Motley Fool Money - Disney+ Dazzles Wall Street

Episode Date: April 12, 2019

Disney shares hit an all-time high after the unveiling of Disney+, a streaming service that’s less expensive than Netflix’s. Uber gets ready for its Wall Street debut. Delta takes off. JetBlue plans for a trip to Europe. And Rite Aid extinguishes its e-cigarette business. Analysts Andy Cross, Emily Flippen, and Ron Gross discuss these stories, dig into the latest hot IPO, and talk Pinterest. Plus, we talk with David Kuo, CEO of Motley Fool Singapore about the US-China trade war and investing in Asia. Learn more about your ad choices. Visit megaphone.fm/adchoices

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And as always, we're giving an inside look at the stocks on our radar. but we begin this week with the Magic Kingdom. On Thursday, the Walt Disney Company held an Investor Day to unveil more details about its Disney Plus streaming service. CEO Bob Eiger said the service will cost $6.99 a month, lower than analysts we're expecting, and nearly half the cost of Netflix's standard plan. Disney Plus will immediately include most of the movies from Marvel and Pixar, as well as 30 seasons of The Simpsons. That was on Thursday.

and on Friday, Andy, shares of Disney had their best day in a decade and hit an all-time high. Chris, forget Game of Thrones and the Battle for Westeros between the Starks and the Lannisters. The real battle is in streaming. I didn't understand one of those references. It's in streaming, streaming between the likes of Disney and Netflix and AT&T and Facebook, Twitter, YouTube. The list goes on and on. This was Disney's latest salvo and their most important one, this big streaming initiative they talked about for the past couple years, announced that they were going to go off of Netflix and move all to their own streaming platform.

$7 per month, Chris, I mean, Netflix costs $11 to $13, so it's a bigger discount than I think that many of us, at least that I was expecting, they're going to invest more than $1 billion per year in content. They're hoping for 60 to 90 million subscribers by 2024. I mean, when you just think about the catalog of programming they have, this makes, I mean, for many of us, almost a no-brainer. Ron? Yeah, I'm coming for the high school musical series, but I'm staying for the Lizzie McGuire reruns.

Beautiful. No, I really like this announcement, and I like the detail that accompanied the announcement, the future guidance, which could easily end up being wrong, but I appreciate the effort. The big thing will be to see if they can get enough subscription revenue to offset the licensing revenue that they will lose. They'll lose $150 million from Netflix alone

when they pull their content off of that. So that will be certainly something that I'm watching. And I actually think they're operating in a space here that has relatively limited competition because they are focusing so much on children, right? And kids programming, there's not a lot of options for that with a lot of the current streaming services. So having a dedicated streaming service specifically for kids, especially at a price point this low, it definitely has a great value proposition. And I'll just add that.

It's clear why they're doing the low introductory pricing, right? They're going to bring people in, show them the value of the service. And I have no doubt that a year, two years, three years from now, they're going to be charging two or three times as much for this service than they are right now. Well, they certainly have a lot more runway to raise prices. Netflix has shown the ability to exercise that pricing power that we like to see, Andy, in different businesses. Certainly Disney, I think Emily is absolutely right. Disney has a lot. Disney has a lot. the ability to do that even more so. I'm curious, though, Andy, you mentioned all the different competition in streaming, and there was one name you didn't mention, and I think there's a reason why. You didn't mention Apple, which made a big show of their streaming service. Bob Iger

is on the board at Apple. He was asked about his role when it comes to those things. And he said, and I quote, I recuse myself from those discussions. There aren't many of them. It's still a very small business to Apple. So on the one hand, you have Apple saying, This is where we're going. And you got a board member saying, no, they're not really there. Yeah, just a slight oversight in my part for getting Apple there in the list. I mean, the list of competition is extensive. Apple clearly, you know, very interesting to compare the announcements.

Bob Iger talking from a studio where they film Mary Poppins, has been around for 70 years. No real All-Stars, no stars joining him so much. Apple totally different. It just speaks to Disney's brand equity and the content library. they have behind there. Clearly, Apple is, they've talked so much about the streaming space. You can't be a media tech company these days. And by the way, those are really merging together, especially at these large mega-cap companies without competing streaming. Disney, just from the content library alone and not having, Netflix will spend more than 10 billion in content this

year, maybe up as high as 15 billion, some are saying, Disney just doesn't have to spend that because they have the content library to rely on. I think it will be interesting to see if down the road. They bundle this with ESPN Plus and maybe even Hulu. Hulu dice here because they only own 60% of it. Obviously, Comcast and AT&T being the other owners. My bet is against the bundling, but I'll be interested to watch. No, I think they say it's likely. I think they say the likely to bundle all three together. I think that's a huge mistake if that's true, because you'll look at how just paid TV developed and it started to bundle everything. And the thing is people hated it because they're paying more and more every single month, and they weren't using all the content. So a household

that once-to-watch ESPN but doesn't have kids is slowly going to grow frustrated with the fact that maybe those two things are bundled Disney Plus and ESPN, and they're paying for all these kids shows, which still never use. So I think if they go that direction, they're kind of repeating past mistakes, and they're going to start losing business to businesses that are doing specialized streaming services. But would you be good if you had the choice of Alicart or bundle? Yes. Okay.

Real quick, before we wrap up, Andy, Bob Eiger set the benchmark out there in terms of several years out, how many they're looking to get out. What do you think success looks like for them over the next, say, maybe a shorter timeline, like two or three years? Well, I think if you look at Netflix at 140 million global subscribers, if they can get to 90 million, which be more than half of what Netflix is today in five years or four years, I think that's a great success. I think they could do it. I kind of just modeling in 100 million members paying $10 bucks a month, you know, more so. You've got $10 billion in revenue per year. Not a bad business for Disney. Uber filed its S-1 as it looks to go public later this spring.

Uber is aiming for a valuation of $100 billion right out of the gate run. I don't blame them for that, but I'm not interested. How about you? Well, if you like revenue, then you're interested. If profits are your thing, then perhaps not. And don't be misled. Some of the articles you'll see out there do say that Uber is a bit profitable almost to the tune of a billion dollars. But that's misleading because there's about $4 billion of one-time occurrences in the latest year for investment gains.

So the company really has an operating loss of about $3 billion. But listen, hey, 91 million users up 35%. That's about five times the number that Lyft has. It's a very strong business. But as they rightly say right in the S-1, operating expenses are actually going to ramp. So profits are not going to be a thing here for quite some time. Yeah, that was the part that left out of me, Emily. They basically said, yeah, we don't know that we're ever going to be profitable.

And maybe I spend too much time looking at companies that are probably never going to be profitable. That didn't scare me, honestly, as much as the industry itself kind of scares me. Because when I look at these companies, they're competing so heavily over. price. And for both Uber and Lyft, I can only speak for myself and my experience, but I've had a discount on both of those apps for months now. And I have no doubt that's related to the fact that they both of these companies are trying to go public, have gone public, and are just trying to show the power of the user base. And there's no doubt that there's value in being Uber, right? You don't say, I'm going to, you know, go hail a cab over my app. No, you say, I'm going to

grab an Uber. I'm just on an Uber home. So there's a lot of. value in that name brand, but $100 billion, that scares me because in order to have that investment, say, double, they're going to have to grow like gangbusters. And that, in my opinion, will require something like self-driving cars. I appreciate that Uber was very upfront in their S-1 filing about how they're spending money, how they're going to ramp that up, and what a challenge profitability is. But we got a little bit more insight this week into another IPO that's coming up, and that's Pinterest. They set their price range at $15 to $17 a share. That's a business I don't know as well as Uber, but I have to say as an investor, I'm more interested in it,

in part because they appear to be much more conservative in their tone with how they're talking about going public, especially when you consider, Ron, that Pinterest is in the business of digital advertising, which seems like it has a pretty nice runway of growth ahead of it. I think they probably do have, they've grown nicely in the past. The runway is the there. I think this will actually be a successful IPO if I had to make a prediction here. But I think it'll probably have some staying power, unlike Lyft, which was hot right out of the gate and has come kind of back to Earth. I'd be really curious to see how Pinterest just stains itself from a stock price perspective, and I think it will be good.

I think it'll be good, too, and a large part of that is because they actually, at the midpoint of their estimated price, are priced below what they've been priced at in the private market. So they're actually pricing themselves at a reasonable valuation. And you'll notice that their revenue growth is greater than Uber's revenue growth. So to me, it's between these two IPOs, Pinterest is the hands-down winner. But this is another company that there's no problem in taking your time before jumping in. I feel like that way with most IPOs. There's really no catalyst for you to say, I have to buy Pinterest or Uber on the first day.

Give it some time. Let's see how management does. It'll be interesting. Uber has about $11 billion in revenue right now. It's growing 40% a year. And let's say the market value of the stock is about $100 billion. So relatively on the sales basis, it looks a little cheaper than a lot of these other technology companies that are coming out.

But Uber's a little bit different because it relies so much on people, much more than other technologies at scale a lot better. But just to dovetail off of what Emily said, we had another example this week of what she was talking about in terms of another hot IPO. This time it's a software as a service company called PagerDuty. up more than 50% on the opening day? It just seems like it's getting pretty frothy out there. And I just sort of look at that and go, okay, that's fine. Good for you. But let's see how you do over the next couple of quarters. Yeah, great performance at the first day with PagerDuty. It was up 60%. It sells it more than 30-time sales now.

So definitely the valuations are getting very elevated for some of the SaaS companies. Yeah, but PagerDuty does have great growth. It does have very, very impressive retention rates, customer retention rates. whether that can support, what is it, like $2.5 billion, $3 billion valuation at this point remains to be seen. Coming up, the friendly skies are about to get a little less friendly. Details next. This is Motley Full Money. Welcome back to Motley Full Money. Chris Hill here in studio with Emily Flippin, Andy Cross, and Ron Gross.

More competition in the airline industry. This week, JetBlue announced plans for service to London starting in the year 2021. and shares of JetBlue, Emily, were up on the news. There was a bit of a teaser leading up to this announcement. I mean, JetBlue has been trying to break into Europe for a while now. There's been lots of talk about that. And honestly, I was a little bit disappointed that it was only London. I mean, I think there's a great opportunity here for JetBlue.

But it concerns me that it seems that they've really only focused on London at this point. In 2021, I mean, we saw how quickly Southwest kind of turned the tables when it comes to adding new locations to their fleet. And this does seem a little slow to me, but I'm excited by it. I've personally never flown on JetBlue, and maybe if they are now the new discount airline, especially with the fall of Wow Airlines, if it'll get me to London, I'm happy. I'm surprised that that didn't work. I have flown JetBlue a bunch of times. I really love their service. It will be interesting to see, though, if Southwest decides to get involved in this, because South West has always seemed like they're not interested in transatlantic flux.

Yeah, you're going to be harder with the fleet that the Southwest has. I mean, JetBlue maybe making some adjustments here. Competing, I mean, that can be very profitable, the transatlantic routes, but competing against British Airways is, you know, there are no slouts. They're not going to roll over on this. Sticking with the airlines, Andy, last week on the show, Delta Airlines was the stock on your radar. This week, Delta reporting record revenue in the first quarter. Yeah, it was a really nice quarter. The stock was near 50 at the end of March, and now it's close to 58. You saw revenue per available seat mile increased 2.4%, which was above their 2% estimate. They had just a couple weeks before that, so they kind of maybe lowballed a little bit.

Sea capacity up 5%. Total revenues grew 7.5%. I know you guys talked about some of the benefits that they have from the American Express relationship that could see benefits up to $7 billion a year by 2023. So EPS earnings per share up 28% and expected free cash flow of $3 to $4 billion this year. So Delta, probably one of the best performing airlines from an operational capacity out there, continued to do really well, and they showed that in the first quarter. Too early to tell if they're benefiting from the Southwest grounding of the max plans. But did they make any comments that you know of in terms of going forward or with guidance? Now, what impressed me is they had the best first quarter completion performance of 99.06%. which means they canceled less than 1% of their flight.

So from an operational capacity, they are doing everything they can do inside the Delta family. But make no mistake, they were absolutely asked about Boeing, as we talked about on the show recently, as we expect all airlines when they're reporting to be asked about Boeing, whether they've got the 737 max in their fleet or not. Rite Aid announced it will stop selling e-cigarettes. But before you leap to your feet to give the pharmacy chain a standing ovation, Rite Aid also reported a dismal fourth quarter and a reverse stock split, Emily, to the tune of one for 20.

Yeah, Rite Aid reminded everybody that it's still a publicly traded company today. You know, I feel like it's one of those companies. They've fallen now. I think they're the fourth largest drug chain, and drug chains in general aren't doing that well in the U.S. and not to mention when you're a small one, like Rite Aid. So things are not looking great for them. I think this is a company that is very quickly going down. Hill. And I'm not about to give Rite Aid a gold star for cancelling sales of e-cigarettes, because

the FDA has already sent them a letter saying, hey, we caught you selling e-cigarettes to minors. Please stop. But is it safe to assume that we should expect e-cigarettes to go in the direction they're going in terms of companies not selling them? But we should also expect we've talked about recently with the influx of cannabis, with the topicals, more and more of those coming? Yes, yes to both of those questions. The first being e-cigarettes has been something that the FDA has been trying to crack down on for more than a year now. And it actually has larger implications, I think, for the online markets, because there's really no way for people who are selling these online to verify whether or not the person who's purchasing them is of age and is giving to them

to somebody who is of age. And so they've had a lot of issues in regulating these companies, and it's something that's top of the FDA's mind, but also CBD is top of the FDA's mind. Granted, the FDA has granted permission for people to sell essentially lotions and stuff that has CBD in it. So that's what our drug chains are getting into right now. There's really no legal issue with that as of the moment. I expect as regulations continue to loosen, we'll see more and more players jump in.

And next month is the first public hearing, I think, that the FDA is having on this. So I kind of feel like, since we're right across the Potomac River, we should just, you know, we should go hang out. Definitely planning on it. Check out the hearing. For the past hundred years, the Swiss government has had mandatory stockpiles of supplies on hand in case of war or disaster. These supplies include things like rice, sugar, and cooking oil. This week, Switzerland's Office for National Economic Supply announced that coffee will no longer be on this list of supplies. I'm quoting here from the report, the office has concluded that coffee is not essential for life.

It does not contribute to safeguarding nutrition. Ron, how can they be so wrong about an issue like this? What about Swiss Miss Instant Coco? Oh, you know, that's in there. That's in there because that falls under the chocolate. With study after study coming out seemingly like clockwork every six months, another study about the health benefits of coffee, Andy. How are they ignoring all of this scientific research?

Yeah, when you think they have three months of sugar, four months of rice, four months of cooking oils and fats, three months currently have coffee and they're moving away from that? Come on. What's going to fill in the space? The shell space now. What should we put in there? That's my question. I mean, you're clearing out the space. You must have something on your mind. What's it going to be? They have a lot of wheat. Four months of different kinds of wheat. Well, just to go back to the business of coffee for a second, I think it's no coincidence whatsoever that we're going to be. when the Swiss government is making this announcement that shares of Starbucks hit an all-time high on Friday and Duncan Brands about 2, 2.5% away from an all-time high.

So investors know what's up. Switzerland, please, it's not too late. Come to your census. Come to your census. We implore you. All right, Ron Gross, Emily Flipping, Andy Cross. Thanks for being here. We'll see you later in the show.

Thanks, Chris. How is the trade war with China playing on the other side of the world? We're going to discuss that and more with our guests. Yes, David Kuo. Stay right here. You're listening to Motley Full Money. Welcome back to Motley Full Money. I'm Chris Hill. David Quo is a regular financial commentator for the BBC. He's also the director of Motley Fool, Singapore, which is where he joins me from now. David, thanks for being here. Good evening to you. Evening where you are, where I am, it's morning, but that's the miracle of technology.

Correct. We are separated by 12 hours. Yes. Morning here is evening over there and vice versa. So before we get into individual stock investing, I want to go macro for a second because one of the dominant storylines for U.S. investors over the last six months has been the trade dispute between the United States and China. How is that story playing out where you are? Well, I mean, if you have a look at the dispute between America and China, I think most people over here recognize that it's not really about trade, Chris. It's really about economic ideology. We have America, which is one of probably the greatest free markets in the world. And, of course, we have China, which is one of the biggest command economies in the world. And really, what is happening is that we're having this debate in front of the whole world where both sides say,

that I am right and you are wrong. So America says that it is the free market that works, and China says, no, no, no, you're totally wrong. It's the command economy that works. And the central government should decide how resources are going to be allocated in order to better the entire country. So really, this is playing out in front of everyone at the moment, and I have no idea who is going to win. If we have a look at China, yes, the economy is slowing down, but the recent figures seem to indicate that China has turned around. So China is saying that its way of handling a slowdown within its economy by cutting the reserve requirement ratios, by cutting taxes,

and directing money where it thinks will produce the greatest amount of productivity is going to be useful for China. So maybe some people will have a look at the Chinese way and say, that's not such a bad model after all. In terms of the volatility that happens, and that can be the result of any number of things, not the least of which is the President of the United States tweeting, I get the sense that as an investor, just as an individual investor, you look forward to moments like that, because you've always struck me as someone who embraces the volatility as a buying opportunity.

Well, absolutely right, Chris. And the reason why I say that is because I have absolute faith in corporations. I have absolute faith in companies being able to survive whatever the economic conditions might be. So you can have high interest rates and companies will be able to survive. You can have economic downturns and companies will be able to survive. And that really is paramount for me. And with regards to those tweets that you talk about, well, personally, I stopped listening to Donald Trump ever since he said that his inauguration crowd was bigger than Barack Obama's.

And I looked at it and I thought, well, that's absolutely not true. And subsequently, I found everything that he said to be challengeable, almost to the point where how can I believe a president? And I have greatest respect for your leaders over there, Chris. But I just think, how can I possibly believe a man who tells me that his father was born in Germany when clearly his father was not born in Germany? I mean, where do you draw the line where you start saying, I believe what you're saying? So, consequently, I don't really sort of pay much attention to the president's tweets, but I do like the idea that it does create volatility in the market.

And when share prices are attractive enough, I will go in and buy regardless of what the president might say. So for all of the headlines that China gets, obviously there are many other countries in the region. as an investor at the moment right now, what countries in Asia excite you the most? Well, I tell you what, Chris. I mean, let me just paint you a very quick backdrop of what has been going on in China. Many of the factories in China have been relocating their production outside of China. It isn't because of the trade war that is going on between the West and the East, but in fact, it is just simply because wages are going up in China.

And about a couple of years ago, myself and a couple of fools from Australia went to China. And we went specifically to look at certain industries. And one of those industries was a garment manufacturer, which is headquartered here in Singapore, but they have operations in China. Now, when we turned up at the factory, Chris, there were no machines in the factory at all. All the workers had been dismissed, and the machines had been shipped to Vietnam. And when I asked the factory manager, why, he said simply because it is too expensive to start making garments in China now. So consequently, they put all the sewing machines onto a boat, and the boat were sent to Vietnam,

and they were up and running within two weeks, Chris. Just imagine that. They had the entire production line up and running in 14 days. And this is really what is happening in China. There is this shift of production lines from China. to the rest of Southeast Asia. Some of them will go to Vietnam, some will go to Thailand,

some will go to the Philippines, some will go to places like Malaysia. So what I'm looking at is the entire Southeast Asian region, and I'm saying which are these countries in Southeast Asia that will benefit from the shifting of the supply train from China to our particular region, our Southeast Asian region. It won't be here in Singapore, Chris,

because Singapore is a very high, wage economy. We don't really sort of make the stickers and the t-shirts and the jeans that you like to wear. But in fact, we tend to go in for more high-tech stuff. But as far as the mass production is concerned, it is Southeast Asia. So that is where I'm looking, Chris. I read an interview that you gave recently where you said that every stock in your portfolio pays a dividend. And I was struck by that. And I'm curious about a couple of things. First, How long has that been your investing strategy? It probably has been part of my DNA since the year 2001.

When I first joined the Motley Fool, I was a jack of all trades. I used to have growth stocks. I used to have value stocks. I used to have income stocks. But what really struck me one day, Chris, was that I felt totally elated. I felt really happy whenever I received a dividend check. It was almost as though it was Christmas Day, and I was opening a present. And in those days, Chris, dividend checks came in through the post.

And once I realized the enjoyment I got from receiving those dividend checks, I started looking for more and more companies that would not only be paying a high dividend, but certainly a rising dividend. And currently, my entire portfolio consists of stocks that pay dividends, and I receive at least one dividend check every month. And some months I might receive maybe five, ten, ten, fifteen dividend checks. And it is really that that drives me. So when I go out and buy shares, I'm not actually buying shares.

I'm actually buying income for the future. And I'm very careful about looking for companies that will deliver me a dividend, not just today, but certainly in six months' time, or in some cases here in Singapore, they pay dividends every three months. So, for me, it's Christmas every day when you're an income investor. So there are investors who will construct their portfolio in such a way where they will have a section that's high growth, a section that is dividend payers. Since all of your stocks pay a dividend, what do you look for next when you're looking to

buy shares of a company? Okay. What I do, Chris, is that I construct my portfolio in such a way that I have a very, a very very strong base of high income producing companies. Then on top of that, I layer companies that will grow, but at the same time will also pay a dividend. And then I have some fund stocks that I have. I mean, these are what I call my speculative stocks. They create a certain amount of excitement, a little bit of volatility in the portfolio, but again, they pay dividends. And it is only a company that pays dividends that will make it into my portfolio.

But I always ensure that my base of high-income stocks is bigger than my growth stocks and is bigger than my speculative stocks at the top. And if you have a portfolio like that, you can go to sleep at night and rest comfortably because you know that as you're sleeping, the companies are working, and then the next morning you'll be getting another dividend check. Now, before you worked for the Motley Fool, you earned a PhD in chemistry. And after that, you worked for Hilton Group's horse race. raising division as a bookmaker. So my question is, which of those two experience do you find

to be more useful in your investing life? Everything is useful because I think that, you know, if you want to be an investor, what you need to do is to learn as much about life as possible. And whether it is studying chemistry, which comes in, it came in very handy when I joined the Motley Fool because I certainly became some expert within the company on pharmaceutical stocks. So it was very helpful in that regard. Bookmaking was also very helpful because, oddly enough, around the time when I joined the Motley Fool, Internet poker was taking off.

And, of course, being somebody who was involved in the gaming industry, that was very useful too. And by the way, Chris, I got the Grand National winner on Saturday. And I don't think that's got anything to do with my gaming past, but certainly I got the Grand National winner. Can you say the same? I absolutely cannot say the same. Well, I did. It was a 9 to 4 winner. Yes. Well, I guess that just means that the next time we get together for dinner, you're going to be paying. Any time, Chris. Oh, by the way, it wasn't 9 to 4. It was 9 to 2. So it was about 4.5 to 1. So that was pretty good. Yes. Are there any betting opportunities I should

be looking forward to this year? Or are you already looking ahead to 2020 for the Summer Olympics in Tokyo? Well, I tend to stick to what I know. And I have done some gaming in the past. I used to, when I was quite young at university, go to the casinos in London. I used to go on a Friday and Saturday night, take in a small amount of money, and I would have a target. And once I reach my target, I would just simply leave. And I think, you know, if you are going to gamble, only bet with money that you can afford to lose. And that kind of sort of works with investing as well. You need to be able to say, this is money that I don't need for the next five or seven years and put that into some good stocks. And in my case, some good income paying stocks. And at the end of five or seven years, you will look back and say, hey, you know, that was a great investment that I made. That was a good decision. And I think, you know, that is how I'm teaching my children how to invest. And that is the way I do it. And I think, you know, that is the way I do it. And I think, you know, that is a good decision. And I think, you know, that is a good decision. And I think, you know,

I think, you know, it is a great way to go through life. Last thing, because we get the chance to break a little news here. I first got to know you over a decade ago when you were working in the Motley Fool's office in London, and you were hosting a weekly podcast called Money Talk. That show ended years ago. But I'm very happy to say that you're now coming back to the world of podcasting. Yeah, you can take the boy out of podcasting, but you can't take the podcasting out of the boy. And I do remember when I first started podcasting in the UK for Motley Fool UK,

the boss at the UK at the time was a man called Bruce Jackson, who is now in charge of Motley Fool Australia. And I came across this thing called podcasting, and I asked him, could I do it? And he said, well, how much is it going to cost us? And I said, probably not an awful lot. So we recorded our first podcast, and we put it up, and guess what, Chris? We had 10 listeners. And I think none of those were moddly full people themselves.

And so when Bruce came around and said, how did we do, David? And I said, we got 10 listeners. And he said, well, that's 10 more than we had yesterday. And so from those 10 listeners, we grew the numbers to, I don't know. It must have been about maybe 80,000 or 100,000 people. But it was kind of disappointing to leave all of that and come to Asia. But you're right. We're going to be starting investing in Asia podcast where we will hopefully be,

going around this particular region and give Motley Fool people and people who are not Motley Fool subscribers a flavor of how we approach investing here in Asia and how we tackle, you know, some of the more difficult countries and the more difficult economies and how we are able to hopefully sort of generate a good return for them. Investing in Asia, the new podcast from The Motley Fool is going to be available on Apple Podcast, Stitcher, Spotify, Google Play coming later this month. You can find it wherever you get your podcast. David Quo, it is always good to talk to you.

Thank you very much, Chris. Thank you. Coming up, 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 or sell stocks based solely on what you hear. Welcome back to Motley Full Money, Chris Hill here in studio once again with Emily

flipping, Andy Cross, and Ron Gross. Before we get to the stocks on our radar, we've got earnings season just around the corner. Ron Gross, I just want to start with you. What are you looking forward to this earning season? It can be a company. It could be an industry. It could just be something that you're curious to see how they do. I'm actually really looking forward to Apple's next announcement, where I'm hoping their guidance

reveal something about the health of their business. Their transition to more of a service subscription business than it has been in the past. Stock has been absolutely on fire this year. We'll see if the business results back that up. Do you think we can get Bob Higer to weigh in on this streaming business? Likely not. No, because he recuses himself. Emily, what about you?

Well, we have a lot of SaaS companies coming up in reporting, and I mentioned this earlier. But, you know, I'm really interested to see how long this SaaS kind of bubble. Yeah, arguably a SaaS bubble is coming about. Because I really think that the amazing businesses that we've seen developed just over the past few years are remarkable. I mean, some of my favorite investments are SaaS companies, but you always have to ask yourself, okay, well, it can't continue like this forever. There are so many players, and if you're in a decision-making position for an organization, I mean, your decision is becoming a lot harder.

So it becomes a question of how do you get these SaaS companies to keep their customers? You have to make that process and their information as sticky as possible, because you know what, now the next new thing is coming along. Yeah, and SaaS stands for software as a service for those out there. And don't send us emails. It's just a mini-bubble. Don't worry. You know, I'm looking at the cost structure.

I mean, we're starting to see a little bit of pricing pressure, but yet the Fed's saying, hey, wait, inflation's not running rampant, but employee costs starting to move up a little bit. We've started to see some companies talk about this. So if you're a company out there that operates with a lot of people, then clearly you have to pay those people. And if the rates to pay those people continues to increase, that could nick into profit margins for these companies. Let's get to the Stocks on our radar this week. Our man, Dan Boyd, is behind the glass, so he's going to hit you with a question. Ron Gross, you're up first. What are you looking at?

I got tractor supply. The largest operator of rural lifestyle retail stores in the U.S., more than 1,700 stores. They acquired Petsense back in 2016, another nice avenue of growth for them. The company has raised their dividend every year for the past eight. Operating results are really strong. Dividend yield currently stands at 1.3 percent for those that like a dividend, not incredibly high, but the results both from a stock appreciation perspective and a yield, both combined to give you a nice total return. And the ticker symbol? T-S-C-O.

Dan, question about tractor supply? So, Ron, I can't imagine that you own an actual tractor, but do you own a riding lawnmower? Okay, so first of all, growing up, I did have a riding tractor. We had a little bit of property in the back, and it was the first thing I learned to drive, and currently I do not have anything. Thank you for asking. So you're mown your lawn with a pushmower? There are people that do those things out there in the world, and I'm happy to support them. I'm going to have nightmares at the idea of Ron Gross driving a tractor.

Emily Flippin, what are you looking at? So my radar stock is actually a cannabis company. Don't judge me. It's called Cushko. Cushco is a really interesting play in the cannabis market because they're much more focused on the packaging. And if you're a believer that the cannabis market is going to develop as kind of like a consumer or packaging industry, then Kishko is a great play. And the reason why it's on the top of my mind right now is not just because they reported amazing earnings yesterday, management's really delivering on their guidance, but actually

because the day before yesterday, they reported that they misaccounted for a couple acquisitions which doubled their losses last year. A couple of details relating to these acquisitions were counted as equity when they should have been counted as liabilities. And so that's just a reminder to everybody who may be choosing to invest in cannabis that, hey, you know what? This is kind of par for the course now. And the ticker symbol? K-S-H-B.

Dan? Emily, what do you think the next state to legalize recreational marijuana use will be? Well, it's always kind of been up in the air. My biggest hope was honestly for New Jersey. So I'm still kind of a believer that New Jersey is going to be the next big state to jump on it. But I think federally, it's happening faster than people expect. Andy, what are you looking at? Chris, I'm sticking with the streaming businesses and Netflix reports earnings next Tuesday.

It's all about subscriber growth looking for near 25%. And to see if founder Reid Hastings and Ted Surround us, the chief content officer, have anything to say about the competition? And the ticker? N-F-L-X. Dan? Andy, I'm kind of worried about Netflix. We just talked about Disney's streaming service. Is Disney going to be what ends up as the Netflix killer?

No, there will be more than a billion streaming people out there in the next conference. couple years so, lots of room for growth. Dan, you've got a stock you want to add to your watch list? I'm going to go against the grain here, and I'm going to go with Netflix. The big surprise, the largest company we talked about. All right, Andy, Emily, Ron. Thanks for being here. Thanks, Chris.

That's going to do it for this week's show. Our engineers, Dan Boyd, our producers, Matt Greer. I'm Chris Hill. We'll see you next week.