Motley Fool Hidden Gems Investing - Motley Fool Money: 02.17.2012

Episode Date: February 17, 2012

Baidu, GM, and Zipcar report earnings.  Warren Buffett rebalances.  Kellogg's makes a big deal.   And Linsanity hits Wall Street.  Our analysts discuss those stories and share three stocks on their radar.  Plus, corporate governance expert and movie critic Nell Minow shares her thoughts on Facebook, bad boards of directors, and the Academy Awards. Learn more about your ad choices. Visit megaphone.fm/adchoices

Chris Hill. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money. Welcome to Motley Fool Money. Thanks for being here. I'm your host, Chris Hill. And joining me in studio this week, for Motley Fool Asset Management, Tim Hanton. For Motley Fool Income investor James Early, and for Million Dollar Portfolio, Ron Gross. Gentlemen, good to see you. Ron Gross. Good to see you, Chris. We've got earnings news and a big deal in the snack food industry. Warren Buffett

has rebalanced his portfolio, and we will let you know what he's buying and selling. And as always, we've got a few stocks on our radar, but we will begin with the big macro. Consumer prices in January grew 0.2%. Weekly jobless claims dropped to their lowest level since March 2008, and the debt crisis in Greece continues to be the debt crisis in Greece. Let's just go around the table. Ron, I'll start with you. What's your big macro headline of the week? It was a slow week for me, macro-wise, but I did notice that the unemployment rate in the U.K. continues to rise. It's actually at a 17-year high, 8.4%. People are hanging

their hats on that this latest increase is the slowest increase since, I believe, June. So people are wondering perhaps there is a bottoming in the increase. I don't know. I have no opinion. We'll have to wait and see. But, you know, obviously Europe continues to be a troubling factor. So you fully exhausted everything you have to say about U.S. employment. I did.

This stuck out in my head. And you have no opinion on it, actually. I actually have no opinion. It's more of a data point. James? Chris, I'm going to talk about core CPI being up 0.2%, sequentially 2.3% year over year. Oh, yeah, that's a big story. Highest since September 2008.

Fed's target is 2% yearly. I say this not really because I care about it, but because I think we're so sick of Greece and jobs. Actually, it does matter because I think this is sort of the best CPI number we could have right about now. It shows that we are seeing some price increase, but nothing too torrid, nothing too slow that might necessarily prompt another QE. Tim Hanson? I'm thinking about just not paying attention to the macro altogether from now on. Because we were laughing about this the other day, which was one of my coworkers said, you know, when did you go to Greece? And I thought, I was like, man, that was March of 2010.

That's right. You did a little research trip over there. And it appeared that at that point, the crisis was at a head and, you know, would either have some sort of resolution over the next eight to 12 months. It's now two years later and there's been, I'm not even sure we've reached the head yet. I mean, there's still a whole, you know, climax and then a denouement to come. That's my English major coming out. Luckily, the rioting in the streets ebbs and flows. We haven't had two years of constant rioting in the streets.

But can beggars be choosers? It's like Greece is the bleeding man who is refusing the ambulance and came to pick him up and wants a better one or something. I mean, they have to accept this bailout, don't they? Well, the government finally voted to put through the austerity, which why it's taken two years to figure that out is beyond me. I don't know how it all plays out. And frankly, I think the reason to stop paying attention is because who knows how long this could go on. So maybe we'll just do a blackout. We'll take it like a couple of weeks. I mean, we could we could probably just check in on Greece every six months or so.

And we wouldn't we might not miss anything. All right. Let's move on to earnings. A couple of auto companies reporting earnings this week. GM and Zipcar. Let's start with GM. James, shares are up this week despite losses in Europe. GM reported record annual profits. What do you think? Chris, the annual profit was good. The fourth quarter profit dropped. Even after a $50 billion bailout and a ton of restructuring, GM is still not firing on all cylinders, I have to say, Ron. IPO investors are still in the red.

Taxpayers are still in the red. I think the stock's around $27. Now it would have to break $50 roughly for taxpayers to break even. So it's losing three-quarters of a billion dollars a year in Europe, which is better than the $2 billion they lost last year. But this is a company that still hasn't gotten its act together. Yeah, I saw one report online where someone commented, yeah, it's easy to have record profits when you've got all this taxpayer money coming in. Uncle Sam's still owns about 26% of GM. You're referring to the stock price. Two, three years down the line, whenever it

happens, do you think ultimately this is going to be something that is profitable for taxpayers? If it is, I think it'll be a modest success story, nothing more, and probably nothing that justifies the risk in my mind. I think they should have just liquidated the company to whoever wanted to buy it. I don't think they did the right thing. I'm skeptical taxpayers make money on this because, as you say,

there probably isn't going to be an easier year than the last one or two for GM ever again based on the money that came in and sort of the troubled competition at Toyota and that sort of thing. So frankly, I think it's had a cyclically high great year and it's downhill from here. Let's move over to Zipcar. Ron, shares dropped more than 12% on Tuesday in the wake

of the company's latest earnings. This is an MDP holding. What do you think? Listen, the street clearly didn't like the guidance that the company offered up for the next quarter for a wider loss than people were expecting. Listen, this is a long-term play. You've got to be an owner of Zipcar for years to come, not just for one more quarter. We think they're on the right track. Membership is up, revenue is growing, they're entering new markets. Costs are up as they move into new markets. They're spending for future growth. We're okay with that. We took the opportunity to add to our position at the lower price. And so, we're in this for the long term. Tim?

Well, actually, what I didn't understand about the guidance, and I think what a lot of investors didn't like, was not necessarily that they guided to a slightly wider loss, but they guided to such a low number of cars added to the fleet next year. As Ron said, if you're in Zipcar, you're in it for the long-term growth story, and you want them spending on growth, and their reluctance to spend on growth next year, when by all indicators, their mature markets are doing very well from how they model out the economies of revenue per vehicle and the cost per vehicle, why not grow faster? That's what confused me about the results. By dues, fourth quarter earnings were up 77%, but shares of the Chinese search engine were

down on Friday in the wake of their earnings. 77%, that sounds pretty good to me, Tim. No, it was a blowout report on a lot of, on almost every key performance indicator. I think what analysts got a little upset about was that they think Baidu is at sort of its peak level of profitability. And they put up an EBIT margin of about 52% in 2011, which is incredible. But, you know, like Google and like some of these other internet companies, you know, Google's got its core search business, which is very profitable. But then they've got all these sorts of other bells and whistles that people go to Google for, Google Plus, sorts of things that don't make any money that drag on margin. Baidu is starting to do that as well, what they call vertically integrating their internet experience. So adding like a travel

component, a music component, it's not core ad business, it's something else. And so I think people think the operating margin is going to drop going forward. I think that's true, but I'm still not sure why the shares are selling off. Like I said, they seem to be doing really well. Their average revenue per user was about six dollars in 2011 to compare that facebook is about four dollars which either means facebook has a lot of room to run or they're run by idiots and google gets it about in the united states has about 40 to 45 dollars i think baidu's got a lot of growth opportunities ahead of it and and i think it's it's worth putting up a little bit of margin degradation um to get the the revenue growth the arpu growth and and just the dominance of the

Chinese search engine market. R-proof growth sounds so authoritative. What is R-proof growth? Average revenue per user. Oh, okay. All right. Google share has stopped declining, right, of the Chinese market. They used to be giving up a lot of share, and I think they've arrested that. Well, Baidu's at 85% now, so everybody else at this point, whether they're stopped declining or not, they're in a pretty bad spot. One of the things that Baidu said in the wake of the earnings, they talked about mobile search, that that's an area that they're looking at for growth. How much upside is there for Baidu when it comes to mobile search?

And to that extent, how much upside is there for the stock? Well, this is a good question for Google also, because mobile search is where all the search query volume is just exploding. People are on their phones and do, do, do, do, do, whatever. What they can't figure out is how to monetize that search. Because when you're on a laptop or a desktop computer, going to the search page and then clicking on a link and following it through via a pretty fast internet connection is easy and it makes a lot of sense. When you're on a mobile phone. The network might be slow. You don't want to navigate to another page. How do you, you know, how do you monetize it? It's something both Google and Baidu are trying to

figure out right now. Baidu didn't offer any hints about what they're doing beyond saying, you know, they're more prominently integrating phone numbers, click through phone numbers into their mobile search ads. So you search for something, the phone number pops up, you hit the phone number and it makes the call for you. I think, you know, that's obviously one strategy to get after it. But the click through rates on mobile ads are lower around the world. And that'll be an interesting challenge and opportunity for companies like Google and Baidu to try to solve for. We talked last week about Diamond Foods having to restate two years' worth of financials

after some questionable accounting practices came to light. The deal that Diamond had to buy Pringles from Procter & Gamble fell apart. Thankfully, Kellogg's announced plans this week to buy Pringles for $2.7 billion. James, P&G is one of your stocks. What do you think of this deal? Well, when the chips were down, Procter & Gamble moved with a call. Kellogg's is paying $2.7 billion, which is $400 million more than Diamond was going to pay, but I think Diamond has some tax differences in that deal, so it's not totally apples to apples. Kellogg's has a good distribution network, which could help Pringles. The issue is Kellogg's has its own problems. Its cereal

business has been soggy lately, and I couldn't stop. Sorry, Fox. And it does have to integrate some of these. I mean, a big merger like this takes a lot of integration, Chris. So there's a lot of things that go wrong, a lot of hidden costs that can pop up. And I'm just skeptical of big acquisitions in general. So, I am cautiously tepid on this, not optimistic. But I'm assuming you like this for Procter & Gamble. It's probably good for P&G, yeah. They're trying to focus more on other things. Coming up, we will dig into Warren Buffett's latest stock trades. Stay right here. You're listening to Motley Fool Money.

Welcome back to Motley Fool Money. Chris Hill here in the studio with Tim Hanson, James Early, and Ron Gross. According to quarterly filings with the SEC this week, Berkshire Hathaway has rebalanced its holdings. Ron, among the changes, Berkshire increased its stake in several companies, including Intel and IBM. What's with the tech stocks? I thought Buffett hated the tech stocks. Yeah, that's what he says. So, I think what we're seeing is the influence of the new guys. Ted Weschel and Todd Combs coming in. Buffett has said he's going to focus on the larger holdings of the portfolio,

Wells Fargo, Coke. He's going to let these other guys focus on some of the smaller things, and they've brought some of their favorites in. Were there any surprises? You know, DirecTV, on the face of it, you would say, oh, that doesn't seem like a Berkshire stock, but we do know that Ted Weschel likes it, and DaVita, a dialysis company, again, a Weschel holding.

So they're a big holding, right? Yeah. Exactly. And among the shares that decreased in the portfolio, they dropped their shares of Kraft Foods, Johnson & Johnson, completely sold off ExxonMobil. Exxon was a small position, so it probably didn't matter either way. So, to what extent should investors read into these quarterly movements? I don't know about reading in, but one thing I like to do is I look at investors that I respect,

whether it's a Buffett or a Marty Whitman, a Bruce Berkowitz. Tim Hanson. Tim Hansen, exactly. And those are companies that perhaps I would look into further as a result of people that I respect liking them. So, it doesn't mean I will like them. It takes two opposite sides of the story to make a market, but it's something to put on my radar. Earlier this week, Apple asked the non-profit Fair Labor Association to investigate conditions at the Foxconn factory in China, an Apple supplier and the world's largest component maker. The audit comes on the heels of a New York Times story detailing dangerous working

conditions, overworked employees, and generally poor living conditions. Tim, the president of the association has already said Foxconn facilities were first class. You've spent a lot of time in China. You've visited factories there. What are your thoughts generally on this story on Apple and Foxconn? I think my first question is just about the methodology. Did they call ahead? I think that's the most important question because Chinese companies are very good at and are gaining a notorious reputation for putting on dog and pony shows. Very successful dog and pony shows for people who want to come check it out, get out on the ground.

So if they call ahead and say, hey, we're coming, I think Foxconn could have enough money to put on a pretty darn good show. You know, there's something amiss at Foxconn, I think, just as evidenced by the rate of suicides at the company. I mean, that's the kind of thing where you can't pinpoint. Is that an indicator of something wrong? It's an indicator of something gone wrong, I think. I did read at the bottom of an article that apparently the Foxconn rate of suicide is lower than the China average.

That indicates – Well, so, I mean, Chinese factories are – I mean, they're not going to be like factories in the developed world. I mean, that's just a fact. And I think there's an inherent unfairness in applying standards from one culture to another and expecting everything to be equal. That just doesn't make a lot of sense to me. That said, Apple certainly sells very high-priced products and promotes certain virtues that if it really wants to be true to its own brand, should probably be using its weight as a mass purchaser and a big client of many of these factories to push some of its values, not necessarily to make the world a better place, but just to be consistent as an organization. Standard across cultures of keeping folks alive would be a good one. Yeah, absolutely. We should probably achieve one base level.

We can all agree on that one. How much leverage does Apple, or any big tech company, we had Adam Lashinsky on the show last week, and he said, you know, Apple's not the only big U.S. tech company that is having components made cheaply overseas. How much leverage does Apple have in this case with a Foxconn or with any supplier? I think we're going to have a significant amount of leverage, not only because it's a big account and one that's getting bigger, So, you know, any Chinese factory owner would see the dollar signs and say, yeah, you know, what do you need? But also because I think most people who supply Apple in China consider it sort of a badge of honor. So if Apple were to pull its business from your factory, not only would you lose the income,

but you'd also lose sort of the status of being an Apple supplier, which I think a lot of those guys really enjoy. You know, you don't want to be just the Brand X component supplier. If you can be in the iPad, I think that's something you probably brag about. And, you know, we've we've talked about this a lot on this forum and others that, you know, status in China is something that many, many people attain to. So does China need Apple more than Apple needs China? You know, that's a great question. I think it's probably a pretty co-equal relationship in the sense that Apple can't really take its manufacturing anywhere else. I mean, in terms of the sheer number of people they need and the sheer number of components they need, locating in Southeast Asia makes way too much sense. Anybody who suggests bringing Apple manufacturing to the U.S. and would still be cost-competitive

may be, but there's a lot of logistics issues that would be horrendous for Apple to move that manufacturing base. At the same time, China is in a transitional state with this economy, needing to move a little bit away from manufacturing. Obviously, Vietnam and Cambodia and some of those countries would like those manufacturing jobs and can undercut China on cost. But China doesn't want to lose manufacturers just yet, because then they'd have a really big unemployment problem, which would be unhappy for that ruling government.

Okay. Just to wrap up on this, what is the next thing we should be watching for in this story? Is it when the audit results of the Fair Labor Association come out next month? What do you think, James? I think it's interesting. I wouldn't watch for that. I think it's interesting. This is a problem that was created by the free market, but is also going to be solved by the free market. I think you're going to see more pressure on Chinese factories and more action by them to disclose what they're doing, show pictures, because there's a market for it. I'll pay $60 more for an iPhone if it's made with humane labor. Really? You think most people are going to do that as well? I think to some degree. I don't know what the price is, but I think there's some amount more

that Americans would pay. Well, that's what I'd watch, would just be, do Apple employees and customers care? And you'll see that in the purchasing patterns. And if iPhones continue to skyrocket and there's really no progress made on this front, it's a non-issue. And I think, I believe I'm correct when I read that the Audit Foundation is actually a business-funded one, And people are saying that perhaps it's not independent because of that. I'd like to see some independent bodies come in that are not in the pockets of these large manufacturing companies. You have probably heard the sports story of Jeremy Lin, undrafted Taiwanese-American point guard from Harvard University who has burst onto the scene in the NBA. Here is the business story.

Since he started lighting it up for the New York Knicks two weeks ago, the team's stock has risen about 10%, adding $170 million to the market cap. Jeremy Lin is the No. 1 search term on Baidu. Tim, you're a business guy. You're also a basketball guy. What's been the most interesting part of this story for you? I think the interesting part for me is these teams, in order to create value as organizations, need to identify talent, and they're just not very good at it, which is unbelievable. You know, Jonah Lehrer had an article in Wired pointing out that when Jeremy Lin worked out for the draft, they had him play one-on-one.

When was the last time you watched an NBA game where, you know, it was a one-on-one, one-on-one game? They don't play one-on-one basketball in the NBA. They play five-on-five basketball. So identify talent that works in that scheme. Maybe you should have five-on-five tryouts, something like that. Is it possible they're measuring the wrong thing? I think it's very possible. You know, I don't know if the value creation at MSG stock is warranted or not.

But it's not ludicrous to say that it is warranted because, frankly, if you win a championship, you get to sell all those rights to the games, the merchandise, the Chinese marketing angle for the Knicks could be just enormous. So why aren't they working harder to identify talent around the board? There are probably more people like Jeremy Lin out there who never got a shot. All right, guys. We'll see you later in the show. Coming up, now that Facebook is gearing up for an IPO, what should investors make of their board of directors? We'll dig into that and get an Academy Awards preview with our guest, Nell Minow. Stay right here.

This is Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. We've got boards of directors in the news, and we've got the Academy Awards just days away. So there is only one guest we can turn to. Nell Minow is with Governance Metrics International. She is also the film critic known as the movie mom. Nell, always good to talk to you.

Well, thank you. I'm very, very happy to be back. Let's start with some recent board news. Facebook has filed to go public, and Facebook's board of directors includes some... A lot of tired old white guys. Well, that's one way of putting it. I was going to say they've got some big shots. I mean, Netflix CEO Reed Hastings, Washington Post CEO Don Graham. Two guys who should be paying attention to their own businesses right now.

Yeah. And of course, at the top, you've got Mark Zuckerberg, who really has voting control over the company. When you look at the total corporate structure at Facebook, what do you think? Well, we see this all the time. And of course, it's going to look very familiar to Don Graham. But these companies, they want the access to capital of a public company, and they want the control of a private company. And for some reason, we keep letting them do it, even though it doesn't work out very well. There's a reason that these kinds of structures have led to disaster in the past in everything from Halliburton to Martha Stewart. And I think it's a real mistake. I would never advise anyone to buy stock in a company like that. For a little while, it will work out well,

and certainly Google seems to be doing just fine. But when things do not go well, the interest of the insiders and the outside shareholders diverge, and there's really nothing anybody can do about it. We will get to the Academy Awards in a minute, but first, it's time for our inaugural Minnow Awards. This is where we're going to recognize some of the best and worst in business, and let's start with the category of best CEO in a leading role. A lot of options when you look at how some of the CEOs at some of the bigger, better-known companies have performed over the last year or so. And you can take your pick. I mean, there are certainly people like Warren Buffett, Jim Skinner at McDonald's, Howard Schultz at Starbucks. Who are you going with?

I'm always going to go with Warren Buffett. He's really the class act. And I'm giving him a double Minnow Award this year for his performance at his own company and for his performance as kind of a representative of the business community. He's been outspoken on a lot of issues, including taxes, and he's been critical of a lot of bad behavior by business. So, you know, he's my poster boy. In terms of the business of Berkshire Hathaway over the last year or two, is there one thing in particular that stands out in the way that he's run that company? Well, I do like the way he handled it when he had an ethical issue at his company. I thought he handled it in a very gentlemanly but very frank and candid way. I like the way that he handles his annual meetings.

As you know, he has day-long Q&A sessions. And I think that his purchase of the railroads is going to turn out to be very good for his shareholders. Let's move on to worst CEO in a leading role. And certainly there's no shortage of candidates. And I'll name a couple, but feel free to go off the board and pick your own. But I know you're, we've talked before about your feelings about Aubrey McClendon, the CEO at Chesapeake Energy, Brian Moynihan at Bank of America. They're the two co-CEOs at Research in Motion who recently stepped down out of the entire public markets. Who are you going with for worst CEO in a leading role? You know, that is tougher than deciding between Meryl Streep and Viola Davis

because they are all such good candidates. And I would certainly give all of them runner-up awards. But for me, there is only one person who deserves the worst CEO award, and that is Rupert Murdoch. Wow, News Corp. Yeah. Anything in particular? I know it's only an hour-long show that we do here at Motley Fool Money.

I was going to say his handling of the phone hacking scandal has just been atrocious. And obviously, you are in the business of grading corporate boards of directors. I think he's had an F pretty much since we started. I mean, I know you're also partial to Hewlett-Packard when it comes to worst board of directors. Do you want to split your vote between those two? No, but you're going to hear some of the people that you've named are going to come up when we talk about worst board. I mean, let's do that now. I mean, in terms of worst board of directors, HP, News Corp, who are you?

News Corp, definitely. I think we want to also add MF Global. They need to have sort of a special award this year because, you know, normally when you and I talk about losing money, we mean that someone's made an investment that has deteriorated in value. We don't mean losing money like you lost your keys. Maybe we'll just name the award after that. Maybe it'll be like the MF Global award for worst board of directors.

Worst board, absolutely terrible. But I want to mention a few other really bad boards this year. You mentioned one of my favorites, Chesapeake, and they just do everything wrong. They hideously overpay their CEO, but I particularly want to single them out because of the really disgusting way they allow him to make side investments with the company. And that's another form of compensation, in my opinion, as we saw with Linda Wachner. And I think it's just despicable. I want to mention, in terms of Worth Corporate Board, Neighbors.

Who gives the CEO $100 million for failing? Now, what is Neighbors? I'm unfamiliar with this. You know, I forget what business they're in right now. Are they an oil company? I forget. But they did give their CEO $100 million to ease him out the door. In fact, I just wanted to mention that we published a report last month of all of the companies that paid over $100 million as severance. to their CEOs since the year 2000. We've got 21 of them, and most of them, not all of them,

but most of them were underperformers. And are any of them hiring? Because I could put my resume in there. That's what my husband says. He says, can't you just get me one of those jobs? I'd do it for half. Who gets your vote as sort of an unsung business leader, someone who doesn't get enough attention for his or her integrity or good corporate governance? Well, you mentioned him already, and that is the CEO of Starbucks. I really want to single him out this year because, in my opinion, one of the biggest problems that we face in this country right now is what has happened as a result of the Citizens United decision. And I think we're in for a very, very rough time in this election year. And so I really want to single him out

for being so outspoken in favor of corporate transparency and principle in deploying corporate assets in political matters. Let's talk about the Academy Awards. And I'm curious to know who you think should win and who you think will win. And let's start with the category of best actor. I would give it to Brad Pitt. I thought he was spectacular in Moneyball. And the thing about brad pitt is he makes it look so easy that he doesn't get the credit for it and also he's so good looking people just don't take him seriously but i thought he gave a superb performance in that movie and um and that it was a much deeper and richer and more thoughtful movie than than people expected from a movie about baseball and about a real person do you think he's going to get it

i don't think he's going to get it for the reasons that i just said i think people tend to underestimate underestimate them. Also, with regard to leading indicators, the leading indicator on the acting awards is the SAG Awards, the Screen Actors Guild Awards, because it's the exact same people who vote. And so you tend to get exact mirror image on the awards, and they gave it to George Clooney, and I think that he'll probably get it. What about best actress? Who should win and who will win? My fingers are really crossed for the woman that I consider to be the best actress in the world whose name isn't Meryl Streep, and that's Viola Davis. And even Meryl Streep, who's a very close friend of hers, is rooting for her at this time in the help.

If it were me, I would give Viola Davis every Oscar, including Best Sound Editing of a Foreign Language Feature. I just would give her everything because I just think she's so extraordinary. She gave two amazing performances last year. She's nominated for Help, but she was equally good in Extremely Loud and Incredibly Close in a supporting role. And I think she's going to make it this year. I think she's just great. What about Best Picture? What should win?

What will win? You know, I would give it to Moneyball because, as I said, I think it's a very, very smart, thoughtful, deep movie. But I'm guessing it's going to go to The Artist, which is okay with me because I think that was a terrific movie. And any movie that zags while everybody else is zigging deserves a little extra credit. So I don't think that it had the depth of Moneyball, but I think it was a real tour de force. I mean, it took a lot of courage to make a black-and-white silent film in 2011, and they did a lovely, lovely job with it. Before we wrap up with a round of Buy, Sell, or Hold, two more movie questions.

Looking back over the last year, best business movie? Margin Call, easily. Margin Call, I thought, was a really smart movie that managed to be specific enough to feel very true about the financial services industry, but also to be resonant enough that really there was a lot in there that applied to any organization you've ever been a part of where people try to put the blame on somebody else. And, you know, that could be any organization that ever existed. So I thought, you know, brilliant performances, very smart script, really moving, very thoughtful film. So I liked Margin Call a lot. And this is probably more in the movie rental category now, but the best movie of the last year that nobody or that not enough people saw? Well, I've got two. One is 50-50.

A lot of people were scared off because they heard it was a cancer movie. And it is indeed based on the true story of a guy who got cancer when he was in his 20s. but he wrote the movie, so you know it has a relatively happy ending. Spoiler alert. Yeah, right. And it's a smart, it's not a, you know, Lifetime Disease of the Week movie. It is a smart, good movie that happens to have a guy with cancer in it, but it's about a lot of other stuff, too, with some great performances.

And then I just, one of my great, great pleasures from last year, I've watched the movie at least three times, and that's Cedar Rapids with Ed Helms from The Office and the Hangover movies. And that's, in its own way, a great movie about business, too. It's about a small-town insurance agent who is sent for the first time to the big city of Cedar Rapids for a trade association convention and about what happens to him and the lessons that he learns. And it's just brilliantly acted with John C. Reilly and Anne Heche and a host of great character actors. And I just thought it was great.

All right, let's wrap up with a round of Buy, Sell, or Hold. It recently announced a partnership with Verizon, and chances are you may have one at your local grocery store. Buy, sell, or hold the future of Redbox. Sell. Sell today and sell fast. I think that everybody's going to be in the cloud within a year or two. Wow, that quickly? Yep. It's happening much faster than I anticipated.

This book has been on the New York Times bestseller list for the past 76 weeks, and the movie version opens in late March. Buy, sell, or hold The Hunger Games. Buy, buy, buy. I hear from so many teachers who read my website and who say, I can't get my kids to read anything, but they will read that and they can't put it down. Those books are very, very meaningful to kids. For those of you who don't know, this is a tremendously popular trilogy about a dystopic

future world in which teenagers participate in kind of something between a reality show and a gladiator fight, and they've got a sensational cast, including Woody Harrelson and Jennifer Lawrence and Elizabeth Banks, and I think the movie's going to be huge and the books are going to be huge. Yeah, my oldest daughter has read all three of the books. I'm pretty sure she's just counting down the days to March 23rd when the movie opens. Yeah, but let me just say, as the movie mom, this is a very, very violent book, and a lot of characters die. And finally, we are prepared to start a write-in campaign, if you think that would help.

Buy, Sell, or Hold, Nell Minow being invited to join the board of directors at Facebook. They don't have any women on the board now. They don't have any women on the board, but I wouldn't do it until they went to a one-share-one vote, so I don't think that's happening anytime soon. Fortune magazine has called her the CEO killer, the Motley Fool. She is absolutely one of our favorites. Nell Minow, thank you so much for being here. My pleasure.

Coming up, 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. I'm Chris Hill, and back in the studio with me, Tim Hanson, James Early, and Ron Gross. Guys, it is that time once again, the time for the stocks that are on our radar. Our man Steve Broido, taking a little vacation. He deserves it. He deserves it. He absolutely does. He's south of the border with his family.

So, filling in for him, behind the glass, our own producer, Mac Greer. Mac, are you ready to weigh in with a question for the guys? Guys, I am ready for action. All right. Tim Hanson, we'll start with you. What is the stock that is on your radar? The stock on my radar is Boston Beer, which is the brewer of Sam Adams. It looks hugely expensive to me, but it's obviously riding an incredible secular trend of craft beer consumption. And there was a really fascinating thread on the Beer Advocate website debating whether or not Sim Adams could properly be characterized as a craft brewer anymore, given the volumes they create and the fact that they contract out or had in the past contracted out so much of the brewing and the beers taste the same, et cetera, et cetera, et cetera. I wonder what – it's interesting because it's a company reaching an inflection point where either it runs out of steam because it loses appeal among its core demographic or it makes the jump into the mainstream and then there's probably a lot of room to run.

And I don't know which side I come down on, but since I like beer, it's a fun one to puzzle over. What's the ticker on that? What is the ticker? I think it's SAM, right? I think it is, yeah. Mac? Do you think people are going to drink less beer as they become more health conscious? We're seeing a lot of these kind of Whole Foods type movements where people become much more health conscious.

Does that work against a stock like Boston Beer? I don't think so. And the reason is I don't necessarily think – there are a lot of things you could – I mean, obviously drinking in enormous amounts is very bad for your health. But, you know, drinking just in large amounts is different. It's made of wheat, for crying out loud. Drinking occasionally, I think, has health benefits, according to some of the studies I've read. You know, Whole Foods, for example, at least at our Whole Foods down the street, has a great craft beer selection,

as well as, you know, growler fills and those sorts of fun things going on in the back of the store. So, you know, I think this affordable luxury, more local eating, that sort of thing actually bodes really well for the craft beer industry. And I think the more important question for Sam Adams is if people, consumers, discerning consumers, continue to think of them as a craft brewer. All right, Ron, what's your stock? I'm going to dig into Aon Corp., ticker A-O-N, the world's largest insurance broker. They also have a large human resource service business. They acquired Hewitt back in 2010, I believe. Stock looks really cheap from a cash flow basis.

I'm not exactly sure why. I need to kind of get in there and figure out what's going on with the business. But several of the analysts in this building have recommended it to me. building. Yeah, it's an inside value recommendation as well. All right, Mac, question about Aon? Who's their primary competitor? Well, they're in that ... I don't know the answer to that. You have some work to do. So you do have a little bit more digging to do. I do. I honestly don't know. They're a broker of insurance. So any of the large

insurance brokers, about 40% of their business, I think, is also on the human resource side. So So we obviously have a lot of competition in the human resource space. But I certainly need to dig in and look at what those valuations are compared to where Aon's trading. Hopefully some of the other analysts in the building have done more research than Ron. James Early. Chris, I've been in a socially responsible investing kick slash rampage recently, more of a low passion rampage. But the other week I talked about mountaintop coal removal, mountaintop mining, excuse me, for coal and named a company. But this week, I'll talk about Bank of America, which used to fund mountaintop removal, which is a nasty environmental issue because it leaches mercury into the groundwater, which hurts fish and hurts the communities in these areas like West Virginia.

Bank of America used to fund it. They got out of it around 2008. But now they've gotten back into it. So I would say that that's bad for Bank of America. Unfortunately, they have plenty of company. Most of their big banks do this as well. Matt, question about Bank of America? What's the most positive thing you can say about Bank of America?

The Bank of America, that's a good question. Well, they have a very good sort of bread-and-butter banking business. I didn't mean that alliteration, but they are spread across the U.S. I mean, they do have sort of regular banking down pretty well. They've messed up in a million other ways, but if they can somehow just distill their operations back to that, they have a decent chance of something. Tim?

I laugh because everybody says Bank of America is cheap. Not necessarily. If you read the internet, everybody's like, oh, the core earnings power of their retail deposits. The stock is cheap. Yeah, is enormous. And that's true. As James pointed out, their bread and butter banking business, which he should copyright, is good. They've got a lot of ATMs, a lot of retail accounts.

They're very sticky. But it's what they do with that earnings, which is just confoundingly idiotic. I don't know what. I mean, just keep it simple. they should be more like a utility than like Goldman Sachs and for whatever reason, ego, idiocy, I don't know they always were like, hey, let's do the exotic thing

I bet we can do that and they can't Alright, Tim Hanson, Ron Gross, James Early Guys, thanks for being here Thanks for our guest this week, Nell Minow You can check out her stuff online at The Movie Mom and of course at Governance Metrics International

For video highlights, you can go to fooltv.com and please check out our daily podcast, Market Foolery on iTunes and at marketfoolery.com. That's it for this edition of Motley Fool Money. Our engineer and producer this week is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.