Motley Fool Money - 21 Stocks for 2020

Episode Date: January 3, 2020

Why should investors be watching 5G, banking, and small cap stocks in 2020? Why do ANSYS, Arista Networks, and CRISPR have big upside potential? Why should investors keep Grubhub, Harley-Davidson, and Nordstrom on a short leash? And is it time for the CEOs at TripAdvisor, Under Armour, and Berkshire Hathaway to update their LinkedIn profiles? Analysts Andy Cross, Ron Gross, and Jason Moser tackle those questions and explain why they’re bullish on Adobe, Stitch Fix, and Target. Plus, we discuss upcoming IPOs we’d like to see and make some reckless predictions about Berkshire Hathaway, DocuSign, and the data analytics industry. Thanks Health IQ.  See if you qualify for lower rates! Go to www.healthiq.com/fool Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi everyone, I'm Charlie Cox. Join us on Disney Plus as we talk with the cast and crew of Marvel Television's Daredevil Born Again. What haven't you gotten to do as Daredevil? Being the Avengers. Charlie and Vincent came to play. I get emotional when I think about it. One of the great finale of any episode we've ever done. We are going to play Truth or Daredevil.

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This is Motley Cool Money. It's the Motley Fool Money Radio show. I'm Chris Hill joining me in studio this week, Senior analyst Jason Moser, Andy Cross, and Ron Gross. Good to see you as always gentlemen. Chris, how are you doing? It is our 2020 preview. We've got stocks to watch, stocks to avoid,

CEOs on the hot seat, and of course, as we do every year, we're going to make a few reckless predictions. But Ron Gross, let me start with you. We're going to go wide to begin with. What's an industry to watch in 2020? I'm going to go with telecommunications, and specifically the 5G catalyst within that industry. It's a data transmission rate that is about 10 to 100 times faster than the existing 4G networks. It will be the primary catalyst for the next generation Internet of Things, whether that's connected cars,

augmented reality, virtual reality, smart cities. Companies show to benefit Erickson, Nokia, Verizon, AT&T, even Apple will come out with a 5G phone. Are we really getting it in 2020? I feel like 5G has been talked about for a couple of years now. This is the year. Unless I do it again next year. All right. Jason Moser, what about you? Yeah, Matt Franklin, I talk about this a lot on the industry-focused financial show with interest rates as low as they are. And really, we're not seeing any signs that they will be on the rise anytime soon. Banking is going to be an industry to watch closely because we do believe consolidation is going to continue in the space. We saw some signs last year with SunTrust and BB&T.

for example. I believe you mean truist. I was going to say, granted, they bungled that name. Talk about rebranding efforts. But even down to smaller banks like Ameris Bank Corps and Fidelity in Atlanta. I mean, we're seeing banks of all sizes looking to consolidation to really scale up and take advantage because they are, they're witnessing some pressure on that net interest margin, and that's really how banks make their money. So I think we will continue to see some consolidation in the space. There's going to be some opportunities there, and so we'll be keeping an eye on it. Andy Cross, what industry you're watching in 2020?

I'm actually going to a part of the market. I'm going small cap, fellas. I think the small caps, it's been a tough past three, five years for small caps. I mean, they've made money, but they've, as overall as a group, have trailed the SP 500. However, when rates are falling low and they get cut over time, his history tells us that's actually a pretty good sign for small cap stocks. The valuations relative to large cap stocks are the most attractive they've been in 10 or 15 years. And so I think that small caps might actually have a little bit of light this year.

I've been saying this now for a past couple of years, but hopefully this year, small caps will have a little bit of a boost above the large-cap brethren in the S&P 500. So, Ron, in terms of trends that you're excited about in 2020, I'm assuming 5G is on that list, but what else is on that list? Well, if you know anything about me, you know I'm excited about the trend of convenience. Whether it's same day or next day delivery from retailers or immediate delivery from, my favorite restaurants or calling a car on demand, watching a TV show or movie whenever I want from a variety of platforms, companies are rapidly moving to meet the needs of me

and other consumers. I like to think that there are businesses out there that are asking themselves the question, how can we make Ron's life more good? Oh, please. More of that. How can we get Ron on board with what we're doing here? What are the chances of this guy setting up a home studio this year? Not only full money from here on now. It's going to be Ron getting to us from Bethesda, Maryland.

Jason Moser, what trend are you watching? Well, of course. If you know anything about me and Ron, I think you do. It's all about mixed reality. Really excited about where augmented and virtual and mixed reality are all headed. I think we saw over the course of the last several years, it's easy to dismiss this technology as a fad. But we are really seeing a lot of money pouring into it. And with a market that was valued at around $4 billion in 2017, expected to top six. $60 billion by 2023. We have a service devoted towards it, and it's been a lot of fun building it out. A lot of ideas out there, just a lot of excitement in the space. And I'll be heading out to California in May to the Augmented World Expo. I know that sounds pretty big. It is big, Chris,

and I'm very excited to see all these new ideas and great technology and bring back some ideas for our members. We're going to get a field report from you back there? There is absolutely no question you will. All right. Andy Cross. Workforce is getting much more distributed fellas. We all know this. We're working from home and just in different locations, more collaborative tools. I just think this area is going to continue to be an explosion for growth. So the likes of the Zooms and the Atlassian, Slack, even, even Microsoft. J-mo, I know you're a fan of Microsoft with Outlook 360, getting more and more distributed as we are working in different locations. I just think this is going to be a place that investing dollars are going to go and that investing

returns are going to be pretty high over the next five years. In all seriousness, I'm not making a joke here. I'm assuming. that when you are looking at the workforce, you're not looking at the shared space industry. And it's not just because of what happened with WeWork, but it seems like that business is great for convenience, but not necessarily one to invest into. Yeah, it's just the opposite, Chris. I think it's not so much the shared workspace. It's actually becoming more shared and connected just remotely and through online systems.

And I think that's going to be a place where we're going to be doing a lot more work over the next decade. I agree with that, but I still don't want Ron getting the idea. idea he can phone in to this show from his home. Wouldn't even think of it. All right. Up next, a few stocks with upside potential and a few stocks with, you know, the opposite. Stay right here. You're listening to Motley Full Money. Welcome back to Motley Full Money. Chris Hill here in studio with Jason, Moser, Andy Cross, and Ron Gross. Jason, let me start with you. What is a stocker industry

that you think is poised for upside in 2020? Well, I'll go stock specific here. And as an economics major, I love efficiency. Let's just find the quickest way to get from point A to point B. And I think what we're seeing more and more with companies in aerospace and defense and electronics and energy to health care, it's really all about simulation software in figuring out the best solutions without having to invest too much money in time. And a company that is really spearheading this movement, ANSIS. The global market for simulation software is a big one. It's going to reach $16 billion by 2023.

And ANSIS is a company that brings in around $1.3, $1.4 billion in revenue today. It is the market leader there. Customer base of around 45,000 worldwide, renewal rates of 95%, gross margins of 90%. It's a very attractive business model. But I think also something that's really noteworthy is that ANSIS supplies about 2,400 academic institutions in more than 79 countries. So they're training a lot of people on this software while they're still in school, which means when they get out of school, they're jumping into jobs with that knowledge base. So a lot of those employers are investing a lot in that ANCS ecosystem to make sure they can not waste any time in getting them right there started.

Who is ANCS competing with? I have to believe there are bigger players in this space. Actually, ANCS is one of the biggest, to be honest with you. Obviously, you've got companies out there like Autodesk, assault systems and the like that are doing similar things. But honestly, ANC is a bit unique in what they're doing in simulation. And they partner with companies like PTC to develop more offerings for more purposes there. Ansis really is the market leader.

Andy Cross, what about you? My humble pie stock was from our Thanksgiving show was ERISA networks, and I'm going back to it, fellas. I think ERISA networks, which provides cloud-based networking gear for the big cloud titans and big data centers. It's had a tough go. It's had some challenges with some of its largest clients, Microsoft and Facebook, these cloud titans pulling back on some of their spending. But I think that trend is going to, if not next year, we'll reverse down the line.

and they're going into new and new markets like campus networking, which is a big opportunity for ERISA. They're exceptionally profitable, so why growth at the top line has slowed this year, I don't think that is gone for good, and the market's forward-looking. So I think over the next 12 to 18 months, the stock will start to rebound. They'll recognize that. Its founders are Andy Beckelschime was one of the original investors into Google. He owns the, he's the largest shareholder, has an exceptional amount of vision, and I just like the way that they are their company in a tough time right now.

Ron Gross, what about you? I'll give you one sector and one stock for extra credit. I think the gene therapy sector of the biotech industry is going to remain very exciting. Listeners know I've been a big fan of CRISPR therapeutics. It's part of my gene therapy basket along with six other companies. I specifically created the basket because I think gene editing will eventually be the future of medicine. Now, shares of CRISPR in particular, they're up 125% this year, but do not let that scare you. scare you. This is a long-term play. There's going to be lots of volatility, ups and downs before

we're done here years from now. But their balance sheet is very solid, which is essential for these early-stage biotech companies. Jason, this isn't everybody gets a trophy day. There are stocks out there that are worth avoiding or shorting or, at a minimum, just keeping on a short leash. What's on your list for that category? Yes. I mean, I look towards the food delivery service and, you know, kind of jump jumping on Ron's pension for convenience here. I love convenience as much as the next guy. I don't know that the economics of food delivery are necessarily as attractive as some investors

may be thought from the get-go. Now, I'm not saying, forget about Grubhub, it's just game over. But I do think we're going to see ultimately consolidation in this space to where just one food delivery service is leading the way there. Maybe that is Grubhub. But you saw Square earlier last year unload their steak in Caviar. In anything, a lot of the state. I think a lot of A lot of that was because, number one, it wasn't very complimentary to their overall business. The number two, the economics just didn't really work out for Squares' overall business model. So I think that food delivery, along with, you know, we're talking about Uber and

Lived on the rideshare side, those are businesses where the economics just aren't as clear-cut. They're going to have to probably figure out some other things to do with those networks. Keep a very close eye on this one. Don't let it get too far away. Long-time listeners know you like to put together baskets of stocks, the war on cash basket. Somewhere on your list, can you start to think around a Ron Gross convenience basket? Well, I mean, that's now, I mean, that's the resolution for 2020, right? I mean, I hadn't really figured it out now, but thank you because you figured it out for me.

That is so convenient. Andy Cross? I don't own shares of Harley Davidson, symbol H-O-G, but if I did, I would keep them on our short lease. They've had 11 straight quarters of sales decline, 19 out of the last 20. The stock has trailed Polaris, one that we do follow and like over the last. last three years. Had some real struggles with what's called their live wire e-bike. That was supposed to really try to lead the turnaround at Harley Davidson as they kind of tried to go after a much younger audience. That struggled. They did not get that out the doors like

they wanted to. So questions around the live wire. The stock does yield a little 4 percent, has a relatively low payout ratio, so it has some dividend potential there. But overall, the stock's underperformed, and I think they have to get some things turned around there, Harley Davidson. It is one of the great iconic American brands, but when you think about the trends that they are working against, it is a real struggle for each year. What about you, Ron? I think mall-based retail, specifically department stores, have to be kept on a very short lease, whether you're talking about Macy's or Coles or JCPenny's, Dillards, even pains me to say Nordstrom's, my favorite one. The trends are just not in favor of these kinds of stores. UBS recently did a survey

that shows the percentage of folks that are going to the mall specifically to shop at a department store are falling. It stands at about 20 percent now of folks only going to a mall specifically to shop at a department store. Most are going for other reasons, including things like the food court. Right now, roughly one-fourth, a quarter of apparel shopping is done online by 2023. That's going to be closer to one-third. The trends are just not there. Do you think, and we talked recently about the run that discount retailers have had over the past deck, 8, Ross, Dollar General, T.J.X, etc. They're obviously not dealing with malls in the same way

that a Macy's or Nordstrom is. But I'm wondering if you think that there's maybe even greater brand loyalty around a business like Dollar General than there is for something like Macy's. I think it's more about the value proposition than the brand loyalty. You have to give consumers something. So if you're a Costco or a T.J. Max, delivering that value. and the assortment in certain circumstances are what people are looking for. So, CEOs in 2019, we saw essentially a record number of CEOs saying, you know what? I'm out of here. And some of them, it was of their own volition.

And some of them were shown the door by the board of directors or just flat out for legal reasons. When you look around the CEO landscape, Jason, who do you think, if they're not on the hot seat, It's certainly getting warmer underneath them. This one stood out to me immediately, and it's Stephen Koffer with TripAdvisor. It's a company that I've wanted to like over the last five years. You look at the stock's performance. I mean, it's just been abysmal. And honestly, that's for a number of reasons.

And a lot of it has been self-inflicted. A lot of it is also due to just competition in the space and the fact that you're going up against companies like booking.com and Google. But the bottom line is that TripAdvisor has failed to really be. able to pivot and develop a business that can sustain any long-term success. And really, what is a massive market opportunity in travel? So it's a wonderful service as a traveler, but they were never able to really become that OTA like they wanted to become. And then they kind of got stuck in this battle with Google and SEO. And now, I mean, you've got this

business that they don't know what else to do. Last year, they declared that special dividend. They're reassessing the business model and returning more value to shareholders in the form of repurchases. And so these are really good. all just signs, to me, of management waving a white flag and saying they don't know what else to do. You add to that, he doesn't really own much of a stake in the business, and there is a bit of a convoluted ownership structure there with Liberty TripAdvisor Holdings. To me, this just all reeks of a business that needs to put itself up for sale to the most interested buyer. I mean, I just don't understand how a coffer continues being able to get

away with this performance because it's been horrible. Andy Cross? I'm going to the CEO's not even CEO yet. Officially, and that's Patrick Frist, who's taken over from Kevin Plank, from Under Armour. Kevin Plank decided to hand over the reins to the footwear and the athletic apparel company to Patrick Frisk, and he starts in January. So, while he might not be on the hot seat, I think taking over from a founder-led CEO, especially the one who has such a personality of Kevin Plank, the performance of Under Armour really has struggled over the last couple years. Sales have stagnated, profits have fallen. The stock's underperformed.

It's an $8, $9 billion business. So he's got some challenges ahead of him to really turn around that performance culture at Under Armour and make the sales growth and the profits come back. Ron? So when I first started thinking through this one a couple of weeks ago, I thought Dennis Mullenberg from Boeing was a no-brainer. And Chris, guess what? The board of directors agreed with you? I was right because he is out of there. So I've been forced to go with Plan B, and that is Warren Buffett.

of Berkshire Hathaway. Yes, you heard it. Warren Buffett. And it's certainly not because he's in any danger of being fired. But it's because he's got to get two things right. First, he won't be at the home forever. He needs to get the solid succession plan in place, which he has begun to do. We've got Aji Jane, who is now head of all insurance activities. Greg Abel has been given authority over basically everything else. We've got Ted and Todd, who we speak about quite often, each managing $4 billion. Interestingly, Todd Combs was just all. also named CEO of Geico, which that's a lot of work. Four billion plus CEO of Geico. Let's assume he can get that done. But Buffett really does need to get this right. Number two,

Buffett has got to figure out what to do with $128 billion of uninvested cash. The stock has underperformed for five years. That's partly because 23 percent of Berkshire's market cap sits in cash. This is my largest personal stock position. Mr. Buffett needs to get this right. So, 2020, obviously, we're going to have a presidential election, and CEO compensation is one of those issues that seems to get more attention in presidential election years than other years. All things being equal, and Jason, I'll just start with you. How do you like to see a CEO being compensated? As an investor, obviously, part of that has got to be you want them to have a stake in the company. Yeah, I mean, I think having a stake in the company is nice.

Now, I don't look at that as a reason to invest. it's just a nice thing to see. I'm a little bit torn here. I mean, I understand the argument against excessive compensation, but by the same token, I mean, let's recognize these are CEOs that are taking care of a lot of employees, and in many cases, are responsible for a lot of economic output. So, generally speaking, I mean, you just like to see performance-based incentives that encourage CEOs to think more long-term as opposed to hitting quarterly arbitrary Wall Street goals. And that's really, we love to see those CEOs that don't even focus on those goals. And honestly, if you see an executive team that just doesn't even set

guidance on a quarterly basis, I love to see that. Agreed. Bonus metrics that are aligned with shareholder, the shareholder, and typically long-term is what I prefer to see. Plus, I love to see CEOs that with their own cash purchase stock. Andy? Yeah, I think just understanding how the culture of compensation from the board level to the CEO is designed and appreciated is something that's really interesting. at, and I think everything that JMO and Ron said makes a lot of sense, because if you are having a CEO at that level who is compensated in the right way and building a culture that is

sustainable and lasting the one that we want, there's a lot of power there, and we've seen there in a lot of good, really successful CEOs. Also, no funky metrics. Just base it on sales growth or operating income targets. Remember, the further to the bottom line you get there, the more they can manipulate those numbers. Our 2020 preview rolls on right after this, so stay right here. This is Motley Fool Money. Welcome back to Motley Full Money. Chris Hill here in studio with Jason Moser, Andy Cross, and Ron Gross.

Ron, a lot of questions going into 2020. What is your biggest question? It can be about a company or an industry. What do you got? I'm going to go with a company. I'm going to make a bed, bath, and beyond. New CEO, Mark Triton, Target's former chief merchandising officer, recently took the Helms, did great things for Target.

It took him less than two months to clear out. nearly the entire executive suite. Six members of the C-suite are leaving, including the Chief Merchandising Officer, Chief Marketing Officer, Chief Digital Officer, CFO is the only remaining executive. Not an easy turnaround here, but I think it's possible. If he can do what he did for Target, maybe moving into some private label brands, improving the in-store experience, speeding up deliveries, online pickups, I think there's something to do here. As investors, we like transparency. And if, If nothing else is clear about Bedbath and Beyond, we have total transparency about who is running

this show and who's going to get the credit and therefore who's going to get the blame. Absolutely. Jason, what about you? Very similar to your business. I'm going with Wayfair, actually. If you look at the most recent quarter, revenue up 36 percent, gross margin up 40 basis points, active customers of 19.1 million. Orders delivered up 32 percent. And I'm telling you, like half of those showed up on my doorstep thanks to this master bath, Renault. But all of these metrics tell the story of a business that's doing really well. But there was a key point in the call from CFO Michael Fleischer. And he said, I quote, since the beginning of the year, more than 90% of our

suppliers who are subject to China tariffs, Ron, have raised wholesale prices, which have resulted in higher retail prices. As retail prices on the site fluctuate, we observed that our customers' consideration cycle gets disrupted and is effectively lengthened. The stock sold off 20% after that earnings call. And I feel like if we can see some certainty here on the China, a tariff side. The business itself is really performing well. If we can see that China situation resolved, I think 2020 stands to be a very good year for a business that really is firing on all cylinders otherwise. Andy? You know, overall, the profitability of so many of these software as a service companies,

the cloud-based companies, has been in question. And for a while, it was like, hey, just grow as fast as you can, continue to plow money back into the business. We don't care about profits, or in this case, mostly, losses. I think that's starting to shift now. We saw that this year a little bit, and I think in 2020, there's going to be more and more demand for closer scrutiny

on the profitability of some of these SaaS-based high-growth companies. I talked about in our review episode, the situation at Patriot Duty. I think in general, companies are going to be under more scrutiny and under the hot seat to really drive up the profitability curve.

So I'm paying a lot of attention to the profits. of these high-growth SaaS companies. Well, and that ties a little bit into our next topic, which is the IPO that you want to see in 2020, because it seems like when you think about 2019 and the failed IPO of WeWork, in a way, that sort of brought an end in some respects to the excitement around IPOs. And I think when I look back on 2019, Andy, it seems like more was, just as you're saying about SaaS companies, and we're going to be looking for a little bit more.

on the profitability side. It seems like we had this 10-year bull market, and at some point investors started to say, you know what? We're not just buying any hot IPO that comes down the bike. We actually want more of a promise of profitability regardless of the industry. And what's really interesting is if you look at the first half of the 2010 period for those big unicorns that came public, when IPO, they almost were all profitable. Like very profitable. Think about Facebook when it came public. Very profitable. In the second half, very few of them were actually profitable, and some of them Uber and Lyft, for example, just getting worse. So I think the market is definitely going to start looking for and appreciating the profit picture much more.

You agree with that? I do agree with that. I think in general in this market, profitability has become more and more important as the bull market gets older and older. Top line growth is wonderful, but I think cash flow is going to become king once again. All right, Jason, let me start with you. What is a private company that you would love to see come public in 2020? Well, yeah, two of my favorite markets in healthcare and mixed reality. There's a little company out there called Medivis.

It's a medical software maker. And I tweeted out a little while back the Verizon keynote from CES 2019. Dr. Christopher Morley, who is one of the co-founders of Medivis, gave a talk and showed some examples of how we're using augmented and virtual and mixed reality in the medical profession now. And it's just staggering to see the potential that exists there. And they're raising a lot of money based on the software that they're producing, building stuff for Microsoft, for that Microsoft HoloLens 2 that's coming out. I hope they have a chance to go it on their own.

I think that the work that they're doing is very important. I wouldn't be surprised to see them acquired before they have the chance to go public. But if they do go public, I'll have a very close eye on it. I was just going to say earlier in the show you were talking about the banking industry and consolidation, Everything you just said about Metavis makes me think they might not make it to the public markets. Andy, what about you? This one has a lot of political ramifications. I'm not quite sure in the election season whether it will actually go IPO or not,

but Palantir Technologies, which is the massive data analytics firm that was founded by Peter Thiel and Alec Karp, and does a lot of business with government agencies, including the Defense Department, the intelligence community, and even the immigration and customs enforcement group. So the last raise was at $26 billion. It's a massively large company. Does a lot of very complex data analytics. They are in the market right now looking to raise, not in the public market, but looking to raise another $1 to $3 billion.

So I'm really interesting because it's such a large company, and it's so fascinating because it touches on so much of the data analytics that we deal with every day. Ron? I would love to see family-owned Chick-fil-A go public. probably, in my opinion, the best-run fast food chain with the best food, a very powerful combination. Controversity surrounding some of their political and moral stance is notwithstanding. I think it is the best position fast food chain for the next five to ten years, and that's regardless of the so-called chicken sandwich battle that is currently being waged, I think they've got the staying power here. It's not so-called.

It's an actual battle. It's an actual battle. It was one of the more interesting things going on in 2019, and in 2020, presumably, this test the McDonald's is doing in Knoxville and Houston, if that goes well at all, they're going to be rolling that out. And yeah, it's more competition. Now, right, more competition, and I don't disagree, it could take a bite, no pun intended, out of the company's traffic and business, and that would be reflected in whatever an IPO valuation is. But the way they get the customer in and out, the throughput the operations of that company is very impressive. Any chance they open

on Sundays? I think not. I agree. Other business shows air. on the side of caution, but up next, we're going to give you our reckless predictions for 2020. Stay right here. You're listening to Motley Fool Money. All right, before we get to reckless predictions, quick shout out to Health IQ. If you're a runner or cyclist or you're into CrossFit or any other type of athlete, even if you're just a committed weekend warrior, you're a vegetarian, a vegan. You deserve to be rewarded for your hard work. And the way you get rewarded is with more affordable life.

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Welcome back to Motley Fool Money. Chris Hill in studio once again with Jason Moser, Andy Cross, and Ron Gross. Before we get to the reckless predictions, a quick round of fill in the blank. Andy Cross, you're up first. In 2020, Blank is going to surprise a lot of investors. A lot of ways you can go there. You can go company, CEO, whatever you want. In honor of Herb Keller, who died about a year ago this time, I'm going with Southwest.

I think it's had a little bit of a tough run. It's tied into a lot of the Boeing-Max issues that have really hurt their earnings. The last quarter, they knocked 20% off their earnings. But when you look at the stock, the market cap's $28 billion. The cash in debt are about neutral, about $4 billion. Stock is cheap at 12 times earnings. They're now aggressively going into Hawaii. They offer from four different cities in California.

They offer a flight to Hawaii. EPS growth north of 10% a year, I think, of the stock price there. I think over the next, not just next year, but over the next three to five a year, Southwest is a winner. Ron, what's going to surprise investors in 2020? Chris, in 2020, value investing is going to surprise a lot of investors. Now, I get it. Value has been crushed by growth for the last 11 or 12 years and even more recently crushed even worse. But that will not last forever. Value will make its comeback and it will regain its lead over growth over long periods of time. Any chance you can team up with Jason on like a value slash convenience basket? Now you're talking. Jason Moser?

Well, I have a pretty well-established track record of ripping on this company during my tenure here at the Motley Fool. But I do think that in 2020, Bedbath and Beyond, new CEO Mark Tritton, I think this is going to surprise people. Really? I think that if these guys have a chance, it's going to happen this year. I think we're going to see some glass-half-full results here this year from Bed-Bath-Bull. I'm not counting them out just yet. Agreed. A shot glass half-full.

Yeah, given the fact that the glass has been like, Five-eighths. Five-eighths. You know, half full is going to be a step up. It's too much math involved for me here now. I'm confused. Andy Cross, this time next year, I think I'm going to regret not owning blank. I'm going to regret not owning Stitchfix, and I'm hoping to buy it at some point here.

I look at this business founded by Katrina Lake. They provide personalized shopping online through their algorithms. I think what they are doing and how we are changing our shopping behavior, consider A lot of people now are going online to shop their tailored experiences. I look at Stitch Fix symbol S-F-I-X. It's a relatively small company in a very large market, and I think that's going to be a winner. Ron, what about you? I think I'm going to regret not owning Target.

I've spoken before about the great job that Brian Cornell has done to turn this business. And I think there's plenty of room for it to continue. Stock's not cheap, certainly compared to other folks like Costco or Walmart. I think there's plenty of room to run here. I think it's a great stock to own. All kidding aside about convenience. Have you tried the target order online and then pickup system? Because I've done that a couple of times. It works out very smoothly. Jason, what about you? Jason, what about you? I'm going to remedy this so I don't regret it, but it's owning shares of Adobe.

I've talked about this company before. Tremendous business on the creative software alone, but big investments they're making into their document cloud business and giving companies like DocuSign a little bit more competition out there. There's just a lot of different ways for this company to win, and it's amazing to think that it's a $150 billion company now. I see plenty more upside, and recent recommendation in our augmented reality service. I will be using this as a no-brainer reminder, as you put it, Chris,

to buy shares once our trading guidelines allow. We often talk about food and beverage innovations on Motley Full Money, and let's face it, sometimes it is, at the expense of the company involved. So this can be helpful, if you want, or it can be not helpful. You can continue that trend. Andy, in 2020, I think blank should test blank. It's a holiday season, and I'm an anglophile, and I like minced meat pie.

And I actually make a good mincemeat. Vegetarian style, Ron. I think for the holiday season, McDonald's should bring a mincemeat pie to their menu. They have the apple pie. It's quite delicious. but I think mincemeat would do them very well. They've certainly had success in the past, usually in December, with the McRibb rollout. You're saying, go mince me.

Go the whole holiday season. Embrace it all and go the mincemeat side. Wow. Okay. Ron? Well, because I like to cook, and I know, Jason, you do as well, I tried to really give this some thought and come up with a real suggestion. So I think Wendy should test a stuffed sweet potato. Now, they have a stuffed baked potato, so this is just augmenting the menu here. We're going to stuff it with things like chili, which they already have. I would suggest an avocado bacon cheese stuffed sweet potato.

For those like Andy, a black bean and quinoa stuffed potato, or perhaps a feta, tomato, and olive sweet potato. My phone is open if you would like to discuss this, Wendy. Are you saying my mincemeat pie wasn't a real recommendation? I was going to say, that was what I gathered from what he was just saying there, A.C. It's Simms Fighten Wars. He's not an anglophone. I just liked that he prefaced it by it.

I put a lot of thought in this. I came up with choices. Unlike all the stock information that Ron was talking about earlier in the show. Jason Moser, what about you? I will say I gave this as much thought as all of our other segments for the show. And I think, Mack, you probably will like this. I'm going back to my southern roots here. You know, I love chicken and waffles.

And I love making chicken and waffles for dinner at home. The kids love it. My wife loves it. It is a lot of work. Okay, I'm not going to lie. I mean, you could cheat and buy the frozen chicken fingers or whatnot. Listen, Bojangles, I know you had a tough time of it as a publicist. company. But how about you introduce a chicken and waffles burrito where the actual wrap is a waffle,

and then your chicken is going inside that. So a chicken and waffles burrito, and we can experiment with the things that go in there other than the chicken. Maybe it's just chicken and syrup. Hey, maybe it's chicken and syrup and some bacon or something like that. But a chicken and waffles burrito from a restaurant like Bojangles, I think, would resonate. And you eat this with your hands? Absolutely. Sounds very sticky. Oh, man. I mean, if you have the foil wrap, then you'd be a restaurant. And you can at least keep it somewhat clean. But yeah, the mess is part of the fun.

So a few months ago on this show, our guest was David Henkes, who spent his career studying the restaurant industry. And one of the things we talked about was Applebee's, which is something we've talked about from time to time on the show. And Applebee's and their drink specials. And at first, it was kind of funny that Applebee's was coming out with the $1 Long Island iced teas and the Appletinis and all this sort of thing. And Applebee's, which is part of Dine Brands, publicly traded company, once you started to say, hey, wait, that thing that they're doing with the $1 drink specials is really working. It's driving traffic. It's paying off for shareholders.

So I think, to our man behind the glass, Steve Broido, big fan of Darden restaurants and a parent company of Olive Garden, I think Darden Restaurant has to start looking at their portfolio of restaurants. What are the drink specials they can start offering? because it is working for Applebee's working for dine brands. I think it could work for Darden. Dollar glasses of Kianti. I'm in. Let's go right now.

Stop it in that Kianti. Stopping in for a little Kianti and salad and breadsticks. I mean, man. I like that that's much more palatable to Ron than something sticky. Let's get to the reckless predictions, which is what the listeners have been waiting for the entire show. And we'll bring in our man behind the glass, Steve Brodo. He can make his own reckless prediction for 2020. Ron, what do you got?

So last year, I talked about finding life on Mars or former proof of life on Mars. And that was pretty reckless, and I still believe we're going in that direction. But for this year, I'm going to come a little more down to Earth. And it's an actual prediction, not necessarily so reckless, even though that's the name of the segment. Sorry. I say Berkshire Hathaway is going to buy back 15% of their outstanding shares for $80 to $90 billion and initiate an annual cash dividend equal to 1.5% yield. For the B shares, that would equate to $3.50 per cents per year dividend. I think that's going to set Berkshire up really nicely. They've got plenty

of cash, $128 billion on the balance sheet right now. It's going to be great for the stock. I mean, it's not life on Mars, but in the context of Berkshire, Hathaway, the way that they allocate capital, yeah, that qualifies his reckless. Thank you, thank you. Jason Moser. Yeah, I'm sticking with what I threw out there a couple of episodes ago. I do think given all of the signs we've seen from Adobe and investing in their document cloud business, they covet. I think DocuSign, small and medium-sized business clientele. I think that with where the stock price is today, with the balance sheet that Adobe has, I think that 2020 Adobe acquires DocuSign at a nice premium because they could afford to do it, and it would pay off for many,

many years to come. Excuse me, I'm going to call my broker and buy some shares of DocuSign because I think you're right about that. Andy Cross, what do you got? Be more reckless if Berkshire paid a dividend. Similar to Jason's, this year we Last year, we saw Salesforce by Tablo for $16 billion. Google bought Looker. I talked about Palantir technology. This data analytics space is going to be really interesting and continue to evolve. I think there will be another big acquisition. Maybe it's Datadog, which is a really fabulous company. Some big player, maybe it's Microsoft, will continue to buy out and consolidate the data analytics space for the software space. So I'm really interested to see which one buys whom in that space. So if we look back on 2019,

and the IPOs and sort of the sobering thought amongst the Wall Street community when it came to IPOs. It sounds like we feel pretty bullish about acquisitions, whether it's the banking industry or more individual cases with software, that sort of thing. We're feeling like investors are going to be on board with all these acquisitions? Yeah, well, I think so. Certainly from the competitive space, when you look at the continued growth of the large players, There's Amazon, Microsoft, Apple, Facebook, as they continue to look for ways to growth.

And the other companies that they're going to acquire have to compete against that growth. And that's hard to do in a world that the big dogs continue to generate more and more of the revenue growth. So I think some of those investors from the smaller companies recognize that's the way to go is to get bought out. And more importantly, investment bankers need something to do. So if the IPO market dries up a little bit, they're going to have to start consolidating industries, breaking up bigger companies. Because, you know, the investment bankers have to eat also. That's true. Let's go to our man behind the glass. Steve Broido, listeners have been waiting the entire show. Do you have a reckless prediction for 2020?

You bet. I believe there will be a national ban on the electric scooter market in cities. And that all those companies that are jumping in to rent you scooters will go away. That's a good one. As someone who's never actually gotten on an electric scooter, but has walked around them when people just leave them on sidewalks. Is it safe to assume you're the same as me in that regard? I'm just not a fan. It is not going to end well. It's just not. They're in college towns all over the place, which is a dangerous mix. The kids come out of the bars, jump on a scooter. What could go wrong? Steve, you'll save private equity, a lot of money if they stop investing today. All right, Andy Cross, Jason Moser,

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