Motley Fool Hidden Gems Investing - Tesla, Space, and the Business of Love

Episode Date: August 10, 2018

Tesla’s dramatic week has Wall Street debating the company’s future. Superheroes rescue Disney’s 2nd-quarter report. Trade Desk’s stock soars on record revenue. And Match Group shareholders feel the love. Andy Cross, Jason Moser and David Kretzmann analyze those stories as well as the latest from Etsy, Zillow, Booking Holdings, Papa John’s and more. Plus, Washington Post writer Christian Davenport shares highlights from his new book The Space Barons: Elon Musk, Jeff Bezos, and the Quest to Colonize the Cosmos. Thanks Handy. To get your first 3-hour cleaning for $39 when you sign up for a plan, visit Handy.com/fool and use promo code “fool”. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Handy is a cleaning service that provides an easy and convenient way to book home cleaning on a schedule that works for you. To get your first three-hour cleaning for $39 when you sign up for a plan, visit handy.com slash fool and use the promo code fool during checkout. Everybody needs money. That's why they call it money. The best things in life are free. But you can give them to the birds and bees. From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Fool Money Radio Show.

I'm Chris Hilton. Joining me in studio, senior analysts Jason Moser, David Kretzmann, and Andy Cross. Good to see you as always, gentlemen. Hey. We've got the latest headlines from Wall Street. we'll talk about the business of space with author Christian Davenport. And as always, we'll give you an inside look at the stocks on our radar. But we begin with the most compelling daytime drama on Wall Street as the Tesla turns. Elon Musk dominated the headlines by tweeting

that he is thinking about taking Tesla private at $420 a share. He did this on Twitter with a single tweet that concluded with Musk stating, funding secured. Andy, there's a lot to unpack here. I'll start with you. Where do you think we're going from here? Well, the funding is yet to be secured, or at least yet to be disclosed, Chris. And I mean, this is, I mean, what a week this was. I mean, it's amazing, just story after story. In my mind, this is Elon not wanting to run a public company. He's fed up. He's tired. He had his little apology on the conference call. I get it. But he does not want to run a public company. Maybe he wants to spend more time thinking about his space initiatives which are super exciting uh but just

the fact that it was through a tweet it seemed a little bit frustration and we haven't heard any information we'll see this quarter this weekend what's going to happen the board has come out and said they're going to consider it and they've asked uh musk to recuse himself and not be involved in those conversations so we'll have to see what comes from the board but clearly a lot of uncertainty. And by the way, the $420 price point that he quoted is not that far off from the all-time high. It's only about 13% above the all-time high. So, if you're a shareholder of Tesla, you're like, what's the upside from here? Yeah, I think it's understandable that Musk is frustrated at this point, because Tesla

is at this relatively early stage of ramping up investment in the Model 3, ramping up production there. And so much of the focus from Wall Street has understandably been on week-to-week production numbers. But Musk is someone who's thinking in terms of five to 10 years and beyond. So when Wall Street is really forcing him to be so hyper-focused on short-term results and really just short-termism in general, then on top of that, you have close to a third of Tesla's float being shorted by short sellers. I think it makes sense that Musk wants to be done with this era of Tesla as a public company and going private. And by the way, I think it is interesting that he wants to give existing shareholders the ability, assuming the company is able to secure funding

to go private, giving the ability for existing shareholders to continue to own shares of the private entity. Because in that case, if Musk and Tesla can convince existing shareholders to hold their shares, that reduces the amount of money the company needs to raise to take the company private. Chris, you may remember a couple of months ago on MarketFoolery, we asked this question and I answered with Tesla. I was thinking, man, I would love to see this company go private. Because of all of these reasons we've stated, I think that it gets this company off of that quarterly radar that Wall Street holds them to, and gives him a chance to run the business without having to hit these arbitrary marks,

so to speak. So, for me, to see Musk get out of the limelight, he's been able to really do it with SpaceX. And I think that has allowed for that business to advance more quickly. I think the same would happen with Tesla, if he's able to pull this off. So, Andy, I don't own shares of Tesla. If I think that he's going to be able to pull this off and it is going to go at $420, why shouldn't I buy shares just to get that little 13% pop? Well, actually, I think there's a chance that the price may actually move up. He may have to raise this price. Again, not that much higher from the all-time high. To get out, David's point is, maybe he can continue

to run it as a private company, keep some investors in there. But he may have to raise the price. But Chris, still, if you're going to buy shares, you have to be prepared to hold these as if you were going to be a private shareholder. I would not go into it thinking you're going to get a little 13% pop. Third quarter results for the Walt Disney Company came in lower than Wall Street analysts were expecting, but studio revenue was a bright spot thanks to Incredibles 2 and Infinity War. Jason, thank God for superheroes. And thank God for the parks, too. The parks were, again, a shining spot on the

quarter, operating leverage there as traffic continues to grow with those parks. That's really a big advantage for the company. But clearly, on the call, Bob Iger's point of focus is on this Disney streaming product that's going to be rolling out sometime in 2019, probably late 2019. Now, this is going to be a more family-oriented offering, and I think they actually drew the line and rated our movies. I mean, they're not going to have certain content on there, so it's not going to be like a Netflix, cast this big wide net and have something for everyone. But what it is going to do is it's really going to leverage all of this property that Disney has, including what they're getting with this Fox acquisition. So,

because they made it very clear that's the priority, they really need to make sure they execute here. And I think it's going to get off to a slow start as they sort of relieve themselves of these encumbrances and all this content that they've licensed out over the past few years. But as this product starts to grow and gain some momentum, they will continue to add to that catalog. And I think that will give them the opportunity to exercise a little pricing power as time goes on. The ESPN Plus product continues to do well. They admittedly set modest expectations. But for right now, I think you really got to keep your eyes focused on this Disney product out in 2019.

I'm a little underwhelmed about that product because they're talking about launching it toward the end of 2019. and you think about it, that'll be almost 13 years after Netflix launched its online streaming service. So the fact that Disney is kind of sitting on their hands there saying, oh, we don't need to rush. We have good enough content. I mean, by that time next year, Netflix will probably have 150 million or more global subscribers. So I wonder if there is a little bit of overconfidence there on Disney's part and the fact that they're spending around $70 billion to acquire and integrate Fox. I just wonder if they'll have a lot to chew next year. Well, it might be overconfidence, although, Jason, it might also be a recognition that they kind of have one shot at

this. Because we've been talking about this streaming app for a while now, and they really better nail it. Yeah, I mean, I think you're right. I mean, knowing that Iger had such a focus on this point in the call, I mean, they're putting their money where their mouth is, so to speak. And if they don't nail it, I think they're going to have some real questions to answer. To me, the real question, though, is, as time goes on, they have all of these different platforms now. They have ESPN+, they have Hulu and the Hulu live streaming offering. Now that they have a majority share in, they'll have the Disney streaming service. So, I don't want to see this big clutter. I have to have all of these different apps to experience

everything I want to experience with Disney products. So, it's going to be really interesting to see how they put this all together. And I think that's where they have a big opportunity. I hope they don't blow it, because it is not going to be an easy task. It's a lot of stuff they have to put together and organize and make easy for the consumer to find. Great week for Match Group, the parent company of Tinder, Match.com, and others. Shares of Match Group up more than 30% on a strong second quarter report. And, David, they also raised guidance for the full fiscal year. Ah, the business of love, Chris. Wonderful thing. And so much of this success is due to Tinder, which over the past four years,

when they just started monetizing the business less than four years ago, Tinder itself, on its Zone is on pace to generate more than $800 million in revenue this year. And for this particular quarter, the number of premium subscribers for Tinder up 81%, subscription revenue up 136%. Across all their different dating properties now, Match.com has nearly 8 million global subscribers. Average revenue per user was up 8% worldwide this quarter. Total paid users up 27%. And I also like the fact that the company isn't just sitting on their hands. They have an internal incubator where they're supporting startups and new projects within that dating space. So, they're not resting on their laurels by any means.

So, in terms of the growth opportunity from here, is it still here in North America or is it outside? I'd say within North America, you don't necessarily need to see more penetration, but you'll continue to see them try to drive that average revenue per user up through the premium side of Tinder with Tinder Plus and Tinder Gold. Internationally, I think there's a lot more room to increase penetration in markets like Japan, where there's still a stigma around online dating. So, it's a matter of getting people onto those platforms. Once you have that audience, you can start to look at direct monetization. Trade Desk is in the business of advertising technology, and Cousin Business is a-boomin'.

Shares of Trade Desk up 35% on Friday after second quarter revenue came in at a record $112 million. Andy, if they keep this up, I don't think it's going to be a company record for very long. Yeah, I mean, what a monster quarter. Actually, this is their second monster quarter in a row now. So, like you said, business is booming. I mean, when you just think about the digital, the programmatic, so what Trade Desk does is they offer technology to ad agencies and buy-side clients to basically make the bidding process for advertising, both online and offline, too, as they think about going more towards programmatic television, which is a big growth market. We spend, in the advertising market, television is a third of all spending.

Very little of that is programmatic. So, when you think about all the advertising we are exposed to, it's a $700 billion business. The programmatic side is growing 20% per year. Trade deaths is growing two times as fast as that. So, sales are up 54%. It's profitable. Jeff Green, the founder and CEO, owns 15% of the business. is, they are building tools for their clients. Their clients are seeing the value there and

they are spending more and more money across those platforms. It's clearly working for not just Trade Desk, the business, but for shareholders as well, who today are seeing a really nice pop in the stock. Shares of Trade Desk, you look at the rise, you look at the market cap of Trade Desk, it's just north of $5 billion. Alphabet has got that in pocket change. Are they going to be a target to be acquired? Well, they might, but here's a nice thing that Trade Desk really prides themselves on is that independence. So, they are a technology company that is just independent of the year, and there's no conflicts. They don't own the inventory.

They just basically match up the buyers with the sellers of that inventory, and they really pride themselves on that. So, you mentioned that we talked about the Disney streaming. Like, those kind of properties, more and more of the bundles, the skinny bundles, the streaming services, that all speaks really well to the opportunity for Trade Desk. And so, when you look at just where they're going, and they're using more and more of automated intelligence, augmented intelligence, and AI to drive their suggestions for their clients, so they really are pushing both the technology and the media side in really healthy ways that's doing really well for their business right now.

And to me, it's really impressive what they've been able to accomplish over the past few years, being profitable from a very early stage, because when you look at the advertising technology space, which Trade Desk operates in, it's littered with a ton of companies that failed or really struggled after going public. But Trade Desk is really bucking those trends. And to Andy's point, when you're talking about the potential for a larger company to acquire Trade Desk, Jeff Green, founder and CEO, who, like Andy mentioned, has about 15% stake, he strikes me as the type of person who wants to stick it out as an independent company. And having that healthy stake probably means they can be independent for a long time.

Yeah, I'll just follow up with the international business has really taken off. Jeff Green took the conference call from Hong Kong. So just the amount to be able to reach out to more and more clients, more and more ad agencies, as well as other clients is really attractive around the world for Trade Desk. Up next, it's our Clint Eastwood segment. We've got the good, the bad, and the ugly. Stay right here. This is Motley Fool Money. All right, quick break to talk about buying a home because of rising interest rates, a lot of unpredictability when it comes to buying a home these days, and it's causing a lot of anxiety with folks. And our friends at Quicken Loans are doing something about that. They're calling it the power buying process,

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based on Quicken Loans data in comparison to public data records. Equal housing lender, licensed in all 50 states. NMLS, consumeraccess.org, No. 3030. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, David Kretzmann, and Andy Cross. Zillow's second quarter revenue came in lower than expected. Shares of the real estate website operator down 14% this week. And Jason, it was not just the weak revenue that Wall Street did not like. No, no. You may have seen, Chris, they are buying a mortgage company. Didn't shed much more light on that other than they're going to try to become more a part of the transaction. And honestly, this is something they have to do

if they want to grow the business, because that's where the money is in the transaction. They better execute, though. And I don't think it's going to be very easy to do. But this could, I mean, we're going to have to keep a close eye on this, because this could turn out to be their TripAdvisor instant booking moment. And I don't mean that in a good way, right? I mean, they're getting into a part of the business where competition is more fierce. This is not in their wheelhouse. Flipping houses, mortgages, that stuff isn't nearly as scalable as the advertising platform that they've essentially built at this point. And my biggest problem with Zillow to date is, this business is still unprofitable. Now, I will give them cash flow

positive, but unprofitable, man. I mean, it's just an ad company, basically. It should be just making money hand over fist. I don't know how much longer the market's going to give Spencer Raskoff the benefit of the doubt here, but they'd better execute on this, or this stock has further to fall, in my opinion. Second quarter results for Papa John's were ugly, and adding to the ugliness is former CEO John Schnatter criticizing current management from the sidelines. And David, you look at this stock, it's basically been cut in half in the last 12 months. And in the meantime, so far this year, Domino's is up over 50%, so that kind of tells you

the story there. And Papa John's, they're really facing pressure from all sides. Customers are avoiding the stores now after all this controversy. Same-store sales in North America in July alone were down 10.5%. Now, the franchisees are struggling as a result of that weak customer traffic. So, potentially looking at royalty relief or even potential store closers down the road. Then financially, just over a year ago, the company accelerated their share buyback program by going further into debt to fund those buybacks. So, now you have a company, and the stock is down over 40% since then, by the way. So, you have a company now with a lot of debt, falling sales, struggling franchisees,

and you have the founder and former CEO, Papa John himself, on the sideline, criticizing management and saying he is not going away, and he owns 30% of the company still. Is there any way this company survives without a significant makeover? And I mean, like, changing the name and everything. I think you have to have everything on the table at this point. But really, before you get to that point, you need to figure out a way to get Papa John himself out of it. And I really don't know what brand at this point would want to take that on. Another example of guidance outweighing results.

Second quarter profits for Booking Holdings came in higher than expected. But shares of the parent company of Priceline and Booking.com fell on their forecast for the third quarter, Andy. Yeah, Chris. I mean, it's the MO of Booking.com. they tend to go a little bit light on the guidance and they kind of beat it time and time again. So, I mean, sales are up 20%. The room is booked. We're up 12%. That's down a little bit. But all these numbers are above their guidance. So, I mean, it was a nice quarter. You know, one interesting point from the conference call that I took was that the CEO said,

we're going to see a bit of a slowdown in the third quarter due to the size of our business. I've never really heard someone complain about the size of their business and impacting their growth size. Now, I can get it. It's a monster company. They do more than $80 billion of bookings a year. But this is a business that's going to grow their revenue in the high single digits for the year on the dollar side. EBS to be about down to flat. They generate a ton of cash, a free cash flow, David, and they buy back a lot of stock. So, that's kind of the story you have for Booking, and it's not a cheap stock, but it's also not the super growth story it was a few years ago. Yeah, it's still a good story. I mean, this is one of the most profitable companies on

the planet. And speaking to free cash flow, since 2013, even though the company is still a good size today, free cash flow has more than doubled since 2013 to nearly $5 billion. So, this is a company churning out a ton of cash, and that should be able to increase going forward as well. Shares of Etsy up more than 10% this week after second quarter revenue came in 30% higher than a year ago. Jason, I've never bought anything off of Etsy. But you know what? They're carving a really nice niche for themselves. Well, Chris, there are a lot of things in life that are hard, right? I mean, golf is hard.

Understanding our tax code is hard. I think existing as a retailer in an Amazon world is hard. But man, I'll tell you, Etsy makes it look really easy. And if you look at their numbers, just quarter in and quarter out. Sellers keep growing. Buyers keep growing. Gross merchandise volume keeps growing. I mean, this is obviously a platform that is resonating with a lot of folks out there. And I think it's because it's a great network. It connects buyers with sellers for a very specific offering. It's great brand recognition. It's a capital-like model. No inventory on the balance sheet. Nice and profitable. Cash flow positive. A holistic solution. There's so many things to like about this business.

I really do expect them to continue on this trajectory for many, many quarters to come, if not years to come. They've just built out a tremendous offering that's resonated with a lot of people out there. And a lot of credit for the company's success over the past year or so really is owed to new CEO Josh Silverman, who stepped in last May. Since that time, the stock is up 300%, and he really helped the company focus its strategy. And since that time, margins and free cash flow, like Jason mentioned, have really exploded over the past year and really making great progress.

Yeah, and they're also talking about they're going to increase the seller transaction fee a little bit here. So just exercising a little bit of pricing power, that'll be something we want to keep an eye on, but it sounds like they're going to be able to pass that through without any problem at all. David Kretzmann, Jason Moser, Andy Cross. Guys, we'll see you a little bit later in the show. Up next, Christian Davenport talks about his new book, The Space Barons, Elon Musk, Jeff Bezos, and the quest to colonize the Cosmos. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. Christian Davenport is an award-winning

reporter for The Washington Post. He covers the defense industry, the space industry, and he's the author of the new book, The Space Barons, Elon Musk, Jeff Bezos, and the quest to colonize the cosmos. Earlier this week, Jason Moser talked with Davenport about the business of space. So the book focuses primarily on four people, Jeff Bezos, Elon Musk, Richard Branson, and Paul Allen. Now, for the sake of our discussion, and because there are a lot of Tesla and Amazon shareholders listening to our show, we're going to focus primarily on Bezos and Musk. And I wonder if you could take a moment to compare and contrast the way you feel Jeff Bezos and Elon Musk think about space from your experience.

Well, they think big about space. I mean, what they have in common is they're thinking very big and sort of their main goal is basically to just reduce the cost of getting to space. It's been so expensive. It's so hard. They just want to make it cheaper, more reliable, efficient, something that's not, you know, you have eight, nine, ten launches a year that cost hundreds of millions of dollars each. They want it to be much more routine, you know, maybe not on order of commercial airlines, at least in any kind of short-term time frame, but to make it more accessible. That's their goal. And they have long-term visions. I mean, literally thinking hundreds of years into the future about what that could mean for humanity, for the future of the human race.

Elon Musk talks about colonizing Mars, you know, creating sort of a backup for humanity should something happen to the Earth. Jeff Bezos talks about millions of people living and working in space and going to space to get all the resources that we would need here on Earth, which, as he would point out, is a limited planet. There are only so many resources. Our demand for energy is increasing, our population is increasing, yet space is vast and infinite. And that's what these guys are thinking about. So I'm glad that you mentioned the goals aspect there, because I think one thing that readers will gather from the book is that it becomes obvious that Bezos and Musk have very different goals in mind. And this makes me think of the chapter in the book on the great

inversion. I feel like that really captures that idea. And you have Bezos who wants to industrialize space, perhaps, and Musk wants to get to Mars. But is there a perception among the space community through your experience here that one of these two space barons is a bit more sensible in their thinking, at least in the near term? Well, let's take SpaceX, for example. I mean, everyone thought Elon Musk was crazy when he first started SpaceX, that there was no way, you know, this eccentric, you know, tech prodigy could go out and start a rocket company and be successful and get to orbit. it. And yet he did. And he sort of showed that it was possible that this was something that could be done. Now, he's, you know, Elon is very brash and he's out there and we saw this, you know,

with Tesla and early on at SpaceX, he was similarly that way. I mean, he got a lot of attention for SpaceX and for his endeavor and what he was trying to do before he had ever even flown a rocket successfully, but is able to sort of overcome that and normalize this idea that space doesn't have to be the exclusive domains of governments as it has been, you know, for decades. You know, Jeff comes along and he's very quiet and doesn't say anything. And they're just almost like the CIA, Blue Origin. I mean, to this day, people don't realize that Jeff Bezos has a space company.

And I would argue that this is – to Jeff, this is the enterprise that he is perhaps most passionate about. But he was being very deliberate, very careful, moving very slowly. So allowing Elon to get out there in SpaceX to get all this attention, get all this hype, and he would just sort of slowly kind of move in their wake and has been following them. And now we're sort of at that moment where I think he's going to break out of that wake and really start to challenge Elon and SpaceX. So a common word I think that will play throughout this interview here is passion or some derivative of it. And to me, my impression after reading this book at least is that Amazon is more of a passion for Jeff Bezos than Tesla is for Elon Musk. Is that a fair statement, or are these guys just really super passionate about space first and foremost? Yeah, I think that to understand Jeff Bezos in particular, you have to see him not just through the lens of Amazon.

You have to see him through the lens of space. It's occupied a huge role in his life ever since he was a kid. He remembers being five years old and watching Neil Armstrong and Buzz Aldrin walk on the moon. He was a huge Star Trek fan. When he graduated from high school, the valedictory speech that he gave to his high school class was about space. And actually, in many ways, he still is giving that speech about his vision for space. It hasn't really changed since he was 17, 18 years old. You know, he even in college was the president of the Student Space Club.

And then when Amazon gave him the resources to be able to go out and start his space company, he did. So that's why, you know, when you look at Jeff and he sees this really as almost, I think, a way of giving back, that this really could be his legacy. If he's able to build the infrastructure that allows people to get to space affordably and reliably and builds that network to the stars, I think that would be a bigger legacy than an internet retailing company. So someone that's sneaking under the radar here, but Richard Branson. I want to ask about Richard Branson here because he plays – he seems kind of like the show in a win place and show here in regard to the book. But I get the feeling, based on your writing, based on the stories that you've told, that he is a force to be reckoned with in this space. And I wonder if you could tell us a little bit more about why you think he will be a part of the next great advancements here in the race to space. Well, they had a huge setback in 2014 when their vehicle, Spaceship Two, it's sort of like a space plane that, like Blue Origin's New Shepard rocket, would just go to the edge of space and then come back down.

And their disaster in 2014, it came apart and it killed one of the pilots. And it was sort of this crucible of where are they going to continue and press on with this. And they decided that they would, that opening up a frontier of space was worth continuing and pushing on even though someone had died. They've since come back. They've built a new vehicle. They say they've made it safer. They've addressed those concerns. They've flown it recently, I believe, three times on powered flight, going faster than the speed of sound and going higher and higher each time.

I think their last flight went to more than 30 miles. So they're really getting closer to doing it and closer to this dream, their dream, which has been more than a decade now that Richard Branson has been talking about of flying Taurus to the edge of space. He's got more than 700 people who have signed up to fly on Spaceship Two for Virgin Galactic. It's possible some of those people get going later this year. They'll probably more likely next year unless there are any more setbacks. One of their goals too is to kind of use that technology to do what they call point-to-point transportation where you actually, you know, say go from New York to Hong Kong in a matter of hours. hours. And that's another one of their big goals. Actually, SpaceX is thinking about that

as well. So it's a really interesting time. We have Virgin Galactic on the edge of taking humans to space. Blue Origin about to do it as well, perhaps by the end of this year. SpaceX could be flying NASA's astronauts. Their schedule is their first test flight with astronauts on board would be next April. And you've got all of that happening at a time when NASA and the U.S. government, you know, hasn't had the ability to fly humans since the space shuttle went away in 2011. In the U.S., the rise of NASA, the Apollo program, this was all against the backdrop of the Cold War. And space and defense have always been linked. Today, where do you feel like the Pentagon and the military fit into what Bezos and Musk and others are doing with space exploration?

Well, they could be a big customer and therefore a big revenue source. Early on when Elon was starting SpaceX, he targeted the Pentagon launch contracts as something he wanted to go after from a very early stage, even before he'd ever been to orbit. He had filed several lawsuits to be able to compete for those contracts, ultimately settled and was able to compete for Air Force contracts against the United Launch Alliance, which is made up of Lockheed Martin and Boeing, sort of a joint venture between those two huge military contractors. SpaceX now competes with those. And they've been successful on a few occasions. So, you know, it's big money. And now you're hearing the Trump administration talk about not just its plans to return to the moon,

but to build up a space force to create another military service branch, which, you know, if they're able to do that with congressional support would be the first new military branch since 1947. And, you know, that could be a great opportunity for these companies as well. And Blue Origin has already said that they want to get into that business and competing for launch contracts. You saw Jeff Bezos tweet on his account not too long ago, a picture of him with the director of the National Reconnaissance Office. So that's something that they're both looking at. And the Pentagon wants to move where, you know, they're putting up not just big satellites that will sit there for years and years and years, but constellations of smaller satellites. And, you

know, the Pentagon is really aware that space is just absolutely instrumental to everything that they do. I mean, GPS and precision guided missiles and missile defense and communications and spying and intelligence, all of that is, you know, based in space. So there's a huge military component there. So we know the four main players in this book, and we understand the challenges, the hard work ahead when it comes to space. But is there a younger class of astropreneurs ready to carry the torch when it's their time, when Musk and Bezos have done what they can do, do you know of a new class that's ready to step in there and learn and keep it going? Yeah, I think so.

And, you know, you walk into these companies, you walk into SpaceX and Boeing and Virgin, and you see the workforce. And, you know, to a large extent, you know, it's like they're kids. They're real young and enthusiastic and, you know, kind of fresh out of grad school and working. But, you know, we talk a lot about the billionaires and the rockets and launch. That gets a lot of the attention. But what, you know, SpaceX in particular has helped to pave the way to kind of this new sort of commercial era. You're seeing them touch off not just the launch industry but, you know, other companies as well that are building, for example, habitats, you know, commercial habitats for space.

I mean, now we obviously have the International Space Station, but there's a company called Bigelow Aerospace that wants to build commercial habitats. There's another one called Axiom that wants to do the same thing. There's a company called Made in Space that's working on space manufacturing, particularly 3D manufacturing in space so that you don't have to bring everything up into space. That, you know, once you get there, you can make it there and do the manufacturing in space. So you're seeing these guys touch off a whole range of other industries, but that's really only possible if the launch, you know, the cost of launch comes down to enable this other industry. You know, another thing people are looking at is mining asteroids. But you've seen, you know, again, this is difficult. There's reports that a company called Planetary Resources, which wants to mine asteroids, is having a lot of financial trouble.

So it's all very difficult. But what Jeff has said about this is that when he started Amazon, the infrastructure was already there so that any kid in a garage or dorm room could start an internet company. The cables for the internet were laid. You could take payment via credit card. He could use the post office to deliver his books. All that infrastructure was in place so that he could come up with and start a company. That infrastructure in space isn't set up yet. And that's what these guys want to do is create that infrastructure that will then create, you know, this entrepreneurial dynamism, as Jeff says, and this sort of new economic sphere that would take place in space.

The book is The Space Barons, Elon Musk, Jeff Bezos, and the Quest to Colonize the Cosmos. It is available everywhere you find books. Up next, we're going to give you an inside look at the stocks on our radar. Stay right here. You're listening to Motley Fool Money. All right, before we get to the radar stocks, quick shout-out to Handy. Over 3 million cleanings done, and all of Handy's services are backed by the Handy Happiness Guarantee. If you're not satisfied with the quality of service, then Handy will send another pro at no charge for your next booking to get it right.

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code fool to get your first three-hour cleaning for $39. 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 Full Money, Chris Hill, here in studio with Jason Moser, David Kretzmann, and Andy Cross. A couple of things before we get to the stocks on our radar. First, Jason, thanks for the interview. Hey, listen, thank you. There's a reason why you do that week in and week out. It's not an easy thing to do, but that was a big thrill, having just read the book. It was fun stuff. This week, Pepsi announced that CEO Indra Nooyi will step down in October.

This is after 12 years in the corner office. She will remain as chairman of the board of directors through early 2019. Jason, good luck to the next CEO, because that guy has got a tough act to follow. Yeah, she set the bar really high. I think this is a really big loss for Pepsi. I can't say that I blame her. You see the industry headwinds coming. I think she's 62 years old. She's got other things that she wants to do in her life. And she is, quite frankly, a very good person. You can just tell by researching her that she is a good person. And I think she's going to do bigger things for the world with the time that she has away from the company. But no doubt, whoever

stepping in there, good luck. Well, and part of it, we were talking about this earlier, part of it, Andy, is just the industry. You look at Coca-Cola, Mondelez, Kellogg's, all these food and beverage companies that have CEO turnover over the last couple of years. Yeah, I mean, just look at what's going on at Campbell's, too, and talking about trying to take it private or sell off the assets. Yeah, Hershey's, too. I mean, it's just tough. It's super competitive. It's only getting more competitive just because of what's happening at their prime buyer market, which is the

grocery stores with the likes of Whole Foods getting bought by Amazon. So, that is getting more and more competitive. It's harder and harder to get shelf space. And there's just other brands out there that are bumping up against the large players. Well, kudos to Ingenuity. A heck of a track record. Let's get to the stocks on our radar. And our man behind the glass, Steve Broido, is going to hit you with a question. David Kretzmann, you were up first. What are you looking at this week? I'm looking at Axon Enterprise, ticker A-A-X-N. This is a company behind law enforcement technology, best known for the Taser electrical weapons.

But they also produce body cams. And perhaps most interestingly to me, they're actually moving into software as well. So they have the Evidence.com platform, which stores footage that police officers will capture on body cams or from in-car camera systems. They now have over 200,000 accounts on Evidence.com. So, kind of moving them more toward a software-as-a-service subscription business, and they're adding more and more layers on top of that. So, an interesting company altogether, growing about 25%, founder and CEO at the helm. Steve, question about Axon? So, I'm a shareholder. My question is, when do they move into the private market?

So, you see a lot of dash cams that people are using. Uber drivers use dash cams. When do they move into the private sector? They do have a self-defense business line, but I think the opportunity with law enforcement and military is so big, that'll probably be their main focus for several years to come, at least. Jason Moser, what are you looking at this week? Yeah, talking about retailers that are existing in an Amazon world. The Home Depot earnings come out on Tuesday the 14th. Ticker is HD. Last quarter, they reaffirmed guidance for the year, targeting $120 billion in sales by 2020 with gross margin expansion. And you know what? I tell you, every time I drive by there, the parking lot is so full. No offense,

Matt Greer. It makes Costco jealous. I think you got to love this business. It's a nice two plus percent yield that'll keep on growing. Steve, question about Home Depot. Do you think Amazon can compete with Home Depot? There's something about when you need a part, you need something, you feel like, I'm just going to go to Home Depot and pick it up. I'm not going to order it online. I just don't think Amazon is going to be able to compete with Home Depot in that regard. There is something to that, Steve. When you need a Joyce holder, you need to see exactly what kind of joist holder you need. Andy Cross, what are you looking at this week? Make my trip. The Priceline of India, one of the largest providers of ticketing and hotel

packages in the Indian market, which is more than a billion people live in India and they don't have huge penetration in online usage right now. So, thinking about what the booking market is, just looking at what's going on with Priceline, MakeMyTrip, their bookings are up 70% in the numbers over the last year. So, will they continue to see bookings growth, and how's that going to be for the revenue stream in India? The travel penetration is far less than what is in China. So, when you compare those two markets, you see a lot of opportunity for MakeMyTrip in India. And the ticker symbol? M-M-Y-T. Thank you.

Steve, question about MakeMyTrip? With all of these booking services, how critical is the bundling? Because it seems like when you go to Expedia, potentially Make My Trip, it's not just a hotel. It's a hotel plus airfare plus car plus this plus that. How important is that? Definitely important. You need to see that across all those properties. And especially in India, the booking market for them needs to continue to grow, and packages are going to be a big part of that, as they are for Priceline as well. Make My Trip, Home Depot, Axon, three very different businesses, Steve.

You got a stock you want to add to your watch list? I think I might take a look at Make My Trip. Do you have a trip planned any time in the next 6 to 12 months or so? Well, we're going to New Jersey with the family, so I don't think that's anywhere near India, but that's okay. Well, if you do make your way to India, you know where to go. Never underestimate the staggering drawing power of the Garden State. David Kretzmann, Jason Moser, Andy Cross.

Guys, thanks for being here. Thank you, Chris. That's going to do it for this week's edition of Motley Fool Money. Our engineer is Steve Broido. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.