Motley Fool Hidden Gems Investing - Motley Fool Money: 07.25.2014

Episode Date: July 25, 2014

  Shares of Facebook hit a new high. Chipotle serves up big gains.  Amazon stumbles. And Apple rises. Our analysts discuss some of the week's big earnings news and take stock in the business of Comic-Con.   Learn more about your ad choices. Visit megaphone.fm/adchoices

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. It's the Motley Fool Money Radio Show. I'm Chris Hill. Joining me in studio this week from Motley Fool One, Jason Moser, and from Million Dollar Portfolio, Charlie Travers and Ron Gross. Good to see you gentlemen, as always. How are you doing, Chris? We have got the latest on tech stocks, restaurant stocks, and the latest hot IPO.

We will head to California for a report on the business of entertainment. And as always, we'll give you an inside look at the stocks on our radar. But we begin this week with the social network. Shares of Facebook hit a new all-time high after second quarter results and run. Overall revenue up 61% and profits more than doubled. Me likey. Yes, yes. This is part of the million-dollar portfolio, yes?

Yes. Big position for us. Really nice to see. What stood out? 62% of ad revenues now come from mobile. That's $1.7 billion, squarely putting them in the number two spot, still behind Google. But there's an interesting differentiation going on, because as we see, and we talk about it a lot, you see Google's prices that they can charge are slowly coming down. Facebook's prices rose 123% this quarter. So it's an interesting distinction. How are they able to do that? Volume. No. They clearly have a product that people are interested in moving towards. The newsfeed

ads that they now have command a higher price, and that's really driving that number. When you look at the stock, though, is this now ... I mean, you're a value guy at heart. Is this now getting to be a little- A value guy at heart with Facebook in the portfolio. Yeah. No, we're looking at the valuation now to give it an update in light of these numbers, but it's still a buy for us. We're still happy owners in the portfolio. Full disclosure, we did sell some recently for portfolio management reasons. It was really after a run-up getting to be a very significant percent of the portfolio, so we just pared it back a little, but we're

still happy owners. Yeah, I think the interesting thing about Facebook here is that no matter really how the business does, they're at this point with scale and the number of eyeballs that they capture, and the money's starting to come in, they can really just kind of take this business in any direction they want. They have the money to do it. I wouldn't be surprised at all to see Zuckerberg maybe issue a few more shares here at some point and do another deal, just because it's kind of cheap currency there. That's funny.

You said take the business wherever they want. With some of those recent acquisitions, they're doing just that. Well, and that's just it. I mean, if they can't do it in-house, they go buy it, right? I mean, that's obvious. That can be scary, though. It can be very scary. You don't want to have a blank check just for anything.

But I'm going to give them the benefit of the doubt, at least up until now, that they're making some good and interesting moves. Well, let's go back to Google for a second because once upon a time, it was a very legitimate question about Facebook. Would they be able to monetize mobile? They have clearly answered that. But what I hear now that not only are they in second place behind Google, but they are raising rates at a time when Google is cutting them back. Are we setting up for an inevitable clash of the titans here? You know, we can go to the other side of the coin now and say something nice about Google in the sense that while their prices are declining, their volumes are actually going up. And we talk about that quite a bit.

Facebook's a little bit different. Their ad impressions actually fell 25%. So while they were able to raise prices, that shift to mobile actually brought ad impressions down. So Google is capturing more. Facebook is capturing less. I'd say the biggest risk for Facebook is they have to avoid cluttering up that news feed, right? I mean, we were talking about this before taping, and the Facebook experience now is seeming a bit cluttered. And I think that's going to be a delicate balancing act that they have to continue to work on.

When Chipotle announced they were going to raise prices because of the higher cost of chicken, beef, and avocados, some on Wall Street wondered if there might be a backlash from customers. And, Jason, I don't think they have to wonder anymore because second quarter profits came in much higher than expected. Same-store sales for Chipotle, 17% increase. Jason likes his chicken spicy. It was a great quarter. I mean, I think any questions over Chipotle price hikes and how that would threaten the business have been officially put to rest. Because this, we saw the results plain as day here.

They were able to pass that price increase through. It's now in all of the stores. Traffic just continuing to grow. I mean, top-line revenue up 28.6%. Just phenomenal. comps up 17.3. The scariest thing is here, when you look at what this company still has to do, like the shophouse concept, the pizzeria locale concept, you've got a management team that is obviously married to the success of this business. And it truly is a stock that you want to own for

the next 20 years. And I don't see my shares going anywhere. Even with the price hike, it remains one of the best values around in food. If you compare the price of, say, going to get burritos for two people versus ordering in pizza or Chinese, at least in this area. The food is better at Chipotle, and it's still cheaper than those competing options. We go there at least twice a week because of that. Yeah. And another thing to note, too, is that with the price hikes, you see maybe some people trading off going from steak to chicken. Chicken's actually a higher margin item for them. So they make a little bit of it up that way as well. So it's a great business. They've obviously thought it out very well. They've executed on virtually

every front. I don't see any reason why that shouldn't continue. I mean, at some point, they're going to be a victim of their own success and have to clear those high hurdles. Maybe the stock pulls back on one of those quarters, and that could be a good opportunity to buy some more. That's when they bring bacon back to the beans. Well, and also this week, we saw McDonald's, a obviously much larger restaurant company, the largest in the world, really struggling with same-store sales. And I think it was pretty easy to kind of predict that was going to happen, because

You know, Chipotle's success is coming at the expense of fast food restaurants like McDonald's. Domestically speaking, they're just facing tremendous headwinds. And the biggest problem that they face now is that because fast casual is kind of disrupting fast food in general, if people are focusing more on the quality of the food and you have concepts like Chipotle, Shop House, Panera, the like, you know, McDonald's is having a really hard time trying to convince people that they're able to add more quality to their menu because that brand just screams value. It's not a quality proposition at all. Shares of Baidu hitting a new all-time high on Friday.

China's No. 1 search engine came in with second-quarter profits up 37%. And, Charlie, just like we talked about with Facebook, mobile was a challenge for Baidu, and it is now starting to really contribute to the bottom line. Yeah, that really seems like a concern that was, say, a year and a half, two years ago, about all of these companies that was really wrong. You know, we're seeing these leading tech companies across the board just nailing it on mobile. You know, 30 percent of Baidu's revenue does come from mobile right now. And a lot of that is search.

So I feel like they've handled that transition very well. But even more interestingly about Baidu is what they've done is building off of that core competency. They've spent billions of dollars in the last two years to basically make a land grab in mobile. So if you think about what you want to do on your mobile phone, you know, people want maps to get directions. They want to watch videos on their phone. They want to download apps. But I just spent a lot of money to be the market leader in all of those areas. So search is their bread and butter.

It's what they're known for. But they're also number one or number two in all of these other areas. So when they guide in Q3 that they're going to do 50% revenue growth again, I think, I mean, that's just amazing for a company that's doing $2 billion a quarter in revenue. It's just huge growth. But they're now the one-stop shop for what people do on their mobile phones. And I see this as a very long-term growth story because of it. So you're not concerned about the fact that they are so dominant in China, they almost have nowhere to go in terms of market share growth?

Not in search, but in some of these other markets, being number one means maybe 25%, 30% market share. So there is growth there, as well as just user demand is going up as well. The day after Amazon reports earnings, its stock has averaged a move of nearly 10%, sometimes up, sometimes down. But that is the average price swing, and that was the case on Friday as shares of Amazon fell around 10% around second quarter losses, nearly double what analysts had been predicting. And we were talking earlier, the fact that Amazon comes out and doesn't really report any sort of profits is in news. But I think this was a miss that was sort of bigger than expected, and therefore the stock's kind of getting punished. Definitely larger than expected.

They don't give shareholders what they want. The conference call is really thin. There's not a lot of meat there. And that's the way they run their business, and people are getting a little bit fatigued about that as well as the lack of profitability. I am not one of those people. I knew what I was getting into when we took a position at Amazon. I'm willing to give Jeff Bezos the benefit of the doubt that the spending on warehouses and expansion to China and buying digital content for streaming is going to pay off down the road.

I'm willing to be patient because I think these things are huge. However, there's a lot of folks who are saying enough is enough. I'm hearing the word competition this time around more than I've heard in a long time, Google, Microsoft, Amazon. And finally, the one thing that I was a little bit troubled about is seeing Amazon Web Services having to cut their prices rather significantly to follow on Google doing the same thing earlier in the year. That's something I'm going to keep an eye on. Jason, this is a stock that has been a big winner over the long run. But in the short run, this is one of those stocks that if you have

trouble sleeping at night, this might be one to skip. Yeah, I mean, it's a dangerous one to look at really analyst expectations. Because while you can sort of model out what top line growth might might be, I mean, understanding profitability is a whole different ballgame, because they're always spending so much money to invest back into the business. But yeah, I think that we know what we're getting with Amazon. We know that Jeff Bezos is just the quintessential long-term thinker. And this is a company that you want to own the stock for the next 10 years to play into that longer-term trend of e-commerce and the potential that Amazon Web Services has. It's not one that you want to hold overweight in your portfolio, because

You have a lot of volatility in the stock. Personally, I still feel great owning the stock. But again, I own just a modest position, nothing that keeps me up at night. It seems like we're sitting around Thanksgiving dinner at the Bezos household. Everybody's being nice to each other. I'm going to call them out here. What is so hard about telling us how many Prime members you have, how many Kindles you sold, what kind of sales you're doing in different geographic regions,

When your shareholders, who are the owners of the company, are kind of questioning your investments, that kind of transparency goes a long way to easing their minds. I don't think it's that big of an ask. It'd be nice to get it. I'll point that out. They said that the sales of the Fire TV device had exceeded their expectations, but they didn't tell us what the expectations were. That does suck. I'd like to get more information from them, but we're not going to get it. Charlie wins that round.

Coming up, Earnings Palooza rolls on. Stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, Charlie Travers, and Ron Gross. Under Armour's second quarter sales rose 34%, and shares of the athletic apparel stock up nearly 20% for the week. Jason, I know Nike isn't necessarily worried about Under Armour,

but I have to believe Adidas is probably starting to get a little nervous. Yeah, it's a big enough playground for all of them to play, but certainly Under Armour is picking up share. You know, the first half of this year, they just surpassed $100 million in international sales. To put that in context, in 2012, for the whole year, they did about $108 million in sales. So, they are picking up international share. You know, I think that when we see the results that Under Armour and Amazon have brought, you know, top-line speaking, there's no retail funk. So, I think we've kind of dismissed that.

You know, I think retail is just a tough industry, and some are better than others. You know, I think that one thing that you look at with Under Armour, they've done a really good job with footwear. I think that was something a lot of people slept on for a long time, because Nike has done so well with that market. But their footwear was up 34% for the quarter. And again, they continue to kill it with direct-to-consumer growth of 38% for the quarter there. It represents 31% of overall revenues. Those are higher-margin sales. It just trickles all down to the bottom line, and you have phenomenal management.

Kevin Plank, just a wonderful holding. This is one of only five stocks in the S&P 500 that have doubled in the last 12 months. Is it starting to get pricey? You know, I don't like buying stocks after 15% pops. I'd rather buy it after a 15% drop. I don't think it's absurdly overvalued, though. When you look at the overall market opportunity, the international market opportunity that's just brewing, I would be more comfortable waiting for some bad news to come out and see a little pullback. And you see that a lot with retail. Mixed bag for Microsoft's fourth quarter, revenue of more than $23 billion. That was pretty

good charlie but uh profit of four and a half billion a little bit lower than people were expecting what stood out to you uh the biggest surprise for me out of the quarter was actually bing search ad revenue growth of 40 percent what yeah really yeah that's a decimal off there uh they claim they have 19 market share in the u.s uh been beaten up on bing everybody laughs at it but it actually seems like it's doing pretty good uh and to show ad revenue growth at a time that Maybe Google's shown a little bit of pricing pressure. It's just interesting. But I think more importantly is new CEO Satya Nadella is really turning this into a cloud company.

Ron mentioned a little bit of Amazon's troubles with Amazon Web Services. At the same time, their competitor Microsoft is just crushing it in the cloud. Their revenue was up, I think, 147% on the commercial business. That's now a $4 billion business for them. And I think bringing Office onto the iPad was one of the smartest things they've done so far this year. They said they've had 35 million downloads of Office onto the iPad. People like Jason here bringing their iPad in the Office to work, being able to get Office on it is huge for them. You've got the Word app on there. It's pretty sweet.

Hey, do you think Bing's search growth comes more at the expense of Google or Yahoo? Yahoo, for sure. When you look at the stock, Charlie, it's at a 14-year high right there in the mid-40s. 40s? Same question as I asked Jason. Is this getting a little pricey? It is on the high end of what I think it could be worth. I think somewhere in the high 40s. So we're not that far from that. Shares of Apple up 3% this week after third quarter results. Ron, let me hit you with a few numbers. 35 million iPhones sold, $37.4 billion in revenue, and $7.7 billion in profit.

46 billion in operating cash flow. Not too shabby. The one dark spot was iPad weakness down 9%. I think that got people a little spooked, although nothing too drastic happened to the stock. We keep waiting. It's the same old story. We're waiting for the new stuff. Come on, guys. Let's get the bigger iPhone. Let's get the watch. We did get a nice partnership with IBM to attack the corporate market. I said in an earlier show, I do like that. We need the new pipeline. We talk about that, but I feel like we're getting company because when Apple reported earlier this week, I saw a lot of coverage in the financial media that was just sort

of like, yeah, yeah, yeah, that was this quarter. Let's talk about the fall. And I'm wondering, when you look at this company, and the stock has done very well over the last 12 months, it really does seem like pressure is increasing on something that causes people to say, wow, whether it's a new feature on the iPhone 6 or an iWatch device that makes It's people like me and Jason who don't wear watches. I wear a watch, but that's just it. I think you have your watch enthusiasts who probably wouldn't get a smart watch.

I just have to question whether that's going to be a real needle mover. Yeah, I think you're right, Chris, but I also think this is not the only time we've said this. We keep saying they got to, they got to, they got to, and I'll say it again, they got to. They keep saying we've got a really robust pipeline, and I take them at their word because if they don't, then they're just shooting themselves in the foot, coming out with bluster like that. But the stock has done really well. So for it to kind of get over this next hurdle and get into an even different valuation range, we need to see something that excites people.

We've asked before, and we've always been turned out, we've never been invited to an Apple event. Do you think maybe this time we could get invited? Do you think the radio show could get invited to the event in the fall where they unveil the devices? And we could do a live blog like they have sometimes? Sure. We'll do whatever they want. If they invite us, drop us an email, anyone who works at Apple. Radio at Fool.com. We'd love to be there.

We promise we'll say nice things. We will absolutely say nice things. No, we don't promise. Well, maybe I promise, and maybe Ron can kind of be there to counter that. How about that? We do not invest in IPOs, as we talk about from time to time, but we do love talking about IPOs. El Pollo Loco, the quick service restaurant chain, went public on Friday, shares up more than 30%. And I don't know what I love more, the fact that El Pollo Loco is now a public company

or the fact that the ticker symbol is Loco. That's a nice one. Have you ever eaten at the Crazy Chicken? There are none around here. No, there are none around here. I've never even seen one. Charlie, guys, I've heard of them. Never been.

Let's go to the other side of the glass. We know our man Steve Broido has frequented Olive Garden. Steve, have you ever found yourself at or near an El Pollo Loco? Isn't this the one at Breaking Bad? That's Pollos Hermanos. Totally different. I've never been to an El Palo Loco, but it sounds delicious. Is that a made-up restaurant?

That's the restaurant in the show, yeah. It serves as a vehicle for bad things to happen. I think we need a road trip. I think we need to head out. Actually, we're heading out to California, Steve. Do you think maybe we can hit an El Palo Loco? I hope we have plenty of time. Yeah, San Frans.

Let's look that up after we get done. All right. All right, guys. Thanks for being here. Up next, we are heading to San Diego for a report on the latest happenings in the entertainment industry. Comic-Con is next. You're listening to Motley Fool Money. Welcome back to Motley Fool Money.

I'm Chris Hill. In 1970, a small group of 300 comic book enthusiasts gathered in San Diego for their first comic book convention. This week, more than 150,000 people are attending this year's San Diego Comic-Con International. One of those people is Motley Fool analyst Tim Byers, who covers technology and the entertainment industry for Motley Fool Rule Breakers and Supernova. And he joins me now from San Diego. Thanks for taking a few minutes away from Comic-Con, Tim? Yeah, no problem. No problem. I mean, I can only give you a few minutes because there's too much good stuff here. No, anything for you, Chris. It's a great show, and it's always fun to be here.

Well, it's pretty interesting. When you look at the history, something that started out as this small convention just for comic books is so much more for the entertainment industry. It's movies, it's television, it's video games. It's huge now. It is. More than 150,000 people, my guess would be more than 170 000 in total foot traffic by the time we're done with the weekend and you're right everything that you know is participating in the entertainment industry is here in some fashion because this is the entertainment industry's proving ground if you get these fans these are the this is where the deep pockets are these are the hardcore fans that lead uh movie openings so So, you know, for example, these are the ones that showed up and generated the buzz for Iron Man

when Marvel Entertainment was still independent before it was bought by Disney. And, you know, they led that rally to, you know, support that film and made Marvel Studios what it is. 2010, Twilight, you know, there are several inflection points in the history of Comic-Con, but 2010 has to be considered among them. And that was the year that Twilight took over the, you know, the famed Hall H. It's about 8,000 seats, about 8,000 people. But that year, you know, teenage girls camped out for like three nights in a row because they just wanted to get in and see, you know, the stars of their favorite movie, you know, starring sparkly vampires. It really is when genre entertainment kind of crossed this point where it became, all right, this is now.

It was always big. it was always growing, but then it became Hollywood's proving ground. So if you can prove it here, if you can prove the concept here, there are exceptions, but if you can prove it in a mass audience here, then chances are it's going to get a lot of money. It doesn't mean it's going to succeed, but if you're an investor and you're an investor in any kind of media stocks and you're not paying attention to what is airing at Comic-Con, then you don't really know where the money that the companies you're investing in, you don't really know where they're spending their dollar, because they determine it here.

And for anyone who has ever seen media coverage of Comic-Con, a lot of times it's people who are dressing up in costume and that sort of thing, which is, obviously, if you're a fan, you're an enthusiast, that can be fun. But to your point, this is very serious business, particularly for the movie industry. So for this Comic-Con, what should we expect to hear? A couple things. I mean, the two majors, the big two are, of course, Disney and Time Warner. And they are the ones that get the prized airtime on Saturday. They get it Saturday afternoon and Saturday night. This year, Marvel goes first. They'll have Hall H in the mid-afternoon. And Marvel has eight untitled, I should say, movies upcoming.

And if you know anything about the way Marvel Studios works, it's run by a small team. It is a subsidiary of Disney, but it's run by Kevin Feige. And so those guys have a budget, and they are putting out movies, and they've been wildly successful at it. It looks to be that they're going to amp up their schedule from two films a year, typically sometime in the fall and then in May or sometime in the summer in May to three a year. They're going to go May, July, and November, and the schedule now goes out to May 2019. So here at Comic-Con, they're going to give us some sense of what those films are going to be. Remember, these are films that are going to get anywhere between $175 to $250 million in production budget.

serious money but you know marvel films have been generating at least 500 to 600 million at the low end recently in terms of total box office so there's there's reason they're putting all that money into these films so you know the question is how far are they going to push it we've got most of the main characters out of the way are we going to see more strong female characters like a black widow film are we going to see like the black panther a popular african-american hero we don't Know that yet, but we're going to find out more of that here at the show. For Warner, it's all TV. It's almost exclusively TV.

Stephen Amell, the star of Arrow, is going to be emceeing the night of Warner Entertainment, DC Entertainment. And Warner has four TV shows that they're betting pretty big on this fall. In addition to Arrow, they have The Flash. And I did get to see that pilot last night. It won't ruin it for anybody, but I think it's very good. I think it's a winner. And if you're Warner, a winner in this case doesn't mean like 10 million viewers.

It only means 2 to 3 million. They have a low bar because this airs on the CW. There's also Constantine coming to NBC, and you also have Gotham that is coming to Fox. Warner's a little different in this sense. They have their own stuff, but they tend to license it out. But in each case, those productions are going to feed Warner profits. And, you know, the more popular those shows are, the bigger the buzz, the better that is for them. And it could filter up into the movies they want to make.

You're listening to Motley Fool Money, talking with Motley Fool analyst Tim Byers, who's covering San Diego Comic-Con this year. From a business standpoint and, therefore, from an investing standpoint, what company has the most to gain? Warner. Warner absolutely has the most to gain, even though they're not here talking about the upcoming, you know, DC Comics movie slate. What I mean by that, you know, you've got Batman and Superman.

You know, next year we're going to have the Batman versus Superman, Dawn of Justice, big stuff. You know, they're going to put a lot of money into that. That universe is separate from what they're doing on TV. But, boy, they are building quite an expansive TV universe. And so if they really hit the mark here, if those pilots are very well received, and not just the flash but all of them, it gives them an opportunity to generate not only some meaningful buzz but some real profit because a key change just happened in the TV industry that really went unnoticed, I think, by a lot of investors and shouldn't have. The advertising industry typically buys their spots in 30-second increments, and usually over the three-day, live plus three days. That has been the industry standard for years.

And that usually, you know, if you're agents of S.H.I.E.L.D. or if you're a show on the CW, that's usually terrible for you because those are shows you can easily miss. You put them on DVR. You get them on demand later. And so the ratings, the live ratings, are usually not that great. But if you measure them on the seven-day rolling period, the numbers go up dramatically. And when the numbers go up dramatically, you can charge better ad rates. And so finally, the industry, which has sort of been shaking Madison Avenue by the collar for years,

saying, these numbers are wrong, you have to let us do C plus 7, they're finally going to get that. And in Warner's case, I think you're going to see, if these shows hit, some better advertising rates, some good profit in a meaningful portion of their business. Warner does a lot of television. Is there anything in particular we should be watching in the video game industry? because last year Walt Disney kind of made a splash with their Infinity game system. They sure did, and this year Activision Blizzard is going to be talking up not only the entire Skylanders universe.

Activision is making a surprisingly big bet on Skylanders, and maybe surprisingly is the wrong word here, because this is, after all, a franchise that's done more than $2 billion in total sales, which is pretty amazing when you think about it's a game driven by toys but it is the innovator in the space and they came out with this in 2011

here at Comic Con they're going to be talking up new versions of Skylanders, new ways that you can interact with the game they're not going to be talking about this to the same extent but in recent months they have done some Skylanders merchandising

that's kind of new You know, we have seen, like, comics properties and other genre entertainment properties stretch into, like, not just T-shirts, but video games and, you know, consumer products. Now Skylanders, a video game, is going to go into, like, cereals and T-shirts and other things. So that's very interesting. Activision does have an interest in getting people continually engaged with Skylanders to make this a franchise that can be what the buzzword here at Comic-Con is, transmedia. Go from where it's at to other media. You know, that does sound interesting, but I've got an eight-year-old son,

so to me it just sounds like I'm going to be spending a lot more money on Skylanders stuff. Well, that's what Activision hopes, right? You're welcome, Activision shareholders. You are not just attending and covering this. You're also speaking on a couple of panels. Yes. One of which particularly intrigues me, the title of the panel discussion is The Future of Geek. Right.

And I'm curious about this because this is something that I'm wondering if there are enthusiasts in the entertainment industry, in sort of the comic geekdom, and geek is a badge that some folks wear very proudly. I'm wondering if they're starting to worry that this is getting too popular, maybe too mainstream. Yeah, there is that note of, you know, when does this jump the shark? When does it go too far? Do we have the opportunity to continue profiting here? That's a bit of what the panel is about. I can preview some data, though, that we have from this. And this is thanks to Eventbrite and, you know, the guy who started this panel, Rob Salkowitz,

who wrote the book Comic-Con and the Business of Pop Culture. And I'll be speaking on this with not only Rob, but Heidi MacDonald, who writes on the popular publisher's weekly blog called The Beat, which is dedicated to comics. So she has some really good publishing insights. And it's hosted by John Suntras, whose Word Balloon podcast has been covering the comics industry and pop culture for nine years now. So these are all really smart people,

and we're getting into exactly what you just talked about, Chris. It's like, have we reached a point of saturation, or is there more to come here? What the Eventbrite data says is that companies still have a lot of work to do to reach the people who are coming to these conventions. So there's an untapped vein here, and mostly it's women. The older demographic, guys my age, they're still sort of gender-favored towards men. It's still about 60-40 men, women that are coming to these cons. But at the younger ages, it is an even split.

It is 50-50, something I never saw when I was a kid. And they are spending real money, women spending real money. And so this is a real opportunity for brands like Disney, like Warner, like Lionsgate. And I would argue, I think, of those three, Lionsgate is doing the best at reaching that demographic. They have a lot of money to spend, but they want property that appeals to them. So if there is a future of Geek, it hasn't really jumped the shark per se, but it does need to shift because the audience is shifting. All right, two more questions, and then I'll let you get to the event. you're a veteran. You've been to these before. As I mentioned prior, there are people who will

dress up in costume. What's the strangest thing you've seen in your years at Comic-Con? Man, the strangest thing I've seen. The best costume I ever saw actually wasn't at San Diego. It was Denver Comic-Con. It was a guy who built this amazing costume to be Galactus, The eater of worlds in the Marvel Universe, and it's connected to the Fantastic Four. And I don't know how he did it, but he was on stilts, and he had big boots constructed around these things. It was unbelievable. This year, I think I'm going to make a prediction. I will say there's going to be too much Batman out there because it's the 75th anniversary of Batman.

But, you know, somebody will come up with, I am certain of it, the most astonishing and awesome My Little Pony costume you've ever seen because that, my friend, is a movement like almost none other. You mentioned Batman. That was actually my second question. As you mentioned, 75th anniversary of Batman. Do you have a preference in all the Batmans we've experienced over time? Some people prefer the Dark Knight. Some are partial to the Adam West TV version, slightly out of shape.

Got a preference? I do. I love the old, you know, the Batman 1966. And interestingly here, they are going to be releasing the Blu-ray. The first time they've collected all of those Batman 66 episodes. So they'll have a panel with Adam West, Burt Ward, and Julie Newmar, the original Catwoman. So I wish I could see that. I won't. But for my personal favorite, I'm a Christopher Nolan fan. I love the Dark Knight

trilogy. And for my money, unless you count The Incredibles, which may be the most perfect comic book adaptation ever, which actually isn't based on a comic, but it's just such a great film, the next best has got to be The Dark Knight. That's one of my absolute favorites of all time. Tim Byers covers technology and the entertainment industry from Motley Fool Rule Breakers and Motley Fool Supernova. Enjoy Comic-Con, my friend. Thank you very much. Coming up, we'll give 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. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, Charlie Travers, and Ron Gross. Guys, before we get to the stocks on our radar, and of course, we'll bring in our man Steve Reuter from the other side of the glass, but with Steve on the other side of the glass this week, one of our members, Bryce Garrity, visiting us from Southern California.

So, always good to have the members coming in for the show. Ron, you're up first. Steve will hit you with a question about your stock. Oh, Steve, Steve, Steve. And you know what? We've got the time if you want to fire one back. Okay. I don't think I've ever done this, but I'm going to do two in a row, same stock as last

week titan international twi and if you liked it last week in the 15s you're gonna love it this week steve in the low 14s um second quarter was rough agricultural in the mining business they're the maker of large industrial tires if you'll remember from last week and this was a disaster of a quarter and we saw an eight nine percent uh hit in the stock um it's a deep value stock it's in our deep value service if you're willing to hang on for two years watch let the cycle turn you can make yourself 60%, 70%. Steve, question about Titan International? When a stock drops one week to the next, when do you become concerned? If it's 5%, 6%, not a big deal. If it's more than X%, you start to worry. It's not for me a numbers thing. It's what's the

reason. In this case, I know I'm investing in a cyclical stock at the part of the cycle that's weak. So weakness doesn't scare me. If I had the opposite thesis and I thought things were great, and then it came in weak, that would concern me. It would mean my thesis was wrong, and I would need to rethink the whole thing. In this case, I think we're okay. Do you have a question for Steve? Steve, do you mow your own lawn? Do you have a John Deere tractor?

Do you have someone that does it for you? Ah, the joys of homeownership in Arlington. We have no yard. No townhome, my friend. No yard. Nice, nice. Charlie Travers, what's on your radar this week? Whole Foods is on my radar this week, ticker WFM.

They report on Wednesday. It has been over two years since you could buy shares of Whole Foods for $36. The market really does not like this company right now. I think the long-term future for them is incredibly bright. They can build another 800 stores on top of what they already have right now. They do double the sales per square foot of any of their organic competitors. I think they're just crushing it. I think this is a short-term blip where they're out of favor.

Now, be wary going into earnings. The last few times they've reported, they've set up a bad trend of lowering their guidance, which is why the stock is at $36. So you might just want to see what they say this week. I should mention co-founder John Mackey does sit on the board of directors here at The Motley Fool. Steve, question about Whole Foods? Is Whole Foods a lifestyle brand, or is it more of a grocery store? I think it might have started as the former and has turned into the latter.

If you look at a lot of the consumer staple products in there, you really see no differentiation in price versus a traditional grocery store. Jason, what's on your radar this week? Making a run for the border, going for MercadoLibre, ticker is M-E-L-I. It's an e-commerce play in Latin America. They've grown sales in 2006 from $52 million to $473 million last year. The World Bank recently released data here showing that for the first time in history, Latin America's middle class will outnumber the region's poor by 2016. So there is a more powerful consumer coming, and I think this bodes very well for MercadoLibre.

Still a small company, $4 billion. And interestingly enough, eBay owns about 18.5% of those shares. I think this is a really neat long-term growth story, and I'd give it a look. Steve, question about MercadoLibre? Travel recommendations when traveling to South America. Is that MercadoLibre? I can't say that I've ever actually traveled further than Mexico in Latin America or South America, so I can't really attest to that. I will say that if you're willing to stretch your thinking a little bit, go to the Maldive Islands.

That place is heaven on earth. One of those three stocks interest you, Steve? The tire one. It sounds very interesting. I love cheap tires, so I think it's just something there. You got it. We'll wrap up there. Guys, thanks for being here.

Thanks, Chris. That's going to do it for this week's show. The show is mixed by Gail Anya Nuevo. Our engineer is Steve Broido. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week live from San Francisco.

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