Motley Fool Money - CEO Shakeups, Retail Surprises, and Hot Holiday Toys

Episode Date: December 6, 2019

Google’s co-founders relinquish control of Alphabet. Expedia and United Airlines make their own changes at the top. Five Below rises on earnings. Zoom Video gets a poor reception. And McDonald’s tests a new chicken sandwich. Motley Fool analysts Emily Flippen, Ron Gross, and Jason Moser discuss those stories and weigh in on the latest from Constellation Brands, DocuSign, and Ulta Beauty. And we explain why investors should watch Adobe, CrowdStrike, and Hasbro. Plus, Toy Insider Editorial Director Jackie Breyer talks hot holiday toys and explains why Target is winning the toy war. Thanks Netsuite. Get the FREE guide, “7 Key Strategies to Grow your Profits," at www.NetSuite.com/Fool. And thanks to Brave for supporting our show. Change your browser experience today by switching to Brave at www.brave.com/FOOL. Learn more about your ad choices. Visit megaphone.fm/adchoices

If you're a small business owner, you already know what it takes to keep everything moving. You're juggling customers, invoices, and about 100 decisions every day. Thankfully, taxes don't have to be one more thing on that list. With Intuit TurboTax, you can get your business taxes done for you with a full service expert. TurboTax matches you with your dedicated tax expert. Who knows your industry understands your business write-offs and gives you the personalized advice your business deserves. upload your documents right in the app, hand everything off, and still feel like you're in the loop the whole way through. You can even get real-time updates on your expert's progress right in the app,

which makes it so much easier to stay on track. And you can get unlimited expert help at no extra cost, even on nights and weekends during tax season. Visit turbotax.com to get matched with an expert today, only available with TurboTax full service experts. Hey, it's Chris. Thanks for checking out this week's show. We've got a lot going on this week. A lot of CEOs in the news. We're also going to dip into the Fool mailbag. And it's all brought to you by Brave, a next generation free web browser that focuses on ensuring your privacy and security. Take back control of your online activity and switch browsers to Brave today at brave.com slash fool. That's brave.com slash fool. Thanks also to NetSuite, the business management software that hands. handles every aspect of your business in an easy-to-use cloud platform. Download their free guide, seven key strategies to grow your profits today, and netsuite.com slash fool. Everybody needs money.

That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Full Money Radio show. I'm Chris Hill joining me in studio this week's senior analyst Jason Moser, Emily Flippen, and Ron Gross. Good to see you as always. How you do? We've got the latest earnings from Wall Street. we will dip into the full mailbag, and as always, we'll give you an inside look at the stocks on our radar.

But we begin with the ever-spinning, revolving door to the corner office. A week of CEO departures was highlighted by one of the biggest companies in the public markets. Alphabet co-founder Larry Page is stepping down as CEO and will be replaced by Sundar Pachai, who has been running the show at Alphabet's most important division. That's Google. Sergey Brin, Alphabet's other co-founder, is stepping down as president. President, both Page and Brin are going to stay on the board. Jason, Pachai is the right person for the job.

This is as smooth a transition as you could want if you're a shareholder. I'm still surprised by how quiet all of this has been, given the size of the company. Yeah. I think it's probably been quite essentially because the bottom line is, I think, for Alphabet shareholders, this is a good move. I mean, this is good news. Succession plans, as we know, are always a very big question. question mark, particularly as a business gets closer and closer to its leadership aging out.

They're not necessarily aging out in this case, but I think they are off to do bigger and better things, perhaps, with their lives, as opposed to just looking after the day-to-day at the company. So I think we saw the market react positively to the news, and I think a lot of that has to do with the fact that we now have more certainty in regard to Alphabet's future and leadership. Pichai, as you mentioned, is the right man for the job. And let's face it, I mean, he's been with a company now for around five years.

have benefited greatly from his leadership. Shares have doubled over that course of time. He's grown revenue at an annualized rate of 20 percent over that time. There are all sorts of opinions out there as to why the time is now that this is happening. Are there political motives or Page and Bryn trying to avoid maybe being thrown into the spotlight with all of these anti-regular, or all of these regulation concerns? That, I guess, we could deliberate over the course of 2020. But for now, as a shareholder in alphabet, I'm okay with this now. Yeah, Paige and Bryn have done a lot for Alphabet in terms of side projects, if you will, investments into new initiatives. And what's really interesting about Pichai is, you know, I think there's, and some people have speculated this, that he's going to focus more on the core businesses.

I mean, we've said it on the show before that YouTube is probably one of those things that Alphabet has really not monetized to its full potential. And so I wouldn't be surprised to see a more focus on its core search business. Plus, hopefully, maybe some change regarding the way that YouTube is run within Alphabet. Yeah, I think this is an acknowledgement that Google primarily is the business. It's a somewhat conservative take on the business, de-emphasizing some of the potential home runs in favor of the incredible cash cow that Google is. So I've got an idea. How about we call the company Google? Well, it really does seem like a move back towards that because of how important Google is.

is to the business of Alphabet. We're talking about Pichai. Ruth Porat, the CFO is still there. The business is in very good hands. But Page and Bryn were as big a champion of the other bets the business was making as anybody. And it wouldn't surprise me if in 12 to 24 months, some of those other bets just got completely defunded. I think it's fair to say this is probably an implicit admission that the alphabet structure hasn't taken off, perhaps, like they thought it would have. I mean, yes, this is a Google story. The name of the company, for all intents and purposes, really should still be just Google. But with that said, I mean, this certainly is a company that's not thinking of the course of

quarters. I mean, they're thinking of the course of decades, really, and you have to admire that, given where they stand today with Pichaya, with PORAD. I mean, I really do feel good about the leadership they have in place to keep this business going forward. And, I mean, it's worth Noting to, Patron will still be a big part of this company. They're not going to be doing it from the positions they held. United Airlines also getting a new CEO. Oscar Munoz is stepping back. Will remain as executive chairman, Scott Kirby, taking the corner office at United. Ron, you think this is a good move. Yeah. Kudos to Munoz for having a great tenure there. The stock really up about

56 percent since he took the reins, which is significantly outperforming the New York Stock Exchange Airline Index. a lot of the initiatives were actually led by Kirby. A lot of the aggressive growth strategy that has turned United around were led by Mr. Kirby. So if you're a shareholder, I think you're pretty excited about this succession. It makes perfect sense to have him just elevated to the top. Yeah, and it's not surprising at all. You know, took Kirby on in the midst of United's transformation when they were, you know, struggling both losing ground to American Airlines, which Kirby came from, and also struggling with things like that horrible incident, where they

were dragging doctors off of Blaine. So the turnaround was much needed, but immediately the bar was low when Kirby came on for United. Yeah, let's not forget, three months after he took the reins, he had a heart attack, a heart transplant, and he went on to lead this company to a pretty nice turnaround. Now I think it continues under Kirby. Anyone looking to be the CEO of Expedia can apply to Chairman Barry. Diller. Mark Okersstrom, the former CEO and Chief Financial Officer Alan Pickerel, resigned this week. And Jason, add them to the list of people who went up against Barry Diller and lost.

You don't cross Barry Diller. He knows people and stuff and has a lot of resources and has his hand in a lot of cookie jars. Yeah, I mean, it's nice to see at least CEOs being removed for underperformance, right? I mean, it's a little bit refreshing to be. There's nothing untoward with another employee. This is just, you're not getting the job done and you've got to go. And that's fair. I mean, if you look at Expedia's financials, I mean, revenue growth has slowed. You have to wonder how are they going to really continue to compete with booking.com, which is obviously the behemoth in the space. We saw a lot of those same types of red flags,

market-wise, with TripAdvisor's most recent announcement. And you can't forget either the role that Google plays here in this space with their search engine. I mean, search really is just an important part of everything that goes on in virtually everything that we do and travel is no exception. So, yeah, I mean, whoever steps into that leadership position with Expedia definitely has a work cut out for him. Cautionary tale for United, because back in the day, the Succession Planet Expedia looked perfectly in line when the other CEO went to run Uber, and not everything works out. So you can't rest. on your laurels, you got to perform.

You know what I noticed is Chelsea Clinton is an independent director on Expedia's board. And given her age, still young, obviously very intelligent, you got to wonder if someone like that doesn't have professional aspirations at some point to become a CEO at some time or another. I noticed that and just the idea started kind of running around on my head. Zoom video is a growth company, and Zoom's third quarter report showed that growth is slowing. of Zoom down 10% on Friday, Emily.

That's misleading. Growth is slowing. Do you know how much their revenue growth was last quarter? A lot. 85%. Growth is slowing, yes. It slowed down from 96% last quarter and 103% the quarter before that. So, yes, growth is...

I didn't say it was bad. I just said it was slower. Growth is definitely slowing in the market. Man, they have hammered them for it. But look, they're still growing at 85%. That's top line growth. And they're a profitable company, which is really, saying something given the market that we're in today. So I think I understand the concern

about slowing growth, but you also have to realize that no company is going to grow at triple digits forever. And we just need to make sure that valuations are in line with new expectations for growth. So that's what we're seeing happen today for Zoom, stocks down, largely because it was trading at something like 38 times sales beforehand. So really clearly a very frothy valuation, but a strong business and a business that admittedly is slowing down a little bit, but it's still growing significantly. Ultimately, it's just an issue of valuation, not really an issue in the business here. I want it noted that you use the word valuation three times, and I'm impressed.

And that is what it's all about, because if they need to grow at 95 percent to support the stock price, and they're growing at 85 percent or less, the stock deserves to come down, and that'll happen every time. You're so happy to have another investor in the room. Hey, hey, hey, don't go that far. Real quick, before we move off of Zoom, I mean, there's a lot of the business. The stock is basically trading where it was when it IPOed in April of 2018. Safe to assume the valuation is at least a little bit more reasonable now?

Yeah, I think it's definitely a little bit more reasonable right now. I think the bigger concern is that people don't really know how big the market for Zoom could be. And so its ability to continue to grow significantly is largely going to be dependent upon their ability to penetrate a largely unknown and untapped market. So you have a really hard time when you look to value Ron, a company, like Zoom. Yeah, and I will say I was down at Wofford College a couple weeks ago speaking, and it came

to like that. They're big fans of Zoom there as well, and it got me thinking that there is a tremendous opportunity in the education space. Higher education all the way down, I think, for poor companies like Zoom. And it was nice to hear that they had such a positive review there. Alta Beauty put up mixed results in the third quarter, but someone must have liked what they saw because shares of Alta Beauty were up 13 percent on Friday, Ron. Yeah, beat expectations after a really good. Really tough earnings report last quarter, and the stock just got slammed.

This time around, pretty good. Net sales up almost 8 percent. Com sales up 3 percent, driven by both transaction growth of 2 percent and almost a 1 percent growth in average tickets. So nice to see both of those things growing. Company has really been capitalizing on this demand for celebrity-led beauty brands, whether it's folks like Kylie Jenner, Jennifer Lopez, YouTuber James Charles, who I've never heard of.

I don't know if you guys have. So the top line looks pretty good here. Gross margin is widened. I like that as well. But operating expenses were up due to investments in growth initiatives, labor costs higher. We're seeing that across the board. We're seeing that across the board. Had lots of retailers. So as a result, net income was actually down slightly at 1%. Earnings per share, fairing, a little better, up 3%, but that was solely because of share buybacks. I'm not nearly as entrenched in the beauty space as a 25-year-old girl should be. But I do know enough to know. know that the beauty market, especially as it applies to makeup, is being so largely driven by Google's YouTube again. And it's actually, you mentioned a little bit the celebrity agreements they have there. Those are so vital. And it's honestly a little bit of a harder business for Alta now because there's so much direct

to consumer availability for these celebrities to get their products out to their watchers, and that's driving a lot of purchases. So it's taking away business from Alta unless they have those. partnerships in place, which hurts their margin. So it's a hard business to make work, but I'm impressed that they're not slowing down faster. It was four years ago this month that Constellation Brands finalized its deal to buy Ballast Point Brewing for $1 billion. Coming up, we'll check in to see how that acquisition has aged. Stay right here. You're listening to Motley Full Money.

All right. Before we get back to the news, quick shout out to Brave, a next generation web browser pioneering a better internet with privacy by default. It begins with giving you back control over who has access to your online activity. Brave's browser protects your privacy by stopping creepy ads that follow you across the web. It performs up to eight times faster than other browsers, which is the kind of thing that only matters if you're a fan of speed and saving your battery life. And Brave is also free. It's easy to switch over to. You can import all your book with one-click, and if you opt into Brave's privacy-respecting ads, you get rewarded with tokens, and you can use those to support your favorite content creators and access premium

content. And that helps give publishers back their fair share of web revenue. I've used Brave before. It's great. Importing the bookmarks with one-click, that's worth it for someone like me. Absolutely. Take back control of your online activity. Switch browsers to Brave today at brave.com slash fool.

Brave.com slash fool to switch your browser to Brave. Yesterday was about big tech. Today is about us. All right. Let's get back to the show. Welcome back to Motley Full Money. Chris Hill here in studio with Jason Moser, Emily Flipping, and Ron Gross. Shares of DocuSign hitting a new high on Friday after strong third quarter results. Revenue came in higher than expected for the electronic signature company. Jason, if you like traditional profits, DocuSign probably is not for you yet, but docusin is getting it done. Listen, as a shareholder in DocuSan, I'm feeling pretty good about today. When I think of management teams that are executing beyond their aspirations, DocuSign really

is one that comes to mind. There was a blip in the middle of the year, if you recall, where the stock got hit on Billings concerns, but that really actually was a great example of a knee-jerk reaction that provided investors an opportunity. Because if you remember, shares dropped all the way down, I think $48 and change in that time. But really, like you said, the business is accelerating revenue growth is impressive. hit the upper end of the target for billings this quarter with growth of 36 percent there, raised guidance for billings and revenue for the full year.

I think you want to look at a business like this and figure out what they're doing to leverage their core competency. And with DocuSign, that's e-signature, right? And so they've done a very good job in taking that core competency in e-signature and building out this thing called the Agreement Cloud, which is a suite of more than a dozen offerings and hundreds of integrations that help companies, enterprises, individuals, man, the life of their contracts. And contracts, as we know, are just a big part of business. Big opportunity to play in the mortgage sandbox as well, so they're getting into the housing

business. The mortgage sandbox sounds like no fun. It's not the sexiest business in the world, but there's a ton of money flowing through it, and it's nice to see DocuSign trying to get their share there as well. So I think all things considered strong quarter, like you said, not traditionally, was that you said, profitable? Yes, we're living in a non-gap world now anyway, Chris. So you just got to go ahead and embrace it.

It's so easy to point at DocuSign and say that it's a business that's going to lose out to something like Adobe. Adobe obviously acquired, I believe it was Hello Sign, and now they turn it into Adobe Sign. It's kind of the Slack versus Microsoft Teams argument, where if a company's already using Adobe, then why would they go out of their way, pay extra, pay the premium that exists for DocuSign when they have something already accessible. And I think It goes, like Jason mentioned, to two testaments, a testament of the really strong underlying product. They're a solely focused business on e-signatures.

That means they can make that experience as great as possible. But expanding it to the entire contract lifecycle management business, and they see that as their biggest opportunity moving forward. There's definitely value in addition to being the verbiage of e-signatures, right? Docu-sign it. Yeah. I mean, customer growth is still there. Total customer is up 24 percent now to 562,000.

And more importantly, Enterprise and commercial customers grew 30 percent to 69,000. So something they're doing is working. Third quarter same store sales for a discount retailer, Five Below, came in a little higher than Wall Street was expecting. Ron, are they raising prices at Five Below? The name of the business is Five Below, and I'm seeing all these stories that they're starting to raise prices. A little bit. Introduce their 10 Below gift shop section, highlighting on more expensive toys

and games. We can make fun of that all day. We'll see how that goes. We'll see how that goes. This is a little bit like Ulta, where if you focus on the top line, things look pretty good. Net sales up 21%, comp sales up 2.9%. But when you start to look at the cost structure a little bit, it gets a little bit more of a mixed bag. Operating income was actually down as a result of tariff and some other merchandise costs.

Earnings actually down 24%. So the company continues to grow, continues to open a significant number of stores, 61 new stores recently, almost 900 now in total. They did manage, interestingly, to raise the low end of their full-year guidance, despite the fact that it was a relatively weak report on the bottom line. But even so, 40 times for a business that is having a little bit of struggles right here, especially on the cost side, I'd be careful. How big a footprint are they looking to get? I mean, 900 locations, we see a lot of headlines about bricks and mortar stores closing.

Put them along with Planet Fitness on the list of businesses that are expanding their footprint. Significantly more expansion to lots more areas of the country. They feel that there's plenty of room to grow. In December 2015, Constellation Brands made headlines when it shelled out $1 billion for Ballast Point Brewing, a craft beer company based in San Diego. This week, Constellation Brands sold Ballast Point to Kings and Convicts, a tiny brewery in Chicago. And Emily, the reports from the beer industry trade media indicate that Kings and Convicts paid somewhere in the neighborhood of $75 million to get this. What is going on at Constellation Brands?

It's a great question. And those same reports say that they actually weren't shopping around Ballast Point either, which means that at some point, likely, Kings and Convicts just approached them and said, hey, give you $8 a million for this. And then Constellation Brands took it. They were like, yeah, that's a good deal. Something they paid just three or four years prior, $1 billion for. It's clearly a bad acquisition on their part.

They said it was just an issue of how they saw the beer industry developing and just simply not in the direction of ballast points. But it doesn't build a lot of confidence in investors, especially because up until the point of the sale, they had only impaired about $200 million worth of that acquisition. So it begs the question of, okay, well, you clearly under-impaired this asset, what does that mean for all the other acquisitions that you've made? And at the time, Constellation Brands was seen as, yeah, maybe they have paid, but they'll be able to expand it in their network, and they weren't able to do that.

Well, they weren't able to do that, and there were two concerns with the acquisition when I saw it as. Number one, they paid 12-time sales for. It was just absurd. I mean, if you look at Boston Beer today trading around four-time sales, and that business has been on fire thanks to the Seltzer and cider parts. But yeah, then you just have to wonder, Ultimately, they misread how that brand would proliferate nationally speaking, and it just never worked out. All right. Jason, Emily, Ron.

We'll see you later in the show. Up next, we will check in on the toy industry with expert Jackie Breyer. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. A late Thanksgiving means this is the shortest holiday shopping season since 20th. 2013. So here with some insights and more on the toy industry is Jackie Breyer, editorial director of the toy book and the toy insider. She joins me now from New York City. Jackie, thanks so much for being here.

Thanks for having me. Before we get to the toy businesses themselves, let's talk about the toys. What are the hot toys for 2019? That is a great question. I would love to say it's Baby Yoda toys. I don't know if you've heard all the excitement around the new Baby Yoda. Have you been on the internet lately? Oh, I'm a Disney Plus subscriber. I was looking for some Baby Yoda stuff. And like everyone looking for Baby Yoda stuff, instantly disappointed that nothing's available. It is not there.

You can pre-order, but, you know, it's not here yet. So while it is probably the thing people are most excited about in that area, there are some toys that are hot. And this is the time of year when it starts to become a parent, you know, what are the hot in-demand toys that parents should be buying quickly? or else they're not going to be able to get their hands on them. You know, now that Black Friday and Cyber Monday have passed, everyone's out shopping and taking it seriously,

like you said, it's coming up really fast this year. One thing is Ryan's world. I don't know how familiar you are with Ryan Toys Review, the YouTube channel. I am not. Ryan is a YouTube star, multi-millionaire child, who unboxes toys, and he has over 30 billion views on his videos. and he has his own toy line.

So now kids can unbox toys just like Ryan. Ryan's their best friend and they go on adventures together. So anything, Ryan, there's a pirate treasure chest, there's a secret safe, there's the surprise eggs. It's all hot. And if your child is into Ryan, you're going to want to pick those up if you come across them. What about technology and toys? because it seems like for years, toys have essentially been losing out to versions of technology, whether that is a consumption device like an iPad or some sort of tablet or just video games themselves.

Are the toy makers doing a better job now of integrating technology into actual toys? You know, it's interesting because, yes. So on the one hand, absolutely, we're seeing a much better job. It's not just tech for the sake of technology. Like I would have said, you know, five or ten years ago, there are companies doing a great job with technology. Hatchamels, which was one of the super hot toys a few years back, they have hatchamels.

Wow, it's very intuitive. Kids have a lot of fun with it. Cubby, the for real friend, Curious Bear from Hasbro. That is really cute, great use of technology. And stuff like the Harry Potter Invisibility Cloak. I don't know if you're familiar with that. from wow stuff, but kids can put on the invisibility cloak just like Harry Potter, and when they're facing their tablet, it appears that they're disappearing behind their cloak, completely

evisible. So there's a lot of cool technology that we're seeing out there, but the flip side of that is parents, especially millennial parents, seem to be kind of reverting back to the classic toys and traditional play patterns. So we're seeing actually less tech toys. fewer tech toys, I should say, and more kind of inclination towards kind of like the simpler classic play patterns that we had when we were kids. That's interesting because one of the notes I had down was about the level to which toys are cyclical because I'm not a millennial, but I've absolutely bought things in the past from my kids that were things or versions, updated versions of toys or games that I enjoyed

when I was a kid. So it's interesting to hear that millennials are doing that as well now that they're becoming parents. Yeah, it's completely true. The retro nostalgia is real with millennials. And, you know, I'm a Gen Xer myself, and I have little kids, and I love to buy them like 80s stuff, you know. So we have an asteroids machine at home.

You know, I love introducing my favorite things to them. And I know, you know, parents do love that. It's one of your favorite memories, and you see something that is either the same or an updated version of that. It's just a really great way to actually share an experience with your kids rather than just giving them something and kind of walking away, you know. When it comes to the toy retailers, the major retailers like Walmart, Amazon Target, what does the competitive landscape look like these days? It's very interesting. So after Toys R Us kind of went on. under last year. And you know, they relaunched a couple of stores this year. We were actually there

yesterday, and we had a lot of fun. But it's not what it was. It's not hundreds and hundreds of stores. So Target, in my opinion, is winning the toy war of trying to snatch up the extra toy dollars left on the table after Toys R Us went out of business. So they've done a number of different things to kind of make themselves the, you know, the location for parents and gift givers to go shopping for toys. So first of all, they did partner with Toys R Us. So, for example, the Toys R Us store I was in yesterday in Paramus, New Jersey, they have kiosks all over the store, but they're highly intuitive. So let's say I'm in their Lego shop. I can go in their Lego shop. They have stuff there in the store, but not nearly the hundreds and hundreds of Lego skews that are out there.

So you can go, find what you want on the kiosk, super easy, scan the QR code with your phone, and you're instantly adding the item to your cart on Target in the Target app. So Target's got that, and really anyone who goes to ToysRust.com and shops for toys when they go to purchase, they'll be rerouted to Target. So maybe a little bit of consumer confusion. You know, why am I on ToysRos.com and I'm actually being shipped over to Target. But people trust Target and it's just extra traffic. So that's one way.

They also launched Disney boutiques within some of their stores. So with the Disney partnership, they're driving traffic and consumer experience. So there's a lot of interactivity, lights and sounds. and fun things for parents and families to actually do in those little boutiques. I think they're in 25 stores, but they're expecting to expand it next year. And there's a lot of exclusive product there that previously you would have only been able to find at a Disney store. And then they're also using shipped, which you probably know they acquired not that long ago. So now they have same-day delivery.

So when you're shopping, I've done this myself. You know, you need X, Y, Z stuff, you don't want to run out, you order it. Your stuff comes in a couple of hours, but you could add toys, you can do your holiday shopping, and they'll deliver it all to you the same day. So I think all these different, the conveniences, the experience, and really the expansion in general of their toy offerings and the refreshment of their toy section, that leads me to feel like they are winning the toy war. but other toy retailers are doing a lot,

or I should say other retailers are doing a lot to gain some traction in the toy category. Walmart launched the Walmart Toy Lab, which allows kids to go onto Walmart's website, and they are kind of testing toys virtually. It's really, it's fun, it's cute, and it's interactive, and it helps kids kind of decide what they want to ask for for holiday gifts. and then Amazon, which, you know, who doesn't love to shop on Amazon is just the most convenient thing,

they have launched their second annual print copy of their toy catalog. So it's kind of the reverse. They're taking their tech experience that makes it so convenient and so easy and bringing it into home. So you're getting this 90-page beautiful catalog. It's actually really nice six-stock. And you hand it to your kid and say, you know, circle what you want. It's kind of bringing back that retro-nistolic toy catalog, Sears Toy Catalog kind of feeling for parents. And then parents can just actually scan, if they don't want to actually search on Amazon,

they could just scan the pictures in the catalog, and it populates into their Amazon app. So it's really simple. I'm just shaking my head at the idea that of all the things Amazon has done, they've resurrected the Sears' wishbook catalog. It's actually really nice, too. So it's a beautiful, I can't imagine what they spent on that, but it's 90 pages of thick stock. It really makes you want to flip through it, so they did a really good job with that. So at the Motley Fool, we look at businesses, we look at the stock performance of those businesses.

And when you look, particularly over the last few years, at Hasbro and Mattel, from an overall business standpoint, from a stock standpoint, Hasbro has dramatically outperformed Mattel. What is the view from someone in your position who looks at them as producers of actual toys? How do you think about Hasbro and Mattel? Well, they're definitely the two dominating forces. And I've been in the toy industry now for over 17 years. So I've seen a lot of back and forth. You know, Mattel's number one. Hasbro's number one.

They're both huge forces to be reckoned with. They both have really great core brands for Mattel, Hot Wheels. and Barbie are, they're strong. They continue to be strong, and while it's somewhat cyclical, they're always among the top 10 selling toys for the holidays. Every year, no fail. And that's, that's really important. I think that having lost the Disney license a few years ago to Hasbro was a big deal. Hasbro now has, you know, they have Frozen, they have Star Wars, it's huge, and they also have Marvel. So with all of those, really high profile licenses. They've got a big advantage that way. And of course they have

their strong proprietary brands as well, like NERF. But everyone is looking for those baby Yoda. The child is actually called it. It's not actually Baby Yoda, but Hasbro is going to have collector products, but not until probably third or fourth quarter next year. So we'll look for that to be exciting for everyone. And Mattel actually, even though they lost that license, they are going to have the baby Yoda plush with a vinyl head, apparently. So I don't know what we call it slicing when they take a license and kind of slice it. Like, you can have this version of the plush and you can have this version of the plush. So it's interesting to see that Mattel will also have a license for that property.

So as we talked about at the top, it's a really crunched time frame for people who are doing their holiday. shopping. And I'm curious before we wrap up, if you have any tips for people who are doing some, I don't want to say last minute toy shopping, but we're getting pretty close to the last minute. Yep. So first of all, grab that must have toy when you see it. If you're shopping for a preschool kid and you see a Ryan toy, just buy it. But really any toy, if you see your kid's favorite character or something like that, don't wait because it will be gone. Christmas is like three weeks away at this point. If you're shopping for a kid, you don't know as well, stick with the classics, classic traditional play, board games, Legos, Ledo, all that kind of stuff is solid, you know,

winners. Just keep an eye on the online shopping. I know everyone thinks, you know, oh, so convenient, I'll just buy it on Amazon. Things can get back ordered. Make sure you keep it, even if something is prime, you know, Amazon Prime, make sure the actual delivery date. Because sometimes you just assume that means two days or one day, and it could, mean two weeks or it could mean January. So just be careful, pay attention to that sort of thing. And know your prices. There's price gouging out there. So if you are shopping online in particular, know what a product should cost and so you don't overpay. If you want more information, you can go to the toy insider.com or toybook.com. Jackie Breyer, I know it's your busy time of year.

So thanks for being here. Thanks so much for having me. Coming up, we'll give you an inside look at the stocks on our radar. Stay right here. This is Motley Full Money. All right, before we get to the stocks on our radar, quick shout out to NetSuite, because if you don't know your numbers, you don't know your business. And that's the problem that growing businesses have.

That keeps them from knowing their numbers. It's the patchwork quilt of business systems. One for inventory. One for sales. Another one for accounting. It's inefficient. It takes up too much time. And that hurts the bottom line.

And that's where NetSuite by Oracle comes in. It is the business management software that handles every aspect of your business in an easy-to-use cloud platform. NetSuite gives you the visibility and control that you need to grow. With NetSuite, you save time, money, and unneeded headaches by managing sales, finance, and accounting orders and HR instantly right from your desktop or phone. And that is why NetSuite is the world's number one cloud business system. Now, NetSuite's offering you valuable insights with a free guide, seven key strategies

to grow your profits, which is better than three or four key strategies to grow your profits. You can find it at NetSuite.com slash fool. That's NetSuite.com slash fool to download your free guide, seven key strategies to grow your profits at NetSuite.com slash full. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Welcome back to Motley Full Money, Chris Hill, here in studio once again with Jason Moser, Emily

Flippin, and Ron Gross. Back in July, an independent group of McDonald's franchisees sent a letter to company management pleading for a better chicken sandwich to compete against the likes of Chick-fil-A. This week, that wish was granted. McDonald's is testing a Southern-style crispy chicken sandwich in Houston, Texas, and Knoxville, Tennessee. Our producer, Mac Career, will be heading back to Texas over the winter break. So we'll get his review in January.

But the dozens of listeners are already sending in their reviews. Got an email from Judy Griffin in Knoxville, Tennessee, who writes, The bun was buttery, similar to how Chick-fil-A's buns taste. The chicken also tasted very similar, but it was not as thick as Chick-fil-A's, nor as crispy. If Chick-fil-A is a 7 out of 10, I would say this is a 6 out of 10. I would get it again, especially on Sundays. Thanks and keep up the good work. Judy, thank you for doing some boots on the ground research.

Did you catch the key phrase there, Ron? Especially on Sundays. Yeah, a little poke. That is what you're hoping for if you're McDonald's. What do you think, Emily? I think we've all been really excited waiting for this chicken sandwich for a while, but perhaps no one was more excited than Bob Darrington, the managing director and senior research analyst at the Tesley Advisory Group, who had some choice words about the McDonald's sandwich.

These phrases included that they were lightly battered, juicier, and more flavorful as an upgrade from MCC's heavily battered, less juicy, buttermilk crispy chicken sandwich, and he said that it included a full-muscled chicken breast. Wow. That just sounds grody. Am I the only one that remembers from 2005 to 2015? They actually had a Chick-Filly knock-off sandwich already at McDonald's with the pickles and everything?

I hope this is better. I have zippy concerns about the sandwich because I'll never have it. I just don't go to McDonald's. I'm just excited about the validation, because I feel like we were talking about this on Market Foolery several months ago. Oh, yeah. Of course leadership is going to do this. They're getting feedback from Boots on the Ground franchisees. It's just a matter of time.

And then it's just crickets. Nothing. The validation is what makes me feel good about all this. Keep the emails coming. Radio at Fool.com is our email address. Let's get to the stocks on our radar this week. Our man, behind the glass, Steve Roydo. He's off this week, but Rick Engdahl is here.

So Rick will hit you with a question. Ron Gross. You're up first. What are you looking at this week? I'm looking at Hasbro, H-A-S, one of the world's largest makers of toys and games. This is a little hairy here. Weaker than expected quarterly earnings and concerns over tariffs really caused a dip in the share price recently. I think giving investors a nice opportunity to buy the stock. Company has a nice combination between toys and brands and entertainment, successfully expanding their digital offerings.

They've raised their dividend every year for the past 16 years. Current yield is 2.7%. I think they're set up well for the holiday season. Rick? Question about Hasbro? Yeah, they do like Star Wars and Marvel and all that. They do. What's the movie property they don't have that they need?

Oh, they've got frozen. They've got Iron Man and those guys. What do they got? Probably need to dip their toe into the fast and furious world. Those movies don't ever see to stop. They never end, right? I like that. I'm going with that.

Emily Flipping, what are you looking at this week? Hasbro. More like Has Been. Oh. You know what I'm looking at? I'm looking at a way more excited company. I'm just sitting here. Mind of my business.

CrowdStrike is my radar stock. CRWD. CrowdStrike is a cloud-native security platform. It really caters to organizations that are looking to protect themselves from cybersecurity threats. Really impressive financial results. Average annual revenue grew 97% last quarter, $120-based net retention rate, so it's a strong business. Rick, question about CrowdStrike? Emily, weren't you one of the people who recommended

Fire Eye? Why should I trust you on CrowdStrike? I was not one of the people that recommended Fire Eye, so thank goodness there, but it's a good question. CrowdStrike is a cloud-native platform, and it's actually one of the big competitors that's been stealing customers from companies like Fire Eye. I think the bigger concern is Palo Alto Network, which is the stronger legacy player. Jason Moser, what are you looking at this week? Yeah, it was mentioned earlier, Adobe, ticker ADBE. E-D-B-E. Earnings come out this coming Thursday, December 12th. And in simplest description, Adobe is a digital media company, but it's

clearly very wide-reaching in what it does there. So, big subscription model that I'm a fan. Of 88% of revenue is tied to subscriptions that range anywhere from 1 to 36 months. And much like DocuSign that we talked about earlier, they've done a very good job in building out an impressive suite of offerings based on their core competency in digital media. I'm really excited to see where Adobe Arrow goes as we move into this AR and VR-driven world. And, you know, I did just bring Adobe into our augmented reality services. I'm kind of excited about that. Rick, question about Adobe? Yeah, Jason. As someone who works in the multimedia world, does Adobe even have any

competition anymore? Well, I think that's a very good point. I mean, Adobe is a very big company at this point around $140 billion market cap. And so there are competitors out there trying to dabble in the space, but it's just the amazing resources that Adobe has to fight back. So any competition that springs up, they can snap them right up. So I really think Adobe owns this market. Adobe, CrowdStrike, Hasbro, three very different businesses, Rick. You got a stock you want to add to your watch list? Well, I already own Adobe, so I'll throw Hasbro in the list.

Finally, a win. I got how to get Steve out of here for to finally get a win. I got kids, Emily. I'm all right. Ryan Gross, Emily Flippin, Jason Moser. Thanks for being here. Thanks, Chris. That's going to do it for this week's edition of Motley Fool Money. Keep the emails coming. Radio at Fool.com is our email address. That's Radio at Fool. com. Show is Mixed by Rick Engdahl. Our producer is Matt Greer. I'm Chris Hell. Thanks for listening. We'll see you next week.