Motley Fool Hidden Gems Investing - Motley Fool Money: 09.23.2011

Episode Date: September 23, 2011

HP names a new CEO.  Nike reports big earnings.  Netflix deals with another backlash.  And McDonald's and Microsoft increase their dividends.  Our analysts discuss those stories and share a few stocks on their radar.   Plus, CNBC's Scott Wapner talks about the new CNBC documentary, The Coffee Addiction. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the show. Thanks for being here. I'm Matt Greer, sitting in for Chris Hill this week, and joining me in studio from million-dollar portfolio Ron Gross, from Motley Fool income investor james early and from motley fool hidden gems seth jason guys welcome mac how are you guys i'm good chris not so good he's got this sinus thing so he's out sick it's no excuse um you know but but he does i mean he used in an email he basically said his head was about to explode and then he mentioned the phrase oral surgery so we have expensive equipment in here we can't have heads exploding there you go so if any of our listeners have like a miracle sinus remedy radio at fool.com that's radio at fool.com something like that smacklers you're making powders yeah

okay good on this week's show we're going to talk nike netflix and the business of coffee plus as always we will share some stocks on our radar um but ron let's talk about the big macro let's lots to talk about twist again mac shall we let's bury our heads in the sand and nice nice referring to the the latest fed stimulus operation twist they don't want to call it a stimulus mac we can't keep doing stimuluses that don't stimulate. This is really the heart of the problem. The Fed, in its infinite wisdom, they're going to spend $400 billion. They're going to sell short-term treasuries. They're going to buy long-term treasuries. And the hope here is that they're going to push down interest rates, which actually, it is successful. Rates have gone down,

at least since this announcement. However, what also went down was the stock market. And it basically imploded right before our very eyes. So they announced this on Wednesday, and the market just has a terrible day on Thursday. Right. So people are coming to the realization that the economy is in very bad shape, and the Fed really does not have the necessary tools to do anything about it, and therefore, what happens next? And when that happens, people want to sell stocks pretty quickly. And it is relatively scary, not just here, but overseas.

We have a global problem, and there doesn't seem to be any real solution to get us out of it. And the Fed is like the kid who's trying too hard to be cool, and it just doesn't work. It's not the Fed's job necessarily to resurrect the economy. Well, it is part of their job. A little bit, but not fully. And they're succeeding in driving down long-term interest rates like some wee bit. But the point that they're missing is that long-term interest rates are already very low, and people aren't borrowing already. So there's not going to be many marginal borrowers who are going to suddenly jump at this, and that's the problem.

Well, they're hoping that people like me will go out and, you know, refinance a mortgage, take that extra $300 some dollars a month and spend it on new iPods. And that's going to happen, but it's not going to have a huge effect on the economy. But at this point, we need every little bit of help it can get. And, of course, I think you guys agree that economic cycles are to a huge degree psychological. And so we need to do something to get that. And Uncle Ben did not help with the phrase, significant downside risks. Yeah, but this is a little bit like telling somebody, yeah, you need to take your medicine, and then all of a sudden they go, wait, I was sick?

Yeah. Medicine? No. So, James, let's go back to that overseas piece that Ron was talking about. We've got concerns over the banks in Europe. We've got Italy now getting downgraded. And we've got the ongoing crisis in Greece and whether or not Greece may default. So just all sorts of issues in Europe. What does that mean for investors? Well, first with Italy. Italy gave us pizza and Fabio, so I'm reluctant to speak ill of it, but it's clearly the next domino to fall. Greece has already effectively defaulted. Default is not a black and white thing. It's a gray area, and all this rigmarole that's gone on it is to sort of mask or make unofficial the effective Greek default. Italy is next. Their GDP to debt ratio is second only to Greece in Europe.

So, that's what's coming next. The question is, how far will it spread? We don't know, but European stocks have gotten hammered, and I actually wonder if some of them might be good buys now. Okay, Seth. So, as all this plays out, what should we be asking about our portfolios? What should investors be doing? Well, unfortunately, you had to answer those questions a while ago. Anybody who is investing in stocks is hopefully doing so for the long term. If you are in need of selling stocks right now, it's, of course, not a great time to do it. So, probably the best idea for anybody to start with is go again through and make sure that your asset allocation is appropriate for your own financial position. If you are about to retire, you need to make sure that you are more in things like bonds and liquid investments.

You mean like water stocks? Like water stocks or dividend-paying stocks, things like that that are going to pay you some income. You're not just depending on capital gains next month or next year in order to get your living expenses. because this is the kind of thing there's going to be significant volatility. There will be buying opportunities. There will be selling opportunities depending on how active you want to be, but it's going to be completely unpredictable. You're listening to Motley Fool Money, or we hope you still are,

talking about some of the week's big business stories. We've also got a daily podcast called Market Foolery. You can listen to that on iTunes or at marketfoolery.com. Next up, guys, a shakeup at HP. CEO Leo Apotheker is out. Former CEO of eBay, Meg Whitman, is in. Failed gubernatorial candidate, Meg Whitman? That would be one and the same.

Now, if you're feeling bad about the old CEO, he's going to take home $7 million in severance and $18 million in stock for being CEO less than 11 months. Boy, that's good work. That is good work. Especially making those tough decisions such as, we're not going to do the tablet anymore. Wait, we are going to do the tablet. We're not going to do computers anymore. No, wait, we are going to do computers.

Okay, Seth, so can Meg Whitman make better decisions? No, of course not. Meg Whitman, what did she do at eBay? Did she not just write a very popular website? Stock did tremendous things during her tenure there. What was Meg responsible for? I'm not really sure. She seems like really a middle management type to me.

Remember what is needed at HP right now. Now, hold on, hold on, though. In her defense, I mean, she came from Hasbro. She has a lot of executive experience. She's very Hasbro. Yeah, that's what I'm saying. She's sort of a mid-level executive. Where is the vision?

Where's the game-changing vision at eBay? eBay was already what it was when Meg got there. What HP is going to need is a combination or one of two things. They're either going to need to make a heck of an acquisition or two. Meg's most famous acquisition would be what? Would that be Skype over at eBay? Skype. Utter failure.

Or some real leadership on creating some products that everybody must have. HP has never been able to do that. Carly Fiorina was hoping to do that, and that didn't work out. It hasn't worked out at all. So in the meantime, HP is slugging it out in low-margin businesses like computers, servers, switches. And if HP can't resign itself just to sort of being an inflationary growth company with narrowed margins, I think there's some trouble because I don't think Meg Whitman can change that. Yeah, I mean, she obviously has experience running a company.

After all, she ran eBay into the ground. And she did buy, to Seth's point, she bought Skype for $2. $6 billion and promptly had to sell it. But I think the biggest strike against her is that she doesn't have any experience with a business enterprise technology company, and that's what this is. She says, oh, we've purchased that at eBay before, but that's weak. Okay, well, in a previous life, on a previous radio show back in 2000, we actually interviewed Meg Whitman when she was CEO of eBay.

The show was, we taped it live at the Stanford bookstore out in California. And, Steve Broido, I'm going to bring you on because you have an interesting Meg Whitman story. We had some technical issues, I think it's fair to say. The segment was not going all that well. Steve, take it from there. Sure. So Meg was sitting behind a microphone that was on a stand that was very loose, and the microphone kept sort of drooping. So she'd be off on mic, and the mic would kind of fall.

So I walked over during a break. I said, you know, Ms. Whitman, if this microphone droops, you just go ahead and droop with it. That's Steve taking it. Did she find the humor in that? No. I don't think she did. No. Can I bring it back?

Can I not pick on Meg Whitman for a few seconds since I've already done it? I think the real, what's the word I'm looking for? What would be the kindest word here? Bozos in this story. It's the HP board. Absolutely. The clown fest. This is a group of people that takes all my, I checked their proxy before we came in here,

between $300,000 and $400,000 upwards of on the way to $500,000 worth of cash and equity. And they're standing around reversing decisions, making statements that indicate that they're barely following the business, and they ought to be ashamed of themselves. And quite frankly, the shareholders ought to throw them all out next time the elections are up. Seven CEOs since 1999 for HP. This is a terrible board, and it needs to be fixed. Well, relatively speaking, and again in Meg Whitman's defense, because you said that she ran eBay into the ground, but you've got PayPal, and eBay's still a very profitable company. Well, PayPal was a good acquisition, but again, that's like getting on a good horse and watching it go. It fit pretty well, but I'm not sure that that's the work of genius for Meg Whitman, and it's something that HP is going to need.

Shares of Nike were up big on Friday after stronger-than-expected earnings. Nike also raised its sales forecast. Ron, didn't Nike get the memo about the global economy? Hey, you know, some consumer companies are still getting it done. They had strong sales across the world, except for Western Europe, not surprisingly. But they really are doing a great job. The big story for Nike was a concern over margins getting squeezed because of higher raw material costs and transportation costs. And we did see some of that, but it was better than expected.

And Nike has such pricing power that they are actually able to increase prices to offset those higher costs. And I think we'll see more of that later in the next quarter and the quarter after that. And so it looks like earnings will continue to be strong. Who here had the original Air Jordans? Remember when they first came out? I did not. I did, actually. I was in on the original Nike waffle shoes and the immediate successors.

One thing I'll say about Nike is it's a rare combination of kind of a fad company that actually has products that diehard athletes also really need. In other words, I run in Nike running shoes, and the whole thought of it bugs me because it's such a brand-based company. But for me, their running shoes really are the best thing out there, and that's one of the strengths they have. Coming up, we're going to talk about Netflix, a lot going on there, and Wendy's redesigning their burger. Stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money. Matt Greer sitting in for Chris Hill this week, and I am joined in studio by Seth Jason, James Early, and Ron Gross.

Guys, what a week for Netflix. Not a good week. Not a good week. You know, on Friday the stock was up, so some good news there, I guess. But on Sunday, let's go back to Sunday. Okay, CEO Reed Hastings apologizes for the recent price hike. That's good, right? No, it wasn't.

Okay. It was a weird combination of a long-winded Jerry Maguire-type apology that was also kind of tone-deaf. I mean, it was emailed to me as a member of Netflix with a sort of pretend return address as if Reed Hastings had sent this to me personally. Now, I knew I wasn't the only one. You thought for a moment. But it sounded like if you hit reply, I thought, this is kind of gutsy. You could actually respond to him. That's pretty cool.

And then you hit respond, and they didn't even have the decency to just throw them in the trash. You got the thing that said, like, this is a no-response email address. And then he went on from there to try and explain to members who were already smarting from a 30%, 40%, 50%, 60% price increase that the real reason they were doing that is that they were going to split the business in two. They were going to rename the beloved Netflix disc business Quickster. So that's the big news. They've got two businesses. Netflix is going to be the streaming business.

The new business, the DVD business, will now go by the name of Quickster. I think it's fair to say the now much maligned Quickster name. Well, it's a horrible name, but it's also a pretty bad idea because a majority or a large plurality of their membership had stuck with them through the price increase, had stayed in both pieces, in other words, the mail and the streaming portion of it. And part of that was because it was so convenient. You could move things from one spot to another. Now you've got to visit two different websites. You can't handle the queues the same way. And if that seems like a little thing, it sure didn't to tens of thousands of Netflix members who just laid into Reed Hastings and a Facebook thread telling him, you're making this more difficult for me.

And of course, he was making it much easier for them to seek alternatives, even if those alternatives aren't as good like, you know, Amazon streaming video. You know, the streaming part is obviously the future. And we're in such the infancy of that streaming business, it's really hard to say who the winner is going to be. It certainly is not a slam dunk that it's going to be Netflix. There's competition is fierce. The content owners are really the kings here, and they're in the driver's seat. And we saw recently where Netflix lost the Starz content, which is the Disney content, as well as some others. And this is going to be tough. Rising content costs and increased competition do not bode well. Seth, you wrote about Amazon potentially being the big winner from all this.

Well, I think it's a long shot at this point, or it looks like a long shot, because Amazon's streaming video right now, if you are a Prime member, the price is right, you get thousands of titles for free. But there's absolutely no queue management or organization really to speak of, so it's definitely not as convenient a solution as Netflix. The problem for Netflix right now is that a lot of their members are really ticked off, and they're willing to put up with a less convenient alternative because they feel like they've been disrespected in some way by Reed Hastings, and an apology that seemed really more arrogant than the original price hike. Okay, so what does Netflix need to do to reverse the slide? They might just need to keep delivering and keep Reed Hastings away from the email account. This is going to cost some money. They need to spend money on content, and they need to keep prices reasonable, because competition's going to be coming in, and this isn't going to be cheap. Whoever wins this is going to have to throw a lot of capital at it.

O' And so, for investors, what does that mean? That means ... O' Things could get worse. Obviously, after a 50% pullback, it's an interesting thing to look at, but as I I said earlier, the winner of this game is, it's too hard to tell right here. It's such in the infancy of it. So, you know, if it gets really cheap, it might be worth purchasing. But, you know, you'd have to have real insight into how this shakes out. And this week in dividends, James, both Microsoft and McDonald's increasing their dividends. I know that warms your heart. Let's start with Microsoft. Sure, Mac. I mean, the story is sort of, it is what it is. It's simple,

but I like it. Microsoft has a 25% increase. That's good for them. They're finally waking up a decade too late to reality, but better late than never. They actually didn't raise last year, so this is a bit of a catch-up raise for them. But it's finally good to see a tech company admitting that all tech companies are not just about growth, and it's okay to pay a dividend. McDonald's only raised 15%, but only 15% is great. And every year it's raised since 1976, which is 35 years now. Pretty darn good. And finally, Wendy's has redesigned its burger. Guys, it's going with a thicker patty, extra cheese, and a buttered bun. So everything's changing except the ketchup is what I read. Wendy's has been losing market share to McDonald's. Ron,

this is all part of Wendy's redesigning its menu, potentially redesigning some stores. How about one suggestion for Wendy's improving its experience? Yeah, Wendy's Struggles surprised me because I actually think it's one of the better fast food places to go. My family and I would probably choose that over the others. I think the quality of the food is better. So it somewhat surprises me. How many times a day or a week do you eat at fast food? On average, zero.

You've talked about Chick-fil-A. Yeah, Chick-fil-A is my favorite. Chick-fil-A is my favorite. What I would do is I would introduce sliders, you know, little mini pancakes. Where am I? Little mini hamburgers. So you get three, you get six, you get nine. and maybe in a little sack like White Castle does it.

I think that would be a nice menu item. Anything you make extra, you have to pay out in vomit cleanup fees from the drunks coming in late at night. No, they can still be quality. No, I'm talking about the drunks who like sliders. Okay, James. One of two things. One, I'd go international fusion. We are a nation of all different nationalities and ethnicities and cultures now,

and we're kind of going that way anyway, so let's stop with the heart disease stuff and do something different and interesting. Not everybody likes burgers and fries. That's one option. The second one would just be to go for, like, the world's thickest patty because that would be, like, sort of a big media draw. Yeah, but then they're just going to be in a fight with Hardee's. Someone else could be, like, a slightly thicker patty.

Seth, what are you going to do to improve Wendy's? Besides covering me with hot cheese the moment I enter the store, I think they need to— What an image that is. How long were you thinking about that one? I like melted cheese. I really do. On yourself, too.

Well, it would get out of the food, right? Anyway, I think that they need to work on the redesign first. I think the menu is fine. I'm with Ron. The menu at Wendy's is pretty good. The food is pretty high quality. But most Wendy's, the locations are a little funky to me, and the stores look kind of dingy. Actually, they're usually pretty clean inside, I've found.

But from the outside, they look dated. They look old. And even McDonald's, which has a pretty old restaurant base, has done a lot to upgrade a lot of their locations. So I would start with the store redesigning upgrades first. Steve? I would do two things. One, I would bring back the salad bar. Do you guys remember the Wendy's salad bar?

Oh, yeah, I do. It was delightful. It was delightful. The sneeze-filled lettuce. And the second thing I would do is I would remove the skylight vestibules they have in the front of them. Do you remember sometimes in Wendy's the front of the stores? Oh, they still have those. They have these skylights.

Yeah. Kind of creepy, the growing things or something in there. Well, if you have any ideas on how to improve Wendy's, we want to hear from you. Our email is radioatfool.com. That's radioatfool.com. Seth, James, and Ron, we'll catch you later in the show. But up next, CNBC's Scott Wapner on the business of coffee. Stay right here.

This is Motley Fool Money. They got an awful lot of coffee in Brazil. Welcome back to Motley Fool Money. Matt Greer sitting in for Chris Hill this week. Chris is under the weather, but earlier in the week, he had an opportunity to talk about the business of coffee with CNBC's Scott Wapner. Scott Wapner is the host of CNBC's Fast Money Halftime Report. and he's the host of a new CNBC documentary, The Coffee Addiction.

It premieres on Thursday, September 29th at 9 p.m. Eastern. Scott, thanks for being here. Yeah, it's a pleasure, Chris. Thanks. So you've done documentaries for CNBC on everything from the business of ultimate fighting to obesity in America. What got you interested in coffee? Well, I think it's something we all seemingly can't live without. I know I can't. Neither can I.

First and foremost, you know, that was it. So, you know, when you think about that first and foremost, and then when you realize, when you take a look from, you know, let's take it from a stock perspective or a Wall Street perspective, you take a look at what these companies' stock prices have done over the last year or year to date, and it's pretty mind-blowing the success that some of these companies have had. Starbucks has been trading close to a new high, or, you know, now a few bucks off it. Green Mountain's run has been phenomenal. And some of these other companies that are publicly

traded as well. So it just seemed like one of those natural commodities for us to look out. Coffee prices had been trading at an all-time high earlier in the year as well. So all of those things kind of came together and seemed like a good thing to take a look at to see really what was behind that phenomenon. Now, one of the things I love about the documentaries you guys do is you really go all over the place, regardless of the topic that you're exploring. When I spoke with your colleague, Carl Quintanilla, I think it was about a year ago, and he was doing one on the trash industry. He went to landfills halfway around the world. You, for this one on coffee, you go to remote areas in Peru. You literally cross the Amazon.

For people like me who are never going to go into the Amazonian jungle, what was that like? Well, you have to go to where the story is, you know. So you get there and, okay, you figure, yeah, okay, Lima's probably, you know, pretty large, pretty cool city. Then you realize that we're taking a flight about an hour or so north and then driving a few hours. And then you get onto this little tiny boat with all of your camera gear and equipment and a bunch of guys, and you cross a tributary to the Amazon, which in and of itself, you know, has the exotic feel to it. So you're kind of wondering, you know, where in the world are we? And then when you get out into the middle of the jungle, you know, you realize that there's no turning back.

It was probably every descriptive word you could come up with to describe that whole trip. amazing, crazy, unbelievable. Just to be out in literally the middle of the jungle in one of the most remote places in Peru and to go on a four plus hour hike straight uphill in mud that is up to your ankles was probably the most difficult thing that I've ever done in my life. You're listening to Motley Fool Money, talking with Scott Wapner, host of CNBC's new documentary, The Coffee Addiction. It premieres next Thursday, September 29th at 9 p.m. Eastern. Okay, Scott, I go into a grocery store. Let's say I buy a pound of coffee beans for $12, $14. Walk me back through the economics. The farmer in Peru that you spoke of,

How much is he getting, and who's getting a cut along the way to the point that I'm buying it in the grocery store? Well, I mean, it's a difficult subject, right? You've got the family in Peru who's living with, you know, next to nothing, hopefully a roof over their head, and then they're farming these coffee beans, high-quality ones at that, where literally you could get $12, $14, or, you know, in some cases even more than that, a pound. Now, one of the issues with these people growing the beans and getting them into the trade routes, they're working oftentimes with co-ops that are working with a bunch of small farmers to make the connections with the wholesalers and the buyers who are coming from the United States

and elsewhere to even get the beans over here in the first place. Now, we're talking specialty coffee and, in large cases, Arabica beans that most of us are familiar with. So you've got the small farmer who has to pay the co-op, obviously, for facilitating the relationships and being some sort of a middleman and doing a lot of the administrative work that it takes, obviously, to have that kind of commerce going on. Then you have to pay, you know, by the time the coffee roaster goes to Peru and he finds the beans. So there's the co-op cost is factored in, there's the roaster and the fixed costs that are involved, there's the import charges. The roaster could be paying a couple of bucks a pound, if that, maybe even a little bit less to the coffee farmer.

And by the time it gets to the grocery store, once everything is factored in, it could be $12 to $14. And it probably on the surface sounds like, well, wait a minute, that doesn't sound like the coffee farmer uh... is getting all that much and i guess in in in reality you know maybe they're not but uh... you know between organizations like fair trade which try and make sure that the coffee farmers are getting their their fair share and and you know that the process is is done fairly uh... that's just the nature of of the way that the business is once went everything is factored in the fact of the matter is it's not that easy to get beans from the middle of

someplace like Peru onto the specialty coffee shelf in New York City, for example. There's a lot that goes into it. So you're in the remote jungle in Peru, but for this documentary, you're also sitting down with Howard Schultz, CEO of Starbucks, going to local coffee shops across America. What surprised you the most when you were working on this documentary? uh i think first and foremost i mean at the peru thing just just realizing that there there are coffee roasters out there who are willing to go that far to to find great coffee beans i mean some you know look you could sit at today's age you could sit at your home computer uh and do most of this stuff and perhaps most roasters out there do that but we were with a guy from a small

roaster outside seattle who was looking as much for a good story as he was for the beans themselves a good story to go along with the beans uh you know maybe it's a bit of a marketing a thing but for him it was certainly more than just fine finding good good quality coffee uh the other thing was in in speaking with howard schultz and and he details a lot of this in his book Onward, is just how open he was to some of the mistakes that Starbucks had made over the past several years. And, you know, I guess it's easy to be open and honest when you've hit the bottom and have been able to come back as robustly as they have.

It's easy to be able to talk about your mistakes once you've gotten past them and been able to rebound as remarkably, really, as they have been. I mean, Starbucks had record profits and revenues in 2010. And a few years ago, that seemed about as far-fetched a proposition as you could come up with. You're listening to Motley Fool Money, talking with Scott Wapner from CNBC. He's the host of the new documentary, The Coffee Addiction. Scott, it seems like every six months or so, there is a study about the health benefits of coffee. And as someone who drinks a lot of coffee every day, I certainly hope they're all true. What did you learn about the effect of coffee on the human body? Well, I mean, I think it's a give and take. Look, there's going to be

somebody out there who says that all that caffeine is not good for you. And the fact of the matter is, I mean, really, it's not a tremendous amount of caffeine in a cup of coffee. It's not going to make you do when we talked to a a medical doctor who said uh look you could have five cups of coffee you're not gonna it's not gonna make you kill your wife i mean you're not gonna you don't have to uh it's not some habit that you have to to give up uh and in in his estimation there are actually you know many benefits to to some of the caffeine uh that is in in coffee you'll have some people out there who say there are some you know inherent risks i guess but uh i think we found that in the big picture, there really isn't anything, at least according to the medical

experts that we spoke with, that you really had to be concerned about. And certainly the medical expert that we spoke with wasn't really concerned about it at all. In your day-to-day job at CNBC, you're the host of Fast Money Halftime Report. Obviously, you're seeing a lot of numbers every day. I'm curious, what are one or two numbers or metrics that you're looking at right now to judge the health of the U.S. economy? Wow. I mean, everybody talks about the unemployment number, which is depressing, obviously, because it's not getting any better. And the jobless situation in the United States is a real problem. But I almost look, and I think that the most important thing to look at

is not necessarily here, but is over in China. I know there's a lot of focus right now on what's happening over in Europe with the sovereign debt crises spread across that continent. But China, to me, is the key to the whole story, really. If the Chinese economy slows too dramatically, if there's a so-called hard landing where they can't engineer either a soft landing or no landing at all, frankly, then we could have real problems, because we rely so heavily on China as a trade partner, obviously, that any hint of a major slowdown, frankly, puts the global economy at real risk, which is interesting in and of itself, because that's one of the reasons why I think, you know, people talk about all the time, well, is China

going to stop buying our treasuries, this, that, and the other thing. I think China, and there was even talk last week that China may be buying bonds from some of these European countries that are in trouble. I think China is going to do anything it can, anything and everything it can, to keep Europe and the United States from falling off a cliff. Because as its two biggest trading partners, China, frankly, can't afford to have us and Europe go into a double-dip recession. And we certainly can't afford for China to slow down so dramatically that it drags the world economy down with it. There are a couple of key metrics today that I thought was interesting. For example, Alpha Natural Resources, Walters Energy warned about

coal deliveries. You saw rail stocks take a huge hit off that. Transports were down big. And one of the issues is talking about a slowdown in China. And that's alarming. I mean, that's the kind of thing that roils the market. So I really have my eyes set on what's happening over in China, and not to discount it in any way, shape, or form what's happening over in Europe, because it's serious, and there are potentially huge impacts of that. But watch China. You're listening to Motley Fool Money, talking with Scott Wapner, host of CNBC's new documentary, the coffee addiction. All right, we're going to wrap up with a round of buy, sell, or hold. This company just started accepting political ads. Buy, sell, or hold the future of Twitter.

Oh, buy. Tell me why. I just think Twitter, Facebook, they're at the forefront of the digital age. I just think that they are such substantial growth companies that when and if Both of those companies have initial public offerings that they'll be wildly successful. I just think the sky's the limit for those two companies. Sometimes this is the only option for coffee drinkers. Buy, sell, or hold non-dairy creamer. Sell. Don't put it in my espresso.

Would never put it in my espresso. And I'll just leave it at that. There's talk that this could give the iPad a run for its money. buy, sell, or hold the soon-to-be-released Amazon tablet. Yeah, buy. A lot of anticipation around that. I've heard people talk about that as really the only device that's in the pipeline that could even come close to challenging what the iPad has done. It's hard to say that if I was Apple, I'd be worried, but I'd be polishing the rearview mirror a little bit to make sure I can see them.

And finally, it's the ultimate companion to coffee, buy, sell, or hold, donuts. Oh, I mean, I'm long donuts. Yeah, I mean, you got to go long donuts. Yeah, no doubt about that. All right, you can catch him each weekday on Fast Money Halftime Report on CNBC. The new documentary, The Coffee Addiction, premieres Thursday, September 29th at 9 p.m. Eastern. Set your DVRs.

It is great stuff. Scott Wabner. Thanks so much for being here. It's a pleasure. Thanks so much for having me. Man, they got a gang of coffee in Brazil. Coming up, stocks on our radar. This is Motley Fool Money. If you got the money, honey, I've got the 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 Matt Greer, sitting in for Chris Hill this week. Guys, Chris is out sick. We think it's a

sinus thing. Feel better, Chris. Yeah, we hope he feels better. Seth, Jason, James Early, and Ron Gross. Guys, time for Stocks on Our Radar. But first, Stocks on Our Radar is brought to you by Encore Insurance Services. Encore, encore. For a free life

insurance quote, visit smartterm.com. That's smartterm.com. Or call toll-free 1-866-347-5748. They'll compare rates to help you save. Licensing and disclaimer information can be found at smartterm.com. Okay, guys, one stock on your radar. Ron. Well, Mac, weak markets like this sometimes create the opportunity to buy blue-chip stocks, which are not normally considered cheap. And one circumstance that I've been looking at

recently is Disney. It's recently dipped back under $30, down from a high of around $44 earlier in the year. ESPN is real strong for them still. Even the theme parks are doing well, even in this economy. Now, people, of course, think that might not stay that way and the stock is selling off. But if you're a long-term investor, this might be a good entry point. Steve, a question for Ron? Sure. Whatever happened to the Disney stores? Do those still exist? They sold them. And then, if I'm right, they bought them back. And they closed a number of underperforming ones. But yeah, they do still exist.

Well, where do you get your princess gear? Online. eBay? Disney.com. Where else? I take back everything I said about Meg Whitman. Ticker symbol is D-I-S. James?

Meg, I'm looking at McGrath Rent Corp. It's just on my radar. I don't know that I love it yet. The ticker is MGRC. It rents business-to-business equipment and office cubicle furniture. It's been beaten down lately, but it has raised its dividend for 20 years in a row. It yields 4.1% now. Steve?

How is this company doing so well with unemployment nearing 10%? Well, it's actually not doing so well, but the stock has been going down sort of commensurately. So the idea is that at some point it may be at a low, so we might only have up to go from here. I know those are dangerous words, but they're true sometimes. Yeah, you can come over and join my members and me in some of those stocks that can't go any lower. Seth? I was looking the other day at Papa John's. That's PZZA. It came up on a screen of mine and looked pretty interesting. I wasn't sure that the price was awesome at that point,

but we've had a pretty down market. Essentially, Papa John's just makes really pretty good cash flow, fairly steady. They've been buying back shares. They sell a premium product in a space where everyone else is trying to always cut costs. Their sales growth hasn't been great because they're having to compete with people who are selling a lower quality product. But I think it's the right thing to do. It keeps the brand strong and I think it makes it a healthier business going forward.

And so I think it's probably a decent entry point right there for a company that is run by a really motivated founder and is interested in making a great product and is relatively inexpensive. Steve? What do you think Papa John's biggest competitive advantage is?

Is it quality of product? I would say that it's probably quality of product and maybe actually that management, that founder management situation. In other words, he takes pride in the product. And you see this if you read the conference call. Someone asks a question, sort of a leading question, like, would you consider putting less cheese on a pizza? And he says, you know, you're stabbing me in the heart here.

We are never going to do that. Somebody else might do that, but we're not going to do that. That's not what we are. We're going to try to charge $2 more for the pizza. And I think those kinds of businesses tend to do okay in the long term, although when everyone's trading down, there are tough times. And I think they use him effectively in the advertising by kind of branding it through him, unlike something like Domino's, which is kind of faceless and nameless. Here's the guy who won't cut the cheese.

Wow. Strong. Wow. Just remember, it's a free show. Okay, let's go around the horn here. Ron, one thing you're working on this week over at Million Dollar Portfolio. So as stocks come down, opportunities are created. And we're looking at some blue-chip companies, as I just mentioned, that are looking perhaps cheap for the first time since 2008, 2009.

And we'll be looking hard at those. James, at Income Investor, what's going on? I am looking for my next Income Investor stock. I have a monthly cycle that I work on. And I am excited about all the turbulence in Europe because I think there are some good buys there. So I'm not guaranteed that I'm going to find something there, but something good is there. And Seth over at Hidden Gems. We're digging into a whole pile of ideas we have that have gotten a lot cheaper and trying to prioritize which are the cheapest.

Guys, thanks for being here. Thank you, Mac. Pleasure, Mac. And thanks to our special guest this week, Scott Wapner from CNBC. The new CNBC documentary is The Coffee Addiction. That's it for this edition of Motley Fool Money. Our engineer is Steve Broido. Chris Hill is our regular host, and we hope he's back in action next week.

I'm Mac Greer. You can catch our daily podcast, Market Foolery, on Monday. Thanks for listening. We'll see you next week.