Motley Fool Hidden Gems Investing - Motley Fool Money: 05.25.2012

Episode Date: May 25, 2012

Shares of Facebook flounder.  Dell reports weak earnings.  Heinz hikes its dividend.  And Yahoo! unloads its stake in Alibaba.  Our analysts discuss those stories and share some stocks on their radar.  Plus, corporate governance expert and film critic Nell Minow talks CEO shenanigans and must-see movies.  Learn more about your ad choices. Visit megaphone.fm/adchoices

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Everybody needs money. That's why they call it money. The best things in life are free. But you can give them to the birds and bees. 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, Motley Fool income investor, James Early. and for Million Dollar Portfolio, Charlie Travers and Mr. Ron Gross. Gentlemen, good to see you as always. Hey, you too, Chris. We have got earnings from Dell, Hewlett-Packard, Pandora, and more. We've got Nell Minow as our guest this week. She's going to weigh in on the latest corporate shenanigans and give us a summer movie preview.

And as always, we've got a few stocks on our radar. But we begin with the story of the week, the IPO of the year, and of course, gentlemen, Facebook. Facebook went public? Oh my gosh. So many parts to this story. We had the stock barely finishing up on its first day, the trading snafus that went on with NASDAQ, charges that Morgan Stanley, the underwriter, withheld information from some of the investors, which led to shareholder lawsuits being filed. And oh yeah, by the way, the stock quickly dropped into the low 30s

just a couple of days after the IPO. Ron, I'll just start with you. There's a lot to get into here, but what is your- But Zuckerberg got married. Yes, and Mark Zuckerberg got married. Congratulations to the happy couple. They're going to be just fine. So for me, to me it's about the valuation. I'm a valuation guy. And I think that speaks to two things. Kind of these private markets that exist, I think they're a mess. And then the underwriter analysts cutting estimates and perhaps only telling some people that's

kind of a mess. To me those are the big things. Are you almost out of breath? Sounds like you're very excited about this whole thing. James, what's your headline? Here's to me, the Facebook IPO, the fact that it flopped really restores my faith in humanity because this was supposed to be droves upon droves of idiots buying this stock at any price, except they really didn't. In other words, the dumb money was not as dumb as the smart money thought, which means the smart money was not as smart as it thought either. Well, they really didn't, but maybe it turns out, in fact, some of them actually did. A lot of retail investors who thought they canceled their orders might actually get stuck with the shares at a much lower price. This is back at the NASDAQ thing. This is your big story.

Yeah. Well, Charlie, I'll get to NASDAQ in a second, but what's your headline out of this whole story? No, it is the NASDAQ angle, because I find it remarkable that in this highly computerized day and age, a high-profile stock like Facebook can't trade. That's completely absurd that this would happen. And now we're seeing reports that Facebook is contemplating leaving the NASDAQ, moving from the NASDAQ over to the New York Stock Exchange. And I think we've talked about this before, Ron, it's kind of inside baseball. It doesn't really matter so much to individual investors where a stock trades. But I think because it's Facebook, because it's this company that touches so many people and so many people are involved with, just by virtue of that fact,

it becomes a much bigger story. Well, I think Facebook will shrug that off. It's not going to matter that much down the road. But for NASDAQ, it could be a big deal because it's very competitive for these new listings between the New York and the NASDAQ. And if they start to lose clients as a result of something as big as this, the most highest profile IPO in a long time, not good for NASDAQ. Charlie, wouldn't that sort itself out, though, after an hour or two? I mean, I don't think the glitch lasted all day, did it? I mean, in terms of pricing, we had price discovery pretty quickly, though. I would agree with you. I think it's just more the principle of the matter, the market being down. Well, and also, if you're an investor and you think you're

buying shares at 39 and your order gets filled an hour later and it got filled at 45, that's going to put a little bit of a dent in your wallet. Let's look forward now to where Facebook is going, because obviously they'll be reporting earnings, their first earnings report as a public company in probably 10, 12 weeks or so, Ron. But it seems like they have some significant challenges ahead of them, particularly when it comes to mobile. It seems like they haven't really figured out how to sell ads on mobile. I mean, I've got a Facebook app on my smartphone, no ads whatsoever. Right. So it's not necessarily about, is this company growing? Because it is, and that's why it was priced so high from a valuation

perspective. But it's about, is the growth slowing? And that, again, speaks to perhaps the underwriting analysts lowering their estimates going forward and not everybody knowing about it. And mobile, as you say, is the big deal here. This is an advertising company, let's face it, as it stands now. We don't know whether it'll be 10 or 15 years from now. But if the mobile ad space isn't as robust as the desktop space, growth rates have to come down. And therefore, the valuation doesn't make sense. And that's what we're seeing in the market. James? That's the big question right now. I mean, Facebook is not that exciting as just an

advertising company. And I think the frenzy of the IPO has made us kind of forget about that. This stock is really about optionality. In other words, what are they going to do? We already know the ads are kind of leveling off. GM pulled out, you know, it's just- $10 million. Yeah, it's not as great as we thought, but they still have this massive base of users. So what are they going to do next? That's really what it's about, but it's very much unproven. Charlie?

I would say I'm a little bit more optimistic than Ron and James are. Facebook is one of the most successful growth stories of the past few years. I would say rivaling only Apple in that regard. This is the most popular website in the world in terms of the time that people actually spend on the website. And I think Facebook has the potential to be more than just an advertising story. I agree with the concerns over mobile. That's a tough area for everybody. But, you know, if you look at their payment business, they get a 30% cut of everything that it's used to spend on the Zynga games.

I think there's a huge opportunity for the company going forward to have products and services on its site, like social games or music or videos or, for example, the UFC, which I'm going to watch this Saturday night, will show its prelims on Facebook. There's an opportunity for businesses to engage with their fans through Facebook. And I think this is an opportunity for the company going forward. Can I come hang out with you? Sure can. I want to dig into this growth aspect just a little bit more.

Because you mentioned Apple and sort of the growth of Apple. But it seems like the growth of Facebook took place without individual investors being able to benefit from it. So, you know, Apple or Amazon. I mean, Amazon went public 15 years ago. And it was more than a decade before Amazon's market cap got to where Facebook's was this week. So, I mean, Ron, do you see what I'm saying? It seems like, whereas a lot of companies go public and they have a long runway ahead of them and a lot of potential growth, it seems like Facebook is already a middle-aged stock.

It went from zero to 60 miles per hour real quick, real early in its life. And it still has plenty of growth runway ahead of it. But those initial years, boy, I mean, it's a real success story. You don't usually see growth that fast so quickly. But unless you're in the private market, you don't get to benefit from that. Right, that is true. Or if you're an initial founder or a shareholder. The esteemed NYU finance professor, Aswath Damodaran, did an interesting exercise where he ran a valuation analysis,

and he gave it the growth rate of Google, Facebook, he gave it the growth rate of Google with the margins of Apple. And that came out at $29 a share. And then under some more perhaps realistic scenarios, it was actually $20 to $25 a share value. So interesting from a finance guy's perspective, that might be a more realistic perspective. So with the stock trading in the low 30s, that would stand to reason that it's still overvalued, yes? Yes, certainly based on that analysis. And whether it's overvalued or not is very difficult to tell. But for me, as an entry point, it's not low enough.

It's not low enough. Not for me. James, what about you? I agree with Ron. And I'm a valuation guy, too. I just don't see. I mean, they could be worth more than low 30s if they do something that we haven't thought about. But I think, as Aswath was saying through Ron.

He was my finance professor, too, at NYU. He's a cool guy. He's a very bright guy. I love him. Yeah, it's too unproven for me. Charlie? You know, we had Demoder come here speak a few times. And he gave an example of how he valued Microsoft every year from 1987 to 2000 and said it was overvalued every time.

and missed a massive run in Microsoft stock. So I think even as much respect as I have for him, we've got to take this with a grain of salt. And I do find Facebook attractive in the low 30s. Has anyone heard from the Winklevoss twins? Because even with the- They're spending their money. They're fine.

They're fine. We shouldn't worry about them. Yahoo finally reached a deal to sell up to half its stake in Alibaba Group back to the Chinese company for $7.1 billion. Charlie, $6.3 of that is in cash, $800 million in preferred stock. So help me out here, because this is a $19 billion company, Yahoo. After taxes, they're going to clear $4 billion, and the stock didn't move at all. I mean, nothing whatsoever.

Yeah, this Yahoo story over the last year has been really remarkable. So they have a 40% stake in Alibaba Group, which is a collection of some of the premier internet businesses in China, including Alibaba.com and Taobao.com and Alipay.com. It's like owning Amazon, eBay, and PayPal of China all at once, and Yahoo had 40% of this business. It's incredibly valued. This is a $35 billion organization, and Yahoo's shareholders, seeing the struggles of its core business here, said, let's get some money out of these Chinese assets. And so they did.

They finally struck a deal with Alibaba Group to sell half of their stake. They are going to get $7 billion roughly pre-tax. The exact amount will depend on when it closes later this year. and it'll be about $3 or $4 a share after tax. And you'd think this would have a bigger impact on the share price. I thought it would. I thought this would be a catalyst that some of the risk that this would never happen got removed, and the stock went nowhere.

This was well-known for a long time. This was the big driver of Yahoo's share value. So the fact that they're just monetizing it because Yahoo has a preference for cash over the value in shares is mathematically not a value driver in a technical sense. So perhaps that's what the market's thinking here. I do agree with James. The only part I thought that might be a driver would be the deal removal risk, because there's a potential that this will never happen.

You would never extract the cash. And cash is more flexible than owning this stuff. And I think what spooked people was the announcement of a potential $5 billion share buyback, and people were hoping for a special dividend in getting cash in hand, including us. Right. We owned it in a million-dollar portfolio until this week, actually. And our investment thesis was realized. We were hoping for monetization of these Chinese assets. But the valuation just wasn't to where we were hoping for.

And rather than own a struggling domestic U.S. business, domestic U.S., is that redundant? I think it is. That is. Rather than own a struggling company here in the U.S., we decided it would be better to sell. The CEO issue did not weigh on you? Well, it's an indication of just continued struggles at the company that there's better companies to own. Things got ugly this week for Dell and Hewlett-Packard. We will dig into the gory details after this.

Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. Guys, bad week for a couple of big PC makers. On Wednesday, shares of Dell fell to their lowest point in nearly three years after a disastrous earnings report. Hewlett-Packard shares dropped as well, but recovered the next day after a good earnings report that included, Ron, the news that HP is laying off 27,000 workers. That's just a huge number of people. I know from a percentage standpoint, it's about 8% of their employees, but still a massive number.

Let's start with Dell. I know you're a Dell shareholder. For a very long time. And you have my condolences. You know, they're both struggling as they try to transition their businesses away from the PC business. The difference here is that Dell missed expectations and HP beat expectations, and that's what the stocks trade on. But they're both really having a tough time. James?

I think Ron is just as angry as he was earlier. Yeah, it's interesting. To me, the price point is something to watch. We would expect like a Cisco maybe to suffer a little bit because the higher price purchases might slow down more so than the lower price purchases. But the fact that Dell is struggling, too, I think indicates that there's an issue with its products. Obviously, the iPad is very competitive and more people are going to Mac. I just see it losing its competitiveness over time. How fragile is the market share when it comes to PC makers? Because one of the narratives for this story in the media was HP taking market share from Dell. We saw it in other

spaces as well. NetApp, a data storage company, losing market share to EMC. Is that something that HP and its shareholders can rely on, or is there just a very short shelf life when it comes to market share in the PC industry? What do you think, Ron? Well, market share is extremely important because there's such pricing competition in this business. It's really a commodity on the consumer level. So you really need to be the go-to manufacturer for PCs. And it's hard. There's no customer loyalty. You know, people, the switching costs are nothing.

It's, you know, I'll buy a Dell this week, I'll buy an HP, you know, next year. It just doesn't matter to folks, so it's hard to maintain. Back in March, JPMorgan Chase got the green light for a $15 billion plan to buy back its own shares. This week, CEO Jamie Dimon announced the company is suspending that plan. James, what do you think? I know they're maintaining their dividend, and you're happy about that. Yeah, well, obviously setting aside JPMorgan's other issues right now, I think it's prudent. I mean, in general, I'm not a fan of buybacks. A number of studies have shown them to be meaningless, if not deleterious, to shareholders

in the sense that they tend to happen at the worst possible times. ostensibly, you're buying back shares, reducing your share count, thus mathematically boosting your EPS. But the big dumb misunderstanding that so many people have, unfortunately, is that they think shares are valued just based on EPS. And that cash has already gone out the door. And the departure of that cash also reduces the value of the company. So it all depends on the price. But if the price was 45 back in March, which it was, and that's when the plan got approved, doesn't it make even more sense to buy back the shares now that it's like 34? All else equal for J.P. Morgan, but I would say they're a little different because

they're dealing with something special. It's just unfortunate this is the reason a company's discontinuing its buyback. It should be the other way around. Pandora's quarterly loss was triple what it was a year ago. You say that with such sarcasm. Ron, why was the stock up so much on Thursday? 15% up, basically because revenue was up 58%, and there was better than expected earnings, and as we keep saying, stocks trade on a daily basis based on expectations. So that's why people just loved it.

However, the costs of the business, the content costs, are going up 80%. They were up 80%. So obviously less than the increase in revenues, the loss widened. I have real quick concerns about the business model here. Most people that use Pandora don't actually pay for Pandora. They really have to continue to monetize it. Those content costs are going to be a constant hurt pressure on margins. So, you know, I stay away. I mean, the stock went public at $16. We're in the $11s, $12s

right now. Obviously, the market also has concerns. Does it ultimately make an attractive acquisition candidate? I mean, the market cap for Pandora is around $2 billion. Is this something where it doesn't make sense on its own, but as part of a larger portfolio for another larger company with deep pockets, maybe it works then? Only if the deeper pockets have some way to lower that content cost. Otherwise, it's just another division you have that is losing money. So you need some way to leverage off of perhaps the larger organization. Better than expected earnings from Heinz, but the stock was down slightly on lowered guidance. But James, once again, good news. Dividend increase of 7%. You

own Heinz. Yeah, it is an income investor recommendation. Yeah, the profits did get squeezed a little, Chris, because of these higher costs, especially the marketing costs. They pulled back their growth estimates. Heinz really typifies what I see happening. The narrative in these branded consumables, where the men are getting separated from the boys. You're having companies like Unilever, like Coke, deliver gains in both pricing and in volume. And a couple of years ago, people started to switch to generics, and many analysts were worried that they weren't going to switch back. Well, they are, but not to all companies. Like Procter & Gamble, for instance, is still struggling. Pepsi is struggling a little bit, too. So, we're really seeing kind of the

shakeout. Some companies are getting their groove back, some are not. You look at the stock price on Heinz. Over the last year, it really hasn't moved out of the $48 to $55 range. Is the dividend ultimately the reason to buy a stock like this? Or if you're looking for the consumer brand dividend payers, is there a better way to go? I value Heinz roughly about where it's at. I've had it at fair value for a while, and it's pretty much stayed there for a while. It's maybe an options strategy type of company. This is not a screaming buy if you're looking to make a lot of money. I think it's roughly fair value. We're seeing a lot of people pour into these names, But there are higher upside names out there than Heinz.

In the 30 seconds we have left, Heinz, obviously. They make a lot of condiments. Memorial Day weekend here in the United States. Charlie, do you have a go-to condiment when you're looking to barbecue or just sort of set out a summer meal? Yeah, I think barbecue is a very timely one, and I would say a nice yellow mustard sauce. Nice. Ron? Definitely a barbecue sauce. I use it on everything, basically.

All food to me is just a conduit to get barbecue sauce into my body. Wow. But you have to remember to put it on at the end of the cooking process, otherwise the sugars will burn. That's a good tip. James, do you have one? I'm not a condiment guy per se, but a lot of people use things like parsley as a condiment. But I would argue it's underappreciated. This is a real vegetable, and I eat typically a head of parsley a day.

It's a great green. Is that true? You don't have to cook it? Italian parsley or the curly? Sometimes Italian, mostly the standard curly parsley. Just eat it raw. It's just ready to go. You've got to floss afterwards.

And it's supposed to be a breath, a freshener. It is. It's great. In your stomach, it just enhances your- You're an interesting guy. That's underappreciated. That's my bottom line. Steve Broido, you got a condiment for Memorial Day weekend?

First off, that's an awful lot of parsley. Are you okay, James? That seems weird. Just try it. Try it first and then get back to me. I do love ketchup. I've got to go with the ketchup. I'd drink it if I could.

I love it. Wow. On that healthy note, coming up, more thoughts on Facebook as well as a summer movie preview with our favorite guest. Now Minnow is next. This is Motley Fool Money. Welcome back to Motley Fool Money, I'm Chris Hill We got a lot of company executives making headlines for reasons they probably wish that they weren't

And we got the kickoff to the summer movie season So there's only one person we can turn to Nell Minow is with Governance Metrics International She is the film critic known as the movie mom And she is our favorite guest Nell, always good to talk to you I'm glad to be back I want to get to some of the more outrageous.

Outrageous. Is that the word you're looking for? There were a lot of words I was picking amongst, and we'll get to the more outrageous stuff in just a moment. But the big business news this week has been Facebook, the IPO, and frankly, a lot of negative media coverage, particularly when you factor in the lawsuits that are being filed. Just writ large, what has been your observation about Facebook as it becomes a public company? Well, you know, I don't know if we even remember how to take companies public anymore. It doesn't seem to me that anybody is really paying attention.

You know, just like with Groupon and LinkedIn, these technology companies, they all try to structure themselves as dual class. Google, as you know, already is dual class. And, you know, to me, that's a great big red flag. and certainly a depressor of stock price. There's a big control premium, and guess who's not getting it? The outside shareholders. So, you know, that's problem number one. Problem number two is that this is not a company that has ever been really great with revenues

and has a lot of vulnerabilities and very little, you know, it's kind of what I call the Ozymandias effect, which is that these companies that come up very, very quickly tend not to stay around. And even the companies that have been around for a while tend not to stay at the top. And I think a lot of people feel that Facebook is already at its top and that the deal, as structured, benefited the insiders too much. You mentioned the dual-clash share structure. Mark Zuckerberg, the founder of Facebook, I mean, he's got the voting control.

Yeah. Do you trust him? Well, I was just going to say, I mean, as a general rule of thumb, what do you make of that sort of corporate structure? I mean, you can't be in favor of one person having that much control. That's right, and particularly not an insider and particularly not a founder and particularly not somebody who, as we have seen, doesn't play well with others. So if, you know, you're not, in my opinion, you should not be allowed to, you know, get the benefits of going to the public markets for control without the accountability that comes with that, too. And, you know, he wants the best of both worlds. He wants to cash out like a public company, but he wants the control of a private company. And that, over time, just hasn't worked out very well.

The only companies that have really made a good argument for that are the newspaper companies. I don't want to say media companies because, you know, then you get News Corp and stuff in there. But the newspaper companies, for some reason, no newspaper has ever really been world class in the United States without dual classes. And the ones that went from dual class to single class went downhill. So we don't seem to know how to do that. And basically you say, all right, that's a public good. We'll take the discount there for a while anyway with the Post and the New York Times. But when you have other kinds of companies, and I would not call Facebook a newspaper,

there's really no excuse for it. But as a general rule of thumb at The Motley Fool, we like to see founder-led companies. We like to see companies where the CEO has his or her interests aligned with shareholders. So on the one hand, you could make the argument that that is the case at Facebook. So what is the solution? What is, let's say Mark Zuckerberg woke up tomorrow morning and decided all he wanted to do was please Nell Minow in terms of his company's corporate structure. What is the way, what is the pathway to do that while still being a founder-led company? You know, one of the many things that I agree with you on is that I also love founder-led companies.

But one thing that we have seen is that, particularly in very new companies that are founder-led, the CEO normally is very, very motivated in a way that has nothing to do with money. This is somebody who is a passion project, and we love to see that. The problem is that when things go wrong, the marginal utility of a dollar to you or me is not the same as it is to Mark Zuckerberg. And when he decides that he wants to do something that is not in the shareholder interest, what is our option? We really have nothing. We don't have a sense that this is a super strong board. We don't have a sense that he's paying attention to anybody but himself. And you can see what the market response is. Just to close out on Facebook,

You mentioned the challenge that Facebook is facing in terms of finding new revenue streams. And one of the ideas that's been floated out there is the movie streaming business, which they tested. They did a test, I think it was a year or two ago, with The Dark Knight. To what extent do you think Facebook could have an impact on the movie business, either by acquiring a company like Netflix or just through its own efforts? I don't really see what the synergy is between that and what they already have, but they certainly are going to have to be in the business of providing some sort of service that's fee-based if they're going to stay in business.

They cannot do it. They cannot make it work on ads alone. You're listening to Motley Fool Money, talking with Nell Minow from Governance Metrics International. When it comes to corporate governance in general, what are a couple of things investors should look for when they're evaluating a company? The number one thing to look for is the incentive compensation. If the board cannot say no to the CEO on crazy pay plans, then the board is not going to say no to the CEO on anything else.

So that is huge. And you want to see not just whether there are all kinds of special perks and things like that attached to it, although those are also an indication that the board is completely spineless, But you basically want to look and see what the benchmarks are and what the company is looking for. I mean, there was one company that we looked at that had, I think it was seven different metrics that they were using to compute bonuses. And you go, hey, great, there's a number, seven, there's the word metrics. That sounds very mathematical.

But then it said at the end of it, well, you know, it's within the discretion of the board to give 100% of the bonus for the achievement of any of the metrics. And then you look at the metrics and you realize they're all over the map. So if six of them are not going to be met, the seventh one is automatically going to be met. And so I think it doesn't take a lot of research to just look at these pay plans because they are described in the proxy statement. And that will give you some idea, really, of where the company is. And look at the board, too. Look at the directors.

And if it's News Corp and you've got three members of the family and the godfather of the grandson on the board, that should tell you something. It's just a little family business. that's all. Well, fine, if they want to keep it as a family business, but then they shouldn't ask for other people's money. Chesapeake Energy, it seems like every week for the past, I don't know, six weeks or so, there was another story coming out about chairman and CEO Aubrey McClendon. I think my personal favorite was the news that for a four-year period, he was running a secret hedge fund on the side that no one apparently knew about. He is giving up the chairman role.

What is going on at Chesapeake? He's the founder, isn't he? I believe he is, yes. Yes, see, so there you go. It doesn't always work. And, of course, he's been, you know, the CEO I've loved to hate for quite a long time for two things. And I'm sorry to say that my company was not the first to notice either one of them, and yours was one, and Footnoted. Michelle Letter was the other.

Michelle Letter was the first person. I love her stuff. You should always read Footnoted. And Michelle Letter was the first person to notice that Aubrey McClendon had persuaded the board to buy his map collection, his collection of antique maps for $12 million at a valuation reached by who? By his own consultant who helped him acquire the maps. And thanks to a lawsuit by the shareholders, he had to buy those back. But it gives you an idea, again, that this is a board that is not really on the ball.

Then you find out, and this I learned from Motley Fool, which did a wonderful job of writing about him, that he was allowed to make side investments in these deals next to the company. And you would say, well, maybe that's aligning his interest with the company. No, no, no. You want to know what aligns his interest with the company? We pay him on how well the company does, not on how well he does. And, in fact, I believe he was using the company as a loss leader for his own benefit and that there were very, very, very conflicted deals going on there.

That's a lawsuit that is waiting to happen. And then we find out that he was running a hedge fund. He was also, you know, grossly overpaid. You know, this was one that just was riddled with red flags. And why people haven't paid more attention to it over the years, I don't know. So the fact that, yeah, he was running a hedge fund without letting anybody know of the board, you know, that's just the cherry on the sundae. Coming up, more with Nell Minow as we dig into some of the must-see movies this summer.

Plus, we'll give you a look at the stocks on our radar. You're listening to Motley Fool Money. pennies from heaven you're listening to motley fool money talking with nel minnow from governance metrics international she's also the movie mom so let's transition over to the movie business i do not want to jinx anything but i checked the numbers uh before coming in the studio box office receipts are up nearly 15 year to date compared to last year seems like the movie business is off to a good start but you tell me what's your headline for the movie business so far Well, you can't go wrong betting on Avengers. That's my headline. The Avengers, I think, shocked everybody, even the most optimistic projections, you know, because the movies like, you know, Thor and the Hulk and Captain America did well, but they were not as good as Iron Man and nobody really knew.

And, you know, Josh Whedon, I think, gets a lot of credit as the writer-director. He did an excellent job. Also, it's a two-and-a-half-hour movie, and that, just as a matter of math, makes it hard to break records because you have fewer viewings that are available. But he just really knocked it out of the park. He did a great job with it. It's a wonderful movie. If you do go see it, everybody listen really carefully.

This is important. Stay all the way to the end of the credits. And I don't mean that first scene where you get to find out who the villain is going to be in part two. I mean all the way to the end of the credits. okay uh because there's a real sweetener there um okay so i uh you know i i think uh avengers got everybody excited and happy and ready to go to the movies and uh you know battleship did not do as well as i thought it would um i think it's it's just got the overhang of of the avengers but there's a lot of speculation that men in black may may take the number one spot but right now

minute the avengers let's just think about the numbers for a minute avengers now number one top box office film in Disney history. Okay? Better than The Lion King, better than Mary Poppins. That's huge. That's a lot of money. And we still have a lot of summer to go. What are a couple of must-see movies this summer, as far as you're concerned? I'm very excited about Brave. It's the first Pixar film that has a female lead character, and it looks great. They've released a lot of little snippets from it so far, So that looks wonderful. I think the one that all the real hardcore movie fans are most excited about right now is Prometheus because Ridley Scott, the guy who who did Aliens and is, you know, he's just amazing and Blade Runner. He's amazing director. And this looks like an extraordinary film. Abraham Lincoln, Vampire Hunter.

I was trying to explain the premise of Abraham Lincoln, Vampire Hunter, to my daughter. And, yeah, I don't think she's going to be seeing that anytime soon. No, it's not really, it's not for kids. But I think that looks very intriguing. Dark Knight Rises, the third of the Christopher Nolan Batman movies. I loved Jeremy Renner in the Avengers movie. So I'm excited about seeing him do the reboot of the Bourne movies. So I think all of that is great.

Woody Allen, I hope, on a roll after Midnight in Paris with To Roam with Love. So that looks kind of good. And I think every summer there's always a surprise. You're listening to Motley Fool Money, talking with Nell Minow, the movie mom. We will wrap up with a round of Buy, Sell, or Hold. Let's start with something that seems to be just becoming more and more ubiquitous in the movie theater, Buy, Sell, or Hold 3D movies. um i'm gonna say hold on 3d i i tend to like 3d more than uh some people i but i think for me

what you really want to put on your buy list is a new technology that is much more important it's going to be much much much more impactful than 3d and that is that ever since the sound movies got invented so we're talking back in the 1920s it's been 24 frames a second that's been the standard. And somebody finally figured out, we don't need to do that anymore. You can do 48. And 48, it's like if you wear glasses, it's like the first time you put the glasses on and you say, won't it hurt my eyes to see that clearly? I mean, it's that good. And when you see this 48 frames a second technology that they're bringing in for the upcoming Avatar movies, for the Hobbit movie, I think that's going to knock your socks off. And that'll be the game-changing technology.

She was the star of the hit movie Bridesmaids, and she just left Saturday Night Live. Buy, sell, or hold Kristen Wiig. Oh, buy, buy, buy. I think she has got a fabulous career in front of her as screenwriter and as actress. She can do anything. Her Susie Orman is phenomenal. Her Kathie Lee Gifford absolutely can't get over how great it is. So I think she's tremendously talented, a really nice person.

You know, she was, I think, not an accountant, but a bookkeeper. She had some kind of background in money, so she's got a good head on her shoulders, and I think she's going to be great. He was one of the stars of the TV show Friday Night Lights, but he was also the star of John Carter and Battleship, both of which bombed by sell or hold the acting career of Taylor Kitsch. I'd hold on him. I think he's got a lot of potential. I don't blame him for John Carter.

I blame everyone around him, starting with Edgar Rice Burroughs, who wrote the book, because he's a very, the character, John Carter, is a very sort of mopey guy, and it was very hard to get on board with him. So I think Taylor Kitsch is a good guy. I think he did a great job in Battleship. I think Battleship ultimately will make its money back, and I wouldn't bet against him. So I'd put him as a hold. But as investors who look at things like return on investment,

it seems like, at least in terms of his film career, Taylor Kitsch's ROI is off to a rocky start. It's off to a very rocky start, but that's why he's trading at a low price right now. It's a value play. That's right. And finally, you have said in the past on this show that this is one of your guilty pleasure movies, and there were reports earlier this year that a second one could be in the works, Buy, Sell, or Hold, a sequel to The A-Team.

Well, the first one didn't do very well, even though I did like it. But I think you'll see some A-team equivalents. I'm not sure we'll see getting the gang back together type with Liam Neeson again. Fortune magazine called her the CEO killer. But at The Motley Fool, we love Nell Minow. Nell, thanks so much for being here. Oh, let's do it again soon. 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. Joining me in the studio once again, James Early, Charlie Travers, and Ron Gross. gentlemen, it is that time, time for the stocks that are on our radar. We're bringing our man Steve Broido from the other side of the glass, our ketchup-loving friend Steve Broido, with a question for you. Ron, you're up first. What's your stock this week? I'm looking at Tiffany's, T-I-F. Stock has been completely decimated, down more than 30% from its high. Concerns about the economy. Looks interesting to me. Steve, question about Tiffany? Assuming you weren't married,

Ron, would you buy an engagement ring at Tiffany? Paying retail for a diamond ring might not sit Well, with me, I would kind of search around for somebody maybe in the wholesale or for a discount because those things get expensive. I know. I look at it with my wife at Tiffany, and we evacuated. But if you buy wholesale, don't you have to buy like three of them or something? Can I just buy wholesale if I want to? Yeah, you go down to New York, you find a nice jeweler down on 47th Street. It's like one of those I know a guy, like one of those things?

You've got to know a guy. James, your stock? Very interesting. Chris, I'm interested in Roundies. This is a company that a lot of people have been talking about lately. The ticker is R-N-D-Y. This is a supermarket chain based in the northern Midwest, like the Minneapolis, Minnesota area, where I once got a ticket for picnicking without a permit.

And it went public in February. It was founded in 1870. For wedding without a permit? Picnicking without a permit. I went through some trees, and I came back with some $50 ticket on my car. I didn't pay it, though. And it was founded in 1872. And the piece to resistance, really, is at 8.8% yield.

So, this is going to be a slow-growing company, but it has a nice big yield. The CEO has been in the industry since 1972, David Einhorn, who runs his Greenlight Fund, just bought in, number one market position in many of its core markets. I'm not sure that I love it yet, but I'm interested in it. Steve? Is having a keyword's name an asset or a liability? Roundy's just sounds like a funny name for a company. It is a little bit funny.

Most of the actual supermarkets are under different names. I don't remember all of them, but Roundy's is kind of like the parent company. I don't know if it's an asset. I do not know the answer to that good question. Charlie, your stock? It's a company called Country Style Cooking. The ticker is CCSC. This is a casual restaurant in China.

So imagine like a Chipotle-style restaurant. So they have 212 restaurants. They're going to add another 70 this year. I think this is a nice growth story. We had some fool analysts in China. They vouched for the quality of the food. They said the places were packed. So I feel pretty good about it.

Okay. Steve, question? How do you evaluate how a restaurant is doing in China versus evaluating how a U.S. restaurant might be doing? Very carefully. Very carefully. The financials are all the same. They report the same store sales metrics, the margins, that kind of stuff. It's the same process, just a different geography. Okay.

I love that James has an outstanding warrant for picnicking. I know. Any authorities in the greater Minneapolis area, please drop us an email, radio at fool.com. Ron Gross, James Early, Charlie Travers. Guys, thanks for being here. Thank you, Chris. That's it for this edition of Motley Fool Money. Our engineer is Steve Broido. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.