Motley Fool Money - Big Tech's Big Miss

Episode Date: April 22, 2016

Alphabet, Microsoft, and Netflix slip. McDonald's surprises. And Under Armour rises. Plus, CNBC's Becky Quick previews the annual Berkshire Hathaway meeting.  Learn more about your ad choices. Visit megaphone.fm/adchoices

To realize the future America needs, we understand what's needed from us to face each threat head on. We've earned our place in the fight for our nation's future. We are Marines. We were made for this. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money Radio Show. I'm Chris Huln, joining me in studio this week from Million Dollar Portfolio, Jason Moser, and Matt.

Matt Argusinger and from Motley Fool Pro and Options. Jeff Fisher. Good see you, as always, gentlemen. Hey, Chris. Erings Paloza is underway. We will get to the latest results. CNBC host Becky Quick is our guest this week. And as always, we'll give an inside look at the stocks on our radar. But we begin with two of the biggest names in technology, Alphabet and Microsoft. Let's start with Alphabet. First quarter profits coming in lower than expected as investments in new projects are on the rise. Maddie, I thought CFO, Ruth Porat, I thought she was brought in to keep those moonshots in line. What's going on? Well, I was, I don't know, I'm searching or actually Googling even for anything that's bad with these results.

And yes, they did miss estimates for revenue and earnings very slightly. But look at the results. You have 17% growth in revenue, more than $20 billion in revenue. Let's put that $20 billion in perspective, quarterly revenue for Google overall. And a 20% growth in operating profits. You know, steady growth in the core, Google business, mostly advertising. 31% operating margin there. And like last quarter, they broke out the other bett segment, which includes fiber, nest, Calico, the Life Sciences Division, Google X. And growth there was over 100%.

Just keep in mind, it accounts for less than 1% of the revenue. So really, a lot of great things happening with Alphabet. And I just think, you know, right now you're paying about 22 times earnings for the business, forward earnings for this year. with all the optionality, the core business, there's a lot to like about Google, sorry, alphabet at the price right now. Okay, but somebody doesn't like what's happening because this stock is down 5% on Friday. Well, and to that point, though, I think that this is a company, you want to pay attention to what management says they're going to do versus what Wall Street maybe is expecting, because they don't really play that game. It's sort of a page out of the book of Jeff Bezos,

right? They kind of do their own thing and aren't really concerned whether they meet analyst expectations or not. So focus more on what management's doing, what they say they're going to do. If you can hold them accountable there, and it sounds like they're doing what they're saying they're going to do. I was going to say the same thing, Jason, that it's funny the stock is down because they miss expectations, air quotes, when Google does not give guidance. So Wall Street was wrong, and they're punishing Google for being wrong. Exactly. But investors could actually win from all of this, right? It's an opportunity, perhaps, to either start a position or build on a position with really one of the most important

businesses on the entire planet? I think among tech companies, Tech Bellwethers, of the 21st century in maybe 2010 and beyond, I think Google is that. And so this could be an opportunity to find a position. Microsoft's third quarter sales came in north of $22 billion, but profits were light and shares down more than 6% on Friday. What do you think, Jeff? Well, again, as with Alphabet, I think part of the situation is stocks have risen quite strongly in the last month or so. And so, when you're... you don't then exceed expectations, the shares give back some. That said, this was a big give back with Microsoft down 6, 7 percent on Friday, going into Friday morning. And what really

is knocking the stock down is that the results, and more so than that, Microsoft's guidance for the next quarter and the next year, let me restate that Microsoft's guidance for the next quarter means you need to lower guidance basically for the next year. And that's why the stock is down so much. But that said, the business is strong. Cloud is growing rapidly. And the company looks on track for cloud to be about 33 percent of its business by 2020. It's made a great transition. Everything is strong overall. And the shares are doing well overall the last three years. 33 percent of their business. I mean, I feel like Sussie and Adela basically just launched the Microsoft Cloud business a year or so ago.

Things move fast in tech, Chris. Apparently, they do. I think it says something about just how huge these companies are that on Friday, combined, fairly or unfairly, more than $30 billion in market cap, knocked off of these two companies combined. Yeah, you know, so now Microsoft trades at a low 20s multiple to free cash flow. It's getting a lot more respect than it did three years ago. In fact, the last three years, the stock is up 26 percent annualized, crushing more than doubling the S&P. But we would probably all be surprised to hear that the last 10 years Microsoft has beat the S&P. It's up 8 percent, almost 9 percent annualized compared to 7 percent for the market. And so even during its slow period, the last seven years prior, it's been strong in the last three years, it's beat the market. So kudos to Microsoft. I think it's interesting to put Alphabet and Microsoft next to each other.

You just said it, Jeff, they trade for about the same multiple. Maybe Microsoft's a little cheaper. And yet I think Google or Alphabet, it's really going to probably double the growth rate of Microsoft, I'd have to say over the next five years. So that tells me, I feel like there's more value in that. You like a little bit better. Global same store sales rose 6% for Starbucks, but second quarter revenue was a little light and guidance for the third quarter wasn't great.

Jason, a lot of companies would kill to have 6% cops. I don't disagree. I think the most impressive part about this business, really, today, it's kind of like Walt Disney. It just has so many different ways to succeed now. And it's not all that long ago where we're kind of looking at Starbucks and thinking, maybe the growth is kind of peaked out. They're talking about building Starbucks is inside a Starbucks restaurant or restroom.

And obviously, there is a bit more to the world than just the domestic play here. And I think they're starting to exploit that phenomenal growth in China, 18 percent sales growth. And it's really interesting to see the strategy there on a base of about 2,000 stores today in China. Schultz says they're going to build 500 stores per year for the next five years in the region. And this is coming from perhaps the most educated CEO when it comes to China domestically here of any CEO that I can really think about.

He travels to China quite a bit and really knows the market there. So I wouldn't put it past them to beat that number, actually, when it's all sudden done. And so the goal constantly is to figure out ways to bring in more customers and to get them spending more. Again, this is a situation where the market was a little bit less than enthused about the comps that Starbucks turned in, but they're able to kind of make up for that by opening new stores. And we know comps kind of go up, they go down. They're somewhat cyclical. You set those high water marks. You've got to beat them and they go lower and then you've got to ease the comps clear the next year. But this is still a very, very relevant business with a number of different

ways to win, particularly in the channel development, single serves. They've just cracked the code on the Nestle espresso machine, which really opens up the entire world for them in the single-served market. So I think plenty of reasons still to be excited about these guys. I think when you've been investing in a long time, you have the advantage of seeing things cycle again and again, and you've learned not to get upset by them. So this week, seeing so many marquee names, Microsoft, Alphabet, Starbucks, Visa, decline on earnings. If you're new to investing, that might make you nervous and think everything's coming apart. But we've seen this many times in the past, especially when the quarterly earnings are coming right after a strong period for stocks.

They just give some back on earnings and then continue toward the long-term story. I agree with Jeff. And I think Starbucks, in particular, the China number, they have, what, 2,000 stores in China right now, opening 500 a year. And I think Schultz has come out and said that he thinks the China business eventually could be bigger than Starbucks's business in all of North America and how many years that takes. But just putting that in context with the size of the company, that is tremendous. That's not too far-fetched of an assumption, either when you consider that their middle class is essentially projected to be somewhere in the neighborhood of 600 million people by 2020, 2021. And one little interesting factoid here, I'll let you move on, Chris. But Starbucks is going to be opening up a store right at the very entrance of Shanghai Disney.

How do you think that one's going to do? I have a feeling it's going to work out okay. No lines. First quarter profits for Netflix came in higher than expected. The company also added more than 2.2 million subscribers in the U.S. That was also higher than expected. And yet, stocked down 12% this week. What gives, Maddie?

It's all about those international members. You know, the expectations for this current quarter, the second quarter is that they're going to add 2 million international streaming subscribers. The original expectation for that, at least the consensus expectation, was 3.5 million. So that's a big kind of downshift in the number of new subscribers. internationally. And really, it comes down to, it's just, if you think about it when they opened, when Netflix opened in 130 additional countries to start the year, there was all this excitement. And you can see that investors, I think, were already extrapolating, oh, the international member growth is going to be huge for Netflix this year. Well, it turns out it's actually

quite hard to open in that many countries. I mean, if you think about it, Netflix, Vietnam, for example. I can't imagine there are a lot of potential Netflix subscribers with, A, international credit card, and B, who are interested in a lot of English content, which is. what mostly Netflix has. And so it's just really hard, and I think Netflix is going to have to spend a lot of money and spend a lot of time getting localized in a lot of those markets. But eventually, if they can set the stage right this year, we can see some really big growth in the coming years. And those are good points, Maddie. And I think the most important factor for Netflix long-term

is the pricing power that it does have and continues to display. There was a little bit of grousing over this latest price increase, but people aren't leaving. People will stay with it. And it's still cheap enough that they can move that price upward for a long time to come. Intel's first quarter profits came in higher than expected, but that was overshadowed by the news that Intel is cutting 11% of its workforce. We had talked on last week's show about PC sales continuing to fall, and Jeff, it is clearly hurting Intel, among others. Yeah, PC sales really hit Intel as well as Microsoft, both on the commercial side. Businesses are not buying that many PCs right now and, of course, consumers. But Intel has been fascinating to watch the last many years, as I have, almost every conference call I've been through for, I don't know, eight, nine years.

And to see them slowly transition away from the PC has been great. They've done it, I think, really smartly, really gradually. And this is another step in that direction. Now they are cutting about 10% of the workforce, but they have to right-size the business for the current environment and put more and more focus on cloud and mobile devices. And it makes a lot of sense. The main concern I have with Intel right now, which I think is around fairly valued where it's at, is will margins take a hit as mobile chips become more and more a part of revenue? Because there, they don't have the advantages that they do on PCs. Coming up, fast food, beer, and a way to pay for them both.

Stay right here. This is Motley Full Money. Welcome back to Motley Full Money. Chris Hill here in studio with Jason Mozer, Matt Argusinger, and Jeff Fisher. McDonald's same store sales in the U.S. rose nearly five and a half. It is the third quarter in a row they've grown U.S. sales. Stop the fight, Jason Moser. Stop the fight because all-day breakfast is the winner by TKO. Sounds like it, doesn't it? I haven't tried that yet. I think I probably have to swing by there and at least do some market research, I guess. This has really been a phenomenal turnaround

for a brand that many of us, and myself included, thought its best days might be behind it. I think the catalyst here mostly has been Steve Easterbrook, right? I mean, he took over after Don Thompson really just didn't seem like he knew what to do with his business. I think it's also worth noting. There's really nothing to – I'm not trying to take away from Steve here, but timing was – his timing was impeccable, right? I mean, he came into a business in trouble, pretty easy hurdles to clear. As they say, timing is everything, and I think his worked out very well for him. Breakfast is no question it's working.

They're going to focus more this year now. on keeping costs under control and really making sure they have that menu optimized for the things that consumers really want. We were talking about Starbucks earlier in the China opportunity. There is an opportunity for McDonald's there as well. They plan to open 250 stores in China this year. A bit of a lower sort of hurdle there than maybe Starbucks is posted. And given the success with breakfast, it'll be interesting to see kind of how Starbucks and McDonalds compete in those international markets. But all in all, a a very good turnaround for a company that was really on the ropes for a while.

First quarter profits for Boston Beer Company came in much lower than expected, and shares fell on Friday to their lowest point in almost three years, Maddie. They're taking a beating. It's been a very tough year and a tough start of 2016 for Boston Beer. Their depletions rate, which is kind of the sell-through rate for their distributors, dropped 5%. And going into the year, and Jason and I kind of looked at each other at the beginning of the year, they were kind of guiding for mid-single-digit depletion rate.

rates. And we just thought, wow, that's going to imply a heck of a turnaround in the second half of the year. And, of course, no, that's not going to happen. They're guiding to depletion rates of negative 4% to positive 2%. That's a big kind of downshift in what they were kind of looking for. And I thought Jim Cook really captured it, the chairman founder of Boston beer. He captured it on the conference call when he said, you know, we believe Sam Adams has lost share due to the increased competition and continued growth of drinker interest in variety and innovation. Really, there's been no beverage market hotter than craft beer. and I think what's happened is there's so many upstarts, so many small micro and small breweries have really climbed into the market,

and that's just kind of crowded up the shelf space a lot. And so if you're a consumer that likes Kraft Beer, but also likes to experiment with new bears, maybe you're not buying as much salmon as you had in the past. So I still think over time, and we've talked about this as well, is that when there is a downturn, maybe it's a downturn in the overall economy or just in Kraft Beer, I think that's when Boston Beer is going to get back a lot of its share. It pays to have size in this business. And so this is one of those ones where you're almost, if you're a Boston Beer's shareholder, you're kind of almost rooting for a bit of a downturn. But do you need to root for a downturn to the point that Boston Beer is able to snap up? Do they need to go more in the acquisition route?

I don't think they'll do that. They might make small acquisitions with their alchemy and science, but I think they're more interested in sort of developing new beverages, new flavors, rather than acquiring. Fees's first quarter profit and revenue both came in slightly higher than expected, but the company lowered sales guidance for the rest of the fiscal. year and guidance trumps results, Jeff. Yes, Chris, and what's happening is cross-border transactions when people travel and then use their card in a different country remain really weak. And what's interesting in the January conference call, Visa said, you know, if trends don't pick up cross-border, we're going to have to lower guidance later this year. And you don't see that sort of, you know, forewarning of a possible warning, all that frequently.

I respected them for that. So now they did come out and say, well, what we talked about in January, the trend hasn't changed. so we're going to lower guidance for the rest of the year. But overall, the business is strong. It's very strong domestically here in the U.S. China remains a giant opportunity as they get ready to enter that market. And they're growing pretty well, Chris, despite a weak economic environment. And as they say, and as we know, when the economy picks up around the world,

this is like a coiled-up spring visa, master card, they'll really benefit. Have they given any specific guidance around China and what they think that can mean for their business? Yeah, and this is why I love following these businesses, Visa and MasterCard. They talk about the whole world. And China Commerce right now, they're seeing a lot of lower exports from China, and any kind of commodity-driven country exports have just fallen off the cliff. So emerging markets are weak. But what they think China can do for their business,

they haven't gotten into specific numbers, except to say that it could be very large. You know what? I'm not a shareholder, but I'm looking for something more specific. I can tell you China's very large, and I've never been there. I can just look at the map. China's a big country, Chris. Under Armour's first quarter profit and revenue came in higher than expected, thanks in no small part to rising sales of basketball shoes. Sure is nice when you've got the best player on the planet wearing your gear, isn't it, Jason? It doesn't hurt. It doesn't hurt at all. I have fielded the question a number of times lately. How big?

can Under Armour get? How far can they go with this? And my answer is take a look at Nike today. It's about five times the market cap at $100 billion market cap that Under Armour is at $20 billion. I use Nike as the proxy. Aspirational, sure. But Kevin

Plank's goal is to knock them off the top of the mountain. Now, whether they actually do that or not, that remains to be seen. But that's what he's after. And so that's why you look at Under Armour and think it's such a wonderful long-term holding because there's so much room for this company to run. And when you look at the numbers, they just keep on churning out results.

This is a 24th consecutive quarter of better than 20% revenue growth. As you mentioned, footwear was the All-Star this quarter, 64% growth, thanks to Steph Curry, more than anything. And they are starting to show some results with the connected fitness acquisitions, the UA Health box that they're selling. I think the risk that comes here with Under Armour today, it trades at a high event. evaluation. And what we're noticing here, this is the third quarter in a row that growth in inventory has outpaced growth in revenue. Now, this is by design. They are maintaining higher inventory levels in order to try to serve the customer better, get product into the consumer's hands faster. But we want to look out for a trend here, because if that's something

that's sustained over a long periods of time, it'll result in margin pressure. And we saw a little bit of that this quarter, but the market kind of forgives them now because there is so much opportunity there. But we'll keep an eye on that. All in all, though, still a wonderful business. And if you're a shareholder and underarmber today, keep them. Pretty amazing that a few years ago, there was a question of whether or not they could compete in footwear at all. I know. It's just been phenomenal the performance there. All right, guys, we'll see you later in the show. Up next, we'll get a preview of the Berkshire Hathaway annual meeting from CNBC host, Becky Quick. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill.

Next weekend, more than 40,000 shareholders will make the trek to Omaha, Nebraska for Berkshire Hathaway's annual meeting, the highlight of which is the Q&A session with Warren Buffett and his right-hand man, Charlie Munger. One of the moderators for that session is our guest this week. She is the co-host of CNBC's Squawk Box. Becky Quick, always a pleasure to talk with you. Hey, Chris, it's great to be back with you. Thank you. Now, in past years, there has been an obvious question heading into the Berkshire Hathaway annual meeting.

One year it was about succession planning. One year it was about potential acquisitions because Warren Buffett was doing a lot of talking about his so-called elephant gun that he wanted to use. What is the big question heading into this meeting? Oh, man. You put me on the spot already, Chris. I don't know. It's a lot tougher to find the obvious question around this. Look, part of what people are going to want to know showing up this time, last year was the 50th anniversary, the 50th year that Warren Buffett had been in charge at Berkshire.

Hathaway. So I think there was a lot of special things that they kind of brought out. Some of the CEOs of the biggest companies they're invested in, like Wells Fargo, Coca-Cola, IBM, and American Express, those CEOs were all there. It was a huge showing. This year, part of it's going to be seeing some of the new parts, because, as you mentioned, that elephant gun that he has, he's constantly on the look for new acquisitions, and they've brought precision cast parts, so we'll be hearing a little bit more about those parts of the company. And Berkshire really has become a much more industrialized company over the years. It used to be much more heavily insurance-based. But with the big acquisitions that he's made, like a Lubrizol, like a

precision cast parts, like an ISCAR over the last several years, it's really changed the nature of the company. And so I think people are eager to hear what's happening with insurance companies, what's happening with a lot of these industrialized companies. And then just get Charlie and Warren's take on the markets and how the consumer's doing, how the economy's doing, because I think those are big questions on a lot of investors' mind, a lot of Berkshire shareholders' minds. And I think that's part of the reason that it's such a huge draw for this meeting is getting their thoughts on where we stand in the economy and the markets right now. There's still a lot of cash on that balance sheet, though. Do you think there are going to be questions about the elephant gun coming

out before the end of 2016? I think Charlie and Warren both are constantly on the look for new deals. I just think it's in their blood. It's part of who they are. Every time they're they buy another big company, Warren will tick off, Mr. Buffett will tick off, how many of the S&P 500 companies they would own if they were individual companies that were separate from Berkshire Hathaway. So I think that's constantly on their mind because they have to figure out some way to deploy all that capital. I want to ask you a couple of questions about the most recent annual letter from Berkshire Hathaway. One of the big four holdings is IBM.

In the letter we learned that there's an increased ownership stake in IBM. Charlie Munger came out in February with some incredibly tepid comments about IBM. And I'm just wondering because his willingness to come out in public and say, I'm not really a believer in this makes me wonder if behind closed doors, he said, Warren, my friend, you're wrong on this one. You know, I think that's really interesting. Buffett has always said that he and Charlie have never had a disagreement, have never gotten in an argument about things,

but that does not mean that they see eye to eye on every investment. IBM was definitely Warren Buffett's doing. And Charlie in those comments, he was speaking separately at another company where he was holding kind of an open forum and taking questions from all people. I think someone in the audience asked him the questions about IBM. And his response was, I don't really have an opinion on where this is going. I don't know if they're going to pull this off or not. And you're right.

When I read through it, I thought the same thing you did, that these were fairly skeptical comments for the guy who's the vice chairman of the company that is the largest shareholder in IBM, because their stake is huge at this point. But I think that's just the nature of the relationship between Charlie and Warren, and that is each of them has their own investing ideas. I know when they talk, which is not as frequently as it used to be. When they talk, they talk over some of these ideas. But I think they each come to their own investing ideas separately, and then probably are most concerned about selling the other person on going along with it. Now, I don't think Warren would do something without Charlie,

at least having some sign off, although maybe, you know, this could be something, they don't even check with each other all the time, I think, on some of the investments that they're making. But I also think they support each other pretty wholeheartedly with the decisions to a grand extent. So I'd be surprised if Charlie said anything privately to Warren, other than what he said publicly. But you're right. Those public comments were certainly tepid and lukewarm in terms of supporting what is now one of the company's largest shareholdings. One of the other topics of Buffett addressed in the letter was the fact that this is a presidential election year and candidates are going around the country talking about the problems in America. And he was very direct in saying,

let's be clear that the babies being born in America today are the luckiest crop. in history. He's dipped his toe in presidential politics before, but I'm just curious because I'm just, you know what, I'm thinking about my mom, who's roughly the same age as Warren Buffett, and my mom's willingness to say pretty much whatever is on her mind at a given moment makes me wonder if Warren Buffett is going to get more involved in presidential politics, more vocal this fall than he has been in years past. I think it'd be tough to get much more vocal. You know, he's been fairly up front about his being a Democrat.

He's supported Hillary. He's supporting Hillary Clinton this time around. He supported Barack Obama and Hillary Clinton eight years ago. And, you know, Charlie Munger, on the other hand, is a Republican who kind of says what he thinks, too. I don't see them getting more involved. One of the things that Buffett has done over the years is right on his views about taxation. And, you know, he's been very vocal in that arena. I don't see him getting more active than he's already been to this point.

But he's also an eternal optimist, and that's why he thinks that betting on the S&P 500 over the long term is the right way to do. Do it because you're betting on American business. You're not taking risks with individual companies that could run into troubles. And he's very optimistic about the future for America, and Americans who, as you said, are being born right now. You're listening to Motley Full Money talking with Becky Quick, one of the hosts of CNBC Squatbox, which you can catch each weekday morning. She's also host of the weekend program on the money, which now that I think about it is making me wonder how much sleep you require. Let's get to earning season, which is starting to heat up. We're really at the beginning of it. But I'm curious if anything has surprised you to this point or if you're sensing any themes emerging. Look, I think this is probably very likely going to be, without, you know, some unknown event at this point, going to be the weakest earning season of the year. But expectations were so low heading into this earning season.

You know, we went through a shock. And a lot of times people talk about the CEOs talking down numbers. There's a certain amount of that that goes on. But I think what really happened is there was a serious downturn at the end of the fourth quarter at the beginning of the first quarter. And any time that we would talk to, whether it be CEOs who are looking at their business or their order books, whether it be private equity guys who have 60 to 80 businesses that they're looking at or more, they would all tell us the same thing, that there was a serious slowdown,

that there was kind of a freezing in orders from customers and orders from other companies, that there was some serious pessimism that took place. And you can look at the stock market and tell exactly when and how that happened. probably just slightly delayed to when you saw the down, the S&P 500 hitting their lows, that creates, when there's a huge shock like that, when there's a big pullback, you know, 10, 15% or more, that puts a lot of things on hold. It makes CEOs nervous to hire. It makes them very nervous about investing money for growth because they don't know if the sales are going to be there.

And it kind of put a deep freeze on everyone. Consumers were watching this on the nightly news every night and seeing how, you know, how far down the averages were on a daily basis, maybe getting some of their statements from their 401Ks and getting very nervous too. It meant that they weren't spending as much. As soon as people started shaking off some of that gloom, we've heard from CEOs, from private equity guys,

from all the people that were talking to all the time, that there was a noticeable pickup that happened probably in the last four to five weeks. And, look, the quarter was already coming towards its close at that point, so you weren't going to hear very different stories. I don't think you'd hear CEOs who are sticking their neck out future sales when things change so rapidly and when any improvement could be tentative. So it doesn't surprise me that the earnings are beating expectations. It also doesn't surprise me that CEOs are a little reluctant to say what the rest of the year is going to look like.

Hopefully the trends that we've been seeing recently continue. Hopefully the economy continues to chug along. And hopefully businesses and consumers feel a little more healthy about that. The IPO market, it hasn't come to a complete halt, but it sure has, slowed down. And I'm curious why you think that is. Is that private company saying we're not ready, or is that the VC firm saying? Look, I think it's, you look at the volatility in the market when we're now, at this point, more than 15% above our high, or 15% higher than our lows that we set earlier this year. You're talking about a very short year. We're not even four, full months into the year at this point.

And the stock markets have been all over the place. And when you see stuff like that, it makes you really reluctant, again, to say, okay, I'm going to put myself up for auction, not knowing what the environment's going to bring and that the swings can be so drastic. Nobody wants to go out to market at a time when investors are panicked. So, again, that volatility slows down the process, makes people more reluctant to get into it. I think they need to see a little stability over a period of time. Look, it helps that commodity prices have rebounded. It helps the oils back up. It helps the people have stopped talking about deflation quite so much, and it helps that people aren't talking about the Chinese slowdown as being quite as serious as they were just a couple of months ago. But you need some

stability before you see people who are willing to say, okay, now I'm ready to take myself to market. I know on Squawk Box you have to cover every industry, but I'm curious if there's one you enjoy more than the others, whether it's because of your own natural curiosity or just because it's at the other end of the spectrum. I guess, you know, one way to think about it is, boy, this is really fun and this is what I'm interested in. And at the other end of the spectrum is this industry is a dumpster fire and I can't look away. I would say there's probably two industries that I'm most drawn to. One are the industrials just because I think that this is real stuff that's being made.

It's things you can get your arms around. It's things you can touch. It's the manufacturing base of America. I think that's so important. I like the industrials for that reason. Actually, there's three sectors I like. the transports I love, because it's the actual goods being shipped based on orders. And I think that tells you so much about where the economy's headed.

That was part of the reason people were so freaked out just a couple of months ago in the markets. You were looking at the transports, and they were basically telling you that a recession was headed this way. Now, part of that is because coal has been down so sharply, and that's huge for the railroads. And that's because electric companies aren't using coal like they used to. They're looking for alternative ways to produce electricity. But it's also because shipments were down across the board, things for housing, things for cars. There was a lot of weakness that was happening, and people were wondering if that was going to bleed over into a recession for the broader economy. The other stuff that I like, I like things like retail and consumer markets, and that's because I used to cover it for the Wall Street Journal.

So I just kind of naturally drawn towards some of those things that I covered as a beat as a reporter because I feel like I know them pretty well. All right. Last question. Then I'll let you go. It's the middle of spring. people are planning their summer vacations. And from a travel standpoint, you strike me as an adventurous person. I mean, the main reason I follow you on Twitter is because you post a lot of business news. It keeps me informed. But you will also post the occasional photo from a trip. And it's not you sitting poolside with a drink with a little paper umbrella in it.

It's you are somewhere off the beaten path. You're on a rocky coastline. Chris, I love you. You know me too well. So for anyone planning a vacation, what is an off-the-beaten path destination for someone who's looking to do just a little bit of exploring? You know, my husband and I love national parks. Our parents both instilled that. You know, both of the parents instilled that in us when we were kids.

And so we try and do a lot of traveling to national parks. And one thing that I'm going to do next month is head out to Olympic National Park, which is west of Seattle off the edge. of the continent. And it's so gorgeous there. There's the whole rainforest that's there. It's the only rainforest, I believe, in the northern hemisphere. There are these incredible rocky cliffs and beautiful forests and hills. The Olympic mountains are there. So that's a trip I'm looking forward to coming up in a few weeks. And I would recommend that. I would recommend any of the national parks. I mean, I love every one of them. And our hope is when we eventually retire. We can't decide if we want to actually get an RV and go to all of them

or just drive ourselves and stay in some of the nicer places. But that's like our dream of when we retire, when we have time, is trying to hit all of the national parks as possible. It is the best way to get a jump on the business news of the day. She's the host of CNBC Squawk Box. Becky Quick, always good talking to you. Chris, it's always great talking to you, and thanks for taking the time. Up next, we're going to see.

Up next, we're giving you the first. inside look at the stocks on our radar. This is Motley Fool Money. As always, people in the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against. So no buy or sell stocks based solely on what you're here. Welcome back to Motley Fool Money. I'm Chris Hillen. Joining me in studio once again, Jason Moser, Matt Argusinger, and Jeff Fisher. A couple of things before we get to the stocks on our radar this week, guys. For all the listeners out there, if you're looking for even more places to hear us, we've got some good news. Both Spotify and Google Play.

are starting to expand beyond music. And now you can hear all of the Motley Fool's podcasts on both of those platforms. So check those out. And if that's not enough, now available in the iTunes App Store, the brand new Motley Fool mobile app. You can get access to all of our podcasts, featured articles, and more. If you're a member of any of our services, you can have access to your entire service. It's all in one place, and it's free. So check out the Motley Fool mobile app.

Download it for your iPhone. and iPad today. The big news story this week in the business world, or rather the money world, actually had to do with money guys, and that is the currency changes here in the U.S. Harriet Tubman replacing Andrew Jackson on the front of the $20 bill, and the $10 bill and $5 bill are getting some updates. The 10 on the back of the bill is going to feature leaders of the women's suffrage movement. And on the five, on the back of the five, Martin Luther King, Jr., Eleanor Roosevelt and Marion Anderson will be added. And I'm thinking, since U.S. currency is not the most interesting in the world, maybe we can spruce up the one. Jeff Fisher, let me start with you. Who would you add to the back of the wall? We'll keep George Washington on the front, but who are you adding to the back?

All right. You know, it would be fun to add some business leaders who really changed America and Stanford. So what about Walt Disney? There you go. Jason, what about you? Yeah, I was kind of going in that same direction, but geez, just go with the first guy of coffee here, man. Howard Schultz, he's done a lot for for us here. Maddie? Like Howard Schultz, not dead yet. I think that might be a qualification, but I'm going to go with Warren Buffett. I mean, this is the father of capitalism, at least modern capitalism, in my view.

And let's throw a wild card in there, Chris. He's not American, but Steve Easterbrook has pulled off one hell of a turnaround. I think that's probably currency-worthy. You know what, I'm going to go with a younger business icon, and that's Beyonce. I think George Washington on the front, Beyonce on the back. That's going to put the $1 bill in demand. Bill Gates. Let's go with the stocks on our radar this week. Jeff Fisher, what are you looking at?

Medivation, the ticker is MDVN. It's a biotech company, about $9 billion in valuation, and what's unusual about it is it's fairly small for a biotech that is profitable. It's making really good money selling a prostate drug. It has a pretty good pipeline, very good pipeline, actually, of cancer-focused drugs, including breast cancer. So some rumors are out there that People are, large biotechs are looking to acquire motivation. But even on its own, it's an interesting kind of mid-cap. Jason, Mother, what about you? I was inspired by the push notification on my phone today that told me my Amazon Echo Dot has just been delivered to my house.

So I'm going with Amazon, ticker AMZN. Earnings coming up on the 28th of this month. So next week, I really like the video offering that they came out with, but not for perhaps the reasons you might think. But it makes me, really, I'm very optimistic that it will sort of open the floodgates for more Prime members. Because honestly, that was the point behind that. I mean, we remember in the letter, Bezos said, we want Prime to be such a good value. You'd be irresponsible not to be a member. And I think this is the type of offering that really exploits that.

Tremendous e-commerce opportunity, tremendous opportunity to do with the Amazon Web Services. Just a great business to hold for a long, long period of time. What do you get with the DOT? Well, it just basically expands Echo's capabilities through your house. So, like, we have a townhouse and our Echo is on the main floor. I'll be able to put this dot on the third floor, and it just expands Echo's presence. So, you know, if I need to set an alarm clock, Chris, or maybe I can just, like, tell my kids to go to bed at night. All right, Maddie, we've got less than a minute.

What are you looking at? I'll stick with the company I spoke about earlier in the show, and that's Alphabet. G-O-O-G-L is the ticker. And right now, you're just not paying a lot for a company with the competitive mode that Alphabet has. the optionality around other bets, and the growth I think the core business can still turn out over the next few years. So I think it's an opportunity right now. Well, and we talked earlier about the leadership, not just at Alphabet, but at several of these companies. And when you look at, not just Larry Page and Sergey Brin, but Ruth Porat and the team that they've assembled there,

it's kind of nice when you're that big and that committee where you can just say, you know what, we're not going to give expectations. We're not going to give guys. We're going to do our own thing. All right, guys, thanks for being here. That's going to do it for this week's edition of Motley Fool Money. The show is mixed by Ann Henry. Our engineer is Steve Broido.

Our producer's Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.