Motley Fool Money - CES: Top Tech Trends

Episode Date: January 6, 2017

Automakers rev up sales. Retailers report some not-so-happy holiday numbers. Apple reports some big numbers for its apps. And Sears unloads its toolbox. Plus, Motley Fool analyst David Kretzmann reports from Las Vegas about some of the hot tech trends at CES 2017. 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. This episode of Motley Fool Money is brought to you by Green Chef. Start the New Year right by eating healthy and saving money. Green Chef is an organic meal kit delivery service that brings fresh ingredients and easy recipes right to your doorstep. Go to greenchef.com slash Fool and get $50 off today. Everybody needs money.

That's why they call it money. From Fool Global Headquarters, this is a lot of money. From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Fool Radio show. I'm Chris Hill, and joining me in studio this week from Million Dollar Portfolio, Jason Moser. From Motley Fool Pro and Options, Jeff Fisher, and from Motley Fool 1, Ron Gross. Good to see you, as always, gentlemen. Happy New Year. Happy New Year. We've got the latest on automotive, tech, retail, and more.

We will head to Las Vegas for the Consumer Electronics Show. And as always, we'll give you an inside look at the stocks on our radar. But we begin with the big macro. Two big numbers for December out this week. Automotive sales were surprisingly strong. And the jobs report out on Friday wasn't amazing in and of itself, Ron, but it was the 75th consecutive month of job growth. That's a nice street. That's a fair categorization. Not amazing, but wraps up a pretty good year with unemployment at 4.7 percent, up a bit from 4.6. But there's a good reason for that if you take into account

that some people are re-entering the workforce, so it's nice to see that. The bigger number of unemployment that we like to look at, 9.2, also pretty good, but nowhere near where we were before the Great Recession started, which was about 8%. So we still have some work to do to get back to that, but certainly a strong year of job creation. Yeah, I think Ron was talking about U-6 there being 9.2%. It's certainly encouraging when you think about the fact that the last time it was below 9.2% was back in March of 2008. So it has been a long time coming. And I think really what I was encouraged by was the wage growth. I think wages grew 2.9 percent, if I recall correctly, which I mean, we've been sort of seeing a relatively flat performance from wages here over the past couple of years, it seems at least.

So it certainly seems like it's playing out a little bit in consumer confidence and some spending in retail, as we'll talk about a little bit. Yeah, wage growth is key. And we have those minimum wage increases coming through in a lot of states this year. And the other thing to keep in mind, though, is a lot of people are still only part-time employed and looking for full-time work. It will be interesting to see, though, because I do think the workforce is a bit constrained right now. If we put forth big packages like Trump wants to in infrastructure or other areas, we're going to need people to go back to work and put forth and work on those projects.

And right now, we don't seem to actually have those people because we're almost at full employment. So that's going to be interesting to see if the economy as a whole gets good. constrained because of the demographics. A lot of people say we're no longer a 3 percent economy, we're more of a 2 percent economy, just because of the way our demographics work out because the labor force just isn't there. Can we go back to the automotive sales for a second? Because I was really surprised that after the huge year that we saw in 2015, that 2016 was as strong as it was for the automotive

industry. It's the seventh straight year of sales growth. Pretty much every automaker in December sold more vehicles than was expected. But we don't really see that translating into their stock performance, at least not across the board. Well, I think sales were strong because of things like steady job growth and low gas prices. Consumer confidence is pretty good. So you see sales being relatively strong also on the heels of incentives. And incentives lower the profitability of each car sale, which therefore affects profitability and speaks to stock price and valuations. So sales are pretty strong, and they're even predicted to be pretty solid for this year. I mean, you think the shoe has to drop at some

point, but the big three are saying it still looks pretty good for 2017. At some point, those incentives are going to dry up. Interest rates are going to tick higher. Financing is going to be tougher. We're seeing some defaults on some of these subprime-type loans rearing their ugly head. And so, you know, this can't last forever, but we might be in it for okay for at least maybe another year. There are a lot of ways to invest in the automotive industry. Obviously, there are the automakers, but there's parts. There's companies like AutoZone, that sort of thing. Jeff, is that an industry that you look to ever for investment ideas? Well, in Pro, we've owned for several years O'Reilly Automotive, which has been a great investment,

great, well-run company. And as Ron was speaking to, car sales and car parts sales go right in line with employment. As people get work, they need a car, they need to drive. So I think The Crown's right that car sales could remain healthy, as long as employment remains healthy. But yeah, the auto manufacturers themselves, tough business. I haven't looked for a while about what sort of long-term total returns they've given shareholders. Have they been market beating in the past 20, 30 years? I don't know. But I know things like O'Reilly Automotive and Auto Nation.

CarMax has had a great year. Yeah. There are many great ways to make money on the auto industry. Results are starting to come in for holiday retail. And so far, it's not pretty. Macy's is closing dozens of stores. Coals cut their earnings guidance and JCPenney reporting falling same store sales over the holidays.

And Jason, not surprisingly, all three stocks taking a pretty sizable hit this week. Yeah, they all got hammered, for lack of a better word. I think the good news here is that retail is growing. I mean, according to the National Retail Federation, they expect retail sales to have increased 3.6 percent versus the 3 percent last year. The bad news is this growth is coming at the cost of a lot of the bricks and mortar retailers out there, and we're seeing that with Coles and with Macy's revised guidance. It's amazing to look at Amazon as a percentage of total online revenue during the holiday season.

I mean, this isn't even close. It's 38% versus Best Buy at 3.9% versus Coles at 1.6%, Macy's 2.4%. So Amazon basically rules the online. online retail space, like Netflix rules the streaming traffic space, right? I mean, everybody's just playing for second, and I don't even know that second really matters all that much in this case. So, no question you're seeing this play out, this big trend towards e-commerce. Macy's, it was fascinating. Back in November, we were looking at Macy's. They were having a decent year. They had reaffirmed their annual guidance. It seemed like they were bringing on some additional

staff in expecting a good holiday season that really did not work out for them. Conversely, you see something like a Wayfair. Wayfair was experiencing record traffic numbers with tremendous growth there. So it is really about more than just low prices and selection. It's about that convenience factor. It's about great customer service. It's about easy returns. I mean, I feel like we need to figure out a way to incorporate some sort of personal time-savings dynamic and valuing these firms, because that really is one of the big advantages they have today. I think in the age of the old economy, we just occasionally. accumulated too many department stores, both too many companies and then too many actual doors,

too many stores themselves. And now in the new economy, we're seeing that that's not sustainable and we need to pair back. And whether it's Macy's or Sears or so many of them, closing underperforming stores, I mean, so many of the underperforming is almost, you know, that's the norm nowadays. They're just not that strong. And the other thing that I won't be fooled again, I say this is probably 10 years in, is the guidance for the holiday seasons is just so bad. They're optimistic. They think things are going to be good. Guidance from the companies themselves. From the companies themselves. They never really turn out to be that way. Shame on me

for being fooled 10 years in, but not again. I think it's also fair to note there are ways to play that brick and mortar space that can work out. You just need to find something that is unique, differentiated. I mean, I look at something like Alta Cosmetics, for example. They have really exploited that brick and mortar space, because the nature of the product, the consumers like to go, sort of touch the makeup, try the makeup, see what the offerings are. I don't think you're allowed to touch the makeup unless you buy that. Well, unless you're trying.

The samples. You can try it. But maybe something like Dick Sporting Goods, another good example, where you see these types of brick and mortar retailer still prospering, doing okay in the face of this massive moot to e-commerce. Right. If you're in a top-tier location and have a good customer. service experience, like you talk to, Jason, then you can still thrive. What's fascinating

too is Amazon, as we know, is building out retail locations now. They're opening a giant bookstore in Manhattan to just sell books. They're calling it Barnes & Noble. But if you think about it, it's a lot easier to go from the e-commerce to the bricks and mortar versus the other way around. I mean, you have a lot of brick and mortar. You've got to start closing stores down. Amazon can be very selective about any physical stores they open and make sure they really only put something in a high traffic area that's going to have the demand. And then they have all the data for what each region is interested in buying,

and they can have it there for you or get it to you in the same day. Certainly. You know who's not having trouble selling stuff? Apple's App Store. Apple announced this week, the New Year's Day was the single busiest day ever with more than 240 million in sales. And for 2016, the company earned over $8.5 billion. And Jeff, I know this is a company that is not hurting for cash, but I have to believe that the revenue out of the App Store has got to be incredibly high margin for them. Yeah. Of that $8 billion, I'd estimate they keep about 90 percent of it. So it's almost

all profit. That said, the company had $215 billion in sales last year, so this $8 billion even is very small compared to that. But still, the app ecosystem has shown its strength in spades. The app developers themselves have made some $60 billion since the app ecosystem. since the ecosystem started. What? Are we up to 10 years now even? Just about. So it's been an incredible job and revenue generator for a wide swath of people and businesses, not just Apple. But it's some nice pocket change for Apple every year to get $8 billion and growing. What's fascinating too is that the revenue grew this year as much as it has

in prior years, even though iPhone sales have stalled a bit. So that just speaks to people rely on more and more on apps for day-to-day life, and they get the new apps when they need them, and also strong sales in China of apps. Do you think they send a fruit basket to Pokemon Go for that? Because that had to contribute just a little bit to the 8.6 billion. Yeah, you know, if Apple were some smaller, lesser company, they probably would be calling them up and saying thanks, but Apple probably barely noticed. Not so much. Shares of Sears up 10% this week after the company sold its craftsman

tool business to Stanley Black and Dead. Decker, and I'm sorry, Ron. I'm having a real tough time with this one. Up 10%. Is that fascinating? That's a lot of enthusiasm for a very struggling retail. And by the way, three, four months ago, there were reports that Craftsman, that they were going to sell it. It's a good brand. There were reports they were going to sell it for as much as $2 billion. They sold it for $525 million. What are you saying? I'm saying, kudos to Stanley Black and Tucker. What are you going to do if you're at a lot of

Lampert and you're the majority owner of a failing realtor, you're going to try to monetize whatever you can. That's real estate. That's brands like Craftsman that could be Kenmore Appliance or diehard batteries. You're going to do whatever you can do. On his way, he still believes he's going to turn this into a profitable company. I don't think so, my friend. But while he's trying to do that, he's ejecting capital another $1 billion, some monetized by real estate, some in the form of debt. He's all in. Let's say that. I don't blame him for doing that. I'm just wondering who are these investors who are looking

at all of this data and saying, oh, yeah, I'm bidding this thing up. You know, it's the kind of thing where when we said JCPenney was dead and it turns out JCPenney wasn't dead. Or Best Buy. It remains to be seen. Or Best Buy. There are investors who can buy distressed equities and do well. For the average retail foolish investor, I think there's other places to put your money in better ways to make money by investing in good, solid companies and holding for the long term. If he pulls this off, kudos to him, but not with my money.

He has got to sit around some night and just regret ever hearing the name Sears and ever getting involved. He should just think about how his life would be if he had never made this investment. Yeah, it's a mess. Just put the money in Amazon instead. How many years ago you did this. That's a good point. Or a money market account.

And we should make clear, as Chris, you pointed out before the show, they didn't really sell the Craftsman brand for 900 million. They sold it for 525 million now, 250 million after three years, and then annual payments over 15 years, if the thing still exists. Right. So, you know, the headlines are a bit misleading. Can we go ahead and everybody lay out their sort of bet right now? I mean, does anybody at this table see Sears existing in 15 years? No, maybe as some kind of REIT spin-off or something like that, but not as a retailer.

I have a hard time thinking it's going to be here in 15 years. Coming up, we'll dip into the full mailbag. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Full Money. Chris Hill here in studio with Jason Moser, Jeff Fisher, and Ron Gross. Our email address is Radio at Fool.com. Drop us a note from time to time, would you? Radio at Fool.com. From Tobin Anthony here in Virginia, he writes,

is the decline in publicly traded companies really a trend that should concern small investors? And he included a link to a Wall Street Journal story. The headline, Ron, is America's roster of public companies is shrinking before our eyes. You go back 20 years ago, more than 9,000 public companies. Right now, there's fewer than 6,000. There are a bunch of reasons for that, but I think his question is a good one. Should I be rooting for this trend to continue? Well, I think it is a trend, clearly, but I don't feel that something regular investors should worry about. There's thousands and thousands of great companies still out there to invest in. And, you know, as you said, there's many reasons why we've seen a decline. Part of that is

murders and acquisitions. Part of that, a big part is the access to private capital is so extreme right now. A company like Uber, for example, doesn't need to go to the public markets to raise capital and grow the business. And why in the heck would you want to be public if you didn't need to be? Because it's a big pain, whether it's a pain with the SEC or with investors or having to meet short-term targets or dealing with shareholders. So if you don't need the public markets to access capital, then most companies will probably say, no thank you. Yeah, we have seen a lot fewer IPOs, certainly over the last couple of years. Yeah, and so the even bigger thing I'd be concerned about is that the companies that do

come public, the best of them anyway, come public at a much higher valuation than they historically did. Like Microsoft, for example, came public at 500 million in valuation. Really? Amazon at 400 million. Facebook came public at 68 billion. So your return is minuscule compared to what you could get by. buying those other companies in decades prior. So there's much less money to be made in the public market because what Ron just said, private equity is getting it all. So this is another

case of big money getting more money in their own pockets at the expense of a wider public. The counter to that I'll say is private equity, venture capital, they do need exit strategies and liquidation events. So we will see some of these companies still go public at some time, but when they're much bigger companies, probably versus when they're medium size and need capital. Yeah, I think when they go public at those big valuations, I mean, let's look at something like SNAP, for example, that's supposed to go public this year at some point with, they're projecting somewhere in the neighborhood of $25 billion.

Now, this is by all means an unproven business to this point. Very, very curious to see exactly how profitable it can be, particularly that they've changed sort of their raison d'etra, so to speak, of being a camera company. I mean, I don't know. It seems like there's a pretty good track record of camera companies having a tough time making a go of it. So, yeah, I mean, just because it's going public, I think there's fewer now, which means they get greater headlines, but it doesn't necessarily make them good investments.

That's true. And so the kind of high profile companies that do go public, like last year, soared even more, because there's so much demand. And buyer beware for these big valuations when they do hit the markets. It's really okay to go ahead and wait a little bit. Let some of these IPOs play out. Let them establish a bit of a track record. Give them a couple of quarters to report numbers.

Kind of see how management's running the business. You don't have to rush in. can certainly take your time and still make some good investments. Hopefully, like Ron said, it is just a trend, and hopefully it will reverse, though it won't be pretty when it does. But when the market falls, crashes, and private equity drives up, assuming it does, then you'll see companies looking to the public markets again for capital, hopefully. Quick question from Todd Neiman. I wanted to get your thoughts on Netflix. I know in general

everyone likes the company, but in my mind, it appears to be overvalued. I'm wondering if it might be a viable short position. Any thoughts on the valuation of Netflix? Jeff? Here's how I would treat Netflix or Amazon or any kind of high profile company that looks expensive. If you admire the company, I would own it. I would buy it. I wouldn't worry about the valuation. I'd look to own it for the long term. I wouldn't want to short this type of company when they're succeeding on an operational basis. In most cases, I have shorted Shakejack, for example, in valuation. But in most cases, you want a short a company that's failing, not doing well,

et cetera, et cetera, because it's so costly if you're wrong. You may think Netflix is overvalued, but if the market doesn't agree with you now or five years from now or however long, you can just obliterate your portfolio. It's not worth it. Instead, you want to own companies like this and not worry about the valuation. Let's go to our man behind the class. Steve Brodow, Steve, whether it's Netflix or some other streaming service. Quick viewing recommendation? You know, I saw part of the hangover over Christmas break, and it was tremendous. It's a very funny movie.

I forgot how well. It's just tremendous. All right, guys. He was hungover. Guys, we'll see you a little bit later in the show. Up next, we're heading to Sin City for a report on CES. Stay right here. This is Motley Full Money.

Viva. Las Vegas. Las Vegas. Beaver, Las Vegas with your neon flashing and your warm back. All right, before we head to Las Vegas to talk about CES, got to say a word about Green Chef. You know New Year's resolutions, two of the most. popular are taking better care of your money and getting healthier, and you can do that with

Green Chef. Their USDA certified organic meal kits make it easy to cook healthy and feel great about where your food comes from. Green Chef delivers everything you need to cook amazing dinners right to your door, organic, non-GMO ingredients, pre-chopped and pre-measured. I did this. I made a fantastic lemon herb salmon orzo that I got to say, the best. The best part, besides the fact that it was easy to make and it was delicious, was the fact that my family was actually impressed that I did it. So that's another benefit of Green Chef. You can actually impress someone in your life.

All you got to do is just go to greenchef.com slash fool. You'll get $50 off today. And you can choose the plan that's right for you. They've got options like vegan, gluten-free, paleo. There's no shopping, no planning. You can switch between menus, skip weeks. You can cancel whenever you want. Go to greencheft.com slash fool and get $50 off today.

And now, let's go to Las Vegas. Welcome back to Motley Fool Money. I'm Chris Hill. This week, more than 170,000 people have descended upon Las Vegas for CES, the biggest consumer technology trade show in the world. David Kretzman is a senior analyst with our Motley Fool's Supernova Investing Service. And he joins me now from Vegas. David, good to talk to you.

Hey, Chris. to talk with you. What is your headline for CES so far? I would say that this is the year of the realistic self-driving car. Obviously, there's been a lot of buzz about self-driving cars last year at CES and over the past year. But this year, I think companies are taking a step back and the public as a whole, taking a step back and saying, okay, maybe we're not going to get to full autonomy right away. But let's focus on the incremental innovations where cars will become increasingly capable of being self-driving, at least in certain circumstances, like on the freeway or certain areas like that. Cars that are fully autonomous where you just get in, you don't have

to touch the steering wheel at all, you don't need any human control. That's further down the road, but these incremental improvements, that seems to be more of a focus this year at CES. How do you think something like this will play out for investors? Because I think it's natural Anytime we talk about the automotive industry, I think as investors, it's natural to just gravitate right towards the automakers themselves as opposed to who's making the parts, who's maintaining these cars, who's producing the technology behind it. When you think about this space as an investor, where do you think the opportunities are going to be?

Yeah, it's interesting. You can look at pretty much all of the automakers now are investing in these self-traumers. driving components in some shape or form. Then you also have the hardware makers like Nvidia or MobileI and many others. I'm personally more attracted to the software side of the equation. I just think that's something that's a little bit easier to scale in a profitable way.

It's harder for competitors to replicate. So if you're a company like Baidu, which is the leading mapping company in China for autonomous vehicles, so Baidu understands the roads in China better than any other company, literally. That's a huge advantage for a company to have. So any companies that can get that software advantage, I think that's one of the more attractive areas for investors to benefit over the long run.

You mentioned Nvidia, the graphics company with a stock, by the way, that's up more than 200% over the past year. One of the keynote speeches at CES this year was the CEO of Invidia. You had a chance to check it out. What were your takeaways? VINVIA is in a powerful position. I wish I had invested last year after we saw him at CES. But the company is really in a wonderful position. They're essentially powering the computers behind key trends like gaming, autonomous vehicles, artificial intelligence, big data. So this

really started as a company that made graphic processing units or GPUs for PC gaming. And that was more of a niche for the company. The company has really dominated. that niche over the long term. The company was founded in 1993, so it's grown quite a bit over the past two decades. But they found other use cases, very valuable use cases for their technology, for those GPUs with those areas I just mentioned. So the company is in a very powerful position to be powering the computers behind all of these key trends that everyone's talking about. And I think the difference is, Nvidia is walking the walk compared to some other companies that maybe are loosely tied to these categories and they really tried to hype that up.

Nvidia is making hard cash already from these different categories. So that's a position you love to be in. I mean, the company now has $3.7 billion in cash. Free cash flow is growing. Margins are growing. Sales are accelerating. So it's not surprising that the stock was more than tripled over the past year. And I think there's still room for the business to grow in 2017 and beyond.

It does sound like they are in a good position. And it also sounds like they are moving into competitive spaces where they will face new, very large competitors in the public markets. When you say that they're going to be working on sort of the powering behind everything that they've already produced, anytime I hear cloud computing, I immediately go to beheemots like Microsoft and Amazon with their web services and Oracle. that sort of thing. Is that a concern for NVIDIA? Certainly the company might be expanding out of its core competency. I think that that is a risk

to watch. But one thing that NVIDIA did during the keynote was they announced about 100 new partnerships, whether it's companies like Google or auto suppliers or automakers like Audi. The company really seems to be focused on establishing partnerships with companies in all these different fields partnering with these companies so they can integrate their technology into all these various trends so again i think the company is doing more than just talking about it they're already doing it they're already on the ground working with these companies very closely whether it's bydo google automakers auto suppliers you name it or even uh in the case of video game streaming facebook live or twitch so the company has formed these partnerships i think that that puts them in a pretty

good position, even as they're expanding into markets beyond PC gaming. Let's get to some of the other technologies on display, because certainly anyone who has seen anything about CES knows that a big attraction is the trade show floor. So I'm curious as you're walking around, what have you seen in terms of, and I'll just spot you up with a couple of different categories and tell me what your impressions have been. And let's go towards health and fitness. What have you seen that has impressed you in terms of connected fitness?

Really, it's been more of the same. Like, we've only spent a little bit of time on the trade show floor so far, but whether you're looking at Fitbit, Under Armour, even traditional watchmakers like Fossil, which is branching into wearables, like a smart watch, it's hard to distinguish between all of these different companies. So I think this is a space that's getting very crowded. And I think if you're a consumer electronics company in the connective fitness space,

you need to find some way to distinguish yourself. And I'm not sure if I really see that. There might be some superficial differences between, say, a Fitbit product versus a fossil smartwatch or anything that Under Armour is coming out with. So I don't know, my initial impression sort of confirms what I've already

kind of suspected with the space, is that this is a very crowded market. It's going to be hard for these companies to maintain pricing power, maintain their margins, maintain their competitive position over the long term, because there's so,

many competitors like any consumer electronics company and consumer electronics tends to be a graveyard of companies that don't rhyme with schnapple so i don't know that that's that's my initial takeaway there's obviously a lot going on with the connective fitness space underarmor is giving a keynote later today actually so we'll see if the company has more announcements about that connective fitness category but at first glance it just seems like this is a very competitive space and i if i'm an investor i would be a little bit cautious before treading into this category. So you haven't had a lot of time to be on the trade show floor, but I know one thing you've had time to do because I saw a pretty awesome video of this is test out some virtual reality

software where you were being a fireman. Do I have that right? Because that's what it looked like. It looked like you're in your headset, you're in your gear, and then the camera shifts over, and in the virtual world, you're putting out a fire. Yeah, talk about a use case that I never would have thought about with virtual reality. Yeah, so we put on a jacket. So it looks like a fireman or a first responder jacket. And then you have this controller that looks like a fire hose. And you put on the headset and you're basically in a kitchen and there's just a fire starting in the kitchen. And as the fire grows and as the flames get bigger, the jacket that you're wearing actually starts to heat up and then you get more smoke in the room so it becomes harder to

see and you're trying to power the hose but you feel the water pressure from the hose and becomes harder and more strenuous to keep the hose and guide the hose and guide the water to put out the fire. I actually didn't put out the fire so if anything it confirmed that I should not be a first responder but this is this is an interesting demonstration of possible use cases with virtual reality because obviously if you're a first responder, training in a scenario like that is very difficult or dangerous or even impossible. So virtual reality could open up the door for more use cases like that. So that definitely opened my eyes to other potential possibilities with virtual reality. And I think there are thousands more that we're not even thinking of today.

Well, and I'm curious if other people that you're talking with at CES are speaking to that, Because I think for a lot of investors, it's easy to think about virtual reality and the applications that go along with gaming. But I think naturally, there are a lot of people, and I'll put myself in that category, who don't really think beyond that, when there probably are very significant applications for virtual reality software and hardware beyond that. And I'm just curious what people are saying in terms of how big VR could get. Certainly it could get a lot bigger. I'd say obviously the immediate focus is on gaming and just making virtual reality more accessible to the wider public.

So Samsung actually, they reveal that they've sold 5 million of their gear VR headsets. So that shows that virtual reality is becoming more mainstream than it ever has been up to this point. But still, certainly the focus, it's kind of a battle of what comes first, the chicken or the egg. does the content come first for these virtual reality devices, or do you need a larger audience of people to be using those devices to attract the content makers? So it's kind of this chicken and egg back and forth.

And initially, most of the use cases will center on games. But I think as more people get their hands on these headsets, get familiar with the technology, and as more developers get familiar with the technology, you're bound to see this expanded to other fields, like possibly real estate. Like you could tour around a home,

through your virtual reality headset. Different use cases like that, I'm sure will pop up just as the technology becomes more prevalent. But first things first, the bulk of the focus is on that video game category. How much, if any, blowback is Samsung dealing with at CES this year about one of, if not the biggest technology stories of 2016? and that is the Galaxy 7 phone catching on fire and being banned from airplanes and Amtrak. Is that still an issue that people at Samsung are dealing with at CES? Well, people might be treading a little bit more cautiously

around the Samsung booth at CES, but no, honestly, it hasn't been something that I've seen come up, but it's a huge trade show. So maybe other people are talking about it, but it seems like Samsung, they're obviously trying to refocus on the gear VR and everything else that isn't exploding. All right. Two more questions, then I'll let you get back to work.

What is the strangest bit of technology that you have seen? Aaron Bush was on our Market Foolery podcast earlier this week, and he talked about an article he read where someone has produced an internet-connected toaster. And we were really trying to figure out why we would need to buy an internet-connected toaster. I'm curious what's the strangest thing you've seen. Yesterday I saw a smart water bottle. So this is a water bottle that has Bluetooth and possibly Wi-Fi in it, and it's supposed to measure your hydration levels and different things like that.

I don't know, maybe other people will use that, but that was just something I looked at and I just thought to myself, huh? Really? Do we need that? But I'm sure there are other things. Then we also have Edwin, the Smart Duck. That might go in the brilliant category. It's essentially a smart duck that is connected, Bluetooth connected, It glows, so it's like a nightlight for kids.

It can play music. I'm thinking, man, if I was a kid growing up, I would have wanted that Edwin smart duck. Wait a minute. I'm sorry, let's back up. It's a duck that is a nightlight, but it also plays music and conceivably talks to my kid? That's the headline for CES 2017, Chris. Edwin, the smart duck? Edwin the smart duck.

What more do you need? So you have the smart duck, you have the smart water bottles. If I'm picking between one of the two, I'm definitely going with Edwin the Smart Duck. If I have to take one home with me, I'm actually going to take Edwin the smart duck home. Because the idea that I need Wi-Fi to tell me that I'm thirsty, I feel like human beings come equipped with their own thirst monitors. That's something that millions of years of evolution handles pretty successfully, I would say. On a more serious side, have you seen a bit of technology that you thought,

ooh, if they're giving those away for free, I'm absolutely taking one home with me. Something that was interesting. I don't know if this is necessarily something that I would put in my home right now, but it's essentially a composter from Whirlpool, and I just thought, man, this is pretty amazing. So it essentially looks like a trash can, and you just stick it in your kitchen, you put any like foods, crabs, or waste or compost into that bin. And over a certain period of time, it does all the magical,

things and you can just pull out a little drawer at the bottom after a certain amount of time, and it's turned into fertilizer. I'm like, well, that's a pretty nifty thing. I don't know what happens if it breaks down if you just have to deal with these unbearable smells in your house or something, but I thought that technology is interesting. I don't know, yeah, like I said, I don't know if that's something I take home with me right away, but down the road, if I have a garden, I might go with that whirlpool compost or trash can look alike. And if version 2.0 of Edwin, the smart duck, also has some nice sense that Edwin can emit, then you can pair those together.

I mean, what more do you need? I think we have the perfect combination there. If you want to check out more highlights from David Kretzman and the Supernova team that's in Las Vegas, including, by the way, that video of David attempting to put out the virtual fire, you can go to CES.fool.com. That's CES. David Kretzman, I will let you get back to work. But remember, it's Las Vegas. Have a little bit of fun, too.

I'll do my best. Thanks a lot, Chris. Up next, we'll give you an inside look at the stocks on our radar. This is Motley Fool Money. 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 yourself stocks based solely on what you hear. Welcome back to Motley Full Money, Chris Hill here in studio once again with Jason Moser, Jeff Fisher, and Ron Gross. You can check out Pass episodes of Motley Full Money and all of our podcasts by going to Podcast.fool.com. You can

subscribe on iTunes, Stitcher, Spotify, Google Play. Click the subscribe button. You got Motley Full Podcasts on demand wherever you want, whenever you want. Wow. How about it's amazing. And the price is right, Ron. Let's get to the stocks on our radar. And Steve Brito hit you with a question you're up first, Ron. What are you looking at this week? A recent reg from our service income investor looks really interesting to me. It's Cedar Fair, ticker symbol, F-U-N.

funds. What could be bad about that? The third largest amusement park operator. They own 11 parks. Big barriers to entry in this business. It costs a lot of money to construct a new park. Getting the land is difficult. They have a dividend yield of 5.6 percent. Income investors sees 20 percent upside to the stock. Steve? Question about Cedar Fair? When people get stuck on those rides for 12 or 14 hours at a time, you'll always see that on the news. That's the only time I really see amusement parks on the news is when someone's been stuck in a ride for 22 hours.

And the stocks dip, and you buy on the dip. Jason Moser, what are you looking at? Taking a closer look at Market Access. Ticker is MKTX. This is a business. They operate in electronic trading platform, which enables the trading of corporate bonds, other types of fixed income instruments. So very, very exciting business, as you can tell, Chris.

Sounds sexy. This is one that I used to have on the watch list at MDP, and I hang my head in shame for taking it off because the stock has done very well since. I've always had trouble getting a grip around the valuation, but I'm starting to believe that the valuation is simply due to the nature of the competitive position of this company. I mean, it is a proprietary technology. They do what they do very well. It builds out network effects.

There are switching costs, gives them a little pricing power there. So operating in a very highly regulated industry like this, it's difficult for competitors to jump in there and really compete against them. So good business, bring them back to the watch list. It's 50 times earnings. I still can't get my head around that. valuation, but it is a high-quality business. Maybe it deserves it. Steve, question about market access?

How can they become the dominant player in this space when it seems like everyone is involved in some sort of trading platform? Well, I think it really boils down to the technology in doing something that others aren't. Typically, bond trading and fixed income investments have been sort of fragmented, so to speak, and they're really consolidating this and bringing a consistent platform to it all. So it's worked out for him so far. Jeff Fisher, what are you looking at? So it seems timely to bring up again medsia.

to bring up again Medtronic, ticker is MDP and MDT. I'm so used to saying million dollar portfolio, MDP. So MDT, one of the largest medical device manufacturers in the world, everything from pacemakers to insulin pumps. The stock is down quite a bit since its earnings last month, but I think any issues that it did have or has right now are temporary. Shares now trade at less than 15 times expected earnings and yield about 2.4%. So for a top-tier company like this, I think It's a good time for someone to consider taking some shares. Steve, question about Medtronic? Does a new president help or hurt Medtronic's possibilities for the future?

Great question, Steve. I'm kind of treating that as a neutral because I just don't know. Medtronic, market access, Cedar Fair, very different types of businesses, Steve. You've got one of these stocks you want to add to your watch list? I think Medtronic seems the most promising for me right now. As Ron Gross shakes his head and disappoint. Enjoy the ride, Ron. All right, Ryan Gross, Jason Moser, Jeff Fisher, guys. Thanks for being here.

Thanks, Chris. That is going to do it for this week's edition of Motley Full Money. Our engineer is Steve Broido with a little help from our man, Dan Boyd. Our producer is Mack Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.