first. Steve Broido from behind the glass will hit you with a question. What are you looking at? Steve Broido, Chris, I am going with Chewy's, ticker CHUY. Chewy's is a Tex-Mex restaurant that's established in the city of my alma mater, Austin, Texas. The restaurant industry

as a whole is kind of in a funk right now. We're seeing slowing traffic and declining same-store sales across the entire industry. But Chewy's has shown positive comps now for 24 consecutive quarters. And with only 76 locations, I still think it's got plenty of growth. And, Chris, they make a killer margarita. I'm in. Steve Broido, question about Chewy's? How does Tex-Mex just differ from Mex? I've always wondered that.

Three key letters. Steve, that is a two-margarita conversation I'd be glad to have with you at a Chewy's sometime, but it's a lot of how the food is prepared. Jason Moser, what are you looking at? Taking a closer look at Marriott International, ticker is MAR. This is one we have on the watch list in MDP, and now with the Starwood acquisition being completed, I think it's starting to remove some uncertainty of the company's future, though I think the price today still reflects a little bit of uncertainty as to how they will integrate the acquisition.

But this is a very big market opportunity, according to Ibis World Research. In the U.S. alone, this industry, the hotel industry, is around $170 billion in revenue. And with this acquisition, that means Marriott's going to hold about 20% market share there. So, I've been doing some more work on the valuation stuff this week, and we're going to be talking about it more in the coming weeks with the MDP team, in the hopes of possibly getting in the portfolio. I think it's an interesting-looking holding for investors with that three- to five-year timeline. Steve, question about Marriott International? It seems like hotels are diving very deep into the loyalty program

world, where your Marriott points or Starwood points, I can't keep track of any of it. Is this appealing to you? Is this loyalty stuff taking off with hotels? It is. It is for these popular brands. I'm not the biggest traveler in the world, and when I do travel, I'm tending just to look for good deals. So, I tend to go to places like TripAdvisor. But definitely, these businesses are profiting from those loyalty programs. Jeff Fischer, what are you looking at? A fun one to say, FactSet Research Systems, ticker is FDS. They provide customized information and data to money managers. More than 3,000 clients with a 95% retention rate.

The company has grown every year since 1996 when it came public. Recently announced earnings has fallen quite a bit, even though I think the growth is still on track. They're projecting 14% earnings per share growth next quarter. The company is a stalwart name in the industry, yet with only 3% to 5% market share, so plenty of room to grow on FactSet. Steve? Is this data not publicly available to everyone in just any way? You know, some of it is in bits and pieces, but FactSet takes it all together from hundreds of sources and makes it into something that's more useful. Plus, they have a lot of their

own proprietary data and analysis as well. Research, restaurants, hotels, what do you want to add to your watch list, Steve? Well, I own FactSet, so I'm going to have to go with Chewy's. I'm in. Gracias, Esteban. All right, Simon Erickson, Jason Moser, Jeff Fischer, guys, thanks for being here. Thank you. That's going to do it for this week's edition of Motley Fool Money. Our engineer is Steve Broido. Our producer is Mac Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.