Motley Fool Money - Big Tech Returns and Big Game Surprises

Episode Date: February 1, 2019

Amazon fails to impress Wall Street. Microsoft reports some cloudy returns. And Facebook connects. Analysts Andy Cross, Ron Gross, and Jason Moser discuss these stories and dig into the latest from Apple, eBay, MasterCard, PayPal, Tesla, and Visa. Plus, Wall Street Journal editor Nat Ives talks about the business of Super Bowl marketing. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Hey, how you doing? We've got earnings from some of the biggest companies out there. We will dig into the business of Super Bowl ads, and as always, we'll give an inside look at the stocks on our radar. But we begin this week with the big macro. On Friday, the Commerce Department reported 304,000 jobs. Added in January, on Wednesday, Ron, Fed Chief Jerome Powell said the Federal Reserve was taking a patient approach to raising rates this year. So you tell me, which one is a bigger deal for investors? Well, I tell you, Chris, it's all related.

But the statements and action by the Fed are much more important. Not only does it look like they've adopted a neutral stance with respect to rising interest rates, But it looks like actually there's a slight bias in the futures market to a rate cut. Don't hang your hat on it, however. But listen, when you get low interest rates, solid GDP, low unemployment, and tame inflation, all at the same time, you take it and you run with it because it doesn't happen all the time. Yeah, you kind of figure we may have to revisit at least a thesis or two on the banking side because we've been talking a lot about how the interest rate environment we've been expecting,

would potentially offer these banks a bit more of an opportunity and profitability. But if rates are going to hang where they are or perhaps even go down, which is kind of amazing to think about still, that may delay a little bit of what these banks may be able to do. I think Ron is right with the Fed being a little bit more important here. But that employment number was pretty impressive. I mean, wages increased more than 3% for the sixth consecutive month now. And the employment participation rate is its highest since 2013. So the employment picture in the U.S. continues to be pretty bullish. Because of that labor participation rate, you actually saw unemployment tick up a bit, and that U6 rate tick up quite a bit, actually. There might

have been some of the shutdown in there. They say they accounted for it. I'm not so sure they did. But people coming back to the labor force is encouraging. That's right. All right, let's get to some of the big earnings this week. The Web Services business grew 45 percent, but Wall Street seemed otherwise unimpressed with Amazon's fourth quarter report and shares falling a bit on Friday, Jason. Wall Street is very hard to please sometimes, Chris. A fickle bunch.

Time and time again, right? So the reason I think Wall Street is perhaps proceeding with a little bit of caution. The important thing to remember with Amazon is the metric that ultimately matters for this business, and it's simple, top-line revenue. That is the fuel that really keeps this engine humming. And so from that perspective, the company is performing well. Now, I think first quarter projections for management were perhaps a little bit lighter than what Wall Street was expecting. And when you have that, along with the fact that now we're

expecting them to hit another stage of investing in the business to build out this infrastructure, it's understandable if there's maybe a little bit of trepidation out there. But this is the same great business that we knew just even a week ago as well. Perhaps there are some concerns there in regard to India. They've been making a lot of investments there recently, but there were some changes to the e-commerce legislation there, essentially tantamount to antitrust concerns. that might make it a little bit more difficult for not only Amazon, but FlipCard as well, which is obviously owned by Walmart. All in all, though, it's still the same business, taking that same long-term approach, Amazon Web Services, as you mentioned, doing really well,

trailing 12-month sales now of almost $26 billion, operating income for the Corps, up 57%. It's really just a matter of, are you willing to take that patient, long-term approach with this company? I recommend that you do. I know I am. Yeah, and let's not forget, all those investments take a chunk out of the bottom line. So while they're profitable to the tune of a few billion dollars, they could be significantly more profitable if they turn that kind of investment spigot off. They choose to build for the future. I think that's a smart move, Basis, I think knows what he's doing. He's not really that concerned about quarterly profits, which I like.

But they could be more profitable if they wanted to be right now, but they're playing the long game. And it's interesting to see how Apple and Amazon are sort of coming to this crossroads here. Apple's always done such a good job of making money from selling the devices. Now they're trying to make money on us using those devices. Amazon's philosophy has always been, we're going to make money from you using our devices, not really from buying the devices. So we're seeing these two businesses hit a little bit of a different point of the strategy, the stage in their lives.

This week, Facebook shares had their biggest post-earnings gain in three years. Facebook up 12 percent on Thursday after a fourth quarter profit came in higher than expected, Andy. And they needed it. It was a tough year for 2018 for Facebook. But it was really, the quarter that Mark Zuckerberg really needed, revenues up 30% to just shy of 17 billion. Now, the growth rate actually was trending down over the past couple quarters, but still, mobile ad revenues up 36%. That is now 93% of total ad revenue. You're very interesting, active revenue per user at $7.37. That's up 19% year-over-year. So 7 million advertisers. across the platform. The message for me is that Facebook is still relevant, even though with 2.3 billion users on the platform, monthly active users on the platform, so it's still relevant. Obviously, they have some challenges from privacy issues, just trust issues, but a lot of advertising, flocking to get access to those billion users on a monthly basis continues

to show impressive growth on the top line for Facebook. Yeah, really in line with what we've been saying for a while, that all these concerns aside, it's really difficult to imagine an investor not making money in this stock simply because of the size of the business and the size of its user base. And I found this really interesting to where they're going to essentially stop reporting all of this granular user data and just start talking about users as a family, right, with Instagram and WhatsApp and Messenger and Facebook. I think it's a bit of a cop out, honestly, because we're not going to really get clarity as to how monetizable WhatsApp is. It sure feels like they paid way too much for that business, and we're never really going to find out if they're generating the return on it. But, I mean, they can do that. And that's

really, you got to at least admire that. Microsoft's second quarter profits came in higher than expected, but shares falling a bit this week due to concerns over Microsoft's cloud business slowing down. Ron, when we talk about Microsoft, it's always about the cloud. What's happening here? This is not their best quarter, but I'm a Microsoft bull. Two things going on here. As you said, cloud business growth slowing down, but still up 76 percent for the quarter. But as that business gets larger, just the way the math works, the growth is kind of going to slow down. It's almost inevitable, but it's still a very strong business. The other thing that investors were focused on is that the Windows operating system business was troubled due to the shortage

of computer chips out there, largely because of Intel or Intel, not really anticipating the proper growth and putting production in place to meet. beat that demand. So supplies of chips was lacking. That hurt the business. That had a flow-through effect. But still, I think this is an overall strong quarter. I wouldn't be surprised to see that shortfall of chips continue into the first half of 2019. But again, short-term problem, I think. Business continues to execute such. And Adela has done a great job turning this into a cloud business. Well, and when we just look at the stocks, and we talk about the big tech stocks and pulling

back from their highs. Microsoft is really not in the same boat as the others that we've been talking about. You look at Facebook, you look at Amazon, Apple, which we'll talk about in a second. I mean, those stocks are down double digits, 20, 25 percent from their highs. Microsoft is still pretty close to its 52-week high. Yeah, up 8 percent over the last year, which is, hey, that's pretty good. And as you said, didn't nearly take the hit as the others. And it's a fundamentally sound business with strong profits and a strong balance sheet. Shares of Apple down from its 52-week high, but bouncing back this week after first quarter results came in higher than expected. Andy, it seems like,

not that we are market timers here at the Motley Fool, but when they came out earlier in January with their warning and the stock fell, that looked like, in hindsight, a really good time to buy shares about that. I think so. Same thing we saw with Facebook, a little bit of, wow, it could have been a lot worse, or maybe investors were expecting now both revenues and operating profits were down for the holiday period for the first time in more than a decade. But it's still an amazing business and the real struggle with what they're having now with the iPhone business is slowing. And Tim Cook wants you to really think now we are building a service business over at Apple and focusing more on the services, which were up 19, revenues, up 19%

this quarter. So services good. China concerns, iPhone concerns, not so good at Apple. Am I the only one who looks at these comments from Cook? And as you touched on this as well, Jason, they're moving maybe not away from the iPhone, but they're trying to really build up the services business so it becomes more important to the bottom line. And because of that, I don't see how Apple avoids getting into video programming in a much bigger way than they are right now, whether that is they make a bid for live sports, they start getting into their own type of movie production in a bigger way.

in the way that we've seen with Amazon and Netflix. I don't know how they have all that cash and don't put it to use, because if you really want to ramp up your services, that could be a key piece to it. I mean, they are putting together video content as we speak. So that is something that is going to appear more and more on their platform. I don't know that I necessarily look at that as the biggest market opportunity out there for them today. I mean, I think that when I think about a services business in relation to Apple, I mean, I like payments. I think Apple Pay has a lot of potential. I mean, Apple Pay yielded

1.8 billion transactions more than double from a year ago this quarter. So I think if they can continue to build out Apple pay, cases to use it, communicate with merchants why they need to be using it, and then in health care. You know, I mean, Tim Cook, he keeps talking about how he believes that we'll look back at Apple decades from now and feel that the biggest impact they made was in the healthcare space. That's perhaps the biggest market opportunity out there when you think about it. And so they're making steps into that space. The partnership with Aetna. I mean, we know that telemedicine is taking off. There's potential there for them in that regard as well. So video, sure, but it is going to be a collection of things for sure.

Coming up, the war on cash continues, and based on some of the earnings reports this week, it's really not looking that good for cash. Stay right here. You're listening to Motley Full Money. Welcome back to Motley Full Money, Chris Hill here in studio with Jason Moser, Andy Cross, Ron Gross. Visa and MasterCard, both out with quarterly reports this week. Solid reports from both, Andy, but investors seemed more impressed by MasterCard. It was a better quarter. Chris, MasterCard revenues were up 15 percent versus in payment volumes, gross dollar volumes on their transactions. We're up 14 percent, a little bit lower for Visa. I think the impressive growth that MasterCard continues to exhibit around the globe warranted a little bit better reaction from investors.

They saw that when you just think about the amount of transactions and dollar volumes going across the MasterCard platform as well as Visa. MasterCard just seems to be a little bit on the higher growth side. They bought back a lot of stock during the quarter, and they bought back more stock during January. So it's exceptionally profitable, growing very fast. MasterCard continues to be the winner in that space. eBay has been under fire from activist investors, but eBay's fourth quarter profits and revenue came in higher than expected.

And, Ron, I like how CEO Devin Wenig said on the conference call, basically, I'm not taking any questions from you about the activist. Yeah, it's interesting, but yet the activist seems to be having effect. The activism does seem to be having effect. Elliott Management, two of the things they suggested were a dividend and an accelerated buyback plan, and lo and behold, what do we have here? We've got eBay paying a dividend for the first time after 24 years and adding $4 billion to their buyback program.

So some shareholder friendly action there, and I'm okay with it because this is not necessarily necessarily a high-growth company, right? We're seeing revenue up about 6 percent, Stubhub revenue up 2 percent. They added about 2 million customers to their hunt. And now they're at 179 million. So it's not a go-go growth company like it used to be. They can afford to return some capital to shareholders. Do you think that there was a stretch of time, a good stretch of time over the last, I would say, 20 to 25 years, we're paying a dividend was in some ways a stigma. It was seen, and we talked about on this show eight years or so ago, a big question about Apple was, oh, are they

going to pay a dividend? It's not going to do something to their growth prospect. eBay comes of age in the dot-com era. They pay a dividend. Nobody bats an eye. It really does seem like this is no longer a problem. Well, it's a capital allocation decision, and it's on a case-by-case basis, whether that's a good decision or not. In this case, they can afford to do that because they don't really need the cash to plow back into the business. In fact, they're thinking about maybe, you know, jettison stub hub and classifieds and doing things like that to create value based on what the activists are saying.

For the third time in less than two years, Tesla has a new chief financial officer. The revolving door in the C-Suite overshadowed the fact that Tesla posted another quarterly profit pushing shares higher this weekend. Chris, you got that right. Overshadowed a really good quarter with deliveries at almost 91,000 up 205 percent from last quarter. revenue at 7.2 billion, up 120 percent, and profitable. So that quarter for Tesla was really pretty impressive. Unfortunately, the retirement of the

CFO and now hiring as the CFO, Zach Kirkhorn, who at 34, will be one of the youngest CFOs, got a lot of the attention. But the quarter that they announced represents a pretty continuing process of Tesla, continuing to be more and more relevant and offer products that people want, and They gave some really nice color around Model Y and Tesla Semi coming out in the next year or two. We've talked before, Jason, about Kevin Plank, the CEO at Under Armour, and the challenges he's faced over the last few years in terms of keeping an executive team around him. It really does seem like the mantle has been passed to Elon Musk because Reuters had a story out this week that wasn't even a story.

It was really just a list of all of the executive turnover at Tesla over the last couple of years. I mean, it's a valid concern, and it's one of the main reasons why we had Under Armour on hold in million-dollar portfolio for a while. You need to see signs that there is a culture there that people want to be a part of, right? And so it was very reassuring to see, actually, that Under Armour recently hired an chief culture officer, because it seems like Plank is really taking this seriously. Perhaps Elon Musk could take a couple of notes from what Kevin Plank's been doing. Ain't going to happen. Probably not.

Shares of PayPal holdings down a bit this week after fourth quarter profits fell six. percent. Jason, they're ramping up the spending. That's hitting their margins a little bit. I don't know. I'm a shareholder of this company. I'm good with this report. I am a shareholder as well, and I agree. I'm good with the report. The stock sold off a little bit based on the expectations game. But you have to completely ignore that. The fundamentals of this business are as strong as ever. We're talking about Facebook and how scale is such a competitive advantage. Let's talk some big numbers here for PayPal. Total payment volume for the year of $578 billion, up 26%. Total transactions for the year, $9.9 billion, up 27%. They now have 267 million total active accounts. Mobile total payments volume clocked in at $67 billion for the quarter. Venmo is now driving this business. They're at a $200 million run rate. There are a lot of things going on with this business, and they are all good. So I think if you're a shareholder, you've got to look at this quarter and feel very encouraged. Two things there. First, as someone who uses Venmo,

to send money to my college kid. We've said this before about things like Costco and Amazon Prime and even Netflix, like, hey, if they want to bump up the price, I'll pay it. Venmo has some room there. If they want to start raising prices in terms of some of their transaction fees, because they're tiny. That's a really good point. I mean, for the longest time, there were no transaction fees. And really, the fees that they've introduced are all based around that instant funding option as well. And there is risk that PayPal takes on, that Venmo takes on with that option. the more data they get on those transactions, the more mitigated that risk becomes.

For all of the innovation that we've seen in the payment industry with PayPal, with Venmo, with Square, with all these others, am I wrong in thinking that Visa and MasterCard have, I hesitate to use the word unassailable, Andy, but it seems like the moats that those two businesses have built are incredible. They're extensive, Chris. I mean, that's one reason also why they have returns on equity in capital north of 50 percent, and with profit margins, some of the highest in the SP 500. So you just think about the ability for them to be able to continue to take a little bit of a lick off the ice cream cone. Every transaction continues to grow and grow. That's just really good for MasterCard.

Their need to continue to reinvest back into that business is really small, hence why they buy back so much stock over the years. And to come back full circle to eBay and activism, the PayPal discussion reminded me that it was Carl Icon back in the day that pushed to have PayPal spun off of eBay, and what a tremendous value creation that was. Let me just take a minute here and personally thank Carl. I really appreciate that. I was just going to say, do Jason and I need to send him like a box of chocolate? Do something? All right, Jason Moser, Andy Cross, Ron Gross, guys.

We'll see you later in the show. What's the best part of the Super Bowl? It's the commercials. We'll dig into those next with Wall Street Journal editor, Nat Ives. Stay right here. You're listening to Motley Full Money. Welcome back to Motley Fool Money. I'm Chris Hill. On Sunday night, the L.A. Rams play the New England Patriots and Super Bowl 53, with over 100 million people across America expected to watch the game. Companies looking to promote their products and services to that audience will pay around $5.2 million for 30 seconds of airtime. Here to help us make sense of it all is Nat Ives, the editor of CMO today, the marketing and media newsletter of the Wall Street Journal. He joins me now from the journal's Newsroom. Nat, thanks for being here.

My pleasure. This is the most watched TV program of the year, and it has been for decades. Most of us watch the commercials for fun. You do this for a living. When you watch Super Bowl commercials, what are you watching for? Honestly, anything that surprises me would make me happy. You know, I think I might be a little bit jaded as one who watches for a living. They begin to show certain patterns that take

some of the fun out of it. But a big laugh or a stirring moment is really what you want to see as a consumer. I suppose if I was a marketer, I would also want to see a compelling sales pitch. I'm glad you mentioned the sales pitch because, you know, there are ads that I think we all enjoy just for fun, but it doesn't mean we're necessarily going to rush out and buy that product. How do Super Bowl advertisers define success? Unfortunately, I think a lot of them define success based on the pop it gets. in the press and online and YouTube views in the days surrounding the event. Unfortunately, that wears off very quickly by the Wednesday after the game. Nobody wants to talk about any of this

anymore. And it's not always evident that you've gotten your money's worth in terms of sales lift. It depends on what your goals are, of course. If you're a brand that nobody's heard of and you need to let everybody in the country know all at once, this might be the right way to do it. You're going to need some follow-up marketing, of course, but it's a nice way to say hello and announce yourself. If you're a brand, everybody knows and you need to fend off upstarts, perhaps it's another way to maintain your position. But, you know, if you're a brand that is just introducing a funny joke and getting a week's worth of PR out of it, you could be rightly asking yourself, did I achieve incremental sales by spending that $5.2 million?

I want to get to some specific companies in a minute, but first, are there one or two commercials that we should keep our eyes out for? The ones that I've seen so far are not blowing me away. I like Bud's ad about the wind power that it uses. I weirdly like Mikhailibulchre Pure Gold's asthma ad. I should say ASMR. This is Zoe Kravitz whispering into a microphone for a couple of, 30 seconds. It's going to stand out in an otherwise very noisy day.

A lot of the other ones are, you know, commercials I wouldn't be surprised to see any other day at a week. So I was looking at a PowerPoint that the Wall Street Journal had put together about advertising on the Super Bowl. And one of the things that struck me was over the last, I think it's 25 years, Anheuser-Bush, Pepsi, General Motors, Coca-Cola. They're among the big public companies who have spent the most amount of money on airtime. These are also incredibly well-known brands, particularly in the case of Budweiser, Pepsi, and Coke. Do you think that that is money well spent? You know, it takes a lot more research than I personally have done to authoritatively answer that. But I would say in the case of AB, for example, they really are defending their position as America's brewer.

They're advertising both their established brands, Bud and Bud Light, and, you know, regularly rotating through. new brands, including a hard seltzer this year. It's like alcoholic sparkling water that they're trying to get off the ground. So, you know, I think that they've got their purpose, and that's why they're going to have eight and a half minutes in the game this year, which is incredible. For the first time and over a decade, Coca-Cola is not advertising during the game itself. I was a little surprised by this, in part because of their history of spending during the Super Bowl,

but also the game is in Atlanta. That's ground zero for Coca-Cola. Why aren't they advertising during this game? Maybe Coca-Cola figured out a better way they thought to use their message and timing. They've got this unity ad that says, you know, he disagrees, she disagrees, but they both drink Coke. They're running it right before the National Anthem. So it's a really fitting spot that actually is still going to have very high tune-in, probably costs less than the very next spot that's going to run in the game.

and they'll see what they get out of it. I support the idea of marketers that are usually in sitting out once in a while or trying something different just to see if they can detect an effect. And if they can't, then maybe they can save themselves $5 million every year. So for years, Amazon did not spend a dime on television advertising. And this year, I think it's going to be one of the biggest spenders during the Super Bowl. Obviously, CBS, the network that's airing the game this year is happy about that. Amazon is famous for the way that they analyze data on their website.

I'm a little surprised that they're spending this much on television advertising, just because, as you indicated, it can be a little tricky other than just sort of measuring buzz in media reports to evaluate how much a television ad is. doing for a particular product. Are you at all surprised at the way that Amazon has jumped into television advertising? I mean, Amazon is being driven by marketing, not its website, for example, but it's new consumer electric electronics product. It's trying to sell the Alexa and Alexa powered devices, and that's why you see Google in the Super Bowl again this year as well. These guys have a package of electronics. They're trying to sell in stores and online, and they're also trying to

trying to become the default, the Coke to the Pepsi in the voice assistant world. You know, this is a wide open segment that's probably going to get bigger and bigger and bigger. So they've obviously made the bet that telling everyone in America that they've got the voice assistant you want is worth it. Amazon's two and a half minutes in the game this year actually also includes a trailer for its Amazon Prime streaming video service, which is another highly competitive, direct-to-consumer business that takes a lot of spending both on the content and the marketing to win. Another big tech company that has a relatively new consumer device is Facebook with their portal device. Unless I miss something, I don't think Facebook is advertising during the Super Bowl. And I'm curious how Facebook, particularly in the wake of 2018, which was a year,

year of consistently bad publicity for Facebook. How is Facebook regarded in the advertising community right now? I mean, their recent ads, to your point, have been for portal, and to say, we're sorry, we're going to do better. That's what they've been on TV for in 2018. And they did a lot of portal ads in the holiday season, so I wouldn't have been particularly surprised to see them advertising in the Super Bowl here, that they're not may reflect some business considerations. it may reflect now that the holiday season is over the calculation that it's better to get out of the spotlight for a second and try to clear up their brand. I mentioned at the top that the price of 30 seconds of ad time during the game is $5.2 million. If it's higher than last year, it is only incrementally higher.

And I'm curious if you have any insight into CBS, which obviously they're making a lot of money off this game. They're charging $5.2 million for 30 seconds. But they've also turned down some advertising. And most famously, there was a medical marijuana company that wanted to buy a 30-second ad and CBS turned them down. Why is that? CBS and the NFL both are going to be very careful with their image and the image at the Super Bowl. this is considered a secular holiday, this is considered a game for the entire country to watch, you're not going to find anything that's terribly risque or off color in this year's game.

I mean, there's certainly ads that have aired in decades past that we would probably consider offensive now and it would generate a lot of media coverage, but you're not going to see weed in any form advertised in an NFL property anytime soon. They just, the NFL got around to letting liquor into NFL games. And this year, even liquor is not allowed in the Super Bowl. So cannabis, I think, is beyond the pale for these guys. They're trying to remain looking as squeaky clean as they can. And the NFL, too, has plenty of controversy to deal with.

They don't need new headaches. All right. Last question, and then I'll let you go. Separate from the Super Bowl, just when it comes to advertising writ large, in 2019. What is something that you're watching this year? It can be a trend. It can be a particular company. What is something that is on your radar in the advertising and marketing industry? I'm always keeping an eye on what the balance is between ad-supported media and media that one way or another lets consumers stay away from advertising. So, for example, Netflix

versus, you know, ad-supported Hulu versus an ad-free version of. of YouTube. There are all kinds of new streaming services coming along, and of course, there are the ad blockers online. The ability of marketers to reach consumers in any sort of normal way, recognizable way, is being constrained. So seeing what channels remain and what new ones come along is fascinating, because everything else outside of that is asking a completely different skill set from marketers, and that's creating content that people actually want to see. If you want to know which businesses are making headlines for their marketing spends, you can follow Nat Ives on Twitter. You can also sign up for CMO today. It is the free email newsletter

about media and marketing from the Wall Street Journal. Nat, I know it's a busy week, so thanks for taking a few minutes and enjoy the game. Thanks for having me. You too. Coming up, we'll give you an inside look at the stocks on our radar. This is Motley Fool money. Friends are here for Monday night. 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're here. Welcome back to Motley Fool Money, Chris Hill, here in studio once again with Jason Moser, Andy Cross, and Ron Gross. Our email address is Radio at Fool.com, and with the big game on Sunday, this is a very timely email from Bill Davis.

He writes, there was a great New York Times article this week about the huge growth coming in sports gambling based on recent legal changes and attitudes and outlooks in the sports culture. Can you talk some about this expanding market opportunity and maybe suggest a basket of stocks in this area? Jason, we've talked about the War on Cash basket, the health and wellness basket. Is there a sports gambling basket? Well, okay, I want to approach this from the perspective. I'm not a big gambler, so it's hard for me to actually see where the competitive advantage lies in any one particular entity. Where I do feel like there is an advantage is no matter what, that money's got to go from point A to point

be. And so I've talked often about how with this move, I think that all of these payments providers have an opportunity to make some money from this market. So, you know, the war on cash basket certainly applies there to a degree. But I'm also going to push Bill over to our recent episode of Industry Focus. January 15th, Nick and Asit did a whole show on casino stocks and sports gambling. It's like an hour long. And they really dug into a lot of that stuff. So I would encourage him to go back there. Listen to the January 15th episode of of industry focus. Ron?

Bill, because I care about you and our listeners, I did a little research here. These are not recommendations, but the main players here, you want to check out. The Stars Group, William Hill, Boyd Gaming, and if you're a fan of the Fandul type companies, Patty Power Betfair, out of Britain, actually acquired Fandual, so that would be a way to play that. William Hill, no relation. No, no. Before we get the stocks on our radar, any proper

bets for the game of interest to you guys, because the one that always gets me is the over under on the singing of the national anthem. I feel like, like you, Jason, I'm not a big gambler, but I look at that and think, gosh, that seems like the easiest thing in the world to fix. Yeah, and it's usually really great fodder for the Stern show that following Monday, because they always have fun with that and then juxtaposing it with Robin's efforts in the National Anthem one time ago. It's funny stuff. You can bet this year, and most years, on the color of gator aid that will be poured over the winning team's coach.

Seems like you could get a little insight info on that, too. Absolutely. I'm happy to share some news. It is really the best kind of news. Earlier this week, our friend and colleague Matt Argusinger, became a father. His wife gave birth to a healthy baby boy, and I'm sure Matt did a great job standing next to her in the hospital while she did all the work. Everyone's doing well. We could not be happier in part because all of us around this table. and also behind the glass. We are all fathers, and so we all know just how sleep-deprived Matt's

going to be for the next year or so. So with that in mind, we've got a very special stocks on our radar this week. It is stocks for baby Argusinger. Not that Matt is not a great investor. He is, but we're going to offer up some ideas for this baby boy and we'll be conservative in our timeline because, look, you know what this kid has ahead of him? Many more decades. of investing than we have. A lot of time. We'll put together some ideas for when he turns 20 years old. So, radar stocks for 2039. Steve Broido is not only going to suggest a stock of his own, but he's going to pick one for the baby to double dot. So we're going to have a five-stock portfolio. Ron, you're up first.

All right. If little baby Argusinger is going to be a snappy dresser like his dad, I've got to go back to Carter's. CRI, the leading manufacturer of children's clothing in the U.S. under names like Carter's and Ashkosh-Baghash. As I said, they are the dominant player here. They've performed well over multiple market cycles, 2.2% dividend yields, buy back a ton of stock. They're digesting the Toys R Us bankruptcy. And there are some China trade issues here. So the stock has suffered, but that makes it awfully cheap. Steve, question about Carter's? So I know Carter's stores. Is Carter's merchandise available outside of Carter's stores? They make specialty collections for folks like Target, Walmart. They have a specialty collection for Amazon. So you can get them out there.

I'm glad you knew the answer to that. Jason Moser. I was thinking we probably have a recommendation for Maddie and Gene, too. They're going to have to set that coffee maker on stun. So why not buy a few extra shares of Starbucks? But for the young man, I'm going to go back to my daughter's portfolio. The most recent edition for them, Santa brought them a few shares of Square. think that's not a bad pick here either. You know all about that business. They're building out the Square Financial Services side now as they've resubmitted their banking license application. And I think that's going to be a really neat part of the business once they build it out. And I'm really encouraged with the things that they're doing. They're opening up access to capital, new products and services for its customers. I think that'll help them build up a pretty enviable competitive

position over time. So, you know, hey, listen, man, if you're looking for the ultra long term, that probably is a good addition. Steve, question about Square? So I hear the name Square. all the time. I still don't really know what they do. Help me. I know it's the little, I know that you swipe your credit card on the little thing. Is that it? It's like a circle. That is basically it. It is a hardware company that has developed a very robust ecosystem behind that hardware, and they help businesses deal with payments, inventory, management, all sorts of things. Andy Cross. I'm going to stick with the advertising theme for a young Mr. Argusinger here and go with Trade Desk symbol TTD, one of the most impressive companies I followed over the past year.

They are the masters at programmatic trading, advertising, matching with clients and ad impressions. On average, per day, their clients, who are mostly advertising agencies, have exposure to almost 600 billion ad impressions per day. So they are really helping drive the automated programmatic trading, matching up buyers and platforms, publishers with ad impressions, and the growth has just been 50% a year for the past year or so, very profitable, beautiful balance sheet, and it's a founder run by Jeff Green, who's really impressed me. So I like Trade Desk, TTD for the next 20 years, Chris. Steve?

Does a company like Trade Desk work with people like Facebook? We talked about that earlier in the show. So Facebook and Twitter, those are kind of closed-walled-off gardens. kind of all on their own. So really, Trade Desk is helping all the publishers and ad buyers out there outside of some of those walled gardens. So that's three stocks for the portfolio. Steve, you get to essentially pick one to double down on, and then if you have one of your own, that would be great. I think Square. I'm hearing the war on cash, and I think that would be terrific.

Hey, now. And in terms of my stock, I see the future. Ron Gross, it is round. It is filled with tires. It is Titan International. Oh, my goodness. Coming full circle. Awesome. I want to go back to something you mentioned. TWI.

You mentioned Starbucks. I was looking at this, and I'm a happy Starbucks shareholder. The market cap of Starbucks is $85 billion, whereas Duncan Brands is $5 billion. So just in terms of growth opportunities, Matt Argusinger, a proud son of Massachusetts, I kind of feel like maybe that Duncan Brands would be, at least in terms of the next 20 years, a better growth opportunity. Perhaps. It doesn't really have the footprint right now, certainly not outside of New England.

Perhaps. But, you know, with all of his New England loyalties, I always see a Starbucks cup on his desk. So, I mean, explain that. That's fair. That's fair. He's going to love watching that game this weekend with his boy. That's going to be great. Hopefully, as Jason said, hopefully he's got a lot of conflict.

All right, Ryan Gross, Jason Moser, Andy Cross, guys. Thanks for being here. Thanks, Chris. That's going to do it for this week's edition. 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.