Motley Fool Hidden Gems Investing - Will Google Overtake Apple?

Episode Date: July 17, 2015

Google has its best week in more than ten years. Will the tech giant overtake Apple in the race to a trillion dollar market cap? Our analysts tackle that question and delve into big earnings from Dominos, eBay, and Netflix. And Motley Fool analyst Tim Beyers talks Comic Con 2015 and the battle for the living room.   Learn more about your ad choices. Visit megaphone.fm/adchoices

Chris Hill, joining me in studio this week from Million Dollar Portfolio, Jason Moser and Matt Argersinger. Good to see you, gentlemen. What is up? Earnings season is up, my friend. It kicks into high gear this week. We're going to take a closer look at the entertainment industry, and as always, we'll give you an inside look at the stocks on our radar. But we begin with a tech giant that is just getting bigger, and that is Google. Second quarter profits came in higher than expected, making gains in mobile and YouTube, Jason, and shares up more than 16% on Friday.

Amazing, amazing day, and a very solid quarter. It's no secret that video, across many of the businesses that we cover, is seen as a huge opportunity in the market today. Google knows this, and they are capitalizing on it with YouTube. Going into the quarter, a lot of us have been paying attention to the costs, and wondering if they could actually kind of pull those costs and tighten the operations up a little bit. They have a new CFO in there, She's doing a good job of communicating with shareholders. She talked a lot on the call. Mobile, they're doing very well. Let's go back to YouTube, though, because I think that's really the secret to this quarter. They did a great job cutting costs, but YouTube brought

in some amazing numbers. The average viewing session on YouTube is now more than 40 minutes. That's up 50% year over year. The number of advertisers on YouTube is up 40% from a year ago. The average spending of the top 100 advertisers on YouTube is up more than 60% from a year ago. So, while we have talked ad nauseum about how Google has more or less missed the social boat to this point, they do have a very valuable property there in YouTube, and I think we're going to continue to see them really trying to exploit that for all it's worth. Yeah, I mean, the remarkable thing is, I don't remember the exact number that Google paid for YouTube.

1.6 billion. Yeah, there it is, 1.6 billion. And Google's probably going to end up adding about $50 billion worth of market cap on Friday alone, and a lot of it is, as Jason said, on YouTube. But I think it's a great point. Video is getting huge, and it's a very friendly mobile format, which is something that Google has been trying to do. I mean, so much of their business is still dependent on desktop, but they have made some great strides in mobile, even though the cost-per-click numbers aren't as great in that space. But they certainly are expanding their audience, and YouTube's a big reason for that.

Well, and just to go back to something you touched on, Ruth Porat, the new CFO, she got a lot of accolades when she was hired away from Wall Street, and already, as you said, really impressing people with, not just her communication style, but also just the way she's bluntly saying, hey look, we are conscious of the money we're spending, and we're being more mindful of it. Yeah, there's no question. I think she comes in not a part of that culture that the former CFO was a part of for so long, where excessive spending was seen as, it's OK, these are these moonshots. Maybe it's sort of an implicit mandate, but it's, listen,

margins are tanking here. We've got a big problem with spending and not really showing any profits from that spending. So, I think that, again, to your point, she did a very good job communicating on the call, and I think we're going to continue to see, quarter in and quarter out, more focus on controlling those costs. If they can keep controlling those costs, and then really see the benefits of YouTube, man, investors could be looking at some good days ahead. Mattie, as you mentioned, Google adding more than $50 billion to its market cap. That is the biggest one-day gain in history. So, let's look at the scoreboard. Google's

market cap around $450 billion. Apple's market cap $745 billion. Which one becomes the first trillion-dollar company? What do you think, Matt? Oh, man. Apple has such a lead. But if I was just picking those two ... You can go off the board. Well, OK, I'd give Google the slight nod here, just because I think Apple's growth is about to slow down quite a bit. But, you know, if I could have a third candidate, I would say Amazon. I've said they're eventually getting to $1 trillion, I believe that. Whether they get there faster than Apple or Google, I don't know, but that would be my dark horse

choice. Yeah, I think I'd probably take Google over Apple, just because I think the commoditized nature of those devices is going to tamp down on Apple's growth. But I do think Facebook is worth an honorable mention here, because they got to $250 billion so fast, and I think it's going to be a more relevant business over the coming decade than something like Google. So, I wouldn't put it past Facebook to get there first. Shares of Netflix up 17% this week after the company added 3.3 million new subscribers in the second quarter. Pretty impressive across the board, Matt, but particularly internationally.

Oh, yeah. Of that 3.3 million, 2.4 million coming internationally, about 900,000 from the U.S. That's double the rate, Chris, that they added a year ago. Their subscriber numbers are accelerating. They're up to 65 million subscribers. Of course, now everyone's excited about Netflix, but I've seen some analysts out there saying that they're going to get to 200 million subscribers within five years. That might be a little aggressive because the company's actually come out and said, yeah, we're going to add five to six million per year over the next few years. That is way too conservative, but I also think 200 is way out there. This is a company that they expect to be in every country by the end of

next year. They're in Japan starting this quarter. They're going to be in Spain, Italy, and Portugal later this year. Still trying to crack China, which is going to be a tough one to crack, but they'll eventually get in there. I just want to point out that Netflix is now an 11-bagger for our Odyssey 1 portfolio and Supernova. We bought it back in 2012 at a split adjusted price now of $10.32, so I'm loving the Netflix right now. Jason Moser. Jason, the further we get away in time from the whole Quickster debacle, the more it seems like that was just a speed bump in an otherwise stellar run that Reed Hastings has had running this company.

Yeah, no question. We talk all the time about how, as investors, we learn from our mistakes, and that's what makes us better. I think that Reed Hastings really made a mistake, but he really learned from it. What we've got is a leader in Reed Hastings who's very customer-centric, wants to make sure he's giving his subscribers what they want. Very Jeff Bezos-like, in my opinion. They just are focused so much on the customer. If he continues with that philosophy, the sky's the limit with these guys at this point. Shares of Intel down this week, because all Intel did in the second quarter was make a profit of $2.7 billion off of revenue of more than $13 billion, I feel a little

bad for Intel. I mean, they're raking in so much money, but profits? Profits? I mean, you're right. This is a huge company, and I think that they've had a very tough year to date. It's a business that's in transition. It's not to say that's not the right strategy. I think it is, as the PC market continues to suffer. But the transition it's making, that's not what got it to where it is today. So, I think the questions are fair as to how are they going to witness the growth in the data center and the memory and the Internet of Things segments that they're pursuing now. Internet of Things, for example, that made up 4.2% of their net revenue in the most recent quarter. That was up from

just under 4% in the second quarter of 2014. Data centers, you know, that's up to 29% of total sales. You know, I mean, hey, you've got to love the fact that they've got options, right? And so, I mean, they're making a move away. Whenever any company has to do that, there's a lot of uncertainty. And, you know, the market just doesn't like uncertainty. It's worth mentioning, though, they still pay out a very healthy dividend yield. And so, for income investors, it's worth hanging onto these shares, even when they're in the doldrums like today. Another chipmaker, AMD, also reporting earnings this week. Earnings is in air quotes,

of course. As that stock drops below $2 a share, can we all just stop pretending that they are a competitor to Intel? Well, Chris, earnings season is more about guidance going forward than the failures of the past. Unfortunately for AMD, both are very bad. The past has been bad, the guidance going forward is bad. They have more exposure to the PC market, and that's a big problem. They've got a lot of debt on the balance sheet they have to deal with, top lines falling off a cliff, margins compressed. Stay away from this one. Shares of eBay up this week after second quarter profit came in higher than expected.

eBay is also selling its enterprise division for $925 million. Pretty good quarter here, Matt. It was, but of course we've always talked about eBay as a tale of two companies, and now they really are two companies. As of this past Friday, PayPal is now officially a separate company. You look at the results, you have PayPal, which had a great quarter, 28% increase in payment volume, 19% increase in revenue, 11% growth in active user accounts. They're targeting revenue growth of 15% to 18% for all of 2015. Then you've got to turn to eBay, where revenue for eBay actually fell 2%. It's partly if you strip out foreign currency, revenue was up a little bit. But this is a company that they're expecting revenue to

they grow 3% and 5%. We know this is the story with eBay, they've been trailing the overall e-commerce market for some years now. At the same time, everyone's going to be excited about PayPal, and I think that, rightfully so, it's a company that's growing faster, it's in a more exciting space at the moment. But, you've got to give some credit to eBay. They're buying back a lot of stock. They also announced a $1 billion stock buyback, that's on top of $2 billion. The company generates a lot of cash, and Jason and I were talking before the show, this is a company that I think is going to be hungry for growth, because not a lot coming from the core business. They have a lot of cash to put to work. I think

they're going to make some moves. I think they might buy MercadoLibre, for example, which is the largest e-commerce company in Latin America. They're going to spread out a little bit. I think you're going to see some exciting things from that business, even though that business isn't growing very well right now. John Donahoe has done a great job running this company for the past seven years. But just to go back to the enterprise thing for just a minute, because they bought GSI for, I think, somewhere in the neighborhood of $2.5 billion, just under $2.5 billion four years ago. So, on the one hand, maybe give them credit that they are cutting bait, but

let's also recognize they're going to take a $1.5 billion write-down on that. Right. And, yeah, so there you go. Not a great, obviously not a great pedigree when it comes to acquisitions. Skype is another one that comes to mind where they really did make a lot on that as well, initially. So, we'll see how they do. I was going to say that was very Microsoft-esque. Coming up, we will talk health care and balance that out by analyzing some unhealthy foods. Stay right here. You're listening to Motley Fool Money.

Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser and Matt Argersinger as Earnings Palooza rolls on. Second quarter profits for United Health Group rose 12.5%. They also raised their guidance. That's a pretty good one-two punch there, Matt. It is. And let me first say, though, this is an industry I don't pay a lot of attention to, but I think it's one investors, including me, should be paying more attention to. Yeah, revenue for UnitedHealth up 11%. Of course, this is one of the biggest players, I think, the biggest player in the healthcare. Biggest for-profit insurer in America.

Right. So, that tells you a lot right there. Their medical loss ratio, which is something akin to the combined ratio, which we talk a lot about with the insurance industry, That fell to 81.4% slightly, which that's good. You want to see that number come down. They raised their earnings guidance for the year. Bottom line with the healthcare space, there's a lot of consolidation happening right now, especially among big players. We saw the Aetna and Humana deal. UnitedHealth was actually in the rumor to be buying Aetna, as well as Cigna, which is another big player. But consolidation in an industry like this, I think, is going to be a good thing.

I think it's going to be good for UnitedHealth. I think it brings scale, pricing power. more. So, this is an industry I think you want to be paying closer attention to. Well, and you look at the stock, down a little bit, as we said, a good quarter, but over the last year, up close to 50%. So, a lot of things going right over there. Sure enough. Domino's Pizza's second quarter profits came in higher than expected. Same-store sales, do I have this right, Jason, same-store sales were nearly 13%? Same-store sales, domestically, were, Let me see here. Domestic same-store sales did almost grow a full 13%.

That's Chipotle-esque. How did they do that? It is Chipotle-esque, and it's pretty phenomenal. Here's another stat for you. This was their 86th consecutive quarter of international same-store sales growth. 86 consecutive quarters. Think about that. That's crazy. That's a lot of mediocre pizza. A lot of very mediocre pizza. Let's face it, it is relatively mediocre pizza. I'm sure I'll probably get an email or two on that, but I stand by my comments. I think the key here, though, is the rebranding effort they're going through with, and going from Domino's Pizza to just Domino's. I think

they've done a very good job with this. The rebranding effort is working. They're selling more stuff now, so it's not just mediocre pizza, Matty, it's a lot of mediocre stuff. Right. Love mediocre stuff, especially lots of it. But, I mean, they're catering to delivery, that's a big deal, obviously. They're getting more customers, selling more stuff, and that's working. It's worth noting that they are meeting their customers on the digital front as well. When you have 50% of sales coming from digital channel, that's Papa John's-esque. Papa John's has done a wonderful job on the digital front as well. Domino's, I think, is wise to pursue that and continue growing

that out. They've just opened themselves up to a broader customer base, which is, I think, helping. Our colleague Matt Joss, who works in Australia, the last time he was visiting Fool HQ, one of the things he talked about was how great Domino's is, and how dominant it is in Australia. That's a good-sized market that they're doing pretty well in. Yeah, I can imagine. It does translate internationally. I remember when we were living in Cairo, Egypt, and Domino's was very successful there. It was a relatively consistent product. We had pizza delivered from there, and it tasted just like you would get here. I think being able to translate into different international markets is great. Obviously, with 86 consecutive

quarter of same-store sales growth, they're doing something right. And another stock that's done really well over the past year. You look at their results and it almost seems like with Chipotle, Domino's Pizza as a stock is entering that range of really, really good results are not going to move the stock higher. They're almost at the point where they need perfection. And it's interesting, we talked about this with Bojangles before, love the food, probably going to stay away from the stock. Domino's Pizza, not a big fan of the food, but hey, the stock actually looks pretty tasty.

Yum Brands is the parent company of Pizza Hut, KFC, and Taco Bell. Second quarter profit looked pretty good, Matty, but it is the, speaking of trends, it is the fourth consecutive quarter of falling sales. Right, and it really is still about China. Still, I feel like we've been talking about Yum's China problems for years. Well, we have been, actually. Okay, we have been, so literally we have. No, same-store sales in China were down 10% in the quarter. That's after the first quarter when they were down 12%, so things are not getting better. I'm struggling to figure out how Yum's stock is actually

up 25% this year, but you dig into the numbers, and outside of China, they're actually doing pretty well. Taco Bell's sales were up 9%, same-store sales were up 6% there, KFC's sales were up 6%. Pizza Hut was up a little bit, mostly flat. But, I mean, it just shows you that the rest of the world still likes what Yum has to have, even if the Chinese are kind of staying away. Well, and they really need to get out of the habit of referring to their poultry supply problems in China as one-time issues. Because, newsflash, if it happens a few times over a several-year period, then you've got a legitimate problem on your hands. And we've

We've talked about this before, Jason. This is one of those issues where this may be the new reality for them in China, that people who are just sort of turned off by the poultry problems that they're having just say, you know what, I'm not going back there. I don't care if you've cleaned up your supply issues. In my mind, I'm done with you. Yeah, and it's also worth noting, KFC, to my understanding, it's not like it's the most affordable food in China. It's more upscale. Yeah, it's a little bit more upscale. So, if it's a bit more upscale and it's going

to make you sick, I think people are probably going to go elsewhere. Yeah, and these problems linger for a long time. I remember Jack in the Box had their scare 20 years ago, but I feel like their same-store sales were in the tank for five, six, seven, maybe even almost a decade. They've bounced back pretty nicely, not just with the namesake stores, but also with Qdopo as well. Right. That was the big Midnight Munchies meal, right? Mark Reith, I think, gave us some boots-on-the-ground research there.

Yeah. Maybe that's Yum's answer, Midnight Munchie meals for their Chinese customers. This whole conversation is making me much more excited about United Health, because I just feel like we're still stuffing ourselves with terrible, mediocre, or worse food, and we're going to need health care. Radio at Fool.com is our email address. Thanks to all the folks who wrote in for the Motley Fool money stickers. We did, as I alluded to last week, we did have to order a second shipment of stickers,

but MakeStickers.com is the people who helped us out. So, the stickers are on their way. So, thank you. Got a lot of great emails. I have to share easily one of my favorites from Andy Kaiser in Princeville, Illinois, who writes, Hey guys, love the show. I got a degree in finance and then came back to work on my family's farm in central Illinois. We raise hogs, corn, and soybeans. I love listening to the podcast while I'm doing my hog chores. You keep up the good work. Oh, there you go.

See, you know, we hear from people who listen when they're on the treadmill, they're going for a run, They're commuting, they're driving, making dinner. It's the beauty of the podcast, man. It's on demand. And now, hog chores. I feel like that's probably not going to be topped anytime soon. Yeah, I think we need to solicit. Someone needs to top that, because that right there, I agree, that can't be topped.

Someone mail in and top it. Radio at fool.com is our email address. All right, Jason Moser, Matt Argesinger, guys, we will see you a little bit later in the show. Up next, we will take a closer look at the entertainment industry and battle for the living room. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill.

2015 is shaping up to be a record-setting year for the movie industry, and the battle for the living room has never been more crowded than it is right now. So here to help us make sense of it all is Tim Byers. He analyzes the entertainment industry for Motley Fool, Rule Breakers, and Supernova. And he joins me now. Thanks for being here, man. Yeah, good to be back on. Good to talk to you. Let's start in California, where you are right now. San Diego Comic-Con just wrapped up, around 150,000 people attending.

A lot of buzz, of course, around the upcoming movies, Batman vs. Superman, some new movies from Marvel. Will, you're a Comic-Con veteran. What's your headline from this year's show? It's neither of those things. It's Star Wars. Star Wars blew everybody away. In fact, they had their big Hall H presentation. It's funny.

Disney decided to put resources behind Star Wars at this year's San Diego Comic-Con, left Marvel Studios at home, and they screened some new footage in Hall H, which is the big presentation center at San Diego Comic-Con. And then when they were done with that, they took everybody out to a venue out by the harbor, the San Diego Harbor. They brought out the Philharmonic Orchestra. They piped in John Williams from overseas, wherever he was, working on a new score. And they played all kinds of the classic Star Wars music to this, you know, crowd that was just in awe and then blew everybody away with fireworks at the end of it.

So, anybody that does not love Star Wars probably loves Star Wars now, and anybody who did love Star Wars probably is absolutely, you know, chomping at the bit to see this movie come December. So, Star Wars really owned the show. As I alluded to, so far in 2015, I mean, the movie industry has just been on fire. And right now, we're on track for a $5 billion summer, $11 billion at the box office for North America for the year, and $40 billion worldwide, all three of which would be records. So when you look at these numbers as an investor, who are some of the winners that you're seeing? Well, the first one that comes to mind is IMAX. Now, this is not to say that there aren't studio winners, but IMAX is part of the reason that these numbers are so huge, because the widescreen

format is gaining hold, and that's not just here in North America, but that's around the world. Blockbusters lend themselves very nicely to the widescreen format, and come, I believe it's 2018 and 2019, when we have the back-to-back Avengers films from Marvel Studios, The Infinity War, those will be the first films 100% filmed in IMAX. There's a lot of momentum for that company. Now, as far as studios go, it has been an amazing year for Universal, which is really nice to see, because Universal's been nowhere for so long, and Universal's been just a huge winner. Fast and Furious, Minions, these are just, they've had a run of properties that have been just astounding. And the biggest of them all, of course, is Jurassic World.

Dinosaurs eat everything. So Universal has had an amazing year. And even with Star Wars, I don't think Disney's going to catch them. Comcast is the parent company of Universal Pictures. You've got, as you mentioned, Disney, the parent company for Star Wars and Marvel. On the smaller screen, though, you've got AMC, which really has started to build up a pretty tremendous track record in terms of the shows that they've produced. Where is AMC, as far as you're concerned, as an investor?

AMC is moving exactly where it needs to. And if you're an investor, you're going to really want to pay close attention to what happens on August 23rd. That is when Fear the Walking Dead debuts. That's the spinoff show from The Main Property, which has been a top-rated program on cable TV for several years now. It's born from the comic that Robert Kirkman created so many years ago, back in 2003. His studio now, Skybound Entertainment, really has become one of the, I would call them the first mini-majors that has arisen specifically out of the comic book industry. And so they have these cross-media deals. AMC has been the biggest benefactor of that. Fear the Walking Dead is interesting for a couple of reasons.

The first is that it is fully owned by AMC. It is an original property. So Kirkman has essentially sold the rights to that program. The second is it's the first one to be fully internationally distributed by AMC International. That's the business unit that was created out of the billion-dollar Cello Media purchase a few years ago. So this is a property that has a chance to give AMC benefits all the way down the line. The Walking Dead is great because there's some merch that they get out of that. They have some licensing goodness.

They certainly get benefit here in the U.S., but Fox International Studios gets the gravy overseas. That won't be the case with Fear the Walking Dead. It will be fully licensed. They get all the benefits of good ratings here in the U.S., and they get all the benefits of good ratings overseas. So if this is a hit, it can be a real catalyst for the stock. You're listening to Motley Fool Money, talking with Tim Byers, entertainment industry analyst. Let's talk about the battle for the living room. And as I mentioned

before, it is really getting messy, which, of course, I love. The messier the fights are, the more entertaining it is for me. But you have so many companies competing for our attention in the living room. Obviously, the cable providers, Comcast, Verizon. We've got gaming companies, Microsoft with the Xbox, obviously Netflix, Amazon with its Prime service. And then you've got the 800-pound gorillas with deep pockets, the extent to which Google and Apple and Microsoft, I suppose, again, want to throw more money at it. Where is the battle right now, and who are you betting on? i okay so i'm betting on uh two and i'm going to throw a third dark horse in there the two i'm betting on are netflix and google and let me tell you why so first with netflix is and it's fairly

obvious they announce in their quarterly earnings the number that gets lost in all this is how much netflix spends on content and now that number is up to six billion six billion dollars annually So they kind of ratably roll this out, and it becomes part of just their spending plan. They spend $6 billion. So there is an accelerating formula to bring originals into the fold. And when you look at the Netflix numbers and read Hastings saying that 90%, nearly 90% of Netflix members engage with original content, And that means that every time they roll out into a new territory, when they have a regional original or something that is worldwide in nature, they already have a natural draw to that property, you know, to that region when they land there. And they're going to land in a couple of places here before the end of the year.

They're going to land in Japan in Q3, and then they're going to go to Europe, Spain, Italy, and Portugal in Q4. China is still being negotiated, but that is out there looming in the distance. So Netflix is a big one. Google is a big one because of YouTube and what's happening with YouTube creators and YouTube shows. There is a lot of uptake for short-form YouTube content and YouTube channels, like one that I really like, Geek & Sundry. They have a bunch of different shows. They appeal to gamer geeks, comic geeks, all kinds of different stuff. It's custom programming, and it's very well-received, and it gets the kind of audience you would expect of a niche TV show. That's very interesting, and seeing what Netflix – I'm sorry, Google can do with that as far as YouTube goes. But Hulu is a third dark horse that is very interesting because of what they've done in acquiring programs. Very quietly, they used that $750 million investment from a few years ago to start building up a library of original programming. and they've done something that I think they should get more credit for this.

They figured out how to get people to pay for streamed programming and still show them some advertising by making it relevant and brief. So Hulu is making fistfuls of money. And when you go, by the way, this is a good investor tip. If you're an investor in any kind of entertainment company, do yourself a favor and look at LinkedIn. And don't just look at LinkedIn. Look at what the companies you're following are advertising for.

And right now, if you go and look at the LinkedIn jobs for Netflix and Hulu, you will see that they are hiring tons of people in content acquisition and business development. So what that tells you is that this is an arms race, kind of what you said at the open here, Chris. This is an arms race in the living room to see who can get the best content, who can deploy it fastest, because the more you can differentiate in that area, the better your odds of keeping members. You also have Comcast coming out with their own streaming service that they are beta testing. Yep. And with the amount of content that Disney is building up, both for kids and for adults, it's not inconceivable to think that they make a serious run at their own streaming service.

So, in a way, Netflix is doing really well, but it's almost like there's a constant other threat out there waiting just around the corner. That's totally true, and this is why originals are so important. And here's the thing that also goes either ignored or just overlooked. Netflix offers something extremely powerful that those other competitors you just mentioned don't and probably never will. netflix buys up front and so there's no pilot there is a guaranteed season and what they get on the back end and they get a lot of savings from this that goes underappreciated netflix doesn't ever pay residuals and if you don't follow the entertainment industry you'll have no idea what that is but residuals are when a show appears somewhere else in syndication

there's a residual payment that goes out to everybody involved with that show if there was a screenwriter and they were named, then they would get a residual payment. An actor would get a payment, so on and so on and so on. A Netflix original program pays no residuals whatsoever because what they say up front is, hey, look, we're going to buy the whole season and you'll be working for six months. And for a lot of actors and a lot of directors, that is highly attractive. It's way more attractive than going to make a pilot and then hoping and praying that you get picked up with the long-term hope that if it's a hit over time, maybe you get residuals. Now, in the latter formula, you can make a ton of money over time, just ask Jerry Seinfeld.

But if you want the guaranteed money up front, Netflix offers you that. They're getting a lot of really good talent because of it. And Disney, Hulu, Comcast, because they already have these kind of contracted agreements in place, they already pay residuals. The chances of them blowing up their model and saying, yeah, you know what, we're not going to do that anymore is highly unlikely. That's a hidden advantage that Netflix has. All right, last question, then I'll let you go. All this talk about entertainment, I need a recommendation from you. Something, it can be a movie, it can be a TV show, it can be a Netflix original, whatever you want, but give me a little viewing recommendation.

All right, a viewing recommendation. I would say, I'm going to give you two. I think Ant-Man is going to surprise everyone and be one of the funny favorite films that gets a lot of traction you know coming up here that's coming up this weekend but i think fear the walking dead is going to be amazing that is a prequel and it will not tell you how the zombies came to be we already know that but it will introduce you to a world where people discover for the first time that zombies are real given what we already know about the walking dead i think that is going to be a terrifying but really amazing show i'm very much looking forward to that i have to say walking dead is maybe the biggest most successful culturally relevant television show that i have never seen

one second of so do i need this i guess it's it's not for everybody i'm personally not much of a horror guy but the show itself the way it deals with the the human condition and what happens like the tagline in the comic was always the best and it's it what sold it is you know when the world is ending people have to figure out how to start living you know so like you know when you have no other choice now you have to figure out what it's like to live um and that is what the show is about and it's great and this you know fear the walking dead will have a different dynamic where it'll be like well wait a minute what happens when you everything you hold dear is falling apart literally around you. That could be really fun. He covers the entertainment industry

from Motley Fool, Rule Breakers, and Supernova. He also makes entertainment recommendations too. Tim Byers, thank you so much for being here. Absolutely. My pleasure. 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, I'm Chris Hill. Joining me in studio once again, Jason Moser and Matt Argersinger. Guys, before we get to the stocks

on our radar, I got a great email. RadioatFool.com is our email address. Question from Cameron Stewart in Provo, Utah, who writes, I'm a new listener and I'm excited to learn how to invest. How can I make sure I'm making good choices about the companies I buy? I realize that you learn by doing, but what can I read to make me a little more comfortable about investing in individual stocks as opposed to mutual funds?" Great question, Jason. It is a great question. What do you think? It's one we get all the time, and that's really why we exist, right? I'd be remiss

if I didn't mention that you could subscribe to something like Stock Advisor and really learn a lot. You, Homer. But, if we're looking to save a little money, or just take baby steps, I think one great resource out there that we've just put together, it's called The Motley Fool Guide to Investing for Beginners. It's an e-book on Amazon. So, if you are a member of Kindle Unlimited, it's free to read. If not, you have to pay a whopping $2.99 to get you the ticket there, and you can download that on your Kindle or other device, read

that. I've read it, and I really think it's great. It strikes on a lot of those notes for beginning investors, and that's a wonderful resource to consider. Matty, before you win, I'll just add that I find Twitter to be a really helpful, free resource in terms of finding smart people to follow. Morgan Housel, our colleague, is someone I would definitely recommend following on Twitter, in part because Morgan does a lot of retweeting of other really smart writers, so a great way to get articles. Well, Cameron, if you don't want to spend $2.99, and that is triple the average app price. I would say, if you go to fool.com, search 13 Steps, you'll find an article called

13 Steps to Investing Foolishly. It's really well-written, it's easy, it gets you comfortable with even setting up a brokerage account, but then buying your first stock. I would highly recommend that. Also, one of my favorite books of all time is Peter Lynch's One Up on Wall Street. It's one of the first books I read early on as an investor. Lynch is so great because he really just buys companies that he loves. For any investor, my general advice is always, buy what you love. If I go back to one of the first stocks I bought, it was Boston Beer, the maker of the Sam Adams. It's right outside college. I love Sam Adams. I've owned the company ever since, over the past 12 years. Just buy what you love, but

read those resources. I think it'll do great. I think that's the book that contains the great Peter Lynch quote, never invest in a business that you can't illustrate with a crayon, which is just such a great mindset. Anytime anyone is trying to pitch you on a stock, and they can't actually explain what the company does. Alright, let's get to the stocks that are on our radar, and our man Steve Broido will come in from the other side of the glass to hit you with a question. Matty? Yeah, and Jason and I kind of planned this a little bit for our stocks on the radar, so I'm going to go first, if that's okay.

Absolutely, of course. So, I'm going to go with eBay. But, we're talking about two companies, because eBay and PayPal are separate, so I'm going with eBay, ticker E-B-A-Y. I just think this company is going to be beaten down a little bit after the split with PayPal. It's an opportunity to buy a company that still generates a lot of cash, still No. 2 in e-commerce in the U.S., and I think it's going to get a little bit of unfair shrift in the market over the next few months. It's an opportunity, potentially, to buy into eBay. As we talked about earlier in the show, a much more focused business now. PayPal

is gone, the enterprise unit is gone. This is a marketplace business. Exactly. And lots of cash to put to work. Steve, question about eBay? I'm an eBay shareholder. I love it. Question is, do you think eBay is at its best when it's selling used baseball cards, or when it's selling a brand new iPad? Great question. I think eBay has a really special niche in the market, which is buying items you can't find in other places. And that is collectibles, used equipment, used apparel, things like that. I think there will always be a source for that, and I think eBay

is perfect for that market. Jason Moser, what's on your radar? Well, if it's not obvious by now, I am actually going to go with PayPal. I'm very excited to see this spinoff happen. Ticker PYPL, it starts trading normally on Monday. I think, you look at PayPal playing into that mobile payment space, it's taking advantage of technology, it's dictating so much of what we do today in transactions. I like the fact that they're acquiring Zoom. I think global remittance is a terrific market to be in. I just wish they would have paid more for it. But, hey, what are you going to do? We

can still play a part in that story by owning PayPal shares. And I think I may own some PayPal shares at some point here. Good smart leadership in Dan Schulman. He was formerly with American Express. So, given the size of the market opportunity, I think, given the nature of how we're moving more and more towards those electronic payments, I think that PayPal is just going to be a very, very relevant company for many, many years to come. Steve? Do you think there's enough transparency in fees with PayPal? Whenever I use them, I never really know what they're making.

You know, I would say that's probably my one gripe with PayPal, is it doesn't always seem so clear. So, Steve, I like that point there. Maybe we'll bring that up with him on an earnings call sometime soon. All right, guys, thanks for being here. 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. Thank you.