Motley Fool Money - Chips, Netflix, and Betting on the NFL

Episode Date: January 24, 2020

Intel reports surprising earnings and hits a 19-year high. Netflix rises on strong international growth. American Express and Atlassian hit all-time highs. And Procter & Gamble deals with sagging diaper demand. Senior analysts Andy Cross, Ron Gross, and Jason Moser discuss those stories and also weigh in on AMD, Comcast, Disney, IBM, and Intuitive Surgical. And they share three stocks on their radar: Tractor Supply, Live Oak Bank, and Datadog. Plus, Villanova sports law professor Andrew Brandt talks about the business of the NFL and the future of sports gambling.   Thanks Health IQ. See if you qualify for lower rates! www.healthiq.com/fool   Thanks to Grammarly for supporting The Motley Fool. For 20% off a Grammarly premium account, go to www.Grammarly.com/fool Learn more about your ad choices. Visit megaphone.fm/adchoices

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go to health IQ.com slash fool, take the proprietary health IQ quiz and potentially save up to 41% on premiums. All right, let's do the show. Everybody needs money. That's why they call it money. The best thing in life are free, but you can give them to the best. From Fool Global Headquarters, this is Motley Fool Money Radio Show. I'm Chris Hill, joining me in studio this week, senior analyst Jason Moser, Andy Cross, and Ron Gross. Good to see you, as always, gentlemen.

Hey, Chris. We've got the latest headlines from Wall Street. We'll talk sports business with our guest, Andrew Brandt. And as always, we'll give you an inside look at the stocks on our radar. But we begin with a big company hitting a big number. Intel's market cap crossed the $300 billion mark on Friday after Intel shares rose nearly percent on a strong fourth quarter report. You tell me, Andy, how good was this report? Yeah, a really nice quarter from the giant chip maker record sales. They were up

8 percent to more than 20 billion. That was a billion head of their own guidance. Earnings per share was up 9 percent. They increased the dividend by 5 percent to a dollar 32 now. Operating margins were a little ahead of estimates. What's really driving the Intel strength is the data center business. The volumes were up 12 percent for that business. And the price per the chips were up 5%. And now the data center revenues make up half of the business. So the data center growth, as we use more and more need for data centers, and the explosion of Internet of Things and all the mobile usage,

data centers is a big growth for Intel, and it's done a really nice job getting market share in that space. Back in my day, semiconductors were always, these chips, they weren't that exciting because it basically became a commodity business, right? and everyone could make them and everyone had the ability to compete on price or not. Is the innovation driving kind of this big growth wave right now? Yeah, across when you look at Intel, AMD, Nvidia, there's still price competition, lots of competition out there, but really the innovation, when you think about all of the demand for all the products that require chips and semiconductors, I mean, Internet of Things,

the mobile eye acquisition by Intel has done really well from them, still memory chips. The PC, the basic PC business, is relatively flat. It's nice. They maintain some market share, maybe not as exciting. Really, the growth in the bigger enterprise data space, which is fueling the growth for Intel in the predictor. Yeah, I mean, as you see more and more this sort of immersive technology future that we jump into, 3D sensing, stuff like that. I mean, I think a lot of this technology, it becomes more specialized. So to your point, back in your day, when it was kind of all just sort of cookie cutter, it all did the same stuff. I mean, now, I think you're seeing more specialization there. I think Lamentum is a great example.

We've talked about that before in that VCS technology for AR and VR and VR and 3D sensing and whatnot. That said, Intel, $300 billion company, all the earnings, they plow back in a dividend and share buybacks. The growth is still on the single digits. So you're not like lighting the world on fire here. A lot more growth than some of the more exciting chip players like Nvidia, but pretty stable and the stock's done really well in the past couple years here.

Well, and you mentioned AMD. I mean, there was a stretch of time where A. AMD was barely surviving against Intel. And you look at least from a stock standpoint, AMD has been a much better performer recently. And I think that speaks a lot of the market opportunity in just the chip business. If you are willing to innovate and change your business a little bit and go more on that side of the exciting chip business, there's some growth there and it's showing the stock prices for the chip players.

I feel like Intel is the kind of company where nobody's sure if they actually own the stock or not. You've got to go back and check your statements. Oh, yeah, I think I do. Well, that's pretty good. The stocks up like 80% in beating the market over the last five years. Not bad. Shares of Comcast down a bit this week, despite the fact that Comcast's fourth quarter profits and revenue both came in higher than expected. What's going on here, Rod? I'm seeing these reports of some analysts on Wall Street being worried about how much money Comcast is investing. It doesn't seem like they're looking to invest an unreasonable amount of money in 2020. Well, it is certainly a very capital-intensive business.

Cap expenditures decreased 10 percent, however, to 6.9 billion over the year. So, you know, it is a capital-intensive business, but I don't think that's what's going on here. I think what we've seen in growth in broadband customers was good, but the company lost more cable TV subscribers than people were expecting, which actually I don't think is that surprising in the world we live in. Lost 149,000 cable customers, but added 440,000 high-speed interest. internet customers. That's just the way the world is moving. Streaming and broadband is the new cable,

if you will. And they're doing a good job of recognizing that. Not a high growth business net net at this point. Consolidated revenue only up 2 percent with NBC Universal, actually down almost 3 percent. I don't know if anyone actually saw the movie Cats, but based on these results, I'm thinking the answer is no. On the other hand, cable communications was up about 3%. So they kind of offset that. That led to an earnings per share increase of 10%. So not too bad at all allowed them to actually increase their dividend by 10%. We're starting to get more details on Peacock, which is their video streaming service. It seems like they are going to leverage the content that they have, including the Summer Olympics,

which they've already sold more than a billion dollars worth of ads against, rather than go the route of Disney Plus, Apple Plus, and really invest tens of billions of dollars in a regional programming. Yeah, I mean, they're holding out a really big hope that Peacock is going to be a big deal for them. I think it remains to be seen. The pricing is interesting everywhere from zero to if you want to pay up for the no advertising model. We'll see what happens. Certainly the content is there. As you said, the CAPX is big in this industry. I misspoke a little bit. 10 billion was their total CAPX. 6.9 billion was just for their cable communication sector.

segment, obviously the more capital-intensive part of this business. Netflix added nearly 9 million net global subscribers in the fourth quarter shares of Netflix up a bit this week. And Jason Reed Hastings and his team don't appear to be worried about Peacock or Disney Plus or any competition. I tell you, quarter-in-and-quarter-out, that guy just paced a smile on his face. It's like, hey, we welcome the competition. This is a great space to be. Join us. I mean, who knows how genuine that is. I think he's just the smartest guy in the room, personally. But I think if you look at Netflix, I think down the road, competition may undermine

its pricing power at some point, but you can't discount the head start that they have in this space and this massive user base that they've built up. I mean, subscribers of 160 million plus at this point. And so I think, yeah, the big challenge for them is to continue to keep a focus off of content costs, because content costs are certainly going up. But, you But we know it's a business that can handle that. They're tapping the debt markets when they need to. Thankfully, interest rates are low. They don't have to really worry about that.

I think maybe the market becomes a little bit more concerned with content costs if or when we see the international growth starts slowing down, because clearly U.S. growth is slowing down. I mean, the U.S. market here is very saturated. And it does look like forecasts for subscribers in this quarter were a bit lower than what the market was expecting and what the company lobbed up last year. So, you know, maybe we start to see some scrutiny there if that membership, if the subscriber number starts to slow down. But for now, they continue just to churn out a lot of content that just attracts a very broad cross-section of a viewer across the world. And clearly, the market is giving it some credit.

Well, you have also a company with a market cap of, what, $150 billion. It's versus Comcast, 200 billion. You have a company that, to Jason's point, are the first mover advantage. I think really on the international front, that's obviously what the growth is. But there's some real value in all the content program they're doing. We see it here. The four of us are on the table here in the U.S. mostly. But internationally, they really have a nice advantage there that I think going forward will be a huge boon for the subscriber base and hopefully, obviously, for the stock as well. I think the biggest mistake, I just see it Corrin and Corrid is this assumption that it's a zero-sum game. It's just not. I mean, it's not Netflix wins and Disney loses. I mean, we're seeing a rising tide in this market. We're going to see some winners. Netflix is going to be one of them and Disney's probably going to be another one.

Real quick, right before we came in the studio, saw that David Einhorn, the hedge fund manager, is increasing his short position on Netflix. Really? He looked out across the entire universe of stocks and said, that's the company I want to bet against? I think that was my initial reaction, too, is I respect him as an investor and the things that he's done. I mean, to me, like, this, I put this in the class of Tesla Netflix. These are cult stocks you just don't want to be shorting. I don't know why you would short that. I mean, his concerns over debt load, cash, burn, future content obligations are all correct. I mean, technically, that does make sense. But I think his mistake is this perception that it's an earning story.

This is not an earning story. Still, the market is looking at this company today as a subscriber story. And as long as they keep adding subscribers, I just don't think that is a very wise, short position to be taking. Good week for Atlassian. Second quarter profits and revenue came in higher than expected for the Australian Software Company. Shares of Atlassian hitting an all-time high on Friday. And really nice quarter still. This company continues to deliver these collaborative software tools, Gira, Trello now cross 50 million registered users. Sales were up 37% for the quarter. The subscription sales were up. 50%. So really nice growth in the earnings per share. It generates a lot of actually healthy

cash flow and free cash flow. So they continue to innovate their marketplace, which is where developers can go and place apps and buy apps cross the $1 billion in lifetime sales for the first time. That's been around since 2012. The guidance continues to be in the sales level around like the 30% level. Scott Farquhar, Michael Cannon, Brooks, who are the co-founders, and own a large chunk of stock. Continue to build this company for the long term, and the stocks obviously reacted not just positively this week, but over the last couple of years, and the stock's up more than 300, 400%, 400%. Coming up, we know he's already checking on them, but we're going to check out two of Warren Buffett's biggest holding. So stay right here. You're

listening to Motley Full Money. All right, before we get back to the show, quick shout out to Gramerley. Gramerley's a writing assistant that makes you look and sound smarter, whether you're at school, at work, you're on the go. The free version can be downloaded by anyone on their computer or phone. It reviews critical spelling and grammar, and that's great. But Gramerle's premium service gives you more advanced help. It looks at advanced punctuation, style, vocabulary, tone, readability for different occasions. Because let's face it, when you're writing for a resume, that's different than, an essay for school, which is different from a business proposal kind of thing. You know what

I'm talking about. I've said it before. Grammarly is so easy to use that I've been using it, because I need all the help I can get when it comes to things like advanced punctuation. Go to Gramerly.com slash Fool and get 20% off your Gramerly Premium account today. That's Gramerly.com slash Fool for 20% off your Gramerly Premium account. All right. Let's get back to the show. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, Andy Cross, and Ron Gross. IBM's fourth quarter revenue finally went in the right direction for the first time in over a year. IBM had sales growth. It wasn't much growth, Ron, but a win is a win. Up 3 percent, adjusting for divested businesses and currency. As you

noted, broke a streak of five consecutive quarterly declines. Listen, it's all about the cloud, and they had to acquire their way to that revenue growth. Red Hat was acquired third quarter of last year. That business was up 24%. The technology services business, which accounts for 30% of revenue down almost 5%. So there's really the story of the old business and the new company hanging its hat on the cloud. Actually, guidance is pretty strong. They're thinking that this growth will continue. Earnings per share, when all was said and done was actually down slightly. But the stock's only trading 10, 11 times earnings. If you think this red hat, you think this red hat, cloud business is sustainable and will continue stocks cheap. Based on the history of this

company and the ups and the downs, I'm in wait and C mode right now. See, I'm having flashbacks to 2011 and 2012 when we would talk about a big company in the tech space, and you would say stuff like that. Only back then, the company was Microsoft. And it took a new CEO in Suttia Nadella coming in in 2014. Ginny Rametti's been the CEO of IBM since 2011. And the stock just hasn't done well under her leadership. I don't own IBM, but I look at what happened with Microsoft, and I think, boy, maybe Lightning could strike twice with a new CEO. Perhaps. Or do you give her credit for recognizing that this business was going nowhere, going out and spending a ton of money on Red Hat, $34 billion. That could have been a big

flop. So far, it looks like it's not. And so maybe she gets credit for turning this business, only time will tell. Fourth quarter profits for intuitive surgical rose 22%. But was Wall Street impressed with that, Jason? No. Shares down on Friday after this report? What's going on here? You keep setting that bar high. I mean, eventually, you know, you can't do anything right. But I mean, I think the bigger picture investment case for intuitive surgical is very much intact. I think the market is reacting, and appropriately so, to some real competitive factors that I think are going to keep management's attention here in the near future. But if we look at just the numbers, it just remains a very impressive business. I mean, global procedure growth was 19%. In the U.S., it was 18%.

They placed 336 new Da Vinci systems bringing their installed base to almost 5,600. Total recurring revenue in the quarter was closing in on 900 million, up 24%. And that, you know, that's 70 to 75% of the business is that recurring revenue. There's a lot of certainty and a lot of clarity in the business and the model and the profitability. And so I think the stock is typically priced appropriately, but they did mention in the call, they talked about some elongated negotiation timelines in regarding to getting those machines into new hospitals. And it all comes back to competitive pressures. I mean, they are the leading, they are the leader in the robotic surgery space, but not the only one that does it. There's a lot of very well-capitalized companies out there that

do the same thing. And we're seeing some new ideas and products coming down the pike. here. And so Intuitive is going to have to answer to that. And that's going to cause some margin pressure, I think, this year and some questions as to profitability. But still, very, very strong business. I'm not saying they don't have competition, but given the switching costs that a hospital system would have to go through, doesn't that give intuitive surgical a little bit of a moat? I think absolutely it does. And that's a very good point to make. And that's why that 5600 installed base is such a great advantage. Kind of like Netflix getting that massive

base of subscribers. I mean, Da Vinci and Intuitive, they really have a massive base of users out there already, and the switching costs are extremely high, particularly when you consider all that goes into training the physicians on how to use these machines. And to that point, their iris augment the reality system entered clinical use this past quarter and is getting a lot of favorable reviews from physicians with boots on the ground experience there. I myself have had the opportunity to use a Da Vinci machine, not on a patient, but in an operating room and it is unbelievable. But the amount of training that is required to be good at it and to use it on an actual human being is really quite impressive. And it's an impressive machine.

Were you the guy that stitched up that grape? Was that you? Were you the grave video? Shares of American Express moving higher on Friday after fourth quarter profits in revenue came in a little higher than expected. They didn't crush this quarter, Andy. But this does cap a really strong year for AMX. It does, Chris. And the stocks didn't all time high. I mean, it's been a really nice kind of resurgence here for a company that many of us just thought just has lost it to the competition, Bank of America, Capital One, just other companies that may have been a little bit more progressive than American Express has.

But clearly, a very nice quarter. Revenue's up 9%. It's a 10th consecutive quarter that they've seen revenues grow more than 8% when you account for the foreign exchange situation. earnings per share up 17%. They added 11.5 million proprietary cards during 2019. 70% now of new cards, new card members are choosing the fee-based options. So they continue to have that stability of earnings. Global consumer sales were up 10%. Global commercial services sales were up 7%. The merchant network business saw some growth a little bit.

Both those are very profitable. So you have a very steady business. sells at 15 times earnings. Very nice profit margin. The stock's done fairly well over the last couple of years. And like I said, now sits at an all-time high. Berkshire Hathaway owns 152 million shares or 18.5% worth. So clearly done very nice for Berkshire shareholders as well. Procter & Gamble's second quarter revenue was lower than expected. Ron, this is a big company, a ton of consumer brands that we all recognize. Is the global birth rate slowing down really? YP&G stock was flat. I mean, yes, they sell diapers. They sell a lot of other stuff, too. That really is the reason that sales growth was rather anemic, only up about 5%. Weakness in baby products because of the global birth rate. Also saw some weakness in feminine care segment as well. But there was some strength here, specifically the health care segment,

skin and personal care category, were both strong. You did see operating margins. wide in earnings per share, actually up 16%. Not a bad quarter at all. Stock has performed really well over the last year. Yeah, this is one of those businesses. It's not the sexiest thing in the world, but if you just go to the Procter & Gamble website and just look at the brands, there are so many that are already in your house. Yeah, oh, for sure. And many of them are a billion-dollar brands. Sometimes these companies accumulate too many, and then they have to start divesting. But company is doing well. They

were able to raise guidance. Shares are around 24. four times, which is pretty much in line with Colgate and Kimberly Clark and folks like that. Stock and the company doing a nice job. All right, Ron Gross, Jason Moser, Andy Cross. We'll see a little bit later in the show. If you're looking to impress people at your Super Bowl party next weekend, we have got you covered. Because up next, we'll dig into the business of the NFL and more with Andrew Brand. So stay right here.

You're listening to Motley Full Money. Welcome back to Motley Full Money. I'm Chris Hill. We are days away from Super Bowl 54. to help us dig into the business of pro football and more. We bring in Andrew Brandt. He is the executive director at the Morad Center of Sports Law at Villanova University. He's also a columnist at the Monday morning quarterback, host of the Business of Sports Podcast.

Andrew, do you ever sleep? You've got a lot going on. Yeah, good to be with you, Chris. I always say this to people because they're always figuring out, you know, what should we call you? You got all these titles. I say, listen, I have a lot of jobs. so I don't have to have a real one. That's really what I do.

I left the Packers almost 10 years ago, and I don't say this to be arrogant. I just haven't had a 9 to 5 or 9 to 8 job since, but I kind of pieced together a lot of deals with academia and media in trying to sort of peel back for people what goes on behind the curtain, and luckily I've been able to do that. Well, let's peel back the curtain on the NFL. when you look broadly, and we'll get more specific in a minute, but broadly, how is business for the NFL these days?

Well, it's the same answer every year. It's booming. And the revenues keep going up. And I think the primary driver of revenue always, probably since the start of the turn of this 2000 century, is media. And media includes broadcast, which it always has included, but now we have other forms of media with streaming on the horizon.

in a big way. And those deals continue to look really well for the future because ratings are always high and ratings seem to be at a peak this year where Fox and ESPN and CBS all setting records. For games, you can pick your category for top demographics, for top games, for most people watched, for most people tuning in at any time of the game. It's just all up across the board when media's down everywhere else because consumers have so many options. So just on that metric alone, business seems to be booming.

I'm sure if I were to ask someone who works in the front offices at the NFL, why ratings are up this past year versus the previous year, I'm sure they would give me a line about, well, you know, the game is stronger than ever, and it's all about the players and that sort of thing. As you were talking, I couldn't help but think about the rise of fantasy football. To what extent is that attributable to ratings going up on television? Well, I'm going to take you a step further because this is the first year where we've had not fantasy football only, but real gambling on football, legalized.

Supreme Court decision, of course, in 2018, and now we have legalized gambling in 15 states, many more to come. And that increases engagement. But I think fantasy football has really done a service to the NFL, maybe more than any other sport, where you have this incredible fan engagement at the early age. And they're getting engaged with the sport through their fantasy teams, whether season-long fantasy or daily. fantasy, and that's bringing them up to adulthood and then through adulthood. And I'm sure you know, I know everyone listening knows people not only in one or two fantasy weeks, but in multiple dozens even, where it's just become such a part of their life.

And yeah, that engagement is tremendous for the NFL and is extended now to real gambling, even beyond fantasy. You and I talked on the show back in 2018 when the U.S. Supreme Court had just clear the way for states to legalize sports betting. And one of the things you said at the time was that out of the four major pro sports in the U.S., the NBA had taken the lead in terms of embracing this legal landscape and the NFL had not. That was a year and a half ago. Is the NFL starting to make its peace with gambling?

Yeah, Chris, they were brought into it kicking and screaming as opposed to the NBA where, I think we talked back in 2015, we're at. Adam Silver had just written unsolicited op-ed in New York Times saying we need to bring legalized gambling out in the light and keep it out of the shadows and make it real. And no one ever thought this would happen at the court level because New Jersey fought to have this done for years and years and lost at every level. But lo and behold, May 14th, 2018, the Supreme Court rules for New Jersey opening the flood games. to legalize sports gambling around the country and taking away the monopoly that Nevada had. So now they're no pretenses.

But the NFL, I've said this many times, they've been very hypocritical. You know, it was only five years ago. They shut down a fantasy football convention with Tony Romo and so many other players because it was in Vegas. Two years ago, they put a team in Vegas, which will start playing.

In September, yet the draft will it be there in three months in April as they kick off Las Vegas. So they establish a franchise before the Supreme Court decision in the mecca of gambling in this country. So their mixed messages have really sort of dissolved now. They're all in. Caesar's Palace is the official casino sponsor of the NFL. They have training camps every year for different teams at the Greenbrier Resort in West Virginia. whose primary feature is an ornate casino.

So I don't think there's no pretense anymore. You have owners like Jerry Jones and Robert Kraft who are early investors in Draft Kings. You walk into AT&T Stadium in Dallas. You walk through the Draft King's Fantasy Lounge. So there's no pretense anymore. The lines have now not even blurred. Well, you mentioned Las Vegas,

and of course, Las Vegas is still the epicenter of gambling. in the United States, but it looks like New Jersey's coming up on the outside. There was a report released this week by the New Jersey Division of Gaming. Sportsbooks in New Jersey are closing in on that of Las Vegas in terms of being the most lucrative in the country. Is it really shaping up to be this I don't want to say a Cold War, but is it really shaping up to be a battle of these two Titans, or do you expect other states to start to rival what's happening in Nevada and New Jersey? Yeah, it's going to be tough for other states because as much as I talk about sports gambling,

it's just a small slice of gambling as people in that industry know. It's just a, I don't even know, it's a very small percentage of the overall handle. And, you know, when you talk about Vegas or New Jersey, which is a distant second, you have all the, you have the glitz and the glamour and the shows and the table games and the high roller rooms. And it's so much more than the sports book. That's the added advantage these resort places have that go way beyond. Now there's some of that in Mississippi and there's some of that in Louisiana and the offshore.

But again, those places have such an advantage. I think the one thing that people ask all the time is, was the legalization of sports gambling good or bad, for Nevada. Bad because they lost their monopoly, but good because it's made it so credible. It's no longer the bookie in the back of the barbershop. And now sports gaming is credible,

and therefore Nevada takes even on a more sort of elevated notion in this world. So I think good and bad for them. I've got to find a new barbershop. I don't have a bookie in the back of my barbershop. I think my dad did. Let's go back to the NFL And this is something you and I have talked about in the past, and it's the health issue.

And in the past 10, 12 months, the NFL has seen some pretty high-profile retirements from the league. Rob Grankowski from the New England Patriots, Andrew Luck from the Indianapolis Colts. And most recently, Luke Keeckley from the Carolina Panthers, these are all star players all under the age of 30. and even though their careers are more than double the length of the average career of the NFL player, because I think that's somewhere still in the neighborhood of about three years, it's still noteworthy that these are players who are not in serious decline in terms of their performance on the field, but they have made the decision from a health standpoint and from a financial standpoint, I'm good in terms of money.

I'm walking away from the game while I can still walk away from the game. And I'm curious, what, if anything, these retirements and any retirements like them tell you about the future of the NFL? Yeah, I think these are notable. I have a couple of comments. One, you noted that they've played more than twice the average career, and they're walking away at the top of the game. You mentioned three players that there's no way. in god's green earth that the colts with luck the patriots of gruncowski and the panthers with keekly

were walking away from them but at some point it would at some point it never ends well i'm a team i was with a team that walked away from bret farv i mean this happens in this sport and it's never pretty

and they're taking the affirmative step to do it before that's done to them I think it's news because of that. I push back on this notion of early retirements, as I wrote in Sports Illustrated, about, you know, these guys had long careers. It doesn't seem like long in sort of the, again, the Tom Brady, Brett Farr of 20-year careers. But in the scheme of things in professional football, it's a long career. And they're financially secure. And they decide they're going to opt out. Now, we don't know how much of it is health and concussion and fears about CTE.

That can only get inside the heads of those players. But it's not a trend, but I see this more happening. I see players that get to 28, 29, and they say, I'm good. You know, I'm good. And I've got money. I put in a good career. We had a good run. And I'm going to get out before the health gets me or the team gets me.

because as I always say, 98% of NFL players don't retire. They are retired by their employer. Before we wrap up with your prediction on the Super Bowl, I want to switch sports on you and move to baseball for just a second because even though it's the offseason for baseball, it is very much in the headlines with the cheating scandal around the Houston Astros, swirling around the Boston Red Sox. We've seen managers and GMs that have lost their jobs.

To this point, players have not been directly punished by Major League Baseball. Do you expect that to happen at some point if enough evidence comes forth? I guess I'm asking you to put on your league executive and your lawyer hats on and tell me where you think this is going in terms of Major League Baseball players? I guess my first reaction is surprise that it only extended to management. And if it's the scheme that Major League Baseball and Commissioner Rob Manfred seem to be to him and to the powers that be at baseball, I just don't know why players aren't disciplined. They were part of the scheme.

They were not unwilling actors. They participated in listening for the bang of the drum that a fastball was coming. I don't get it because, again, I'm used to the NFL world where not only players are disciplined, but there hasn't been any regard for the status of the player that disciplined. We've had players like Ben Roths, Berger, and Tom Brady, Ezekiel Elliott, et cetera, disciplined heavily. So I don't get it.

I really don't. I understand the severity of the penalties for the organization, for the GM. for the coach, for the draft picks, but I just don't get it. You're right. Something more could come out to implicate the players, and then we may see player suspensions, but I'm not following it.

Now, it's not players, but managers, the ripples have extended, as people know, the erstwhile coach of the Red Sox, Cora was involved with the Astros back then. He's gone. The erstwhile coach of the Mets was involved as a player and he's the only player mentioned, he's now gone as Mets manager. So I don't think we've stopped in terms of tentacles that are going to extend from this.

It's a major, major scandal. Super Bowl 54, Kansas City Chiefs with their prolific offense against the San Francisco 49ers and their great defense, the classic matchup, where do you see this game going? I know, these are two extremely fast teams. really the speed jumps out at you at this game. It's going to be so entertaining. As we talked about before, it's going to get Bafo ratings. Got into my head, I'm going to pick the San Francisco 49ers because of defense.

I know Patrick Mahomes, and I know the wonderful offense of the chiefs. I just don't trust their defense as much as I do the 49ers defense. So 49ers by a field goal and based on a superior defense. You can read them in Sports Illustrated. You can check out the Business of Sports podcast. Andrew Brand, always good talking to you. Likewise. It was a pleasure, Chris.

Coming up, we'll give you an inside look at the stocks on our radar. This is Motley Fool Money. All right, before we get to the stocks on our radar, let's talk about you for a second, because if you're a runner or a cyclist or you do CrossFit, you're some type of athlete, even if you're just someone who eats healthy, you're a vegetarian, you're a vegan, you deserve to be rewarded for your hard work with more affordable life insurance rates. And that's where health IQ comes in. They can save you up to 41% because physically active people have significantly lower risks for things like heart disease, cancer, diabetes. But these savings are exclusive to health IQ,

and you're not going to find them anywhere else. And you must qualify to get a special rate. So how do you do that? that's easy. You go to health IQ.com slash fool. Take the proprietary health IQ quiz, and depending on your score, as well as other related qualifying factors, you can save up to 41% on your life insurance premiums compared to other providers. Again, that's health IQ.com slash fool. All right, let's get to the stocks on our radar. 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 Fool Money, Chris Hill here in studio with Jason Moser, Andy Cross, and Dr. Ron Gross. Before we get to the stocks on our radar, and we go to our man behind the glass, Steve Broido. Who's going to hit you with a question, as he does? It is the 20th anniversary of Steve Broido joining the Motley Fool.

So a shout-out to our man behind the glass. Steve, here's to the next 20. Thank you. All right. Let's get to the stocks on our radar. Ron, you're up first. What are you looking at this week? I'm trying to find something that looks cheap, and it ain't easy. So I'm going to go with tractor supply, T-S-C-O. The stock has really underperformed over the last year,

which is really the main reason why it looks not to be too expensive. They're the largest operator of rural lifestyle retail stores in the U.S. They acquired Petsense back in 2016 as an avenue for growth. I think we'll see margin improvements going forward. Sales growth should continue. Recently announced a new CEO who was the former president, of Macy's. I'll leave it to you to decide whether that's good or bad. The company has raised their dividend every year for the past eight, only 18 times forward earnings. They report earnings

January 30th. Steve, question about tractor supply? So even if you were a rural lifestyle person, can't you just order your stuff on Amazon like everybody else? That's what makes them kind of Amazon proof, because some of this stuff is so big and so heavy that it doesn't really lend itself to online shipping. Jason Moser, what are you looking at? Yeah, digging more into Live Oak Bank, ticker is LOB, a little shameless self-promotion here, Chris. But earlier in the week, I had the opportunity to interview the president of the bank, Huntley, Garriott on Industry Focus. So check that in an interview, if you like. It was very fun, very enlightening. This is a, it's an interesting bank. It's based on a tech platform. They have no physical branches.

They have a very strong presence in lending to SBA-type company, small business administration loans. I found out that one of their biggest points of exposure, one of their biggest borrowers, veterinary practices. Chris, this is another way to play into my favorite market in pets, apparently, at least. Neat business. I want to learn a little bit more about it. Earnings came out this week, and the market seemed to approve. So I'm going to enjoy digging more into this company. Steve? Question about Live Oak Bank? Sure. How do you compete with somebody like Synchrity Financial or Ally, which just seems to have a huge footprint? I think that's a very good question. And really, Huntley was telling me it all boils back down to doing something really well. They consider themselves a niche lender focusing on businesses that other competitors out there in the space don't really know a heck of a lot about. And their technology, the data that they're able to gather makes them a better lender and a better partner over time.

Andy Cross, what's on your radar? Digging back into the IPO space, Data Dog, DDOG, operates a really fast-growing platform that helps customers monitor their systems, especially tied to the cloud. and looks for data insights. The IPO stock price was around 27. Today, it's around 40, 42, a $13 billion market cap, not making money, growing exceptionally fast. Revenue is growing more than 90%. This dollar-based retention rate is up to above 140%, so its customers continue to order more and more products. The likes of The Motley Fool, Amazon, Twitter, Zendesk, lots of big customers use their services. So, obviously, very volatile, new stock to the markets, but exciting growth opportunity, Datadog. Steve, question about Datadog? What's the value in having a cool name to your company?

Because Data Dog is a cool name. Well, we work at a place called The Motley Fool, which I think is fairly cool. I am not a cool person, Steve, so I can't really comment on that. But, hey, it sounds cool to me, and the symbol, D-D-O-G sounds good, too. Data Dog, Live Oak Bank, Tractor Supply. You got a stock you want to add to your watch list, Steve? Jason has made a compelling argument, so I'm going to try to do. check out Live Oak Bank. That is a wise kick based on clearly years of experience, Steve. Good call.

Jason Moser. Ron Gross. Andy Cross. Thanks for being here. Thanks, Chris. That's going to do it for this week's edition of Motley Full Money. Our engineer is Steve Broido. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.