Motley Fool Money - Investors vs. Inflation

Episode Date: June 11, 2021

Despite increased fears about inflation the S&P 500 hits a new all-time high. Chewy, RH, and Marvell Technology all post better 1st-quarter results than Wall Street was expecting. Dave & Buster’s pops. Casey’s General Stores drops. Monday.com makes its public debut. Stitch Fix shows encouraging growth as it gets ready for a new CEO. Jason Moser and Ron Gross analyze those stories and share why Masimo and Accenture are on their radar. Plus, best-selling author and Nobel Prize-winner Daniel Kahneman shares insights from his new book, Noise: A Flaw in Human Judgment.   Interested in getting stock research delivered right to your email? Get 50% off Stock Advisor just 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. I'm Chris Hill, joining me this week, senior analyst Jason Moser and Ron Gross. Good to see you, as always, gentlemen. How are you doing, Chris? We've got the latest headlines from Wall Street. Nobel Prize winner, Daniel Kahneman, is our guest.

And as always, we've got a couple of stocks on our radar. But we begin with the market in general. The SMP 500 hit a new all-time high this week. This comes amid growing concerns about inflation, and yet, Ron Gross, to borrow from Taylor Swift. Investors are shaking off those inflation fears, but should they? I think a little bit of concern is warranted. Prices are clearly higher from food to cars, to energy, real estate. Some of this is transitory as the economy reopens, But the question is, will all that stimulus money that was pumped into the economy plus the Fed's quantitative easing programs lead to more sustained inflation? Supply chain problems, labor shortage have added to the increase in prices we're seeing now.

Again, it's cars and it's even your burrito at Chipotle. It's very widespread. And I do think some higher prices are here for a while. Are we looking at a repeat of the 1970s? I don't think so. I certainly don't hope so. But Deutsche Bank, a bit of an outlier here, thinks perhaps so. Inflation is more likely to persist in their opinion. It's going to lead to a crisis in the years ahead. But again, they are the outlier, the conventional wisdom is that a lot of this is transitory.

One other problem to keep an eye on wages are not keeping up with inflation. We definitely should watch that. But I am glad to see the Fed's recent announcement that it would begin to taper. its quantitative easing program, its bond buying program in August or September, that's important to start unwinding some of that stimulus. It'll be interesting to watch if the Fed kind of eases up or change their minds on their willingness to tolerate inflation that is higher than 2%, which was previously their line in the sand. But have you seen anything so far that makes you think, you know what, maybe I shouldn't be buying stocks right now?

No, primarily because stocks are a pretty good place to be even in an inflation. environment. Certainly, there are specific sectors that will benefit more than others, commodities, banks, industrials, energy. But just in general, as prices are rising, stocks are a pretty okay place to be. Let's move on to some earnings. Chewy's first quarter results were better than Wall Street was expecting, but the goodness was quickly overshadowed when the Pets products retailer warned about supply chain issues and shares of Chewy down more than 5% on Friday, Jason. Well, speaking of inflation and supply chain issues, right? It's not just semiconductors. Chris, yeah, I think Chewy represents a very powerful combination here of not only growing the customer base, but growing wallet as well.

You want to be aware of these types of opportunities, and it seems that Chewy is really becoming one. What I mean by this is over the last two years, the companies increase their active customer base by about 75%. That means a large part of their customer base is still very much in the beginning stage. of that relationship. And for context, why that matters, Chewy customers historically spend over $400 with the business in their second year compared to approximately $700 in their fifth year and almost $900 in their ninth year. So it's just, it's something worth keeping in mind and given the nature of their market that they pursue in pets. I mean, there is some durability there, I think. But when we look at the actual core itself, really strong

results. They added 4.7 million net active customers up 31.6%. Ended the quarter now with just under 20 million active customers. If you look at sales, I mean, net sales were up 32% from a year ago to 2.14 billion. Autoship continues to gain a little bit more of that share. Those sales were up 34.4%. They actually represent, Autoship now represents almost 70% of total sales for this business. And customers continue to spend more. as well. Hey, bonus positive net income. Chris, not even adjusted, just positive net income. And they're raising full year 2021 net sales guidance. That's going to be about 25% top line growth there for the year. A lot of things to really like. I wouldn't read too

much into the market's trepidation here. It seems like this is a business that's really executing. Huge first quarter results from RH, the home furnishings retailer formerly known as Restoration Hardware had profits and revenue higher than expected. They raised guidance for the full fiscal year and shares of RH up more than 10% this week. Ron, you've really got to tip your hat to what they are doing. A firing on all cylinders report if I've ever seen one, Chris. Let's not forget they are anniversarying some pretty weak pandemic numbers, but still, this is pretty exciting. And we've talked about the performance of the stock before over the last five years.

up more than 2,500 percent as they really transformed their business. And this quarter is no exception. Net revenue is up 78 percent. Adjusted gross margin up 550 basis points. Operating margins up 1,200 basis points, that's 1.2 percent. Now standing at 22.6 percent operating margins for a specialty furniture retailer is pretty darn impressive. Adjusted net income up 375 percent. CEO pointed out several unique things about their business model that's been allowing them to put up these kind of results. And I buy into them. I think they make sense.

It's not a very seasonal inventory business. They have similar inventory throughout the year. Limited fashion risk. Their modeling, their designs don't change yearly or quarterly. It's more on a multi-year basis. They've got a very impressive membership model that they moved to several years ago. Some, including me, were a little skeptical about it. worked out really nicely. And there are now a luxury brand right up there with some of the

higher brands that you would recognize. And that's really accruing to the bottom line. They increase their guidance, as you say, revenue growth in fiscal 21, expected to be 25 to 30 percent versus a prior outlook of 15 to 20. They're growing. They see accelerating growth in fiscal 22 and beyond. They're launching their new digital portal. They're expanding internationally. They think they can be a 20 to a $25 billion global brand in their current form, and that's up from where we are now, the $3 billion business. So perhaps some really strong growth runways ahead. Marvell technology is not in the superhero business.

They're in the semiconductor business. And business appears to be good these days. Shares up more than 5 percent this week after first quarter profits came in higher than expected. Jason, the stock is close to an all-time high. How good is it going at Marvell these days? Well, I think this is really attractive way for folks to invest in the 5G opportunity. So if you hold on to these shares long enough, Chris, you may feel like a superhero. So with that said, I mean, you could be forgiven if this company was off of your radar over

the last five or so years, because the top line really hasn't gone anywhere as we've seen so much saturation in the mobile market. But R&D is a percentage of revenue is averaged about 35 percent annually since 2016. 16 for these guys, and it's because they've been investing in just this very 5G opportunity. And it's starting to pay off. Management is now targeting 10 to 15 percent top line growth over the next several years, thanks to key growth drivers and 5G cloud automotive. You look at the numbers. Net revenue for the quarter, $832 million was up 20 percent from a year ago.

Gross margins looking strong at 64.3 percent. And if you look at that revenue growth of 20 percent, it was 17. 15% organically, if you exclude the recent Infi acquisition that they just closed on. I think that's going to be a good one that will expand their capabilities here. But the business itself is really divided into two primary segments in networking, which grew 21% from a year ago, storage revenue, which grew 17% from a year ago. Infi really gives them more exposure on that storage and data center side. Management did note a pause in China's 5G investment. There is some exposure there, but that exposure is decreasing, right?

I mean, this is a company that's diversifying its revenue stream, geographically speaking, and customer-wise as well. Just to put some numbers around that, I mean, they traditionally have relied on Western Digital Toshiba and Seagate as primary customers. That was about 45 percent of total revenue just a couple of years ago. Now those numbers are down considerably below 30 percent. So all in all, I think this is a company that's made a lot of interest. Investments, really excited to see what they've got in store for the next decade here.

Coming up, we've got retail, restaurants, and a hot IPO. If you're an investor, you're right where you should be. You're listening to Motley Full Money. Welcome back to Motley Full Money. Chris Hill here with Jason Moser and Ron Gross. Wall Street was expecting Dave and Busters to report a loss in the first quarter, but the restaurant and entertainment chain surprised analysts with an actual profit, Ron, shares of Dave and Busters up 7% this week.

Yeah, back to pre-pandemic levels, up 50% year-to-date, which just brings them back to pre-pandemic. This report was not a great report, but it was one that was moving in the right direction, which, okay, that's not bad. They began the fiscal first quarter with 76% of their 141 stores opened. Almost all of their restaurants, the stores are open now. Most stores were open during the quarter under reduced hours and capacity limitations, So this is nothing new to the COVID story, obviously. Revenue was up 66%.

But again, obviously anniversarying pandemic level revenue, they've provided us with comparisons to 2019, which a lot of retailers, a lot of restaurants have been doing. I appreciate that. If we compare it to Q1 of 2019, revenue is actually down 27%. So again, much more of a true picture there than a 66% increase. Overall comparable store sales decline. 35% when you compare it to the first quarter of 2019. So it's just very important to get a good picture of what's going on there.

But as you said, net income totaled $20 million. That's compared to about 40 million in 2019. So again, down, but still profitable. And did the quarter with only $20 million in cash. Not a great balance sheet there, but they do have 340 million of liquidity available to them. I'd like to see the balance sheet a little bit stronger there. guidance was pretty good. Business recovery momentum has continued through the first five weeks

of the second quarter. So again, on the right track, moving in the right direction. Monday.com, the work management software company made its public debut on Thursday. The stock was priced at $155 and finished the day up a little bit more than 20%. Jason, I feel like Monday.com and their investment bankers really hit the sweet spot for IPOs. It was up a decent amount, but not so much that they left a lot of money on the table. That's what you like to see. I agree totally. And I can see the potential in a business like this for sure. It's not one where I feel it all compelled to get it on the ground floor, though.

I think it's worthwhile for investors just to be patient and learn about this one. The business itself, they say they democratize the power of software so that organizations can easily build software applications and work management tools that fit their needs. They call this work OS. I would assume just work operating system. And it is a, it's building blocks. It's no code and low code building blocks to help companies build essentially bespoke software for what they need.

I get that. I mean, the value proposition seems to be that workplaces tend to shape themselves based on pre-packaged software that they're given. And Monday.com is ultimately trying to let the workplace shape the software based on what it needs. And, I mean, that's great. I think that makes sense to a degree, but there's a lot. There's a lot of software out there today. And to me, one of the bigger challenges is in any company, it's having the hands of the few inside the company building solutions for the many, because people work differently.

And that seems like it's only going to become more the case now. But I mean, the company is doing something right. They have close to 130,000 customers, very, very proud of their culture. As a matter of like, they say that's why they win. I would hope they could maintain that culture. I mean, the risk that you run there is companies get bigger, culture changes. But all in all, you know, interesting, interesting business and nice to see that they had such an uneventful introduction to the public markets.

And a bold branding choice when you think about Monday as a brand. Like Monday doesn't always, you know, invoke wonderful feelings. I was going to lead with that, Chris, but decided to try to be a little bit more optimistic. But, yeah, I see Monday.com. I start thinking Garfield. My mind just goes to a dark place. I don't like Mondays. Solid end to the fiscal year for Casey's general stores.

Fourth quarter profits and revenue came in higher than expected. Despite that, shares of Casey's down 5% this week. I don't know, Ron. This seems like one of those businesses that really stands to benefit from more Americans getting on the road this summer. 100%. Yeah, this was a solid report. But as you kind of mentioned, investors weren't impressed, perhaps looking for stronger guidance. These numbers look pretty good to me. So, total sales up 31 percent, inside the store revenue,

up almost 15 percent. Inside same store sales, up almost 13 percent, as guest counts steadily improve, as the pandemic subsides, obviously, inside margins improved by 100 basis points. Now, when we get into fuel, the picture changes a little bit. Fuel gallons sold were up 10 percent, but fuel gross profit were down 11 percent, and that's primarily due to really very high fuel margins achieved last year as a result of all the supply and demand shocks that were going on in the earlier stages of COVID. Net income down 33 percent during a difficult time, obviously. But the numbers look pretty good to me. They closed on a $580 million acquisition of Bucky's convenience stores, not a chain that I am familiar with.

Big in Texas. Big in Texas. Exactly right. They're also closing on the acquisition of 49 Circle K stores in Oklahoma. So they've got both organic growth as well as acquisition growth, I think, on the table here, which I think will bode well for the coming quarters and end years. Interesting to see that expansion, because in different parts of the country, people are, in some cases, very loyal to their brand. In the Mid-Atlantic region, it's Wawa, and in the Midwest, it's Casey's. Yeah, I love a good Wawa. I've never been to a Casey's. Their new stores, as you You said, and also Illinois and Nebraska is big for their new acquisition. They're adding about 94 stores there, 79 dealer locations.

But yeah, people are loyal. I know some folks love sheets. Some people love, you know, as you said, Wawa. I love a good slurpy myself. Shares of Stitchfix up 15 percent this week after the company's third quarter loss was smaller than expected. Revenue was also higher than expected. I don't know, Jason. This seems like one of those quarters that if you're a shareholder,

it kind of whets your appetite, but they're moving in the right direction. They still need to do more. I feel like you really just encapsulated this dilemma that I have with this business. I mean, it was a strong quarter, hats off to them. It's very hard for me to see them being able to repeat this performance reliably and consistently. I mean, fashion, it's just too fickle, even for a quote, unquote, quote, data company like this one. But I mean, let's give credit where credits do. Again, it was a strong quarter. You look at net revenue, $535 million. It was up 44%. Now, it was a bit of a coiled springs. It's certainly understandable, but it's not something investors should get used to their guiding for 22 to 24 percent revenue growth here in their company's fourth quarter. Active clients

4.1 million now that was up 20 percent from a year ago. And net revenue active client, However, down slightly. $481, it's down 3% from a year ago. So to me, I mean, this is a business, I think, trying to figure out its optionality, right? And so they've introduced things like fixed preview, where you can actually get an idea of what you're getting before you get it. The big question for me, it's really going to be on the direct buy front though now. Clients can engage with direct buy.

That's something that takes this business model in a fundamentally different direction. Not to say that that's a bad thing, but it's something that they're going to have to work at. I think it's going to be something that will be a little bit challenging. So, so, yeah, fashion is just too fickle for me to one, for me to really be able to get too convicted about this business. Real quick, new CEO takes over August 1st for Katrina Lake. How long you give a new CEO? At least a year, right? Oh, I would, yeah, absolutely give her a year. I mean, it does feel like they have a plan. They're executing. It is just going to be a matter of whether these new features and

investments actually bear fruit. All right, guys. We will see you later in the show. How can investors make better judgments? Best-selling author, Daniel Kahneman, has a few ideas. He's coming up after the break, so stay right here. You're listening to Motley Full Money. Welcome back to Motley Full Money. I'm Chris Hill.

I don't know about you, but the first time I had heard of Daniel Kahneman, it was in Michael Lewis's best-selling book, The Undoing Project, a friendship that changed our minds. That book explored the partnership between Conneman and Amos Tversky, two Israeli psychologists who created the field of behavioral economics. In 2002, Connemon was awarded the Nobel Prize in Economic Sciences for the work that he'd done with Tversky. He's written several books, including the bestseller, Thinking, Fast and Slow. And Connaman's latest book is Noise, A Flaw in Human Judgment. It explores why we make bad judgments and how to make better ones. Recently, Motley Fool senior analyst Maria Gallagher caught up with Daniel Connaman to talk about the

The wisdom of crowds, the wisdom of the markets, and how noise applies to investing. When we're talking about investing, there's an incredible amount of information that we get about companies, you know, on a minute-by-minute basis. So if you think about the wisdom of crowds effects, like you say in the book, at averaging the independent judgments of different people tends to improve accuracy. So you would think that the information investors get separately, and then the average of those, generally the stock price would be about that correct price. but also like you speak about in the book, there are wise crowds, and then there are crowds that follow tyrants,

crowds that believe in magic. So as we're all thinking about investing and being a part of these crowds, how can you tell if a crowd is a wise crowd? How can you figure it out with all of this information that we're getting? Well, I mean, in general, very few people would want, it's hard to think that the market is not wise. The market probably has a lot of wisdom in it. It's extremely difficult.

to beat the market because of the feature that the market integrates judgments of a large number of people. And people who think that they can beat the market, most of them are expensively wrong. There are a few, very few, who are able to do this, mostly with mathematical tools, but individuals who have just the feeling that they can do it, they had better take a shower. And so then when you think about this, too, so you have that, the market as kind of this large crowd. And then don't you have kind of those subsections of crowds if you see things like the rise of Reddit or meme stocks and, you know, within these subsections of people,

do you think that there's the general wise crowd and then within it, depending on who you're talking to you, maybe talking to people who are wise or not wise? Well, certainly there are what we see, and that's in large part due to social media. you can get a crowd that decides on a different valuation of the stock, as, you know, happened recently. And, you know, whether to judge whether they're wise or unwise, that is difficult, you know, that I can't really pass judgment on it. In general, you would say that the larger the market, the closer it is likely to be statistically, to be more or less wise, more or less efficient, and deciding that you can beat it is a risk that you're taking.

Interesting. And so through all of your research on noise, is there an industry you found to be either the noisiest or the least noisy? Actually, when we looked at it from the little information we have, and this is really the study of noise in some way, we always knew that there is noise, because matters of judgment by definition we expect some disagreement.

What we didn't know is how much noise there is. So the motivation for the book was that there is, wherever there is judgment, there is noise and much more of it than you think because it's a surprising amount of noise that justifies an effort in that direction. Now, this is fairly recent. it's recent for us, certainly, that wherever we look in terms of profession, we found way more noise

than we had expected, and certainly way more noise than people in that field had expected. So you find it in underwriting, you find it in the evaluation of business proposition by venture capitalists, you find it in loan approval, you find it in patent. approval, and you find it in medicine, and I've already mentioned sentencing. So wherever we have looked, we've found a lot of it. And even in fingerprint reading, now, fingerprint reading is much less noisy than underwriting, but even there, there is some noise. People disagree more than almost anyone would think. So we haven't found anything that is,

anything that involves judgment, you can be virtually certain, will involve noise. Wow. And so then now the natural question is, what should we do to reduce noise? I know in the book it talks a lot about noise hygiene. So can you explain a little bit about how that works? Well, one obvious way of reducing noise

is taking judgment out of the equation by imposing rules or algorithms. But we know. And when that happens, because algorithms are noise-free, when you present the same problem to an algorithm on two occasions, you get the same answer, which isn't true when you ask two underwriters. So one way of dealing with noise is to apply algorithm. But, of course, for the next few decades,

we can be certain that human judgment is still going to be the most important source of important decisions. And there we have a suggestion that we call decision hygiene. And it's a deliberately off-putting term because decision hygiene has no glamour to it. It's like washing your hands. And like washing your hands, you don't know what germs you're killing. And if you're successful, you'll never know. And so those are just procedures that you've got to trust and adopt and follow.

And there is a list of them. Now, the simplest of them is take more than one judgment. Because when you average judgments, you can be mechanically certain if the judgments are independent of each other, that averaging reduces noise. So that's one piece of advice. The other piece of advice is independence. Keep if you're averaging judges, make them independent. If you're looking at different aspects of the problem, make the judgments of the different aspects independent of each other.

Another idea that's related to this is break up problems to the extent you can into fact-based, narrower assessments, and, and that's the key, delay intuition. intuition. Intuition is the global view that people have that gives them confidence that they've got it and that their decision is right. You don't want to do without intuition, but intuition tends to jump to conclusions. And so you are better off by delaying intuition,

looking at the various facets of a problem, and when you have the whole profile of the problem, then and only then let your intuition free in integrating the information. So those are some of the examples of decision hygiene. There are more. So how does one delay intuition? Because I would imagine, so if I'm interviewing a candidate and I'm breaking it down, I'm asking the same questions.

I'm putting into this sheet, these are going to be, I'm going to rank them in some kind of numerical way. But if my gut tells me like minute two, I don't really like them. And I keep filling out the form. How do I delay that kind of gut feeling? Well, the gut feeling is going to. going to be much attenuated when you are collecting information. And another thing that happens is that when you are just conduct an interview in what is called an unstructured way,

then what happens is you get your gut feeling and you spend the rest of the time confirming your gut feeling by asking questions that effectively lead the candidate to confirm your initial hunches. When you have a set of structured set of dimensions, your gut feeling is less pronounced, and it doesn't affect the intermediate judgments because they are fact-based. And so you give yourself an opportunity to be surprised. You give yourself an opportunity to discover either good things or bad things that were not expected on the basis of your first impression. And that is an advantage. Whenever you're surprised, when you collect information, you are very likely to have learned something.

And people tend to, the way our mind works, we resist surprises. We tend to go with our intuition and confirm it. And that leads to noise and to bias, by the way. Daniel Kahneman's new book is Noise, a flaw in human judgment. It's available everywhere you find books. Up next, Ron Gross and and Jason Moser return, and if history is any guide, they've got a couple of stocks on their radar. Stay right here. You're listening to Motley Fool Money.

As always, people, 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. Chris Hill here once again with Jason Moser and Ron Gross. If you're listening to us on your favorite podcast platform, thank you for subscribing. We appreciate the ratings. We appreciate the good reviews. And if you're listening to us on the radio, we have a new station to welcome to the Motley Fool Money

affiliate family, KRQX AM 600 in Youngstown, Ohio. Shout off. Welcome. Welcome. That's awesome. Our email address is Radio at Fool.com from longtime listener Gary Carr in Tucson, Arizona, and he adds parenthetically, warm, dry, and cicada-free. Gary writes, Jason Moser's slight bearishness about Twitter, a service he uses and appears

to like, makes me wonder, how much should an investor weigh personal enthusiasm or even just constant usage for a product or a service? I'm thinking Facebook, Google, Spotify, Apple, or on the flip side, if the other aspects add up, does it matter if you don't particularly like the service or product? It's a great question, Jason, because there are great investments to be had in businesses that for one reason or another rub people the wrong way. And you can look at a business like Comcast, which for years was routinely at or near the top of the list of the worst customer service brands in America.

And over the long haul, that's been a stock that has rewarded shareholders. Yeah, I agree. It is a great question. I feel like we could have an entire show just center around this question because it is not one simple answer. I mean, it does kind of depend. I think it's very easy to fall in the trap of loving a product and then thinking, therefore, it's a good investment. And even the other way around, hating something and thinking, oh, It must be a bad investment. And it just clearly isn't always the case. I mean, Twitter, for example, I mean, yeah, for a very long time, I just, I had a bullish

outlook on it because it just seems so relevant. People continue to use it, and it just conveys so much information in real time. The Twitter blue thing was kind of like the straw that broke the camel's back because I feel like all of those things that they're asking me to pay for, I feel like those are the things they should have been developing here over the last five, six, seven years that they just didn't. So then it makes me question management. It makes me question vision. Costco. I mean, I want to go to a Costco like I want to know a hole in the head.

But I fully recognize the fact that 100 million families here in the country love the experience, apparently. And so being able to divorce yourself from your personal feelings and just recognizing the merits of the business, it's not an easy thing to do. It's an important skill to develop, though. Yeah, I take great pleasure in owning over long periods of time companies that I appreciate. And Costco is one of them, actually. Disney would be another example. And conversely, I don't think I would enjoy being an owner of a company for five or 10 years that I didn't think was doing a good job or didn't make the world a better place or didn't

make a product or service that I agreed with. The one thing to be careful about is we don't, those are all typically consumer product related companies. And so you'll miss out on some great investments in cloud or biotech or tech in general that you don't come across in your average daily life. And just to exclude them because you don't have any personal exposure to them on a daily basis would be a mistake. But as Peter Lynch would say, finding companies that you use that you love are a great

place to begin an investing journey. Well, and it's an opportunity, particularly, as you said, Ron, consumer-facing businesses to do your own boots on the ground research, to see what are the stores like, are they crowded, what is the staff like, all that sort of thing. But it is important to make sure that you're not alone, that you're not on an island. Like, you're the person who loves this. There have got to be ways to sort of check out, like, wait a minute, am I the only one who loves this or do other people love it as well?

Yeah, I love my Kodak camera. Boy, do I love that? It seems I'm the only one. Let's get to the stocks on our radar. Our man behind the glass, Dan Boyd, is going to hit you with a question. Jason Moser, you're up first. What are you looking at this week? Yeah.

out on the show before, one that I've recommended and I own a company called Massimo, ticker is M-A-S-I. It's a medical device company that has traditionally focused on non-invasive monitoring. It started with monitoring oxygen levels of the blood, but they have evolved into much more as technology has allowed. But the business itself has a lovely razor and blade model. They get those units in the hospitals installed, and then they can sell these consumables. Over Over the last 10 years, the razors, right, the installed base machines, they've shipped approximately 2.2 million of these razors. And that just is a tremendous installed base that really ramps up those switching costs as time

goes on. And the adhesive sensors, those consumables, the blades, they're very high margin. And that's something that they'll continue to sell as long as they keep those machines installed. Something very similar to like an intuitive surgical, if you will. They've developed a terrific new platform with safety net, multiple applications that capitalizes on the growth in remote healthcare telemedicine, innovative founder leader there with Joe Keanu, just a lot of things to really like about this business. I think it's a little bit overlooked right now due to some tough year-over-year comps from the COVID

pull forward, but there is sequential growth here that's a very positive sign and one that I'm very encouraged by here, very excited about the future of this company. Dan, question about Massimo? Well, Chris, more of a comment. So, Massimo, great, you know, medical stuff, awesome, great. But let's think about Massimo, the clothing line real quick. I don't even know if it exists anymore, but it was big in the 90s. And I just remember, I knew this older kid in my neighborhood grown up. He was Ian, it was his name. He was always really cool. He had cool glasses and he always wore a Mossimo T-shirt. And that guy was just really cool. Yeah, well, hey, listen, they sold that stuff like hot cakes and Target, damn. And it was popular for a time. I'm not sure where it is right now, but like I've told you before, my sartorial sensibilities are not the greatest.

Ian, if you're listening, Ian, please, please write us. Radio at fool.com is our email address. I don't know, Mozer. It seems like it could be a tuck-in acquisition that Massimo makes just to get all those brands under one roof. I like it. I like the way you're thinking. Ron Gross, what are you looking at this week?

I'm looking at Accenture, ACN, a name derived from the phrase accent on the future, Accenture. Provides consulting technology and outsourcing services in more than 120 countries. You may recall, it began as the Business and Technology Consulting Division of accounting firm Arthur Anderson. Remember the days where they were big six accounting firms? I don't know where they've gone. But this company has actually been incorporated in Dublin, Ireland, since 2009.

So some changes to the company over the years. But they produce steady growth, strong cash flow. They've got a reliable dividend. thanks to their long-term relationships with clients. They have newer focus areas like cloud, security, supply chain, and digital manufacturing. Those are all seeing really solid growth, even as their traditional consulting business advances a bit more slowly, which is not really surprising. In addition to their organic growth, they consistently make acquisitions to spur growth, enter new markets. That's really good, but it also can be a risk. Keep an eye on their capital

expenditures as it relates to acquisitions. They've raised their dividends for the last four, 15 years. We love to see that. Current yields of 1.3%. Dan, question about Accenture? You know, I was going to make fun of the name accent on the future, but I was thinking about it just now. And Accenture is probably the best they could have done. I mean, what do you got?

Few act. Acture? Like, there's nothing there except Accenture. So I got to say, good on them. I believe that was an employee who won a contest who recommended that name. So, glad you like it, Dan. Two very different businesses, Dan. You got one you want to add to your watch list?

Chris, you know I love a good employee contest. I'm going to go with Accenture. I hope that employee got some options or something for winning that contest. No kidding, right? Hopefully they got more than just like a gift certificate or something like that. All right. Jason Moza, Ron Gross. Guys, thanks for being here.

Thanks, Chris. That's going to do it for this week's edition of Motley Full Money. The show is Mixed by Dan Boyd. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.