Motley Fool Money - Is Apple a Trillion-Dollar Value?

Episode Date: August 3, 2018

Apple reaches a trillion-dollar milestone. Baidu faces a Google-sized potential competitor. Blue Apron fails to deliver. And Red Robin and TripAdvisor lose altitude. Ron Gross, Jason Moser and Matt Argersinger analyze those stories, as well as the latest from Tesla, Square, Take-Two Interactive, and Activision Blizzard. Plus, Restaurant Business Magazine executive editor Jonathan Maze talks Chipotle, IHOP, McDonalds, and the changing restaurant business. Learn more about your ad choices. Visit megaphone.fm/adchoices

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See what's new at TD Ameritrade.com slash innovation. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Full Money Radio show. I'm Chris Hill, joining me in studio this week. Senior analyst, Jason Moser, Matt Argusinger, and Ron Gross. Good to see you, as always, gentlemen. Hey, hey, you do. We've got the latest headlines from Wall Street. We will dig into the restaurant industry with our guest, Jonathan Mays. And as always, we'll give an inside look at the stocks on our radar. But we begin with the first company to hit a market cap of $1 trillion. Shares of Apple up this week after third quarter revenue came in north of $53 billion. And Ron, this isn't even their big quarter. But what's not to like?

I mean, it's very impressive with revenue up 17%. Even though iPhone volume was flat, they've been able to increase price points. The service business up 30%. Love that that's becoming a more important part of this business. Repurchase shares, gobs and gobs of shares, $43.5 billion of its own stock during the first six months of this year, 220 billion of stock since it announced the Buy-Back program in March 2012. 12, you know, still has $243 billion of cash on the balance sheet. Plenty more buybacks to come.

Dividend is there. It's only 1.4%. I imagine that will be increased. We'll have a nice shareholder yield company going forward. Yeah, that's what's so impressive is that by buying back so much stock over the last several years, they've kept upping the bar on the share price they needed to hit $1 trillion. And so it just makes my defeat feel so much worse because I had been kind of right. Amazon's train for a few years here now. But I think it's nice because now we get to talk

about the first company to maybe get to $2 trillion. And you can bet who I'm going with. Yeah, I mean, I was with Maddie along that ride calling for Amazon. I think we both probably knew, though, the chances favored Apple. It makes a lot of sense. I mean, it didn't have that far to go. And there's a reason why they're there. I mean, it's a phenomenal business, a phenomenal company. We've talked a lot through the years and quarters that it is still primarily a phone company. And then the big question was, how do they address that? Can they make the leap beyond just that? And, I mean, to Ron's point, iPhone sales, pos, it's abating a lot, the growth abating a little bit. But they've really turned it up on the services side.

I think they continue to bring a little bit more value to the table for the people that are in that Apple universe already. So, I mean, it's just a very relevant business that should continue to be relevant for many, many years to come. I have to say, I think one thing we talked about in the past with Apple is with the dependency on the iPhone, what would ultimately happen to its pricing power with so much competition. But the average selling prices for the phone has kept going up. It's been very impressive. Well, they got a lot of that, too, from the iPhone X or 10 or whatever it is.

Why wouldn't they just need a 10? That's like the one black mark on this company. You just put a 10. It does seem like they bump that price up considerably. I mean, it's $1,000. They're not selling those things like hotcakes, But they're selling enough to where it's really helping juice that average selling price along with that iPhone 8.

And by the way, the stock is not expensive. I mean, there's no irrational exuberance going on here, even though the trillion number sounds big. I don't know what's 16 times maybe forward earnings. Relatively reasonable. You remember when the big question around Apple was, is this company ever going to pay a dividend? And then once they did start paying a dividend, you had some people out there saying, well, I think that's it.

I think that's it for the stock. It's going to be 3M, and it's just going to, people are just going to buy it for the dividend, and there's no growth. Interesting week for Baidu. Second quarter profits for the Chinese search engine giant came in 45 percent higher than a year ago, but shares at Baidu falling this week on reports that Google is planning to launch a censored version of its own search engine in China. What do you think, Maddie?

Well, Google throws the wet blanket because Baidu's results were, as you mentioned, were fantastic. And I remember seeing the stock price go up like $15 in a lot. after hours trading, only to drop by almost $15 when it opened the next morning because of the Google News. But it would be easy for me to say, to dismiss the Google news and say, don't worry about it. Biden's been dominating in China. They haven't had to deal with Google for almost a decade now. They've had this dominance in terms of search impressions, advertisers. And does Google really want to launch a search engine where they have to restrict words like human rights and democracy? It doesn't feel like Google. But keep this in mind. Depending on what

report you believe, Android has something like a 70 to 80 percent market share on smartphones operating systems in China. So if this Dragonfly or whatever Google ends up calling this does pass the Chinese sensors and becomes able to be sold and serviced in China, enormous lead right off the bat if they can get it onto the Android system. TripAdvisor's stock has been having a good run in 2018, and that ended this week when TripAdvisor's second quarter revenue came in just 2% higher than a year ago. You tell me, Jason, is this a legitimate concern or is this sort of a speed bump kind of quarter for TripAdvisor? I'm not going to be an apologist here. I mean, I think we've involved in pretty critical with TripAdvisor and the

bungle they made with the instant booking platform. But going through the release, it does feel like this was a pretty harsh reaction to what was not really a bad quarter. But I think anytime you have a business like TripAdvisor that's run into the top line growth headwinds that they've run into, the market's only going to pay up so much for that. So the good thing is that they have a platform that's still very engaged in growing. I mean, users are growing, reviews are growing, and people are doing more with those reviews. And it's encouraging to see that they're growing the non-hotel side of the business as well. A bit of margin pressure there for the quarter, that was also a bit of a comparables thing there. All in all, I mean, it's a healthy platform.

I think management really lost a lot of time and money in that instant booking strategy. strategy, which just didn't really work out. But it seems like the market is liking the stock a little bit more after that initial sell off. We'll have to see. I don't know that I'd be terribly concerned right now, but it was a harsh reaction. Do you have a sense of what sort of the next move is for TripAdvisor? I mean, obviously, as you said, they put a lot of time and effort into the instant booking. I'm wondering if there's some other monetization strategy that they're working on. But primarily, it's attractions. I mean, they're really

trying to get to that point where TripAdvisor is a platform that not only you consult whenever you go, wherever you go, but then when you want to book something to do, you're able to do that through TripAdvisor. So I mean, hey, listen, when I went to the Bahamas, I told you, everything I found there that we did, we found it on TripAdvisor. Pig Island, hey, do I need to say anything else there? I mean, that's worth gold. So as long as they can figure out a way to really effectively monetize that going forward on a

sustainable basis, and I think they will. That's certainly what they're gunning for. and just bringing over a seamless experience to the phone because those monetization challenges still exist. You had me at Pig Island. Shares of Tesla up more than 15 percent this week, despite a second quarter report that featured Tesla's worst loss ever. Ron, they lost more than $700 million, but the confidence that profits are just around

the corner really seems to be there. I guess so. Investors, we're focused on they hit their 5,000 sedan goal. They say they're going to be able to up it to their 6,000. sedan gold. They said they would not need to raise more cash, which I think it was a big deal. Investors calmed down after he said that. He said they would be profitable in the second half of 2018. And get this, he expects Tesla, he meaning Mr. Musk, he expects Tesla will record a profit in all subsequent quarters. Now, who wouldn't want to be a shareholder of that?

Didn't we have that recently from what? Was it American Airlines CEO coming out and saying we're going to be profitable from now to the end of time? We will never lose money ever again. He's obviously full of bluster and makes big promises. Interestingly, the street also reacted to the fact that he apologized this call for being rather rude to analysts on the last call. I'm a forgiving guy. That's fine.

It's kind of weird that he had to apologize because he can't hold his tongue. I'm not a big fan. I think he's too much of a salesman for my taste. I actually finally bit the bullet. the plug and asked for my $1,000 deposit back. Oh, wow. Decided not to pursue the purchase of the Model 3. I just got fatigued by the whole thing. Just real quick, how long were you waiting?

From the time that you put down the $1,000 to the time that you said, I'd like my money back, how long? It was in the second half of 2017 that I asked. So it hasn't been a full year yet, but it's probably coming up on it. I think Tesla is a paradox. Because in a way, short sellers are just hounding this stock. course, they got obliterated this past week. And that tends to happen to companies like this. But actually, if I am a Tesla short-seller, I'm actually rooting for this company to actually

be successful, start generating a profit. Because actually, for something you said, Chris, is when they do start generating consistent profits, maybe it will be valued just like all the other automakers. It wouldn't get this crazy valuation that it certainly gets in the market. So you're going to get tweets that say this is not a car company. I get it. Can't be valued as a car company. A bit of an unrelated note here, but sort of related. I was reading recently where Jeff Bezos is pumping a lot of money and resources into Blue Origin, his space company. Now, after reading that book, The Space Barrens, which talks a lot

about Bezos and Musk and their race to space, so to speak, I really do believe that SpaceX is Musk's true love. And if he needs to start devoting more time and or resources to SpaceX, I just can't help but feel like Tesla is set up to suffer from his absence. If there is is any kind of a prolonged absence. I really just, I mean, it's SpaceX, I think, is his baby. That's his passion. Tesla, maybe not so much. Up next, we've got video games, financials, and a little something just in case you're hungry. Stay right here. You're listening to Motley Full Money. This episode of Motley Full Money brought to you by TD Ameritrade. You're always on the cutting edge of technology. And TD Ameritrade prides itself on being ahead of the curve, too. Their latest

These innovations put their resources and services on the popular platforms that you carry and use every day. So now, to stay on top of the markets, all you have to do is enable the TD Ameritrade skill for Amazon Alexa, or just message them on Facebook. You can learn more about their commitment to innovation at TD Ameritrade.com slash innovation. Welcome back to Motley Full Money, Chris Hill here in studio with Jason Moser, Matt Argusinger, and Ron Gross. Good second quarter results from Square. Share's up, despite Square's guidance being a little lower than analysts we're hoping for. But Jason Moser, the war on cash is alive and well. The war on cash continues.

I tell you, I mean, I saw a lot of square equipment at many of the stores I visited in Rhode Island and Connecticut here this week. The gross payment volume is really the important metric to watch with a company like this. This tells us precisely the power of the network and how it's growing because it draws a direct line to the question of that growth, to the money that's actually flowing through all of their systems. And GPV was up 30% from a year ago to 21.4 billion. Now, you compare that to a company like PayPal. They just reported gross payment volume for the quarter of $139 billion. My reason in bringing that up, Chris, is simply to show you that not only is PayPal still

light years ahead, but it also shows there's a tremendous market opportunity out there. And Square's working on trying to capture that. Products like Square Appointments, Square for retail, Square for restaurants, they are really going after all sorts of angles there, giving up or getting these businesses that are made up of sort of smaller businesses that need to benefit from these cheaper payment solutions and better technology to help them grow their businesses. Square is doing a great job in building this out. And there is a blueprint out there to be profitable in this line of work. Obviously, PayPal is sort of the poster child for that. So you can see how powerful the business.

can be if they keep doing what they're doing. And there's no reason to believe that they shouldn't one day get there. Video game stocks in the spotlight this week. First quarter profits for Take Two interactive were higher than expected, thanks to its Grand Theft Auto franchise. Activision Blizzard's second quarter profits got a boost from Call of Duty, but shares falling despite that report. Take that in any order you want, Maddie. Yeah, I think it's a tale of expectations with these companies. I think Take Two's results were just a lot better than expected from investors. And their annual guidance has kind of been increased because of that. Activision Blizzard also had a better quarter, but just didn't raise their

full-year guidance. So I think there's some questions from analysts saying, you know, well, maybe they're expecting a little bit more of a tepid second half to the year. But for both these companies, there's so much built in to the next five or six months because you've got Red Dead Redemption 2 coming in October. That's going to be Take 2's biggest franchise release since the last Grand Theptado. And for Activision, you know, we've got, of course, the annual Call of Duty game that's coming out in the fall, but also, a new iteration of World of Warcraft and Harthstone and some other things. And so I think these companies are just doing better than people thought right now,

but it all really hinges on how good holiday video game sales are. And they look like it's going to be pretty good. I was going to ask about the holiday quarter. Is that the most crucial quarter for these types of companies? Because we've talked before that video game as a business tends to be a little lumpy. It's very, very lumpy. Yeah, this tends to be the slowest period right now. We're in the summer.

Hopefully most kids aren't at home playing video games, or they're playing Fortnite. They are. But, yes, it is really all about it. And video games kind of build their publishing schedule around the holidays. Shares of Blue Apron fell more than 30 percent this week after second quarter results were a disaster. Ron, Blue Apron is not just burning cash. They're losing customers.

And that may be the even bigger problem. It's a really bad report. Loss of customers down 24 percent from last year, down 9 percent from the end of March. We recall that they had a bit of a snafu with one of their facilities and that, you know, hurt operations. And they can't seem to get it right. And it continues to spiral down. The one good thing, and this is not a sustainable way to run your business, is that they were able to cut costs. And they did a good job there. Gross margins actually up, administrative costs down. So I'll applaud them for that. But it's the business model

here that is really keeping them from succeeding. One interesting note is that they're trying to sell into Costco right now. Their kits, which I think is interesting. I'll be curious to see how that goes, but I don't think that's the savior for the business. Does this industry work? Because it seems like we've talked about, whether it's Blue Apron or any of the competitors in the meal kit delivery space, whatever one thinks of the actual product. Maddie, I know we've talked before about HelloFresh. I mean, I've tried a couple of different ones. Like them, not enough to keep it going. And it makes me wonder if this works as a standalone business or if the future of meal kit delivery is really as a loss leader for a larger business. I think there is a future.

I just think right now, there's just too many players in the marketplace. And so, and you mentioned it. You've tried several. And I have two. And I think that's the problem. I think people are just trying this one, this one. But there almost needs to be some consolidation and needs to be one big player that can reach 10 million customer subscribers and eventually succeed. But hard to see right now. Completely agree. This week, Red Robin Gourmet Burgers warned that second quarter profits will be lower than previously thought, and that was all investors needed to hear. Shares of Red Robin down more than 20 percent and hitting their lowest point in five years, Jason. Well, I mean, you cannot guide down the way they guided down and not expect just a total

market exodus, and that's what we got, right? I mean, these are cheeseburgers at the end of the day. It's not rocket science. So it is a very, a very complexist. competitive industry to begin with, management actually used the word hypercompetitive in the call, which I found interesting, making the point that it's very difficult to grow sales in this hyper competitive environment where most everybody else out there is focused on cutting prices, offering discounts and deals and whatnot. Red Robin trying to take a little bit of a different tag here in maintaining pricing and sort of convincing consumers that they are getting something special by going there. I mean, hey, bottomless steak fries,

I can get on board with that. I just don't know how many people out there really care about it at the end of the day. It's not a small business, right? They do own most of their stores, so that's encouraging. But we also see with companies like Chipotle, that can be a sword that cuts both ways as well. So I just, not a bad business, but it's a very difficult market. Restaurants are tough to really sustainably do well. Restaurants are tough, and it is a competitive environment. We're also in a good economy. I mean, I was thinking that when I was looking, I mean, we're Cheesecake Factory reported this week, similar type of results in terms of the stock.

I mean, what happens to some of these restaurant chains when the economy invariably hits a recession at some point? I mean, I think some of them have to disappear. The world just doesn't need some of those concepts out there. We always ask this sort of rhetorical question about J.C. Penny. Does the world really need J.C. penny? No, probably not. I think we'll see some of those restaurants fade away as well.

Why do you think Shake Shack gets the benefit of the the doubt because they're also in the burger business. I'm not saying that they're running their business exactly the same way, but I mean, that's a $2 billion company. Red Robin Gourmet burgers is $500 million. Maddie, if I offered you, you can own all of Red Robin Gourmet or I'll give you a quarter of ShakeShack. Which of those two are you taking? Oh, gosh. I'm going Red Robin all the way, and that's just because I don't have the right number in front of me. But I think at some point, the average Shake Shack, the average shack was valued at something like $20 million. And I don't know if that still holds true today.

But the valuation on ShakeShack is just confounds me. There's some sort of cult following in both the people that go eat there and the people that buy the stock that doesn't exist with like a more staid company like Red Robin. It sounds like Tesla. You could have just said the same thing. Same question, Ron. I'm giving you all of Red Robin. I'm giving you a quarter of ShakeShack.

Which one are you taking? I think I'm going Red Robin. Really? I think I'm going Red Robin. You're in New York guys. We have a steak shack being built right around the corner from my home. I've never been in one. So I will visit and then I will get back to you. You know what? You're going to change your tune.

And all the Amazon New HQ people are moving into your neighborhood. They're going to love going there. Ryan Gross, Jason Moser, Matt Argusinger, guys, we will see you a little bit later in the show. Up next, more restaurant talk with industry expert, Jonathan Mays. Stay right here. You're listening to Motley Full Money. Welcome back to Motley Full Money. I'm Chris Hill. Jonathan Mays is the executive editor of Restaurant Business Magazine, and he joins me now from Minneapolis, Minnesota, Jonathan, thank you so much for being here. Thank you for having me. There are a bunch of things going on with a bunch of different restaurants, and we will get to those,

but I want to start sort of broad. Right now, when you look at the restaurant industry from a 30,000-foot view, what stands out to you? The thing that really stands out is the industry is undergoing a fairly monumental shift in the way consumers are using restaurants. So even individual restaurants. So they are getting a lot more takeout and they are not dining in as often. And when they dine in, they really want, they want a new experience or they want entertainment. So almost doesn't matter what kind of chain you look at. If you're looking at somebody like a sub-concept, if you're looking at noodles and company,

if you're looking at a casual diners such as Applebee's or anybody else, consumers are really much, much more likely today than they were even a couple of years ago to order that food and take it with them. They don't like eating out at restaurants. And if you think about that, the impact this has on the industry is actually fairly big. The big headlines tend to be on delivery, right? You've got all these third-party providers and all these restaurant companies are falling all over themselves to deliver food. But just people are just going to Chipotle or they're going to a firehouse subs and they're they're taking the ordering the food and they're taking with them and so it's kind of influencing how companies are

looking at how they develop real estate it's really forcing massive changes in the casual dining sector they're opening smaller restaurants and and then that just sort of has an influence just on overall sales because if you're taking food with you you're less likely to get a drink you're not going to get alcohol, and so sales have been relatively weak. It's interesting because one of the restaurants that, in general, has been a better-than-average performer over the last few years is Texas Roadhouse. Ken Taylor, the CEO, we had him at a Motley Fool event last year, and he was asked about delivery, and he said, you know, we encourage all of our competitors to do as much delivery as possible so they can deliver lukewarm food to their people. I mean, he's very focused on the in-restraintzance. And it seems like at least in the case of Texas Roadhouse, that really hasn't hurt them at all.

No. And Kent is a very famous contrarian on this because a lot of his competitors, like Outback Steakhouse or, you know, they're really going gangbusters on takeout and delivery. And, you know, and Texas Roadhouse isn't. But we separate out the delivery element. and even Texas Roadhouse will tell you that they have had increases in the number of takeout orders over the years. So it's just, delivery, I think, is one part of this whole thing about takeout and the growth of overall takeout in the restaurant business. And the thing about Texas Roadhouse and what they've been able to do is they do a really good job of, you know, their service is really good. Their food is very good.

I mean, their roles are spectacular. You can throw peanuts on the floor. It's kind of a fun experience. It's very energetic. You know, the restaurants are busy, and that makes a difference and that sort of thing. So, I mean, yeah, they sort of prove, they show that if you do your job and you do it well, people will come into your restaurants and will dine in. But even in their case, they're seeing increases in takeout.

You mentioned Chipotle. Obviously, the big news this week with Chipotle is in Ohio where a county health department reported more than 500 inquiries tied to a possible outbreak at a Chipotle restaurant. We've seen this movie before, Jonathan. What is going on with Chipotle? It appears to me, at least on the surface, that their food safety practices are pretty solid. So they voluntarily closed the restaurant. They sanitized everything. you know, they're asking employees if they're sick before they come into work every single day.

Actually, if you look at one of the inspection reports that's been on that restaurant, they were noted for how good the hand washing was, but, you know, they keep having this. And, you know, at this particular point, we don't really know what happened with this particular restaurant. You know, but it's, you know, historically, their last few years have been something else. It certainly was obvious back in 2015 that they definitely had some operational problems. those operational problems that really revealed themselves as a company overhauled its management. To be honest, I sort of wonder if there's like a hyper sensitivity a little bit to Chipotle sometimes and people are really quick to report things. But at the same time, I mean, we got more than 500

people saying that they got sick at this particular location. That's substantial. So it's not small. So I've never really seen a restaurant company go through what they've gone through. It's pretty incredible, actually. Because let's face it, there are restaurants all across America that have food safety issues of one kind or another. On an ongoing basis, they're not getting the headlines that Chipotle has. And I'm wondering if Brian Nicol, the CEO, I'm assuming he knew that when he took the job, that fairly or unfairly, this is just the world that Chipotle is living in right now, and it's right in the middle of the spotlight. Yeah. I mean, they knew when they started. I mean, you have to. Just look at what happened last year and their restaurant in Sterling, Virginia,

which by the way, sickened a lot less than the reported cases in this Ohio situation. And, you know, it really set their sales back. And it is something that they're going to have to deal with, really, until they've gone through a period in which they haven't had a situation like this. But, you know, I mean, single restaurant outbreaks do happen. restaurants are fairly common sources of foodborne illness. It just sort of is. And the other thing I'll point out, Chipotle also recorded that on Tuesday, that they had their best summer sales day in the company's history

and their best digital sales day ever. So as this is happening, as we're getting all these reports of all these people apparently getting sick, in Ohio, people are still going because they wanted to free guacamole. I think that no food chain has been in the spotlight in 2018 to this point quite in the way that Papa John's has been. And this week, it took yet another turn the entire Papa John's saga when the founder, John Schnatter, went on CNBC and basically trashed the current management, saying he has no confidence

in the company's current management team, including Steve Richie, the CEO, that he, he has worked with for so long. I mean, look, I understand if Schnatter got his feelings hurt, if he's upset at the board of directors, he's the largest shareholder of Papa Johns. Doesn't it behoove him to sort of quietly stand off to the side and let the board and the management team write this ship? Because forget comparing Papa John's to Domino's. Domino's has been one of the most dominant operators, and by the way, one of the best performing stocks of the last 10 years. But Papa Johns is just in a world of hurt right now as a business. Yeah. I really don't know what he's doing. I'm not entirely sure what his end game here is.

I mean, look, Papa John's is company. I mean, he founded it. He was, he was, the chairman for its entire history. He was a CEO for most of it. And really, if you go back, if you just go back less, you know, just one year, he was a very successful one. And then all this happened. He was also, by the way, for a long time, highly regarded as a company spokesman. So, and he, you know, he drove very consistent sales for a very long time. And, and suddenly he's seen all of this go way. And again, in his mind, it's his company. His name is on the, you know, I mean, his name is on the, on the signs. He's been, there's maybe no restaurant company in modern history so associated with one single person as Papa John. So he's very emotional about it. And clearly regrets that he stepped down,

clearly regrets that he's no longer, you know, in charge there and still kind of believes. I mean, he feels that, you know, he doesn't really see that he did anything wrong. And just in, in, from his perspective, and also believe that, look, I mean, look at my history running the company. When I've been in charge, his company has done well. And when I'm not, it's not. But, you know, at the same time, as you mentioned, he hired all these people that he's now trashing. I don't see a real easy way out. Absent John Schnatter getting together, you know,

with getting together maybe with a private equity firm or some of the buyer and engineering a buyout, you know, kind of leveraging as 30% ownership, something like that would, to me would seem take the most likely scenario here because I really don't see anything else at this particular point, given the way shares have gone. Let's go to the largest restaurant in the public markets, and that's McDonald's. You look at the job Steve Easterbrook has done as CEO. It's been tremendous. It's really shown up as well in the stock performance.

Although, over the past year, it's been kind of up and down. I mean, the stock basically trades where it was a year ago. And I'm curious when you look at the behemoth, that is, McDonald's, what is the opportunity you see for the business going forward? They are the biggest name. They have the biggest marketing budget. And, you know, in the United States, their opportunity is still, you know, continuing to improve the food and finding the right solution from a value standpoint to get people in the door because they've got a, you know, if they want to start adding any locations again, they've got to get that traffic

back up in the United States. And I think that's the issue keeping their stock down, I believe, is this concern that their traffic numbers have not been very strong, especially this year. I'm curious as someone who studies the restaurant industry for a living, all aspects, not just operational, but also promotional. What your thoughts are about the recent campaign that IHOP had to promote their burgers, where they said they were changing their name from IHOP to IHob, And then they basically said, no, we were just kidding. They got a lot of attention for it. Based on the latest earnings report, it doesn't appear to have moved the needle at all in terms of that restaurant sales.

No, it hasn't. I mean, the campaign on balance, in theory, was a success from the standpoint that they did get a lot of attention for the brand. I mean, how often have you talked about IHOP in the last decade the way you did? when they were doing this campaign. But I think it also sort of opened themselves up to a lot of criticism. People were confused by it. I still get people who think that they were literally changing their name to burgers, which wasn't remotely the case.

And, I mean, to me, I thought it was kind of obvious at the get-go that they're not really changing their name because that would have been an entirely dumb idea. Because, you know, International House of Pancakes is extremely, iconic and it's a very, very good brand name. And breakfast is where you want to be. It's the strongest growing day part right now. Breakfast is a very, very good thing. Burgers, on the other hand, while people eat a lot of burgers, highly competitive. So, I mean, I understand what they're trying to do. They're trying to build the day part that they weren't very strong in, but at the same time,

it's just sort of not what they do, and it's not their strength, and it confused people. You know, maybe it got some sales, but it also might have alienated some people that really didn't quite like it very much. Last question, and then I'll let you go. When you go out to eat, are you able to relax and enjoy yourself, or is some part of your brain always evaluating the business of the restaurant that you're in? No, I don't. I got kids, and they're active. And I remember going to a casual dining restaurant, and I'm just sitting there assessing it. It wasn't a very good time, to be honest.

And the food was mediocre. The atmosphere was bad. And we, you know, I have two kids in my life, and we each had a meal. My teenage son, who eats everything in sight, didn't finish his burger, which is really telling. And then we ended up paying $80 for this experience for the four of us. And the entire time I'm remarking on this and analyzing it with my family. and ever since every single time we go to a restaurant, I have compared it to that particular event,

and I think my family is getting annoyed with me at this point. Jonathan Mays from Restaurant Business Magazine. If you're on Twitter and you want to learn more about the restaurant industry, Jonathan Mays is a great person to follow. Thanks for being here. Thank you very much. Coming up, we'll give you an inside look at the Stocks on our radar. This is Motley Full Money.

As always, people on the program may have interest in the same. stocks they talk about, and the Motley Fool may have formal recommendations for or against. So, don't buy or sell stocks based solely on what you hear. Welcome back to Motley Fool Money, Chris Hill here in studio. Once again, with Matt Argusinger, Jason Moser, and Ron Gross. Quick update, before we get to the stocks on our radio, quick update on the Motley Fool podcast, Swag Shop. As you may remember, for the month of July, we were having a sale across the shop, 25th-offer off everything in honor of the Motley Fool's 25th anniversary sale.

And I'm happy to say that we are extending that sale throughout August, in part because it was so popular that we started to run out of stuff. And it turns out Ron, I've recently learned that inventory, it's not the easiest thing in the world. It's not your thing. It's a learned skill. You're not born with inventory management skills. I'm going to be less critical about retail inventory controls. Under Armour Kevin Plank? It's not easy. Square's got some technology to help you with that, Chris. Let's talk after the show. Again, but you can check that. I'll go to shop.fool.com, and the 25% sale continues through the month of August. Let's get to the stocks on our radar and a man behind the glass. Steve Brod is going to hit you with a question.

Ron Gross, you're up first. What are you looking at this week? I got Equinix, EQI-X. It's a real estate investment trust that is the largest operator of data centers in the world. Strong competitive advantage because of that installed base. Obviously, capitalizing on the growth. and data consumption and cloud outsourcing, strong management team, 61 consecutive quarters of revenue growth. And again, it is a real estate investment trust. So you've got a nice dividend that I think will grow over time. 61 consecutive quarters?

You got it. That's a nice little street. That's a nice run, yeah. I just jinxed it probably. Steve Broido. Question about Equinix? Where is real estate going in the next 10 years? We look like we've got prices that are very high.

Homes are very expensive. Commercial real estate. going up or down? I think it's an interest rate play here. So if I had to guess, I would say there'll be some tough times. But the trend over our lifetime, next 20, 50, 100 years, I think will be up. But there'll be some blips as we get some interest rate hurt on the way. Jason Moser, what are you looking at this week? You know, I feel like I'd be letting Mac down if I didn't bring up Teledoc. So I'm going

to go ahead and just bring the Teledoc. Actually, Teledoc Health now. The ticker is TDOC. Teled released earnings this week, and they chalked up a very strong, if not predictable quarter. One of the nice things about the business is when you have a membership model like that, it can be fairly predictable. They are adopting a new corporate brand, as I mentioned, Teladoc Health now. And it's a subtle difference, but really it speaks to their ultimate strategy, the goal of being a comprehensive provider in the telehealth space. So it's going to utilize the acquisitions they've made recently, like Best Doctors and Advanced Medical, trying to become more than just that one app on your phone that you use if you've maybe got a sore throat or something.

Steve, question about Teledoc Health? What's the first industry that Teledoc will displace entirely? The first field of medicine? The first field of medicine? That's a good question. You know, I mean, we always hear him talk about flu season and how it's just really having such a great impact on keeping a lot of sick people out of emergency rooms. So, hey, if we can keep all of the flu sufferers out of a hospital and just send them some prescriptions and get him cured that way. Hey, let's disrupt the flu.

I mean, why not? I'm in. They're disrupting the flu. Matt Arkansasinger. What are you looking at this? I'm looking at Despegare.com, tickers DESP. You made that up. Well, I have to get credit to one of our young analysts at the full, Emily Flippen. She came up with this idea. It's the leading online travel agency in Latin America. It came public last year. But it's down about 40% from its IPO. It's had some changes in the executive ranks. The CFO recently left.

But revenue is growing at 20%. And Expedia owns a 13% stake with an option to buy the company or take a majority stake in the company. So I'm starting to get interested in this one. Despegare.com, Steve. What are some hot travel spots in Latin America if you live in Latin America? If you live in Latin America, oh my gosh. You're making the trip to the U.S.? No, no.

I mean, I think you're staying in country. I think there's some beautiful beaches in Mexico and Brazil and some great hiking you can do in Argentina. I'm just, I have no idea what I'm talking about. Yeah, Kava. There. you go. Go to Cabo. Three stocks. Steve, you got one you want to add to your watch list? Well, I recently bought Teledoc, so I therefore will be watching Teledoc. Hey now. All right, guys, thanks for being here. Thanks, Chris. That's going to do it for this week's show. Our engineer is Steve Broido. Our producer is Dr. Mac Greer. I'm Chris Hill. Thanks for listening.

We'll see you next week.