Motley Fool Hidden Gems Investing - Revenge of the Big Tech Stocks

Episode Date: July 31, 2020

Amazon, Apple, and Facebook all rise on their latest earnings reports. Alphabet 2nd-quarter makes history, but not in a good way. PayPal and Teladoc Health hit all-time highs, while Visa and Mastercard deal with lower payment volumes. Andy Cross, Jason Moser, and Ron Gross analyze those stories, as well as the latest from Starbucks, UPS, Sherwin-Williams, Scotts Miracle-Gro, McDonald’s, and Pinterest. Plus they share three stocks on their radar: CEVA, Kinsale Capital Group, and J M Smucker.   Thanks for helping us with our 2-question listener survey! Learn more about your ad choices. Visit megaphone.fm/adchoices

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That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Fool Money radio show. I'm Chris Hill. Joining me this week, Andy Cross and Jason Moser. Good to see you, gentlemen. Hey, Chris. Howdy.

It's earningspalooza. We've got so many companies reporting, we don't even have a guest this week. And as always, we do have a few stocks on our radar, but we're going to begin with the big macro. The U.S. economy suffered its worst period ever in the second quarter, with GDP falling 33%. Andy Cross, it is the biggest drop since GDP started getting measured 70 years ago. Yeah, not a great quarter just because of the numbers and because of what we've been experience with the COVID pandemic. That is an annualized number. So quarter over quarter, Chris, it dropped to 9.5%. Still very bad. Still recognizing that we are in very difficult circumstances as we are trying to come out of a quarantine from COVID. And actually,

we've seen some flare-ups around the country and some kind of further concerns. But 5.6% on the consumer spending side, the numbers just came out this week. So that wasn't so bad, Chris. that was down a little bit from the 8.5% the month before or the quarter before, sorry, the month before. So we're seeing a little bit of spending patterns kind of come back. Interesting, the personalized savings rate, Chris, really spiked as more and more people have really held back on that spending that has hurt the GDP numbers overall. Yeah, Jason, I suppose if there is a silver lining, it is good to see people saving more money. Yeah, I mean, that is nice. I'm not going to complain. We always say we'd love to see that

personal savings rate go up. And so, you take what you can get, even though that's probably somewhat of an adjusted number, I guess you could say. It does feel like, given everything we know today, I mean, it's more than reasonable to assume, at least, that the rest of the calendar year is going to be challenging in a best-case scenario. Now, with that said, that doesn't mean things won't start getting better and it doesn't mean that we stop investing, but it really does feel like there is some sort of gap, there's some sort of disparity between the thinking of investors and Wall Street and then the reality of the situation on the ground, right? I mean, we're talking about this before taping where you look at the market and I mean, it's obviously been

a very volatile year, but essentially, I mean, maybe we're a little bit down, maybe we're close to flat for the year on the S&P, it certainly feels like it should be a lot worse based on what we know is going on on the ground. And that's my concern, is that we go into the back half of this year with continued headwinds, continued challenges that maybe start to play out in the market a little bit more as we start to realize these numbers are going to be challenged at least for a little while longer. Yeah. And Chris, I think that most of the challenging real environment is happening at the small and medium-sized businesses, not so much on the larger companies as Jason mentioned, as we're seeing in the stock market. All right, let's get to earnings. We're

going to start with the FAANG stocks. Amazon's second quarter profits blew away Wall Street's expectations. CEO Jeff Bezos called the quarter highly unusual. Jason, I bet shareholders would be fine if the next few quarters were also highly unusual. Hey, I'm a shareholder and I'd be fine with that, too. We've talked a lot about the evolving retail space and how more competition continues to enter the fray to challenge Amazon. And that's true, but for now, I mean, I think we're very, very clear here. This is still Amazon's world, and we're all just living in it. I mean, who grows their top line 40% in this kind of environment? I mean, really, that's almost insulting to everyone else out there. You know, the benefits for Amazon there,

they don't have just the retail business to rely on. I mean, when you look at Amazon Web Services, I know there was some criticism there and that growth decelerated, or maybe it wasn't quite as robust as analysts were hoping for. But at 29%, 30% revenue growth, the thing that really stood out to me was operating profit for AWS was up 60%. And so now you've got a $43 billion run rate business here that is continuing to pick up share and become a more meaningful part of this business. So, even if regulators have Amazon in their sights and want to consider breaking this company up, as a shareholder, I mean, I'd rather not see that. But you know what? I don't know that I really mind seeing it. Like, I'd still own both companies. And clearly, AWS is a good

business and it keeps on getting better. So, I mean, let's not forget, too, they have the Prime day lever they're going to be able to pull. It's going to be in quarter four this year as opposed to quarter three, with the exception of India, where Prime Day will be on August 6th and 7th. So, that's another nice little lever we can expect towards the back half of the year, too. Just great business doing a lot of great things. And I think the mentality of Jeff Bezos there, he said it in congressional testimony, and regarding to gaining the customer's trust, he said, you earn trust slowly over time by doing hard things well. And I really do feel like that's just Amazon story in a nutshell. Third quarter revenue for Apple rose 11%, which doesn't sound

like a lot, but historically, this is not a big quarter for Apple's business, Andy, and shares hitting an all-time high on Friday. Yeah, Chris, it was actually a really nice quarter. Sales were actually up 14% if you back out some of the strong dollar effects on the foreign exchange side. Stellar performance across really all categories, including Mac and iPad, that may have been benefiting from more of us staying at home and more of our kids staying, working at school from home. So earnings per share were up 18%. As I mentioned, sales up 14% to be back out the strong dollar. Across the board, products were up 10%. Now 78% of revenues. iPhone was up about 2%. Mac up 22%. Chris, that's the highest third quarter in eight years. iPad sales up 31%.

and the wearables and accessories continues to grow up 17%. As we've talked about, the services side of the business continues to grow, is now 22% of total sales. Their services business was up 15%. Demand picked up really across the board. Their iPhone SE was a nice launch. They now have 550 million total subscribers across their services, Chris, versus 420 million a year ago.

That's up more than 30%. continued to pay out a dividend, continued to buy back a lot of stocks. And Chris, the big headline was they announced a four-for-one stock split as well. I was just going to say, everything you just said about their business and how Apple is performing, it basically got overshadowed when they said, oh, and by the way, we're going to split the stock four-for-one. And Wall Street and a lot of the financial media just went crazy latching onto that. Yeah, it's become such a big impact on the Dow, which is a price-weighted index. And now So Apple will go from being one of the most meaningful stocks on the Dow, having an impact on the Dow, to kind of like more like in the middle and less impactful than stocks like UnitedHealth and Home Depot.

So overall, just a really nice quarter. They talk about how they wanted to broaden their investor base and give access to more people for more stock. We've talked about this. It's not really so much the price per stock you pay as long as you're not buying penny stocks. But, yes, certainly there are probably more investors who want to pay a cheaper nominal stock price than a more expensive one and who can afford it depending on how much they're allocating into Apple stock. So, a really nice quarter from Apple and continues to show and be one of the best-run companies out there. Alphabet's second quarter was also historic. It was the first time in company history that revenue declined and shares of Google's parent company down 4% on Friday, Jason.

Yeah, Chris, I got to go Ricky Bobby on these guys for a second. With all due respect, I mean, this really was an unimpressive quarter. I mean, I know it's unprecedented times, but for a world-class company like this, I mean, this really was just kind of a meh quarter. With that said, I mean, I don't think it's something where investors need to worry, but you're definitely seeing them suffer from a challenging environment, particularly when it comes to brand advertising, and that's really been a lot of their bread and butter. They noted in the call, YouTube advertising revenues were $3.8 billion. That was up 6% from a year ago, and that was driven more by direct response ad, and that

countered the decline in brand advertising. So, I mean, there's some challenges there they have to deal with in the near term. But, I mean, when you look at the business, again, like Amazon, I mean, they do have some diversification there. That being said, Google still is primarily, it's an ad business, but Google Cloud continues to gain some traction. It looked like the end of the quarter with a backlog of $14.8 billion, which substantially all of that relates to Google Cloud. And it does, the other bets segment doesn't really bear a lot of fruit, but it does seem like Waymo continues to gain some traction with new relationships with automakers and getting

to that level four and potentially level five autonomous driving. Good business, doing a lot of cool things, not a great quarter. Probably going to have some continued headwinds here in the coming quarters based on the advertising market out there, but I don't think that takes away from their advantage in being just number one in search. The other butts segment actually lost over a billion dollars. I think that was a bit of an understatement when you said it's not really bearing fruit. I looked at that and thought, a couple more quarters like this, and CFO Ruth Porat, it's not going to surprise me if she starts to bring the hammer down on the other bet segment. She very well may. Unfortunately, that's not new. Generally speaking, that's par

for the course. What they need is one or two of those bets to really pay off meaningfully, and that justifies the entire existence. And I think that's one of the things they're really hoping for with Waymo. It remains to be seen how far they'll be able to take it. But yeah, I have to believe they have that under a microscope. Up next, we've got Facebook and a big week for the war on cash. Stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here with Jason Moser and Ron Gross tagging in for Andy Cross. How are you doing, Chris? doing well. Before we get to Facebook, we started the show with the big macro,

what did you think of the GDP numbers? Gosh, troubling. Really, really weak, would have even been more severe without trillions of dollars in government stimulus. Let's not forget that this is artificially better than it actually would have been. It would have been an actual disaster. You wouldn't know it by looking at the stock market, but I think the recovery is actually stalled a bit. More stimulus, I think, is needed. People are hurting. More than 1.4 million Americans filed new claims for state unemployment benefits this week. Not surprisingly, consumer confidence is down from June. So, we'll get there, and I'm an optimist. But right now, real folks are hurting, and we've got to recognize that.

Facebook shares up 10% this week and hitting a new all-time high. After second quarter profits revenue came in higher than expected. Revenue growth is slowing, Ron, but the social network is still making money. Yeah, for sure. Revenue growth of 11% was their weakest ever, but not bad considering where we are right now. Solid results despite an advertising boycott, the impact of COVID, 1,100 companies joined in that advertising boycott, well-known companies like Unilever, Starbucks, Coke. It should be noted though that a significant amount of Facebook's business is the smaller and mid-sized companies that wouldn't necessarily make headlines boycotting the advertising platform. So, still not too bad, though. Solid

results. 11% growth. Ad sales up 10%. Everything moving online was certainly a catalyst for their business. Their monthly active users now stand at 2.7 billion. That's a 10% increase year over year. expenses were up a bit, but you know what, they added 4,200 new hires in the quarter. So, yeah, expenses are going to be up a bit, that's a staggering amount of hiring. All in all, things look pretty good. They gave us some guidance, interestingly, July ad sales first three weeks up 10% year-over-year, and they indicated that that should be consistent as we go through the quarter. So, a little guidance there. As we started to tape, I noticed that they've reached an agreement with the three largest

music companies for the rights to show official music videos on the platform. So, something new there for Facebook and its users. Shares of PayPal up 12%, hitting a new all-time high after a strong second quarter report. And Jason, they also resumed guidance. Yeah. I mean, Chris, I'm really glad you brought up the war on cash. I mean, PayPal is up 232% since the inception of the basket. the basket is up 214% to the market's 39%. Oh, wait, we're talking about PayPal. Hang on one sec, let me get back. Yeah, I mean, listen, as far as all seriousness, as the war on cash continues and the digital wallet continues to pull away, PayPal has a number of levers, a number of

different ways to maintain a strong presence in this world of money movement, and they are doing just that. I mean, this is a record-setting quarter from a number of perspectives, but one of the amazing things was 21.3 million net new active accounts added for the quarter, the strongest quarter in the company's history. So, clearly, the demand is there for the digital dollar. Revenue surpassed $5 billion for the quarter, first time ever. Total payment volume of $222 billion was up 30% from a year ago. The remittance business, Zoom, that we always like talk about, continues to witness strong growth. Zoom net new actives were up 600% from the previous quarter. So, this all just tells us Venmo, I mean, grew total payment volume by 52%.

So, really, it just continues to, as Ron might say, fire on all cylinders. They're just doing a lot of good things. And, you know, CEO Dan Shulman on the call, we've noted in the restaurant space, some restaurant companies taking a little bit of an offense perspective. PayPal, definitely right there with them. Dan Schulman said on the call, this is our time, and we intend to seize the moment. And it seems like they're doing just that. On the flip side, Visa's third quarter report and MasterCard's second quarter report, we actually saw lower payment volume, Ron. Look, these are giants in the payments industry, but it seems like it could just be a speed bump. Yeah, I think the story is the same for both. Basically, the travel and retail industries

were just whacked. And cross-border volume as a result of travel bans also really taking a hit. So, MasterCard had revenue down 19%, gross dollar volumes down 10%. The travel ban, as I mentioned, caused a 45% drop in cross-border volume for them, net income down 30%. I do think this comes back eventually. I don't think this is an impairment for the long-term for either business. But the story is the same for Visa, revenue down 17%, volumes down 10%, cross-border volume 37% decrease. So, almost like line-for-line, kind of the same story, which isn't surprising, Visa had a profit decrease of 23%. Great companies, though, still wonderful companies to own. You can own either, you can own both. They're

not the cheapest right now, because earnings are hurting. So, you know, MasterCard 41 times, Visa 35 times, but that's a little bit artificial as well. Still wonderful companies, and I think they'll do great long-term. Shares of Teladoc Health hit an all-time high this week, but then fell a little bit from that peak after second quarter revenue only grew 85%. Jason, what are they, asleep at the wheel over there? I mean, what are they doing? I have no idea. Yeah, listen, remember last quarter, I said that PayPal, to me, felt like last quarter, PayPal won earnings season. This quarter, it really actually does feel like Teladoc may win this earnings season. I know we're not through it yet, but they chalked up some pretty impressive

numbers. Members now stand at 51.5 million versus 26.8 million a year ago. Visit fee only members, substantial growth there, 21.8 million versus 9.7 million a year ago. The thing that stood out to me was, in a world where companies are pulling back on guidance, stopping guidance altogether, Teladoc is out there not only raising guidance for the quarter and raising guidance for the year, but then they had, Chris, they had the audacity to get out there and actually set guidance, revenue guidance for the full year 2021. I mean, how dare they? Don't they understand that this is a point in time where everybody needs to be pulling back on information? Seriously, I think that's a testament to their business model, right? That subscription model,

particularly in healthcare, it's very resilient, very predictable. And I think that's a good thing for their business. And one last point I'll note, they said on the call that in areas in this regard regarding visit volumes, where areas where there are hotspots, they, of course, saw volume tick up. But what I found even more interesting was in areas where COVID has more or less been contained, that things are okay, they've actually seen volumes growing at double the rate from pre-COVID levels. And that's with doctor's offices basically all back to operating at pre-COVID levels. So that just tells us that the consumer is starting to use telemedicine for more than just an emergency coronavirus situation, right? The consumer is becoming more educated that it exists

in the different kinds of use case scenarios for it, which honestly, I mean, that's what you want to see with a business like this. Up next, a reminder that boring businesses can be incredibly rewarding for shareholders. Stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here with Ron Gross and Andy Cross back in for Jason Moser. Shares of Starbucks up slightly this week despite the fact that same-store sales in the third quarter fell 40%. On the plus side, Andy, revenue was actually higher than expected. Yeah, Chris. When you look at that comp number, the weekly comparable store number bottom at down 65% and exit of the quarter down only 16%. They are starting to see now as 96%

of their stores in the U.S. are open, 30% are now open for seeding. They are starting to see some business come back. Interesting that comp number was driven on the downside mostly by fewer transactions, Chris. Globally, 50% fewer transactions. In the U.S., 52% fewer transactions. But in both cases, we are buying more things when we do go to a Starbucks. In the U.S., 25% of the comp number was an increase in average ticket size. So when we go to the Starbucks, whether it's drive-through, pickup, and they are offering more and more of those solutions, we're actually spending more and we're buying more of what we do. So fewer visits because of the store closures, but we're buying more. So that's the bright side. So coming out of it,

I think there's still reason to be optimistic. I'm an optimistic Starbucks shareholder. $90 billion market cap still will be profitable, probably north of $3 in earnings per share in a normal environment. So stock's not too horribly expensive here. One of the things that surprised me a little bit in a good way was Kevin Johnson, the CEO, came out this week and talked about growth in China. He said they're still on track to open 500 new stores in China. Right now, they've got about 4,400. That's a pretty sizable increase considering everything that's going on in China right now. Well, Chris, and they still grew their store footprint 5% over the year. So they are adding stores. They are continuing to have an expansion mindset. I think Kevin Johnson,

he was very early, as we talked about over the past couple of months, very early in experiencing the impact of the COVID-19 crisis over in China. And they brought that experiences over to the U.S. where they were very fast and very effective in being able to change their business and take care of their employees in the right way. So very forward thinking, and they still have a growth minded perspective for Starbucks. What a week for UPS. Second quarter results were much better than expected, sending the stock up more than 15% and Ron, not surprisingly, the consumer segment doing very well for UPS. And perhaps we should not be surprised. I know at my home, either FedEx or UPS are here multiple times a week. So not surprising. Stock up 20% this year. Great

quarter. Revenue up 13%. Average U.S. daily volume increased almost 23%, reaching 21.1 million packages per day. Those are big numbers. U.S. residential delivery, as you said, surged in the quarter, driving that business-to-consumer B2C shipment growth of 65%. huge numbers. Even international was strong, up almost 10%, driven by strong outbound demand from Asia, increase in cross-border e-commerce in Europe. So, both U.S. and international strong. Net income up almost 9%. Didn't offer guidance, not surprising, but really strong. And you know what, the stock is not really that expensive at 19X. This could be a nice stock for a while. You know, going back to what Jason was

talking about with Teladoc and they're putting guidance out there for 2021. I'm going to go ahead and trust that management knows what it's doing there. I also see the wisdom of UPS management saying, look, there's no upside for us to get guidance, particularly not when the stock pops on this kind of surprisingly good quarter. So, I don't blame them one bit for holding the guidance back? I don't either. You've got to assume that in coming quarters, the growth will slow as hopefully things get back to normal at some point. I don't think they want to look out and start trying to project how much a slowing growth there is and when that starts to occur. I think it's just too difficult.

Let's move to the boring business portion of the show. We'll start with Sherwin-Williams. Shares of the paint company hitting an all-time high after second quarter profits came in much higher than expected. Andy, Sherwin-Williams also raising guidance, a rare thing in this environment. Stock's at $644, Chris. It has beaten the market over the past 1, 3, 5, 10 years, and probably even beyond that. Pays a little bit of a dividend, buys back some stock. As you mentioned, it was a decent quarter. Revenue's down a little less than 6%. Really, the bright spot was in the consumer brand business that was up more than 20 so that's like consumers do-it-yourselfers out there going to other retail outlets buying sherwin williams paints sherwin williams paints

to upgrade their house um to we're inside our house what better time than to splash a little bright color around your kid's bedroom or your dining room whatever it might be so they saw a really nice um growth in that area area and they have managed costs very well they raise a little bit of guidance for the fiscal year. They're going to show a little bit of growth in their earnings per share. They, again, like Starbucks, are starting to see a little bit more signs of life. They gave one interesting fact, Chris. Spray equipment pump sales are starting to come back strong and near the end of the quarter. And that's an indicator of some positive actions from the contracting business. So maybe there are some other bright spots besides the consumer side

on there for sure on Williams, but clearly been a great stock for people to own and not very volatile, too. Well, and as you said, probably not that surprising that the consumer segment is doing so well, given people being trapped inside their homes. But it's nice that they also gave that sort of insight into the contractor side of the business, too. Yep, absolutely. It's really just a very, very solid, well-run business. Let's move from paint to fertilizer. Scott's Miracle-Gro, also hitting a new all-time high. third quarter profits and revenue came in higher than expected. And on top of that, Ron, they also raised the dividend. Something for everyone here. Stock up 48% this year. Who knew?

Who was watching this one? Sales up 28%, including their Hawthorne subsidiary. I didn't even know they had a Hawthorne subsidiary. That was up 72%. U.S. consumer sales up 21%, benefited from more than a 40% increase in branded soils, even higher gains in the consumer purchases for most of their ortho-insect business, which is a real strong adjusted EPS of 22%. They're increasing bonus payments across their employee base. They're giving bonuses to folks that normally wouldn't qualify for bonuses, I don't begrudge them that, the company is doing really well. And then, even more for shareholders, a $5 per share special dividend and a 7% increase

in their regular quarterly dividend payment. So, I mean, this is one that's firing on all cylinders right now. It's not just me, right, Ron? Like, the whole thing of, we're going to raise our dividend and on top of that we're going to give a special dividend, I don't ever remember a company doing that at the same time. It's, you know, they're generating cash flow in excess of their needs, so they can do both, they can raise that dividend and hopefully continue to do that consistently. And then also, just take some cash off of the balance sheet and give it back to shareholders,

it's a great thing. Plus, you get a stock that's up 50% this year almost, that's pretty nice. I know we talk a lot on this show about the innovative companies out there, the technology companies, the acceleration of moving to things like digital payments or telemedicine. I look at Sherwin-Williams, I look at Scott's Miracle-Gro, you can throw Clorox in there as well. That seems like a trio of companies that's probably going to do really well over the next decade, and they're about as straightforward and boring as it gets. The value investor in me loves these kind of old-economy, old-school type businesses, especially when they're not expensive. Scott's at 21X. That's not too bad for a company that's doing so well. I love to see

these, especially when it gets a little bit difficult to sometimes understand the high-tech companies. I think it's a way just to diversify your portfolio too as you add 15, 20, 25, 30 stocks just to diversify that portfolio too. Up next, more headlines and a few stocks you might want to add to your watch list. Don't touch that dial. You're listening to Motley Fool Money. As always, people on the program may have interests 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 with Andy Cross, Jason Moser, and Ron Gross. It's the whole gang

as we head into the homestretch of earningspalooza. A couple more earning stories to get to. Let's start with McDonald's. Second quarter, same-store sales fell just 2.3%. That's a lot better than what we've seen out of other restaurant companies, Jason, but shares at McDonald's still down a little bit this week. Yeah. I mean, it obviously wasn't a great quarter, understandably. Why? But when you look at the results and compare it to other restaurant companies in the space, I mean, I felt like this was a pretty good-looking report, all things considered. It shows me certainly that businesses that are going to be able to control their expenses in the near-term, they're going to be the ones that are going to continue to pick up a little share here and make

it through this pandemic okay. And I think McDonald's is certainly one of those businesses. International operated market segment was an interesting data point they noted on the call. Pre-COVID, nearly 70% of customer orders were in restaurant across those larger markets. That international operating market segment, very big part of the business there. So, with a lot of these dining areas closed or even limited in capacity, that does play out on the results. So, you can look at McDonald's and say, well, at least they have drive-throughs, at least it's fast food, you're not going there for the experience maybe. But the fact of the matter is, a lot of those sales still do come from customers dining in.

And so, that is something they're going to have to deal with in the near-term at least. But when you look at all things considered, they've pretty much got all of their stores back open. In June, they recovered nearly 90% of 2019 sales. I think the one thing that really stood out as a noteworthy challenge they're going to have to deal with, because we're not commuting to work every day anymore, breakfast is really suffering. And even though they have the ability to serve breakfast whenever they want, some people, oddly enough, Chris, they want breakfast for breakfast, and they're not getting it now because they're not going to work or leaving the house. So, they are suffering a bit

from that. But again, I think this is a company that weathers the storm just fine. We talk about the strong getting stronger in situations like this, and McDonald's is going to be one of those. Well, and tied into that, it's a reminder of how profitable coffee can be. And just within the breakfast segment, that's been a winner for McDonald's in the past. Yeah, not just coffee, but all of the little incremental sales that come with it. You stop for a coffee, you get a McMuffin. Next thing you know, you've got a hash brown in your hand. Chris gets out of control.

Getting hungry. Shares of Pinterest up 30% on Friday after a monster second quarter. And Andy, monthly active users now topping 400 million for Pinterest. Yeah, Chris, I think the bright spots here, the highlights, are the monthly active users grew 39% during the quarter. That was an increase off the last quarter of 30% and up from 26% growth a year ago. The revenues were up only 4%, but it was really just the story they continue to tell and some of the guidance they gave. A lot of engagement with what they're seeing on the video side. Daily video views were up 150%. Unique video uploads were up

600%. They're starting to see this traction, Chris, I've talked about before, which is the integration with the direct shopping they have shopify as a partner there you can now do more on the shopping um experience on the pinterest platform than you could before so as the advertising is starting to really evolve and change with this with the covid pandemic they're starting to make some real progress on the on the the shopping activity they can offer their their users um now globally um revenue per user was down a little bit in the u.s they're starting to see a little bit of growth internationally, which is good. And interesting, Chris, 80% of consumer product, good ad spending that runs through their network is now going through

the auto bid algorithm. And that's a really interesting evolution as they continue to work on the technology to make their ad business all that stronger. So guidance also for the quarter, Chris, coming up, 30% revenue on the top lines. That was a bright spot too. I want to go back to Apple for one second and the four-for-one stock split. Ron, tell me why the other big tech companies shouldn't do the same thing. When I hear Tim Cook laying out the case for why they're splitting the stock four-for-one, yes, I think obviously part of it is to stay in the Dow, but it seems pretty shareholder-friendly to me. Do you think others will follow his lead or do you think Amazon is like, no, we're just going to keep our

stock right where it is? It's certainly not shareholder unfriendly. It's either friendly or neutral, depending on how you look at it. Stock splits are largely cosmetic, they don't change anything except the stock price, which may make it more accessible to more people. Obviously, in the age of fractional shares, fractional trading, that's not as important as it used to be, because you can buy a fraction of a share, many brokers will allow you to buy a fraction of a share. But to your point, I wouldn't be surprised if some of the higher-priced stocks followed suit and brought their stock price down for the same reasons that Tim Cook outlined. Before we get to the stocks on our radar, I have a small request of our dozens

of listeners. We have a very brief survey, and if you could help us out by taking it, that would be great. One of the things we've talked about during this pandemic is that a lot of companies are looking at their businesses and how they're serving customers, and they're looking for ways that they can do things differently. And if you've been listening to Motley Fool Money for a while, you may have noticed we haven't been running any ads lately, no Harry's Razors, no Rocket Mortgage. And that's because more than ever, The Motley Fool, our parent company, is focused on trying to help everyone from our members to our readers to our dozens of listeners to invest better. And that's why we're taking a break from those external ads. To the extent that

we promote things on this show, it's going to be for ways in which The Motley Fool can help you invest better. And to do that, we want to know a little bit about who you are and how we can help you. So, if you go to motley.ly slash survey, that's M-O-T dot L-Y slash survey, we've got a two-question survey. It's going to take you less than a minute. I'll put the URL in the description of this podcast. But if you could help us, we'd really appreciate it. So, thanks for doing that. Let's bring in our man behind the glass, Dan Boyd. He's going to hit you with a question. Jason Moser, what's on your radar this week? Sure. Well, just a shout-out to last week's radar stock, Corvo. Hopefully, investors saw that was a great earnings report they had this week.

So, hopefully, my radar stock this week, which is CEVA, ticker C-E-V-A, will witness that same type of windfall when they announce earnings in a couple of weeks. But Siva's in the business of wireless connectivity and smart sensing, plays into all of these markets I'm covering, like augmented virtual reality, 5G, Internet of Things. They operate a licensing and a royalty business model, so they can be really profitable as long as the IP they have is valuable, of course. Very broad customer base in Broadcom, Cirrus Logic, Intel, iRobot, Sony, Samsung. Neat business. you can really do well, again, if your tech is good. That's what I'm trying to ascertain. It is a small business, a small company under $1 billion market cap, which presents its fair

share of risks in this world of big tech. But nevertheless, one I'm digging into. Dan, question about Siva? Certainly, Chris. Jason, what kind of products are out there that consumers can buy that are using Siva tech? God, I was totally wrong. I thought you were going to ask me a question about how this might be related to John Cena. Or then we were talking about some kind of a question that related towards Kava based on the ticker. But yeah, products, things like, I mean, the smartphone is the obvious one, but we're talking about all sorts of electronic devices, connected devices. That's what Steve is helping out. Andy Cross, what are you looking at this week?

I like Kinsale Capital. It just reported earnings today. Stock was up 9%. Just one of the best run insurance companies, specializes in very small insurance accounts, $10,000 kind of accounts. a very special, unique insurance market cap, 3.7 billion stocks up 60% year to date. Dan, one of the best run insurance companies I know and find out they're growing very fast, 40% on the book line in earnings per share. So really well run insurance company, Kinsale Capital, KNSL. Dan? Yeah. So we talk about specialty insurers quite a bit here at The Fool because, of course, Markel gets mentioned all the time. I'm not really clear on what a specialty insurer does differently than a regular insurer.

Could you brighten that up for me? Very unique, not like regular property and casualty stuff. Construction, mining, marijuana, dispensaries are some stuff that Kinsale specializes in. Ron Gross, we've got less than a minute. What are you looking at? Just started looking at this one again. J.M. Smucker, S.J.M., well-known manufacturer of food, beverage products, pet food. What caught my eye is they increased their dividend recently by 3.3 percent.

That's the 19th year in a row they've increased it. And, Dan, just because it's you and me here and no one else is listening, I will tell you that during this quarantine, I had my first peanut butter and jelly sandwich ever, and it was delicious. Dan? No, no, no, no, no, no, no. we cannot let him get away with having his first peanut butter jelly sandwich in year of our Lord 2020. What is what? I'm being honest with you, Dan. It was delicious, though. I'm going to go back for more. Dan, what do you want to add to your watch list? I can't. I don't think I can add anything to my watch list. My mind has exploded. Really? You're speaking for all of

us at that point. All right. Jason Moser, Andy Cross, Rod Gross. Guys, thanks for being here. Thanks, Chris. That's going to do it for this week's Motley Fool Money. Our engineer is Dan Boyd. I'm Chris Hill. Thanks for listening. We'll see you next week.