Motley Fool Hidden Gems Investing - The Biggest Surprise of 2015

Episode Date: December 18, 2015

What's the biggest investing story of 2015? The biggest surprise? The best CEO? The worst CEO? On this week's show, our analysts weigh in on some 2015 surprises, highlights, and lowlights.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Chris Hillenbrand, Jr.: Everybody needs money. 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 Hillen. Joining me in studio this week, for Million Dollar Portfolio, Jason Moser and Matt Argersinger, and for Motley Fool deep value, Ron Gross. Good to see you as always, gentlemen. It is our 2015 year in review. We have so much to get to. And of course, we're going to give you an inside look at the stocks on our radar. But let's start at the top, gentlemen, the business story of 2015. Ron Gross, when we look back on this year, what's going to stand out to

you? Global mergers and acquisitions reached an all-time high of around $4.3 trillion in 2015, beating the record set in 2007. Cheap debt, investor pressure to get things done in a relatively weak economy has caused companies to consolidate, to try to grow through acquisition, and it's reached an all-time high. I'm not surprised that there's a lot of M&A. I guess I'm just surprised that you go back a year and it really seemed like if there was going to be a lot of M&A, it was going to be in oil and gas. Right. We haven't seen that materialize. We saw the largest one is in pharmaceuticals, the Pfizer acquisition of Allergan for $160 billion.

And then we saw a big one in beer. We saw a big one- Wait a minute. Just a review. Drugs and beer? Drugs and beer. The largest technology acquisition in history happened this year, Dell's $67 billion takeover of EMC. So, we saw some big ones, but as you said, not in the field that we would have guessed. Jason Moser, what gets your vote for business story of the year? I think this is probably one that'll slip been on the radar for many, but I think the fact that Amazon surpassed Walmart in the size of market cap, that to me, that's the changing of the guard right there. I think

we are now really in the age of e-commerce, and I think that this was the year that really put the nail in the coffin for Walmart. I'm not saying Walmart is going to die an ugly death. O' You're just putting them in the coffin. Yeah, well, you know, it's got to start somewhere, right? Maybe it will die an ugly death at some point, but I think that it just goes to show, really, that all of the investment Jeff Bezos has put into this business up to this point, has really paid off, regardless of how many people really wanted to criticize what he was doing. The fact that Amazon doesn't

make a profit, no way to sustain it, a lot of whining, and a lot of us who actually study the business and study the man in the leadership style, we know how he is planning to grow that business, what his priorities are, and everything he's doing is in line with what he says he's going to do. O' Can you do that again? Make that sound good. Oh, that's hard to follow, Jason. That's a good one. I'm surprised that Ron didn't ... I thought I was going to trump Ron on this, but for me, it's the collapse in energy and commodity prices.

I couldn't do it. I'm too depressed. I know. I'm sorry. Sorry to bring it up again. But it really was the story for me, because you go 18 months ago, and oil's at $100, and commodity prices are relatively, well, a lot higher than they are today, and everything just kind of fell through. And we can look at it and say, well, in a lot of ways, this is great. This is massive stimulus for the U.S. consumer and the economy, low gas prices, low commodity inputs for a lot of industries. At the same time, if you look at the economic growth of the U.S., really, over the last five or six years, it was so much due to the energy renaissance we had here in the U.S.

And really, it hit a brick wall this year, and you just wonder if it's going to come back this year or how long it's going to take. But, I mean, we are at a point now where we are going to allow U.S. oil exports for the first time in 40 years. And that's a lot to do what's happened to the sector this year. It's a major development. No matter how much you study the stock market, as we do every day, every week here at The Motley Fool, there are always surprises. Some in a good way, some in an astonishingly bad way. Ron Gross, what's the biggest surprise this year for you? I was shocked. Shocked, I tell you, when Activision acquired King Digital Entertainment,

the creator of Candy Crush for $5.9 billion, and I don't actually begrudge Activision. It's a way to increase their mobile presence. They certainly have the balance sheet to get it done. It really was only at 10 times earnings, but Candy Crush is a declining business. It's not on the upsurge. So, I scratched my head a little bit there. Thank goodness they didn't ... it's a big dollar amount, but thank goodness they didn't pay up from a valuation perspective. I feel like, on the one side, I really feel like the surprise is, it actually took this long for RadioShack to actually get the bankruptcy. It seems like it's been a long time coming. But the biggest surprise to me is one that just really recently happened,

Keurig Green Mountain going private. That business maybe has been a little bit under a microscope as a publicly traded company, but the fact that we just woke up one morning and they decided they were going to go private, I was a bit surprised by that. Yeah, but when we talk to CEOs, as we do from time to time, some of them are more forthcoming than others about saying, you know what, being CEO of a public company, no picnic. It's not that great. And some have gone so far as to say, yeah, if I could do it all over again, I'd love to be running a private company. Sure. And that's a business, I think, that will do nothing but stay under the microscope,

given really not only competition in the space, but I think that people are actually starting to pay a bit more attention to the actual waste that all those pods create. It is actually pretty breathtaking when you think about it. And I know Ron is a big fan. Ron Grossman- Are you blaming me? O' I am. You're part of the problem. For the environment. O' I don't have a Keurig at home. What surprised you this year, Matty?

O' Well, I had Activision buying King Digital, paying more than Disney paid for Lucasfilm. That was my surprise. But I'll go with this other one, which is a little bit less of a surprise to me, but Google changing its name to Alphabet. Maybe it's just because I'm not used to the name. That is a good one. But Alphabet, I still can't get used to it. It's still Google to me, and the fact that they changed it, and did a lot of restructuring of the business, was a pretty big surprise. Let's be clear on the numbers here when we talk about acquisitions. Activision Blizzard,

and as you said, Ron, they can afford it. They paid $5.9 billion for King Digital, really for Candy Crush. If King Digital has another hit on their hands, they're doing a great job of keeping it a secret. Right. Well, it's for their 470 million active monthly users, whatever the number is. But go back a couple of years, and Bob Iger and his team at Walt Disney paying 50% less, paying just over $4 billion for Star Wars. I don't know. Call me crazy. I think that's going to work out better for Disney than it is for Activision Plus. Yeah, you're probably right.

There's so much media out there. It doesn't matter whether it's sports, entertainment, certainly financial. And with all that media, the big stories bubble up to the top, and it's easy to miss other stories. So, Matty, I'll start with you. What went under the radar this year, what was a story where you said, I can't believe this isn't getting more attention? It hit the headlines for a good day or two. But to me, the rise and fall of fantasy sports this year was big. You couldn't watch an NFL game this season without seeing ... every other commercial was DraftKings, FanDuel, these online daily, weekly fantasy sports games. Billions of dollars were being bet every week, and still are. But I just thought

it was interesting to see this meteoric rise, and all of a sudden, maybe a month or so ago, or two months ago, the New York State said, hey, stop. No longer allowing people to put money in this. We're looking at this. We're treating it as online gambling. We're going to try to put a stop to it. A lot of states have come up and said, we're looking at it, too. I think the bigger story, though, is what this means for years going forward. Because I think fantasy sports is here to stay. There's no doubt about that. Sports gambling is here to stay. The question is, does it become more legal? Does it become more open? And I think, generally, online gambling, especially sports betting, is going to be a big trend in the years to

come. And I think we saw the first salvo with the fantasy sports this year. Well, and you're absolutely right about the amount of television advertising that DraftKings and FanDuel did. But keep in mind, you look just behind the curtain, they got some pretty big-name backers, both of those companies, whether it's marketing agreements or just outright investments. Comcast is an early investor in one of them. Honestly, I get them confused. But Jason, what stood out to you this year in terms of, gosh, this needs to get more sunlight? Jason Moser. I feel like the market and Twitter, they were all a flutterer with Chipotle's

E. coli crisis. That's fine and dandy, it is what it is. But did not Costco, did not Starbucks have the same sort of E. coli problems? Some people out there might be saying, did they? Well, yes, in fact, they did! That's why it was so unreported. And I don't know, I think the market in general, people really love to bash Chipotle. Chipotle does ride a little bit of a high horse on the food with integrity and sourcing from local suppliers and whatnot. We've always said that's one of the risks with the business. If they're going to really flaunt it, they better be able to back it up. With all this said, I don't know if they've actually been able to isolate the source of

this issue. But regardless, the fact is that Costco and Starbucks were dealing with the very same issue, and I feel like nobody out there really knew about it. We saw this a year or two ago with the data breach at Target, right? Because there are, I mean, the total number of data breaches in a given year for retailers is literally in the hundreds, and I think if you're at Target, you're sort of feeling like, wait a minute, why are you picking on us? Yeah, Target got pinged, and I think Home Depot kind of skated. Well, it's a name like Target, you really get what's coming to you.

Hey, I see what you did there. What about you? You know what? McDonald's has quietly gotten its act together. U.S. sales are growing for the first time since 2013. All-day breakfast is a big hit. The company's returned a heap of money, $7 billion or so, to shareholders through buybacks and dividends. The stock is up 27% this year. Nobody's really talking about it, but they've done a good job. Here's a story that I don't think is getting any attention right now, but I think this is going to make for either a great long-form story, investigative story, or maybe even

a book. And I think 2015 is the year that Comcast looked at Disney and said, we're going to take you head-on, and we're going to start with the movie business. Because if you look right now at the biggest movies of 2015, the top five are either Disney films, or Comcast owns Universal, so they're Universal films. And I think if you look at what Comcast is doing with their movie studios, looking to go for those blockbusters that lend themselves to consumer products that lend themselves to theme parks. I think they are going square at Disney. Before we get to the break, anything fun this year, Ron? Anything at all? There's always something. Well, let's

face it, the market didn't have a great year, and maybe that's to be expected after the run we've had, but certainly the market itself wasn't the fun story of the year. My favorite story, very recent, Howard Stern staying at Sirius for another five years, reportedly making $90 million a year. It's actually a 12-year deal if you include licensing of all his content. They're going to be putting out a new app with audio and video. You can listen to the show, you can watch the show. I'm a big fan. Helps my commute. Happy to hear about it. Jason? You know, I have to second that. That was my fun story, because honestly, as a Howard

Stern fan, I had a hard time believing Sirius would ever even think about letting him go. The success that he's brought to that entire concept, and I'm really excited to hear about all of the plans he has in the coming years. Not only the five years that he signed on, but like Ron was saying, the 12 years in total. He's going to be building an app, which will incorporate video streaming on demand. There are all sorts of ways they're going to take this business. And he's talking about revolutionizing the broadcast industry. I'm going to be really excited to hear and see how he does it. And to me, this was great news for the next five years. Baba Booey, hey now!

Somewhat of a business story, but I just think the resilience of Donald Trump and the entertainment factor that he's brought to the political landscape this year. It's been fun. It's scary at some points. Listen, Matty, Donald Trump is really, really great, OK? He's a winner. Every time he speaks in front of you, he's great. Really, really great. It's going to be huge. My favorite story of the year is something that got teased out over the summer, and this is in the entertainment industry, where they have the up-fronts, the

big advertising conference for television networks. And John Langrath, who runs FX, raised some eyebrows where he said, there's too much TV. And it was noted that, here's a TV executive saying, there's too much TV. And just recently, earlier this week, came across this stat that proves out, in fact, we may have reached peak TV, that this year there are over 400 scripted television shows. If you look at broadcast, cable, and online, over 400. And just six years ago, there was half as many. And there's some good ones, too. It's almost impossible to watch everything that's good. It's true. And that's why we're complaining

that there's too much good TV, proving that the comedian Louis C.K. was right when he said, everything's amazing and nobody's happy. I don't disagree with that at all. As a matter of fact, people ask, hey, have you seen this show? I'm like, listen, there aren't enough hours in the day. There's more TV than I have time to watch. But it was interesting to see Reed Hastings, the CEO of Netflix, completely counter that. He took the opposite side of that argument, and he said there's not enough TV out there. So, we'll see how that all plays out in the coming year. Speaking of Reed Hastings, coming up, we will head to the corner office for a look at the

best and worst CEOs of 2015. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, Matt Argersinger, and Ron Gross. It is our 2015 year in review. Fortune Magazine naming long-time Nike CEO Mark Parker as their business leader of the year. I think that's a great choice, but you know what? Fortune Magazine isn't the only one who gets the handout award. So, Ron Gross, who's your business leader slash CEO of 2015? There are plenty of good choices, but I'm going to go with Mark Zuckerberg of Facebook. book. He's doing a fantastic job. Stock is up 37% this year, near an all-time high. We're

approaching $295 billion in market cap at this point. Top line growth at 28%, approaching $3 billion in profits. And he recently announced, after becoming a new father, that he was basically donating 99% of his net worth to charitable causes. A little controversy about how he's choosing to do that in the foundation and the structure, but hey, when's the last time you donated 99% of your net worth for anything? So, I applaud that. Hey, what's the story been all year if it's not been Star Wars, right? I'm going with Bob Iger. Disney has done very well this year as a stock. It's outperformed the market. This guy has delivered, and shareholders have got to be feeling really good about the fact

that he's still going to be there next year, and I think even the year after that. Man, this guy, he knows how to run this business. He's done a great job this year. I think he deserves it. $4.1 billion for Star Wars, and it already looks like a steal. He has headed up a trifecta of acquisitions that have really changed the scope of not only our public markets, but just the entertainment industry in general. When you think about Pixar, and you think about Lucasfilm and Marvel, what they've done with those properties just to date, and to think about what they can do with those properties over the next

30 years, this is a good investment to hang onto. O' How can it not be Jeff Bezos of Amazon? The stock has doubled. I love Jason's point earlier in the show about the tipping point between e-commerce and bricks-and-mortar retail. It certainly happened, and we've said it many times, I still think Amazon is the first company to a trillion dollars. And it's going to get there because Jeff Bezos is tenacious, he's a visionary, there is not an industry that he doesn't want to go after, there is not a profit margin out there that he thinks he can shrink. In any other industry or competition, I just think Jeff Bezos. We could almost vote for him every year.

And he's willing to send Donald Trump into space, so we've got that going for us. Winning! So, we see this every once in a while in sports, where one particular athlete has a great year, and the question is not, is this person going to win the Most Valuable Player Award? It's simply a question of, is the vote going to be unanimous? And I think, when we look at the worst CEO of 2015, Martin Trichelli, the pharmaceutical CEO who the FBI recently took away in handcuffs, probably gets the unanimous vote there. But Ron, let's just couch this as, if Santa Claus could bring shareholders or business partners a new CEO, who would

be a deserving company? Sure. Well, the holidays came early for this company, because this CEO was already replaced, and it's Volkswagen Chief Executive Officer Martin Winterkorn, eight years at the helm, forced to step down after admitting that the automaker cheated on U.S. emissions tests. Not a good situation. Stock has been crushed, shares down 30% this year. But a new CEO has been named, Matthias Müller, if I'm pronouncing that correctly. That's not bad. Thank you. So, hopefully, they'll get their act together.

Jason? Yeah, let's go with the theme here with Christmas and the holidays. This is, like Ron, one of my CEOs. He's already gone, thankfully. It was hard to come back at the very beginning the year with Mattel and their CEO, Brian Stockton. Mattel was really witnessing some sagging sales, some serious headwinds, as Hasbro just continued to blow by them in every capacity. Hasbro took the frozen deal from them. You just couldn't figure out how they let that go. And I think maybe that was the straw that broke the camel's back. So, with him gone, with Stockton gone, I think that Mattel, at least, there's some silver linings

to look at. They're possibly light at the end of the tunnel. I think this is a business that has a chance to reset and look forward to 2016. And we do see that from time to time, where there's a business that maybe the stock isn't doing well, and you can look at it and say, well, you know what? It's not necessarily the business, but the person at the top who's leading the ship here. It sounded like there were some culture issues from the inside, so this was the right move. We've got less than a minute, Matty. What do you got? I almost felt like nominating a category,

because my category would be hedge fund manager. I think if you look at the hedge fund industry, The average hedge fund has underperformed the S&P 500 seven out of the last eight years. It's been miserable this year again. But I'm looking at Bill Ackman of Pershing Square. Pershing Square is down 20% this year. There's no more, I guess, public-loving, media-loving hedge fund manager than Bill Ackman. And I just think, hubris counts a lot in the hedge fund industry, but it counts for nothing in good long-term investing. And I think at some point people are going to realize, this guy's not very good, and he's going to stop getting the public eye that he doesn't deserve.

Snappy dresser, though. He is. Good hair. Matt Argersinger, Jason Moser, Ron Gross. Guys, we'll see you a little bit later in the show. Up next, more of our Year in Review. Stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill, and our 2015 Year in Review show moves on with two new panelists from Motley Fool Rule Breakers and Million Dollar Portfolio, Simon Erickson and our Chief Product Officer here at The Motley Fool, Tim Hanson. Thanks for being here, guys. Hello, Chris.

I think I just got a promotion. Thank you, Chris. I can give you the promotion. I can't give you a pay increase. What are we going to remember about 2015 when you think about business and investing? Tim? I think there are a number of big stories this year that are notable. One, I know Ron mentioned earlier about all the merger and acquisition activity this year. The crazy thing to remember there is most big M&A deals fail or don't work out nearly as well as people expected. What about synergies? The synergies are humongous normally.

Yeah, so that's one of those things that I think a low interest rate environment has begotten, and we'll see how that turns out for some of those people down the line. And the other two things that pop into my head, which maybe we can get around to talking about, are one, the Volkswagen scandal. I mean, wow, wow. And then the ongoing saga of Valiant Pharmaceuticals and all of the craziness that is surrounded that multi-tens-billion-dollar company and all the smart people involved on both sides of that trade. Those are three things that

I think I'll remember about 2015 for a long time. Simon, what about you? Chris, I guess the only one that we haven't talked about yet is the rate hike from the Fed. Apparently, this did not blow up America like so many people thought it was going to happen. A quarter of a percent rise, first time in nine years. The market actually applauded this move. I think it shows that the economy is back on track. It's recovered since 2008. Let's go back to Volkswagen for a second. The people's car! When that story first broke,

it was breathtaking to look at the scope of it and think, my gosh, have they really been doing this for ... at least if you go back in terms of the planning stages, because these are 2009 models. They're cheating the emissions tests. And they had to have been planning for it at least a couple of years before that. I mean, I'm not a conspiracy guy. But when that story broke, I thought, wow, this really does seem like a conspiracy at a major company. Well, and for them to deny that, I thought, management didn't have knowledge, that a few rogue engineers had sort of figured this out for some of their top-selling, most popular models and oh by the way this was the number one value proposition of those cars right was that

they were clean diesel and um you know that would be the equivalent i don't know of the big mac actually not being big nor a mac or something along those lines i mean i think and obviously the ceo there is already gone volkswagen is is pursuing a variety of remuneration techniques i think they have a long way to go to build back their brand equity and and the respect they had engendered in the manufacturing world for some of their innovations, I mean, if the core competency of one of your best-selling models, or, you know, obviously that technology spanned a number of different models, is called into question, I think it's going to take a long time for the world to sort of get comfortable with folks who are going to get much to the

detriment of that company. I said this earlier in the show that there is so much news, there are so many ways to consume media that invariably stories bubble up to the top and many stories fly under the radar. And when you think about this year, Simon, what's a story that you thought, gosh, I can't believe this didn't get just a little bit more attention? I mean, this is a personal interest of mine, but I think that it's not reported enough that the surge in solar power right now. I think we still kind of as a country think that solar is just kind of a small player. It's real expensive. Maybe there's a perception about that. The sun is a fad, Simon. It's going to burn out.

Some of us might be pessimistic on the future. But, you know, it's less than 1% of the electricity supply, so it is still a small player in the grander scheme of things. But solar electricity, as far as capacity added this last year, was 30% of the total. So you've got a small base, but just growing incredibly quickly right now. For me, that's the under-reported headline. What about you, Tim?

I don't know. I mean, this was certainly under-reported just in the sheer inanity of it all. But people may have missed that Nintendo, after about 10 years of thinking about doing it, finally decided that they had to get into the smartphone games business. And this quote, in fact, comes directly from a Bloomberg article that reported on this decision, which, after they made it, the stock doubled after years of trading for basically cash, right?

It ignored smartphone gaming for that long. Quote, it took them a long time, but Nintendo, according to insiders, finally realized that the $30 billion moment gaming market is too big to ignore. Kudos to Nintendo. Good call. kudos to that you know they we should have splashed that headline mobile gaming market too big to ignore why do you think it took him so long you know i i you know japanese companies not

not to say that there's a cultural difference but certainly i mean they they are slow to innovate once they have something that seems to work um because you know management people often don't get forced out of top management positions there's a lot of pride and so on and so forth that goes on companies. They also had it in their heads that they could create more value by having their own hardware platform, even when their hardware platform was being displaced by these very cheap handsets and so on and so forth. Ultimately, it's the right decision. I think there's lots of value in their IP. I'd love to be able to play Mario Brothers on my phone. That's fun. Sometimes, good ideas just take a long time to bake.

We see that with other companies, though, in other parts of the world. bad ideas all the time. Well, not necessarily bad ideas, but just the sense that we've had success doing this one thing for many years. And so anytime the landscape changes, I think maybe it's human nature to just sort of latch onto it. No, no, no, but we've been doing this for so long. This is going to get better. I mean, Simon can speak to this, I think, given where he works in terms of analysis. But I mean, it's a hard business decision decision to disrupt yourself, which is why you see so many small companies, you know, make inroads very quickly.

Things like Uber, right? It would be unheard of for a car manufacturer to say, you know what, maybe we should stop selling cars. That's an idea that just doesn't get into the head of a car manufacturer. But, you know, it shows up at a startup, which over the course of five years is now worth $70 billion. I think Nintendo's got to milk Mario Brothers for all that it's worth. I mean, they can put that little dude on a cell phone screen and still make money off

it and more power to him. Before we look at some of the business leaders of 2015, both good and bad, let's go back to Valiant for a second, Tim, because as you indicated, this is a very large pharmaceutical company, not necessarily a household name in the way that, you know, like a Pfizer or … Although, this is your test for Valiant, I would defy anyone to go into their medicine cabinet and find a cream or something that they have in there and read the fine print. You probably have something from Valiant in your house somewhere, but it is under the radar, certainly. In a nutshell, what is going on

with this company? I don't know, Chris. I'm not sure anybody does. There was a story in the Wall Street Journal either this week or maybe last week about how Valiant was not only innovative on sort of their mergers and acquisitions activity within the pharmaceutical industry. Because that's really how that company's grown over time. Yes, they're a very serial acquirer. But they're also really innovative on the accounting side, which is one of those damn with faint phrase type things. If you're an innovative accountant, you're in poor company.

But, you know, I think what's most interesting about Valiant is that there are some very smart and successful people who are very long the stock. And there are some very smart and successful people who believe that it's basically a fraudulent company. I mean, you have big money at both sides, and that doesn't happen all the time. I think that's what makes it interesting, and then watching them sort of volley back and forth about what's important and what's not important has made that. I mean, if you're interested in learning about investing, temperament, accounting, and so on and so forth, you could do worse than be just sort of a fly on the wall, the Valiant story, and just soak it all in.

It's been a great year for a number of business leaders. earlier, the guys we're talking about, Bob Iger, Jeff Bezos, Mark Zuckerberg, all having great years, and their businesses and their stocks attached to their businesses, reflecting that. Simon, if I'm giving you a vote for Business Leader of 2015, who are you giving it to? It's hands down, Chris. All good choices there, but the hands down CEO of the year is Elon Musk, probably almost for any I mean, you look at what this guy is doing. He's building out the world's largest battery manufacturing facility for Tesla Motors. At the same time, he is also building out the world's largest solar panel facility for SolarCity, which he's chairman of.

And he is also redefining the role of the private sector in space exploration for SpaceX. Any one of those stories by itself is a heck of an accomplishment. To do all three at the same time is simply amazing. I've got to go with him CEO of the year. Is there any concern that Elon Musk is spreading himself just a little thin? Just a little thin. If it was me, yes, I would be feeling like I'm being spread too thin. But he can handle it. I mean, I just finished reading the book about him.

And when he was a kid, he read every book in the library. And he's just remembered everything that he read throughout his entire life. So, truly an amazing guy, one of a kind. Are we sure he's human? Is it possible he's an android of some sort? I think that is possible. Possible cyborg. Possible cyborg.

Okay. So, when we say CEO of the year, the C stands for Cyborg. Got it. Tim Hanson, who are you giving your vote to? I mentioned Uber earlier. I mean, it's still a private company, but I think Travis Kalanick, I mean, not that that company has not been without its own controversies from time to time, but just an incredibly innovative solution that they've managed to scale really rapidly

without really deterioration in quality, and then also have moved it into things like, you know, food delivery and Uber for business and Uber for event. I mean, it's just, you know, from, you know, my new title has something to do with products. Like, from the product side, that's been a fascinating company to watch grow that quickly with really relevant solutions for people. And I think, you know, obviously a lot to be proud of there. You mentioned it's really hard for businesses to disrupt themselves. themselves. When you think about what is happening right now with Uber and the automotive industry, it really does seem like Uber has the potential not just to disrupt the automotive industry,

but to set off ripple effects that would disrupt multiple other industries. So, for example, auto insurance. If Uber, one scenario is Uber becomes so successful and so large that automobile ownership drops pretty dramatically. And therefore, if many more people are not owning cars, who needs car insurance? Absolutely. I mean, it prompts the question, I think, how many dead assets do I have sitting around in my life, right? Like, I use my washing machine once a week. I use my microwave once a week. You know, what other things could people share to have higher efficiency? And what's interesting about that is I think you have, And it's just a really nice place where utility and efficiency and growth align with one another because it's better for the world, right?

If fewer things are being used more often than having a lot of just wasted assets sitting around, it's better for you. I mean, it's less money. It's more efficient. You get more of your time back. And then, you know, generally speaking, I think an economy that's functioning with that much interplay with one another. I mean, you know, years and years ago, there was a book written about the decline of sort of, you know, political, not the political class, but just political interaction in America was bowling alone. Like nobody goes to the bowling alley anymore. We just kind of sit there.

Whereas an economy that looks more like what Uber is doing is you meet more people, you're sharing more things. And I think that's an interesting place to be. And that's why I think sharing carbs is one thing, but just the mindset refresh that that solution, I think, has given to people and now has prompted solutions all over with regards to how I get my dinner and how I do this and that and the other thing. I think that's potentially very interesting for the global economy. Simon, if Santa Claus gets to bring shareholders a new CEO, who needs a new CEO? Oh, gosh. This is a tough one. You go a bunch of different ways.

I guess the one that I picked is going to be Stratasys. I think Stratasys CEO David Rice has had a tough year, definitely for shareholders of Stratasys. Stock's down 70%, largely because Stratasys has just had to continually write down their MakerBot subsidiary. Their consumer 3D printing arm has just been completely overpaid for. They've been writing it down all year. And I think that you've got a management team there that got really too far ahead of the game. And for lack of a better way of saying it, lit some shareholder money on fire on this. I'm not saying that they can't return, and that could be profitable for them in the future,

but definitely in the short term, that's not been a win for shareholders. Tim, we've got less than a minute. Who gets a new CEO in 2016? Speaking of dumpster fires, I would humbly submit Marissa Mayer of Yahoo, who has lit a lot of money on fire with regards to acquisitions, poorly timed buybacks. I think Stan's to get paid about $400 million for her five years of work, just because Yahoo is an Alibaba tracking stock. I think that's undeserved. She should probably give it back. and has shown no traction in the core business

despite a lot of money that she's spent. I think that company needs a new pair of eyes looking at it. They throw some nice parties, though. They do. If anybody hasn't looked at what happened at the Yahoo! holiday party this past month, you should check it out online. It's fascinating.

Thanks for being here, guys. Up next, we'll give you an inside look at the stocks on our radar. This is Motley Fool Money. Caroling, caroling now. As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.

Welcome back to Motley Fool Money. I'm Chris Hill, and joining me in studio once again, Jason Moser, Matt Argersinger, and Ron Gross. Guys, before we get to the stocks on our radar this week, it is the Christmas holiday, the Hanukkah holiday. It's the holiday season, and you know what? But we love food, not just Thanksgiving food, but just any kind of food. All food. All food.

So is there a particular winter holiday food that you look forward to every year? Ron? Yeah, this time of year, for me, especially for my daughter, potato pancakes, latke, if you will, very big in our house. You're an applesauce guy. I was about to say, I'm an applesauce guy. Keep the sour cream away. Nothing against the sour cream people.

No, they're fine people, but it's not for me. But they're wrong. Jason, what about you? I feel like I can't really pick one single food out. I do really like this time of year and the winter beers that are out there. A good stock choice for the fridge is always going to be Samuel Adams Winter Lager. If you're in the area where you can find this in your store, Schlafly's Christmas Ale is another really good one. A little brewery right out of Charlie Shriver's hometown in St. Louis.

Oh, nice. Matty? I come from a strong German household, and so therefore Glühwein, which is kind of ... What? No, it's a really good red wine that you heat up and then you add cinnamon sticks to it. It's really, really good. I can vouch for it. My wife makes it.

Okay. It's good. We should hang out. I'm just wondering if climate change means, among other things, that the whole hot wine industry is on a slow secular decline. It is going to be a warmer Christmas. How about you? What do you got, food-wise?

All the desserts. Really? Just every single one of them. Just all the desserts. Here's the tooth of sweet. I use Christmas as an excuse to just put on weight and bake as many cookies as possible, and just say to my wife, it's for the kids. Christmas cookies for the kids. Let's get to the stocks on our radar. We'll bring in our man Steve Broido from the other

side of the glass. Think of this as a gift for Steve. It can be a gift that maybe he should be opening Christmas morning, or maybe, depending on the stock, one he wants to hold off on opening for a few years. I'm glad you said that. What do you got, Ron? I've got Heister Yale, HY, a company you've probably never heard of, a manufacturer of forklifts. It's a recommendation of our Fool's Hidden Gems service, and it's a new deep value watch list stock for me. Steve, I recommend putting this under the tree, but not opening it until Christmas 2017, because the company is struggling. It's going to take a couple years. Stock's down 30% this year. Results

have been weak. Stock is cheap. Rock-solid balance sheets. Still profitable, but we need some of this industrial spending to kick back in. O'Reilly. Steve, question about Heister Yale? O'Reilly. Is there a lot of brand loyalty to Heister Yale? People saying, boy, do I love my Heister Yale forklift. O'Reilly. Well, they sell both under the Heister brand and the Yale brand. They split it up because two is better than one. O'Reilly. I think I saw their logo on a golf ball somewhere.

O'Reilly. Sounds like a good craft beer. O'Reilly. Heister Yale. O'Reilly. Jason Moser? Well, Steve, in that house where your stockings are all hung by the chimney with care and your children nestled all snug in their beds, you know, chances are pretty good that you signed that paperwork, and Ellie Mae was a part of that. And Ellie Mae is what I'm giving you today, ticker E-L-L-I. Now, Ellie Mae is not just any company, Steve. It's our most recent addition to Million Dollar Portfolio, and we like it for a lot of reasons.

Increasing regulation in the mortgage industry is driving the need for automated solutions, which is exactly what LMA does via their Encompass platform. They sell software as a service, and they also have a steady revenue stream, which comes in with transactions. Very, very high barriers to entry here because of the regulation involved, and high switching costs as the relationship continues with the customer. So, we're very excited about where this business can go in the coming years. Steve, looks like interest rates are rising. What is this going to do for LMA? You know, it's very interesting you say that. We look at that and we think, okay,

well, number one, it's going to be either purchase mortgages or refinances or anything else like that. But number two, in periods of downtime, this is actually a great opportunity for clients who are thinking about switching over to LMA services to go ahead and do it. Because if they switch over during times of high business, that disrupts a lot of their business and they make a little bit less money, which is not ideal. Matt Argersinger, what's on your radar? No surprise here. One I brought in to the show many times this year, and it's Mercado Libre. I just think Latin America is facing so many problems. One business that's not facing any problems really is MercadoLibre, ticker M-E-L-I, biggest e-commerce player in the region. It's

just, e-commerce is an undeniable big trend, especially in a place where a lot of users still haven't jumped on the internet yet. So, that's my pick. Steve, question about MercadoLibre. How do I evaluate what's going on in Latin America? It seems like a very far away place with very, very different practices than we have here. It is far away. I couldn't help you there, but just focus on the business for MercadoLibre, and things are going well. That's all I'm paying attention to.

How about take a trip, Steve? I could definitely do that. Get some boots on the ground. Steve, MercadoLibre, Ellie Mae, High Street Yale, three very different stocks. Which one are you opening first, Christmas morning? I think it's going to be Ron's for sympathy. I feel bad that he's coming to me with a forklift company. I appreciate that.

Yeah, it was great. Alright, Ron Gross, Jason Moser, Matt Arkansas. Guys, thanks for being here. Thanks. Thank you. Check out The Motley Fool podcast on iTunes, Stitcher, everywhere podcasts can be found. That is going to do it for this week's edition of Motley Fool Money. Our engineer is Steve Broido, our producer is Mac Greer. I'm Chris Hill, thanks for listening, we'll see you next week.