Motley Fool Hidden Gems Investing - Intel’s Drop, Microsoft’s Record, MercadoLibre’s Future

Episode Date: July 24, 2020

Intel plunges on chip delays. Microsoft declines despite a record quarter. Twitter pops on strong user growth. Chipotle serves up strong digital growth but slips on closed restaurants. Coca-Cola’s CEO says the worst is over. Intuitive Surgical surprises. Boston Beer surges. Tesla slides. Disney delays Mulan indefinitely. And Slack goes to war with Microsoft. Analysts Andy Cross and Jason Moser discuss those stories and share two stocks on their radar:  Equinix and Qorvo. Plus, MercadoLibre’s Head of Investor Relations Federico Sandler talks online retail, online payments, and the future of the e-commerce giant. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Because we have your number. 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 joining me this week andy cross and jason moser good to see you guys Chris. We've got the latest headlines from Wall Street, and as always, we've got a couple of stocks on our radar, but earnings season is heating up, so let's get right to it. We're going to start with Intel. Second quarter profits and revenue both came in higher than expected, but that was completely overshadowed

by Intel's guidance for the third quarter. Not only was it lower than Wall Street was expecting, but Intel announced delays to their next generation of chips aimed at competing with AMD. Shares of Intel down 15% on Friday. Jason, it's the biggest drop after earnings in nearly 20 years. Do you look at this and think that's an overreaction, or is Intel really behind the eight ball on this one? So, Chris, you know, I do a lot of digging into this space with the work I'm doing on 5G and our 5G service. And my initial reaction is that, no, this is not an overreaction, actually. I mean, there's no denying the success that Intel has had to date. But management has noted this more than once, that the business, they are in the middle of

this transition. Intel has always been a PC-based company. They really weren't ever a mobile company, so to speak. So, they kind of missed that gold rush, so to speak. But it's going from a PC-based company to a data-centric company, and that's presenting its fair share of challenges. Now, I don't necessarily think that's the wrong decision. I mean, when you look at the role data plays in our lives, now, I mean, that makes sense. In data-centric, revenue now accounts for about half of the company's overall revenue. So, that's cloud and network infrastructure, spending, I mean, that's driving essentially 70% of the revenue. But this delay in the seven nanometer technology that's pushing their results out further, that was the news in the call that

I think the market, I mean, I understand why the market's receiving that the way it is. I mean, this is a company trying to make a pivot. Obviously, some key technology in a very meaningful part of the business in its PC, commercial PC business. Those results are getting pushed out. That's going to hold revenue growth back. Clearly, it's going to hold revenue. It's going to hold earnings growth back. I mean, this is a big business, really good at bringing things down the bottom line.

obviously, an R&D machine, 2.2% dividend yield, lots of things to like about it. But, you know, they really have to kind of prove themselves here. The burden of proof is on them at this point. Yeah, yeah. Chris, the stock has actually, look over the last few years, it's actually done okay. You had that little dividend in, beating the NASDAQ. Over the last 10 years, though, has not, has really trailed the wider NASDAQ tech market. So, you know, $255 billion market cap, Jason said a little bit of a yield, nice little grow, not that expensive. Probably going to be an okay holding for those who are looking for more stability in their portfolio. They're not really going after the rocket ship growth. Like I said, the stock's

done pretty well, had a nice rebound this year. So just more of a steady business, but clearly there's some concerns about some of the growth angles. Shares of Microsoft flat this week, despite fourth quarter revenue coming in north of $38 billion. Great way to wrap up the fiscal year, Andy. The cloud division continues to deliver. And Microsoft's gaming division had a really great quarter. Yeah, those are really the highlights, Chris. You look at the big winners on gaming with Xbox and their cloud, the Azure business growing 47%. That's actually a little bit of a deceleration, though, of the last few quarters and over last year. I think there's some concerns in there. The stock sold off after the earnings this week. But like you said,

Revenues up 13%, $38 billion. That was much higher than management guidance at $36.8 billion. Operating income up 8% as they continue to kind of manage with some of their costs. Part of that cost is they're closing those 80 stores we talked about before on the show. That's a $450 million hit with part of that coming in the second quarter. So the segments, when you kind of break through the quarter of the segments, Chris, it's really interesting with productivity and business processing up 6%. LinkedIn up 10%, Dynamics and Cloud up 13%.

The Dynamics 365 business, which is like CRM and planning tools, was up 38%. And like you said, really, their Intelligent Cloud, the Azure business, continues to show more and more growth, really benefiting from the work from home, remote workplace with Teams and the like for Microsoft. And that's driving most of their growth along with the gaming, which was just gigantic. I think it was up 65%. Their Xbox sales were up 65% for the quarter. Yeah. And Teams got a little added bonus publicity this week when Slack filed a lawsuit in the EU. I guess Slack is now admitting that Microsoft Teams is actually a competitor.

Yeah, it sure is. I mean, I think they've been pretty much on that train for the past, really since they went public maybe a year ago with Stuart Butterfield kind of being a little bit cheeky with some of the competitive with Teams. But concerns around antitrust there from from their perspective that is tied so teams are so closely tied into the office business reminds me a little bit of what we saw with the antitrust uh fights in the late 90s and early 2000s um with at that time it was the browser wars tied into the dominance of of windows oem so um so yeah that's something we'll have to watch but it's probably it's more impactful for for slack than than than microsoft the worry with microsoft the one kind of weakness we saw was continued on the

advertising front their advertising business was down 18 percent and that's a trend that they expect to continue this year. I wonder what the management team at Zoom thinks about this Slack legal filing. Zoom and Slack, obviously, different businesses, but certainly dealing with the same competitive forces from a company like Microsoft. And yet, it really does seem like Zoom has been able to gain a lot of traction through this pandemic, whereas Slack, they're having to do a little bit more convincing, perhaps, as to why they're a more compelling solution i guess it's interesting and in the in the retort microsoft had for slack it was that they've they lack a very robust video conferencing tool like teams

is by the way teams now can show 49 users at one time and used to not be able to do that i think that's what what zoom can do so they can they clearly are going into the space for the remote work face space also with schools and it's not just companies as with organizations and schools is an important market for Microsoft. And Slack doing that video, it's not for lack of trying. They certainly did try it for whatever reason, they just failed at it. Last week, we led the show with Twitter being hacked. This week was better though, shares of Twitter up thanks to a second quarter report featuring a nice jump in daily active users. And Jason, I feel like we say this every time Twitter has a surprisingly good quarter,

they need to prove they can do this two, three, four quarters in a row. Yeah. Chris, you know that gif of Larry David from Carb Your Enthusiasm where he's just kind of sitting there. He's like, I don't know, maybe so, maybe not. He's sort of deliberating in his own mind. I mean, to me, that's what Twitter is to me at this point, I feel like. It's that investment. I see the good. I see the bad. It's just, I don't really know what fully to make of it at this point. I mean, the biggest question to me remains, and it's a shame that it still does for as long as they've been public. What is next? They need to do something to take this network to the next level, because right now they just are not doing it. Monetizable daily

active users grew 34% to $186 million. That's terrific. That's six consecutive quarters of very robust double-digit growth there, but yet revenue fell 19%. Now, I mean, we understand why revenue fell. Clearly, it's a challenged ad market, but companies out there are still growing. I mean, snap-recorded revenue growth for the quarter. So, to me, it just keeps feeling like they're just not doing anything to take the business to the next level. And, you know, I told you a while back, I mean, I cut ties with the investment, I mean, you know, just because that was what I was seeing. And I don't know that we saw anything in this quarter that leads me to believe they're on the cusp of anything new. I mean, there were rumors of subscription and whatnot, but that word was

mentioned three times in the call, right? There's no plan there. It's just a seedling of an idea. So, still, you know, a good quarter, still big questions to answer. Shares of Intuitive Surgical hitting an all-time high this week after second quarter profits more than doubled the expectations of Wall Street analysts. You tell me, Andy, is this a sign that the worst is over for Intuitive Surgical and the path is clear? Or was this kind of a situation where look accurate forecasting is tougher than ever because of the pandemic yeah i think a little bit of both so uh intuitive surgical makes the da vinci robotic robotic uh surgery systems minimally invasive for urology thoracic and

gynecology among other things sales down 22 instrument and accessory sales down 20 that's about a little more than half their sales and system sales down 24 da vinci procedures were down 19 percent chris so there's a lot of talk in the release and the call and they talked about this for the for the year really about just as as hospital centers and and surgical procedures that are not required um have fallen off and a lot more focus obviously going into um to fighting the covet 19 pandemic and and treating that um that disease uh we're just not doing nearly as many surgeries as they used to. So that has really impacted overall for the year for Intuitive Surgical. But we are starting to see a little bit of that slowdown across the world. They're

starting to see different geographies improve faster than what we have seen in the US. So I think investors are saying, wow, this is the leader in this space. Minimally invasive robotic surgery is going to be the growth. It is going to be the way that surgeries are performed transformed around the world. When you look out the next five, 10 years, DaVinci and Intuitive Searchable and their innovations continue to lead the space. So as this situation really starts to normalize over, hopefully over the next, you know, year or two, the procedures will come back and DaVinci will be the leader in that space. On last week's show, the stock on Andy's radar was Boston Beer. This week, that stock was up 25%. What happened? We'll tell you next.

So stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here with Andy Cross and Jason Moser. Shares of Boston Beer up 25% after second quarter profits and revenue came in much higher than expected. Andy Cross, how much Sam Adams are people drinking during this pandemic? Actually, Chris, not very much Sam Adams. It's maybe of the company, but it's really, We truly seltzer and twisted tea with a little bit of dogfish that are driving the bulk of volumes. As you said, it was a really impressive quarter compared to, I think, what we were expecting. It was much higher than what I was expecting.

Sales up 42%. Neck income more than doubled. Depletion, which is the sales from distributors to retailers, was up 46% for the quarter. Chris, shipments just of their alcohol, Sam Adams shipments, were up 40%. So, earnings per share really had a monster quarter. Hard seltzer, twisted tea, and a little bit of dogfish, which they acquired a few years ago, coming online. You just look at what Boston Beer is doing. They've really tried to manage their cost structure.

Taking care of their employees at the brewery is a big focus. But clearly, that brand, the twisted tea, truly seltzer brands. I think Jim Koch, who owns more than 20% of the stock, had mentioned that Truly Seltzer is one of the only Seltzer brands that was not introduced this year that is taking market share. Incidentally, Chris, they also are taking a little bit of market share, it seems, from the wine and spirits category of anywhere. So for those of us who like our spirits, Truly Seltzer taking a little bit of share. Very impressive quarter. and the guidance that they had, which they withdrew, they kind of brought it back on the earnings per share growth, but also on the depletions growth for 35%. So, it looks really

impressive from Boston Beer. Digital sales for Chipotle rose more than 200% in the second quarter, but shares falling a little bit this week, Jason. That's an amazing number, but it still wasn't enough to make up for the fact that restaurants are closed. Yeah. I mean, just a handful of their stores are still closed, which is good for them. I mean, I think all things considered, I thought this was a really impressive quarter. I mean, I think we're going to look back five years from now and we're going to see a Chipotle that is a lot bigger, even more mobile, and quite possibly Chris has even better queso than they do today, which I know it feels like there's only room for them to go up in that regard. So, maybe they make some investments

on that front and really surprise us. But I think at the end of the day, it's still a good stock to own. I mean, you look at some of these numbers, like, revenue was only down close to 5%. I mean, that's $1.4 billion still. I mean, comp's down close to 10%, that's understandable, given everything that's going on in the market. But they are back up almost fully operational. They're investing a lot in those Chipotle lanes. So, I think that as time goes on, they're going to ultimately make it easier for the consumer to get their product. which is what a lot of successful e-commerce companies have done, obviously. So, I mean, I think that when you focus on making sure that you can get your product

to your consumer in virtually any way possible, making it easy, and you have good food, then people tend to come back. I mean, they're really investing a lot in delivery. And honestly, when you look at it, they're still talking about doubling the store base and getting to that point with average unit volumes of $2.5 million per year. Now, if you do the math there, you're talking about $12.5 billion to $13 billion in sales annually for this company, which is more than double what it's doing now. Now, I'm not saying they'll fully get there, but I'm saying they've got a reasonable shot of getting close.

And if you believe that that is the case, then you can certainly still see room for this stock to perform well in the coming years. Shares of Tesla down a bit this week, despite the fact that the company reported a profit for the fourth quarter in a row. So, Andy, what's your headline for Tesla this week? Yeah, some of the news on the production side we kind of knew because they had given a little bit of an update. A couple of big kind of strategic pieces of news. They announced that they're going to build the next Gigafactory outside Austin, near Austin.

It'll be on 2,000 acres, Chris, and employ more than 5,000 people. It will be an ecological paradise, as Elon Musk calls it. People will be able to visit that area, and I don't think necessarily inside the factory, although who knows, around that area. It'll be for the Cybertruck and the Semi, Model 3 and Model Y for the eastern United States, and then California will continue to do Model S and X, and then Model 3 and Y for the western U.S. So, obviously, a lot of excitement from the Tesla side to be able to invest in that business. It actually was a pretty good quarter when you look at the numbers. They still get a lot of that money from the regulatory credits, and that helped their profitability.

So, some concerns on watching about what that growth may look like, But the stock has done just phenomenally. I think it's up more than 500% over the past year and a lot of excitement around Tesla and the innovations and the investments they're making to continue that growth projection going forward. And Musk maintaining they're going to hit that delivery goal by the end of the year. Yeah, it's still the goal. They shut down the California factory for a good chunk of the quarter.

So it's even all that much more impressive. I think they may have been a little bit cagey on that 500,000 target, but still going there And given the results recently, you can't put it past them. Coca-Cola's second quarter report featured the biggest drop in revenue in 25 years, but shares of Big Red actually upped this week on comments from CEO James Quincy. Jason, he says the worst is in the rearview mirror. What do you think? Well, that's the hope.

I mean, whether that actually is the case or not remains to be seen. I don't think we're going to get quite back to the same level of economic shutdown that we had before. So, maybe he's right there. This has been a bad stock to owner the last five years, and I certainly understand why. It's got 400 master brands, less than 50% of those are global, regional, and local brands that are actually responsible for 98% of the company's total revenue. They rely on some serious brand power there. And what's made them so successful, just beyond the massive distribution network,

their core product, it's starting to turn against them, even just a little bit. Unit case volume down, marketing, there's going to be some more marketing spin here in the back half of the year, so that could certainly weigh down results if they do run into some headwinds. I'm not fully compelled by this business, I get it, I understand it, but it certainly seems like it's a different day and soda just doesn't hold the same status. It is interesting to see, though, when you compare Coca-Cola and Boston Beer, you know, we don't have live sporting events.

I mean, we're starting to get it, but we can't go to them. That appears not to have really hurt Boston Beer over the last quarter, it's still hurting Coca-Cola. Well, yeah, and I mean, there's that false sense of security and happiness that you get from drinking more and more of Boston Beer's products versus something like a Coca-Cola. So, that probably has something to do with it, but yeah, I mean, again, Boston Beer, great example, their core product in Samuel Adams has started to turn against them. the success of that business really has been primarily due to what they've been able to do

in Seltzer in expanding the portfolio. So, always good to remember. All right. Andy Cross, Jason Moser. Guys, we'll see you later in the show. One of the best performing stocks over the last five years is MercadoLibre. Up next, we will go inside the company with one of their executives. Stay right here, you're listening to Motley Fool Money. Welcome back to Motley Fool Money, I'm Chris Hill. From time to time on this show you've heard us talk about MercadoLibre, the e-commerce business based in Latin America. It's nearly a $50 billion company and over the past five years the stock is up more than 600%. Earlier

this month. Motley Fool co-founder David Gardner and Motley Fool contributor Danny Vena got the chance to talk with MercadoLibre's head of investor relations, Federico Sandler. They discussed MercadoLibre's total addressable market, how the company is dealing with COVID-19, and Federico started with an overview of the business. MercadoLibre is the largest e-commerce and payments ecosystem in Latin America. The way for the audience to think about it, it would be equivalent to what eBay, PayPal, Amazon, and Square put together are in the region. So we've started as a more like Craigslist-Ebay-ish type of flavor. But over time, not only we've evolved to more professional sellers on our marketplace,

although most of what we sell is not owned by us. And then we have a payments ecosystem where not only we process payments online for merchants away from our marketplace, just like PayPal does online off of eBay, but also we have begun to venture in processing payments in the physical world where we've seen a significant void, I would say, in terms of the services that banks offer. So it's not only about payments, but we've identified opportunities around essentially generating financial inclusion and digitalizing cash. So two very big opportunities that are highly synergistical among themselves. That's wonderful. And Federico, since I love superheroes and superhero origin

stories. I love hearing where things came from. Can you tell the story a little bit of Marcos Galbarin and how he started the company and just a little bit of his background? Yeah. So Marcos, who is a founder along with a few other co-founders, went to Stanford to do his MBA. He used to work at a large oil company in Argentina, the largest national oil company doing trading of oil futures. And when he went to Stanford to do his MBA, he realized how much eBay was growing at the time. And he decided to do as part of his business plan, try to replicate, if you will, you know, an e-commerce business that looked like PayPal with a few other flavors. So the logistics piece was already in the cards and the payments

piece was already in the cards. And interestingly enough, when he started to do, when he did a survey around his students asking him what were their thoughts about building a commerce business in Latin America they all thought he was crazy that it would never work because of the payments because of the logistics because of the trust but interestingly enough he actually met I believe it was Mr. John Muse who is a very prominent finance person in the in the U.S. and and essentially he came to one of the classes and he basically offered himself to take him to the airport and he purposely took the long road so he could actually pitch him on Mercado Libre and on the way to the airport is that he sort of got his essentially the the seed financing for the business

which then in turn opened other doors for for for other investors in the early days before we went public but after Stanford Marcos moved to Argentina he met other people in Stanford who are actually in the company today, like Stelio Tolda, who manages our Brazilian business and is our chief operating officer. And we started to expand into Latin America very quickly. And then as we continued to make seed financing rounds, we ended up actually with an offer from eBay, which we did not take. And then we ended up going public in 2007. And then the rest is history. It's really a remarkable story, starting literally from a garage, which we can actually see the building from our offices where Mercado Libre was founded.

And, you know, when I think in part about the story, your own background, Marcos' background, I think about Argentina. Argentina does not strike me from my position here in the United States as the best economy that you could be operating out of. It seems as if it's a country that has a lot of problems with public debt and foreign debt.

It doesn't look like a shining example of capitalism to me. And yet, you have managed, being based in Argentina, you have managed to expand throughout the continent and weather some political strife here and there. Federico, what is it like to run the company from Argentina? What are your views on your country and the rest of the continent? Yeah, so I think, first of all,

I think operating in the region like ours, we believe it's a competitive advantage and a differentiating factor. Latin America is not only diverse from a geographical standpoint, but there are nuances that are inerrant to the region. Each country has its own sets of regulations, integrations with banks, logistical challenges,

obviously dealing with crisis. We went through the tech bubble, the financial crisis, the Argentinian crisis, the Brazilian crisis, and now COVID. And I think that because we have seasoned management with experience in the region, A, and B, because we have a business that is, for the most part, pretty flexible in terms of our cost structure, we can adapt, we're agile, we have been able to very successfully weather many of the storms. I would even argue that because we had to actually build all the rails on payments and

on logistics, we probably didn't grow as much as other players did like in Asia, but I think now that we've actually built the rails and have the user experience where we need it to be, we believe now is the time that we're going to start to grow very, very fast. And COVID just has accelerated this. But I think one of the reasons why we've been more successful than most is because we have CSUN management, because we are responsible allocators of capital, and because I think operating in Latin America is unique and not for everyone. Now, Federico, you know, one of the things that comes to mind based on what you were saying is, can you talk a little bit about how MercadoLibre's management approached this COVID-19 pandemic?

Obviously, this is an unprecedented time in world history, and very many businesses are finding this extremely challenging. So can you talk a little bit about MercadoLibre's approach to dealing with this pandemic? Yeah. So I think, first of all, we're very fortunate to be in an industry and business that really we haven't had to change our overall strategy. So the two major goals for our CEO is to win e-commerce and to become the fintech leader. Unfortunately, because of the crisis, that hasn't really changed. There's been some changes on category focus perhaps, but really the underarching investment thesis about retail penetration and underbanked, bank is still there. But specifically to COVID, I think, A, we moved very fast to guarantee business

continuity of our managed network, given that we have government relations team across the region, and we have been deemed an essential business in most of the regions that we operate. So in spite of the lockdowns, we were well prepared in the sense that not only we have a logistics network, but because we actually moved quickly with governments, we were actually allowed to operate. And the genesis of this was also because we're fortunate to have a board member that sits in Asia who not only let us know that we should be moving from a government standpoint, but we've also strengthened significantly all our security protocols within our distribution centers. So taking temperature at entry and exit, organizing separate groups for picking and packing. And when

we see at the level of infections in Mercado Libre, it's actually quite low. And that's because of the processes that we have in place. Also, I want to highlight that in this sense, I think COVID caught us at a perfect time, given the investments we have done in logistics over the past three years. So, unlike what happened to Amazon, we really did not have to put any restrictions on categories to be stored in our distribution centers. And then, like I briefly mentioned, I think the other thing that has happened more shorter term is some of the organizational focus has been on certain categories like consumer packaged goods given the pent-up demand of the category and though it's still single digits of our gross merchandise volume

which would be the equivalent of the sales of a retailer we're a commission-based business so we make a percentage of the gross merchandise volume but CPG is still single digits of gross merchandise volume but growing triple digits so I think you know that's some of the the learnings and how we've moved a little bit the business as a consequence of the pandemic. So each of us, we're in different country. Well, Danny and I are in different coasts. We're in different countries. And I especially feel like I'm far from Latin America right now. Maybe it's because I'm holed down in my own room and I've been here for quite a while. But I'm so this is a question, Federico, about just overall adoption of e-commerce in Latin

America. It's something I don't feel equipped to judge because I'm not there. I don't know what it's like. I don't know the differences between Buenos Aires and Mexico City. You know, I don't know the different countries and what the states of adoption are. So could you give us a sense of the overall total addressable market that you see and where you are in the journey? Okay. So let me break down where we are. First of all, first, the addressable market separate for payments and commerce, and then I'll tackle around what we're doing in that respect. But So, directly from Mercado Pago, we look at a region, according to the World Bank, that has approximately 640 million people, of which roughly 362 million and growing are internet users, and roughly 250 million are online buyers. During 2019, we had about 40 million unique buyers.

So, 20 years out, we're not even close to what the addressable market could possibly be. not only in terms of people engaging with our platform, but when you look at the purchase frequency of Melly relative to some of our American counterparties, let alone the Asian ones, there's about 10 purchases per user per year on Melly. I think that's like three or four X in the US and that is like almost seven or eight X in Asia. So on the commerce business, I would say even 20 years out, it's still early days. And I think we are incredibly optimistic about the opportunity ahead of us. On Pago, I think it's the same population, but what we see is that roughly half of the population is either unbanked or underbanked. And there's like approximately 80%

of smartphone penetration. So there's more people with this than bank accounts. So we can actually arm them with our payment services and the phone and begin to bank them. But the other important data point is that when you look at the amount of transactions that occur in Latin America with paper money, it's still about three quarters. So we see a huge opportunity there to move some of those transactions that today occur in cash more into our digital mobile wallet and our payments ecosystem. Really well broken down. Thank you very much. It is interesting just to think about the different states and stages of e-commerce. And it seems like it kind of goes from east to west. the East has adopted it massively and used it. Most of all, those of us in North America feel

as if we're, you know, keeping up. And then we look at South America and we see that there's still so much opportunity for growth and penetration. Definitely. And I think, look, what's happened, and it's interesting to comment a little bit, I think we believe that we are going to overcome this period of health crisis, being more mature and stronger as a company, understanding better the benefits of buying online but also from different angles from the depth of assortment a but also from the health and safety and convenience of buying online but just to throw a few numbers but i think if you look at and that's probably a good indication of what lies ahead but if we look at the period from for example february 24th to may 5th the

amount of new consumers who enter our platform grew exponentially there were five million in that period alone, that's a 45% growth year over year. And it's quite an expressive data point. If I told you that in 2019, we had for the full year, about 40 million users in our platform. We have a presentation that we actually facilitated on our website that has a whole bunch of insights. But the other important thing I think it's important to highlight in this point is that our expectation is that these new entrants, both the buyers and the sellers, will, for the most part, have satisfactory experiences when using our technology. And so even, you know, e-commerce being today 6% roughly, probably higher as a result of the

pandemic, when we look at e-commerce where penetration will be, even after physical retail opens, we don't think it's going to receive too much from the incremental penetration that we've seen in some countries as high as 16%. Physical retail will happen again, but I don't think e-commerce will regress too much. And I think the focus of our organization in that sense is making sure that to you as a buyer, you are getting the best possible user experience because that is the best guarantee that when you try to move back offline, you will leave some of your purchases online because you got it fast, because you got it cheap, and because it's free shipping for you. Up next, Andy Cross and Jason Moser are back with a couple of stocks on their

radar. Stay right here. You're listening to Motley Fool Money. As always, people on the program may have 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 once again with Andy Cross and Jason Moser. Guys, one more news item before we get to radar stocks. This week, Disney announced major changes to its movie release calendar. Planned sequels for the Avatar and Star Wars franchises have been pushed back a full year. The release of the live action version of Mulan, which had been slated for August 21st, has been delayed indefinitely.

Andy, I'll just start with you. It's really starting to get bad for the movie theaters. yeah netflix touched a little bit on this and they said it's just been slow to kind of come back on board uh with the production side um concerns they are now with covid cases kind of ramping back up again i think some concerns long term about what that might mean for the production of continued production of movies and entertainment uh this was pretty massive i mean they they changed a lot of different schedules mulan has had a lot of problems i think over the past a couple years with production release schedules so you know just more evidence of the challenges with these big budget releases that these companies are so concerned about.

Yeah. And Jason, obviously Disney had planned to release Hamilton into theaters in the fall of 2021 and just decided, you know what, we're just going to put that up on Disney+. I actually don't think they can do that with every movie they have. I mean, they really need to figure out a way to get some of these big action movies on the big screen. They may be. I mean, I do agree with you. I mean, in certain cases, that is a more enjoyable experience. I mean, I think you just have to kind of look at the conditions on the ground and try to ascertain how much of that do we go back to. That we could certainly debate. One thing I don't think you can debate is it's a really great time for Disney to have that Disney Plus platform

now. That really saves them from a lot of hemming and hawing that they might be undertaking here otherwise. It could be worse. I'm sure management probably remembers that at the conclusion of every meeting. Let's get to the stocks on our radar. Our man Dan Boyd is going to hit you with a question. Andy Cross, you're up first. What are you looking at this week? Dan, I'm looking at Equinix, a real estate investment trust that operates more than 200 data centers around the world for i think more than 3 000 customers coming off its second best first quarter of all time where peak traffic was up 44 so this is a company that provides these big data centers companies rely on them to maybe to move network traffic internet traffic around of course as we've

been spending more and more time connected to our devices and all of internet of things internet traffic more and more important 65 billion dollar market cap stocks and very well nice little 1.4 percent yield um generates 1.3 billions in friends and in funds from operation cash flow for the company 25 of revenues stocks up very nicely so i'm looking for a little bit of a pullback before i go shopping on equinix dan question about equinix not so much of a question chris merely an observation i think i have the hardest job on this radio show because i have to attempt to make jokes out of Equinix as a radar. You know, you could, you could ask an actual investing question if you wanted. Yeah. Well, not right now. Jason Moser, what are you looking at this week?

Oh man. Okay. Well, we've talked a lot about alcohol on this show, so not to be mistaken or confused with Jose Cuervo. My company is Corvo, Dan, Corvo, ticker Q-R-V-O. And Corvo is a market leader in radio frequency solutions and semiconductor technology. So, in simplest terms, it's a chip company. But as we roll out into 5G, Corvo is a company that is focused in particular on this ultra-wideband product, which is basically responsible for sending lots of data over short areas with low power. So, a big opportunity for them there. It has has a lot of great properties that make it a preferable technology. And so Corvo is feeling a lot of tailwinds from the benefits of 5G and a neat business, really, really digging into this

one. Dan, question about Corvo? Yeah. So, you know, Jason mentioned Jose Cuervo at the top of this and corvo with a q here and i believe this the ticker is q r v o uh that's that's quite the name uh jason do you think that they could have come up with something better you know i guess they could have but it really is memorable and you know it's like chris and i were talking about taylor brands and their ticker t l r d just makes you think like what in the world why weren't they going for something just like suit s u i t i think corvo struck gold here man it's a memorable name what do you want to add to your watch list dan i'm gonna go with the equinix just because i think the name's better all right guys thanks for being here we're out of time thanks for listening we'll see

you next week