Motley Fool Money - GameStop, Adobe, and Domino’s CEO Ritch Allison

Episode Date: March 26, 2021

GameStop’s volatility continues in the wake of earnings. Adobe has a strong start to the fiscal year. Restoration Hardware hits an all-time high. Laser equipment maker Coherent settles on a suitor. Darden Restaurants serves up a stronger-than-expected quarter. And Pepsi teams up with Peeps on a marshmallow-flavored cola. Motley Fool analysts Ron Gross and Jason Moser discuss those stories and share two stocks on their radar: Marvell Technology and Vulcan Materials. Plus, Domino’s CEO Ritch Allison talks about the rise of delivery services and the changing competitive landscape. Looking for more investment ideas?  Get 50% off Stock Advisor by going to http://RadarStocks.fool.com.   Learn more about your ad choices. Visit megaphone.fm/adchoices

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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. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money Radio Show. It's the Motley Full Money Radio show. I'm Chris Hill, joining me this week, senior analyst, Jason Moser, and Ron Gross. Good to see you, as always, gentlemen. Hey, Chris. We've got the latest headlines from Wall Street. Domino's CEO, Rich Allison, is our guest. And as always, we've got a couple of stocks on our radar. But we begin with the stock of the year so far, and that's GameStop. The meme stock of 2021 issued its fourth quarter report on Wednesday, and it was not pretty. Profits in revenue were lower than expected, and GameStop's

management refused to take any questions on its conference call. At one point this week, shares of GameStop had fallen 40%. They rebounded to finish the week down only about 10%. Ron, we've We've got the underlying business, the management, the stock itself. Where do you want to start? You kind of nailed it, Chris. The volatility in this stock this week is laughable. It shouldn't work this way. The stock market is more efficient than this stock would have you believe. As you said, shares sold off sharply on worse than expected quarterly results, rebounded by the end of the week. If we look at that quarter, and I'm going to try not to mention the word Reddit more than once, and that was the one time. So I'm going to do this story without that as a factor.

Let's look at the business. Net sales down 3%. That's on a 12% decrease in their store base and a reduction of about 27% of European store operating days. There are about 1,000 stores out of 5,000 that are overseas. Most folks might not realize that. Now, this was offset by some strong demand for a new generation of game consoles that were recently introduced. This kind of game console refresh that people were looking for did show some strong demand. But this is the 12th straight quarter of declining sales. The Brightspot e-commerce up 175 percent, represented 34 percent of net sales for the quarter, which was up significantly from previous quarters.

So gross margins take a hit, lower margin consoles. They're not as high priced as the margin. in them is not great. They had some higher expenses as well. Now, they were profitable, adjusted net income of about $90 million, compared with about $84 million last year. So, we can talk about games out of all day long and about how this is potentially a dying business, and it is, but they still are profitable as of now. And they said there's a strong start to 2021 as February comp sales increased 23%. Now we move to kind of this reorg that's going on with the Chewy co-founder and two other folks coming in, getting board seats, wanting them to go all digital,

become the Amazon of gaming, easier said than done, but a fine strategy versus the current one. The company hired three new executives recently, including a new C-O, and a new regulatory filing as if there wasn't enough going on, indicated that eight members of the board are expected to leave the company. Jason, we were talking about this earlier. I really was surprised they didn't take any calls, any questions on the conference call. Because, you know, it's fine if you want to go the Berkshire-Hathaway strategy of saying, we're issuing our report, we're not having a conference call, therefore we will not be taking questions. But to have the call, to not take questions, they had to have known that this call was going to be in the spotlight.

I would imagine. I would imagine, too, they figured that if they did open it up for questions, then that would have been hijacked pretty quickly. It would have gone in one direction, I think, in one direction only. That would have taken the narrative out of their controls. I do understand, at least, that decision that they made, whether I agree with or not. I don't know. I mean, I'm kind of torn. I mean, I do actually like calls with no questions because oftentimes, more often than not, the questions are really kind of useless to me, at least. I mean, listen, the business itself, I mean, Ron said it's a dying business. I mean, I don't disagree really. I mean, it feels like there's a lot of sort of JCPenney sort of vibes going on here. I mean, bringing in new

executive talent, you know, these fancy titles and growth and innovation, tech. I don't know. I mean, I appreciate the fact they say they're continuing the work to expand their addressable market. They're to grow the company's product catalog beyond just gaming, right? I mean, it's gaming, it's computers, monitors, game tables, mobile gaming, gaming TVs. They say that this opportunity ultimately increases their overall market opportunity by five times. Now, I don't know if that's the case. Maybe it is, maybe it isn't. But I am willing to venture a guess that there are other companies already selling that stuff as well.

Again, this is a business very much on the defensive, very much on the turnaround. Whether they pull it off or not, it remains to be seen, but I personally would not be putting my chips in the category. Yes, they will pull it off. Two quick things to note. Their only guidance was that there'll be no guidance. Specifically, they will not be reporting same-store sales in fiscal 2021. Things are too hard to predict, and they don't want to get kind of bogged down with that metric. And this is potentially smart. With a market cap of now $14.5 billion, thanks to that social media community, they are considering selling $100 million worth of stock and firming up the balance sheet a bit, which you couldn't

fault them for. Shares of Adobe up slightly this week. The software giant got a little bit gianter after first quarter profits came in higher than expected. And Adobe's management sounded pretty bullish with their fiscal year guidance, Jason. Yeah, it was good quarter, good call, outlook looks good. I mean, I recommended this company back in November of 2019. It's been a wonderful performer at eight. I recommended it based on this idea that in times of higher valuations, when the market seems like it's a little bit stretched, you really want to focus on quality companies,

not only companies pursuing big market opportunities, but companies with established reliable business models that are leaders. the space. And Adobe, to me, is just a prime example of one of those types of companies. It's a digital media company utilizing a subscription model. I mean, that's kind of a big deal. Subscription revenue is basically 90 percent of the business, gross margins, essentially 90 percent. Revenue for the quarter, $3.91 billion. It was up 26 percent. Non-gap earnings per share of $3.14 since that was up 38 percent. I think, to me, with everything they do very well in the digital media side. I do think the document cloud opportunity is a fascinating

one. It's becoming a more important part of the business. That document cloud segment revenue grew to $480 million. It was up 37 percent. For context there, if you look at DocuSign, their total business, that revenue in their most recent quarter is $431 million. And that grew 57 percent from a year ago. So when you look at DocuSign's assessment of this total market opportunity of around $50 billion. I like that both of these companies are pursuing it. I think there's a lot of opportunity there, and they're really kind of just getting started. Balance sheet is in tremendous position, around $5 billion in cash and equivalence, down a little bit based on a workfront acquisition that they made for $1.5 billion. They did note that CFO John Murphy

will be retiring at the end of the year. But again, I mean, this is a company that is just right at the forefront of this digital economy that's forming. And so I suspect that they're a plenty of good days to come. What a year for restoration hardware. Fourth quarter profits and revenue came in higher than expected. Shares of RH up 10% this week and hitting an all-time high on Friday. And Ron, if guidance from the RH management team is to be believed, the demand for high-end furniture just continues to be strong.

Really unbelievably strong. Let me give you some context here. This stock is up 1,200 percent over the last five years and up 120,000. 25% from pre-COVID levels. So, folks are clearly fixing up their homes and buying furniture, and management thinks that is going to continue, and it's not just a COVID-related bump. The quarter was really, really strong. Revenue is up 22%. Demand for their core R.H. Store was 36% in the fourth quarter. Overall demand up 29%. You saw both gross margins and operating margins widened significantly. You see that.

that kind of pricing power of some luxury furniture, adjusted net income up 57%. That return on invested capital, we don't talk about that a lot, but a return on invested capital up 53% in 2020. That's probably, if I had to say, double what a typical furniture store would look like. These are incredible numbers. For the current quarter that we're in now, demand continues to accelerate February up 73%. First two weeks of March up 96%. So, So the goodness continues. The guidance is they expect first quarter revenue to grow at least 50 percent and project 2021 revenue growth of 15 to 20 percent. And just one comment on what management said. They said they ended 2020 with just less than $3 billion in net revenue, but

they believe the data supports the RH brand can reach 5 to 6 billion in North America and 20 to 25 billion globally. So if they're right, if they have a good handle on this business and the future of this business, the stock still has room to run. run if these growth numbers continue because it's not that cheap for a furniture company at 25 times, but also, I mean, it's not priced like it's a technology company. So this could still have room. On last week's show, we told you about a bidding war going on in Silicon Valley. This week, the bidding finally stopped and a surprising winner was declared.

Details next, so don't go anywhere. This is Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here with Jason Moser and Ron Gross. In the show, we'll get to the stocks on our radar, but if you're looking for even more stock ideas and recommendations, check out our flagship service stock advisor. You get recommendations from Tom and David Gardner, their best buys now, and a lot more. Just go to Radarstocks.fool.com.

That's Radarstocks.fool.com. Get 50% off just for being one of the dozens of listeners. Coherent, the laser company that had three other businesses trying to outbid each other to buy it has picked a winner. Lumentum increased its bid, but Coherenton ended up choosing 2.6. You tell me, Jason, Lumentum says their bid was higher. Why do coherent go with less money? Well, I mean, Lamentum's bid, in fact, was higher.

I mean, math is math, and we can't really argue that, but lest you think that money is everything, sometimes I guess it's not. There were also some role players here in Silver Lake Capital and Bain Capital on both sides of that equation as well. I'm sure it would have been eye-opening to be in those meetings and on those calls because I'd imagine those folks had something to say about it as well. But it was very fascinating. I mean, this was a situation where 2-6 and Lamentum were both going to pay $220 per share in cash. 26 had the edge based on share-based component. So then Lamentum came back and actually submitted an offer where it increased the cash to $230 per share along with that share-based component, which was increased.

And yet, you have coherent, ultimately going with 26. It seems like this, perhaps it's a culture thing. Perhaps it's a feeling where coherence, business in photonics and lasers marries up with 2-6s a little bit more so than Lumentum. Lamentum being very much, you know, the leader in that VCS technology that we talk about in regard to sensors and whatnot. It's hard to say exactly why they would have gone with this, but ultimately they felt like it was a better fit. And so coherent pays the breakup fee to Lamentum. Lamentum walks away. We often criticize acquisitions. I mean, right? We criticize deals saying

it's not necessary. I'm not going to sit here and criticize Lamentum for not winning this deal. I think it was kind of indifferent as to whether it actually happened or not, because it was really about getting the technology. But at the end of the day, 2-6 is paying a King's ransom for a business that you could argue has been in a bit of a state of decline over the last five years. I mean, this is 60 times EV to EBITDA. So not cheap at all. They're going to need to prove this out. And based on the language and the call, it's going to take at least a couple of years for this to even be accretive. So maybe this is a blessing in disguise for Lamentum shareholders. Either way, I think the company will be just fine.

Shares of Darden restaurants hit an all-time high on Friday. The parent company of Olive Garden had strong results in the third quarter. And their guidance for Q4 look good too, Ron. Yeah, guidance was solid, results better than expected, but they are still quite weak. Let's be realistic. COVID had stores, obviously restaurants closed for part of the quarter, and things remain weak. Total sales down 27%. That's due to a same store sales decrease of 27%, offset by 10 net new restaurants, which helped. But, you know, if you break down and look at the segment's weakness across all segments. Olive Garden down 26 percent. Longhorn steak, down 12. Fine dining, including Capitol Grill, my personal favorite, by the way, down 45 percent. Still profitable, though. Net

earnings from continuing operations, 120 million, $236 million of EBITDA. So the company is still profitable even at these levels, but things certainly need to improve. And I think they will as the economy opens up. The board has approved a $500 million share report. purchase programs. Let's see if they go into the market and buy stock at $147 or around there where the stock is today. Some things I'd like to see is that they're increasing their hourly wage for workers. They're starting with $10 per hour, moving to $11 in 2022, then $12 in 2023. They spent quite a bit of money this year on bonuses to workers, which I love to see as well. You said Q4 guidance was solid. I completely agree. I like this one for, as

company continues to reopen. In fact, I purchased it myself a few weeks ago as a result of kind of that reopening investment. And I think this one looks good. Our email address is Radio at Fool.com. Got a note from David in Fort Worth, Texas. He writes, I've been investing for my son since he was two weeks old and plan on educating him to be financially responsible or at least fiscally fluent. What is your biggest don't when it comes to teaching your kids about good money habits and finance in general? What is the biggest mistake you've seen others make in an attempt to help their children. I love this twist on a question. We get a lot of a lot of different ways you can go with this. I think this

is, don't overwhelm them when they're too young, right? They're like a little frightened animals. You don't want to scare them off, right? You want to be gentle. I think the biggest mistake is going too far one direction or the other. Either, you know, being unable to contain your excitement and wanting to teach them everything and nerding out or or really not being quite open enough about your finances. I mean, it is trying to strike that happy medium, but I think going too far one way or the other can often be a mistake that many of us are guilty of. Ron, what do you think?

I would say if you've accumulated a nice amount of savings and investments, don't necessarily reveal all of that to them right away at a younger age. You don't want them to mistakenly think that they've got all this money behind them. behind them. You want them to stay hungry, for lack of a better word, and realize that they have to continue to work and save. For a kid, a few thousand dollars seems like a lot. $20,000 seems like a lifetime of money. So be a little bit careful about complete transparency there. And then I just want to mention, don't forget that once your children start to earn money, not babysitting money, but money where they get a 1099 from a summer job, you can open a Roth IRA for those children

and put money away up to $6,000 a year or really up to the amount they earned in that given year. And the compounding from age 15 to age 65, your money is going to double probably five or six times over that period of time. It's an incredible way to build wealth. So don't forget about that Roth IRA for children. Good news for people who love peeps and hate their own taste buds. Pepsi is teaming up with peeps to create a marshmallow-flavored cola. It will come in a pack of seven and a half ounce cans, but guys, you can't buy it in a store. You have to win them by posting photos on Twitter and Instagram with the hashtag hanging with my peeps. I do like the hashtag, Jason, but this sounds frighteningly awful.

When I first saw this news, I thought, hmm, not sure I like it. But then I started thinking a little bit more about it. You know what? It sounds like this could have a little cream soda vibe to it. And if that's the case, I mean, I am. at least going to keep an open mind, because I mean, who doesn't love a good cream soda, right? Ron Gross, Jason Moser, guys. We'll see you later in the show. Up next, a conversation with Domino's CEO, Rich Allison. Stay right here. This is Motley Fool Money. I'm going to fall. It wasn't the bad love. I wouldn't have no luck at all. Welcome back to Motley Full Money. I'm Chris Hill. In July of 2018, Rich Allison,

took over for Patrick Doyle as the CEO of Domino's. A CEO transition can be tricky, and let's face it, some of them just don't work out. So I asked Rich how he and his former boss worked together to ensure a smooth transfer of power. I had a great working relationship with Patrick over the seven and a half years that I reported to him. And the great thing was that being a part of the executive leadership team, you know, I had a great thing. good view across the entire business, even though my area of focus was specifically outside the U.S. And then once Patrick decided to retire and I was announced as his successor, we had a really great opportunity over a period of months to work very closely together

such that he could transition knowledge from the other areas of the business that I was acquainted with, but not deeply knowledgeable about. And the way those things kind of work when they work effectively is, you know, by the final date when, you know, the departing CEO leaves and the new one steps in, you know, the new one should already basically be doing the job, you know, every day. And that's really how Patrick, and I just applaud him and I'm so thankful to him. He really let me lean in over that period of months such that, you know, as we got into those. those final weeks and whatnot. The decisions that we were taking, I was very much involved and making those decisions ultimately, obviously with his blessing and oversight. But all in all,

I couldn't have asked for a better process that he helped me work through. I'm guessing there's not a typical week when you're the CEO of a public company, the size of Domino's, but I am curious how you spend your time, what are sort of the major areas of the business that you are focused on? Yeah, there really isn't a typical week, Chris, and certainly the last year has been a far from typical year. So, you know, I'll try to give you a bit of a sense for it in a normal operating environment. We're a franchise business. We've got 17,000 plus stores, but 98% of them are owned by franchisees around the world. So a big part of my job is getting out there and spending time with our franchisees and in our stores. And so,

you know, over the course of a year, I'll take a lot of trips, you know, here in the U.S. out to visit our markets, franchise stores, corporate stores, supply chain centers, et cetera. And then I always take, you know, several international trips each year where I'll typically combine a couple of countries on a week, you know, in a week or two weeks outside the country. So I've really believe that a CEO in the restaurant industry has to spend a lot of time on the ground with the franchisees and in the stores to really know what's going on in the business. So that's a high level of focus for me, most certainly. You know, I have responsibilities also overseeing many other functions inside the business.

So I spend a good bit of time with my leaders and my teams there in areas that range, you know, everything from technology to legal, to supply chain, to you name it. And in particular, across those organizational elements, I spend a lot of my time focused on people and making sure that we are developing the leaders of tomorrow, that we've got succession plans in place for folks that folks are getting the training and development and the opportunities that they need. Then there's another group of stakeholders that I spend a fair amount of time with, as a publicly traded company, investors and analysts are an important stakeholder group that I spend

time with. Others would include folks like yourself in the media and with our PR functions. And then also I spend a little bit of time, you know, on the government relations side of things as well to, you know, to make sure that folks do know how important this industry, you know, is for job creation and growth in the U.S. So no week is a typical week, but over the course of a month or a period of months or a year, I got plenty of work to do across all of those things. One of the ways the landscape has changed since you joined Domino's is the rise of businesses like DoorDash and Uber Eats. I know that Domino's does not use third-party businesses like that for delivery, but I'm curious, has the rise of delivery services like that change the way

that you think about competition? Absolutely. It has. In the old world, and it's not that long ago, we sort of looked at our competitive set as the pizza competition, right? The large the large, you know, global and national players, then also, you know, the regional's and the independence. Well, now it's and, you know, we still compete against those companies, but now you can get anything delivered from anywhere, virtually any time of day or night. And so we do look at, you know, those third-party aggregators, you know, absolutely as in many ways, is the most important competitive set that we have today. And so when we're trying to understand what's going on with consumer trends,

what's happening with technology, how we need to be thinking about our own investments and where we focus our energies, we are absolutely looking at both of those sets, the pizza competition and more broadly, the brands that are enabled by these third-party delivery activities. aggregators. I find that advertising and marketing can be an interesting window into a business because

it's unfiltered. It's a business spending their own money, saying, this is who we are, and these are our products and services. This is what we want you to know about us. And I think that Domino's, by and large, has done a very good job of that by essentially playing it straight and not overcomplicating things. It probably helps that you sell pizza and you're not like a cloud computing business or a software as a service. We have to spend part of your time explaining what you actually do. But I have to say a couple of years ago, I was intrigued by a national ad campaign that Domino's had, and it was about the rewards program, giving people rewards for eating pizza, but not for eating

Domino's pizza for eating any pizza. Now, take a photo of the pizza, you get rewards points. And I was really fascinated by that because, yes, ideally, you're getting more people to download the app and engage in your service. But that's a riskier move to go out and say, hey, we just want you eating pizza. My hunch, and I could be wrong, my hunch is that there were some people at Domino's who took some convincing with that ad strategy. What was that conversation like with you and your team? Yeah, it was a great and fun, spirited discussion, you know, Chris, because it is. On the surface, it sounds a little bit crazy, right? We're in the business of selling pizza to our customers, and we're going to go out there and reward them for eating somewhere else.

But as we thought about it, there are a couple of elements there around that campaign that made a lot of sense to us. Number one, you can only do that if you're the leader in the category, right? Because when you go out with a message like that, we're promoting the pizza category. And we couldn't do that if we were the number two or number three or number four player in the space. So, you know, we recognize it by building, you know, by trying to build the pizza category, we're going to get the largest benefit out of that ultimately over time. And then second is, you know, what it could do for us around driving customer engagement. And the loyalty program that we have, our piece of the pie rewards program, which now has 27 million active members.

Active means that they purchased from us at least once in the last six months through that program. That is such a valuable asset for us. You know, the data and the knowledge that we have around our customers, knowledge that we never sell to anyone outside, we only use it to better serve those customers over time. To the extent that we can continue to build that, and this campaign was a great way to do that, that creates long-term value for us

because it's not just about one transaction. It's about the next one and the next one and the next one and the next one, over time, as customers continue to concentrate more of their business with us. Let me get to the food for a second here. One of the big trends, as you know, in restaurants and groceries over the last decade is vegan, sort of the rise of vegan options. How does Domino's view that opportunity and or challenge? Sure. So I'll talk about it, maybe through two lenses. One is, you know, there's a lot of what you hear about out there, which is, you know, plant-based proteins, you know, in particular. And a lot of brands, and to your point,

a lot of grocery, you know, going out there big on plant-based proteins. We've certainly been looking at that, you know, in our business. And, you know, when we, you know, when we identify an opportunity there that we think makes sense for our brand, then we would go after it. Really, for us, that means it would have to drive incremental profitability for our business. our franchisees at the store level, and we would need to be able to execute it operationally, such that it doesn't bring significant added complexity to our stores. Because a big part of our success is being able to operate very efficiently and get food to people as soon as they want it.

But the other thing that's interesting about the pizza business that's maybe a little different from some of the other food categories is, you know, we've got that we've got a lot. a wide range of vegetables on the menu already. And in fact, for me personally, you know, over half the time when I order, I order our Pacific veggie pizza. Do I love pepperoni and sausage? Absolutely. But I can't eat it as much as I used to, you know, and maintain the health and the weight that I'd like to have over time. As you get older, those things kind of happen. So that's mostly what I eat. If you traveled to India where we've got 1,300 plus dominoes,

you would see that we've got a vegetarian menu and a non-vegetarian menu. And well over half of the pizzas we sell are vegetarian pizzas. So that's how our customers choose, our vegetarian customers choose to, and some who aren't vegetarian like myself choose to eat their food from dominoes. But we always have an eye on it. We're always watching what these trends are and how they're evolving over time. From time to time, you'll hear in just the restaurant industry writ large, you know, a company is testing a new concept, a new product in a given market with the eye towards rolling

it out nationally. I know you have a massive test kitchen at Domino's, but I'm curious when it comes to testing new things with consumers, how do you, what is the process of deciding what makes the cut and what doesn't? Sure. So we do an extensive amount of product testing with consumers. We don't do it in test markets like some other brands do, because at least we found over time that that doesn't always give you the most accurate set of results. We've got a set of testing protocols that give us a much more accurate representation of what consumer demand will ultimately be.

And then as we assess demand, you know, at Domino's, it's not just about, you know, would that product, you know, achieve a certain mix on the menu? And the restaurant industry, you'll hear a lot. Well, that product was successful because we got it to 10% mix. Yeah, that's important, but that's not what's really important to us. What we're looking at is for as incrementality. So we're not only looking at, you know, us understand do consumers like that product. We want to understand would they buy that with a new occasion?

or a new item added to their order, or would that potentially cannibalize something that we already have on the menu? And so that's a big part of the analysis that we run to really understand would it drive incremental sales and incremental profit for our franchisees at the store level. And then we do that assessment. I was mentioned just a little bit earlier when we were talking about some of the vegetarian options. Would it introduce significant added complexity to our operations, because that's another key element of how we think about new products. We don't do limited time offers, like a lot of folks in the restaurant industry do, because we think it infuses a lot of operational complexity. You spend a lot of advertising dollars, and as soon as you

get a customer to really love that product, you pull it off the menu. It just doesn't make any sense to us. Yes, that can drive some short-term same-store sales growth, but what we're really focused on or introducing product platforms that can build sales and consumer engagement over the long term. So I shouldn't expect you to partner up with McDonald's for a limited time, McRibb pizza? Unlikely. Last thing, and then I'll let you go. Anyone who lives with other people knows the challenge of ordering pizza and the negotiation

around toppings. So you touched on this earlier, but just imagine health is not a consumer. concern, you're by yourself, you know, your family is elsewhere. It's just you, Rich. You're ordering a pizza. What are you going with for toppings? Yeah. So I will tell you, you know, Chris, I don't have, you know, I don't have one always go to, but depending on kind of what I'm feeling like, there are kind of three pizzas that I really are at the top of my list. One is that Pacific veggie that I talked about, which is just a great and I do it on a Brooklyn crust, which is our hand-tossed dough, but it's stretched thinner. I like more toppings to dough ratio, typically.

A second one for me, that's a pizza geek comment, by the way. The second thing I've been ordering a lot lately is our new chicken taco pizza. In fact, that's what I had for dinner last night, and I always add jalapinos to that to give it a little bit more of a zip. And then if I feel really indulgent, then it's going to have to be one of our, our hand-stretched pan pizzas with sausage and with onions and mushrooms on it, which is just awfully darn good. I just have to gait myself a little bit on how often I do that. I like that you're not locked into just one. You've got sort of a portfolio, and you choose, depending on how you're feeling. Pins on the mood. You got it. And how many miles I ran that morning,

that may come into play also. Up next, Jason Moser and Ron Gross return with a couple of stocks on their radar. Stay right here. You're listening to 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 ourselves stocks based solely on what you're here. Welcome back to Motley Full Money. Chris Hill here. once again with Jason Moser and Ron Gross. Got to get to the stocks on our radar. Jason Moser, you're up first. What are you looking at this week? Yeah, going with Marvell Technology, ticker MRVL. Marvell is a semiconductor company with a focus on high performance data infrastructure

products for key markets being automotive, carrier, data center, and enterprise. Revenue growth for Marvell has been non-existent over the last several years, but I think that's turning a corner with 5G. Management's targeting 10 to 15 percent annualized growth over the next several years, thanks to key drivers there. And they've invested a lot in preparation for this. It's R&D as a percentage of revenue over the last several years. Since 2016, actually, has averaged 35% annually, Dan. And then to top it all off, the NFI acquisition, which will close later this year, we'll open up additional opportunities and data movement, one for investors to keep an eye on. Dan Boyd, question about Marvell. Yeah, Jason. Last week, you had Terradine. You are high on these

Technology stocks right now, aren't you? I'm high on life, Dan. You know, hey, listen, better than being high on other things, right? Ron Gross, what do you look at that? I got Vulcan Materials, VMC, the nation's largest producer of construction aggregate. That's crushed stone, sand, and gravel also produces asphalt, ready, mixed concrete. I recently took a small position in the stock, so I'd have some incentive to learn more. My overall thesis is that this company would be good to own, if any type of meaningful

infrastructure plan gets passed. And the fourth quarter management noted some positive signs like increases in construction employment, strengthen residential construction, growth in heavy industrial projects. So I think this is a good infrastructure plan play. I'm going to learn more and dig in over the next couple weeks. Dan, question about Vulcan materials? Yeah, absolutely, Chris. Last week, it was Titan International, so wheels. And now this week, it's stone. Ron, is there some sort of Stone Age basket that you're putting together? I have recently rotated into industrials and some economy reopening stocks, and so you are very observant. Two very different businesses, Dan. You got one you want to add to your watch list? Chris, I have no idea. I'm just going to go with

Vulcan materials because I'm tired of giving Ron losses week after week. Thanks, Dan. Jason Moser, Ron Gross. Guys, thanks for being here. Thanks, Chris. That's going to do it for this week's edition of Montlickville and The show is Mixed by Dan Boyd. Our producer is Matt Creer. I'm Chris Hill. Thanks for listening. We'll see you next week.