Motley Fool Money - Home Stocks & Oscar Picks

Episode Date: February 26, 2016

Home Depot raises the roof. Restoration Hardware gets hammered. And Domino's delivers. Our analysts discuss some of the week's earnings news and dig into some field research on the Chicken McGriddle. Corporate governance expert and film critic Nell Minow talks Apple vs. Uncle Sam and shares her Oscar picks. Plus, we share details on The Motley Fool's 1st-ever digital pass to our recent investing conference in San Diego. To learn more go to digitalpass.fool.com .  Learn more about your ad choices. Visit megaphone.fm/adchoices

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in the app, which makes it so much easier to stay on track. And you can get unlimited expert help at no extra cost, even on nights and weekends during tax season. Visit turbotax.com to get matched with an expert today, only available with TurboTax full service experts. Everybody needs money. That's why they call it money. The best thing they'll life are, but you can get them to the press. From Fool Global Headquarters, this is Motley Fool Money. It's a Motley Fool Radio show. I'm Chris Sill, and joining me in studio this week for a million-dollar portfolio, Jason Moser, from Motley Fool Rule Breakers and Supernova, Simon Erickson, and from Motley Fool Deep Value, Ron Gross. Good to see you, as always, gentlemen.

Hey, hey, great. We've got the latest on restaurants, entertainment, retail, and more. We will get an Oscar preview from Nell Minow. And as always, we'll give you an inside look at the stocks on our radar. But we begin with the week in Home Improvement. Home Depot and Lowe's both reporting this week. Home Depot's fourth quarter profit and revenue came in higher than expected. Lowe's fourth quarter sales up more than five and a half percent. Ron, let's start with Home Depot some pretty impressive same store sales numbers. Yeah, these numbers look really good. Big ticket items were strong. Housing continues to be strong, which is a big deal for here. And for

once we have good weather, warm weather, to thank for a retailer. So these numbers look really, really strong. Company continues to put up numbers that are slightly better than Lowe's. Lowe's is fine in and of itself. Home Depot just a little bit better. Yeah, Simon, Lowe's, by comparison to Home Depot, seems to pale over the last couple of years. But you look at their performance quarter in and quarter out. This is a solid company. Got to agree with Ron, though. The Home Depot, getting it done. Lowe's doing good, but just not quite to the same extent. I think that's because of the relationship that Home Depot has with contractors. There's been a lot of

new home starts in the last couple of years because low interest rates, and that's really worked in Home Depot's favor. That's why you've seen Home Depot with a 9% comp figure in the US versus five and a half for Lowe's. I think most of it's on that contractor side of things. And you're actually seeing Lowe's take another play out of Home Depot's playbook on this one. They now have 160 direct sales reps that are calling pro reps that are going out directly selling to those contractors to hopes that they can continue to follow Home Depot's performance. The thing with Home Depot's versus Lowe's was you could always say, well, Home Depot is doing a little bit better, but Lowe's is just a bit cheaper. So from stock perspective, maybe you want

to go there. But that never seems to bear out because Home Depot continues to do a little bit better, and that gap just continues to be there. Did they give any color on their same store sales numbers? Because analysts were expecting overall comps to be just a little bit north of 4%. They came in a little bit north of 7%. And in the U.S., they were up almost 9%. That's a little bit north of 4%. That's a little bit north of That's a blowout in terms of comp sales. Yeah, business, you know, those big ticket items, I think, are really what's helping here. And as I said, the weather.

And just in comparing the two, Home Depot is a much larger company. You have maybe, I want to say, 400 more stores and market cap of billions and billions and billions more. So not only a bigger footprint, better economics and, you know, better profitability. One other thing I'll say, Chris, both these companies are tremendous capital allocators, paying out steady dividends, buying back a ton of shares. They're not over-saturing the market. They know the part that they play in America, and they're just continuing to return cash to shareholders. I think they're both doing really good.

From home improvement to home furnishings, online retailer Wayfair, up 11% on Thursday. After fourth quarter sales grew 81%. Still no profits, Jason, but 81% sales growth. Holy cow. Well, Chris, let's be clear. This was their first quarter where they were adjusted EBITDA positive. So let's just talk that up. I love that adjusted. The adjusted. Yeah. I think we have to be very careful with those adjusted numbers, because typically those adjusted numbers are accounting for stock-based compensation, which that's really a true expense that we have to at least be aware of. But that aside, Wayfair

continues to really perform very, very well. This was the stock on my radar last week. I still have some reservations about the valuation here, particularly after the pop-up. The market is pulling forward really a lot of great expectations, but to the company's credit, they keep delivering. I want to see how this stock reacts to adversity before I can fully get behind it. But when you have these numbers, 81 percent top line growth, like you said, they foresee that same growth carrying over to 2016. And all of the numbers that really matter for this company are trending in the right direction,

particularly the repeat customers. A repeat customers placed 54.3 percent of total orders in the fourth quarter versus 50.3 percent a year ago. And that repeat customer business is really important to the model because that's less money they have to spend to acquire those customers in the future. So, again, the metrics keep on going in the right direction. And that's why the stock has performed so well. I really want to see how it performs in the face of adversity. I imagine we'll get our chance at some point or another. Not such a great week for Restoration Hardware, the luxury home furnishing company offering

guidance on their next earnings report. And safe to say, Ron, the guidance wasn't pretty at all. Now, preliminary results look really weak. And the biggest problem here is, in of themselves, they're not so bad. You had revenue up 11 percent, comp sales up 9 percent, not so bad, but they were significantly below the company's own guidance, which if you're going to start a company out there and take it public, you want to try to avoid that. You should be able to at least give guidance that is in the ballpark. They really missed here. They're blaming a pullback by the high-end consumer. That's a little different than we saw with Home Depot, where big ticket looks strong. They're blaming stock market volatility for freaking out the consumer.

Markets hurt by energy prices weren't spending money. So cross the board, real weak compared to their own guidance. And the stock market does not like that. Stock down 50% year-to-date. I don't know who's running this company, but I just heard a lot of finger pointing. And I'm sorry, if you can't nail your own guidance, I mean, there aren't a lot of business mistakes you can make that are bigger than that, are there? They're not. Things must have kind of fallen quickly, and they didn't want to put out updated guidance. This is actually preliminary results, not actual. So they did come out and give an update. It's a little bit too late.

That's fascinating that they referred to stock market volatility as a contributed to their weak performance. I think we've got a new weather excuse here, right? This really, that takes it to a new level. Yeah, that's an interesting one. DreamWorks Animation, surprising Wall Street, was a fourth quarter profit compared to a loss a year ago. And this really was a surprise, Jesus. I don't think anyone was expecting this kind of quarter from them. It was a surprise. And I tell you, it's amazing to think as an investor that the future could actually look fairly bright for DreamWorks.

If there is one point to note from the quarter, it's that management, I think, is starting to recognize the opportunity beyond the theater. And recently, they cut back from the three movies per year. We're going with two now and really trying to focus more on quality. But they're really becoming beneficiaries of the Internet TV revolution, which we talk so much about here. And that really is what brought the results here for this business this quarter. The TV segment doubled revenues based on the same quarter last year. Typically, it's going to be pretty lumpy results because they depend so much on hits in the

theater. So it's important that they're able to really capitalize on this TV opportunity and continue to sustainably bring that quarter in and quarter out. And I think they can do that. They had this acquisition of awesomeness TV not long ago, which sort of plugs them into the YouTube generation, beginning to get more and more stuff out there on Netflix and other internet channels, which I think will ultimately help them. For a business that we were not terribly all that fond of about a year ago, we are starting

to see signs that maybe they are learning how to capitalize on something beyond just that theater strength that they've kind of relied on for so long. And let's not forget, management really, I think, played the right card in post postponing the release of Kung Fu Panda 3, because that was slated to go out right at the same time as Star Wars was slated to go out at the end of 2050. They postponed, waited until the new year in late January, and I think that'll end up working out well for them. So far, I think it's taken in more than $300 million at the box office.

So yeah, that does seem to have worked out pretty well. Fourth quarter profit for the gap fell 33%. There are other numbers to report for the parent company of Old Navy and Banana Republic. Ron, Oof. Fourthwater profits fell 33%. Yeah, even if you adjust them, as we were just saying, those adjusted numbers, profits were down 24%. Gap, same store sales down seven, Banana Republic, same store sales down 10. Old Navy, which is typically the bright spot. Com sales were flat. The company really

is struggling to get the right merchandise in the store at the right price. They've had some management shakeups. The old Navy president left. The creative director for Banana Republic has left. The company struggling to get this right. That's concerning. If you see Old Navy struggling, that's really sort of the silver lining for this company. It has been for the last few years. We see Old Navy suffering. Boy, that just doesn't bode well. Coming up, the best restaurant stock of the past five years is a name that will surprise you. Stay right here. This is Motley Full Money.

Welcome back to Motley Full Money. Chris Hill here in studio with Jason Moser, Simon Erickson and Ron Gross. Baidu's fourth quarter revenue grew 33%. Simon, how are things looking for the Google of China? Because on the surface, they're looking pretty good. Pretty good indeed, Chris. In fact, you said the Google of China. I think that Baidu is actually starting to look a lot more like the Facebook of China, too. First, let's talk about the Google of China part. The core platform, which is in search, has just continued to do really well. The number of customers that advertise on Google's search platform was up 18% year over a year. For the full year, 2015, versus 2014, and the average revenue per year was up 11%.

So that core cash flow from the core operations of the business doing just fine. The reason I say that they're looking more like the Facebook of China is because they're enabling small businesses to actually close transactions. They're calling this online to offline or 020 transactions, and it's not just about the search, but going from the customer looking for something to do business with and then all the way to closing the transaction at the end. Bidu's making that entire thing possible for smaller businesses to get up and running. And they've just seen the gross merchandise volume from transactions up fourfold year over year.

So they're really enabling this technology shift in China, doing a really, really good job at it. Didn't we talk about this at some point last year where they, I feel like they had a quarter where the stock really got hit, and part of it was they were making these investments into the online to offline, and there were plenty of analysts out there saying, I don't think this is going to work. So, Baidu has been selling off for most of the last year because of that. The market was not giving them any credit for the bets that they were taking on their own company. Full year revenue, as you said, was up about 35% for 2015. SGNA was up 64% R&D up 46%. So the costs are outpacing the top line. And a lot of people are scared by that. But what I'm seeing in this is that

the bets are really, really paying off. You get more transactions closed. That means your cost per clicks and your take rates are going to also follow that. which is monetizing this platform, which means more money coming to the top line, and scaling of those operational costs, that's really, really good for shareholders. Maybe they need to take one more page out of Google's playbook and hire Ruth Porat. Get in a new CFO, get some more transparency around just how much money they're bringing in the door. I like the play. I mean, who doesn't love fiscal responsibility, right?

Plenty of people don't love fiscal responsibility. All right. You know who enjoyed the holidays last year? J.C. Penny, fourth quarter profits came in higher than expected. sending shares of J.C. Penny up more than 12% on Friday. Jason, what's going on here? Are good things happening finally for J.C. Penny? Who says turnarounds never turn around, right?

Don't tell that to Marvin Ellison, the CEO of J.C. Penny, because it seems like he may be on to something. We've asked before, I think, many, many times in this very room, does the world actually need J.C. Penny? We did. Perhaps, perhaps not. But I don't think that doesn't mean they can't occupy their own little corner of the retail space. And it seems like maybe Marvin Ellis and the team there have, they're onto something, I think. They entered this quarter, entering this year with a three-pronged approach of focusing on growing a robust offering of private brands,

taking advantage of the secular shift to e-commerce and becoming a true Omnichannel retailer, and then making sure they can grow revenue per customer. They've not really been able to grow the number of customers that are coming through the door. If they can at least grow revenue per customer, then that will help drive that top line. And so far, we're seeing the early signs that this is paying off. Beyond these strategies, gross margin is up, 120 basis points for the quarter. They're painting a wonderful picture for 2016. So they're making little steps to just sort of work their way back into relevance.

There's a pilot there in selling appliances. We'll learn more about that as the year goes on. But wow, wonderful Friday and a wonderful year to date for the company. What you said earlier, I think it's important when we open our big mouths and we opine and make bold statements like JCPenney doesn't really need to be around. If we're wrong, I think we need to own up to that. So far, we're wrong. The jury's not out yet. But, you know, if we're going to take victory laps when we're right, we're right, we also have to point out where we're wrong.

Well, but let's be clear here. I mean, if J.C. Penny shut its doors tomorrow, I don't think the world would stop turning. Now, if Amazon, for example, shut its stores tomorrow, that would have a much more profound impact. But to go back to this quarter, same store sales up more than 4%. and they guided for basically that area for 2016, that's not lighting the world on fire. No, no. But for JCPenney, if they can steadily produce that kind of same-store sales growth, then it does become meaningful. And that's the flip side of really performing so poorly for so long.

The expectations are so low that at some point or another, you've got to be able to clear them if you're just opening your doors. And that's where a company falls into a deep value investment territory, where you really have to make the bet that this either is going to survive and be, expectations are so low that you're going to make a killing or the company's done. Yeah, don't get me wrong. I'm not jumping out of here saying go buy JCPenny stock right now because there's plenty left that they need to prove. But these are wonderful signs that at least something may be gaining some traction here. 4% growth is not that impressive to me. When you look at the growth at Amazon seeing and the online e-commerce, I mean, that's great. If that's going to be, you compare that, that's maybe

a couple percent over GDP. I think you've got to take the bigger picture in mind here. Shares of Domino's pizza hitting an all-time high this week after blowout fourth quarter results. Speaking of same-store sales growth, more than 10%, Ron. Company's doing unbelievable. The stock's up 700% over the last five years. And the company continues to beat expectations, which is hard to do, because expectations are pretty high. Revenue was up 15%. As you said, same-store sales up almost 11%. Earnings per share are up 35%. Now, cheese, for those cheese lovers out there, Their cheese prices are way, way down, which really helps the company and it helps their margins.

You know, it's a supply and demand thing. I actually don't know the reason. It's a cow milk thing. It's like how people got saturated with cheese. So that's not going to persist. That ebbs and flows. So margins may, you know, we may see that them come under pressure when cheese prices start to tick up again. But for now, guidance is strong.

They increase their dividend. They're making interesting shifts to everything digital. You can order pizza using your smartwatch. the Amazon Echo, everything online. They're making some interesting moves there, and they continue to put up great numbers. On that note now, actually, 50% of orders are now from mobile or online for Domino's Pizza. We talked a little bit ago about taking a victory lap, Ron. If I remember correctly, you shined a light on Domino's Pizza maybe five years ago.

I maybe recommended this stock at $5 in 2008. Now it's 134, but even a broken clock. Saturated with cheese is my favorite Neil Sedaka album, for the record. I feel like in some small way, we were asleep at the wheel on this one. This is the best performing by a country mile. This is the best performing restaurant stock of the last five years. Yeah, it was doing quite poorly, actually, back in 2008 when I first recommended it. And that's when they came in and they revamped the whole menu. They revamped the sauce.

They revamped the crust. They added subs and chicken dishes and really turned the thing around. It just goes to show people actually care about the quality of food. It's a franchise for the most part, and they took the poor performing franchises they took back and gave it to people that would do better. Let's stick with restaurants because last week we talked about McDonald's testing the new chicken McGrittle sandwich at a few locations in Central Ohio. We asked our listeners to do some on-the-ground research, and I am happy yet unsurprised to say they answered the call. I love our listeners. Email from Brian Balman in Hebron, Ohio.

I was very excited to try the chicken McGrittle, especially since the regular McGrittle is my favorite breakfast sandwich. I enjoyed the sandwich but thought it was a little dry and spicy. I'm not a fan of eating anything spicy for breakfast. Please let me know when the chocolate-covered French fries make it to Ohio. They need to inject more maple syrup into the bun, obviously. I think they do. And from Chris Stroud in Columbus, Ohio, I always enjoy listening to the show. But last week, I was downright giddy when I learned of the new chicken McRiddle sandwich.

being a connoisseur of fried chicken, I believe I'm well positioned to offer the listeners of your find radio program a review. The chicken McGrittle is a near perfect match with the sweetness of the McGrittle bun and a hint of spicy in the chicken. It delivers on the dream of having the taste of chicken and waffles in a sandwich form that can be eaten on the go without mess and a $2 per sandwich. It is a great value. I plan on making a return trip in the morning and buying several for my friends in the office. best wishes and keep up the great work. That is an incredible review, right? Yes.

It's a very thoughtful. Chris to review our radio show. Wonderful listenership. Yeah. Radio at Fool.com. Keep the reviews of the sandwich coming. All right. Ron Gross, Jason Moser, Simon Erickson, guys.

We will see you a little bit later in the program. Up next, Academy Awards predictions and more from the one and only, Nell Minow. Stay right here. You're listening to Motley Full Money. Welcome back to Motley Full Money. I'm Chris Hill. the Academy Awards are this weekend, and there is always something happening in the corporate boardrooms. So there's only one guest we can turn to in times like these.

Nell Minow is a corporate governance expert. She's also the film critic known as the movie mom, and she joins me now. Nell, good to talk to you. Thank you. I'm delighted to be back. We're going to get to the Academy Awards in a moment, but let's start with what is topic A outside of the presidential race in America, and that is the debate going on between Apple and the FBI. And we're seeing tech titans like Facebook and Google and others in the tech community that are siding with Apple.

Apple arguing that the FBI is asking for a backdoor that would jeopardize the security of all iPhones. But this week we saw no less a tech titan than Bill Gates come out and sort of side with the FBI in saying that, you know, this is just a one-time access that the FBI is looking for. When you look at all the angles of this debate, where do you find yourself coming down? Oh, I come down as a former prosecutor. I am totally in favor of getting this information. It's ridiculous, and it's even more ridiculous that Apple is now saying they're going to come up with an unbreakable software so that this won't come up again. The fact is we've got long established rules in this country for determining when somebody's privacy can be breached. You have to make a really good case in court saying, you know, that's just like getting a warrant for coming

into your house and going through your sock drawer or going into your bank account or going into your safe deposit box. There are rules in place that allow the government to do that when they have reason to believe that there is something going on. And in this case, where you've got such overwhelming evidence, I think it makes all the sense in the world that the government should be allowed to see that. Does Apple's argument, part of their argument, that, hey, we're not being asked to hand something over. We're being asked to create something brand new in an effort to hand something over. Do you think that will ultimately hold water with whatever court this ends up in realizing that if it does, in fact, go to the Supreme Court, we're talking about something

that's years away. I don't think it will hold up because it's very easy for anybody to say that. It's very easy for me to say, I'm sorry, we only have one key in our safe deposit box, and the owner has got the key. The bank doesn't keep a key anymore. I'm, gee, I'm sorry, you're sunk. You know, the fact is, once again, we do have procedures for that. They will drill the box if they have to do it. And so I don't think that that's a good case, legally or technologically. Let's move to CEO compensation and a report that came out recently

about the 100 most overpaid CEOs of 2016, even though we're only two months into 2016. seen, some pretty familiar names to the average consumer at the top of this list, Discovery Communications, Oracle, CBS, Chipotle, and Microsoft rounding out the top five. And these are rankings that are based on roughly 30 or so factors. How do you define overpaid? Because some people just look at the take-home salary and say, well, whatever the stock options are, That's another thing altogether. And let's be clear, in some cases, we're talking about a huge amount of upfront pay. And in other cases, we're talking about CEOs running multi-billion dollar corporations,

and their take-home salary is maybe a million, two million, but it's the stock options where the real money lies. Yeah, I like this report a lot. I've looked at and worked on myself many, many reports about CEO pay, and this is the second annual report from a group called as you so, and I advise them a little bit on it, but I'm extremely impressed with the way they go about it. They don't just say, here's what the guy got paid. They say, here is how much we consider to be overpay, and they do look at a number of factors.

And one thing I particularly like about it is they look at sort of cost of capital numbers as well as just the typical total shareholder returns, which I think is a more robust assessment. Also, at my urging, this is the one thing I'm really proud of in terms of my contribution in the report. They've got a separate list of board members who have served on at least two overpaying comp committees. And I think from an investor perspective, you want to know what these would have called virus directors are who take bad pay ideas from one company to another. And even more important than that, and this is something I really love about this report, they talk about the way that large institutional investors vote on these pay plans.

So as a owner of a mutual fund or some kind of investment fund, you want to know whether it's with Vanguard or Fidelity or Tia Kref. You want to know whether they're voting in favor these pay plans. And there are some real stunners in there. People that you would have thought would have been on the right side turn out to be, I'm just going to say enablers of the addiction to overpay, and that's people like Vanguard and BlackRock and Tia Kroft. And so I think it's really important for retail investors

to pay attention to how their proxies are being voted. You know, whether you have an index fund at Vanguard or Fidelity, you're getting the same return, you're getting the same portfolio securities, you're getting the same, you're paying the same fees. There's one of the few ways that you can distinguish between, one mutual fund in another, is are these proxy votes being cast in favor of $156 million pay package at Discovery Communications or not? It is pretty surprising that Vanguard is one of the enablers, as you call them,

when you consider Vanguard's long and storied history of really keeping their fees low and really, in that sense, being very individual investor-friendly. Exactly. And of course, nobody is better on these issues than Vanguard visionary, Jack Bogle, who often, when I've talked with him about this, just shakes his head and basically, you know, says like King Lear, how sharper than a serpent's tooth it is to have a thankless child. You know, for all the talk that you and I have engaged in over the years about CEO pay, I want to go back to something regarding directors and I saw a stat this week that you probably saw as well. In fact, you may have tweeted it, which is probably why I saw it since I follow you on Twitter,

which is that compensation for directors, people sitting on boards across America, is up nearly 50% just in the last 10 years alone. Yeah. That is, I mean, I used to think I wanted to be a former CEO in my next life, but no. Now what I want is to be a current member of a board of directors. You sure do, because on an hourly basis, you will really be chopping some tall cotton. Yeah, I used to say in the old days that we pay directors too much for what they do

and too little for what we want them to do. And I did support the idea of paying them more. I would like to see it more tied to performance, however, and just giving them stock is not good enough. The stock has to be tied up. I don't think that directors or executives should be allowed to sell the stock for three to five years after leaving the company. You're listening to Motley Full Money talking with Nell Minow, corporate governance expert and film critic.

In just a couple of weeks, March 10th, you are going to be taking part in the Economist Innovation Forum, and the topic is, do activist investors help companies thrive? I'm guessing that your answer to that question is yes, but what are one or two of the biggest ways do you think companies benefit from activist investors? You know, there's a new television series called Billions about an activist fund manager and the prosecutor who thinks he may be doing something not quite kosher. And one of the things that he says, which I may be quoting in this debate, is he says that his people are the white blood cells of the financial system. And I kind of think that's true. You know, it would be nice of large institutional investors like Vanguard and Black Rock, infidelity, and Tia Kraf could provide the kind of oversight that was originally anticipated

and setting up the capitalist system, but they can't for a lot of bureaucratic and conflicted reasons. So you really need activists to pay attention when you've got a company that has sluggish performance, that has a bad asset mix, that has too much cash. You need these people to come in and say, hey, the market expects better from you. and we're going to be in your face until we get it. Let's move over to the business of movies. Star Wars, The Force Awakens, has cleared the $2 billion mark in terms of global box office.

Obviously a lot of money, but it is still well short of Avatar's Hall of $2.8 billion. And I can't believe I'm asking this question, but is this movie a financial disappointment for Disney? Not at all. I think Disney is extremely happy, and as you well know, they will make more money on merchandise than they did on the film, on box office, and Avatar was not big on merchandise. So when you think about the movie as kind of, I don't want to say a loss leader, but certainly an infomercial for a lot of merchandise, you'll see that it is going to be just the gift that keeps on giving forever and ever and ever. They're going to have all kinds of ancillary spinoffs in the 60th anniversary special for Disneyland. Harrison Ford presented for the first time the concept work for a whole new Star Wars area of Disney World and Disneyland that they're going to be building. They're doing just fine. Their return on investment is excellent.

The Academy Awards broadcast always features an in-memorium tribute to honor those in the film industry who have died in the past year. and I know she was not an actress or a director, but Harper Lee died earlier this month. And To Kill a Mockingbird is one of those rare examples of a great book that is also a great movie. I have to believe, or at least I'm hoping, that she's going to be included in that honor on Sunday night. I certainly hope so, especially because the story of To Kill Mockingbird was so personal to her. It was based on her own life and her father and her best friend, Truman Capote. And so I definitely think that we'll be hearing some tribute to her. Let's get to the awards themselves.

We'll go with the big three, best actor, best actress, best picture. And as we do every year now, tell me who will win, tell me who should win. And with Best Actor, it's his fifth nomination. Is there any reason to think that Leonardo DiCaprio is not going to win this time? The only reason to think that is that he should have won for some of the other nominations. I would have given it to him in a heartbeat for The Wolf of Wall Street, which I thought was one of my favorite performances of all time. And for his first nomination in What's Eating Gilbert Grape,

just an incredible performance featured in one of my books, One Must See Movie Moments. This one, however, just hits in the end. Academy's sweet spot. The Academy loves to see beautiful, successful actors playing ugly and under great physical distress. And of course, Leonard Caprio, first of all, had to have that ugly beard for a year. He was out there in the wilds of Canada. I interviewed one of the other actors in the film, Will Polter, who said the great thing about being out there was they didn't have to act cold or hungry or tired because they were cold and hungry and tired the whole time.

And so, you know, okay, he's a vegetarian, he had to eat some liver. That's the kind of thing that impresses people in Hollywood. I would not be giving it to him for this. But, yeah, I think there's nothing that can stop it. Which of the other nominees would you be giving it to? I would give it to Michael Fastbender, who I thought was just dazzling in the Steve Jobs movie. The best actress category this year is an incredibly strong group. It seems like one of those years where you almost hate to give it to just one person,

but who do you think should win and who do you think will win? Same on both for this one. Bree Larson should win and will win. I've been a fan of her since she was a teenager in the movie Hoot. I interviewed her then and was so impressed with her. She gave one of my favorite performances in a movie called Short Term 12. If you haven't seen that one, you must see it. It's extraordinary, and she was incredible in room.

She was the heart of the story in every way, and yet the story is narrated by and told from the perspective by this boy who played her son, who was five in the movie. In real life, he was, I think, seven or eight. And she really, you know, it's really almost like one performance, the two of them. Part of her performance was in making him comfortable enough that he could do what he needed to do. And I think she deserves it, and I think she's going to get it. All right.

When it comes to Best Picture, I'm in the odd position of being completely biased because one of my friends from college is Tom McCarthy, the writer-director of Spotlight. So I am very much rooting for him. But you tell me, which of these eight great films will win and which should win? You know, I like Tom McCarthy a lot. And I've talked to him several times, and he also came out with one of the worst movies from last year. although I didn't hate it as much as everybody else, so good for him for Spotlight. I think he's probably the frontrunner.

Normally, you have some sense at this point from the Producers Guild, Directors Guild, and Writers Guild Awards of what's going to win Best Picture, but they split three ways this time. So it's really a tough one. I think I have a bias, and I would like to give it to the big short because I think that's a very important film. Very, very, very well done. I think it's going to go to spotlight, which is fine with me, too. It's a great film. One of the best reasons to be on Twitter is so that you can follow, Nell Minow,

you can get our thoughts on corporate governance, CEO pay, movies, of course, and so much more. Nell, enjoy Sunday night. Great to talk to you, as always. Coming up next, we'll give you an inside look at the stocks on our radar. This is Motley Fool Money. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, So, don't buy ourselves stocks based solely on what you hear. Welcome back to Motley Fool Money.

I'm Chris Allen, joining me in studio once again, Jason Moser, Simon Erickson, and Ron Gross. Guys, before we get to the stocks on our radar, earlier this month, we were out in San Diego and held an all-day investing conference for members of our Motley Fool One service. And now, I'm happy to say for the first time ever, we are offering a digital pass to the entire event. All the presentations, keynote speeches, breakout sessions, where our analysts are sharing stock ideas, advice on how to manage your portfolio better, deal with taxes, so much more. 12 hours of investing content, and you can get it all. Just check it out by going to

digitalpass.fool.com. That's digitalpass.fool.com. Ron Gross, Steve Brodo, our man on the other side of the glass is going to hit you with a question. What are you looking at this week? I got a deep value recommendation, Lidal, L-D-L. It's a $480 million company. They manufacture thermal and acoustical insulation for vehicles, cars and trucks, and filtration and HVAC systems for industrial companies. Shares are down about 20% this year after being up almost 40% in the fourth quarter of last year. But results are actually improving as the stock is going down, and that's the disconnect that I think gives everyone a great opportunity. The stock is at 28. I think it's worth 41, almost a 50% upside from here. Steve, question about Lydol? If you're a Lydell customer,

Are you a Lidal customer for life? That is, you're in, and you're like, this is the best acoustical foam from a car in the world. I'm going there. I'm going to go right back. Not necessarily, but there are switching costs. Once you have the whole process in place with one of these manufacturers of the acoustical or the thermal materials, there is a cost to switching and switching over your manufacturing process, but there is competition. Jason Moser, what are you looking at? See, if I was a betting man, I would have bet that Steve's question would have been,

How often do people confuse Lysaw with Lydol in another way around? Shows what I know, I guess. Looking into a little coffee company, I think we all have heard of, Starbucks, ticker is SBUX. They made some headlines this week with some changes they're making to the reward system, which I think was interesting. It got me digging a little bit more into how many members they have as a part of their loyalty program.

And I was actually surprised to see that it's only around 11 million people domestically here. You consider there are 150 million or so coffee drinkers in the United States alone, that just shows there is still a tremendous opportunity out there. That's a big lever this company can pull. A lot of money gets preloaded on those cards. The company's good about investing that cash into new offerings. I think there's still a huge opportunity if they can ever nail a food part of it.

But anyway, it got Starbucks back on my radar. Steve? Looking at a chart of her right now, it looks like it has not been whacked as hard as many other companies during this latest turnaround. What's going on there? Well, Steve, I got four words for you. Death, taxes, and coffee. Simon Erickson, we've got about a minute left.

What are you looking at? Chris, I'm going with Splunk. SPLK. And to continue the name game. It's similar to Splunking, which would be cave diving. Splunk dives into unstructured data. Oh, whoa. Structured data is things like Microsoft Excel.

It's nicely formatted. It's easy to go through the rows and columns. But most of the data being produced now is actually unstructured. It's from web traffic laws and cell phone. activity and machinery performance. And this is really interesting for Splunk's 11,000 customers to really dig into and make it easier to understand. Splunk is working with the Department of Defense, with Target, with Amazon Web Services. And I just think it's a great play in the tech space. Steve? Can you ever have too much data?

No. And actually, Splunk will make it easier for you to understand it. Three stocks, Steve. You got one you want to put on your watch list? I think I'm going, Splunk. All right. Simon Erickson, Ron Gross, Jason Mozer. Thanks for being here. Thanks, Chris. That's going to do it for this week's edition of Motley Fool money. We will see you next week.