Motley Fool Money - Big Tech is Getting Bigger

Episode Date: October 27, 2017

Alphabet, Amazon and Microsoft all hit new highs after their latest earnings reports. Jason Moser, Matt Argersinger and Jeff Fischer analyze the growing dominance of these tech giants. We also take a look at Baidu, Intel, Twitter and more, and share a few stocks on our radar. Plus, we get the inside scoop on two of the biggest candy makers as we talk with Joel Glenn Brenner, author of The Emperors of Chocolate: Inside the Secret World of Hershey and Mars. Thanks to Freshbooks for supporting The Motley Fool.  Get a 30-day free trial by going to FreshBooks.com /FOOL and enter “MOTLEY FOOL” in the “How Did You Hear About Us?” section.   Learn more about your ad choices. Visit megaphone.fm/adchoices

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It's the Motley Full Money Radio show. I'm Chris Ellen, joining me in studio this week from Million Dollar Portfolio, Jason Moser and Matt Argusinger. And from Motley Fool Pro and Options, Jeff Fisher. Good to see you, as always, gentlemen. Hey, hello, Chris. We've got the latest headlines from Wall Street. We'll take a closer look at the business of candy. And as always, we'll give you an inside look at the stocks on our radar. But we've been a lot of the next time. Begin this week with earnings paloosa, three of the biggest public companies, all hitting record highs, Microsoft Alphabet. We're going to start with Amazon's third quarter report. Revenue came in just shy of $44 billion. That is a 34% increase over a year ago.

And shares of Amazon on Friday, Jeff, up 12%. Unbelievable, Chris. And the shares are up 46% year-to-date and 360% just the last five years. So if you thought you were too late to Amazon, you were not. And the good news is, I don't think you are too late now either. I think the company will be much more valuable five and ten years from now. Right now it has a $525 billion market cap. Let's see where it is five years.

I bet it'll be much higher. Anyway, Chris, retail sales were up 22% year over year. That's higher than they grew a year ago when they grew 20%. So that's amazing. Amazon Web Services revenue is up 42%, which is a little slower than a year. year ago, but still very strong. The company did have lower operating margins pretty much across the board, but in the web services business, which is key, which is where a lot of

profits are made, the operating margins were up sequentially. So people were happy to see that as well. Not talked about so much, but really interesting to me is ad revenue is up about 60%. Huge growth there, and that's very high margin revenue. And they have a lot more room to keep growing that revenue. Yeah, Amazon, a company that famously keeps things close to the vest, they don't have an ad advertising division per se, Maddie. That actually, the number he referenced there, goes in their other revenue segment. All right. Well, it just speaks to the tremendous optionality of this business.

And I'll just go back though to the core retail business growing over 20 percent. If you look at the e-commerce, overall e-commerce just in the U.S., it's growing in the low teens the year over here. So as mature as Amazon is, it's still putting up this amazing growth. And we've talked a lot about other companies making headway, Walmart's making headway, Target to a certain extent, other e-commerce players. But Amazon, the juggernaut of the business, is still growing and it's accelerating its growth, which I just think is exceptional. Yeah, Matt, and they haven't yet cracked, of course, groceries to great extent.

They bought Whole Foods, but it's still a small part of their business. They haven't really cracked health care, let alone pharmacy, where there are rumors looking at how to get into that, because that's a giant industry. So there's a lot more for them to grab. Yeah, as we came into the studio to tape today, there are all these reports that CVS is in talks to buy health insurer, Aetna, for as much as $66 billion. And part of the rationale for that, Maddie, if it in fact goes through, so that CBS can defend against Amazon.

It's amazing. Well, and actually, Jason was telling me before the show that if you can type to Amazon RX, and right now it goes to just Amazon. But clearly, whatever anecdotal events you need out there, Amazon is getting into this business. I think about the fact that now, my wife and I, for the most of where, we get all our groceries at home. Amazon Fresh is just an amazing service. We have, with the Whole Foods acquisition, you just have more and more to choose from. But I like the idea of, you go see your doctor. You order directly from your doctor online through Amazon, and by the time you get home,

your drugs are waiting for you. Along with your groceries. You think there's someone whose job it is at Amazon to just secure URLs. Jeff Bezos is just like, you know what? I don't know if we're going to do this. Go ahead and secure that. Just in case. I bet. Alphabet's third quarter profits. came in higher than expected. So did overall revenue. Their margins are growing. Maddie, did anything bad happen to Alphabet? Or was this just all sunshine and rainbows? Because it really looks like all sunshine and rainbows.

It really is. There might be one thing I'll mention. But this is just another example of the big getting bigger, the big getting stronger. We talked about Amazon's business, accelerating Alphabet's business is kind of accelerating. Revenue up 24 percent. That's above the average they've been generating the last several years. Growth in the core advertising. business was up 21 percent, and growth in Google's other revenue, so this is not other bets, but just other revenue, hardware, cloud. That business was up 40 percent. What really impresses me, and it's impressed me for a long time, but just continues to blow my mind is YouTube and just what the power of that, what that's doing for the platform and for Google's

search business. One point five billion users spending an average of 60 minutes per day on YouTube, which is just massive. But one interesting thing the company pointed out in the conference call is they're also racking up a lot of time in the living room, 100 million viewing hours per day at home through smart TV or other TV devices. So no longer is YouTube just, I'm looking at my phone or I have my iPad or I'm playing a game or something like that. It's now people are watching YouTube on their TV and doing so in really prodigious rates. Yeah, the skinny bundle offering, just like Hulu has. I think there's a lot of runway there, and we're seeing them make a big advertising push. Certainly, we've seen some stuff going on here in the baseball playoff season.

I think that as time goes on, those skinny bundles that Hulu and Google are offering are only going to get better, because they really do. They give consumers what they want in the way of content, and the service aspect of it is just so much more optimal. I mean, when you consider you don't have to call anybody, you just kind of go in there and click a button here or there, you record a payment with your video. You don't have to call or wait or old. It's service aspect of it is just so much better than something you might deal with Verizon or Comcast, who just notoriously have very bad reputations for service. One small cloud over this sunshine and rainbows we've been talking about is the traffic acquisition costs. They're up 54% year over year, and that's, of course, Google who paying smartphone makers and web browsers to run Google search and ads. Critical cost, that's up, again, of 54%. Mainly that's because mobile is just so much more of an expensive platform from them. They have to really pay up for it. We want to see that sort of scale out. You want to see that number kind of come down. Otherwise, Alphabet's operating profits probably aren't going to keep up with

revenue over time. Microsoft's first quarter profits came in solid. Highly higher than Wall Street was expecting. Jason, the cloud business continues to grow. It's been growing for a while. The PC business growing this quarter, too. That was a little bit of a surprise. A little bit. I mean, the word I used back in July was cloud. The word this quarter is cloud. I mean, this is the same old thing here, but that's in the good way. And when you look at the commercial cloud business, the run rate is now at $20 billion annually. And for context, Amazon Web Services is around $18 billion. Both really kind of

leaving Google in the dust in that regard right now, but Google is obviously also a very big player as well. The more I think about it, the more I think Satya and Adela is Microsoft's Steve Easterbrook. I mean, we think about all of the success that Easterbrook has had at McDonald's in sort of turning this business around. Satya Nadella has done a lot of the same with Microsoft, identifying the key opportunities, cloud. I think we probably all still have some questions about the LinkedIn acquisition, but the bottom line is they're realizing stronger engagement and it's contributing to earnings per share. And then there's a big runway in gaming as well, a new Xbox coming out soon. All in all, I mean, this is a business that is still

extremely relevant in offices all over the world. And I think that is going to continue. And Nadella and his team are doing a very good job exploiting that and monetizing it. And investors are clearly winning. Okay. So we've got Alphabet, Amazon, Microsoft. We've got three stocks. These are three of the four biggest public companies out there. Apple is the biggest. We'll be talking about them on next week's show when they report their earnings. But of these three stocks for investors who are looking over the next five to ten years, they're all hitting new highs this week. Are any of them unreasonably priced? Is one more so than the other that you look at and you think,

well, even if you have the five to ten year time horizon, it's something where you want to wait for a little bit of a pullback. What do you think, Maddie? I would say, I'll call out Microsoft only because I think the business, compared to the other two, is a lot more mature. And the valuation for Microsoft is kind of in line with Alphabet, actually. And I just think Alphabet's got a lot more, a lot of bigger runway ahead for them. I mean, Microsoft's, what they've done is very impressive. I had to pick one of the three, I'd say Microsoft.

I'd kick that out. Jason? Yeah, I think Amazon's the easy target there. But, you know, Maddie hits on a very good point there. We've got to think forward, right? And so Microsoft, I think we've been conditioned to sort of accept. up this low valuation. It's still somewhere around 20 times free cash flow. But on a forward-looking basis, I think that Alphabet and Amazon are the companies that have the bigger opportunities,

honestly, I think you buy a little bit of all three of them and you're going to be just fine. Jeff? There's no question, all three trade at a bull market type of price. At some point in the next five to ten years, we'll see a significant market drawback. It's almost inevitable. Call it a bare market, whatever you like. We'll see a year or two of stocks falling at least in the next five to ten years. That said, I'll see a fair market. I think all three are priced such that five years, there's a decent chance they'll be, they'll generate a decent return over five years. Ten years, there's a very good chance they'll generate

a good return. That is, as long as Amazon or Google, Alphabet is not attacked by regulations. Or Amazon, which trades at 75 times free cash flow compared to Microsoft at 20 doesn't make some missteps and hit its profitability prospects. Third quarter profits for Baidu more than doubled, but shares of the Chinese search engine giant fell more than 7% on Friday after guidance fell short of what investors were hoping for. Even with the drop, Maddie, it's been a hell of a year for Baidu. It absolutely has. I mean, I just think in particular, I look at the 31% increase in the average spend per marketing customer.

Again, this was a company that for the last two years has been kind of, there's been a shadow on them with some of their customers and the Chinese government got involved. They've cleaned that out. And so even though their averageizing ranks are lower, the amount of spend per advertising customers is really, really impressive. And I, E, which we've talked about before, just their kind of YouTube Netflix hybrid is, as I'll say, Ronnie's out here today, firing on all cylinders, 160 million daily active users on mobile, time spent using ICHE up almost 30 percent year over year.

And I thought their guidance was actually quite good. I mean, if you adjust out some of the businesses like the delivery business and the mobile game segment that they invested, the core business is going to grow between 28 and 34 percent in the fourth quarter. I don't know. The sell-offs, to me, seems a little overdone. Yeah, I looked into it as well. And, Chris, you're right. The stock is up 46 percent year-to-date despite the sell-off, so it's great. It's up 1,800 percent since it went public in 2005, which to me feels recent. Life-changing returns there with what was known from day one as the Google of China, so it isn't like it was hidden. But the outlook, the problem that I see

in the quarter was the talk about their big investments in autonomous cars and AI. Like, AI is their second pillar, strategic pillar. And it's going to be a long time before they see artificial intelligence adding anything to profits. In fact, I don't think any company has really cracked how to make a lot of money from AI yet. So investors lost little patience hearing that. Coming up, earnings paloosa rolls on. Stay right here. This is Motley Fullman. Hey, if you're looking to get a mortgage here, a couple of tips.

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lender, licensed in all 50 states, NMLS Consumer Access.org, number 3030. Welcome back to Motley Full Money, Chris Hill here in studio with Jason Moser, Matt Argusinger, and Jeff Fisher. Shares of Chipotle down 15 percent this week after a disappointing third quarter report. And Jason, it appears that Koso is in fact Not the answer. It seems like the perception out there is that you could get a better meal on the upside down from stranger things than going to Chipotle. I mean, it's just scaring people away.

It comps of meager 1%. I mean, we've been talking about this a lot. I know you're a little bit hot under the collar, Chris. So I'm not going to try to talk you back off the ledge because I think things are about as bad as they look. For me, at this point in time, I can absolutely see a scenario where Chipotle, where Steve Ells decides to maybe look at taking this thing private again. I don't know that he is suited to take this company forward as a publicly traded company. I think part of the problem is, for better or for worse, he's going to put purpose and mission above everything else. And that includes profits.

Now, that's okay. You can do that. But as a publicly traded company, your life is going to be a living hell. So I think that we need to start looking at the options here as far as the path forward. I mean, if you look back a year ago, he was targeting 2017 earnings per share of about $10. forward to today through the first nine months, it's at about $5.309 adjusted for some one-time events, which just basically means they're not going to hit that target this year. The best case scenario, maybe they hit that target next year. You plunk a 30 multiple on that, you get a $300 stock. All of a sudden, it looks like the stock is actually pretty reasonably priced today, and I don't know that it ever garners that multiple that we're so used to seeing that premium multiple. So, all in all, just an extremely disappointing 2017. It seemed like it

started off so promising, and boy, the tie just turned quickly. Intel's third quarter profits came in 26 percent higher than Wall Street was expecting, and shares of the chipmaker hitting a new all-time high on Friday. Jeff, this was not one of those beat-by-a-penny kind of quarters. No, massive results. And we have to give Intel credit when you think about it how much the industry has changed since the 1990s, let alone the 80s, and it has stained power, and it has evolved as technology has changed.

Whereas IBM, Hewlett-Paggart, so many other early computer leaders. fell by the wayside. Intel is trying to be the driving force of the data revolution, so it's making money on Internet of Things, on, of course, storage, data cloud, on memory, which grew sharply its memory chips, and of course, on the CPU sold into computing devices. 26% earnings per share growth this quarter. The stock trades at 13 times expected earnings for the year ahead, so it looks very inexpensive compared to all the other tech giants. It has a good 2.5% yield. I think we've been saying for many years that Intel looks like a good value with a good yield and the stock has delivered results as well. Not as much as the others, but still decent results. And I think

it's on a good path. Align Technologies' third quarter profits came in higher than expected and shares of Align up more than 16 percent on Friday. This big day, Maddie. A huge day. And this is such a great example of a early, a small rule breaker who kind of owns a niche market within the medical industry and is just skyrocketed and become kind of a standard and a go-to brand. I was looking back at the Rule Breaker's recommendation, which I wrote up in June 2014 for Align Technology. At that point in time, they were growing revenue year-over-year-over-year between 15 and 20 percent, depending on which quarter you looked at. Flash forward to today, revenue in the most recent quarter of 38 percent, and the core

Invisaline business up over 40 percent. Totally example of a product that has just caught fire. Earnings up over 60 percent, both of those numbers crushing estimates. The big deal for a line, and we've been looking at this, is just a rapid expansion they've had overseas. And so, Invisaline not only has become the go-to place for braces or lining teeth here in the U.S., but it's being really adopted overseas, especially in the Asia-Pacific region where they're seeing incredible growth. You know, it's an expensive stock at $230 per share, but I thought it was expensive around $50 a few years ago, and it's trading roughly the same multiple. And Invisaline is expensive itself, so there you go. Good margins.

Are they talking at all about expanding outside the mouth? Or are they just thinking, you know, we're just going to focus on this for now? I think it's all about the mouth right now, but they do have some things, you know, other types of dental technologies they're looking at. But no, they're staying in the mouth. What are you thinking, Chris? What else could they align? Your spine? Possibly. Maybe, you know, team up with some chiropractors, get some R&D going on that. For the first time in a very long time, it was a great week for Twitter. Shares up 20% this week after a strong third quarter report and they raised guidance for the fourth quarter.

They're not profitable yet, Jason, but they're getting darn close. Yeah, what do they say, broken clock and all that good stuff, right? I mean, at some point or another, I mean, the statistics, you just had to believe a good quarter was going to happen. I thought you'd be a little more excited about it. I'm excited. I just, I think we need to look at this from a practical viewpoint here. I think that there was probably a little bit of a short squeeze involved with the stocks run

up on Thursday and Friday. Now, with that said, it does appear that management's efforts to get the growth engine going again are starting to pay off. You look at daily active users. That was up 14 percent, fourth consecutive quarter of double-digit growth there. They've sort of redefined their advertising landscape with some different offerings and products that focus more on the video front that they're making all of these investments in. So ad engagements doubled, the cost per engagement down 54 percent.

from a year ago. And data licensing is becoming a bigger part of the business at about 15% of revenue today and growing very fast. So this all put together gives us a company where they very well may be gap profitable here at the end of the year. And I think that once it becomes gap profitable, then we can look at it from a more fundamental sort of point of view in regard to valuing the stock. And I think it's important to note that they do finally now have sort of a leadership trifect in there with Dorsey and Noto and the new CFO, Siegel. So perhaps that will help keep this company moving forward. We want to see at least one more quarter of performance like this so we can call it a trend as opposed to, you know, could just very

well be an outlier, but we'll wait and see. And Twitter still gets such a tiny percentage of the dollars being spent on online advertising compared to Google and Facebook. They're not even in the same ballpark. So you can view that as a positive. There's a lot of upside if they crack this. Well, I think there's such a great point, Jeff. And I think advertisers are probably in a way kind of sick of the Facebook. They're not sick of it because they're making lots of money, but they'd like another platform, another place to be putting ads. And Twitter should be that. There's no question. Advertisers are looking for that. A lot of industry research does point

to that. And it's also worth noting the tailwind of the stock-based compensation as that continues to come down. Once revenue re-accelerates, that'll really make a big difference in a short amount of time. All right, guys. We'll see you later in the show. Halloween is just days of way. Up next, we'll dig into the secret world of Hershey and Mars. Stay right here. This is Motley Full Money. Come with me and you'll be in a world of pure imagination. Welcome back to Motley Full Money. I'm Chris Hill. If the most secretive chocolate maker you've ever heard of is Willie Wonka, well, that's probably because you've never heard of the Mars family. And that's just how they like it.

Mars is not only one of the biggest private companies in America. It is also one of the biggest private companies in America. It is also one of the most secretive, but our guest this week got a rare inside look at Mars. Joelle Glenn Brenner is the author of The Emperors of Chocolate Inside the Secret World of Hershey and Mars, and she joins me now from New York. Joel, thanks for being here. Absolutely, my pleasure. Let's go back in time because this is a book that you wrote, I believe, in 1999, when you were working at the Washington Post, you had a chance to

go visit Mars headquarters, which is not too far from full headquarters in northern Virginia. This is an incredibly private company. I guess my first question is, why did they let you in the front door? How did you get in the front door? Well, you know, I pestered them endlessly and made it clear I wasn't going to go away and that I wasn't going to write a story about them that, used just sort of former employees and outsiders. That, you know, that had been done time and time again.

And the only story that was really worth pursuing was one where you actually got to go inside, talk to members of the Mars family, learn how the company was managed, learn its history, understand its operations. And, of course, for the Washington Post, Mars was one of our local businesses. So they're headquartered, as you said, in McLean, Virginia. and, you know, so my assignment was pretty basic. It was, you know, I was a business reporter, and it was, hey, we want to know more about Mars.

So after endless pestering, I think the final sales pitch that landed the deal was that I said, hey, if you guys let me do hand it out, never have to talk to another journalist again, and if you hate the piece and you don't want to do that, well, then you can just use it to tell everybody, this is why we don't cooperate with the press. So I said it's a win-win, either way. And, you know, I was young and ambitious, and I made it clear that I didn't have an agenda. I really just wanted to get in there and understand what they were about. What did you think you were going to find when you got there, and what did you actually find? Well, you know, it was very interesting because, you know, as you said, there's hardly

anything written about the company. I remember going to the library in the Washington Post, and opening up, you know, the folder for information that we had, and there was one article in there from 1966, and that was it. It had become kind of this, you know, joke, the kind of holy grail of a business journalist, right, that have this company about the secrecy, about the eccentricity, about members of the family, just doing all kinds of odd things. It was that by getting inside, I get to put them into a much broader context. and what was most fascinating, to be honest with you, Mars was the most well-run company.

I was dumbstruck by the things that that company was doing the 19th, 20th century, I'm sorry, early in the 20th century that nobody else was doing. They were so far ahead of their time, the founder Frank Mars and then his son, Forrest Mars, who took over the business. I mean, Forrest was he put together a really unbelievable. program for managing his company that's unlike anything I've ever seen. Those principles, which were distilled almost 100 years ago now, they are still in place at the company today. And you will find things at Mars that you never find anywhere else. And I think a perfect example of that is that basically at Mars, everyone essentially knows

what everybody else makes in terms of their salary. And that's the reason why it works at Mars is because, like I said, boiling his management practice down very, very specific numbers and categories. And his whole management structure only had six levels to it. And the top level was the family. So in truth, you only had five levels of management. And within each of those levels, there was a published charge. And it was within each level.

So by understanding how well your division was doing and understanding where you were on that chart, you could essentially, you know, see what you were making for this. Mars is a company for their efforts. Your salary does not stay consistent at something again. You never find that a company. Here's a place where if your factory does not achieve, I'm going to see a deduction. 10% bonus to their base salary just for punctuality. I mean, these are things that are written in stone.

They're called the Mars Guiding Principles. And it's like a 30-page booklet that every employee gets. And in that 30-pages thing about how the company runs. But again, because it's privately held to put in place targets and goals and a way of managing that the public companies simply can't get away with, it has made them an incredibly efficient company and always on, the cutting edge of technology. But this is not, by definition, a cutting-edge technology business.

This is not a business that is on the leading edge of healthcare or science. They make M&Ms. And I appreciate that because I'm a fan of M&Ms. But I'm curious where the culture of secrecy comes from. I'm wondering if it is simply a product of Forrest Mars and his personality. or if it is seen as a business advantage that they're willing to exploit to every possible extent? So the secrecy is a very interesting thing. First of all, I don't know.

The story of Willy Wonka, the Raul Zol original story, was between Cadbury and Candy Business, as being this incredibly secret in this industry. And you'll understand it really quickly when I explain. explain. The ingredients in the products, they're not a secret, right? I mean, everybody knows what's in an M&M, what's in a Milky Way, what's in a Mars bar. If you can't protect intellectual property, so those are the things that all secretive about. If, for example, were to figure out how to put a crispe, a bonbon of chocolate, which they did with their candy Ferreira Roche, which is now very popular in the United States,

that little, you know, incredibly valuable. And I'll tell you, Forrest-Marz Sr. Would have given anything to understand how the Ferrara family had figured that out. Because getting a crispy cookie into a piece of chocolate that has bright fat, it has cocoa butter in it, it has some liquid in it, there's a lot of technology and a lot of science

that goes into making the candies that we eat. When I talk about technology, I'm not talking about the Internet. I'm not talking about coding, but I'm talking about things, for example, at Mars, their manufacturing systems on this planet that can match the production levels. What Mars can get out of its factories in a 24-hour period beats the competition. That's a huge trade secret. So when Mars has to have somebody come in from the outside, which is a little rare, but when they do have to bring someone in from the outside to fix someone,

something on that line or to fix a piece of equipment, they don't want anybody outside of the company to those things become your trade secret. So let's go back to your closing pitch to the Mars family for why they should let you in the building. What was their reaction to the story that you wrote for the Washington Post? Well, it was very interesting, actually. They had ordered, I think, over a thousand copies of the magazine prior to the piece being published that they intended, you know, to take to headquarters and, and I guess used in the way that I had recommended, which was to send off other journalists. But they called the Washington Post after the piece came out and they said they didn't want the

copies. They would pay for them, but they weren't picking them up. They were incredibly upset. Not for the reasons that you and I might think. It was because I had given what they considered to be, and some of their practices coming to the factory, what their timing was like coming into work in the morning, and they really thought that the piece represented a security threat to John and Forrest. And then I told them, of course,

that I was going to go on and write a book that was not just about Mars, but also about their competition. Her detail a history of the candy industry by looking at these two enormous competitors, and they were not at all thrilled. But after the book came out, I will never forget. I got a letter from Boris Mars Jr. That said all things considered, by fair, he didn't mean, you know,

fair isn't even handed. He just meant, you know, I did okay. And I think that's like the highest compliment the man ever gives out. So I was quite pleased to receive that note. It's interesting to compare these two companies, because as you said, they are obviously competitors. But when you look at the way that these two companies, companies have evolved. You have two chocolate makers, one of which is a private company that

is incredibly secretive. The other, in the case of Hershey, is a public company that might be one of the most open and public encouraging companies I can think of when you think about Hershey, Pennsylvania as a destination. It's not just that they're a publicly traded stock. They want you to come and visit. They want you to take the tour. They want you to enjoy. the theme park, and they want you to know everything about Milton Hershey. Well, you know, it's very interesting because the history of these two firms is closely intertwined, and you are absolutely right. Milton Hershey had a very different understanding of marketing in his day, and he strongly believed that just putting the Hershey name out there,

no matter how he got it out there, whether it was through the town, whether it was from a rapper that had been tossed on the ground at Hershey's name on it. whether it was stamping Hershey actually into the chocolate bar itself, he believed that all of those marketing tactics were enough to make Hershey successful. And so the idea of the town and the amusement park and all the other assets that are related to Hershey, they were all part of Milton's way of promoting his chocolate. But what's really fascinating is something that Hershey actually doesn't talk about very. much. And that's the fact that their biggest stockholder is actually the Hershey Trust. And what is

the Hershey Trust? Well, the Hershey Trust is the entity that Milton Hershey put all of his wealth into long before he died, didn't leave himself a penny. And he established that trust to fund and support a school for orphaned boys. That was his main interest and focus. He and his wife, Kitty, could not have children. And they founded an orphanage. And today, believe it or not, that Hershey Trust still funds a school that is still in the town of Hershey that most people are completely oblivious to when they go to Hershey. But the Milton Hershey School has saved hundreds and hundreds. Now it's a boys and a girl's school and it's not just orphans, but it's kids from inner city situations, unstable homes, you know, kids who've lost a parent.

And these kids would be bereft in the world save for this. They're given the best education and they go on and they make amazing lives for themselves. But when you buy a Hershey Bar, believe it or not, what you're really doing is... Last question, and then I'll let you go. Since Halloween is just around the corner, what's your favorite candy? Boy, that's a toughie, but I happen to have the palate of a five-year-old, and that's an honest admission. And I love anything that is brightly colored, super sweet, and super tangy. And so one of my favorites has got to be now and later's, if you can believe that.

I'm not really a big chocolate fan. I appreciate chocolate, and I appreciate all that Hershey and Mars have gone into producing their products. but when it comes down to it, I would rather have a lollipop or something than a piece of chocolate. The book is The Emperors of Chocolate Inside the Secret World of Hershey and Mars. And now you know that when you read it,

she did so as a fan who is someone who's not really a fan of chocolate. Joel Glenn Brenner, thanks so much for being here. Thank you. They played the monster man. It was a graveyard smash. They played the match. It caught on in a fly.

I'm next. We'll give you an inside look at the stocks on our radar. This is Motley Fool Money. Thanks again to FreshBooks for supporting this episode of Motley Fool Money. The nature of work is changing, and the Internet has enabled more people to start their own businesses and become self-employed contractors. And that's great, but if you're starting your own business, that means you've got to start keeping the books. And that's where FreshBooks comes in.

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FreshBooks is offering a 30-day free trial. Go to FreshBooks.com slash Fool. And in the How Did You Hear About Us section, just enter Motley Fool. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against. So don't buy or sell stocks based solely on what you hear. Welcome back to Motley Fool Money. Chris Hill here in studio once again with Jason Moser, Matt Argusinger, and Jeff Fisher. Time to get to the stocks on our radar this week. And for that, of course, we bring in our man behind the glass. Steve Brodow to hit you with a question. Jeff Fisher, you're up first. What are you looking at this week?

If you're a biotech investor, you have to take a look at Selgene now. The formerly $100 billion biotech leader is now about $75 billion. It's actually lost 33 percent the past month. It's a cancer, inflammatory disease treating biotech giant. One of its leading drugs saw light sales. One of its pipeline candidates had a giant setback. But the company still foresees 20% earnings per share growth annualized through 2020. And the stock trades it 7.8 times that estimate. Now that said, Chris, a year or two ago, they gave guidance out to 2020. And when they did that, I got a little nervous.

IBM has tried that. I believe eBay tried it years ago. And when you're just wrong, the stock gets clocked. And that's what's happened because they had to lower that guidance a lot. And the ticker symbol? CELG. Steve, question about Seljean. How involved are they in the genomics space?

base. And with all this genome stuff going on, we hear about all the time? I think it's become an integral part of almost any very large biotic company. But they don't talk about it that much, Steve. Jason Moser, what are you looking at? Yeah, Under Armour, ticker UA. Earnings are up here on Halloween. Here's to hoping for treat, not trick. Now that Founder Kevin Plank has a full executive team with Patrick Frisk and C.O. And David Bergman is the new CFO. I'd like to see if it doesn't be a benefit him, that he's got this full team kind of helping lead this company forward. It could

be argued that he made some bad decisions or decisions maybe that haven't paid off like he hoped previously. And there's a lot of value in having a team of diverse and respected opinions. Frisk, particularly as he has a lot of experience in retail and apparel with VF Corp and Aldo. Maybe some improvement there with the Curry 4 lineup coming out, easier comps coming down the road here for the coming year in 2018. So I'm just interested to see how they're looking at 2018 Beyond with this new executive team. Steve? When do they get beyond just sportswear? I know they kind of claim to be a little bit, but when does that happen? Well, Steve, let me tell you. About a month ago, I went on the app and I ordered three new pairs

of Under Armour Slacks. I'm going to tell you, man, I love the stock, and you know that. But these are, by far and away, the best pants I have ever bought. Matt Argusinger, we got less than a minute. What are you looking at? I'm sicking with Bidu. B-I-D-U. I just think the sell-off on Friday was a little overdone. You got a strong balance sheet. strong, improving, accelerating core business. You've got ICHE and you've got an optionality around AI and driverless cars. Steve? Would you like to visit China if you could? I would. I would, Steve. I'd take you with me, too. Three questions and an offer to go to, three stocks in an offer to go to China. What are you going with, Steve? I think I may be going with Jeff Fisher. Oh, no China trips. I'm surprised.

I thought you'd think. I thought the trip was, too. Well, the pants, too. The pants, too. The pants sound like. That was a tough call. They're good pants. All right, guys. Thanks so much for being here. That's going to do it for this week's edition of Motley Full Money. Our engineer is Steve Roydo. Our producer is Mac Rear. I'm Chris Hill. Thanks for listening. We'll see you next time.