Motley Fool Hidden Gems Investing - Motley Fool Money: 06.17.2011

Episode Date: June 17, 2011

What does the crisis in Greece mean for investors in the U.S.?  Will online music service Pandora produce sweet music for shareholders?  Can a retail guru from Apple turn around J.C. Penney?  And should the CEO of Miracle-Gro really be targeting the marijuana market?  Our analysts discuss those stories and share some stocks on their radar.  Plus, CNBC sports business reporter Darren Rovell talks about the future of LeBron James and the future of pro sports. Learn more about your ad choices. Visit megaphone.fm/adchoices

Chris Hill. Welcome to Motley Fool Money. Thanks for being here. I'm your host, Chris Hill. And joining me this week, from Million Dollar Portfolio, Ron Gross, from Income Investor, James Early, and from Motley Fool Hidden Gems, Seth Jason. Guys, good to see you as always. Good to see you, Chris. We've got retail news, energy news, and the latest hot IPO. We'll talk about the business of sports with CNBC's Darren Revell. Plus, as always, we'll give you an inside look at the stocks on our radar. But we begin with the unrest in Greece, where there are protests over government cutbacks, some of those protests turning violent. There are concerns that Greece

may default on its debt. And there are questions about a second bailout. Ron Gross, I'll start with you. A lot of uncertainty here, obviously. Where do you think this shakes out in terms of what it means for investors? I mean, in the extreme, it could be quite serious. I mean, pretty much as serious as worldwide economics gets. They need to cut back costs. They need to raise taxes. There's a proposal to privatize some state assets. They need to get all these things through, so both the EU and the IMF will come in with additional aid so they don't default on their debt. If they were to default, this has contagion possibilities to spread to Ireland, Portugal, France, and Germany hold the debt of Greece, the banks,

and it would spread to them. And that would affect, obviously, companies throughout the world, affect stock markets throughout the world, and it could be a disaster. The way I think it shakes out is that there will probably be a compromise and the IMF and the EU will come in. Called kicking the can further down the road, I think. What Greece really needs to do, and nobody says this anymore, is they need to devalue their currency. The trouble is their currency is the euro. It's not just their currency. That is the entire problem here. It's the reason I agree to an extent with some pundits or analysts even in this building who say, I'm not so sure the euro is going to last, because typically the solution to problems like

this is a devaluation of currency. And that is, it's kind of a harsh tool to have, but some countries need that tool, especially countries like Greece, where everyone likes to get stuff for free. James, what do you think? Yeah, in terms of relevance to the person listening at home, if you're the parent of a teenager, the lesson here is to think twice before you get your son or daughter a credit card under your name, because that's really what happened here. Socialism at its finest. All these second-rate European countries borrowed all this money with France and Germany as co-signers, essentially, and now they can't pay it back, and they're angry. Now, it's just, to me, it's, well, it is what it is.

So, it's safe to say that your son, when he gets to be a teenager, will not be getting a credit card with your name on it. We'll see what happens. Probably not, though. All right, guys, sticking with the big macro, consumer inflation in May was up 0.2%. and it's the lowest monthly rise since November. Ron, it doesn't seem like that big a deal. How big a deal do you think it is? So, what's interesting here is that, for the first time in a while, the core inflation number, which is the number that excludes energy and food, rose more than people were

expecting it to. On the other hand, the overall inflation number was relatively OK, because gas prices have fallen recently. But that core number is what worries people. I actually, although I am worried about inflation in general, I'm not that worried about this report because there was a lot of auto price hikes, increases in prices for the auto sector here. A lot of that's due to the Japan situation. I don't think that follows through. I don't think that's a sustained situation. Seth? Yeah, I also think we're seeing some trickle down from those high fuel prices. So even in the core inflation rate, eventually high fuel and commodities prices work their way through because you are using agricultural and petroleum products to make things like rubber and nylon and materials and fabrics.

So I think we're seeing some of that come in. I believe that will abate, you know, but we're going to see. You probably need to keep an eye on it. James, do you agree with that? Yeah, it's a great point. I mean, you can't take gas prices out of it entirely. In fact, we should think of some longer lag way to measure that anyway because we still have to pay for food and gas. But let me just ask Ron a question because you said you're not worried now.

So at what level, out of curiosity, would you become worried, and at what level would you begin to panic? Interesting. I don't have a number for you, but my worry would be... If you did have one, what would it be? If we start to see inflation creep up, but then we also need additional stimulus, like a QE3, you can't really do both very well. That's trouble. Guys, another week, another tech IPO. This time it's Pandora, the internet radio service that lets you program your own channels.

Shares IPO'd at $16, got as high as $26, and have settled back down in the neighborhood of the original IPO price. Ooh, that doesn't sound good. This is a company that has lost over $90 million since it started 11 years ago. That's not that much. So, is this stock a hidden gem? Well, let's see now. It's not really hidden, and I wouldn't call it much of a gem. No, I like a little bit more of a competitive advantage. I don't think Pandora has that because, you know, I have Last.fm on my Xbox and on my Windows phone, and you can get that on other devices.

Pretty much does the same thing. You will probably get similar services you already do in a way from Microsoft through Zoom players, from Apple. And so I don't think there's a sustainable competitive advantage here. I think it'll be around for a while. I just don't see this as a business that is made for the long term. James? I'm just mildly intrigued. No profit in 11 years, and they're still going.

I mean, that's kind of an accomplishment. They're almost right there. Does this sound familiar to anyone? They're going to have a lot of users, and they're going to sell ads. Yeah, see, that's what drives me crazy here. Every IPO of recent is advertising-based. Pandora's 90% of their revenue is 90% advertising-based. This is 1999 and 2000 all over.

Again, not everyone can make money selling ads. There's not enough advertisements. They're not all going to be profitable. Yeah, when are these people going to realize there's a very steep drop-off function, as Ron's saying, just having the eyeballs and actually converting that into money. I mean, it's just a tough business. I don't know who would even work for an online media company. It's just, well.

Seth, you mentioned Last.fm. When you start to look at Pandora's competitors, the list gets pretty long pretty quickly. You've got SiriusXM satellite radio. You've also got Apple, Google, Amazon all at various stages of rolling out their cloud-based services. Who else could do this? A little company called Facebook. Does anyone remember what Zuckerberg's first program or what's called his first program? It was the first one in the movie he discusses.

A little thing that looked at what you listen to and then suggested other music that you might want to listen to. That's essentially what Pandora is all about. And speaking about other little companies here that could be a competitor, Google, which actually represents 11% of Pandora's advertising sales. So, if that goes away and they also step up as a competitor, that's a little bit of an interesting dynamic. So, who's the biggest threat to Pandora? All of them. Pandora is. Its success means that everybody else will get into the business and kill it. Now, as I said, this is a service that allows you to customize your own channel of music. If you're a Bruce Springsteen fan, you can customize a Bruce Springsteen channel.

For our man, Steve, who's a SiriusXM shareholder and a music lover, if you had a channel, let's just say we send Steve to a desert island, you get to program a channel for Steve. What are you doing, Ron? So, what's the one group I focus the channel around? Yeah, what's the one musician? You know, they're as good forward as they are backward. Abba. Abba. Nice, nice.

James, what about you? I would relax, Steve, with some wonderful Yanni. That sounds like a Yanni thing. The pan flute? Yeah, the master of the pan flute. No, that's Zamfir. Zamfir, yeah. Oh, sorry, I confused them.

Yanni is the master of the awesome haircut. Yeah, absolutely. Seth, what about you? I think most of our listeners can't see Steve, but I think just based on his look, I'm going to have to go with a little Elvis Costello. Ah, I can see that. All right. All right, Steve, I mean, you're on a desert island.

You've got some ABBA, you've got some Yanni, Elvis Costello. What are you picking? Got to go with Elvis Costello. Although I'm not a huge fan, I'd rather listen to him than ABBA or Yanni. I think I might drown myself in the island. Safe to say that you and the missus have not been to see Mamma Mia? No, not ever, hopefully. All right, coming up, how much is a CEO worth?

For one major retailer, it's a billion dollars. Details next. Mama mia, here I go again. My, my, how can I resist her? Mama mia, does it show again? My, my, just how much I miss her. This is Motley Fool Money. Welcome back to Motley Fool Money.

Chris Hill here in the studio with Seth Jason, James Early, and Ron Gross. Guys, before we get to more headlines from the week, we need to tell our listeners about the new Motley Fool mobile app. It's free. You can get it at, just go to app.fool.com. You'll get up-to-date investing commentary and analysis, sector-specific news, and of course, you'll get Motley Fool money and our daily market foolery podcast, all for free. Download it now. Just go to app.fool.com. All right, on to the headlines. Energy Transfer has agreed to buy Southern Union for $4.2 billion in a deal that will create the largest natural gas pipeline company in the United States. James, I will paraphrase Ron Burgundy, this sounds like kind of a big deal. It is, Chris, and I do know a fair bit about natural gas.

We have been finding more and more gas in this country. We actually have more installed gas generation capacity for making electricity than we do coal. In other words, there's all these gas plants. They can turn them off and on depending on need. So we have the power infrastructure ready, but what's missing is the transportation. And that's what this merger sort of gets at. Enterprise transfer is strong in Texas. Southern Union is stronger in Florida.

So it's kind of a good mix. The price isn't cheap, which is maybe my only concern. But overall, it seems like a pretty good deal. Shares of JCPenney's were up 17.5% on Tuesday, adding $1 billion in market cap after Ron Johnson was named the company's new CEO. Johnson has a track record of success in the retail industry, first at Target and most recently at Apple, where he was the architect of Apple's retail stores. Seth Jason, our retail guy, what do you think of this? Is he worth a billion dollars? Well, he might've been to Apple and maybe even to Target. I really fail to see how he could be worth the same thing at pennies. This is one of the stranger stock moves I think I've seen in a

while. I think that the Apple stores are cool, but I don't think they're responsible. The design of the stores isn't responsible for the success that the stores have had. That has all been just because Apple has become the it brand. And there's another thing to think about, which is that Apple can afford to have this cutting edge, if you want to call it that, design that's very sparse. There's very little inventory around because they sell, like, 15 things in this store, right? And they're all Apple branded. I think they sell themselves, yeah. Yeah, JCPenney does not have even nearly the same situation.

Can he improve things there? I suppose. Is he going to turn JCPenney into the Apple of the retail world? Never. Ron? I think what he did for Target is probably even more relevant than what he did over at Apple, where he really did turn Target into kind of a savvy store that people really wanted to shop in versus kind of a Walmart kind of competitor.

And he has to do that for JCPenney as well. One thing he said that kind of worried me, he said the single greatest opportunity in American retailing today is the department store. I didn't love that. I didn't love that. What are you going to say on the day you get hired by a department store? I'll give him some slack. James, the problem with JCPenney is it is it's really in between concepts. It's not as nice as Nordstrom's in terms of fashion and service. It's not as cheap as Target. And the brand isn't strong. So it's kind of neither of either world, so to speak. And to me, that spells death in retail. This guy might be able to improve things a little bit. But as long as it has the brand reputation that it does, I just I see it as not a success.

But to their credit, they have 1,100 stores. So, I mean, Seth, you and I have- 1,100 stores that are across the mall from some other chain of 1,100 stores. But you've said in the past that sometimes what you like to do is look for a company that is just doing quite poorly. And your thesis is, wow, if they can do just a little bit better, it's going to be an investment that pays off. No, no, yeah. The shares have to be priced as if the company is about to go out of business. And that's not the case with JCPenney.

I mean, even though JCPenney has lost to the market, their stock has lost to the market over the last five years, it's still overvalued? In my opinion. They are doing some of the right things, though. They're closing underperforming stores. They're closing down the catalog business. They closed down an outlet center. Even before Ron Johnson came on board, they've started to do some necessary things.

Whether that's enough, we'll see where Johnson takes it. What would it take you to shop at JCPenney's? I would not shop at JCPenney's. Why do you walk in there? I don't think I'm necessarily the target audience, to be fair. Anybody here? Yeah, it's just such a difficult question to answer. If JCPenney, they don't pass what is my simplest test. If they disappear from the face of the earth tomorrow, does anyone care?

And I think the answer is no. Sticking with retail, shares of Best Buy were up this week after first quarter sales and profits were both better than expected. Ron Gross, what do you think? Good news. Better than expected news. Let's put it that way, right? Net stocks trade on a daily basis based on expectations, not based on really and truly how companies will do over time. Even though the stock was good, they had strong demand for their mobile phones and their tablet computers, the TV business was weak, same-store sales were down almost 2%, their net income was down 12%. There's a lot of competition in

this space. We actually own it in million-dollar portfolio, and as I said earlier in the week, I've always had this kind of like-hate relationship with this company, and you'll see I did not say love because I really do not love it. It's an interesting business, and they're doing what they need to do by shrinking their footprint and opening smaller stores, but there's a lot of competition. Seth, what do you think? I love going to Best Buy to see stuff once in a while

because sometimes you just want to get your hands on the gadgets, but I almost never buy anything there because the help is awful. I think the only thing they can say best by, and I believe I've said this on this show in the past, is I think they need to roll the dice and spend more money on training and on getting better service. Paying people a wage that makes them proud to work there, I think that's the only way they can differentiate. If they want to compete on price alone, they're dead. Jim Hagedorn, the CEO of Scott's Miracle-Gro, made headlines earlier this week by publicly stating he's looking to boost sales by targeting the medical marijuana market.

but shares of Scott's Miracle-Gro went to pot later in the week after the company lowered guidance for the rest of its fiscal year. Sorry, I couldn't resist. What is the upside of publicly stating this? Let's ask James. I mean, James is our outdoorsy guy. I mean, why would he do this? All the marijuana growers, I'm sure, are using Miracle-Gro already, isn't that right, Ron?

Really, it just seems like a PR disaster when it happened. There obviously is marijuana here in the U.S. sold for medical reasons, but the states are basically doing this in spite of federal law. It's still federally illegal, so the government can always put the kibosh on that. So it seems to have a big political risk and a big brand risk, and it's a small market. So maybe it's just the novelty factor. I don't know. By his own admission, he said this is a niche market. It's clearly one of those things that's not going to move the needle that much.

I don't doubt that it makes sense to go after it, but why would you just be that brazen about it, Ron? Maybe you want free press. It could be the spark they need, Chris. Or it could just all go up in smoke. It's hard to say. Insert cymbal sound here. And finally, Tang, the orange powdered drink that traveled with astronauts to space, has crossed the $1 billion sales mark.

It is the 12th billion dollar brand for Kraft Foods. Guys, I'll be honest, I didn't even know Tang was still being sold. That's why I love this story. From what I read in the story a few years ago, four or five, sales were half what they are now. And you're right, the sales are pretty much dead in the United States. But Kraft said, this is a great brand. They looked at overseas markets, and they tailored the product with different flavors, different serving sizes.

They pushed it overseas, and it's been a huge success, which is really interesting. It shows you that there can be life in a product that everybody else considers dead, but you have to have a good strategy. Good for Kraft. Were you a Tang drinker when you were a kid? I think probably. I remember a lot of orange stuff. so so just it's all a blur your childhood is a blur of orange does it taste more like orange

soda what is it i don't know i do but i feel like you remember those saint joseph aspirin those those little orangey yeah to me that's the flavor i remember tang having it tastes a little better than that and the thing that's funny in america we've you know people have at least of a certain affluence level have kind of moved beyond these sugary drinks but for people in foreign countries who don't have access. I mean, orange juice is really pretty cheap for us. In other countries, you can't get orange juice. You can't get something like this. And so the story said is this is seen as a reasonably healthy, reasonably inexpensive beverage. And I think that's just what's selling it. James, you're a resident. I see it as a sign of the end times. I was going to say,

you're a resident health nut. Yeah, I wouldn't go. I mean, I don't even know where to buy Tang if I wanted it. But I think Seth's point is correct. Somebody else is buying it because I just don't see it around here. Drop us an email, radioatfool.com. Tell us, where can we buy some Tang? And our global listeners, anyone who can give us the weirdest Tang flavor they've seen on the shelves, we would love. Send a package.

Exactly. Radioatfool.com. All right. That's Jason, James Early, Ron Gross. Guys, we'll see you later in the show. Up next, a conversation with CNBC's sports reporter Darren Revell about the future of pro sports, Comcast's attempt to make money off the Olympics, and the business of LeBron James.

This is Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. LeBron James and the Miami Heat lost to the Dallas Mavericks in the NBA Finals. James has been taking a lot of criticism for both his performance on the court and his statements off the court. So what does the future hold for LeBron James Incorporated? Here to shed some light on that and some of the other big stories in the world of sports business

is CNBC's Darren Revell. Darren, welcome back to Motley Fool Money. Thanks for having me. So how badly damaged is the LeBron James brand? As damaged as a brand can be without a criminal event. Listen, I have no idea how hard it is to be him. But he has clearly, the self-dubbed king has clearly surrounded himself with yes-men. And he's lost all sense of reality.

and uh you know in some way he has fallen farther than tiger because tiger didn't do anything to you tiger ruined his family and uh his relations with his wife and maybe his children are compromised but he didn't really mess with you lebron messed with you as a sports fan if you're a knicks fan or a bulls fan he he messed with your mind he waited until the last second and he screwed his greatest supporters in Cleveland. And I think LeBron thinks it's because of the decision to go. And I think half the fans in Cleveland are unrealistic and are angry at his decision to go and think he should have played in Cleveland all along. I don't think those people are right. But I do think that there are a good amount of people who are upset about the way

the decision went down. And it's pretty amazing because over the past couple days, I've kind of asked myself whether winning, we always use the winning will cure everything, whether winning will really cure everything for LeBron. And it sounds like you don't think it will. I don't know. I mean, I do think it will if he hires people he's willing to listen to and willing to hear advice from. You're listening to Motley Fool Money. My guest this week is Darren Revell from CNBC. You can also follow him on Twitter. Speaking of Tiger Woods, he and LeBron James are probably Nike's two biggest athletes that they have under contract. From a business standpoint, which one of those guys do you think Nike is more worried about?

neither i think nike is the dirty little secret is they don't need either of them that's why nike is nike i mean i know that's probably shocking especially from a motley fool standpoint i mean nike is so good at what they do that i think they needed tiger to launch their golf business and legitimize them but i think they're so good at what they do know what if you're looking for a collared golf shirt for the most part and you're not a niche guy so you're not looking at the niche brands nike blows away the competition they simply make the best shirt you understand what i'm saying and so so at the end of the day being a company with 22 billion dollars in sales it's it's not going to significantly move the needle and it's not

going to significantly hurt Nike. From a LeBron standpoint, you know, they come out with limited edition amounts. What I'd be interested in is if they made as much LeBron shoes as they could sell and as much Kobe shoes as they could sell, who would win at the same price points? Because clearly they are giving the creative and the better designers, I believe, to Kobe. Kobe has a shoe That's the low-cut shoe. It's different. It's not what every basketball shoe has been. That's the innovation.

LeBron's the same old stuff, but, you know, you put a different color on it and put a couple drawings on it. You're listening to Motley Fool Money. Our guest this week is Darren Revell from CNBC. Moving off of LeBron James and sort of widening our scope a little bit here, we've got in the major sports leagues, we've got labor disputes in the NFL and the NBA. And in the recent past, we've had the same in Major League Baseball and the NHL. I'm curious what you think about, in terms of, from a business standpoint, which league do you think is the strongest and which league do you think is the weakest? The NFL is the strongest. And the weakest right now is the NBA.

The reason I say that is just from a – I answer questions from a financial standpoint. The NFL is going to get their deal done. They're going to be great. No one's going to walk away. The NHL is doing really well for their niche. It's, you know, you thought I was going to answer NHL, but no. They're good for their niche, and they're doing as well as they can. Actually, Major League Baseball is suffering pretty badly.

I mean, if you follow my Twitter feed, I've tried to stop tweeting out the empty stadium pictures, but I can't. I mean... They're just too tempting. I mean, the first pitch at Dodger Stadium last night on a bobblehead day, and there's like, I don't know, 4,000 people there in Los Angeles? Or, I mean, the Marlins games, where there's clearly less than 1,000 people in the fifth inning.

So baseball's suffering, and baseball suffers because the season ticket is dead, right? I mean, there's no redeeming quality of the season ticket anymore. Oh, I get to sit in the same seat every time. How great is that? Right now you can pick and choose anything on the secondary market. So I think because their intent on their 162 games because of tradition and the season ticket being dead, I think baseball's in a tough situation. The NBA is in a tough situation because I think they do have massive problems. I do believe the NBA's tax-audited annual losses of $325 million a year,

and there are teams definitely suffering. There's no doubt in my mind as we sit, the NBA owns the New Orleans Hornets, and their best financial move to make money as quick as possible is to contract them so that you split it, split all the revenues by one fewer team. I don't want to get you in trouble with your employer, but I do need to ask about the Olympics, because recently Comcast bid $4.4 billion. I'm willing to talk about it. They haven't stopped me from commenting on it.

From looking at the numbers, I don't believe ESPN was there to really bid. I honestly think they got caught in the whole, let's, see, the thing is that I agree with. It's very frustrating, but the idea of putting it all live does not allow you to put out the best bid or make the most money. I'm just telling you that. And I think that's what ESPN got caught up in. I think they had told the media that everything was going to be live, and then when they ran the numbers and said, what kind of ads can we do at 10 a.m. figure skating, the people came back and said, you can't. Now, will Comcast make money off it? I'm not sure.

I was surprised the numbers came in a little bit higher, even though they're doing the same deal basically for the first two Olympics. but I trust that they know the numbers. But just for the sake of context, NBC lost over $220 million on the most recent Winter Olympics in Vancouver. And might lose more on London, right. And yet Comcast CEO Brian Roberts says, we're going to make money. Yep. Listen, who the hell knows what our watching habits are going to be in 2020? What I do know is, hey, I wouldn't knock out the idea of an Olympic channel that runs forever.

I mean, one of the problems is, you know, after two weeks, it's gone. You know, I know you have Universal Sports and stuff, but they might figure out how to do it. But there's nothing like sports in terms of being able to get the advertising dollars because it's live. And it's a race like we've never seen. You're listening to Motley Fool Money. Our guest is Darren Revell, CNBC sports business reporter. Darren, time to wrap up with a round of buy, sell, or hold. Let's start with someone else whose reputation has taken a beating,

especially in the wake of a recent 60-minute story. Buy, sell, or hold, Lance Armstrong. I'm going to hold. And I say that because I'm not sure, you know, it's the cancer thing. I mean, he's raised $450 million for, you know, cancer research. My question is, you know, we tried to take Barry Bonds down, and it didn't really work. We're now taking Lance Armstrong down or trying to under the guise of the U.S. Postal Service. You know, did he fraud people because that was the sponsorship?

Let's just take away the cheating stuff. Again, I'm in the business. I cover the business side. The U.S. Postal Service paid like $30 million a year for that sponsorship. If we don't get our Saturday mail, it's not because of Lance Armstrong. It's because they lost $6 billion last year. So from the business standpoint, I don't get it. And then I also am not sure we want to take this man down.

He has some use in this world. And I know people will rat on me and say, oh, come on, I think he cheated, and we should, you know, he's a cheat and he deserves to blow up all his Twitter friends' victories. At the end of the day, I think you've got to step back and say, just what are we doing here? Barry Bonds, go bust him. Lance, I'm not so sure. This is a global NBA star who may have to retire because of recurring injuries. Buy, sell, or hold Yao Ming? Sell. I mean, the guy was going to be, you know, the next big thing in China.

Reebok stole them from Nike. I couldn't believe Nike was passing on them. I knew China was going to be the next big market, and this guy, he has busted out. It's all the rage for some mobile users, and it's an incredibly popular game. Buy, sell, or hold Angry Birds. I'm going to hold because I feel like we're kind of reaching the tipping point on Angry Birds. I've stopped playing it. I'm looking for the next thing.

It's the Ravel Index, is that it? Yeah, I'm moving on. This makes some of the action in the NFL look tame by comparison. Buy, sell, or hold the future of mixed martial arts? You know, they're now looking with Comcast into buying the G4 network. I'm going to buy. I'm cautious about it. But I'm on the buy side there.

I won't buy too many shares. but i'll buy and finally you're on twitter you just got your mom on twitter buy sell or hold the business future of twitter that's the best question in this entire interview i swear i saved the best for last no i can't honestly i'm trying to figure out how they're going to make money i it it bothers me because so the promoted tweet what it used to cost like 40 000 now it's 140 i I mean, that's not where it's at. I'm just buying TweetDeck or whatever. I mean, come on, you've got to let app people do their thing.

I don't know how Twitter's going to make money, and I don't think they do either. It's kind of scary because it's a tool that I have devoted 17% of my life to over the last year. My wife would be upset, too. Actually, she wouldn't. That sounds like a sell. Yeah, I'm going to sell it right now, because they haven't convinced me how they're going to make money. Are you buying, selling, or holding? I'm holding, but it's one of those positions that I check on a monthly basis.

But like Pandora, hey, who needs to make money? Exactly. He is CNBC's sports business reporter. He is the best in the business. Darren Revell, thanks so much for being here. You got it. Give me some money. Give me some money. 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, Seth Jason, James Early, and Ron Gross. Guys, time to welcome in a new station, WHAN-FM 102.9 in Richmond, Virginia, another station here in our beloved Commonwealth. Before we get to the stocks on our radar, you can always drop us an email, radioatfool.com. I wanted to share one email that we got from Seth Balaban in Louisville, Kentucky. I like him already. Guys, big, big fan of the show. Keep it up.

I'm an advisor slash portfolio manager at UBS in Louisville, and I also run a ready gourmet cupcake business from my home. And he sent us a link. It's Extreme Cupcakes is the name of the business, Extreme Cupcakes in Louisville, Kentucky. Seth Bellabend, thanks for the note. Where are the cupcakes? They look amazing.

The peanut butter on the page two of the link looks delicious. Yeah, I mean, the cupcakes look great, but it's the internet. We have no way of knowing if these are actually Seth's. So, obviously, if Seth wanted to send us some cupcakes. Yeah, I think a free plug like we just gave Seth is probably worth some cupcakes. Just, you know, drop us an email. Or, you know, just go ahead and send them to 2000 Duke Street in Alexandria, Virginia. All right, time for the stocks on our radar.

And we will bring our man Steve Broido in from the other side of the glass with a question for each one of you. Ron Gross, you're up first. Chris, I must go back to Microsoft. I must. It's just too cheap. M-S-F-T, at $24 a share. The company has a 2.7% dividend yield. If being undervalued wasn't enough, the stock is priced for very little growth right here, yet it is growing, despite what people think. It is a growing company, and it is very undervalued here.

They had $8.7 billion in operating cash flow in the last quarter alone by Microsoft. Steve, what do you think? Sure. Ron, how is it possible that the shares have gone nowhere over the last decade? I've built multiple computers. I've bought many copies of different Microsoft OS products. I don't get it. It doesn't make any sense to me. It's hard for me to obviously say why a stock does what it does. All I can look at is the company and the value. The company has paid out dividends quite a bit, and they've bought back a lot of stock. So, the fact that the company hasn't gone anywhere doesn't mean

that value wasn't created and value wasn't shared with the shareholders. James Early? Chris, I'm going with Greif. This is an industrial packaging maker. I'm sorry, what? Greif? That sounds like a made-up name. GEF. GEF-B, actually, is the class of shares I'm going with today.

This is an I.I. recommendation. I'll say that. It makes steel drums, flexible bags for putting stuff in, and it buys up these little packaging makers and makes them more efficient. It's a boring company. It pays a 4.2% yield if you buy the B-class shares. Put limited orders in because there's a lot less liquidity on the B shares, but to me it's a better deal when you buy the B shares.

Steve, your question? What's the ticker symbol on that? G-E-F-B, or .B, depending on what the feed you're using is. Gotcha. My question for you, James, with fuel prices being uncertain, a shipping company, how might they be affected by that? It's not so much a shipping company. It's more of a packaging proper. Oh, I'm sorry.

But they're still packaging products. They do use some plastic resins, yes. So the oil prices affect not the steel somewhat, but the bags. So, that is a factor, but usually they can bake these things into their cost because the people who are buying these things have to use the products one way or another. And again, it really does sound like a made-up company. So, what is the origin of the name Greif? Greif Brothers, I believe, were some of the founding guys along the way. No offense to the Greif Brothers, but it's like our colleague Jim Gillies, who's been on our Market Foolery podcast, who lives in Canada, and the town he lives in is Guelph.

That's made up, too. I mean, Guelph. It's from a Tolkien novel. No, it's not. It's an Italian political party from the medieval period. No, it's Middle Earth. Anyway, Seth Jason, your stock this week. Well, speaking of companies that are priced as if they're going out of business

and they're not so great and all they have to do is get mediocre or maybe not even that to pay off as an investment, this one comes from my colleagues at Hidden Gems, Radio Shack. Wow. Yes, the butt of many jokes, Radio Shack. But when it's got a 2% yield, produces a lot of cash, trades at eight times earnings, and even lower multiple of enterprise value to EBITDA, really, take a look. R-S-H. Steve, you're a big fan of RadioShack, aren't you?

I do go there sometimes. I do like electronics. My question for Seth is, how would you fix RadioShack? I know how I'd fix it. The first thing I'd do is I'd change the name. I'd remove Radio and Shack. Radio and Shack. I think they're keeping the shack portion, unfortunately.

I don't know that they do need to do a lot to fix it. I look at it this way. If I came to you with this business and it was five stores, Mr. Steve Broido, and I showed you how much cash they make and how much cash they could potentially pay out to you over the years of holding them, you would look at the financials and you would not balk at buying it at this valuation level. It's only because it's a stock and people are looking for constant growth that companies like these get pushed down to these levels.

If you could buy, it was a smaller chain, and you could buy the whole thing, you'd look at it, and I think you'd buy it. I just don't know what Radio Shack's purpose is. I don't know why. It seems like people go there for very different reasons, and it doesn't seem like a consistent reason. Yeah, they go there. Well, they're trying to do a little more with the phones. But people go there who are unfamiliar with tech and want a little bit of an explanation. People go there who are interested in all those doodads for hooking up.

You know, there's still people, believe it or not, who want those electronics parts. I go in there once in a while for that weird stuff. All those round batteries that you can't get at the supermarket, that's where you go. Yeah. Steve, do you have a name in mind? I mean, obviously, when you're CEO, you'll get rid of Radio Shack. And you can't take Greif, because that's taken. The obvious one is Technology Hut.

All right. Seth Jason, James Early, Ron Gross. Guys, thanks for being here. Thanks, Chris. Thanks to our special guest this week, Darren Revell from CNBC. Our guest next week will be Luanne Loftin, author of the new book, Warren Buffett, Invest Like a Girl and Why You Should Too. goes on sale June 21st, but you can get the first chapter for free. Just go to www.fool.com slash girl. 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.