Motley Fool Money - Is Facebook Serious?

Episode Date: March 8, 2019

The government reports surprisingly low jobs growth. Facebook CEO Mark Zuckerberg lays out a new vision that doubles down on privacy. And Costco produces some bulky earnings. Analysts Andy Cross, Ron Gross, and Jason Moser discuss those stories and dig into the latest from Big Lots, Eventbrite, Okta, National Beverage, and Salesforce.com. Plus, Andy talks with Q2 CEO Matt Flake about the future of banking. Check out Hello Monday from LinkedIn Learn more about your ad choices. Visit megaphone.fm/adchoices

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Find Hello Monday on Apple Podcasts or wherever you listen to podcasts. 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. We'll join you meeting studio this week, senior analyst Jason Moser, Andy Cross, and Ron Gross. Good to see you, as always, gentlemen. Hey, you do. We've got the latest headlines from Wall Street.

We will dip into the full mailbag. And as always, we'll give an inside look at the stocks on our radar. But we begin this week with the big macro. The jobs report for February surprised a lot of people with just 20,000 new jobs added to the U.S. economy. The worst month for job creation in a year and a half. Ron, the consensus expectation was for 180,000 new jobs. So how do we miss by that much? The headline is very curious.

By curious, I mean confusing. 20,000 much weaker than expected. So much, you've got to wonder if potentially maybe it's not even correct. There could be seasonality in there. There could be weather. There could be the government shutdown. There seems like something is wrong. It doesn't jive with the ADP report we got earlier in the week,

which showed construction sector adding 25,000 jobs. This report today shows the construction sector losing 31,000 jobs. That's a $56,000 job swing. Somebody's wrong there. So there's a lot of things going on. Don't forget also, this number today, there's a margin of error plus or minus 100,000 jobs. That's a pretty big margin of error. And I expect that we will see pretty large revision.

Once somebody figures out what's going on, things to focus on, I think, are the all-encompassing U-6 unemployment rate, which went down significantly to 7.3% and a nice wage increase. Yeah, I think on the overall way to think about this, is you have to remember to take these in three years, even six-month average estimates. So last year, we were up $223,000 per month over the course of when you look at a three-month rolling period. So I think it's important to not just take one number into play here.

One interesting point that I did like was the professional and business services were up $42,000 for the month. And that's basically in line. with the average over the last year or so. So, those tend to be high-paying, well-regarded roles that the U.S. is going to be more responsible for growing over the next decade or so. So that one continues to be pretty impressive to me. I was going to say, you shouldn't expect to see robust job growth forever, right?

Once we get closer to full employment and there's less folks to get jobs out there, you'll see that number come down. So I wouldn't be surprised to see that number slowly come down over time. This is just so severe that it makes me think something is a little wonky. So it's safe to assume that we all expect there to be revisions upward when we get the numbers a month from now. But I want to go back to the construction number, Ron, because as you indicated, that was the thing that leapt out to me in the initial report. I hadn't seen the ADP numbers earlier in the week. That's one of those things where, not to get greedy here, but not only do I want to see revisions up in a month's time, I want to see that construction.

construction number up. Because if this number is correct and the ADP number is the one that's wrong, that has broader implications for the economy. For sure. You would much rather see a robust construction industry, for sure. Now, the ADP report and this report are often at odds with each other. They don't always go in lockstep. It's not typically as severe of a difference as this. I like that they have a margin of error of 100,000 jobs. Wouldn't it be nice? I'm going to start doing that. Whatever your job is in life.

life, you had a margin of error that big? This week, Facebook CEO Mark Zuckerberg published a 3,000-word blog post outlining what he called a more privacy-focused future for the social network. This comes as Facebook is building out a new integrated messaging service that will allow users on Instagram, WhatsApp, and Facebook Messenger to communicate in private with each other. Jason Moser, I feel like we've seen this movie before. Sure. I mean, I call me a skeptic. I mean, I feel like this is really really a very just a strategy move kind of hidden in a PR stunt, more or less.

If you read the blog post, then you get what I mean by a PR stunt, I think, because it's very, just equivocates, essentially. He just doesn't really commit to anything. You know, we're facing a point in time where Facebook has really lost a lot of consumers' trust, and for good reason. I mean, the privacy concerns abound. And we're also facing a point where we're seeing the evolution of social media where I think more and more people are finding the drawbacks of living your life out in public to be a bit greater than they initially anticipated. So,

Facebook needs to come up with something new, and messaging is really it. That's not really a surprise, but, I mean, again, you go back to the actual blog post itself. There really was nothing committal. I mean, he didn't commit to really anything other than just things he'd like to see. So, I mean, I appreciate that he's getting out there and talking about privacy. It's certainly an issue, but this is something that could have a material impact on the business. I mean, if they go towards a messaging platform with end-to-end encryption, that very much limits their ability to advertise based on what they're doing today. The idea of bringing commerce and payments into their universe is a great one. That

would drive revenue growth. The problem is they've been working on that, essentially ever since they went public. And I don't know, essentially, I don't know really why people would bring that behavior into their universe now with companies out there like Amazon and PayPal and Square that have built such strong competitive advantages and networks in their own right. So, yeah, I mean, if I'm an investor in Facebook, I don't know that I'm feeling a lot better about this situation. They've got a monumental task ahead. Listen, Zuckerberg and the company have been under significant pressure over the last couple of years relating to privacy, whether it's from the Senate, the media consumers.

So I think it was inevitable that we would see something to shore up or move to a more privately secure functionality. But Zuckerberg's got $22 billion of net income to protect here. This is not him changing the business model overnight, not unless he wants the stock to plummet and layoffs to follow. So this will be a very measured move that will take quite some time and how it actually ends up shaken out. I don't even think we can envision quite yet. There's a lot of stuff out there today comparing what they're thinking about doing to what WeChat in China is doing today, essentially being that one-stop shop, or you can get everything done just in WeChat. And I don't have any doubt that in a perfect world, that's the strategy

that Zuckerberg would pivot to. I think it's worth also remembering, though, this is China versus what we're doing here. They're very different cultures. And perhaps this is a testament really to the forward thinking that was involved with what WeChat is built out. I mean, they kind of went to that from the very beginning, almost, versus what Facebook had built up to this point. So it's going to be more difficult, I think, for them to pivot into that direction when you see what WeChat has already built from the ground kind of up in that regard. Well, and as you indicated, Jason, I mean, nowhere really in that 3,000-word post did Zuckerberg lay out specific steps. There weren't specific promises in terms of, and here's what we're

building as we try to create this more privacy-focused platform. I mean, you're going. You're go back to last year when he talked about how, yes, we're going to come out with this functionality where people can clear their history. That really hasn't materialized yet. Not at all. And I mean, if you read that blog post that you see exactly what we're talking about, it's a lot of ifs and maybes and possibilities, but nothing really concrete whatsoever. Shares of Salesforce.com down 6% this week after guidance for the first quarter came in light. Andy, you look at the fourth quarter results for Salesforce. They were pretty darn strong. Really impressive for a $100 billion company.

And that guidance, I mean, it was not that light. I mean, just look at the quarter, Chris. It was 3.6 billion in revenues. That was up 26%. That was above guidance. Subscription and support revenue up 26%. A non-gap EPS of 70 cents, which was far higher than the estimates. Cash generated up 24% for the full year.

And they have a cash flow yield if you just look at the cash flow versus the revenues of 26%. So Salesforce continues to be the leader in the CRM customer relationship management space, and they are growing their influence. They guided for a four-year growth rate of sales north of 20%, which, again, for a $100 billion in market cap company, it's exceptionally aggressive. And maybe some analysts think, that might not be possible. But Mark Benioff, who is a co-founder, owns more than 4% of the company. It's almost $5 billion with a stock. Has his life built into Salesforce, and I certainly wouldn't doubt him too much. much because his history of delivering is pretty exceptional for Salesforce, customers, and shareholders.

We were talking before. We started taping. You go back a couple of years, Salesforce was in the conversation, all these reports that we saw of possibly acquiring Twitter. When you look at this business and the way Benny Off has built it out, do you look and think, okay, these plans are great in terms of organic growth, but do you want to see him go out and make some acquisitions, whether it's Twitter or something else. I don't. They bought MuleSoft for $6.5 billion. They're continuing to integrate that into their platform. They just partnered with Google Analytics 360, so now their clients have access to Google Analytics more seamlessly. They continue to invest in things like AI, their Einstein

AI delivers more than six billion predictions every day. So they're really building this platform for all kinds of global customers to have a really 360-degree view to their entire customer lifecycle from sales to bringing them into the platform. And that's really impressive as we think about the world being more and more integrated. Salesforce is a leader in that space. Coming up, a check-in with one of the biggest retailers in America. Stay right here. You're listening to Motley Full Money. Welcome back to Motley Full Money. Chris Hill here in studio with Jason Moser, Andy Cross, and Ron Gross. Shares of Costco up 5% on Friday after second quarter profits came in higher than expected.

Ron, you looked at the quarter. What's your headline? I think I'd have to go with U.S. same-store sales excluding gas up 7.4%. That's strong. That's strong. It's a great quarter. Total revenue up 7%. Some weakness internationally. So we do have to address that. Less than 1% same-store sales increase internationally. Canada was actually down slightly. But the bulk of this business is U.S. So it all offsets to shake out to be same-store sales increase company-wide of 5.4%. Very, very strong. Largely, the result of a 4.9% increase in traffic to stores and websites. Online sales rose 20%. Membership revenue up 7%.

Margins are up. Translates to a profit increase of 27%. Fantastic quarter for Costco. Great numbers in the U.S. But as you said, international, it seems like, I hesitate to use the phrase a weak spot, but it seems obvious to me that Costco management really hasn't been able to make international work close to the same way it does here in the States. That's correct, and I'm glad to see that they've rolled that out in a very measured pace because you know, you plow into some region with huge cap-X and it just doesn't work out and it can turn a great business into a weak business. One final thing I want to say is they did just raise wages for their hourly workers to $15 a share. That certainly has implications to the cost.

But in the end, I think it's a great move, very shareholder-friendly. Rough week for Eventbrite shareholders. The event ticket platform posted a loss for the fourth quarter, and revenue guidance for the first quarter was not what Wall Street wanted. Shares of Eventbrite down 25% on Friday. Jason, was it that bad? Because it seems pretty bad. The question I think is, knowing what we know today, is this a bad business?

Or is this a business that is being repriced for good reasons? I think it's the latter. I think this is a good business, but you got to remember, this is a young company just fresh to the public markets, low float, stock price based on zero fundamentals because they're not making any money yet. So to me, this was more a matter of when, not if. And frankly, I'm kind of interested in the stock now with this pullback, because when you look at the numbers, it was a good fourth quarter when you're talking about net revenue and paid tickets are up. guidance was a little bit light. Now, there are good reasons for that. Before Eventbright went public, they acquired Ticketfly, which was another big player in the ticketing space. And they're integrating that acquisition, ultimately, in the back half of the year, they're going to shut down Ticketfly completely and rely on Eventbrite music. So that will present some near-term challenges, but I really like CEO Julia Hartz here. She is focused on the forest, not the trees. A lot of great language in the call and presentations. They're focusing on years, not quarters,

So, really, she's our kind of CEO. Another interesting little side note there, because this is a global business. It was nice to see that they added Mercado Pago as a payment provider for their Latin American business. So all in all, to me, it's a business I like. I do own some shares. I'm looking at this pullback with some greed, because I think there is a great market opportunity here for a business that has run very much in line with the things that we look for here. There are a lot of different industries that we talk about where we say, look, there's going to be more than one winner in this space. There'll be more than one winner when it comes to event ticketing. But

it seems like there's not going to be a ton of winners. How do you feel about event bright going up again? Because when it comes to buying tickets to an event, there are a lot of different platforms out there. And it really seems like five, ten years from now, there's going to be fewer dominant players than we have right now. Yeah, I think you're right. I think that's why we saw some of the consolidation there with the ticket fly acquisition, for example. And where event bright focuses primarily is kind of that smaller to mid-market event management. They're not focused on these big concerts and events. They're trying to help the smaller bands and events and whatnot gain some traction

and have some low-cost ways to promote their events. So they do focus on a particular market opportunity, which I'm encouraged by, and it is a big market opportunity when you look at it from a global perspective. So I think they continue to do the right things. This loss in the fourth quarter was smaller than expected, but guidance for the first quarter was lower, and shares of Octa down 5% on Friday. Andy, you tell me, is this a speed bump? Because shares of Octa are up about 80% over the past year. Well, I don't know if it's a speed bump, Chris.

They are certainly investing a lot into the platform, and that's worked exceptionally well. Just look at the quarter results for the fourth quarter. Revenue was up 50%. Subscription growth of 53%. They ended with 6,100 clients. That's up 40% for the year. They generate some free cash flow during the quarter, which is really nice to see. So when I think about the balance between growing the revenues and adding to the cost structure to be able to grow those revenues,

I think there's maybe some concerns from the analysts community trying to think about how that balance may work out. The guidance for the year was certainly slower growth than we've seen over the past couple years, which have been north of 50%. now they're looking more in the 40% range. But they'll continue to invest more and more in research and development, more and more in their sales cycle. As they continue to try to grow the business, they now have more than 1,000 clients that generate more than $100,000 billion dollars per year.

And that's about 17% of the total they have. And the more they can add to the larger clients, the better it is for profits and for cash flow. So the Octa Story continues to be in. in play, and it's a business that I think as we continue to expand and use more and more applications, all of us globally, we are going to need identity, you know, identity, you manage, systems to be able to integrate all those applications in OCT as a leader in that space. Obviously, a 5% drop, not as bad as a 25% drop, but to the point that Jason made about a

vent bright, do you look at Octon and think, this is a stock that's a little pricey? Well, it's a little less pricey now. I mean, they're now, they used to sell higher than 10 times revenues, but now they sell more in the 8 to 9 range. So it's a healthy growth story, and maybe the pricing in times is ahead of itself. Certainly, shareholders have to be ready for the volatility that any company selling at those levels will come with. Discount retailer Big Lots has had a rough few years, but fourth quarter profits came in much higher than expected and shares up more than 15% on Friday, Ron. Biggest one-day gain for Big Lots in five years.

And they needed it. Stock is still down 35% on the year, even accounting for this. They got crushed in December when they reported weak results. These results are better. They exceeded both companies' guidance as well as analysts' estimates. Com sales up 3.1 percent. Their remodeling efforts, their loyalty rewards program seems to be paying off. Profits were up 4 percent. Not knocking the cover off the ball, but it's still an increase. Nice to see. They're going to buy back $50 million worth of stock. And listen, for those that are interested, this isn't a recommendation. But nine times earnings, 3.8 percent dividend yield may be worth a look.

Is a loyalty reward program now table stakes for any retailer? Is it just a red flag if a retailer doesn't have one of those? It appears to be, and they appear to be actually working across the board, whether it's something like restoration hardware or something like Big Lots. All right, Ron Gross, Jason Moser, Andy Cross. Guys, thanks for being here. Q2 Holdings is not exactly a household name, but with the way the stock has performed over the past few years, maybe it should be.

Up next, a conversation with Q2 C2. CEO, Matt Flake. Stay right here. You're listening to Motley Full Money. All right. Before we get to this week's interview, let's talk about you for a second. Let's talk about you and your work life. Because over the course of a lifetime, the average person spends more than 115,000 hours at work. That's about 13 years. So finding a way to make work more rewarding, fulfilling, and enjoyable is pretty much guaranteed to be a good use of your time. Hello Monday is a new podcast from LinkedIn's editorial team about how to get the most from Monday and your career. Each week, host Jesse Hemphill sits down with featured guests to investigate the role that work plays in our lives, uncovering lessons that you can apply to your own career.

So whether you're just starting a new job or you've just got a few weeks left to retirement, you're going to be ready to take on Monday and the rest of your work week with the knowledge to make your career work for you. you. I had the chance to not only listen to the first episode of Hello Monday, I got the chance to talk to Jesse Hempel on the phone. I've been an admirer of her work as a journalist, and I'm really excited about this new podcast that she's heading up. So check it out when you get a chance. Find Hello Monday on Apple Podcasts or wherever you listen to podcasts. Now, let's get to this week's interview. Welcome back to Motley Fool Money. I'm Chris Hill. Q2 is a software company that helps banks of all sizes offer their customers' digital services, services like

mobile banking and online bill payment. And with a stock up more than four times in value over the past five years, Q2 has paid big returns for investors. Last week at our member event in Austin, Texas, Motley Fool Chief Investment Officer Andy Cross sat down with Matt Flake, the CEO of Q2. They discussed security, the future of banking, and Andy kicked off the conversation by asking Matt Flake, about the business of Q2. You have about 400 clients, mostly focus here in the US. Just talk a little bit about Q2, the business and the software and really what you specialize

and how you serve your clients every day. Yeah, so I think one of the things, my mom always asked me, have you signed Wells Fargo yet? And it's like, there's Wells Fargo Chase, Bank of America, and City. Those are the four banks that are vastly different than almost any other bank in the United States or in the world for that point.

So there's about 11,000 banks and credit unions. in the United States, and we service, our market is all of them but about 100. They build their own stuff and they live a very different life and how they do technology. But for the rest of the financial services space, whether it's Fintechs, like Acorns or Money Lion or Square or all finance companies that do leasing and lending or community banks and credit unions, that's who we provide technology to. And our technology essentially takes the data that resides in these back office systems and allows you as an ins user, a small business, a corporate customer, or a retail customer

to do your bank, see your balance, transfer funds, pay your bills, pay your payroll. And if you think about what's happening in the world today, if you watch TV, every TV show, there is one advertisement from a financial services company about getting a loan, making a deposit, it, you know, where to use your debit card. And that pressure is really mounting itself on these types of financial institutions. And our technology allows them to go compete against the people that are doing the advertising

to whether it's Bank of America, Wells, Chase City. So a huge market opportunity for us. We had our Investor Day yesterday up in New York where we talked a little bit more about the business. And then when we started the, when we went public in 2014, our total addressable market was about $3.5 billion. We were zeroed in on virtual. banking and digital banking, which is really the

deposit side of the house where you view your balance and transfer funds. We have expanded with our product suite now to where we do loan origination. We do some banking as a service and our cut, and so what that has done is expanded our total addressable market. And we announced yesterday that our total addressable market

has gone from $3.5 billion to $8 billion. And it's just a dramatic increase over the last five years. And so it's just, it's a great, the opportunity continues to grow for it. That's awesome. Congratulations. Rather significantly large merger announced between two larger banks, SunTrust and BB&T. I think it's combined maybe 600 billion in assets or 400 billion in assets for a large company. Talk about some consolidation, how that impacts your business, opportunities, challenges of the small and regional bank world, and then what it might mean for your prospects when you look at the next five.

years. Yeah, so if there's consolidation happening, I mean, SunTrust PB&T is one example, but there's the M&A activity in the banking space has been well documented. For us, what drives our revenue are the people that have accounts at community financial institutions. So there's no doubt that you're going to see fewer banks and credit unions. And I think, as I said, I want to have a lot of community banks and credit unions. I don't know that we need 11,000, but five or six thousand is probably a good number.

And I think that's probably where it's going to land on. But they're merging with each other. Bank of America Wells and Chase and City aren't buying them. So what's happening is the billion-dollar banks are becoming larger. And that's really our sweet spot. We don't do a lot on the $200 million and below unless they want to use technology as a way to compete. So I think that the merging market, they're merging with each other, they're not going out of business, and we're driving more usage through the platform that way.

One of the things is when we went public in 2014, we had one bank that was greater than 10%. billion in assets. Today we have 30 that are greater than 10 billion assets. And so all that's a function of the consolidation. Some of those are signing net news, but a lot of that's growth that's occurring through acquisitions. So because strategic financial institutions are buying our platform, those are the ones that are doing the acquisitions. If you think about it, I'm not going to go pay more for a technology platform if I plan on selling the business, but I will go buy a top-end technology platform if I'm trying to grow and be around for a lot of it. The name Q2, if you want to share some insights into where the name came from, you

from and then just the brand of Q2, do you continue, how do you continue to support and grow the brand or just how do you think about the brand of Q2? If you do it all, or if it just may just be a software solution. Hank started a company called Q-Up, which was quotes and updates. That was the one he started in the mid-90s where I started working for him. That business sold to a company called S-1. It was an exponent. A lot of different thing happens with that transaction. and Hank wasn't very happy about the way some of the customers and employees were treated. So then he started Q2 and the tagline was exponentially better. I had to explain to Hank that that means nothing to anybody other than the other people.

But we've gotten all past that. That's Hank. He's the chairman. What are you going to do? And so that was $3 billion ago. Yeah, yeah, right. But it was fun. So from a branding perspective, we're trying to drive the brand globally now.

So we have operations in the UK and Anzi and India. So trying to drive the brand more. We have not been known as a big marketing company around pushing our name. And that's somewhat representative, Hank. Let's just go execute and people will hear about us and do that. I don't know if that scales globally. So we're putting more into the brand around Q2, as you'll see more. But we are excited, I think, we're going to have the website Q2.com instead of Q2EBanking.com.

Thank you very much. Yeah, we're very much. to your site a lot. Yeah, yeah. Exactly. We talked a little bit before we came on stage about the regulatory environment, how that might change with whoever's in the various divisions of government. But just talk to us a little bit about the regulatory environment right now after the year is now over.

And how is that impacting either the opportunities for Q2 to continue to promote your solutions as being superior? and challenges it may it might possess as well. Yeah, so just put some context around their comment. Andy and I were talking about how 2016, let me just frame this by saying, my mother, if Jimmy Carter and Oprah had a baby, that would be her. My father is just to the right of Gingas Khan

and has a gun and a W sticker on the back of his truck still. So obviously the marriage didn't work, but I'm neutral as can be on politics. But in the middle of 16, When it started to become apparent that it was Hillary or Trump, one of those two, decisions stopped because if you're in a regulated business, those were very different things. Elizabeth Warren and Hillary Clinton were going to come in. So I've got to figure out what's going to happen because there's going to be a change in the regulatory environment.

And then, you know, November, whatever, Trump happens and then it changes. And so we were talking about in 20, what's it going to be like? I have a feeling it's going to be two very contrasting decisions. And so in a regulatory environment, that's one of the things. that we're trying to get our arms around, what's that going to mean? If it's Bernie Sanders, Elizabeth Warren, whoever on the other side of it versus Trump or if there's a third, it could freeze decision-making. And so regulations are things that actually are barriers to entry for other companies to get in.

It's a competitive advantage for us, but it also creates a lot of cost and burden for us and our customers. And so from a regulatory perspective right now, the regulators are finally getting up to speed with where the cloud is and where technology is, which is a good thing. Our customers are getting more comfortable with it. We spent a tremendous amount of time educating them on security versus running it in your own facility, any amount of money we spend. So it's a differentiator for us. But in 2020, who knows whether it could be a slowdown or not? I will say that one of the things is we're a vastly different company than in 2016.

We have far more products to cross-sell. So if you do have a slowdown in decision-making, people will lean on more cross-sales. So I feel better about 2020 than now than if it would have been 16 where we were. Right, great. How does Q2 technology make my accounts more secure? Yes, so from a technology perspective on the security piece, we started using machine learning in 2009. We hired mathematicians from the University of Texas to come in and look at the behaviors as they occur on devices. And we also, so when you log in, who you pay, how much you pay.

If you think about you or a business, we usually receive money about the same day of the month. We pay the electric company, the cable company, all about the same day of the month, the amounts. about the same. You usually log in from your computer around the same time. And when those behaviors are outside of that, we have machine learning that says, this could be the person that's saying it, but it's not the normal behavior. So we can stop that transaction. And so there's that layer of it, and then there's the layer around. I would encourage anybody in this room to not use email as a way to get your password. If somebody sends you an email, here's your new password. Just get the text is a much better way. It's much harder to spoof. So, because

I always tell people my mom is the weak spot in the chain, not the data centers and those things. The hackers have really gone after through fishing emails and those things to get your information and then go scam you. But we've put $150 million into infrastructure, which includes gates at the front of the data center to prevent these types of attacks that go on. But I just encourage people to, like, I wouldn't do much banking via email. Let me just put it that way. And somebody that tells you that if you just put some money in your account for a couple days and you can keep a little bit of it, it's probably a scam. Especially if they're from Nigeria. Or if you fall in love with a guy in Afghanistan and he just needs some money and he's a soldier, he may be.

I hate to discourage that, but he may be a scam artist too. So maybe wait until you gets home. What's one of the top characteristics that you and Q2 look for in hires when you hire? Well, Hank says, hire the heart, train the mind. But I like to hire smart people too. Big Hearts is the best combination. That's great. So, yeah, we look for people that are passionate about what they're doing, eager, ready to learn, humble.

And that seems to be a winning formula. That sounds like Hank and Roy Spence and Herb Keller are all just kind of cut from the same cloth. What's the best piece of advice that you've ever got? I'm kind of a quote-of-the-day guy, and I heard one recently that stuck with me, which is humility is not thinking less of yourself. It's about thinking more of the other person. And I just think it's really important that humility, the longer you can carry it with you,

the better you'll learn more. People want to be around you more. It's just a better place to be. So I really like that advice. If somebody had to tell me about you one strength and one weakness, what would they say? Someone you work with closely. Oh, man.

I could give you the weaknesses. He's never happy. He focuses on the 5% of the problems, not the 95% of the things that are working well. But the other thing I would say that they would probably say that I, there's nothing, I'm not above anything. I'll lead from the front. If I got to get on a plane, somebody I'll do it. If I got to stay up late and do it, we'll do it. I never forget my roots where I came from.

Do you meet with still to this day, meet with clients quite frequently? Two of them today. How has your leadership changed over the last decade, especially going through the financial crisis? You know, I think that moving to the mission-driven company and the – 10 years ago, I wouldn't say we were as mission-driven as we are now. I just realized that if I can just get people to connect with what they do every day and be passionate about it, it may be community banking. It may be – you know, I love community financial institutions, but I'm probably more proud of the fact that we've paid $700 million in payroll, and that's gone into the system. and plus the people have built buildings for us, the lawyers, the real estate, the accountants, everybody, the money that goes in the economy with, you know, Hank had one idea and put his money

behind it. And that has led to, you know, a lot of wealth transfer. We've had more than 100 people that are employees of the company that are worth more than a million dollars on paper. Now, most of them sold it long ago and they have depreciating assets in the parking lot. But still, if they would have held it, they would have done well. That was Matt Flake, the CEO of Q2. Coming up, we've got a few stocks on our radar. So, stay right here. 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 yourself stocks based solely on what you're here. Welcome back to Motley Fool Money, Chris Hill, here in studio once again with Jason Moser, Andy Cross, and Ron Gross. Our email address is Radio at Fool.com from Ben Farber, who writes, I'm a subscriber to several Motley Fool services, and consider myself an avid listener of Market Foolery and Motley Fool Money. I'm not a shareholder of National Beverage Corp, but I saw their latest earnings report,

and I think it's a contender for most unhinged company press release. I'm interested if you agree. Love the shows. Keep up the great work. Thank you, Ben, for the question. So for those unfamiliar, National Beverage, the parent company of LaCroy Sparkling Water, came out with their third quarter report, shares down 20% on Friday. Chairman's CEO, Nick Caperella, blamed the drop in sales and profits on. and I'm quoting here,

Injustice. He wrote, We are truly sorry for these results. Negligence, nor mismanagement, nor wawful acts of God were not the reasons. Much of this was the result of injustice. Managing a brand is not so different from caring for someone who becomes handicapped.

Brands do not see or hear, so they are at the mercy of their owners or care providers who must preserve the dignity and special character that the brand exemplifies. It is important that LaCroix's true character is not devalued in terms. potentially in any way, National Beverage Corp is and will remain the preeminent innovator that adds zest and authenticity to the sparkling water phenomenon in North America. Wow.

I'm stunned by this. React. I'm stunned that a lawyer at the company said, sure, go ahead and put this out. And unhinged is one word to describe this. Yeah, if you told me that was a tweet, like a la Elon Musk or something like that. John Ledger, T-Mobile. Yeah, I'd be like, okay, that's still kind of. weird, but this is a press release. Reviewed by the company, the CFO, the general counsel.

I would imagine the employees around that CEO are just scratching their heads. And that guy's full of something. I mean, I just... Full of fizz. I mean, as a... Hey, listen, man, I'm a big seltzer drinker. I love it. But, you know, what, I find myself buying more of the store brand seltzers than LaCroy? And we were talking this morning, Ron and Green, they have some really funky flavors as well. So I'm just... Coconut turmeric? I don't know. I mean, maybe the injustice is. They can't give me a simple lime

themselves. Well, there's also more in competition, too. There's some more lines in whole foods when we go to walk down the street to our local Whole Foods. So we're seeing those. I see them more in the office, those competitors. So they're not the only play on the block anymore. I was just going to say, look at the biggest carbonated beverage companies in America. They're pushing these brands even more. Investment from Guggenheim just moved to a sell recommendation, actually, which you don't see very often because it's going to be hard for them to regain market share. And you see there a lot of discounting in that space, too, again, with the grocery store is becoming more and more cost competitive now. And you see that national, those

lacroys are getting more and more discounted shelf space. Yep. Let's get the stocks on our radar. Our man behind the glass, Steve Brodow's going to hit you with a question. Ron, Gross, you're up first. What are you looking at this week? All right. Following our conversations about Costco and Big Lots, I'm in a discount retailer mood. I'm going with Dollar General DG. It operates more than 15,000 stores in 44 states. They're going to report earnings on March 14th. Company cut their full-year guidance when they released their third quarter earnings. So I'm really curious to see what this report looks like. There was a lot of weather-related issues in that last report that theoretically shouldn't be repeating themselves. They expect to deliver their 29th consecutive year of same-store sales growth with this report. So I'll be keeping an eye out. Steve, question about Dollar General? So I haven't seen a Dollar General around the D.C. area, but I've been to one somewhere in Maryland or Virginia, I think. What exactly is Dollar General?

It's a retail store where you can get inexpensive merchandise, often at a dollar or below, but not always. It's similar to a family dollar, which is also part of dollar tree. Jason Moser, what are you looking at? Well, at first mentioned billboards and surety insurance may not seem to go together like peanut butter and chocolate. But Chris, Boston, Omaha is making a very good business out of it. This is a small-cap business that is led by two founder leaders, building up a strong business, and actually billboards, those ones you drive by on the interstate, and attractive surety insurance business as well. And I'll give you a little bit of a heads up here on Monday's

industry focus. I am going to air an interview. I recently sat down with our own Buck Hartzell here. And Buck knows this company very well. He's spoken with management before. So we dig in a little bit more on Boston, Omaha and present why it looks like a compelling investment option. And the ticker? The ticker is B-O-M-N. Steve, question about Boston, Omaha? So I'm going to ask a similar question. What is this company?

I don't understand. They make billboards? What's going on? They own in monetized billboards that are on the roads everywhere, and they also run a nice little shirty business on the side. Andy Cross, what are you looking at? Alta Beauty, operates 1,200 beauty stores around the country. They report fourth quarter earnings next week.

They have 30.6 million local. loyalty members, that's up 15% over the past year. And those people generate more than 95% of total sales of the company. So I really want to see that number continuing to grow. And that means more comp store sales growth of 8 to 9%, anything above that is a bonus. Steve? I do know Alta. So my question is, is it the salon business that they're most well known for or selling cosmetics? Selling cosmetics. Three very different businesses. Steve, you've got one you want to add your watch list? Well, there's only one I understand. So I'm going with Alta Beauty. Sorry. Steve-O. Not my best work today. Jason Moser, Andy Cross,

Ron Gross. Guys, thanks for being there. Thanks, Chris. That's going to do it for this week's edition of Motley Full Money. Our engineer is Steve Broido. Our producer is Mac Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.