Motley Fool Money - Big Banks, Tech, and Zoom’s CEO

Episode Date: June 28, 2019

Nike reports a rare profit miss. FedEx delivers a warning but shares climb. Apple announces a big departure. And a Taco Bell hotel quickly sells out. Analysts Ron Gross and Jason Moser discuss those stories and dig into big banks, Constellation Brands, General Mills, Shopify and McCormick. Plus, Motley Fool CEO Tom Gardner talks with Zoom founder and CEO Eric Yuan about video conferencing technology and the future of the workplace. Thanks NetSuite. Get the FREE guide, “7 Key Strategies to Grow your Profits” at www.NetSuite.com/Fool.   Learn more about your ad choices. Visit megaphone.fm/adchoices

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this week, Senior analyst, Jason Moser and Ron Gross. Good to see you, as always, gentlemen. Hey, hey. We've got the latest headlines from Wall Street. Zoom CEO, Eric Yuan is our guest, and as always, we'll give an inside look at the stocks on our radar. But we begin with some earnings. For the first time ever, Nike's fourth quarter sales cleared the $10 billion mark. Nice accomplishment, Jason, but it also coincided with the first profit miss in seven years and shares of Nike down a bit on Friday. Yeah, but I mean, let's remember the profit miss was due to invest.

investments in the business. So at least there's that. I do think, I mean, this is a really impressive business. It just feels like they can deal with virtually any macroeconomic challenge. I mean, whether it's China or the consumer or something else entirely. And I mean, when we look at the geographical breakdown, China was the star of the quarter, 22% sales growth. But I think even more impressive, you know, we've talked a lot about North America and these retailers over the last year. Nike chalked up 8% growth in the North American segment again this which is, I think, a really important number for them. It shows that they've got that thing going back in the right direction. I have never used the sneakers app that they have. They

have this Nike Sneakers app. This thing's doing really well. It accounts for 20 percent of total digital sales now, and it's operating on a $750 million annual run rate. And Nike Digital itself grew 35 percent for the year. So, I mean, they're keeping inventory in check, continue to buy back shares. Frankly, if I was going to be in the market, frankly, if I was going to going to ding them for anything. I'd really like to see them juice the dividend a little bit, as opposed to just buying back shares. But to give them some credit there, the share account is coming down over the course of time since 2014. It's down about 10%. So those repurchases are at least helping. So the more they go direct to the consumer, though, that is bad news

for the footlockers of the world, yes? In theory, it would be, yes. Especially since most of their product is Nike product. Yeah. Does the pairs trade, perhaps? Well, I've looked at Footlocker, Dick's sporting goods, those kinds of, those are the companies that I feel like are really in a tough spot. When you have Under Armour, Nike, I mean, Adidas, all of these companies are going more direct to consumer. It puts those middlemen in very precarious place. But you get such amazing service at Footlocker. What will I do with that? That's what that's why people keep going back, right? Does the good number that Nike put up in North America put a little bit of pressure

on Under Armour to deliver, maybe not a similar number, but at least directionally a similar Absolutely no question about it. I mean, that's the one thing we've really been watching with Under Armour is they need to get that North American segment back in the right direction. It sounds like, you know, we're seeing some progress there, but it needs to keep headed in that direction. FedEx lost $2 billion in the fourth quarter and warned of the impact of an economic slowdown. And somehow, Ron, shares of FedEx were still up slightly this week. This is a confusing company to me. It was a bit of a roller coaster because they beat profit estimates, but they warned about U.S.-China trade tensions, their non-renewal of their contract with Amazon that would take a bite out of 2020. They forecast a mid-single-digit percentage point decline adjusted earnings for fiscal 2020. So, you know, it's good and bad. Adjusted revenue up 3%, adjusted operating income, down 7%. A mixed bag, the stock trades just that way.

Well, and the stock trades basically where it was five years ago. They are a good operator. They have arguably the dominant brand in their industry. And I'm not sure why they can't reward shareholders. What I do like. And I'm not a shareholder. Either am I. I do like what they're doing going out to reach the customer. So, for example, most recently they're putting in Dollar General stores, places to pick up or drop off FedEx packages. That's 8,000 stores. Really good touch points with the consumer. Contrast that with Amazon. who is in Coles, much smaller footprint, not as exciting.

Of course, Amazon is doing many other things as well. But I do like that FedEx is going to meet the customer. Are they, and I mentioned this in our production meeting, I'm wondering if sort of big delivery companies like FedEx and UPS are now in danger of becoming analogous to the beer industry, where for a long time you had the dominant players in the beer industry with the rise of craft beer and more local producers. used beer, they start, you know, sort of snipping away at the margins there. There are a lot more companies, including, by the way, Amazon, who are in the delivery

space. You have a lot more independent players, and it seems like it's tougher now for them. I agree with that, but it is such a capital-intensive business that it's not just anybody who wants to do it can get a fleet of airplanes or a fleet of trucks. It's real, you've got to be a big boy like Amazon is. The smaller player is hard to compete. Ive, the longtime chief design officer at Apple, is leaving the company after more than two decades. I've designed the iPhone, the IMac, and the iPad. He is leaving to start his own design firm, and Apple is going to be a client. You tell me, Jason, how big a loss is this for Apple? I don't really think it is. I mean, I think it's a great headline. I don't really think this is a big deal.

I think it's just one more sign that this is kind of, you know, this is the steep jobs era is over. I mean, this is the new Apple, trying to move beyond just being the hardware company and being more of a services and software company as well. I didn't realize the Johnny's designs were somewhat of a polarizing issue there. I mean, I was reading some articles where people were really happy to see this because they don't like what he did in making Apple's products difficult to repair, difficult to replace batteries, always in pursuit of shaving this thing down one more millimeter to make it just a little bit more sleeker. Sorry for the great products.

Yeah, I mean, it does seem to be a little bit nitpicky, but I mean, I think this is really just another move in what we're seeing is sort of the transition of this company is becoming something different. You know what? I bet none of those people were. Apple shareholders. Well, yeah, but I mean, I think you made a good point in our production meeting earlier today is really with him gone. And, you know, Tim Cook, I mean, he's not getting any younger. Let's just put it that way. Not all this are. No, and that's just, you're right. But what is the succession playing there?

Because I'm sure some people kind of wondered if he wasn't part of that. Clearly, he's not going to be now. Jeff Williams, the C.O.O. of the company today, has been with him since 1998. So that's a name to keep in mind. We do like C.O.O.O.S. that can make that step because they know so much about the business already. It seems like maybe they were going to split the role into two, which I'm not sure I love. Steve Jobs always talked about Sir John. John as his kind of soulmate, his right-hand man in creating the rebound that was Apple.

And I think Tim Cook or whoever the CEO is into the future needs that as well. Somebody really creative, really innovative. Otherwise, I think Apple will lose something. Shares of Constellation brands moving higher on Friday after first quarter profits and revenue came in higher than expected. Constellation is the parent company of Corona Beer and a number of other alcohol brands. Ron, the wine division seemed like it was doing pretty well for Constellation this quarter. Actually, wine and spirits were down for the most part on a shipment basis, but it's such a small part of the business. The beer segment, I want to say it's about seven times as large as the wine and spirits sales. Spirits not really getting it done

for Constellation. The higher demand was in the beer segment. As you said, the Modellos, the Corona brands doing quite well. Net sales overall, 2.5. percent increase, but beer sales are up 7 percent. Operating margins widens. Really nice to see. Favorable pricing, stronger dollar, help them out there. But they did report a net loss due to their investment in marijuana maker canopy growth. Their $4 billion-plus investment there. If you strip that out, you're fine. You've got earnings growth of 9 percent, and they did raise their guidance. But canopy for now is taking a bite. You know, in general, Constellation brands has done a pretty good job over the years of acquiring these different alcohol brands, bringing them into the portfolio and their distribution network.

Do you think what happened with canopy growth has essentially put maybe not the company off marijuana altogether, but it has hit the pause button in terms of future marijuana-related acquisitions? Because at the time, one of the things we said on this show was not just, wow, that's a lot of money to put into a marijuana company. But if they're looking to spend that kind of money, why wouldn't they spend it on another alcohol brand? Yeah, it's certainly, well, it's time to hit pause, but it should be anyway because it's a big number. It's a big investment. Let's see how it plays out. And then they can decide, you know, what they want to do for the future. I actually like that they're divesting things that aren't working.

They're selling some of their wine and spirits brands to Ernest and Julia Gallo, for example. So they're kind of trying to right-size their product portfolio. But obviously, that entree into the marijuana business is a big, big investment. Yeah, and I think they've also been feeling really good about where Corona stands today. Because if you go back just over the last decade, I mean, they really had a period of time there where Corona beer sales kind of fell off of a cliff. It took about eight or nine years for them to basically get back to those levels of eight years ago. But they did get it back. Now, the trend is such they've done a good job of selling this lifestyle kind of brand.

We see Kraft Brewing Alliance doing the same kind of thing. thing with their Kona brand, there is a lot of power in being able to sell that lifestyle in the alcohol business. And Corona is making a little bit of a comeback. Yeah, and keep an eye on trade wars, specifically with Mexico. Hopefully, that's behind us. But a significant percentage, a majority of Constellations beers are imported from Mexico. When your doctor orders a stress test, it means you get on a treadmill and the doctor cranks up the speed to get your heart racing. When Wall Street banks undergo a stress test, it's not quite the same. Details next.

You're listening to Motley Fool Money. Welcome back to Motley Full Money, Chris Hill here in studio with Jason Moser and Ron Gross. The big banks on Wall Street passed the latest round of stress tests from the Federal Reserve. J.P. Morgan, Bank of America, and Goldman Sachs. We're so happy with the results, Jason. They're getting ready to increase their dividends. Who doesn't like a higher dividend? Everybody loves higher dividends.

I mean, on the one hand, I really do like the fact that we're putting these banks through this scrutiny. I think that the Great Recession, the housing crisis, all of that together. We saw a lot of investors that were relying on those bank stocks as income plays, and they really had the rug pulled out from under them for quite some time. And that really, for me, I mean, that's for most investors, bank, represent that ideal income opportunities. So for these stress tests, I think, to be performed on a regular basis, no, they're not perfect. Can they be better? I'm sure. But they do address four key capital ratios for this bank. You can find those capital ratios. and their SEC filings and learn more about them. But ultimately, they're just trying to make sure

that the banks are healthy and that what they're paying back out to shareholders in the form of dividends and repurchases is something they can sustain. And so in this case, it sounds like all banks passed. I think JP Morgan and Capital One had a little – A little blow. Go back and maybe try to do over on a couple of questions, but ultimately they passed as well. I'm actually surprised in this age of deregulation that these stress tests are still in place to the extent they are. I'm happy they are. But I'm actually a little bit surprised that the government has enlightened up on some

of those questions because of the four key metrics in order to let these banks kind of do their own thing. I wonder if that's not because maybe politically speaking, it's just not as high up on the priority list. I mean, I guess coming into this presidential election, we're going to see all sorts of different priority list. But maybe that's one where they can feel like they can kick that can down the road if they want to address it later. You know how you go by a construction site and they have a sign up there? It's like X number

of days since the last accident. Maybe what the government is waiting for is like, let's get 25 years or more past the Great Recession before we decide to cut the banks some slaps. That's a good policy. I like that. The struggles continue for General Mills. Fourth quarter sales were down in the Snack Division and shares of General Mills. down a bit this week. Ron, they've got a lot of different divisions. Obviously, General Mills has their cereal division, snacks, all types of things. What are they going to do to turn this thing around? Pet food, baby. I mean, they're going to continue to diversify through acquisitions as they did

with the Blue Buffalo pet food business, which is actually really strong for them. 38% increase this quarter. The rest of the business, not so much. Organic sales, which are sales, not of organic food, but not including acquisitions is what we mean by organic. Felt 2% for the North American retail segment. Obviously, everyone's looking for healthier breakfast, snacking options. It's hitting everybody. Kellogg, Mondalies, Kraft Hines. They're all seeing it across the board.

They're all trying to diversify into healthier products or other complementary businesses, like a pet food business. And General Mills is doing it. The stock's been strong. It was up 25%, I think, this year even after. it took a hit on this earnings report. So people really liked that pet food acquisition. I think we're going to see continuing acquisitions. Well, and in some ways, it's sort of the opposite of what we talked about earlier with Constellation brands, where General Mills got a lot of

attention when they went out and bought Blue Buffalo. And the success they have had with that acquisition, I think that's just got to fuel the fire inside that company to go out and find more acquisitions like that. And honestly, if you're running the cereal division or the snack division, you've got to be a little nervous. Yeah, probably all these companies are going to start competing for acquisitions. It's going to make the price of these acquisitions go up. They can't just, they have to right-size their product portfolio also. They're focusing on Hagen-Daz and Old El Paso. They want their snack bars to kind of firm up a bit. And obviously, their organic food offerings. So they're working

on the stuff they already own, but for sure, I think acquisitions are coming. And I love cereal. It always kind of confounds me that it's such a headwind. So we just got this new, so Pop Tarts has a cereal now. Have you seen this? No. Yeah, it's like Pop-Tarts cereal. And so they're like... Sounds very old. They're little Pop-Tarts with little Pop-Tart filling.

And, man, that's really good stuff. Sugar and a ball. Oh, the box lasts like a day in our house. Where do you find little toasters? Oh. It's, you know, milk in lieu of toaster. Oh, okay. Clearly, I'm confused. Second quarter profits for McCormick came in 21% higher than a year ago. The Spice Makers' overall sales, however, not as impressive, Jason, although McCormick did raise guidance. Well, I mean, if there's one thing that's going to get me more excited than Pop-Tart cereal, it's McCormick. You know that as well as I, Chris.

So I think the big story of McCormick, and this is a bit of a prediction here, is I think that within the next 12 months we're going to see them make another meaningful acquisition. With these consumer staples businesses, that's really where growth comes from. I mean, they did chalk up modest growth, 3% total sales growth of the quarter. It was a nice team effort from the entire business there. They have the consumer side of the business, which is the stuff that we get in the store. They also have the flavor solution side of the business, which is industrial customers, restaurants. And they lock into some pretty long, attractive contracts with those businesses as well. But, you know, it all really did boil down to, for the longest time, this RB Foods acquisition with Franks and

Frenches and were they going to be able to pull that off. They pulled it off really nicely. They've really, they've paid down the debt on that deal. Their coverage ratio of five and a half means they can afford pretty much whatever they want to do going forward as well. They continue to focus on costs. Margins continue to take up a little bit. So they continue to run this business very efficiently. They reward shareholders in the process. I like to see that they're not repurchasing shares. They're paying that dividend out, but they're not repurchasing shares. But again, I think the language of the call is very clear that they are now on the hunt for the next acquisition. I want to get to some of the language they used in a second, but when you think about acquisitions that they make, do they need to think in terms of something that has a national footprint already? Because certainly there are acquisitions that they could make that are more regional-based.

Yeah. I mean, there's no doubt that immediately buying some big national brand could have a bigger impact. I do feel like there are some neat brands out there on the regional level they could get for far less that they could plug into their distribution network immediately that could probably do really well. So, one of the things that the company said regarding this latest quarter was they referenced a late start to grilling season. I was wondering what we're going to get to that. I had no idea that... Drilling season never ends. I'd grill all year. That was what I thought.

I didn't realize it ended. But I guess it's like one of those you can't wear white, what is it, after Labor Day? Yeah, something like that. You know, I've got the soratorial senses of a tree. But I think, listen, that's one of those weather things, right? We see that, we make fun of it, and we think, okay, whatever. I don't read too much into it other than, like, they're looking for something to say. Don't you use spices regardless of where you actually cook the food?

Absolutely. You do, but I mean. We're on the grill. But I will say, too, like, you have to at least acknowledge the fact that if you break the year into halves, right, the front half and the back half, the back half of the year, the back half of the year, the back half of the year, the back half of the year. So there is something there. So maybe they just felt like they had to attach the grilling season on the front end of the year to give Easter a fair shake. I don't know. I'm just speculating, but it is what it is. All right. Ron Gross, Jason Moser, guys. We'll see you later in the show.

Up next, a conversation with Zoom video CEO, Eric Yuan. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. The video conferencing tech company Zoom has made a big splash on Wall Street, IPOing in April at $36. a share, Zoom now trades around $90 a share. Part of that rise was fueled by Zoom reporting better than expected earnings in its first quarter as a public company. The company's founder and CEO is Eric Yuan. After a long career at WebEx and Cisco Systems, he started Zoom in 2011. Recently, Motley Fool CEO Tom Gardner talked with Yuan about a number of topics, including

interesting applications of Zoom's technology, corporate culture, and growing up in China. But here's how Tom kicked off the conversation. Eric, we just wanted to start right in the first paragraph of your S-1 with a line about the aspiration of the company to make Zoom meetings better than in-person meetings. And I'd just love to hear your vision for that. What does that look like for you relative to the standard in-person meetings that we've all been having for our entire lives?

Yes, so we are working very hard to improve the meeting experience. However, I think compared to the face-to-face meeting, I think far from being there, meaning, you know, face-to-face meeting is still much better. So, like, I can shake hands with you or can give you a hug, right? And with a face-to-face meeting. But online meeting, I would see the video quality is great. I can see you. I can, you know, collaborate, share content.

But, again, you know, not as good, not as intimate as a face-to-face meeting. However, I think technology can change. I think in the future, the online video collaboration experience, like Zoom, have even delivered a much better experience than face-to-face meeting. I gave one example, like a feature we introduced one year ago, which is a meeting transcription. I think for face-to-face meeting, I do not think anybody is going to, you know, have meeting notes, right? And with Zoom, we can do that, you know, automatically. So I think we are going to get there, but we will take several years' effort.

Eric, I want to ask a question just in general about the, how do you think about the workplace? Like just when you think out like 10 years, what will be different in the workplace and how will Zoom be benefiting from that over time? Yes, great question. If you like what's happening today in the workplace, I think, you know, over one third of workforces are millennials.

They need flexibility. Not like 10 or 20 years ago, everybody has to go to the office. physically working together. I do not think that would be the case in the future. Anywhere, anytime you want to work together, it's great. You want to get together, go to workplace, or go to Zoom, and, you know, online video, collaborative experience even better than face-to-face meeting. I think that's going to happen in the next 10 years.

I guess my question for you is, what was it that motivated you and the other leaders of Zoom to leave your previous employers? Because when I think about what Zoom does, It was a crowded marketplace. You were talking about huge companies and huge competitors that already did video conferencing. So there was a certain confidence there that I'm fascinated by and would love to hear your take. I don't think I had a confidence.

But I was, seriously, I was not thinking about leaving Cisco to start a new company. Because I, you know, sort of built WebEx before as one of the first several founding engineers. and ultimately I became vice president of engineering. The year before I left Cisco, Cisco WebEx, every time when I talk with a WebEx customer, seriously, I did not see a single hyper customer. Every morning, I really don't want to go to office. I was very embarrassed.

I really wanted to fix that problem. I really did not look at the market. Look at how gravity. That's not what I thought about that. I only thought about one thing, how to bring happiness back to WebEx customers. What can I do to fix that problem in sort of eye-created, right? And that's the reason why I decided to leave to build a better solution. If I look at it from market perspective, look at a competitive landscape perspective, you are so right.

I don't think anyone wanted to start a company, you know, for that very crowded market. Yeah. You talk about happiness today and many of your communications about Zoom. I'd love to hear maybe a few specific examples about how happiness is alive inside of a company that's growing at 100%. I mean, we hear in very high-growth situations that it can be hard to enhance the culture, that the culture may start to get diminished by all that growth and change. So maybe two or three examples of happiness in the workplace and for employees at Zoom. Sure. So one thing I often told our employees, also told myself every day, is when you wake up in the morning, the first thing you have to think about, are you happy or not?

If you are happy, it's great. Please come to the office, you know, start working, right? If you do not feel happy, absolutely fine. Don't come to the office, you know, take a step back, really understand what had happened. if that's a family related, you know, please figure out a root cause, you know, fix that problem. If the business related, also think about what's the root cause. You might ask you to the head of your department, you also can talk with me or me to talk with the peers to really understand what had happened, what's the root cause to come up with the solution. If you do not feel happy, absolutely okay, stay at home. No need to come in office.

Like every morning, I ask this question to myself as well. Like, if I feel very happy, immediately company office, otherwise, I really want to understand why. I think if employees are not happy, I think, guess what, the customer will not be happy easy. Because we truly believe if we can do everything we can to make sure a customer happy, our business will be okay. To make our customer happy, the number of the things, we need to make sure employee happy. This is something, this is our guiding principle. I'm curious about just the simple end of the experience of a Zoom call with the, the thumbs up and thumbs down.

And I know that must have emerged somewhere for you. I know from your history that when customers canceled early on in Zoom, you would contact them right away to understand why. So just a little bit from you on how to ensure that you're getting the information back from the end user that they're having a good experience and how that developed. Yeah, great question. It boils down to our company culture to really care about the customers. You know, got to do from top down and bottom up as well.

I cannot say, hey, guys, let's focus on customer experience. Tell me about the customers. If the customer already canceled, I still don't know what had happened. I do not think, you know, that's right. I should lead by example. Wherever canceled, I sent a personal email, have a Zoom call, really understand what had happened. If that's a product related, I needed to drive other engineer to fix that problem.

I mean, pricing related or anything related, I want to understand what's true cause. Otherwise, customer already left. You already lost the customer. As the CEO, you still don't know what had happened. I think that's a number of priority. Why customers, you know, they left you, right? I think if you think your business is doing well, the product works so well, why customer they cancel?

I think that's a number one priority. That's why I personally involved in early stage. For now, we have very scalable the team, a process. Anyway, for the bigger con, for whatever reason they wanted to cancel, I still involved. Sometimes the company, you know, they got to acquire. you know, by one of our bigger competitors, no matter what I do, you know, still they will cancel. So I still understand what we can do better, right? I think it's very important to understand, you know, what had to happen.

So at our company, we've spent a lot of time studying Jeff Bezos and what they did at Amazon, particularly early on. And one of the things that they always, you know, that they always emphasize that any, any free cash that they had, they were plowing back into operations, into marketing and things of that, of that nature. Zoom is blessed with $700 million on its balance sheet. And I was wondering if you might speak to how you think the company is going to deploy that most effectively. Yeah.

Yeah. Back to Amazon, I really like their philosophy, like day one philosophy. That's where our border in the comfort room, you know, the name is that they went, right? And we got to think about where we are coming from. I think having side of that, we do have a lot of cash in the bank, but I don't mean, you know, we should not have a decision to spend, right? I think, you know, this is one of the top priorities, you know, for us, for our management team to look at how we can leverage our cash, right, to further drive our growth. Unfortunately, I do not have an answer now, but, you know, I really not good at it spending. So, I'm going to encourage you, Eric, to consider this.

Not that I have any great insight, but looking at your company versus other companies, looking at the incredible growth rates, the extremely high levels of satisfaction, NEPR motor score of 70, the extreme enthusiasm in your workplace, and the great opportunity you have in front of you, and the high margins, gross margins, rising north of 81%. I would look at the situation and ask, should we at Zoom spend a lot more on marketing right now? Because the more people we get onto our platform, we know it's sticky.

We know we have the discipline of really caring about the end user. We're going to solve their problems. So let's make sure they come to us before anywhere else. We've got $700 million. Let's just continue to amp up our online spending so that there's no question in anyone's mind that Zoom is the dominant brand in the category. I think you're right on. That's why we want to become hot enough for yours, right?

working together to guide us, you know, how to spend more effectively online. So I'm curious because I know that you all have done a great job interacting with the people who are using Zoom system and learning from them. What are some of the most interesting use cases that you have seen how people are using Zoom? Oh, I think it's several years ago the first time I heard about a doctor is using Zoom, you know, for telemenis. and this is several years and five years ago. I think that's a really, really impressed, you know, how doctor, you know, talk to the patient, you know, get a job done,

you know, without letting the patient to visit the doctor. This is part of the telematterson. That's one use case. I think another use case is more like online teaching, online learning, because quite often the professor say seriously they can live in Australia. The students can't be anywhere in the world, right?

I think that can change the learning experience. I think all kinds of use cases, I think Zoom can help. Can you talk a little bit about your personal journey? We know about the WebEx Cisco experience, and you mentioned the difficulties you faced in serving the end user there and why that advanced you to start Zoom. But maybe even before that, a little bit about your childhood,

a little bit about your journey in life and some of the values. user principles that you hold dear. Sure. Absolutely. So I was born in China. I was born in 1970 and I got my master degree from Beijing, China as well. And I traveled to Japan for four months back to, I think in 1994. And I remember that a beer gets, you know, he was visiting Japan as well to give a keynote speech to one of the industry events over there. I was so impressed, you know, by his speech, very inspirational. And at that time, realized, our internet is going to change everything.

So after the back from Japan to Beijing, and I thought about what should I do, you know, because I worked for a publishing house of electronic industry, and my biggest hobby is to collect books. At that time, I thought about, hey, why not, you know, start a billion to sell books online? And I think in 1995 in China, but it's too early. And nobody even had the email. At that time, I thought about I should come to Silicon Valley to take a look. However, I tried to get a visa. I got a decline. It took me one and a half years.

Finally, I got my visa. I tried eight times. Next attempt, I was successful. And when I got a visa, it already became the working visa, H-1 visa. It's not a business, B-1 visa anymore. So I joined WebEx in 1997 as one of the first several founding engineers. I remember, you know, before I came here, and my father told me that, hey, you are going to go to a different country. We know that's a worldwide innovation center. However, you know, you are not familiar with the culture and also, you know, you even do not speak language well. And you've got to remember two things. Hard work, stay humble. And every day I think about, you know, what my father told me that. You know, I have all the past 21 years, 22 years, seriously, I reminded myself of that. Hard work and, you know, stay humble.

Those two things I think really help me a lot. You can learn more about the company by visiting their website, zoom.us. Coming up, do you have a watch list? If so, we've got a few stocks on our radar. Stay right here. You're listening to Motley Full Money. If you don't know your numbers, you don't know your business. And the problem growing businesses have that keeps them from knowing their numbers

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number one cloud business system. And right now, NetSuite is offering you valuable insights with a free guide. It's called seven key strategies to grow your profits. And you can find it at netsuite.com slash fool. That's netsuite.com slash fool to download your free guide, seven key strategies to grow your profits at netsuite.com slash full. 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, Chris Hill here in studio once again with Jason Moser and Ron Gross. Our email address is Radio at Fool.com.

You can also hit us up on Twitter at Motley Fool Money. That's where Kevin Rice hit us up with this question. Do you consider Shopify a good starter stock to buy and hold at the current price? I'd love to hear some feedback. I love all the Motley Fool podcast. Thank you for the question, Kevin. Thank you for listening. I should point out, shares of Shopify have doubled in the past year, and this company is not yet profitable. Yeah, and I think that's the big concern, and it's a reasonable one. I mean, I will say I like the business a lot. Generally speaking, it ticks all of the boxes for me as far as when I look at these companies. Is it something I'd want to own? Shopify is definitely something I would want to own. save for one glaring problem, Ron. The valuation just is out of hand. Oh, details. Well, and I mean, to your point, it's not profitable. It's not cash flow positive. And the thing is, we know that it's not going to be profitable for some time to come based on what they continue to say in their earnings calls. So you can't hold that against them, right? You can't hold investing in growth. And then they clearly are doing something right. So I view Shopify as a great buy in thirds stock. If it's something that you want to own, great.

Take the total amount of money you feel like you would want to invest in the stock, and let's for simplicity's sake, say that's $3,000. Split that up into three, $1,000 purchases, perhaps. You get some skin in the game, even if it's what seems like a crazy valuation, because I'll tell you, 100% ago we were saying the valuation seemed crazy too. And then you can follow it, learn more about the business and whatnot. Yeah, I think it's a fine company to own. Specific to his question about is it a good starter stock?

I feel like the answer is no. Maybe that's because I'm a little more conservative, perhaps. But I'd rather see more stable, cash-flowing, profitable companies as starter stocks. Yeah, I think that's right. Starter stock, I'd go with something a little bit less conventionally risky. A while back on the show, we talked about the latest innovation from Young Brands, parent company of, among others, Taco Bell. I'm referring, of course, to the Taco Bell themed hotel and resort in Palm Springs. It opens for a limited time in August. And this week, They started taking reservations.

Ron, they sold out in two minutes. There's a lot of fun people in the world, aren't there, Chris? There really are. I don't get it, but I like people that like to have fun, and I'm not going to begrudge them. They're fun. I kind of feel like this is going to be happening again in the future, that maybe they do this again next year, and the limited run of this hotel and resort, Jason, is extended.

Oh, there's no question. I mean, next thing, you know, We have a Taco Bell invitational golf tournament to go along with it, and perhaps a Taco Bell Pet Hotel. I mean, there are all sorts of different ways you can run with this thing. The food, they're taking over the restaurant and obviously tweaking the menu to make a Taco Bell centric. I can only imagine. Let's get to the stocks on our radar. And our man behind the glass, Steve Brodo is going to hit you with a question. Ron Gross, you're up first. What are you looking at this week?

I've got waste management. W.M. provides trash removal, recycling, and other services to both residential and commercial customers. Dominant player in, let's face it, a very essential business. We've got to get rid of that trash. Limited threats of seeing demand outsourced or disrupted. They are entrenched because they have North America's largest networks of landfills that they own. Organic growth and acquisitions have fueled their revenue growth. Really great to see. They have increased their dividend for 16 consecutive years. Love a nice, stable business that can continue to do that. Yield currently stands up. at 1.8%. Steve, question about waste management? If executives could go in a time machine and

change the name of that company, do you think they would? The word waste in the title does get me. That seems fair to me. We'll have to come up with another name and maybe help them rebrand. Jason Moser, what are you looking at? Well, speaking of rebranding, you know, when I did our porch at the house, I had all this lumber that I tore off that thing. To get it picked up, I used waste management service Bagster, where you buy this thing at Home Depot, you fill it up with all this stuff, and then they bring their big waste management truck out there and pick it up with a crane and take it away. Perhaps Bagster is that rebranding.

I don't know. I don't think so. It was a great service, and I will definitely use it again. I am looking at a company called PTC. Ticker is also PTC. And this is a company I've got on the watch list for the augmented reality service, and they are in the business of augmented reality for the enterprise. You've heard me talk about Autodesk before, somewhat of a similar. business, but just an interesting data point of things that consumers probably don't really see

is that around 42% of U.S.-based industrial companies currently use smart glasses as a part of their workforce. We just don't see that kind of stuff. But this is a company that is really firing in on that market, and I'm going to dig in and learn more. Steve? I heard Google Glass is coming back. Are you for that or against? I am all for it, baby. Two very different businesses, Steve. You've got a stock you want to add to your watch list? I think I'm going with waste management, despite the name. Baxter. All right, Ryan Gross, Jason Moseer, guys.

Thanks for being here. 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.