Motley Fool Money - Amazon's Speed, GoPro's Drones, and the Colonel's Comeback

Episode Date: May 29, 2015

Amazon launches same-day delivery. GoPro gets into the drone business. Michael Kors reports some unfashionable numbers. And Yum! Brands brings back Colonel Sanders. Our analysts discuss those stories and share some stocks on their radar. And Motley Fool Asset Management portfolio manager Bill Mann talks investing and China.  Learn more about your ad choices. Visit megaphone.fm/adchoices

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app, which makes it so much easier to stay on track. And you can get unlimited expert help at no extra cost, even on nights and weekends during tax season. Visit turbotax.com to get matched with an expert today, only available with TurboTax full service experts. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money Radio Show. I'm Chris Hill, joining me in studio this week. From Million Dollar portfolio, Jason Moser from Motley Fool Pro and Options, Jeff Fisher, and from Motley Fool Deep Value, Ron Gross. Good you see you, gentlemen. Hey, hey, you doing.

We've got stocks hitting multi-year highs and stocks hitting multi-year lows. We will talk international investing with portfolio manager Bill Mann. And as always, we'll give you an inside look at the stocks on our radar. Guys, a lot going on this week, but there's not a single business story really dominating the news. So let's just go around the table. Ron Gross, I'll start with you. What's your headline for the week? I think I'm going to do some big macro.

Can you? Absolutely. Some recent data pointing to a slowing economy. Government data showed corporate profits fell 8.7% in the first quarter. Not something we want to see on the heels of that. GDP contracted. 0.7 percent. Actually a little bit better than expected, which is interesting. But still, we have two pieces of data that show a slowing economy, a bunch of different things going on here that I think can explain it.

One, we had, if you recall, the problem in the West Coast ports, which slowed hurt retail businesses quite a bit. We have lower spending in the energy sector, oil prices down. And then finally, and I think this is important, the stronger dollar has a lot of the has really hurt companies who sell, who make some of their revenue overseas. The translation, the currency translation, hurts businesses, and that affects profits. My feeling is that a lot of this is temporary. And there's also some question about the model the government uses for first quarter GDP, about whether it accounts for seasonality enough, and they're actually taking a look at that. So I think we'll start to see things pick up as the year goes

on. If we don't, then we're going to be sitting here having a different conversation. Well, you talk about profits being down, and yet the market up around 8 percent year-to-date. That sounds like the sort of thing that people who are pounding the table, Jason, saying, there's a bubble in the stock market. It sounds like fodder for people like that. Certainly. But I mean, however long this weakness goes on, I mean, the one thing that's kind of scary is it really, the option to lower interest rates isn't really on that. the table because, I mean, they're essentially as low as they can go. So that, in part, is what makes the stock market look so much more attractive, is that's

where really the returns are. At some point, we will see interest rates start to tick back up, albeit very slowly. And I don't think that's going to be something that really throws the market into a state of shock because it will be so incremental and so slow. But, yeah, to Ron's point there, it's certainly, it raises a lot of questions. I mean, what exactly that's slowdown? It's actually the second quarter in a row where we saw a decline in corporate profits, and that hasn't happened since the middle of the recession. So that's not something I really want to

go back and revisit if we can at all help that. Like I'd also say, like, you see a lot of these doom and gloom kinds of headlines in regard to profitability, but when you can account for the decline in that profitability as, you know, due partly at least to currency effects, you know, we tend to look at currency effects from a very long-term perspective as long-term investors. And I think a lot of times that can actually represent opportunities. If a company misses the Wall Street's expectations based on currency effects, that's a pretty short-sighted sort of reaction there, but it can open up windows of opportunity to add on that weakness to really good businesses.

Yeah, the euro has fallen more against the dollar in the last six months than I think it ever has historically that quickly. It's down some 15 percent-ish, I want to say. And that companies are doing as well as they are, despite that, is telling that companies aren't doing things wrong, but the dollar in some cases is taken away 15, 20% of their growth rate. That's a sizable hit. So, yeah, Chris, as you said, the market, the NASDAQ is up about 8% this year to date, and the SMP is of about 3% year-to-date. So the SMP is fairly flat.

It's so full of international companies. I'm happy for the NASDAQ, given that it kind of sat out 2014 for the most part. Jason, what's your headline for the week? Yeah, I thought the Amazon's announcement for free, day shipping for Prime members was a good one. They've been doing same day shipping for a little while now, and it was a minimal charge for Prime members. I think it was $5.99. In many cases, I had used it because it was actually a great tradeoff there. My time, I feel like in many cases is well worth that $6. And so now it's going to be something that you can actually get for free. Orders over $35. You order it by noon. You can get it by 9 p.m. that evening. It's going to be in 14 metropolitan areas to start. That includes D.C. Now, while we are not technically in D.C. here, I did check to see the zip codes where it would qualify.

And so where I live in Fairfax County, for example, does qualify. So you can get it in places it looks like in those metropolitan areas and in surrounding areas. So this is right in line with what Amazon's been doing all along. They've been building out this business, trying to shorten that distance between them and the consumer. And if you look at the way they've invested, ever since Prime started in 2005, they had 13 fulfillment centers in 2005. They have 109 now. And if you look at capital expenditures as a percentage of sales over the course of that decade, you could see it goes from 2% up to 6%. So they are just investing in this prime relationship at a breakneck pace.

And I think that's the right thing to do. I would think that margins on something that you deliver same day must be pretty thin. Retail margins did in the first place. I imagine they would be, but also you remember back in November, they mentioned that they were actually working with Uber, partnering up with Uber to use Uber drivers as actual delivery guys. So there are ways to get around that, and you're seeing a lot of these sort of sharing economy businesses that are starting to play different roles, roles beyond just disrupting the taxi industry, right? I mean, Uber potentially could become some sort of delivery model as well. And Amazon delivers so many packages they should start putting advertisements on them. from other companies.

That's not a bad idea. Very good point. Jeff, what's your headline of the week? Biggest technology merger ever, actually, shockingly, is the Avago purchase of Broadcom. 37 billion dollar buyout, about 17 billion in cash and 20 billion in stock. Avago is a Singapore-based semiconductor maker,

and they're buying Broadcom to broaden their connectivity semiconductor portfolio. What's happening overall in the chip industry where there are a lot of mergers and merger talks is complexity is growing in smartphones in connected devices in general and where it used to be like

someone like Apple could take one little part, say the antenna from one company and the attenuator from another company and voltage moderator from another company, those are all going into a module into one piece. They all have to work together so they're all shipping together. So there's

a lot of consolidation in the industry as companies realize they need to make modules and fulfill all this complexity or they're going to get squeezed out. If you think back to the beginning of the year, one of the things we talked about was how 2015 was kind of being set up for a lot of mergers and acquisitions

in the energy industry, particularly oil and gas. But we've seen recently reports of Intel looking at possibly acquiring all tariff for somewhere in the neighborhood of $15 billion. We're definitely, not to say that the oil and gas mergers won't play out for the rest of the year, but certainly the first half of the year,

we're seeing a lot more in tech. It's true, and there will probably be more. Now, this merger makes Avago, which it'll now be called Broadcom. It makes it the third largest semiconductor company in the world after Intel and Qualcomm. It's a fairly distant third, and there are a bunch of semiconductor companies right behind it, so I expect more of those to merge. Are we seeing big premiums that these mergers are going out at? This was a big premium, Ron. It was, I want to say, around 30, 40 percent when all is said and done.

Not too chabby. It started creeping up since rumors. And it looks fairly expensive, too, that they're paying 18-ish times EBITDA. A pricey buy. But they say it should add to earnings right away, and it gives them a stronger portfolio overall. Speaking of earnings, let's get to some of the company earnings this week. Costco's third quarter profits up 9% from a year ago. But same store sales down 1%.

It's the first drop in six years, Ron. It's a nice run they had there. It is. And in the large part, it is not their fault. This is things beyond what they can control, largely, actually what we spoke about earlier, gas prices and currency translation. If you remove those, you actually see comp sales increased 6%. So the company still continues to do a great job.

Unfortunately, they can't control everything. It's not all in their power. But they're operating margins widened, and their membership rate retention continues to be strong. And you know, you recall that they really make the bulk of their money on these membership. It's a membership model where they retain 88%, 89, 90% of their members in a given year, and that really flows to the bottom line, maybe about 80% of their operating income is driven by those membership fees. So, as you said, profits up 9%.

The company's still doing a great job. I think the stock's not as cheap as it used to be at $142, but I really think Costco's the kind of stock where you can put it in your portfolio as a core holding and probably hold it forever. Certainly on a risk-adjusted basis, I think you're going to do well. Shares of Michael Corr is down 25% this week after fourth quarter results. Jason, sales are still growing, but this was the slowest sales growth they had in a quarter in more than two years. Yeah, it's not like these guys are lobbing up negative 20% comp, so not a broken business by any means. The comp number down 1.7%.

I think that was really the first quarter they witnessed that. And it was a stock with a lot of expectations baked into it before that announcement. As you see shares trading in around 10 times full year expectations now. I mean, I don't know that that's all that unattractive of a deal. But, you know, the flip side of that is that we've seen this story play out before. I mean, we saw it with coach, plain and simple. And I think those who think that Cores is somehow immune to that are delusional. I mean, there's just no way in the world that they're immune to it.

I think that the more people that get it, the more people that wear it, that show that brand, you know, the more saturated becomes, the less special it is, and then the consumers lose interest and they move elsewhere. So, I mean, this could be something worth looking at, I think, for your value-style investor who's maybe, you know, able to get in and get out. It's not one I'd want to hold on to a very long period of time. And I tell you, what was really disappointing here is they just, you want to look at, you know, a textbook example of how not to pull off share re-purchases. I mean, these guys are it. It seems like over the past couple

of quarters, they spent close to $500 million of purchasing shares at an average of around $76 for share. Now, I'm the rocket scientist, Chris. No, you are. I'm just a stock guy. But $76 is a lot more than $45, which is where that share price is now hovering. So, yeah, I would say on the share repurchase front, they get a big fat F in my book. Coming up, can iconic characters increase sales? Two All-American restaurant chains are about to find out. Stay right here. This is Motley Full Money. Welcome back to Motley Full Money.

Chris Hill here in studio with Jason Moser, Jeff Fisher, and Ron Gross. GoPro, the maker of wearable cameras, announced this week. It is developing a virtual reality camera for sale later this year. And Jeff, a flying drone camera is in the works that they're looking to sell in a crazy. Don't cameras capture actual reality? What's a virtual reality? This is something where it has multiple cameras. and you can take that footage and, I guess, input it into an Oculus Rift-type virtual reality.

That's the reality you just can't quite attain, right? You want it, but you just can't quite get it. In your dreams, it's a spherical content they're calling it as well. It has six hero four cameras mounted in such a way to create. Is there an attenuator in that? I'm sure there is. Probably a flux capacitor as well. That one won't be cheap and probably will not be so mainstream, but they're hoping

possibly that their quadcopter drone will go mainstream. It's a four-rotor drone. There are a lot of these drones out there on the market now. So they have competition, but GoPro's advantages, it'll have, of course, a way to hold GoPro cameras and tape your recordings of whatever you want to record as you fly around. Can you smell the privacy being violated? Yes, I can't.

I will give them credit, though. When they first went public, and maybe it's because I just don't really get technology all that much, I just thought, well, you know, I've got a camera on my phone. Everybody's got a camera on their phone. And they haven't, for whatever else you want to say about GoPro, they haven't sat still. They've got a 16 camera device that they're working on for 3D footage. So they're really pushing the envelope here.

Yeah, it sounds cool. You just have to question, as always, how large is the market? The company is worth $7.7 billion right now. So I think there's a fair amount of risk in owning shares of this company. If you end up generating strong returns, you've earned it because you're taking a lot of risk. Yeah, I mean, the strategy is to be a content provider ultimately. And if they can figure out that audience and how to disseminate that content, I mean, there probably is a long life there. But it's a, yeah, I think it's a step is right.

It smells like an acquisition candidate to me. They won't be on their own forever. Shares of Alta Salon hitting a new all-time high this week. First quarter results for the cosmetics retailer were, Ron, they were a thing of beauty. Boyant. Everything was up. Profits up, revenue. They increase their market share across the board? Com store sales up 11.4%.

They continue to really put up just strong, strong numbers. And recently, they've been really focusing on their online business to get that up to be stronger. 50% growth in that business. As you said, margins were up, profits up 34%, up to about a little less than 800 stores right now. Still plenty of room for growth. Stock's not cheap, but they do have plenty of growth ahead of them. So you could maybe take a little nibble here, but they're going to have to continue to put up strong numbers like that to validate that valuation. Have you ever been there, Ron?

I have, yes. We have one locally. Good haircuts? No, I've never done the beauty salon part of it. I've roused the shampoo. On Thursday, Abercrombie and Fitch posted a loss for the first quarter that was nearly three times the size of the first quarter loss they posted a year ago. And yet the stock was up 9% for the day, Jason. Do I need to start giving them the benefit of the doubt?

No, I wouldn't give the benefit of the doubt. Not yet. They haven't earned it. And I mean, I think it's worth noting they did give back a decent chunk of that on Friday's trading as well. So, I mean, there was nothing really good about the quarter. I mean, probably the best part about the quarter is the management. You know, they've ripped the Band-Aid off. They've obviously changed management so that Jeffries is not really a part of the equation anymore.

And on the conference call, no mention of teenagers whatsoever, they really do seem to be aiming for a broader market. They are. And, you know, that's why I think they are, you know, they're taking that logo down. I mean, they're basically eliminating the logo from a lot of their clothing. So, you know, to me, I feel like when your logo becomes a liability, I mean, that's a problem for a retailer, isn't it? I mean, you know your audience and cater to your audience. And if you just, are you going to be able to convince people that you're not really? a teen retailer anymore because you don't have the Amichromian Fitch logo. And I'm not so sure that's the case. It's not a retailer that I would have any interest in owning. They should combine with Aeropostale and just have one big disaster. Yeah, that would be of Hindenburg proportions. Earlier this month, McDonald's brought back the hamburger character to help promote the chain's new sirloin third pound burgers. Now, Yumb Brands is trying the same thing.

The parent company of KFC is trying to boost sales with a 100,000. $185 million campaign that includes remodeling some of the 4,300 locations they have here in the U.S. and national TV ads featuring Colonel Sanders. They're bringing back the Colonel, Ron. Is this going to work for them? It is not. The remodeling is fine, but the commercials are, I think they're kind of creepy. I love Daryl Hammond, but I don't get it. Daryl Hammond, yes, from Saturday Night Live fame is playing Colonel Sanders. I don't know.

I guess I question, Jason, whether any character can drive sales of a food product. It's tricky to pull that off for any sustainable period of time. I mean, I agree with Ron. These are creepy commercials. Check them out on YouTube. With Daryl Hammond, I'm waiting for the punchline, right? I mean, he's a Saturday Night guy, and I'm just waiting for the punchline. But the other thing I was thinking about here with McDonald's, if they're looking to change their sort of perception of the market as being a go-to-burger joint,

Well, why are these new surloin burgers for a limited time only? Wouldn't you want to make the new norm? Maybe they will. Hey, McDonald's. Think about it. Let's bring in our man from the other side of the glass. Steve brought us. Steve, any thoughts on either the hamburger or Colonel Sanders?

I could just say it worked for Taco Bell with that little dog, that little Chiquita guy, wasn't he the Taco Bell dog? Yeah, his kiddo Taco Bell. He was huge, and it's young brands. I think they know what they're doing. Yeah, I guess, you know what? Would be more interesting is if they brought the dog back to try and push KFC, just to try and mix things up. Drop us an email, Radio at Fool.com, weigh in on the Hamburgler, Colonel Sanders, or anything.

We'll take your questions. All right, Ron Gross, Jason Moser, Jeff Fisher, guys. We'll see you a little bit later in the show. Up next, we will go around the world of international investing with portfolio manager Bill Mann. Stay right here. And the baby needs shoes. And I'm busting. You're listening to Motley Fool Money.

Welcome back to Motley Fool Money. I'm Chris Hill. Bill Mann is the portfolio manager at Motley Fool Funds. And he joins me in studio now. Thanks for being here. Glad to be here, Chris. A bunch of things I want to get to, including your most recent trip. But let's start with something that we had talked about earlier in the year.

The last time you were on the show, we were talking about emerging markets. We were talking about China. And up until... the middle of this week. It was a rocket. Holy cow. What was, for listeners who probably don't pay a lot of attention to international markets, what has been the story in China's stock market so far in 2015? Well, the major indices in China have more than doubled in the last six months, which is, which is extraordinary. It's particularly extraordinary when you look at the earnings reports from the companies that are within these stock markets. And would you like to guess on aggregate,

down two and a half percent? Really? Yeah. And the markets have doubled. So China is very similar to a number of other countries and that the investors tend to be very momentum based. There's no shorting allowed. And literally people start getting excited about stocks because they go up and they plow into them in very, very large ways. I mean, it's, yeah. But when I hear a stat like that, I think bubble. A hundred percent. Yeah, 100 percent. So, yeah, it is because there is no reason to be on the other side of the trade and you're in a, you're in a country where there are currency controls, people have nowhere else to put money. And the real estate market in China has dropped. China is, and you could call this an actual reason, and I would give about 67% validity to this.

China is trying to turn the yen into a global currency, which will increase liquidity in China. So you could see that there are reasons why people would want to invest in China, but not in the Chinese real estate market. So that leaves the stock market. But the companies in China, by and large, we describe them as being mystery meat. You have no idea what's in them. Well, and so maybe then not a surprise to you on Thursday when the Shanghai market drops 6.5% it's one of the biggest one-day drops this century. Is that a small step towards sanity in the market?

Yeah, but again, when you're talking about a market that's momentum-driven, that's gone up 100% on basically nothing, yeah, those kinds of things are going to happen. You say those kinds of things are going to happen. It's only happened a couple times in a century. but neither has the second largest market in the world doubled in a period, you know, in such a short period of time. It just hasn't happened. So it's wild. You know, and we have looked and looked in our funds for investments in China. And it's really hard to find ones that, you know, even rise to the level where you think that they're, they're beating their basic cost of capital, which is

not even beating your cost of capital is, to me, like table stakes of even beginning to consider something to be a company and not a charity for somebody. You know, you're not even talking about investable companies. You're talking about ones that aren't destroying money. So for the average investor, is it a better route to look at consumer brands that are expanding in China? And you can think about, you know, big, all-American brands like Coca-Cola. But, you know, also recently we saw price line at a $250 million stake in

to sea trip. So that's one way they're trying to get in. Yeah, for sure. I think that there are lots of ways that you can be involved in China. And one of the ways that we've done it in the funds is by holding consumer companies. There again, I mean, you know, an interesting piece of background. That has been a very tough trade because of the corruption crackdown in China. So you really, it's really a market. A lot of people just say, I'm just not going to play in it. And that is a rational decision. I mean, it's not, it's not one that we make. You know, we do believe in every market that there are companies that are investable, that are shareholder friendly. I mean, I think Baidu is still a wonderful company. You know, it's Chinese and almost all of its revenues are in

China. But it's hard. I mean, it's really, really hard, you know, to invest in a country like that with such an information deficit, such regulatory shortfalls, and that are prone to such weird swings and momentum. I know you're a big soccer fan, so we've got to talk about the big story of the week, and that is the U.S. Justice Department charging officials from FIFA, which is the international governing body for soccer, as we call it here in the U.S. Football. Football, what the rest of the world refers to as.

47 counts of money laundering, wire fraud, etc. you were stunned by this news. Can you believe I don't know how these idiots could possibly have screwed up the World Cup and yet. And yet. So, you know, we were joking, like, who amongst us was surprised

when Cutter got the 2022 World Cup that there wasn't Paola involved? I mean, we were joking about this earlier. Was on the merits, could you see, well, you know, there's U.S. and there's Qatar and I can't really tell the difference, but Cutter says there's not going to be any rain, so let's go there. Right. There won't be any rain because the average temperature in August is about 115 degrees. Right. It's just, it's such a, it's such a terrible decision on its face. You're talking about a

country that has one city where the stadium's going to go. Well, I mean, I guess they've got a bunch of sand. They've got a bunch of other land where they can build stuff, but yes, FIFA headline is corrupt. and I just the amazing thing to me is this is all in Switzerland and it's the U.S. Justice Department that got involved. I mean, how metal is that?

Like, Europe, get out of the way. We don't even play soccer in America and we're going to come clean up your mess. We're terrible at it. Let's get to the business angle of this because last year, FIFA took in more than $175 million in

marketing sponsorships and now these These big global companies are looking at this. And I'm talking Visa, Adidas, Coca-Cola, McDonald's, Hyundai Motors. They have all come out this week and expressed varying levels of concern and have also expressed varying degrees of sentiment that says, you know what? Maybe we won't be renewing our sponsorship.

Do you think that's actually going to happen? Or is the marketing opportunity just too big to pass up? Because the World Cup final draws an estimated audience of somewhere in the neighborhood of a billion people. Yeah. So go find me the person that says, well, you know, Brazil is in the World Cup. But because FIFA is corrupt, I'm not going to watch. That person doesn't exist. The World Cup, first of all, the World Cup is in 2018. It's a long time from now.

This is almost, this is almost, I don't want to say this is good news for FIFA, but from a timing perspective, we're really just coming off of the World Cup. We've got a long cycle and a long time for people to forget. I wouldn't worry about the sponsorships that much. But, you know, who knows how deep the rabbit rabbit hole goes? It could be deep. You know, they're saying that one of the bids that they're looking at was South Africa. They're looking at the bid. I'll tell you where they actually have a little bit more exposure is for some reason, the tournament that's usually played in South America will be played in the U.S. this year. And that's actually a primary part of the case is that these bribes happened in the United States. And that one may be at risk,

but not not not not not not the World Cup finals. You're listening to Motley full money talking with Bill Mann portfolio manager at motley fool funds. Let's bring it a little closer to home. Your most recent trip. And we've talked before about trips you've made to to Europe, to China. Almost the same thing. And you're most. recent trip for you and your colleague Brian Hinman, Nebraska. Nebraska. Besides Berkshire Hathaway. And we didn't see Berkshire. Actually, what's from a business perspective, what's in Nebraska? That's of interest to you. There are wonderful companies in Nebraska. You know, Tom Gardner has often said, and this story will not quite come back to where you would hope it to because it's not quite there.

But he's often said that a great exercise for investors is to think about a single criteria that you would invest in companies in. Like if you couldn't see anything else, you couldn't see the name, couldn't see market cap. You had to choose one thing. And Tom, his thing is he wants to see insider ownership. A long time ago, I thought through this and I came up with something that, you know, that was probably not exactly what he was thinking is I wanted all the companies from Minnesota. If you just gave me the list of companies from Minnesota, you know, they've got this Midwestern, you know, this, this Midwestern work ethic. They tend to be very conservative. They tend to be, you know, they don't take on that much debt.

Nebraska is exactly the same way. There are a number of really, really great publicly traded companies in Nebraska, starting with Berkshire Hathaway. And, you know, we, I'm sure Berkshire has gotten lots of coverage in, you know, in the time that you all have been on the air. And that's great. but it's almost like it takes the air out of the rest of the state. You know, TD Ameritrade is based there. Cabela is one of the great sports brands in America is based there. We went to go see a company called Valmont that makes, amongst other things,

giant those rotating sprinklers that you see when you're flying across country, the giant crop sprinklers, and they make equipment for highways. And these are great businesses. They really are. And I just think that there's so much power in getting out and going to go see companies where they are. And so it's a big part of our process. And, you know, even if it doesn't seem particularly romantic, it doesn't seem like a particularly awesome place to go. Nebraska's a wonderful state.

I mean, we really just, you know, we learned a lot and, you know, really standing in Sydney, Nebraska, which is where Cabellas is and wondering how it is that, you know, maybe the East Coast. She's like, how in the world do they get people to come relocate to Sydney? And you get there and the people from Cabellas look at you like you're an idiot. They say, you could be from this parking lot to some of the best fishing in this country in nine minutes. So you tell me. Now I'm intrigued. Right. If you like fishing, have I got a deal for you?

Right. So, yeah. By the way, Nebraska, not necessarily where you think of when you think of great fishing. Yeah, but fly fishing, right? You know, so it's available. And they find people that they want to find. And the people who commit to coming to Sydney, Nebraska are not leaving. Before I let you go, and since you mentioned Berkshire Hathaway, the most recent meeting took place.

Warren Buffett seems as energized as ever. Yeah. I think it's perhaps a sugar high, but he is one of those. people that you just sort of look at and think, wow, okay, so some of our health is just completely left up to whatever is in our DNA. He's the Keith Richards of diets, I think. Yeah. In the wake of the most recent meeting, any thoughts about Buffett, about the track record he is

amassed, and anything that you think people are missing because so, it seems like he gets so much coverage. And you could spend a series of books on his investing acumen. Yeah. Well, first of all, I think that a lot of people, a lot of people either want to put him into one bucket or the other. People who love Warren Buffett want to put him into this evocular character who, you know, looks people in the eyes and says, I see, you know, I see someone I can work with. And all those things are, in fact, true. He's also ruthless. I mean, he is a ruthless businessman. And I don't know that people who are real, you know, Berkshire, Berkshire hollocks,

I don't know what you want to call them. You know, real Berkshire fans want to really think through, you know, some of the things that, that Buffett has done. And Buffett always talks about things like, you know, the fact that he doesn't pay enough taxes, right? But he's not out there purposefully paying more taxes. He's going to take advantage of the rules as they exist, which, you know, as a shareholder, he should do. But I think that people either think of him as being more hypocritical than he comes across or they think of him as being a lot more genteel and polite than he actually is.

You can read more from Bill Mann and his colleagues. You can go to foolfunds.com and sign up for declarations, which is the free monthly newsletter. or just go to foolfunds.com. Bill, man, thanks for being here. Glad to be here, Chris. Thanks. 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 ourselves 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, Jeff Fisher, and Ron Gross. Guys, it is that time, once again, time for the stocks on our radar. and our man Steve Rojdo behind the glass will hit you with a question.

And you know what? Feel free to hit him right back with a question. Oh, with a question. Because there is the thick glass between us. Ron, you're on first. All right, Stevie, I got a radar stock, not a recommendation, but it's a potential deep value opportunity. It's called Big Five Sporting Goods, BGFV,

sporting goods retailer, 437 stores only in the Western U.S. Obviously, a lot of competition in the space, whether it's Sports Authority, Dix, online, Under Armour. Two activist investors involved. Just got three board seats. My decision is, is this a value investment or a value trap? The stock looks awfully cheap, but this is a tough business. Steve, question about Big Five? What's a sporting good I would only go to a store to acquire? Wow.

A bowling ball where you need to be fitted. How's that? That's good. That is good. Good answer. Do you have a question for Steve? Yes, Steve, I was going to ask you, what's the last sporting good equipment piece of equipment you've purchased. You know, you're asking the wrong guy. Probably a tennis racket at some point. Quick question before we move over to Jason. Do you have any sense of what the shopping experience is like in Big Five?

Because the only store nearby like this I've been to is sporting sports authority. Yeah. And it is positively claustrophobic in that. Yes, I agree with that. It is a large store. So there's a big footprint there, and they do pride themselves on customer service. But you know what? So does Besvi.

I don't think they're getting it done. All right, Jason, what do you got? Yeah, taking a look at White Wave Foods. Ticker is WWAV. This is one that, you know, I tapped it back in caps back in late 2013, and it's done quite nice. We finally got it in the Foolish Universe here. I'm looking at it for MDP, perhaps.

It's a consumer package food provider plays into the whole healthier eating movement, a hain, Celestial, and other companies like that. Brands you might recognize would be something like Silk or Horizon Organic. They acquired a little company a little while back called Earthbound Farm, which makes organic salads, packaged fruits and vegetables. You'll find that stuff in Costco, Trader Joe's, and everywhere else in between. And it's just, it's a leader in this space, along with something like Hain. I think that you have a lot of room to run there.

I like, you know, food, man. People got to buy it and keep on buying more of it. And so you got to love that. I think this is one we could probably even see be acquired at some point. Steve, question about White Wave Foods? I'm looking at a chart right now, and it appears to be a 45. degree angle going straight up. Does that make you nervous? I look at a chart like this and go, goodness, this looks pretty encouraging. Yeah, no, I like that. I mean, I like adding to winners,

to be quite honest with you. So I think when you see a business performing like that, there's a reason why it's performing like, or the stock, you know, and it's because the business has performed so well. Do you have a question for Steve? I do. So when you go to the Olive Garden, what is your go-to dinner? Like, what's the one, you know that you're going to get this? It's going to make you leave with a smile. Chicken Parm and an endless salad will do the trick. Chicken Parm is a tough. Soft drink or wine? Oh, soft drink.

Skip the wine. Not a good idea there. It's only in an Italian store. They don't know wine. They know why. Jeff Fisher, what are you looking at? I have to go mainstream. I'm talking about Intel.

Steve, ticker, I NTC. And I'm mentioning it only because top of the show we talked about chip industry. The rumor is back that Intel is looking to buy Altera Corporation for $15 billion. Why would they do this? Altara specializes in making programmable chips. So chips that your customer say it's Microsoft or Amazon, they can program the chip as they want for their server on the fly. So that's pretty cool technology. And servers are, of course, Intel's most profitable chip division, and it's a growing industry. So it looks like a pretty smart acquisition for Intel. It would be a big premium from where Altera traded at as the year began. But

Intel seems to know what they're doing. The company is reasonably priced as is. And so I think with Altera, its future may even be a bit brighter. Steve, question about Intel? Well, there's the famous thing that computer speeds are doubling every X number of years. I think it's three years. I don't feel like my computer's getting markedly faster every three years. And I think Intel is a huge part of that. And that makes me nervous about the company. Steve, are you buying a new computer every three years or just hoping your existing one gets? That is a good point. I love that.

Do you have a question for Steve, other than that one? Steve, what is your favorite novel? Oh, my goodness. I don't think I have a favorite novel. I do not. I'm not a big reader. I'm not going to lie. No sports, no reading.

In his defense, he has young children. Tough to settle down with a novel. Not even in your 20s? No, just not a huge reader. All right. Love movies. Intel, White Wave Foods, Big Five Sporting Goods. You got one you like there?

I'm going White Wave Foods. It sounds pretty encouraging. Hey, now. All right. I think we knew he wasn't. going to go with the sporting goods. Yeah, exactly. All right, Ryan Gross, Jason Moser, Jeff Fisher.

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