Motley Fool Hidden Gems Investing - Motley Fool Money: 02.19.2010

Episode Date: February 19, 2010

The Fed hikes the discount rate. The stimulus package celebrates its first birthday. Abercrombie & Fitch exposes itself. And Comcast rebrands itself. On this week's Motley Fool Money Radio Show, we discuss those stories, share three stocks on our radar, and talk with Whole Foods co-President and COO Walter Robb. 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 welcome to the show thanks for being here i'm your host chris hill and i'm joined by motley fool senior analyst seth jason James Early, and Shannon Zimmerman. Guys, good to see you. Good to see you, Chris. Coming up, we'll talk with the Chief Operating Officer of Whole Foods.

We'll take sides in the Southwest Airlines Kevin Smith Smackdown, take issue with Comcast's new name, and, as always, give you an inside look at the stocks that are on our radar. But we begin with the Fed's decision on Thursday to raise the discount rate by a quarter point to 0.75%. Now, guys, this is the rate the Fed charges banks that borrow from the Fed. So what does the hike mean for investors? James, earlier, we'll start with you. Chris, let me give you the official version. The discount window has long been the lender

of last resort for banks, a sign of desperation. Traditionally, banks didn't use it much. That changed during the financial crisis because of some special terms. And now the Fed says it's not trying to do anything big here. It's just returning things to normal, raising the rate a little bit and shortening the repayment window. All right, here's the unofficial version. So James is exactly right. It's a small incremental move, but the symbolism of it is absolutely huge. And in that sense, it's a bit of a bold move. They're beginning to mop up liquidity so that the days of easy money are over, despite the fact that small businesses and consumers are still having difficulty getting credit.

So you've got double-digit unemployment. You've got a housing foreclosure crisis that's still underway, a meltdown in commercial real estate. And the Fed's choice, small though it is right now, is to err on the side of mopping up liquidity. It doesn't make a lot of sense. Although it does strengthen the dollar, which has pros and cons. For those traveling to Europe, yes. All right. On Thursday, the government reported that the PPI, the producer price index in January, increased by 1.4%, which was higher than expected. When you take out food and energy prices, the core PPI still increased 0.3%.

Seth, let's start with what do these numbers tell us and why the fuss over PPI when we've got the CPI? Well, CPI gets all the headline news, but that really tells you something you usually know, which is how much you've been paying for stuff. The PPI, core PPI especially, in addition to being a lot more fun to say, gives you a bit of a glimpse perhaps into the future because this is the price that wholesalers, others further back in the pipeline are paying. And so it suggests what you might be paying for products coming forward. Now, this report, I think, is mixed. There's going to be a little bit of the rampant fear pounding the table. Look, we've got inflation. We have to stop with the stimulus.

But if you look at these numbers, if you take out food and fuel, okay, a 0.3% rise, it might be triple the 0.1% rise that economists had predicted, but it's still relatively tame. The thing I would like to point out, however, is that, unfortunately, minimum wage schlubs like those of us in this room. Minimum wage plus tips for me, buddy. Speak for yourself. We actually have to pay for things like food and fuel. Exactly. This does matter, and I think this is going to, if this continues, it's going to feel a little bit like stagflation for a lot of people in this country, and that won't be a good thing. Yeah, core PPI is bogus.

I mean, you strip out energy and food costs, which are, of course, volatile, which is why they strip them out, and the figure is arbitrary. Strip out retail sales and services, and you know inflation was zero. You're actually paying for your energy costs and your food costs, and that's not a good thing. If inflation rises on rising commodity costs, that's bad. If it rises on consumer demand increasing, that would be great. that's not happening. Well, there's still demand in the picture, even as for commodity costs. I mean, the way I think about inflation is maybe like burping after a big meal. At least she has something to eat, right? It's sort of the aftershock, but there's demand still there.

What does this mean for investors who are looking at these numbers? What's the takeaway there? Well, you know, those companies for whom energy is an input cost, which would be all of them, but on a relative scale, some are affected more than others, they are disadvantaged by that. And at the other end of the spectrum, if you are a commodity producer and prices are higher, You're going to enjoy a benefit from that. And if you are investing in companies that are looking to sell stuff to people besides food and fuel, you might want to keep in mind that labor picture, looking a little cloudy, wages stagnating. These people are going to have to choose at some point.

Are they buying Assassin's Creed 2? Are they going to feed their family and keep them warm? In my house, we went with the video game. The Horns of Dilemma. Other people might go the other direction. The economic stimulus celebrated its first birthday this week, and the $862 billion question is, has it been a success? Shannon, what do you think?

Well, it clearly has been a success, notwithstanding the barrage of news stories suggesting otherwise. And it's been a success in the most no-brainer of ways. Lo and behold, if the government spends a lot of money when consumers aren't able to spend a lot of money, the economy is stimulated because folks, in two main ways. Most of the aid went to states who were otherwise not going to be able to continue to pay firefighters, teachers, and health care workers. Well, they got paid, and they spent the money on goods and services, and that helped to stimulate the economy. The other piece of it is there was a break in the tax code for businesses to ramp up capital spending. That happened dramatically in the fourth quarter of last year.

Independent of that tax code stimulus, it remains to be seen if business spending is going to be as resilient as it was. I'm not a political guy, Chris, so I'll take that out. Just mathematically, though, Obama saying that the stimulus has caused all the benefits we're seeing is kind of like an office of linemen saying that he won a football game. I mean, he may have been, and that's not bad, he may have been a contributor, but we've had a lot of other things going on. We've had, well, $287 out of the $787 billion stimulus has been spent proper. For perspective, the AIG bailout alone was $180 billion. Fannie Mae and Freddie Mac have cost at least $100 billion. And according to CNN, automaker bailout could now be $130 billion total.

So nobody wants to come out and say that AIG bailout is what saved the economy. There's so many other things. I would say the biggest one is simply just the Fed, the Treasury, and the FDIC acting to restore stability to the financial markets. I mean, certainly the stimulus helped, but there's so many other things, it's hard to take credit. Seth, how are you measuring the success here? There's something pretty important that I think the media is ignoring here, which is that the stimulus package also keeps away tigers. I don't see any tigers around here. Do you?

The endless series of headaches. This is head fake after head fake after head fake. That's a great stolen Simpsons joke. I agree that there's probably some credit, but I will probably always disagree with the extent to which it mattered. And in a lot of ways, it is unknowable. And so for Obama and his folks who've been for a long time kind of creating these new non-existent or previously non-existent measures like jobs saved, these are political. I mean, it's propaganda. The thing is this. Obviously, there are other inputs into economic stimulus. Business has not been one. Dramatic cost reductions, including massive layoffs, of course, and they've not been stimulating the economy. The government was the stimulator of first resort in this case, and things could have been done better, but that, like I was saying, makes perfection the enemy of good, and it's just carping to say that the stimulus didn't do what it was supposed to do because they're overreaching and representing what it did.

I didn't say they didn't do anything. I just said they're overreaching, and you need to be careful. $287 billion. That's not a lot of money. Personally, I'm with Seth. I'm fired up that there are no tigers in this studio. Let's move on to earnings news this week. Hewlett-Packard reported better than expected earnings thanks to a pickup in business and consumer spending. Shannon, how did it look to you? It was a great earnings report for HP so that the revenue was up 5% year over year, even after adjusting for favorable currency translation.

Operating margin also rose, but not as substantially, and that was helped by cost reductions. You can't cost-cut your way to profitability forever, but on both the consumer side and the business side, HP had a very strong quarter. The computer industry is a cyclical industry, and if we really are in the midst of a real-deal economic recovery, I would expect that pattern to continue. If not, if the tax code stimulus that helped businesses feel good about spending during the quarter evaporates and is not replaced, HP looks more than fully valued to a cheapskate like me. All right. Abercrombie and Fitch's fourth quarter profit fell 32%, and yet somehow the retailers still beat expectations. Seth, you're our resident retail guru. What's the story with Abercrombie? You know, you can get the entire story on Abercrombie. I'm going to hold my computer screen up to the microphone for everybody out there to see.

The investor relations page at Abercrombie has these two shirtless dudes written in red, fierce, the word fierce underneath. And this explains Abercrombie's problem. They are completely delusional. That's on the investor relations page? That's on the investor relations page. Yeah, those guys have great abs. These are the kind of abs you might find in the men of Motley Fool money calendar. But, I mean, it's awful.

And they are, I listened to a little bit or I read a little bit of the conference call. They're delusional. They talk about protecting their brands, which is stupid Wall Street speak for not dropping prices even though you should. Same store sales decreased 8% at Abercrombie & Fitch, decreased 11% at Abercrombie Kids, decreased 19% at Hollister, which is one of their most popular brands, one of the most popular teen brands. The reason is that Abercrombie's stuff costs a lot, and I think they are now at the point where they've become uncool because in the past, in the recent past, mom and dad were withdrawing money from the house as an ATM,

handed it to the kids. They were buying $90 shirts. They're not doing that anymore, and I don't think that's going to get cool in the near future. I think they're in real trouble. Abercrombie, would they be smart to compete on price? I mean, really, what do they have? I don't think they can.

In teen retail, it's all kind of voodoo, right? You sort of imbue your brand with a sort of mystique, and then if that goes away, and it would. You don't have it, yeah. And it really does. The kids have spoken. It's pretty much the same thing as you can get at Aeropostal or at American Eagle or at other knockoffs. And so I think they're in big trouble. Do you still make those short shorts?

For guys, I'm talking about. I hope so. I can't believe a cheapskate like you, Seth, is complaining about the fact that their investor relations website's not been updated. I mean, they're passing along those savings to shareholders. Yeah, no, but that's the thing. I'm sure that is updated. It's just that they don't realize how tired their bare-chested dudes act is, and I think they're going to go the way of the gap.

Fiercely banal. I don't know about you guys, but after the show, I'm going to the investor relations page of Playboy. Coming up, we're going to dig into an international financial scandal that will change the way you eat. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill in the studio here with Seth Jason, James Early, and Shannon Zimmerman.

Guys, time for some quick takes. Microsoft introduced its Windows Phone 7 this week. Seth, going to be a game changer? I think it will be. It's going to get a lot of laughs at first, but it actually looks really cool. It's really hard to talk about it without people seeing it, so go find some web video of it if you can. It takes what are some pretty well-thought-out, interesting, and very forward-looking OS changes from the Zune HD of all places

and wraps them up in a phone that steps far in advance of the current Microsoft phone operating system, which is basically like small Windows and really sucks. So if they get developers on board, I think they're going to win back people like me who might otherwise go to an iPhone or the Google phone. Filmmaker Kevin Smith squared off with Southwest Airlines this week. Smith is a rather large man. He bought two tickets for a Southwest flight, tried to fly standby on an earlier flight, but there was only one seat, and Southwest kicked him off the plane because Southwest employees said his size infringed upon the space of the person sitting next to him. Smith proceeded to tweet about it. Southwest later apologized, gave him a voucher. Tweet? He had a fit.

You know what infringed? What infringed on my person was that Jersey Girl movie. What a lousy one that was. Yeah, I was going to say that the reason he was thrown off is because the pilot paid full price to see Zack and Miri make a porno. Which wasn't bad. It was certainly better than Jersey Girl. Was that the guy? Was he in the movie? Kevin Smith was the director, yeah.

Gotcha, okay. Who knew he was such a big guy? I mean, I mostly remember him from his days in the Clerks movies, the Silent Bob. He was always in a trench coat, and you really couldn't see how big he was. But maybe Kevin Smith has fallen on hard times. What's he doing flying southwest?

Yeah, that was my first question. I've never thought Kevin Smith lived up to his hype, and I find him pretty annoying. Or his girth. Yeah, or his girth. I find him pretty annoying, but I'm going to have to go the other way here. Even though I have a rant about Kevin Smith and what a big crybaby he is, that the real criminals here are the jerks running the airlines. This is a time when Americans are getting bigger.

They keep shrinking the seats, and even I don't fit into these seats. I weigh a buck 60, and I don't fit in the seats. I barely fit in them width-wise. certainly not lengthwise, and this is, it's not only a joke, but I mean, an airplane ride almost killed me because I got a leg clot that nearly like ended my life. So this is no joke. I think that they should take, I don't know how the guys at Southwest fly, but I think the jackasses who run the airlines should be required to do all their traveling and coach and sit next to Kevin Smith. Let's move on. In France, a dozen wine producers and traders were found guilty of having

supplied Ian J. Gallo, an American trader, with mislabeled Pinot Noir wines. In 2008, French customs found that during a three-year period, some 13.5 million liters of mislabeled wine had been sold to Gallo. So, Seth, they're using a less expensive grape, slapping a Pinot Noir label on it, and selling it for twice the normal price. Hey, forget Ponzi schemes. This is an outrage. This is an outrage. The good news is that there isn't a single drinker of Gallo wine who can tell the difference.

You should have never said anything. No one would know. And that's not just a bust on Gallo or Gallo drinkers. Actually, I like to drink wine, and I like to drink some better wine. You just like to drink. But studies have shown that the people who claim to be experts on wine cannot discern nearly as many separate little flavors as they think. And the wine producers, once in a while, they'll go to a contest, and they'll introduce the same exact wine in a couple of different bottles just to see what the judges say. And the judges will routinely say one is great and the other is undrinkable.

It's all a sham. Now, fraud is still fraud, even if it's based on complete snobbery. I'll bet you a box of wine I could tell the difference. I'm kidding. I don't drink. And there's a place in France where people actually prefer boxed wine. I was there about 10 years ago, and you would go, and you were the American tourist, and you'd buy your bottles and your baguette and go home. And then here would come the locals with big boxes and hoses,

and they'd just plug them in and take it home in a box. They're big in England, too. Well, it keeps better because there's no air on top of it after it gets pulled out. The Italians keep their table wine that way, too. It makes sense to me. And now, of course, the screw top has been perfected. Apparently, the cork industry is going to go away in good riddance. Yeah, sell your shares of cork industry.

Cork co. And finally, Comcast is giving itself a makeover. The company is rebranding its TV, internet, and telephone services as, wait for it, Xfinity. The corporate name will still be Comcast. Guys, I think I actually watched an Xfinity movie one night in my hotel room on one of those pay-per-view channels. By mistake, right? Yeah, well, they determined that I, Infinity, wouldn't work, so they went for Xfinity. I mean, they're taking a lot, in all seriousness, Comcast is taking some shots, and rightly so.

It seems like a somewhat absurd name, but let's look back. Philip Morris was taking shots for changing their name to Altria. Arthur Anderson, when they changed to Accenture, but now... This is the worst, though. Come on. I think the worst, actually, was when Pricewaterhouse Consulting tried to change their name to Monday, and they quickly changed it back. They literally changed their name to Monday because you're, like, ready to work on Monday, ready to go consult, right? Nobody likes Monday. That's not a made-up word, at least.

Usually when they try to – there's consultancies that do this. They try to make up these words, and they always try to do – they always try to have one syllable that sounds, like, action and aggressive. So there's your X, and they try to have another syllable that's softer and suggests broad horizons, and there's your affinity. But this is just so blatant. You'd be pretty good at this. This is straight out of The Simpsons or The Onion. I swear, the guys who did this were probably first years,

and I think they were stoned when they did it, and they did it the night before it was due. All right, exit question. There's an old song that I think we all know about, that your porn star name is actually the name of your first childhood pet followed by the name of the street that you grew up on. So with that in mind, and in the spirit of Comcast rebranding, let's go around and share our Xfinity names. Matt Greer, our producer, we'll start with you.

That would be Bo Camelot. Bo Camelot. That's solid. That's solid. Seth? Butch Knob Hill. That's also solid. James?

Jesse Foxtail. Wow. These are some strong names here. Shannon? Can we get the ding ding? Lady Route One. Lady Route One. Okay.

Whoa. Oh, that's the dirtiest one of all. You know what? I did not have a pet growing up, so mine is just my street name. It's just Dalton. Dalton. Also good. That's it.

Steve Broido? Kato Northwoods. Kato Northwoods. Oh, that's a celebrity name right there. He was the Canadian star. No, no, he lived out back of OJ's house, right? Who figured out this? Because this does really work incredibly well.

All right. Drop us an email at motleyfoolmoneyatfool.com if you want to share your Xfinity name, if If you have any advice for Southwest Airlines, Kevin Smith, we want to hear from you. Drop us a note at MotleyFoolMoney at Fool.com. The guys will be back later to talk about the stocks that are on their radar. But coming up after the break, Whole Foods COO Walter Robb says we need to change the way we do business. We'll talk to him about that and get his thoughts on the future of Whole Foods. Stay right here. You're listening to Motley Fool Money.

welcome back to motley fool money i'm chris hill walter rob started working for whole foods in 1991 when he opened and operated a single store in mill valley california today he's the chief operating officer and co-president of the entire company which has 53 000 employees 289 locations across America, as well as a few in Canada and the UK. And he joins me in studio now. Walter, welcome. How are you doing? I'm doing well. How are you doing? Good. We're doing great. We had a wonderful week this week. I was going to say, let's start by telling you about your earnings. Whole Foods reported earnings this week. Definitely had a good quarter. The share price got a nice boost. What do you think was the biggest contributor to that? Yeah, I think

Obviously, the street liked what we had to say, but I think probably the biggest contributor was the sense of the sales momentum, the feeling that the sales that we reported were significantly more than what they expected, both on a one-year and a two-year stack basis. So I think that surprised folks that we had that sort of momentum at this point. And I think the rest of the P&L went along with it, but the sales were really strong. Now, most of your locations are here in the U.S., but you do have a few, as I mentioned, in the U.K. One of your stores in London had great growth, I think double-digit comps. Is that – I'm sure that's encouraging. I guess my question is, how encouraging is that in terms of the extent to which you're looking at further international expansion? Well, you know, I think the most encouraging thing about the sales was the strength of this quarter

and the last couple quarters really end-to-end, country-to-country. And really we saw it across the board in all stores and all departments. We couldn't have generated that sort of a number without it being that broad base. But in the U.K. specifically where we have, as you know, struggled for a couple of years to kind of find our feet, we have a wonderful new leader over there, Jeff Ternes, who is living in London now, is actually kind of going Euro. His hair is kind of looking like a beetle.

And we sometimes don't recognize him. But I think we just kind of learned some lessons. I think we've really got our feet on the ground there. And while we're still not making money over there, we have definitely crossed over to where we've got some real sales momentum. And Canada, actually, we've been in Canada over five years now, both in Vancouver and Toronto. And I have to tell you, I am so impressed with that country. And I'm so convinced that we're going to put substantially more investment in that country and look at additional cities as well. Whole Foods has certainly been the leader in the organic food movement, but let's face it, there are others that are catching up and certainly catching on.

Kroger's, Safeway, even Walmart adding organic. One of the things that makes those stores different is they can be one-stop shops. They can offer people everything from organic food to Crest toothpaste and Doritos, that sort of thing. what holds Whole Foods back from going one extra step in that direction and being more of a one stop shop? I mean, I would argue that we probably I think I would argue that we are a one stop shop for the most part. But I think I would say it like this. We've got the highest set of quality standards in the supermarket industry in the United States and they continue to evolve. And so we have our purpose is not to be all things to all people, but rather to be really good at the

things that we do offer. And that's based on the standards that we've set. So I recognize that at times, perhaps we may not get all of everybody's basket. But I think that by the flip side of that is by keeping our focus really clear and sharp. I think customers know what we stand for, and they appreciate what we stand for and what we offer. And so it actually, we have an opportunity in that to continue to get more of a customer's basket business in that because we're not a one-stop shop for some people. But I think the positive trade-off is just being very clear about what we sell, and we don't sell everything. You're listening to Motley Fool Money. We're talking with Walter Robb, the COO and co-president of Whole Foods. In addition to being at Whole

Foods for a long time, you're someone who's, for a long time, has really had a passion in healthy eating, healthy living. Where does that come from? Is that from your childhood? Is that something instilled by your parents? Or did you learn it somewhere else along the way? You know what happened is actually after college, looking for kind of a direction,

I think reading some Wendell Berry, who wrote a book called Unsettling of America 40 years ago, if you can believe it. And Francis Morlepe died for a small planet. And E.F. Schumacher, who's a British economist for the Coal Board, wrote a book called Small is Beautiful. And I think, you know, as every young person does getting out of school,

they're reading, they're thinking, they're trying to figure out where am I going to go with my life and looking for a place to contribute. And that all landed for me in the idea of a natural food store. But I'm assuming you have an answer to this next question. What is your least favorite vegetable? You know, it's okra. Really? It is.

There's no way, even if I fried up some okra, it's not doing it for you. I don't think I could go there with you, Chris. John Mackey has said and you've agreed that we need to rethink the purpose of business how does business need to change in your opinion I think business needs to discover its deeper reason for being and obviously we have lots of news stories today about where business has fallen short in terms of ethical conduct or in terms of decision making with respect to the stakeholders. But I think it's really about why are you in business and how does that reflect what you're here to do, what your deeper purpose is. And I think that I would say the purpose and

I would also say a broader description, a broader array of consideration of all the stakeholders that are in the success of the business. So for example, in Whole Foods, that means we've got our customers, our team members, our stockholders, the environment, our community stakeholder, our investors, our vendors. Those are all participants in our business. And I think good decision-making balances the needs and interests of all those stakeholders. So I think it's purpose, and I think it's a more ecological way of thinking about the business. Jim Senegal, the CEO of Costco, was here a few months back. And one of the things we talked about was he's someone who goes into a lot of stores, his own stores, but also competitors.

and we talked about sort of getting a sense of how a store is doing. When you go into a Whole Foods or a Kroger's, a Safeway, what are you looking for that will give you a sense of how that store is performing? Well, after some 30 years doing this, it's really a lot of it's a feel. You know, what's the environment feel like? So you start with the energy of team members, the morale, the sort of how are the customers. You know, it's sort of a perception thing that you can pick up after years of doing that. I'm sure Jim can do the same thing.

And by the way, I have a great deal of respect for him. And so, you know, if you think about a store as sort of an organism, as a living organism, and, you know, how is that being expressed? How is that thing feeling? So after you tap into that, then you're going to look at the various things like the merchandising, the presentation, the programs, those sorts of things. But the most important of all is the sort of esprit of the space and how well it's expressing the feeling of the company.

Um, when you look at the next 10, 20, 30 years, what do you think is the biggest opportunity? And what do you think is the, or who is the biggest challenge? You know, I think the opportunity is to, I think we're, we're still so, you know, in the, in the world of supermarkets, we're still incredibly small. We have less than 300 stores across the country. And so we really, as being 30 years old, we're, we have a lot more market share than we have mind share even at this point. And I say that those that are in the unhealthy eating space, it's a much larger space than those that are in the healthy eating space.

So I think we have the opportunity to continue our mission of bringing healthy foods to the world and grow the number of stores and grow the number of countries in which we're doing business. I see nothing but tremendous upside for Whole Foods. And I think we've just really begun to tap the deeper purpose that we have as a company. You mentioned the conscious capitalism that we've been doing some talking about with other companies. And I think we just continue to find more ways in which I think we can contribute. We're working right now on the humane standards for meat. We've been working on sustainable seafood standards. There's lots of areas about the food supply and about how companies function that we can continue to participate in.

And in terms of the challenge, is there a company that keeps you up at night? it's not it's you know the challenge the challenge actually is the company gets larger is is to how for me the one that i worry about at night which is is how do we keep our culture vibrant because i i believe the secret sauce of whole foods and i believe of most successful companies if you dug in would be the culture of the company it's the sort of fluid that's in the peach edition which all the action happens and so i think the challenge is how do we continue to now that we have we're over 8 billion in sales and 56,000 team members, is how do we continue to make that experience as fresh and vibrant for somebody coming to work now who's perhaps was there, you know, at the

beginning. In terms of the competitors, I think there's no one exactly like us, but there's certainly lots of people that are selling the products. And so I think you just keep, there's no one that I'm, you know, that I'm losing sleep about at night, but there's everybody that I'm watching. And I think we're all watching and learning from those. But I think really, if we we stay focused. We're going to continue to create our own space in the marketplace. Just because we talked about okra, what's your favorite vegetable? I got to give you that chance. Vegetable or fruit? Vegetable.

I want fruit. My favorite fruit is apricots. And I'll tell you, an apricot only comes out five weeks a year. It's actually, a lot of the growers are going to pluots, which is not a true apricot. But an apricot is really only- I'm sorry, a pluot? A pluot is a plum and an apricot crossed. Okay. Okay. I'm clearly learning here.

It's a little more, yeah, it may be a very small detail. Just by way of comparison, on last week's show, I had never heard of Werner's ginger ale. So, you know, this will be... Live and learn. Live and learn. So a pluot is a little more shelf-ready, but an apricot in its finest form has this wonderful combination on the front end of being very sweet and delicious, and the back end sort of gets you at the back of your throat.

It's truly a delicious fruit, and I think the fact that it's seasonal and you get it a certain time of year and then you're out, contributes to the appeal. In terms of the vegetable, I really like carrots. So you can have them raw, you can cook them, you can do any number of things. You can shred them. So that's my favorite vegetable.

Walter Robb is the COO and co-president of Whole Foods. Thanks for stopping by Full HQ. It's been a pleasure, Chris. Take good care. Broccoli, I really dig it, Steve. Broccoli, just plain with cheese or cream. Coming up, we'll get to your emails and give you an inside look at the stocks that are on our radar. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. As always, people on the program may have interests in

the stocks they talk about. Don't buy or sell stocks based solely on what you hear. I'm Chris Hill, and back in the studio with me are a trio of senior analysts, Seth Jason, James Early, and Shannon Zimmerman. And guys, it's time to dip into the Fool mailbag. Steve Broido, what do you got for us this week? Well, Chris, Kevin from Georgia wants us to mix it up a bit more. He writes, I'm a little tired of always hearing about Apple or Google. What about other sectors of the U.S. economy? How about the manufacturing sector? If the jobs don't come from there, then where? I've been saying for years, companies have been diverting production overseas, not because they were going bankrupt manufacturing in the U.S., but for pure greed.

In real life, only some people can add value through knowledge. 80% of the people don't want that kind of work. They want to get it done and go home. Without them, nobody will have money for Apple's products. Yeah, it's a fair point, particularly emphasis on the manufacturing sector of the economy, which has been resilient over the last six months. But we're not a manufacturing economy anymore. I don't think we will be into the future. Yeah, the greed thing is true. I mean, whether you call it greed or just profit motive and working hard for shareholders, which include people who just have regular pensions, you have to get your manufacturing done where you can get the product made the best at the cheapest prices. And in the U.S.,

We can manufacture many things better than other people can at the right prices, certain specialized equipment, specialized machinery, big tractors, and other things. But the vast majority of stuff that needs to get made in the world is better off being made in places, unfortunately, where people are paid less and where you can dump as much kind of pollution as you want. By the numbers, only 10% of U.S. jobs are in manufacturing. But I actually agree with Kevin in that it's not so much just the show, just people in general tend to focus on Apple and Google. We just know this from studies.

Investors like those stocks, but the boring infrastructure stocks are the ones I like. I'm the dividend guy, so I'm a little bit biased. They tend to be solid investments, a lot less vulnerable to speculation. These are pipelines. These are electric utilities, things like that. These are nuts and bolts kind of companies, and I certainly like them. And we threw out a Google story today anyway. Got rid of it.

Cut it. Steve, what else you got? And speaking of Apple, sorry, Kevin from Georgia. Ian weighed in on the iPad. The most important thing about the iPad is not the iPad at all, but the App Store. The only hurdle on the road to total domination is whether developers will write applications for it. In reality, this will not be a problem, since there's already hundreds of thousands of iPhone apps available that will work out of the box.

What else you got, Steve? And Chris, we got a number of responses to your comments last week questioning the existence of Werner's Ginger Ale. Uh-oh. Rick writes, Werner's was made in Detroit for years. It does exist. In fact, I am drinking one at this moment. Tina writes that she's a Verner's fan but prefers Reed's Extra Ginger Ale.

And Chris from Michigan offers this cautionary advice. Verner's is a bit spicier than Canada Dry, so much so that if you breathe at the wrong time through your mouth with a beverage too close to your mouth, it will make you cough. Take it easy out there, Chris. And it's a risk well worth taking. I'm so gratified that there are lots of other Verner's fans out there. Frankly, you can believe the hype, and I'll dial up the hype.

Not only is it my favorite beverage from my childhood, my misspent youth, It makes every other ginger ale taste like carbonated backwash. I guess I have to eat. Take that, Ken. I will eat some humble pie, and I will wash it down with a Werner's. The weird thing is they seem to have just trucked this stuff from Michigan to Florida and not stopped anywhere in between to drop it off. Was it smoking the bandit about that?

I think it was. I'm looking for some now around Alexandria. You need to find it and review it, I think. All right. If you have a comment about anything you've heard on the show, drop us a note at motleyfoolmoneyatfool.com. All right, guys. It's that time again.

And time to hear about the stocks that are on your radar. Shannon Zimmerman, we'll start with you. All right, so I'm looking at energy companies right now, particularly those with substantial natural gas exposure. And Chesapeake is on my radar. Natural gas levels remain high. They're about 3% higher than they have been over the last five years on average. And the futures market still has natural gas priced below the cost of new production.

And that eventually is going to lead to a drawdown of those supplies, which should put the supply-demand curve back in balance, if you can balance a curve. When that happens, Chesapeake will benefit, but when that happens, as anyone's guessed, it's dependent on weather, and on whether or not new exploration is going to find supplies that will maybe permanently lower the cost of the commodity. And the ticker one more time? CHK. James Early?

Chris, Obama is tripling loan guarantees to build nuclear power plants, and the first round looks like it's coming out. $8.7 billion in loan guarantees have been given to Southern Company. The ticker there is ESSO. This is a core stock in my income investor newsletter. It's a utility. So that's one obvious candidate. There's a dark horse candidate that I like, too, which is Exelon, which actually got squelched out, I guess, of the first round. I think the leader in nuclear in the U.S. with about 20% of our capacity, I think it's likely they'll get something eventually.

The ticker there is EXC. It's a Chicago-based company with a 4.8% yield. Seth Jason? Did I, a while ago, say that people needed to watch out for restaurant stocks? Because a lot of them were a little bit priced, or am I imagining that? Are you about to contradict yourself? No, I'm going to say, what a smart thing to have said. Because one of our favorite restaurants at Hidden Gems and in the Motley Fool world or universe is Buffalo Wild Wings.

It looked really expensive for a while. I may even have said that in particular on the show. And this week came out with earnings. And guess what? When your revenue goes up in the 20% range, but you only go from $0.43 a share last year to $0.46 this year, investors get kind of scared and they run. So the stock dropped about 15%, still not cheap enough yet. But I think the broader lesson, aside from wait a little bit on Buffalo Wild Wings, is

if you're into restaurant stocks, I've looked at a few, a lot of them are pricing in a recovery that I think is not only not likely, but is absolutely already shown to not be happening. If you look at restaurant sales, things just aren't that great. And so if consumers aren't willing to spend, a lot of these restaurant stock valuations are going to come back, not just Buffalo Wild Wings. And the ticker symbol? BWLD.

A question about that. Bewild. So in another side of a world gone mad, is it still the case that chicken wings are more expensive than chicken breasts? I haven't looked at that number. But that's a major input cost, obviously, for BWLD. Yeah, but chicken wings have been volatile. And when they go up, they go up.

But yeah, chicken wings used to be free. And some people have suggested, at least on our Hidden Gems boards, that Buffalo Wild Wings may be a victim of its own success in a way and making wings a little more popular so that there's more demand and the price goes up. Yep, craziness. Okay, Butch Knob Hill, Jesse Foxtail, Lady Route One, thanks for being here, guys. Thank you, Chris. Next week, more companies reporting earnings, including DreamWorks Animation, Office Depot, Target, and more. Thanks to our special guest this week, Walter Robb, the COO of Whole Foods. And if you missed any part of the show, you can find it at our website, MotleyFoolMoney.com.

You can also get a copy of our free report, The Motley Fool's Top Stock for 2010. All that and more at MotleyFoolMoney.com. Our engineer is Cato Northwoods. Our producer is Beau Camelot. And I'm your host, Dalton. Thanks for listening this week. We'll see you next time on Motley Fool Money. Boogie Nights, ain't no doubt, we are here to party, Boogie Nights, come on out, got to get it started, that's where the boogie get down, that's where the boogie get down, cause Boogie Nights are always the best in town.