Motley Fool Hidden Gems Investing - Motley Fool Money: 08.15.2014

Episode Date: August 15, 2014

Wal-Mart fails to impress Wall Street. Kate Spade slips. And Noodles & Company leaves investors feeling hungry.  Our analysts discuss some of the week's top business stories.  Plus, Wired Senior Editor Adam Rogers talks about the business of booze.  Learn more about your ad choices. Visit megaphone.fm/adchoices

The Royal Canadian Legion is celebrating its 100th anniversary. And now, our change has a $2 coin to mark this milestone. Honour the Legion's mission to carry forward stories of service and sacrifice to new generations. And their dedication to supporting veterans and their families from coast to coast to coast. Celebrate this enduring legacy. Find the 100th anniversary of the Royal Canadian Legion $2 coin today. Chris Hill, joining me in studio this week from Motley Fool One, Jason Moser from Motley Fool Income Investor, James Early, and from Motley Fool Supernova, Matt Argesinger.

Good to see you, gents, as always. Good to see you, Chris. We've got the latest results for restaurant stocks, apparel stocks, gaming stocks, and more. We will dig into the business of alcohol with Wired Magazine's Adam Rogers. And as always, we'll give you an inside look at the stocks on our radar. But we begin this week with big retail. And why not start with the biggest retailer of all? Walmart eked out a profit for the second quarter, but it cut guidance for the full fiscal year.

And Matt, got to point out, seventh quarter in a row that same-store sales fell. I think this is going to be a little hyperbolic, but I think this is the end. I mean, I think Walmart, I mean, look, I'm looking at, look. Oh, the end of Walmart. The end of the band. Oh, yeah, yeah. The end of the year. Oh, the world's going to go on fine.

Exhale. It's the end of Walmart. Like, if I look at total sales, up 2.8%. You know, international's where Walmart's supposed to be growing, right? Well, sales there were rolling up 3.1%. And then, like you mentioned, the comm stores were down again. The big box retail aspect of Walmart, it's just not working. The same store sales there are down repeatedly.

They have rising healthcare costs. They're investing a lot in online, yet still being crushed by Amazon and other e-retailers. I just think that this is a slow-moving ship that's not going to grow any faster than GDP from now on until forever. And to me, that's a market loser, for sure. But James, this is the world's largest retailer. It's not going away overnight. You know, when I think of Walmart, I mean, this is going to take us on a tangent. But in China, it's actually pretty popular.

I've been to China a bunch of times. But it's being eclipsed now by a store called WooMart, which has almost the same logo, almost the same look, the nastiest bathrooms known to man, which I won't get into further detail. Thank you. But even there, you know, with the Internet, and I think this is true of all the world, the big box concept, I think, is losing out to online ordering. I think Matt's point is true. I mean, there may be some runway outside the U.S., but I don't think it's as long as we used to think. And, you know, Alibaba, we have Alibaba, you know, going public, and that is growing like gangbusters. That is the Amazon equivalent to China.

I know we use that metaphor too many times. But that, of course, is going to be a big threat to any kind of Walmart growth overseas in China. And lest you think retail problems are confined to just big box retailers, on Tuesday morning, Kate Spade, the handbag and accessories company, reported second quarter revenue rose nearly 50%. And within an hour of the market's open, the stock hit a seven-year high. And then, Jason, the company's conference call with analysts began, and shares fell 35%. What did they say on the call? What did the executives at Kate Spade say? I tell you what, it's what they really didn't say. You know how we know that the market doesn't like uncertainty,

and I think that really the takeaway from this call was that management just laid out a big, fat pile of uncertainty for investors, and that's why investors fled. Because, yeah, when you look at the report, when you look at the numbers, it actually wasn't that bad of a quarter at all. But when they got to the discussion about gross margins, that's when really the tide started turning. Gross margin was down for the quarter over 300 basis points, 320 basis points, actually, which is a lot. When we look at Coach and we look at Michael Kors and we look at these retailers that can command a little bit of pricing there, gross margin really tells us that they're able to maintain that. Now, management chalked it up to a little bit of inventory mismanagement.

They feel like this is something that will not be a recurring theme. But by the same token, they did ratchet down expectations for the rest of the year. They sort of put aside their projections for 2015 and 2016, saying it's maybe not quite so clear they'll revisit. And when you hear those things in an earnings call, I mean, that's just – you know that Wall Street's short-term sort of fetish is really going to come into play, and that's why the stock got peppered. But what is this – go ahead, James. You go ahead, sir. Well, just speaking of fetish, I mean, it's just – That's a good way to start a conversation.

That is the apparel retail market, right? I mean, we go from fad to fetish to fad to non-fad to hate. I mean, we've seen that with Michael Kors. We've certainly seen that with Coach. And I just think this is just such a terrible, hard place to invest. It's a brutal space. But I will say, in Kate Spade's defense, this is not a company that's just levered to handbags like Coach was for the longest time. And I think that what Michael Kors is more or less perceived to be.

Kate Spade is somewhat of a lifestyle brand, which is sort of the direction you see the coach trying to go. So I think that's at least something that's working in their favor. The stock was very expensive before that big sell-off. I think now it's a little bit more reasonable. But I agree with Matty totally. This is a really, really fickle space, and what's in one day can really go out the next. And a fickle investor base. I mean, how many stocks shoot up and then plummet down within a matter of hours?

What does that say about, I don't want to say the intellect, but to me, the judgment and the patience of the investors in this fine company? Well, and, yeah, I mean, when you wipe out a third of your market cap in less than a day, part of me wonders if this is an overreaction on some level. From retail to technology, fourth quarter profit and revenue were flat for tech giant Cisco Systems. They also announced they are cutting 6,000 jobs, which is about 8% of their workforce. James, where is this company now? Well, first of all, revenue was actually up a bit quarter to quarter, which actually seems like a typo to those of us who've been following this company because it's been down so long. Cisco has dominant market share in switches and routers. It essentially always had for a long time.

They've been dabbling in video conferencing and security and other kind of miscellaneous enterprise-type products, various signs of desperation, basically. But unfortunately, this quarter, the signs of desperation are what are doing the best. So it's like somebody likes you for being fake. not your real self, but that's okay. The long-term story here is that Cisco was supposed to have all this runway because the internet is still under-penetrated all across the world, so everybody's going to need to buy the switches and routers, but they're just not. Maybe it's competition, maybe it's cloud computing, maybe it's just, you know, kind of global recessions, but they're just not buying. So we're going to see what happens. The job cuts, Cisco still has

70 something thousand people so it's it's material but it's it's not crazy well it's the fourth year in a row that they've cut jobs they've cut nearly 20 000 jobs now in the last four years and that tells me that they're doing a pretty bad job of hiring or at least figuring out the human resource aspect of their business their messaging is that they're reallocating chris whatever that means they have actually net added people because of acquisition so they're they're firing here and then just taking some on by assuming other companies. They say they're reallocating strategically to the best places, whatever that actually means. Is there anything about this stock you'd like right now?

It's an income investor recommendation, actually. I do see 13% upside as of today. It's one that I would say I'm honestly less certain about the upside on than others, but they make a lot of cash. And they did $1.5 billion in buybacks, which is, I think, compared to $120 million market cap this quarter. So that's over 1%. They've been buying back a lot. On Wednesday, Amazon unveiled a mobile payment service called Local Register. The new business is aimed at smaller mom-and-pop shops. Matt, this comes with a small device that you plug into your smartphone so people can swipe a credit card, a lot like the mobile payment company Square. So my question is, how nervous are the people at Square right now?

This is another example of Jeff Bezos saying to the world, Your Margin is Our Opportunity. I mean, with this, this goes right into the face of Square, PayPal. And for customers who pay $10 to get this piece of hardware and buy the app, if they do it before October 31st, they're going to pay 1.75% on each swipe in each transaction. Right now, if you do Square, you're paying 2.75%, and PayPal is around 2.7%. And eventually, Amazon is going to be charging 2.5% per swipe. So right there, you're undercutting two of the more well-known brands in the mobile transaction space.

And by the way, this is a really big space. I mean, IDC says that mobile transactions are going to hit $1 trillion in five years. And, of course, this is also another way for Amazon not only to profit from that, but also to just remove, yet again, more friction from buying stuff on the Amazon platform, which they're really good at. Jason, we were talking earlier. You mentioned that, you know, it's almost like Jeff Bezos never sleeps because they're also now dabbling in the college textbook market. Yeah, that's something we were looking at earlier. You know, they had – I think the initial effort here was at UC – one of the universities in California, not Berkeley maybe, but another one.

And now it's with Purdue University, and they basically are working alongside with the university to develop this digital storefront that's also going to get books, either textbooks for purchase or for rental, physical textbooks, digital textbooks, and other items that you could buy from Amazon. They are going to share in some of those profits from those sales with the school. And so I think, really, it's an attractive proposition for the school because it helps them really offload, I think, a lot of work that they probably don't want to do, don't really recognize much in the way of profitability to a company that truly is just a logistical feat of nature. I mean, the distribution and the wherewithal that Amazon has built in this platform is just phenomenal. I expect to see this more and more with more schools. At what point will all goods and services worldwide be bought from Amazon? I mean, it just seems like. I mean, I understand the sarcasm in your statement, but there has to be at least a hint of seriousness there.

I mean, it does seem like every day there's a new release of something that they're doing. And, you know, just going back to the retail discussion at the beginning of the show. I mean, it's it's not I mean, that is the big long term trend. Right. It's mobile commerce and it's and it's digital commerce. It's e-commerce. We're not wanting to go through these big stores and have to deal with that experience anymore. And Amazon is by far and away the most proactive in trying new things. And I think that's what you have to really be encouraged by. There will be other players that win the space, but Amazon is really the one that's defining and shaping the space.

Coming up, a reminder that just because people are looking for healthier food options doesn't mean they're actually going to buy healthier food options. Stay right here. You're listening to Motley Fool Money. The best things in life are free. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, James Early, and Matt Argesinger. Second quarter profits for Priceline rose 32%. James, I think that for people who are just consumers, it's easy to think of Priceline as just a big travel site along with Expedia and Orbitz. And yet, from a business standpoint, it is so much bigger than both of those two combined.

I am actually starting to get interested in this company, Chris. Years ago, I used the service. I saw Shatner, and I decided this is clearly not a thinking man's business, so I just kind of avoided it. But they own Booking.com, which is a Dutch-owned, 60% of the revenue, Dutch-owned travel business. Priceline itself, a go-to open table. They invested $500 million in Ctrip. They have, I think, about a 4% market share in the world, the largest travel booker in the world. And this stock is up 7,000% over the past decade.

So Shatner, I think, must feel pretty silly because apparently he got paid in equity early on, but then he sold his equity very early on as well. Never bet against William Shatner. But it's a strong company. And in this economy, they'd still be growing revenue at 26%. That's phenomenal. Well, particularly just in Europe, too. I mean, they've been so phenomenally successful in Europe over the last 10 years, and we don't exactly have called Europe a great economy or a hotbed of growth. But it's been incredible.

How long before we get a sense of how the open table acquisition is really making hay for them? Because on the one hand, it seems like it's very much in their sweet spot. But I also can't imagine that's going to be as profitable as sort of something like a booking.com. Yeah, I don't know what the ROICs are, the returns on invested capital for that business. I mean, obviously, acquisitions statistically, like worldwide, four out of five or three out of four acquisitions don't work out. But Priceline has shown themselves to be adept at acquisitions. So I'll give them the benefit of the doubt. Time for something I like to call this week in recent IPOs that reported horrible earnings.

Let's start with Noodles & Company. Shares down 17% on Thursday after second quarter profits and revenue both came in lower than expected. Same-store sales were down, Jason, and they can't use cold weather as an excuse there. No, they can't. There are some times when you want to buy the earnings dip, and there are times when you do not want to buy the earnings dip, Chris. And this is one of those times that you do not want to buy the earnings dip. I would avoid this company really altogether. I think that one of their taglines is actually potential weakness, a world of flavors under one roof.

And basically what it's telling us is that we don't necessarily know what these guys do well. It just kind of seems like maybe they do a lot of stuff just sort of OK, I guess. But if traffic is any indicator, then it's not really doing so well at all. And I think that's a big problem here is that the falloff in traffic is really starting to squeeze their margins. There are a lot of fixed costs in keeping those restaurants open. And they own most of their restaurants at about 400 today. They see an opportunity over the next decade for about 2,500 restaurants here in the United States. I think that's way, way overdone.

I just – I don't see – They're modeling one consumer per restaurant per week. That sounds actually reasonable now. But, I mean, I – I took my son there the other day. It was empty. It was fantastic. I think that the growth prospects with this company are overestimated.

You know, management referred to weakness in the Middle Atlantic where they have, you know, about 20 percent of their overall exposure. And also they believe that the softness in the middle income consumer, which is their sweet spot, is still affecting their top and bottom line there. But I think at the end of the day, this is one of those restaurant concepts that doesn't quite resonate like a Chipotle or even a Buffalo Wild Wings because you don't really know exactly what they do so well. And I'm just not too optimistic. I was going to say, it's a bad summer for restaurant stocks not named Chipotle. Shares of King Digital Entertainment down more than 20% on Wednesday after second quarter revenue came in lower than expected. They also lowered guidance. Matty, this is the company behind the video game Candy Crush Saga.

They went public earlier this year. And everyone, this is one of those IPOs where everyone was saying the same thing, which is, well, they've got one hit game. Do they have anything else? And the answer appears to be no. Right. I mean, crush is the right word. I mean, the stock has been crushed. And I think you nailed it, Chris.

I mean, when this came out, that was definitely, I mean, you know, it had a poor IPO. I mean, very, you know, highly valued company, but the IPO was kind of a dud. It premiered, and I think it was down 17% on its first day. And that was the market saying, gosh, you know, we just, we don't believe that this model can, you know, repeat itself. So, you know, King Digital is, of course, in the business of free-to-play games, and they had this enormous hit with Candy Crush. They've made some acquisitions. They've invested in other games. But the truth is, Candy Crush is still over 60% of their revenue.

Bookings are down there. They look like they're going to be down even more in the next quarter or two. So until they can come out with another hit, it's going to be a problem. Did I hear correctly that a Kim Kardashian game actually was partly to blame here in taking traffic away from King's products? That is absolutely right. I don't know. I can't remember the name of the company behind it, but that apparently is the hottest game right now. My son downloaded, apparently, Candy Crush.

He's five. When he was four, Candy Crush on my phone, and they just kept popping up all the time trying to sell me stuff. So I don't mind their suffering right now. Nice, James. It was almost a year ago that Burger King unveiled what it called, quote, one of the biggest fast food launches. I'm referring, of course, to Satisfries, the low-cal version of Burger King French fries that featured 20% fewer calories, 25% less fat than their regular fries. That was almost a year ago. This week, Burger King announced it was dropping Satisfries from the menu, and James, gosh, it's almost hard to believe that this didn't work out.

This is philosophically intriguing, Chris. It's almost like a Plato's Cave analogy in the French fry business. And what I mean is this. Go on. It's what is real versus what is perceived. There's a Wall Street Journal article covering this. They brought up a great point. The McDonald's had a very similar thing in 2002.

They said they're going to start using trans-fat-free oil to cook the French fries. So apparently their customer service lines, and I'm quoting, its customer service lines were flooded with complaints about the fries tasting different, even in cities where nothing had yet changed. Ah, the placebo. It's really, really intriguing. We don't know if it's really the actual fault of the Satisfries, like in a blind taste test sense, or just the idea that people have this weird, agonizing love-hate.

They want to be healthy, but then they don't want to have the – they want to have unhealthy food when they want it. I just – I can't really figure it out. Well, I don't know about you, but, man, when I read the headline the other day that apparently, like, you know, cutting salt from your diet may not have the health effects that we once thought and that a diet higher in salt could actually be okay, I mean, I danced a little jig there. I said, hey, it's time to go get me some Chipotle and a pretzel. Let's go to our man behind the glass, Steve Brodo. Steve, did you ever actually try the Satisfries?

I don't know. I don't think so. I've eaten fries at Burger King, but I don't recall ever trying to satisfy us. How much of this do you think had to do with the name itself? Because our producer, Matt Greer, pointed out to me that this is a little bit like the Sprint Framley plan. It's a weird name. It's creepy. Not for me, I don't think.

Yeah, I think that has just a little bit to do with it. But drop us an email, radio at fool.com, and let us know what you think of the Framley plan. coming up we will dig into the science and business of beer wine and liquor i hope you're thirsty this is motley fool money welcome back to motley fool money i'm chris hill adam rogers is a senior editor at wired Magazine. He's spent most of the past 20 years covering science and technology, and he's the author of one of this summer's most intriguing books, Proof, The Science of Booze. Adam, good to talk with you. Thanks for having me. I appreciate it. Ours is a show about business and

investing, and certainly investors have done well over the years buying shares of companies across the alcohol spectrum, Anheuser-Busch, SAB Miller, Diageo. And one of the issues that all of these companies, and I'm guessing anyone, whether they're making beer, wine, or whiskey, one of the issues that they are dealing with on the science front is climate change. Very much so. Of those three groups, first and foremost, who is the most concerned about the effects of climate change on their business? The winemakers.

Why is that? Because they're, well, a bunch of different reasons. One of which is that the places that grapes grow, especially producing higher quality wines, are places that are likely to be greatly affected by changes in climate and the microclimates, the small scale temperatures and levels of humidity, levels of moisture around the one hillside where you can grow the grape that's the only kind of grape that you can make, the only kind of wine that you make, has a potential to not be there anymore. in a few years so the for example the california the northern california winemakers napa region sonoma region um are very um are very concerned because they see the temperatures that make napa cabernet let's say unique in the world and high quality going away and moving north um headed to the pacific northwest to the willamette valley let's say um the same thing um and the same is true with any of the wine growing regions it's true in australia where they're growing a lot

of wine, especially in Australia. Australian wines are kind of known, I'm tarring with a broad brush here, but known as more commodity wines. They're making a lot more high quality and they're stepping on them in a lot of ways. They're using other processes besides the artisanal ones to make enough and to make high enough quantities and to make it at a cheap enough price point that a lot of people can afford it. Well, if it gets super hot where they're making that wine, they can't grow those grapes anymore. Now, the reason that I'm separating out winemakers from the folks who make beer and the folks who make whiskey, let's say, is that they're relying on grains, and those grains tend to be seen

as more of a commodity crop, which is to say you can grow a lot of them, and you can grow them in a lot of places. The distillers, even the American distillers, who are making huge quantities of whiskey, let's say, places like Jim Beam or Jack Daniels, but all they want is yellow corn number two, and they don't really care where it comes from. They don't really care who's growing it. That's, again, an overstatement. They do.

But as long as someone's growing yellow corn, number two, they can buy it and they can make what they feel like is as good a product as they were making before. So if the corn-growing regions of the world move north, that bothers them less than if there is no more corn at all. And they don't see that coming, I think. Smaller producers do worry about that because they're trying to take greater care with regional specificity for their substrates, right? They're looking for not just a particular kind of plant that they're going to make whatever booze they make out of, but also where it comes from. If you're St. George's Spirit here in California and Alameda, just right across the bay from my office, it's not enough for them to have sugarcane to make the rum that they make.

They have to have California sugarcane. And so if conditions change and you can't grow sugarcane in California, they can't make their rum anymore. So the smaller-scale places begin to worry about it more than the large-scale ones. With, I would say, again, another exception, I know that the scotch whiskey makers have some concerns about climate change because they need such high volumes of barley. If the places where you can grow barley change, and if more storms come and knock down your barley before you can harvest it, and all the things that people worry about with climate change happen to their barley crop, they can't make whiskey anymore. I know you were talking with scientists and your focus was on science, But I'm curious if you've got a sense from the people that you interviewed, if they feel like this is still a good business, whether or not they enjoy the craft of making beer or whiskey or wine.

Do they still feel like this is a good business with a bright future? Because for a very long time, the business of soda was a good business to be in in the United States. And we've seen over the last 10, 15 years, soda consumption steadily falling. That's an interesting parallel to make. Yes, they do as far as I know. Now, I don't know the economics of all of the different categories, but I can tell you a little bit about the economics of the ones that I know. The small-scale American distillers, the craft distillers, are very optimistic,

not necessarily about each and every one of the little tiny distilleries that's opening up around the country, But as a broad class, they see themselves on the same trajectory as craft brewing was about 30 years ago. And if you compare, if you pick the right year zero for it, then they are actually on the same trajectory for the number of breweries that were opening in, let's say, 1984 or whatever, pick a number, and number of distilleries that are opening now. They think that the laws are going to change and make it more possible, more feasible for them state to state to sell their own product in their own distillery. They think that they're going to have more and more in response to increasing demand for unusual and more, let's say, weird stuff to drink that's local and artisanal. Now, it's not exactly the same. The parallels break a little bit because the craft brewing industry grew up in response to a perception of a lack of quality in the national brands, and that's not the case here. Nobody argues with a straight face that Wild Turkey is bad bourbon.

It's delicious bourbon. I was just going to say, I would certainly hope they wouldn't argue that. Right. So there's no, whereas they were arguing 30 years ago that, I don't mean to pick any one beer brand out of any other, but people were saying Budweiser didn't taste good, and that's why you were going to make something like Anchor Steam, another San Francisco brand,

to respond to these nominally bad-tasting national brands. So they're very positive. So brown spirit distilling, American whiskeys and Scotch whiskeys and Irish whiskeys are very excited right now because they can't keep up with demand. So much so that they're having to change the rules for their labeling, issuing what they call no-age statement whiskeys because they're running out of the oldest barrels, which are the things that take the longest. Obviously, they're the oldest, but also because they spend a lot of time aging, they lose some volume to evaporation. So a 25-year-old barrel has less in it when you open it, when you put it into a bottle, than a 12-year-old barrel, let's say. And they're selling more and more to Asian countries. So China becomes a market, India becomes a market, Japan's always been a big market.

And all the whiskey that you could find and it didn't cost that much, but it was still rare and unusual, now all that stuff is basically gone. You just don't find that anymore for a price that, let's say, a print journalist who wrote a book about alcohol might be willing. to pay, hypothetically, just hypothetically. So they're positive. You're listening to Motley Fool Money, talking with Adam Rogers. His book is Proof, the Science of Booze. Let's talk about the science of hangovers, because that's something you cover in your book. And what was striking to me was that, essentially, scientists haven't figured out a cure for hangover, a true cure, in the sense that maybe you have a friend who says, oh, just do this and do that, and that'll take care of your hangover. But in terms of a scientific cure, one doesn't exist. How is this

even possible? I know, right? Like, come on, science, help a brother out. What are you doing? Now, some of the reason that they don't have a cure for a hangover is that they don't really know what a hangover is. And some of the reason that they don't really know what a hangover is, is that they're not really sure how ethanol affects the brain. So if you don't know how how the booze actually makes you feel the way it does. It's hard to figure out what the bad outcome, what the cause of the bad outcome is going to be. And part of the reason just to be really reductionist about it,

that they don't know how ethanol affects the brain, is that they don't really know how the brain works. It doesn't take a long conversation with a neuroscientist before they start to tell you what they don't know, and there's a lot more of it than what they do, which is cool. That means that they're on the cutting edge of science. The interesting part of science are the questions, not the answers. But what they don't know about hangovers is how it's possible that you can feel as bad as people do when your blood alcohol level goes back to zero, your electrolytes are back to normal, the kinds of sugars that you're digesting are back to normal.

Basically, almost all of your baseline diagnostic numbers go back to where they were before you started drinking the day before, and yet you feel terrible. There's obviously something wrong, and they're trying to figure out why that is. The best research that they have now suggests that it's an inflammatory response, like when you have the flu or something. And there's a symptomatic overlap there. That has some intuitive power, too. It does feel kind of the same. There's also a lot of symptomatic overlap with migraine.

If you're the kind of person who gets migraines, you know that those can feel a lot like hangover. And that's probably because the receptors in the brain, that is to say the tiny elements of the synapses that are the connections between the neurons that make up your brain as a whole, there are a bunch of different kinds of receptors and they do a bunch of different things.

And the specific ones that are involved in migraine may also be involved in our response to ethanol. And so it makes sense that they'd be involved than our response is to have too much ethanol in hangover. So the question is, well, if it's an inflammatory response, what do you do about that? And there are anti-inflammatory drugs that you can buy over the counter. That's what acetaminophen is or ibuprofen is. Of course, if you take those in quantity, they all have their own side effects as well.

And a lot of them, sadly, again, have overlap with hangover, so gut symptoms, for example. So it becomes a tricky problem. The one really very good study on treating hangover came out of Europe, used a drug called Clotam, which is not available in the United States. It's an anti-inflammatory prescription strength, very powerful anti-inflammatory that's prescribed for migrants, and that seemed to have an effect. And a couple of the over-the-counter, like the kind of stuff you can buy online,

you know, sold as hangover therapies. One of them is an extract of prickly pear cactus, nopal, and that also has some anti-inflammatory characteristics. as well, but a couple of things that have been shown in studies to have an effect on hangover, a therapeutic effect. So I'm talking about decent studies, not the kind of stuff you buy at the convenience store, right, that's

next to the counter, next to the cash register. Those never work, or at least no studies have ever shown that they work. But there are a couple of studies that have shown that, for example, something called peritonol, which is a vitamin B6 analog, has some effect.

Anecdotally, I've tried that and felt that it had some effect but don't take medical advice from me i'm a print journalist um but i like that you went the extra mile and did some research for the book i i felt that at that point it seemed like we had to try some stuff so yes i did have a couple of people over and we um had some research cocktails and uh and tried a bunch of the ones that we um that we could get our hands on and uh it didn't go well for anybody. It's all in the name of research. Before I let you go, I have to ask for a whiskey recommendation or two. You were kind enough to be a featured guest at our recent member event in San Francisco. And even better, you helped me pick out some whiskey for the

reception. But for folks listening who maybe have never tried whiskey or bourbon, what's one or two that you would recommend as just something they might want to try if they're going to dip their toes in the uh the whiskey waters oh if you if you've never had one and you want to like if you've never had a single malt and you want to try one that will make you into a fan forever instead of like oh i can't drink that stuff um there is a uh there's a there's a whiskey that i was one of the first bottles i ever bought called glenn farkless g-l-e-n-f-a-r-c-l-a-s um it's one of the few single malt distilleries that's still family owned in scotland so it's not owned by one of the big transnationals like the agio um which isn't to say that any of those companies don't

make great stuff too but this place is still the same family has been for generations they make some wonderful stuff and it really is it's just delicious by any objective even if you've never tasted this stuff before it's sort of a lighter um spirit it's not that pd phenolic um isla kind of whiskey it's not the scary one it's a good one um and then in the american uh in the american whiskey um you know oh i mean as i intimated before i i drink wild turkey so i i tend not to get too fancy but i do um i do uh really like a blend of bourbons that the folks at saint george spirits here in california make they buy kentucky bourbon and then make their own blend uh it's called b and e for breaking and entering and that's a very good bottle of bourbon and not

very expensive. It's also a great name, too. Good name. The book is Proof, The Science of Booze. It is already a New York Times bestseller. So pick up a copy because this is your ticket to more interesting conversations the next time you're out with your friends. Adam Rogers, thank you so much for being here. It's my pleasure. Thank you. I appreciate it. 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. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, James Early, and Matt Argersinger.

Guys, before we get to the stocks on our radar this week, you can always drop us an email. Radio at Fool.com is our email address. Got an email from Dominic Doan in Irvine, California. He writes, do you have any reading recommendations for a new college graduate who is still trying to stumble into the real world, and real world is in quotation. So here's a young guy, just graduated from college. Any reading recommendations, James? Chris, I have not read an investment book in my life. I've read technical accounting books and certain things to, you know, tax books to understand aspects of it, but I'm not a big believer in the narratives. You can pick that up from articles, certainly, on our site and others, Dominic, but the danger of reading some of these books

is getting enmeshed in some particular guy's ideology or some philosophy. And you want to be careful about joining your team right off the bat. So I wouldn't say it's a bad thing. I'm the odd man out and not reading. But I've gotten this far, I guess, whatever that says. James Early, anti-reading. Okay, good. Matty?

Well, we've talked a lot about Amazon on this show. And like some of us here, I'm reading The Everything Store by Brad Stone, which is the Jeff Bezos biography that just came out last year. I think it's a phenomenal business book, entrepreneurship book, investment book. And I think it hits a lot of chords, especially if you're just out of college and looking at careers and where you want to go. Jason? Yeah, I mean, I guess if you want to look for something sort of business investing related, the book Bull by Maggie Mayhar was really good. Kind of looked at that boom and bust cycle from 1982 to 2004.

You sort of see how irrational the market got as technology was really sort of changing the way we lived. And I just thought that was a really fun book. It's not investing-related so much as it's just real-life sort of business-related. And I think it can give you some sort of foundation on how you might want to think about things going forward. And, I mean, if you're not looking for something like that – I mean, I always enjoy reading about U.S. presidents. To me, that's just kind of a fun sort of history sort of buff, I guess. What about cats? Cats?

No, not too much into cats. I'm a dog guy, James. But I would say I read the Bully Pulpit, the book on Taft and Roosevelt, and that was a really good book. I would recommend that one, too. Let's get to the stocks on our radar this week. We'll bring in Steve Broido from the other side of the glass to hit you with a question. James Early, you're up first. For people who like to profit from death or actually care for the deceased, I should say more respectfully, but it's a reality of life.

It's a reality of life. Everyone is born and everyone dies. It's Stonewall Partners, S-T-O-N, is a master limited partnership. This is an income investor recommendation that basically owns cemeteries. And they yield 9.9%, which is nice. They have very strange accounting because of certain state trusting laws that require them to put a certain amount when somebody prepays for the burial vault. They have to put them into a trust, and they can recognize the revenue later on. So it's kind of quirky.

People don't understand it, but I'm a believer long term. Steve? I'm a Stillmore shareholder, thanks to James Early. And my question for you, James, is should we be afraid of companies that are dark? You know, that's your choice, Steve. I choose to accept life in all its facets. I mean, I invest in sewage companies and in death care companies. It's just it's all part of our existence here on this planet.

Matt Argersinger, what do you got this week? Oh, it's one I've brought up before. MercadoLibre, M-E-L-I, had great earnings earlier this month, up about 20 cents but i don't think this one is done uh you know it's a big the leader in latin american e-commerce investing great you know investing making some great investments in their business um and they've been held down by some of the macro problems happening in argentina venezuela and brazil but this is one where you know the short interest in this stock before the earnings was over 30 so i feel like there's a bit of a squeeze going on it's got it's got room to

run steve question about mercato libre is there a difference between e-commerce and regular commerce anymore well the e yeah that's there it is right there yeah when does it just become commerce i mean like when does e-commerce just become commerce because that's the norm i think the answer can be found in plato's cave jason moza we got about a minute left what's on your radar uh taking a look at mobile iron this is a relatively new ipo but you know the world is going mobile we talk about this all the time and and really consumers have led the way but now the workplace is really jumping on board and what we're going to see here in the in the coming years is is workplaces adopting that mobile platform whether it's tablets or smartphones and mobile

iron essentially uh develops the platform has the tools and the in the the know-how to to help enterprises incorporate that that mobile presence into their you know own day-to-day operations so who knows maybe one day mobile iron might be even serving here serving us here at the motley fool but uh an interesting little company ticker is m-o-b-l uh yep that's it steve should i ever buy a company that has just gone public? No. I think that is just a patent standing rule that I have is I just, no.

Steve, just a few seconds left. You got one you like? Stonewall. I like it. Great dividend deal too, right? Huge. Alright, thanks for being here, guys. It's total bias. You already own shares. That's going to do it for this week's show. The show is mixed by Gail Año Nuevo, our engineer is Steve Broido,

our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week. Thank you.