Motley Fool Hidden Gems Investing - The Fed's Next Move & Apple's New Gadgets

Episode Date: September 11, 2015

Will the Federal Reserve raise interest rates? We analyze what the Fed's next move means for investors and discuss Apple's latest gadgets and Lululemon's latest earnings. Plus, Grantland columnist Andy Greenwald analyzes the business of television. Learn more about your ad choices. Visit megaphone.fm/adchoices

Chris Hill, joining me in studio this week from Million Dollar Portfolio, Matt Argersinger and Jason Moser, and from Motley Fool Deep Value, Ron Gross. Good to see you as always, gentlemen. We have got the latest earnings from Wall Street. We will dig into the battle for the living room with TV writer Andy Greenwald. And as always, we'll give you an inside look at the stocks on our radar. But we begin with the market in general, as the recent volatility has subsided for the moment. All eyes are on the Federal Reserve's two-day meeting, which begins on Wednesday the 16th. And the big question, guys, is, will the Fed raise interest rates? And Ron, I've got to say, it's getting pretty heated out there. You've

got some money managers and analysts saying they've got to raise rates, and others saying that would be a massive mistake. What do you think? Well, they look at three main things and 75 other little things. Economic growth, measured by GDP, strength in the job market, measured by unemployment, and the inflation rate. I think economic growth is pretty good at 3.7%, unemployment pretty good at 5.1%, and inflation is actually lower than their 2% target, significantly lower actually. So things are pretty good. The low inflation rate actually buys them some time if they want it. And they might want it, because of the market volatility you just discussed,

what's going on over in China with the weakness in their economy. Things aren't necessarily perfectly rosy. So they can have some time if they need it. You're asking me to bet, and you didn't, but I'm going to bet anyway. I say no hike in September, hike in December. Pushing it off, alright. And the employment numbers are really ... if you look at jobless claims, they've been under $300,000 almost every week this year. That is usually the sign of a very robust economy. The unemployment rate itself is down to 5.1%. What I'm worried about is the Fed's going to make a move, not based on all the metrics that Ron just brought up, but because

the market's been volatile, because global stock markets have been falling down. China's stock market is down 40%. That would be a mistake. We don't want a Federal Reserve that's really reacting to movements in the stock market, unless they're really fundamentally based on the economy. I just don't see that. I think we are ready for a raise in interest rates to get back to some semblance of normalization. We've had zero rates for, gosh, is it eight years now? Forever. O' Nine years?

I like that. O' It just seems like forever, and I think we need to get back to it. There are a lot of industries, by the way, that are really going to benefit from rising rates. Banks, brokerages, insurance companies, companies that have lots of float, lots of assets, they can start monetizing. I think Matty's just spot on there in that you don't want decisions being made on market volatility. We think back, it was just two weeks ago, and we did a lot of talking with a lot of folks out there, and a lot of the same question, oh, what is this going

to do now with the interest rates? Are they going to raise rates? Are they going to push it off? And that's just exactly what everybody's perception is, because of the market volatility. And yeah, maybe it would be a bold call to raise rates in the face of market volatility like that. But let's look at the underlying data here, and just the health of the economy. I think there is enough to be argued with employment rates, with economic growth, that you could start ratcheting rates up a little bit. It's not going to be like just one big fell swoop. It's going to be very incremental, slow. It'll take a lot of time to get it back to where even a savings account looks more attractive for the typical consumer. But like

Matty said, there will be benefactors there, there will be beneficiaries there. It's not a bad thing, necessarily, that they actually do bump those rates up. Final point, I think we have to just remember, these are people, human beings on the Fed, who have really faced a tough decision here, and they're worried about spooking the markets, they're worried about investors, and they're worried about the economy, it'd be easy to just plug this data into a computer and get it to spit out a yes or a no, do we hike or do we not? But they don't do that, obviously, for reasons that a lot of these things are hard to measure and deal with emotions and sentimentality.

But to go back to what I said at the beginning, this is getting so heated, I feel like no matter what they do, they're going to catch flak from one side or the other. They're going to piss half the world off. There's just no question about it, Chris. Isn't that every decision the Fed makes, or any politician makes? There's always haters. The final question, though, is, what's the individual investor to do? And I say, even though we just spent a number of nice minutes talking about it, you really can't focus on it too much, especially for the long-term investor, if you own good companies that you're happy with for the long-term.

Alright, we will look for that next week. But earlier this week, Apple held an event to unveil their latest set of gadgets, including Apple TV, the iPad Pro, and upgrades on the iPhone 6. Anything really stand out to you, Matt? Well, nothing really stood out to me. But if this was any other company that came out with all of these new products and innovations, we'd say, wow, this is pretty incredible. But Apple has set such a high bar that an announcement like this, even though I think there's some really great innovations here, I think the 3D Touch aspect on the new iPhones, That gives them a lot of different versatility in terms of how hard you can press on that

phone to do different things. I think the set-top box is a real competitor to the Roku box or a lot of the gaming consoles out there. Finally, iPad Pro. That might be, for me, the biggest dud in the lineup, just because I think, for most people, it's still too big of a leap from the laptop to a tablet. We've seen Microsoft try this. I don't know how successful. They're probably, by the numbers, not very successful. There's a lot to worry about there, but I'd say it's still all about the iPhone. This is 60% of Apple's revenue. I think the iPhone 6S and 6S Plus, it's not really going to be enough, probably, for someone who has an iPhone 6 to upgrade, but someone who has an iPhone 5 or hasn't upgraded their

phone in a while, definitely, and that's important to Apple. Jason, the majority of people who have an iPhone don't have an iPhone 6, so they've you've got an installed base. I've got an iPhone 6, Chris. Well, I don't. See, I don't. I have an iPhone 5, and I'm ready. And I think you're right there. I think it's important for people to remember, this really is still a phone story. So, for all the cool stuff out there, iPad, I tend to agree with you there. Tablets in general have just not quite been able to clear that hurdle of becoming a production device. I know in this sort of happy world, we want

to say that they can be, but they're really just not yet. At least for the majority of out there, they're just consumption devices. They're just new TVs, really. Apple obviously commands a very big premium on those. I think the thing that took me back the most is, I was really uninspired by this. When you think about all of the work that they put into these things, I really wanted to learn more about Apple TV and their pursuit there. I think Apple Music has been really getting lambasted here lately. I want to hear how they're going to make that better. We didn't really get too much insight into any of this. Yeah. One thing about the TV that I think

is really compelling to me is that it's really open for developers to develop apps for it. I think, as long as they've created a versatile enough platform, and I don't know enough about it, but it could be something that evolves into a really, really technologically advanced way to use your TV. What do we think about the new installment? You can rent your phone on a monthly basis. Numbers look pretty high. It looks expensive to me. Do we think that gets any traction? I'm kind of doubtful. Right. I mean, I think for someone who's not interested in the contract offers, you know, the two-year contract offers, and can't pay $500 or $600 for a phone,

I think that's a great option. You do. Shares of Lululemon Athletica falling more than 15% this week. Help me out here, Jason. I mean, second quarter sales were up 16%. They had positive same-store sales for the first time in two years. This looked like a pretty good quarter. You know, it wasn't a bad quarter. Perhaps it was a bit of a hasty reaction from the market. But, I mean, this is still a retailer. And retail is very difficult. The big concern there with Lululemon, and it's something we've been paying attention to for years now, is really the

margin line there. And they are losing any sort of luster they had with that brand to be able to command premium pricing back when they were, I guess, maybe a bit more new to the market. And so, we saw gross margin really, really take a hit. I mean, somewhere in the a neighborhood of four percentage points, because they're just depending more on what they like to call investments and pricing, really. All that is just selling things for cheaper and offering promotions and whatnot. So, I think that when you look forward and you wonder where the growth really is, because they still haven't really convinced us that they can make that leap into men's apparel and other things than just that niche yoga

gear. That's the concern. I mean, it's a good company with a good brand, and I'm happy to give Laurent Potdevin, the CEO who took over after Chip Wilson really kind of almost took that company down, I'm going to give him a pass there, as he's kind of turning this thing around. But again, I think the market's forward-looking, and that's really what it's looking at now is, where is the opportunity going forward for these guys? And add them to the list of retailers who continue to have inventory problems as a result of what's going on with the West Coast. And that's just, yeah, and I mean, you even see, they've got a tremendous buildup in inventory

as well. And whenever you see that big buildup in inventory not really in line with sales growth, you can look for more discounts to come. And I think that's just going to indicate more margin pressures, and I think that's got investors spooked. Dave and Buster's Entertainment is the restaurant chain that combines playing games and watching sports with food and alcohol. Second quarter results could hardly have been better, Ron. I mean, profit's higher than expected? They raised guidance? Yeah, things are really looking up. And it hasn't always been the case with this company. It's an interesting story. It went private back in 2006 for $375 million, then

sold itself, still private, for $570 million. Now we're at $1.7 billion market cap, and the company's kind of knocking the cover off the ball with comps of 11% in the last quarter. So people are really liking the combination of the food and the gaming. I've been there, I don't know, dozens and dozens of times with my kids, spending ridiculous amounts of money for prizes that I could have bought at the dollar store. So, it's a business model that if it works, it works. I'm floored by that. Yeah, I am too. I just think the comps of 11%, I mean, this is not a new concept. And I just feel like, is there something suddenly driving the Gross family to Dave & Buster's?

We haven't been for a while, now that the kids are older. But if you think about what this business offers, keep in mind, this is happening against the backdrop of what is largely a very healthy economy here in the US, and has been for years. This is almost the definition of discretionary spending at this place. It seems like, when you see the stock hitting an all-time high ... O' All-time high. Only 77 stores, let's remember, at a $1.7 billion market cap. They think they can get to 200 in North America alone. So, there is growth ahead, as long as these numbers continue.

I'm less floored by the performance, and more floored by the fact that Ron Gross and just died, and the whole value guy is carting his kids over there and just dropping a bunch of coin on pixie sticks and stuff. You never needed to entertain your kids on a weekend. I sure have. Up next, if you like hot soup but hate the inconvenience of opening a can, we have got some really good news. Stay right here.

This is Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, Matt Argesinger, and Ron Gross. strong second quarter for grocery chain Kroger. Profits higher than expected, and they raised guidance. Jason, that is the nice one-two punch we like to see. That's the one-two punch, and the market tends to reward it. We do a lot of talking about Whole Foods here, and it struck me earlier that, I mean, we do a lot of talking about Whole Foods, but if you go back and look at the last five years here, I mean, investors

the bet was on Kroger right there. I mean, investors have won handily with Kroger. It's not even close. And I think that makes sense, though, because this is a business where scale is crucial. When you have that scale, you can really control costs, and you can take advantage of being able to do that. And Kroger is far larger than Whole Foods at this point. I think the acquisition of Harris Teeter was a very shrewd one. I think that opens them up to a consumer base that might choose Whole Foods otherwise. And they foresee comps for for the full year here, somewhere between 4% and 5%. That's strong. And speaking from the perspective of having gone to Kroger, there's one down by our house in Georgia,

they are nice. They've really come a long way. And so, I expect to see continued good things. Yeah, I want to go back to the Harris Teeter acquisition for a moment, because I think it is worth pointing out that those are tough to pull off in this industry. And there were some people at the time wondering whether or not that was actually going to work. They deserve a victory lap on that one. Sure, absolutely. I think the biggest question when that deal was first announced was, what are they going to do with the branding? Is this going to change anything? And really, ultimately, it has changed nothing whatsoever. You go into a Harris Teeter today, it's the

same one that was two years ago. They really just rolled that concept into their holding structure, so to speak, and it's just been a nice incremental driver. It is a good addition. I always think that at Harris Teeter, they split the difference between a Whole Foods and your everyday grocery store, with higher quality produce, higher quality meats, some organic stuff in there. I think they, probably more than most, do a really great job. Agreed. Keurig Green Mountain is best known for single-serve pods of coffee and tea. This week the company unveiled single-serve pods of soup, available in home-style chicken noodle

and southwest-style chicken noodle. And hazelnut. Well, I guess if you don't clean out the coffee pot, you're a Keurig owner. I'm a daily user of Keurig, but I'm sorry, Keurig, I don't get it. There's many ways to get soup very quickly nowadays, from cans to instant, just add hot water. In fact, you could use the Keurig to just add the hot water. You don't actually need the K-cup. I don't see it. Keurig needs something to help it. Stock's down 54% this year since the release of the Keurig 2.0, the company's really been taking it on the chin. They're looking for things to take that machine in other directions, other than coffee, soup

being one of those directions. I don't see it. I got an idea. How about a $300 cold beverage machine? That ought to do it, right? So, how much do they need this to be a hit? I mean, you look at their latest quarter, revenue was down more than 8%. This seems, unlike what we were talking about earlier with Apple, and I get that it's a completely different business, but Apple can afford to take some chances here. Based on what you just said, it sounds like Keurig, this isn't just a little add-on that maybe has some nice financial benefits. It sounds like they need this to be a hit. They need it to be a hit, but it's

going to be an uphill battle, especially with the trial of TwoSoups right now, which I can't imagine is going to go well. The company is cutting the workforce by 5%, doing what they can to cut expenses while they try to turn this around. Ever since the K-Cup patent expired in 2012, it's been an uphill battle. This is a company that I think had still does, has a great platform to do hot beverages, mostly coffee. I just think at some point, management will decide, hey, we've got this great thing, people like using it, we can do all kinds of stuff with this machine. It's the biggest example of divorce-ification is a term we use that I've seen recently.

O' It's going to be a great case study one day, and I think you came up with the title for it right there, a trial of two soups. Look at that. It was the best of times. O' I know you're not interested, but will you at least commit to just testing it just once, just for us. For this show, I will gladly do it. Bring it in, bring it in. Selfless efforts. The NFL season kicks off this weekend, and that means big business not just for the league and TV networks, it also means big business for the growing industry of fantasy

football. Companies like CBS and Yahoo are in on this, but it's also spawned standalone businesses like FanDuel and DraftKings, each of whom has raised more than $350 million in venture financing, Matty, they're not public companies yet, but when I see that kind of money being thrown, it tells me that they're probably going to be public in the next year or two. I think so. If you had any doubt, fantasy sports is a big business. I came across some data here from the Fantasy Sports Trade Association. Didn't even know there was a fantasy sports trade association. I can't believe you did research. 56 million people in North America

will play fantasy sports this year. Of course, the majority of that's going to be betting on or playing fantasy NFL sports. That's up from $12 million in 2005, and an estimated $5 billion is going to be spent on fantasy games. It's a huge business. You mentioned FanDuel and DraftKings. I can't watch sports now. It seems like every other commercial is a fantasy sports commercial for one of these guys. Each worth now well over $1 billion based on the recent funding rounds. There are big companies getting into this. Fox Sports is into it, Disney's into it, the New England Patriots have made an investment. Yeah, that Walt Disney deal with DraftKings, they didn't plunk $250 million in there,

but they got an advertising deal, so that DraftKings will be advertising on ESPN properties come 2016. They'll be exclusive in 2016. And as a consumer, it's a really attractive little setup there, because you can go in there and play, maybe you spend $5 a week doing it, so you're not breaking the bank or anything, but you're having fun. And again, like Matty said, it creates that interest to where now you're not just focused on your team, you're focusing on every game because you've got a player involved. O' I wonder how much of that money you

talked about, which is a big number, is really privately changing hands. Between you and me, who are in a fantasy league together, we both put in $50. Does that number include that, and how does a business capture any of that money? That's a great question. I think that is probably the overall transaction volume, and of course DraftKings and FanDuel are taking a small piece of that. Most of that money going into the winning pool that you can ultimately win from whatever league or whatever game you're playing. I know we've all done fantasy football. Let's bring in our man Steve Broda from the other side of the glass. Steve, if you had the number one pick in a fantasy football draft, who do you

think you'd take? I don't even know what fantasy football is. I'm not going to lie. I have no idea. It sounds really dorky. Would you like to enter a league with us? Yes. No, I don't. I don't know anything about football, but good luck. Thanks, Steve. All right, guys. Thanks for being here. We'll see you later in the show. Coming up after the break, we will bask in television's warm, glowing, warming glow with TV writer Andy Greenwald. Stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. We've talked for years on this show about how one of the most interesting business battles out there is the battle for the living room, and at the heart of that battle is television.

Andy Greenwald covers the TV industry for Grantland, and he joins me now from New York City. Andy, thanks for being here. Oh, thanks for inviting me, Chris. Let me start with something from a few weeks ago. The Television Critics Association press tour was going on. You have the major broadcast and cable networks making their presentations. And John Landgraf, who's the CEO of FX, raised more than a few eyebrows when he said point blank, there is simply too much television. Is he right about that? I mean, I feel that way because I'm a middle-aged man with kids, and so I hear all the time about great shows that I just can't really find the time to watch. But here's the head of a network saying it. Yeah, can I equivocate like a CEO and say I think he's not wrong?

You know, John, I think, is a very, very wise guy about the industry, and he generally has very good taste about television. And I think he's talking about this from a number of different angles. I think purely from a creative standpoint, you know, to make a television show and to make a good one requires an enormous amount of talent on all sides of the ball. You know, you need to have the best possible actors, the best possible writers, the best possible production crew, and that is a finite number of people. And as more and more networks and services get into the field, that number is getting stretched pretty thin.

So I think he's starting to feel it from his end. I think he's also thinking just about in terms of what is a rational expectation of what audiences can watch, because we've entered into an era where television now demands completism. You know, you can't just dabble like you used to be able to do with 22 unserialized episodes of a TV show. Now, in order to commit to a show, you're committing anywhere from 8 to 10 or 13 hours of your time. You don't just watch one, you watch them all. And generally, as he's tried to launch new dramas over the past few years, and one that I was particularly fond of fell prey to this, a show called The Bridge,

if you don't hook them in those first two hours, they're pretty much gone. And the economics of TV is not yet built to support discovering it late, no matter what the Netflix accolades will have you believe. The opposite argument against what John Landgraf is saying, I think has been articulated pretty well by a number of TV producers In the New York Times article about it, Marty Noxon, who produced a show called Unreal that got a lot of good buzz this summer on Lifetime, expressed it very well, saying, well, it's one thing to say that there's too much TV, but let's also look back at what kind of TV we had before there was too much TV. And it was very unrepresentative of the country as a whole. Would a show like Amazon's Transparent, which is just brilliant and subtle and wise and smart and also covering an issue that generally wasn't covered by mainstream television just a few years ago, would that have found a way onto the air?

without this glut of peak TV, as he's calling it. So it's a pretty, it's a multi-nuanced argument. Although, as a professional critic who has to watch all of it, I'm pretty sympathetic to it. Well, and one of my thoughts was, I don't think John Landgraf is making a comment like that if a ton of people are watching his network. As you said, he's a smart guy, but there's a slightly self-serving edge to that, as there probably should be, because he's the CEO of the network. Yes, it's true. Although, I would say that FX is doing very well under his tenure,

But I think that he's getting frustrated when the shows that he's passionate about can't get an audience. And not only that, they can't cut through the clutter or the noise to even get the attention that's required these days to get people watching. You know, he's done a good job launching shows that he's passionate about, but then he can't control it once they've launched. And as a good CEO, which probably means a controlling CEO, that's got to be frustrating. If it's a little bit tougher on the business side of the equation for television, is this a golden era for the creative people, for the showrunners? Because it seems like they have so many more options as opposed to when I was a kid, you basically had ABC, CBS, NBC, and that was it. Oh, absolutely. I mean, there's been an absolute

explosion of talent and opportunity over the last few years. You know, famously, that this, if you want to call it a golden age, was kicked off when AMC went out on a limb and got into script in a big way with Mad Men and Breaking Bad. And both of those scripts are great examples of projects that were basically tucked away in the desk drawers of their creators. Matthew Weiner and Vince Gilligan had worked on TV for over a decade on shows that you know and shows that you may not like very much, everything from The Sopranos to a comedy called Becker. These were the scripts that they wrote for themselves to get people's attention and, you know, to sort of show what they could do. The thought of anyone making them, well,

that was another story. All of a sudden, you had a network that had nothing to lose and was willing to take a chance on this material. Now, if you can't get it, if you can't sell your script to HBO while there are three dozen other opportunities as you go down the food chain, someone is probably going to make your show. Whether they will make it to the production levels that it requires or get it to the audience that it needs, that's another story. Let's go back to the business side. When you look at broadcast networks, basic cable networks, and premium cable networks like HBO, who's in the driver's seat in terms of making money? There's no question it's the premium networks. Networks like HBO and Showtime have the dream scenario. They are subscription services

where audiences pay them directly to get what they want. And it basically cuts out the middleman. And now, as these networks, and particularly thinking of HBO and Showtime, again, who are going with what the industry term is called over the top, HBO Now is a service where you no longer need to have a cable subscription. You just need to pay a certain amount of money per month and then you can get access to it, you know, online or via your Roku or Apple TV. They've cut out the middleman completely. You know, in the sense they are in the driver's seat going forward in the same way that a company like Apple is and that it's top down. You know, they make the shows, they own the shows, they have a library of the shows and they can now sell it directly to the

consumer. That's the best possible scenario, I think, for anyone to be in. As you go down the the network food chain um it gets a little bit murkier basic cable channels um you know the ones that come bundled with your cable bill whether you want them or not are in a little bit of a different scenario one of the reasons why they've all gotten into scripted tv in a big way over the last few years is to make them necessary because the carriage fees you know and that's the fee that basically you're paying for food network and uh amc and you know channels i probably haven't even heard of whether you want them or watch them or not they get money from every cable subscriber regardless. And that's called a carriage fee. Those have basically kept all these companies

afloat for a very long time. As they saw the writing on the wall, as we started to head towards an over-the-top era, these channels suddenly realized they needed to have a reason for you to know them. So they all got into scripted in a big way. Whether they've been able to build up that audience affection, build up that library of content in order to themselves go over the top is another question. How much does international distribution matter for networks? Is it the same level for all of them or is it more important for certain networks as opposed to others? I think it depends. International financing, as it is with film as well, is more important than it's ever been. But there are a lot of different ways that you can make it work

and the economics for every, not just every network, every show I think is different. One way you can see that it's affected the industry is the push towards dramas on the broadcast networks and the reason for that is because sitcoms as much as we love them don't travel very well the jokes are generally regional or specific so if you have a show for example like the office which was a huge hit here the format of the office was sold internationally there was a french office and an israeli office and of course you know diehard fans know originally it was a uk show but our version of the office doesn't travel as well whereas a show like hawaii 5.0 on CBS, its domestic ratings almost are irrelevant, because the show is so wildly

popular everywhere around the world, because what translates better than Sunshine, Cops and Robbers, that it'll pay for itself no matter what it's doing here at home. Isn't that why Baywatch was such a huge hit? I mean, at one time, wasn't Baywatch the number one watch show on the planet? That's exactly right. That's exactly right. Some things just export better than others. But sometimes it benefits everyone. NBC had a really amazing show for three years called Hannibal, based on the Thomas Harris novels and Hannibal Lecter mythology. And that was a co-production with Gaumont International. And it was never quite clear how much NBC was paying or who was paying for what, but it was like nothing else on TV. And it was beautiful while it lasted, although this year NBC did finally pull the plug. You're listening to Motley Fool Money, talking with Andy Greenwald, TV writer for Grantland. Grantland is owned by ESPN, so I realize I'm putting you in a little bit

of a spot with this next question. But some analysts have looked at the steady, unfettered rise in the cost of live sports programming, and they see a bubble that is getting ready to burst. Do you think that is the case? And if so, what does the aftermath look like? I, you know, for the reasons you mentioned, and also just because of my general purview, I don't have the specific information in front of me to discuss this, to discuss it with any level of expertise. But I would say that just having paid attention to television to the degree that I have over the last few years, I don't know if live television events are overvalued yet. You know, as we've moved towards not just a DVR era, but basically an on-demand era where people just assume their shows will be available to them at any time, we've lost the sort of the communal show, the water cooler show.

And award shows and sports have been the only things that have really seemed immune to the general decline in ratings across the board. I'll be curious to see what the Emmy Awards do later this month for the same reason, because I think interest in watching the Emmys live has weirdly gone up because people miss that collective experience. Similarly, I wouldn't bet against sports ratings for that same reason. I know he's been on the air for less than a week, but do you have an early reaction to how Stephen Colbert is doing?

I've only watched his first show, and I have to say it was a lot bumpier than I would have imagined. And I guess in retrospect, it's pretty clear to see why. You know, he's a performing genius and performed a character for nine years on a very small set. that seeing him without the character made him seem a little bit small, I have to say, because there are all the things that are required to do this job, to host a nightly talk show, which, by the way, is an insane and anachronistic job

that I'm not even sure if we as a country need anymore, requires a bigness of character and a voice and a personality to fill the silences, to generate content out of nothing, out of bad interviews or jokes that die on the vine. And I feel in the early going that seemed to be more of a struggle for him than I would have expected. But again, I think he's a brilliant performer and a very smart guy, and I wouldn't be surprised to see him fix it by, I don't know, this time next week. CBS shareholders have to be pretty happy, though, because now that CBS owns The Late Show, whereas David Letterman owned it before, CBS is going to be making a lot more money in late night. Yeah, and having Colbert and hiring him as quickly as they did was a very, very smart move for CBS and for its president, Les Moonves,

because he smartly recognized that there was no way to directly compete with Jimmy Fallon, who has changed the dynamic of that time slot and pretty much owned the ratings ever since he took it over from Leno. I think hiring another young person who is going to be singing and dancing would not have been smart. But if you give people an alternative, especially the people who had been happily watching Letterman and the average age of the 1130 audience is creeping up there, I think that having Colbert as a counterweight, even if his ratings never quite reach Fallon's, I think everyone at CBS is going to be very happy with it. I know that the way the television landscape has changed, particularly over the last decade or so,

means that the new television series in the fall, that's not quite the thing that it used to be. That being said, there are a bunch of new shows being launched by various networks this fall. Do you have one or two that you're particularly interested in? I have to tell you, this has been the most dispiriting network fall in my recent experience. it does seem like they've tried everything over the last few years and are really shrugging. They can't quite seem to figure out what audiences want, or at least what they want in big numbers. And so, you know, you look at the comedies, and there are things that wouldn't have been out of place 10 or even 20 years ago.

Dr. Ken on ABC is a family sitcom built around a comedian. The Muppets are back. There's a show on NBC called, it used to be called People Are Talking. I think they just changed the title to something involving the truth. And it's about how, you know, it's like the old cliche about the stand-up comedian act. White people talk like this and black people talk like this. It's not very inspiring. I think Fox is taking a big swing with something like Scream Queens, trying to bring Ryan Murphy,

the guy responsible for American Horror Story and Glee, bring his more out-there aesthetic to a broader audience. I think, you know, CBS is trying to age down its audience a little bit by getting into the superhero game with Supergirl. NBC, weirdly, seems the smartest to me because they're just playing it safe. Every one of their shows basically looks the same, and it looks like The Blacklist, a sort of glossy action thriller which may or may not include Wesley Snipes. Since you mentioned it, I have to ask this last question, and then I'll let you go, because on behalf of my colleague Ron Gross, who is a huge fan of Superman, do you have any sense of how good or bad the CBS fall series Supergirl may be?

You know, you're talking to me about a day before I'm going to commit to actually sitting down and watching this thing, but I actually don't know, because judging from the trailer, which was pretty grim when it was leaked a few months ago, I was feeling pretty disappointed about it, because it seemed CBS's attempt to basically not make a superhero show, but make an ABC show, sort of a vaguely touchy-feely, you know, rom-com with a little bit more of action-y stakes. People who I know who work in the industry have now seen the pilot and say, you know what, it's not half bad, so we'll see. CBS does know how to make a competent drama, so if they can bring their magic to this and sprinkle a little, I guess it would be anti-kryptonite in this case, but we'll see. You can follow him on Twitter, or better yet, click over to grantland.com and read his stuff. He's one of the best when it comes to writing about television.

Andy Greenwald, thank you so much for being here. Thanks for inviting me. Up next, we'll give you an inside look at the stocks on our radar. This is Motley Fool Money. As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Welcome back to Motley Fool Money. I'm Chris Hill, and joining me in studio once again, Jason Moser, Matt Argersinger, and Ron Gross. Time once again for the stocks on our radar, and we

we'll bring in our man from the other side of the glass, Steve Broido, to hit you with a question. Ron Gross, you're up first. What are you looking at this week? Well, Steve and Chris, I have a new Deep Value radar stock. Not a recommendation, a radar stock. It's a $600 million company, Movado, M-O-V. Most people, I'm sure, have heard of it. It's the watch company that makes watches under the Movado, Coach, Hugo Boss, Juicy, Tommy Hilfiger brand names, among others. The stock got absolutely slammed in the second half of 2014, weak retail environment, weak demand for watches overall. People just aren't wearing them, let's face it. But they put a plan in place, they raised selected prices,

they cut costs, they bought back stock. Things really have turned the corner now. Stock has rebounded off its 52-week low, but there still could be a lot of room to run on this stock if they can put up growth. Really strong balance sheet. The question for me is, is there growth to be had, especially in this age of smartwatches? Steve, question about Movado? Does Movado release a smartwatch in the next 10 years? Within the next probably two years. They call it a connected watch, and it is definitely coming.

Whether it's successful or not, I'm not sure. But my question for you, Mr. Broido, is do you own a watch, and if so, do you wear a watch? I do own a watch, and I do wear a watch. Very nice. Any chance you're going to upgrade to a Movado? I don't think so. But maybe. Jason Moser, what are you looking at this week?

Sure thing. You know, I've been able to play golf like twice in the last month, which for me is a lot. I don't get a chance to play a whole lot of a lot. And this kind of got me back to looking at a company called Club Corp Holdings, ticker is MYCC. And I've said before, this is the only golf investment I would ever actually consider, because these guys aren't making golf equipment. These are the guys that own the golf courses, the clubs. And so while golf may be facing some headwinds and really growing the number of players in the game,

I think that actually, Club Corp is compelling from the sense that it's the market leader in the number of properties it owns. It's the biggest operator out there. Scale is a big advantage here, where they can really actually help control the costs, bring the costs down of being a member of a facility, and make that actually a bit more of an attractive sort of aspirational goal for many. They just recently acquired Sequoia Golf, which gives it now 204 clubs in total, more than 430,000 members worldwide. Just an interesting situation there. They get membership fees every month, which I like that recurring revenue there. It's interesting, when you look at the profitability of the company, because of all the property

and equipment they use, they have a lot of depreciation and amortization on the income statement, which I think makes them not seem as profitable as they really are. They do bring in a lot of free cash flow. A very interesting investment. I'm going to go back and do a little bit more research on it. Steve, question about Club Corp? What happens with a water shortage like we're seeing in California? That's an interesting question there. Actually, what we're seeing, the USGA is spearheading a movement to where the golf courses are actually using less and less water.

They're less concerned with maintaining the off-the-fairway appearances of golf courses so that they don't have to consume as much water, because when those water shortages come into play, golf courses certainly are not immune. O' Mandy, what are you looking at? I can't take my eyes off GoPro. The ticker is GPRO. It's a company we just recently added to our watch list in Million Dollar Portfolio. It has been beaten down almost close to its IPO price from over a year ago, really because of some short guidance by Ambarella, which is a chip maker supplier to GoPro. But of course, this is the action sports camera

founded by Nick Woodman 10 years ago. He owns 30% of shares. The latest quarter, the sales are up 71%. Free cash flow hit $50 million. This is a company that's not only profitable, but growing by leaps and bounds. The GoPro brand is really spreading to all different kinds of areas of sports and the market. I'm just really excited about the company. O' Is there a storage opportunity with GoPro? Some of the footage that stuff creates gets very, very large. Right. GoPro has some cloud-based options where you can store with them, or you can use other cloud services. But they make it really seamless from capturing the video and storing it, editing it, all that

kind of stuff. O' Steve, you've got GoPro, Movado, Club Corp, any of those stocks peaking your interest? Maybe something you want to add to your watch list? I own Ambarella, so I'm thinking GoPro looks kind of promising right now. All right. Fixed. Steve, showing his data knowledge with the question about storage.

Steve, do you play golf? No, not at all. I neglected to ask my Steve Broderick question. I'm going to get a little bit more personal here, Steve. How does it feel getting your first child into school, right? Just started preschool, right? He did, yeah, it feels great. He's in preschool.

It feels very, very good. Boy, that's a big move in that direction, buddy. All right, guys, thanks for being here. Thanks, Chris. That's going to do it for this week's show. Our engineer, Steve Broido. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening, and we'll see you next week.