Motley Fool Hidden Gems Investing - The Trillion-Dollar Sleeper

Episode Date: April 26, 2019

Microsoft’s market cap crosses the trillion-dollar mark as shares hit an all-time high. Amazon reports its most profitable quarter ever. Facebook surprises, but in a good way. And Uber and Slack get ready for their public debuts. Analysts Andy Cross, Emily Flippen, and Jason Moser discuss those stories and dig into earnings from Comcast, Domino’s, PayPal, Starbucks, and Twitter. Plus, CNBC’s Becky Quick talks Warren Buffett and previews the Berkshire Hathaway annual meeting. Thanks to Molekule for supporting our channel.  Get $75 off your first order at http://www.molekule.com code fool75. Learn more about your ad choices. Visit megaphone.fm/adchoices

This week's Motley Fool Money is brought to you by Molecule. Molecule is reimagining the future of clean air, starting with the air purifier. For $75 off your first order, visit Molecule.com, that's M-O-L-E-K-U-L-E.com, and use the promo code FOOL75. 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 Hill.

Joining me in studio this week, senior analysts Jason Moser, Andy Cross, and Emily Flippen. Good to see you, as always. Hey, Chris. We've got the latest headlines from Wall Street. We will preview the Berkshire Hathaway annual meeting with our guest, Becky Quick. And as always, we'll give an inside look at the stocks on our radar. But we begin this week with the biggest company in the public markets. Shares of Microsoft hit an all-time high this week after a strong third quarter report.

And for a brief time on Thursday, the company's market cap cleared the $1 trillion mark. It closed just under that. But, Andy, Microsoft's evolution under the leadership of Satya Nadella really has been incredible. It's been fantastic. This quarter just continued to show that emphasis. Revenues up 14%, earnings per share up 20%, free cash flow up 19%. And really, Chris, the theme of the push to the cloud for Microsoft and what Satya has done at this company continues to show in the results with their intelligent cloud sales up 22%, driven by the commercial cloud, which is their Office 365 commercial and their Azure business, LinkedIn commercial. That is now representing about a third of their business gross margins of 63% versus 58% a year ago.

The Azure business itself was up more than 70% versus up about 76% last quarter. That was down from 93% a year ago, but still this exceptional growth as Microsoft makes its evolution to pushing the cloud. But across the entire business, with the exception of maybe gaming, which is a little bit kind of lukewarm, sales up 5%. Microsoft and Satya and his team continue to show the initiatives they put forth a few years ago, when he joined as CEO, are now paying massive dividends. It's easy to forget what a great innovator Microsoft is, because it is such an old name.

But I mean, you look at just their Azure business, it's growing faster than Amazon Web Services. I mean, it's substantial when you look at the opportunities in front of this company, and management continues to be strong innovators. So, I think there's still lots of opportunity for Microsoft out there. Yeah, and I think Amazon Web Services probably gets most of the headlines just because it's Amazon. But you look through a lot of these companies, S1s or their 10Ks, and you're seeing that they're getting their cloud services from some combination, really, of all three when it comes to Amazon, Microsoft, and Alphabet. I mean, so it is a big market opportunity. It's not just a zero-sum game there. And certainly,

Microsoft has taken big-time advantage of it. Well, and they still have the subscription business of Microsoft Office, which, you know, just as Microsoft often gets overlooked, when we're talking about the big tech companies, I mean, that recurring revenue just continues to pay dividends. Yeah, on their productivity and personal and business processing business line, that was up 14%. But the Office 365 commercial seat growth was up 27%. That's been in the high 20s for the last few quarters. And then the Office 365 consumer side, subscribers were up 12%. So, as they continue to evolve this business and push more and more into the cloud and make their business more scalable, and they drive consumers to that Azure business. Very sticky revenues,

great customer service, and great services overall. Satya and what Microsoft have done has been really impressive over the last couple of years. First quarter profits and revenue were record highs for Facebook. The social network also said they've set aside a cozy $3 billion to $5 billion in anticipation of a privacy-related find from the FTC. Jason, it still seems like there are some clouds hanging over Facebook, but not when it comes to advertisers. No. I mean, I think Facebook is essentially too big to fail in its current form. And I mean, we can rip on them all we want about privacy and data, and we do. If you listen to the show, you know we rip on them every week. But the numbers

are the numbers. You know what? People keep on using it. It seems like a lot of people maybe are frustrated with what they're doing, but they keep on going back to Facebook and Instagram and WhatsApp and Messenger, and using those platforms. And that is really, it really just shows you the advantage that comes with having such a large network. And when you start rattling off some of these numbers, it's really hard to grasp. In some cases, total revenue of $15.1 billion was up 30%, excluding currency effects. As you noted, they set aside $3 billion for the FTC investigation. That could go up to $5 billion. Really, that's chump change for these guys anyway, so it doesn't matter. Their top 100 advertisers make up less than 20% of total

ad revenue, so that's a nice diversified base. And on average, 2.1 billion people use at least one of the big four apps every day, 2.7 billion monthly. And we go back to when they made that acquisition of WhatsApp, and we've all been pretty critical of that because they paid so much for it. And at the time, the justification was, well, we get another platform with a billion users, and then we can do all sorts of things. Well, I don't know that they've done a whole heck of a lot in monetizing WhatsApp, but they so cleverly now have rolled all of their users into basically that one user metric. They're never going to have to really account for that anyway. So, they definitely have some opportunity down the road to

branch out and try revenue drivers in gaming or payments or commerce or whatnot. But I think investors in the business today need to get used to the fact it's going to be an ad play for some time to come, and that's working out okay. Well, and that's shown up this quarter when the number of ads across all their platforms increased 32%. Now, while the price per ad was down 4%, clearly advertisers continue to spend across all these platforms. More than 100 million users, to Jason's point about other alternative means on Facebook, 100 million users are now watching Facebook on video, Facebook Watch for video consumption, and 130 million Instagram accounts are tapping, like, reveal products or learn more every month. So, like, members

and users of Facebook continue to integrate with this platform and use this platform in different ways. And ultimately, that's going to be good for the revenue line. Yeah. And, I mean, I've been critical of Mark Zuckerberg and Sheryl Sandberg. Their leadership styles have just rubbed me the wrong way. I will say, in listening to this call, Mark did a very good job of sort of dancing both sides of the fence there in regard to that manifesto that he put out where they're talking about taking Facebook in more of a private messaging direction. But he did a really good job of dancing both sides of the fence on the private side and keeping that public side available, primarily for all of

the small businesses in the world that use Facebook for their businesses to grow. So, he actually painted a picture where you could see them taking this business in both directions and pulling it off. Shares of Amazon were treading water on Friday, despite first quarter profits being the highest ever. And Emily, Amazon Web Services, as we mentioned earlier, continues to print money. Yeah, Amazon had a great quarter, but you'll notice the stock was, at least at the time of filming, pretty stagnant. And this is in large part not because the earnings weren't great. I mean, earnings crushed, but people are concerned about Amazon's continued growth. I think there's

a lot of questions about how long can Amazon continue to grow at the pace it's growing, but but it doesn't seem to be bothering Amazon at all. They announced they're coming out with one-day shipping, hoping to make that the new standard for Prime members, and hoping to drive continued growth in terms of just transaction and customers through this expansion of one-day shipping. And what's really interesting is that, well, Amazon's pretty stagnant. You'll notice that Target, Walmart, they're all down a lot on the news. I mean, they've been trying really hard to just get at the same pace with Amazon with two-day shipping. There's no way at least as they are right now, that they can meet up with one-day shipping.

It's an exciting time to be Amazon. Well, that's not going to happen just by a snap of Jeff Bezos' fingers. That's going to cost up to $800 million. Just the investments they're making in the business to be able to compete at such a high level with those competitors that Emily mentioned is just really impressive. Investors simply just don't really care about the investments they're making. Their dollars are thrown around, thinking that eventually they'll pay off. Well, I mean, the nature of the business is to innovate, to invest, to spend money, and to never stop. Investors who like to take the bear side are critical of that. But I think,

if you're an investor and you take the bull side, you need to be concerned when they stop doing this kind of stuff, when they're not investing $800 million into trying to establish one-day shipping, because that means they've kind of hit a dead end there and they're not sure where to go next. Exactly. It doesn't take a lot to kind of disrupt businesses. And I think we've continued to see businesses come in, disrupt incumbent businesses, and that's put a big pressure on companies, including Facebook, like we talked about. But Amazon, by spending the money to disrupt themselves, there's something to be said for the value in that. And personally, I'd rather own a company that looks overvalued, but looks like it's also trying to be the

biggest player, not for the next year, but for the next five years, the next 10 years, any day. I did, however, think about Doug McMillan, the CEO at Walmart, who's done a great job leading that business with the Jet.com acquisition, getting Walmart into that membership model, two-day shipping. I did kind of want to see a live check-in video of him getting the news that Amazon's moving to one-day shipping. No, he might have actually liked the challenge. Starbucks' second quarter profits came in higher than expected. The company also raised guidance for the full fiscal year. Andy, that is the one-two punch that we like to see. The stock wasn't moving. What gives? Yeah, I think it was really just

seen, the numbers came in pretty good, except the traffic numbers just continued to be really low. So, overall, people not necessarily going into the store. When they get there, they are paying more. The ticket size continues to grow. China was fairly nice. Comp stores in the U.S. up 4%. China comp stores up 3%. Earnings up 13%. Revenues up 5%. Up 9% if you back out that Nestle consumer products good deal they cut. The loyalty program was up 13%, now almost $17 million. So, that's good news. They're going to open up 2,100 stores this year, continue to grow. It was a very nice quarter, but I think the stock has done so well over the past six months, I think maybe investors are looking for a little bit more fireworks.

Jason, that loyalty program really has been a sore spot for so long. So, it was interesting to see the tick-up in members there, and I guess over the next couple of quarters to see if they can continue to do that. Yeah, it sounds like they're trying to reduce the friction in bringing people into that rewards program. Just going back to Andy's point on traffic, I mean, we've talked about it a lot on this show. It does seem like we're living in this adjusted, non-gap world now. I mean, the solution for traffic, to me, is very clear. Listen, I have a coffee bar at home. And that thing gets a lot of traffic on a daily basis. And it's stocked with a

bunch of Starbucks beans. So, we just start including that traffic in there. It's a non-gap measure, but maybe we can frame the conversation a little bit differently. I like that. You want analysts coming into your home to do a channel check? Maybe I'll just fire out a tweet every week or something. And I'll just add, Andy, you mentioned it for a second there about China and the growth in China. And there's been a lot of skepticism, I think, over Starbucks' viability in China, especially with a growing competitor, Luckin Brands, announcing they're going to go public.

And for me, that just makes me even more bullish on the company. The more people you can get in China aware of coffee, drinking coffee, the better it's going to be for both businesses. And just the fact that Starbucks is such a premium brand, they have such a well-known brand name, their cups, their straws are green, I just think there's still so much international opportunity. Quick note, they increased a little bit on both operating margins in the U.S. and China, 20.9% for the U.S. and up to 18% for China. So, they're getting closer. Coming up, earnings palooza rolls on. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here in studio with Emily Flippen,

Andy Cross and Jason Moser. Shares of Twitter up nearly 15% this week after first quarter profits and revenue came in higher than a year ago. Jason, good quarter, but it seems like Twitter needs to string a couple of these together. Jason Moser. Yeah, I mean, I think they are stringing a few of them together. I mean, you can question the size of the user base all you want, but it's hard to argue that they're not monetizing that user base in a meaningful way. And I mean, that's starting to pay off for patient shareholders. If you look at revenue alone, $787 million, that was up 20% excluding currency from a year ago. The big news, I think, going forward,

you can forget about that MAU number, that active monthly number. They're going into a new metric, the monetizable daily active users, which I think is more fitting for their platform anyway, because it is more of a daily type of engaging platform. So, those users continue to grow. They're keeping expenses in check, which is nice. Balance sheet got $2 billion healthier, too, which is really encouraging. I wouldn't underestimate the value in this platform they're calling LittleT. It's that TWTTR app. It's a prototype that they rolled out to people who want to use it. That's their incubator, where they go try new things to see how users like it. Then they can discover what maybe needs to be incorporated

into the actual app. It gives them a chance to innovate without disrupting the original service that most of us are using. So, all in all, I think they've got things going in the right direction. Certainly, Jack Dorsey has lived up to the promises he's made. And as a shareholder myself, I think I'll continue hanging on to my shares, because it seems like the future is bright. Same-store sales for Domino's Pizza rose nearly 4% in the first quarter. That's pretty good, Emily, but for Domino's, that is their slowest growth in five years. Reason for concern, or do you think this is a speed bump? Well, it's part of their new strategy, which they're calling Fortressing, which is essentially building a ton of Domino's really

close together, which is kind of counterintuitive, because you might think that will cannibalize sales. But the idea is that they want to be the cheapest, fastest, most convenient pizza option anywhere in the world. They've had some success rolling this out in Las Vegas, and they continue to plan to roll it out internationally, which is why you'll see they project really strong store count growth. And it's going to be interesting, because part of this strategy means we're not going to use third-party delivery people, right? So, they're going to hopefully increase the margins on their business a little bit by doing so. But it really is a bet on their ability to sell pizza and the ability for people to keep up demand for pizza. So, it'll

be interesting to see how it folds out. I did like CEO Rich Allison on the conference call just being very straightforward about how, no, we're not looking to get involved in third-party delivery. Why would we do that? I appreciate it, because it definitely is in line with what their strategy is. And if he hadn't given such strong statements, I would be concerned about their actual trust in the strategies that they're pursuing. Shares of Comcast hit an all-time high this week after first quarter profits came in higher than expected. In addition to all of the NBC Universal properties, Comcast also has that 30% stake in Hulu, Andy. Interesting times for CEO Brian Roberts and his team.

Yeah, and they've actually done a pretty nice job. They bought Sky for about $30 billion, and the results this quarter were right in line. The sales were up 18%, earnings up on an adjusted basis about 18%. They generated $4.6 billion in free cash flow, added 3.6% more Comcast subscribers, and the Sky consumers were up about 3.5%. So, I think overall, the playbook that Brian Roberts has kind of put together in this new world of the way we are consuming media, they're executing on this. And the stock, from my perspective, has done very well. And I own it myself, and it pays a little dividend, and it's not that expensive. And I think, actually, over the next few years, it'll probably be an outperformer.

Do you think, by the end of the year, Comcast and Disney strike a deal? Because Disney seems interested in that 30% Hulu stock. Well, I think they do. If you look at just the debt picture that Comcast has taken on now, it's about a $200 billion market cap, and they have more than $100 billion in net debt. Now, they can service that pretty easily with the operating profits, but they need to get that debt level under control a little bit. PayPal's first quarter results were highlighted by the fact that the company now has 40 million people using its Venmo app. Jason, I'm one of those people, I have to say. They make it really easy.

Well, I'm feeling like a broken record here, Chris, because it was another good quarter, and I think this is just a stock that everyone needs to own in their portfolio. When we talk about Foolish Holdings, this is a great example. It's a very good business pursuing a massive market opportunity. They're never sitting still. They've got good management. it's one you can plan on owning for many, many years to come. I mean, the numbers are just all headed in the right direction. Total payment volume of $161 billion for the quarter, up 25%. Total transactions, $2.8 billion, up 28% from a year ago. Added 9.3 million new accounts for the quarter. Now have 277 million total active accounts. You mentioned Venmo. They are finding

a lot of ways to monetize this business, and I think that's going to continue for some time to Do you like the investment they're making in Uber? The Uber investment, I'm a little bit more curious about. The MercadoLibre investment made a lot more sense, though I do see the investment in Uber as perhaps a little bit of an investment in itself, given that Uber results in so many transactions. And if PayPal can steer those transactions in their direction, then you can see how it works out for them. Alright, Jason Moser, Andy Cross, Emily Flippen, we'll see you a little bit later in the show. What should we expect from Warren Buffett at the Berkshire Hathaway annual meeting

next week? We will discuss that and more with CNBC's Becky Quick. Stay right here. You're listening to Motley Fool Money. Hey, before we get to Becky Quick, quick shout out to Molecule, which is reimagining the future of clean air, starting with the air purifier. Molecule has introduced a breakthrough science that is finally capable of destroying air pollutants at a molecular level. Their technology has been personally effective and verified by science, but most importantly, it's been tested by real people, including me. I love what they do at Molecule. They've given allergy and asthma sufferers around the country an all-new experience, And though they've reinvented the air purifier, Molecule doesn't just collect air pollutants,

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All right. Let's talk to Becky quick. Welcome back to Motley Fool Money. I'm Chris Hill. Next weekend, the investing world will turn its eyes to Omaha, Nebraska for Berkshire Hathaway's annual meeting, the highlight of which is the marathon, and it is a marathon, Q&A session with Warren Buffett and his right-hand man, Charlie Munger. One of the moderators for that session is Becky Quick, co-host of CNBC's Squawk Box, and she joins us now from New Jersey. Hi, Becky. Hey, Chris. It's great to hear from you. Great to talk to you as well. So going into this meeting,

what is your biggest question for Warren Buffett? you know i think right now if i had one question i'd want to put um it's what he sees in the economy and earnings because that's one of the biggest stories that's moving the market i don't think there are any big berkshire scandals like there have been in some years past i there aren't burning questions that i have and i got to talk to him not too long ago about a lot of berkshire things that we've had covered that we had uh questions on so i think right now what i really want to know is, what does he see in earnings? What does he see in the economy? He has such a huge portfolio of either companies that he owns outright or that he owns a major stake in,

everything from the Burlington Northern Santa Fe Railroad, to American Express, to Coca-Cola, to Kraft Heinz. I mean, there's just so many things that he has a really good read on. He's got massive holdings with a lot of financial companies, and that's been a big laggard. We had all these thoughts that we were going to see an earnings recession, perhaps. But right now, in the midst of earnings season, it turns out that's not going to be the case. It looks like earnings are actually going to come in better than expected, and earnings are actually going to see growth, not a decline. And that's been a big surprise. Part of the reason you saw so much pressure on markets at the end of last year was because of this idea of a potential earnings

recession. If companies continue to report like they have been doing right now, look, it gives all kinds of hope for the market, and that's why you've seen the major indexes hitting new highs recently. I want to get to all the things that Berkshire Hathaway owns in a second, but let's stick with, maybe not a scandal, but certainly a recent problem within the Berkshire Hathaway major holdings, and that's Wells Fargo. Because this time last year, you and I were talking about that, and Tim Sloan, who had been there during the credit fake account scandal at Wells Fargo, and then was CEO, and then just suddenly resigned earlier this year.

And I say suddenly, because it was, I don't know, a day or two right after the board of directors had issued a statement saying, we're not looking for a new CEO, Tim Sloan is our guy. Since this is such a major holding for Buffett, how is he thinking about Wells Fargo these days? You know, it's interesting, because I actually happened to be with him on the day that that announcement came out. I was interviewing him at a charity function down in Dallas. And we were on stage early in the day. I think it was around noon or something. And I asked him about Wells Fargo at that point. And he said he had total faith in Tim Sloan, too. The news came maybe three hours, four hours later. I was at the airport and got a call from the

news desk saying that Tim Sloan had resigned. And I tried to call Warren just to figure out what had happened. I had known this was coming. He was already on his flight because, of course, he's not waiting on the commercial airline flight like I am. He was already on his flight, so I couldn't get him until three or four hours later when I landed in Newark. And he told me at that point that he actually had known about Tim Sloan's announcement that Tim had called him the day before and asked if he could talk to him at some point that day. And when Buffett told him he was going to be out of pocket for the entire day, Tim went ahead and told him what was going on. So he said he was sorry that he couldn't say anything, but he knew that Tim was stepping down. I think

what really happened was there was so much pressure coming from regulators and from Washington in general. Tim Sloan had become a big punching bag. Everybody from Elizabeth Warren down and even the OCC had really been coming after them because of all the problems that have continued to pop up. Now, again, these are things that predate Tim Sloan's time as the head of Wells Fargo, but he's a long-term insider. And I think it was hard to kind of get away from some of those things. And he had just been paid a big bonus. And that drew even more fire from Washington. uh recently uh buffett had an interview somewhere i'm not even sure where it was but he made the comment oh i think it was the financial times where he said that um he thinks it's going to

have to be somebody who's not a traditional wall street banker who is heading up um wells fargo as the ceo just because of all that fire and all that flack they've been taking from washington regulators it probably can't be an insider because again um it's hard to separate yourself from what happen. I think Tim Sloan did a great job as the CEO there. But it's an election year coming up. We're already back in election cycle. There are something like 20 Democrats now who are running for president. And it's going to be a continual issue and a continual focus for regulators. And I think they have to be wary of that. Again, I don't think there's anything that Tim Sloan did wrong. But it is difficult to try and separate yourself from what's happening in Washington.

and they are continuing to kind of weed out problems that had come up. So, it's interesting that Buffett has said he thinks it's going to have to be an outsider. As we've talked about seemingly for the past few years, it really does seem like Warren Buffett is itching to buy something. And in terms of the cash on the balance sheet, it looks like he's got somewhere in the neighborhood of $80 billion that he could comfortably put to use buying something for Berkshire Hathaway. some intriguing names being batted around on Wall Street and in the financial media.

Target, Anthem, Sherwin-Williams. If you were a betting woman, would you bet that he makes an acquisition? Or, to the point you made earlier about how earnings season has been going and how we're seemingly hitting new highs all the time with this market, that the price is just too high for Warren Buffett, and it's more likely he's just going to plow money back into the stocks that he already owns. Yeah, I think the latter is certainly the case, at least if prices continue like they are here. If you had seen prices that we saw back around Christmas Eve, the recent lows for the market, that might have been a different story. But in every interview that I've spoken with him over the last six months, maybe longer, maybe 10 months,

he has said that you are looking at near historic highs. He and Charlie Bunker both have told me, because Charlie, I talked to, I think in February, you know, they've both said that the premium you pay for buying a business outright is higher than just about any point that they've seen in their careers. And that has to do with a lot of factors, not only are market prices high, but you also have so much competition because there's been so much money that's flooded the markets, so much money that's flushing around in private equity funds and other places that it's really hard to buy a company outright. There's just so much competition out there, and the premium that you have to pay is such a high level. Now, they've both told me that stock prices,

while they don't seem particularly cheap, also don't seem particularly outrageous when you look at where the 10-year note is, right? When you look at interest rates, which is what you have to do to factor and decide if equity prices are expensive, relative to what you see in the treasury market, stock prices aren't all that expensive. Now, that's not to say that you couldn't see a big downturn in the market. That absolutely could come for a lot of different factors. But you're still looking at the 10-year at 2.5%. And when you're looking at yields like that, you got to figure where's the best place for my money longer term. So I don't see them buying any major business anytime soon unless there's some unusual circumstance that comes up

or somebody who just absolutely wants Berkshire Hathaway as a home. That's happened in certain instances, particularly with a private company like Aniscar or something, or if you want a portion in M&M Mars or to be partners in something like Kraft Heinz. But I think it's not very likely that they outright buy a company. In fact, just yesterday there was a rumor circulating early in the morning that Berkshire Hathaway was going to acquire PG&E,

the California energy company that's been in so much trouble because of the fires and all the liabilities there. It struck me as a crazy thought, but the stock was up like 18% in the pre-market yesterday. And, you know, the weird thing is, when's the last time you ever saw a Buffett acquisition get leaked to the media first? But I called him up and he said,

no, that's 100% not true, and I would know. But I just think you're much more likely to see either them plowing money back into stocks like Apple, like you've seen, others that they've been buying, other of the financial stocks that they've been loading up on, or maybe some creative partnership that we haven't seen in any sort like that before. It would completely surprise me if they made a major acquisition, unless there were some unusual circumstances with the company. We are in the thick of earnings season. I'm curious if anything has stood out to you so far,

anything that's caught your attention? well um look i i think my overall take is that the numbers have just been so much better than many people were expecting uh all of the fears as we got into the heart of darkness or the hard burning season you know for the most part haven't played out you do see some exceptions uh 3m out this week and that was a bit of a head scratcher because 3m said that five of its five of its six or four of its five businesses saw revenue declines, and that it was seeing a lot of softness in its end markets. But I think that might be an outlier. That alone was responsible for taking down the Dow futures, at least in the pre-market today, to the tune of like 130 points.

But from my best guess, and from all the analysts I spoke with today about that, it's probably more of an outlier than really the rule when you're looking at the industrials and so many others. So, if anything, we keep waiting for the end of this long growth cycle and the end of this long bull market. But based on the numbers that we're seeing so far, it looks like there's a lot of places where there's improvement and maybe better than expected demand, even in places like China. We had Facebook and Microsoft reporting this week, both stocks up. We've got Alphabet coming next week. And as you mentioned earlier, the 2020 political season has already started.

And yet, I'm wondering if you think big tech companies like that are essentially out of the doghouse in terms of political pressure. It just seems to me like there's less talk coming from Washington, D.C. about breaking up these big tech companies, even though they seem to just keep getting bigger. I don't think we've seen the end of the potential regulatory threat. I think that Facebook went a long way this week when it laid out kind of a place marker for the fine that they're expecting potentially from Washington. They reserved $3 billion and said they expected a fine of maybe $3 to $5 billion, although they admitted it's still early on and it's hard to say for sure until

there's an actual deal that comes through. And I think that was a relief for Wall Street, that on top of the idea that their business right now was better than anticipated. So even though we see all this pressure coming from Washington, even though we see Mark Zuckerberg trying to come up with a better way to deal with privacy concerns and build a new network that is much more privacy centered, it's not impacting their business yet. And that was a huge relief for Wall Street. I do think that you are going to continue to hear regulatory talk, particularly, as you mentioned, since it's an election cycle. You are going to continue to hear regulatory talk come up. You are going to continue to see this be one of the few places where you actually see the right

and the left agree, the idea that big tech has gotten too big. And the privacy, data privacy concerns, I think are real. And I think that we still are just waking up to the idea of how much we've been giving away. I think all of those things are going to change these companies and how they do business. But I think all of these companies are also realizing that and kind of racing to address it. So, you know, maybe it's not a massive impact from the stock's perspective, but it's a change in the way business is going to be done. And I think we are going to continue to see the repercussions of that. All right, last thing, and then I'll let you go. I know you love to visit national parks whenever you get the chance.

You know me too well. When you go out to Omaha next week, Are you going to get a chance to get outdoors on the trip at all, or is it just all work? You know, for me, it's a really kind of work-focused, work-centric week. I fly out early. I'm there for about six or seven days. And it's pretty much go, go, go the whole time. But I'm bringing my family with me, my parents, and two of my kids are coming. And they already have plans to go to the zoo.

And my son has been to the national parks that are right there because, you know, You can walk across the river there into Iowa, and there's a bunch of parks that are right there. And my son has actually done that tour with my husband. My husband's got to stay home with the other two kids this weekend because they have sports events and different things that are happening. Not this weekend, the weekend of the annual meeting. So they actually have some stuff that they're busy with at home. But, yes, there will be members of our family there who are taking advantage of the outdoors. I just am not lucky enough to get to be one of them.

I'll just point out that the Midwest Regional Headquarters for the U.S. National Park Service is not in St. Louis or Chicago. It's in Omaha. It is. And my husband and my son went there and got badges and pictures there. I'm thinking maybe if you get a chance, you just stop by, drop off a resume, say, look, for a second career when you're done with this whole CNBC thing. It's an excellent idea. Trust me, it's one my husband's already considered. But yeah, it's great. It's actually right there by the conference center where they hold the entire Berkshire Hathaway annual meeting.

So it's literally walking distance from there. You can catch her every weekday morning on CNBC's Squawk Box. She's also the host of the nationally syndicated weekend program, On the Money. Next weekend, she'll be out in Omaha talking stocks with Warren Buffett and Charlie Munger. Becky, always good to talk to you. Chris, it's always a pleasure. Thanks so much for the time. Coming up, we'll give you an inside look at the stocks on our radar. Stay right here. 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. Chris Hill here in studio once again with Emily Flippen, Jason Moser, and Andy Cross. Real quick, Uber and Slack are each closer to entering the public market. Slack filed their S-1 this week, and Uber set a price range of $44 to $50 a share for their IPO. Of the two, Andy, which are you more looking forward to in terms of their IPO?

Well, really, Slack. I mean, the S-1 just filed, and we're users internally here of Slack, and it's just really impressive what they've been able to build in a very short period of time with more than 10 million worldwide daily active users in more than 150 countries and more than 1 billion messages sent per week. So, interested to see what Slack has to say. Jason? Yeah, I'm just really curious about all of the different directions Uber can ultimately pursue. So, thinking about that a little bit more, and hey, I mean, I guess we're going to have some indirect ownership to Uber by virtue of the PayPal shares. So, I got that

going for us. Emily? Personally, I just look at Uber, and I worry about the growth opportunity there. Although it is being priced, I think, a little bit lower than many analysts expected it to be, including myself. Ultimately, it's hard not to be a fan of Slack, especially when we do spend so much time using the platform every single day. That doesn't mean that it can't get better. But I definitely think, at least in my experience thus far, like we said, That's one just released. It looks like an interesting company. All right, let's get to the stocks on our radar. Our man behind the glass, Steve Broido,

is going to hit you with a question. Andy Cross, you're up first. What are you looking at? I'm looking at Twilio, Steve and Chris, symbol TWLO, which makes in-app communication tools for lots of large companies, Amazon, Netflix, Uber. They report next Tuesday, they just made a big acquisition last year of SendGrid, which helps them in the email communication. So, not growing as fast as Twilio's core business is growing. So, I want to see what Jeff Lawson and his team say about SendGrid. Steve, question about Twilio. What's a good example of a specific product that Twilio has built for one of these platforms? Well, anything like Netflix communications or the Uber, like if you get an Uber alert,

that's all from Twilio. Jason Moser, what are you looking at? Chris, I'm up to my neck in augmented reality, putting together an augmented reality report for us here at The Fool. And I've got Lumentum on my radar, ticker L-I-T-E. For augmented reality, there is a technology called VCSEL. It stands for Vertical Cavity Surface Emitting Lasers. Get all that, Steve? And Lumentum, believe it or not, is the market leader when it comes to this technology. And that technology is used for 3D sensing, which is a core technology behind augmented reality. The fundamentals of the business are very strong. It's profitable. It's cash flow positive. Good leadership taking a long view. I've got this one under a microscope.

Steve, is it possible this could go the way of 3D movies, all this VR stuff? I really don't think so, because we're seeing so many practical applications for augmented reality today, particularly in the healthcare market. I think it's only making these markets more robust. Emily Flippen, what are you looking at? Well, my favorite cybersecurity company is actually reporting next Tuesday. Its name is Tenable, T-E-N-B. I'm really interested in the business. They're basically the only people out there right now doing holistic cybersecurity. It's been around for 20 years. A really wonderful innovator. Steve, question about Tenable. Is this something that I would use personally,

or is this for corporate? Well, it's a little bit for both. They have enterprise solutions. But if you're a cybersecurity professional, you likely grew up, whether that be in college or any work that you're pursuing, using at least one of their products. So, enterprise or individual, they supply to both. Three very different businesses, Steve. You got one you want to add to your watchlist? Well, it's going to be weird, but I'm going to go with Lumentin. I think Jason may be onto something. It's going to result in some real profits for you, Steve. Real profits, not augmented real.

Alright, Jason Millerzer, Emily Flippen, Andy Cross, thanks for being here. Thanks, Chris. Thank you. 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.