Motley Fool Money - Motley Fool Money: 01.10.2014

Episode Date: January 10, 2014

Target sees red after its data breach.  Twitter gets downgraded.  And Ford's CEO turns down Microsoft.   Our analysts discuss those stories and share some stocks on their radar.  Plus,  Motley Fool analyst Matthew Argersinger shares some insights from CES 2014. Learn more about your ad choices. Visit megaphone.fm/adchoices

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It's the Motley Fool Money Radio Show. Thanks for being here. I'm your host, Chris Hill. Joining me in studio this week from Motley Fool 1, Jason Mozer, from Motley Fool Pro, Jeff Fisher, and for a million-dollar portfolio, Ron Gross. Good to see you guys. Hey, hey, Chris.

We have got the latest on retail, technology, social media, and more. We will dip into the full mailbag to answer your questions. And as always, we'll share a few stocks you can put on your watch list. But we begin this week with the big macro. The December jobs report came out Friday morning. Ron, just 74,000 jobs added much lower than the consensus, which was an expectation of 200,000. But the unemployment rate drops to 6.7%. What did you think of the number?

A lot of people were surprised, particularly given how some of the other macro numbers GDP among them have been pretty strongly. And even the ADP report, which sometimes is in conflict with the official unemployment report, looked like we were going to see a better number. So it was a bit surprising, you know, people focus on now the taper that the Fed is going to start tapering the bond buying program. People are calling this perhaps the untaper. Are they still going to be able to do that?

I think the answer is yes. But they have a lot of flexibility to go up and down and be gradual. I'm hoping this is kind of the pause that refreshes that we're still on the right track. The unemployment rate coming down is kind of smoke and mirrors. It's because the labor participation rate is at its lowest point in a long, long time. Since 1978. Which is bad news. The U6, Fuller unemployment numbers at 13.1%.

That remains unchanged. It's still a lot of people that are unemployed. But I do think we're still on the right track. I'm staying optimistic. Yeah, and part of what may have depressed this payroll number was the rough weather. in December. Apparently about a quarter million people could not work at some point in December, and that may have resulted in no paycheck for some of them, and that would reduce the payrolls number. So other thing is hiring slowed down with the rough weather and the holidays. And so

the thing to think now is January we may see more of the same with this extreme weather that we've been having. It's too bad the polar vortex didn't actually happen in December, because that would have made, I think, a better headline. If they're blaming the weather, it'd be like, well, It was the polar vortex, and that was really the key issue there. A big good band there. I mean, there is a point to that, though. I mean, it can only take you so far, though. And I think, like Ron, I mean, I'd like to stay optimistic.

But, I mean, I think also Janet Yellen's job just got a little bit tougher. You know, I think that when she takes over, it's just not enough one way or another to be able to say, well, we're just going to take our foot off the gas or we're going to put our foot back on the gas. I mean, she's got a real decision to make here. But considering, again, the relative strength of the other economic numbers we've seen, isn't it almost a given that this number is going to be revised upwards in a month? Yeah, it definitely will be. I mean, I think I saw Morgan Housel tweeted something. Typically, these things are historically revised up to seven times after the initial release. And so there's no question this will be revised. I mean, I think the problem, though, is that even the revision isn't going to make a truly meaningful difference to this particular number. I mean, it's still. It's still. bad. All right, let's talk retail. Remember when Target said that up to 40 million customers

may have had their credit and debit card information affected by the data breach during that three-week period last November and December? Yes, Chris, we remember. Two things on that. One, now it's up to 70 million customers who may have been compromised. And two, the data breach may not, Target is now saying that the data breach may not be confined to that three-week period. yet, Jeff Fisher. A month ago, shares of Target were trading in the low 60s. That's basically

where they are right now. So should we not be worried about this? Oh, that's remarkable, because this is bad news that has gone to much worse news, really. And Target now has its situation on its hands. Similar to Johnson & Johnson and the Tylenol scare from years ago, they need to rebuild customer confidence in what they do. To be fair, a hack like this, data was hacked at the point of sale on the... And as you said, Chris, up to 70 million customers at this point. And it was credit card numbers, address, email, everything that's on that magnetic strip and that went through the point of sale.

So that could happen anywhere. To be fair, it's not exclusively Target's fault. It's partly the system's fault. But Target really needs to convey now what they're doing to enhance its security, of course, what it can do. And they're also, they need to reach out to customers and apologize. And they're doing that a little bit. They're offering to any Target customer can get identity theft protection and a credit monitoring

program for one year free from Target in the next three months. The details of that are rolling out. You can go to Target, sign up for these free credit protection programs for a year. But they'll need to do more than that. And the credit card companies need to as well. All the major credit card companies are working together to install the chip and pin. system in the U.S. that Europe has where there's a digital chip on your card and then you have to enter a pin, whether it's a credit or a debit card, to make a transaction. It's much

more secure. And that's, they're hoping by 2015 to 2017 for that to roll out everywhere. Ron, what do you think? The names, addresses, and emails don't really bother me that much. I live under the assumption that eventually all of our names addresses and emails are public. It's the credit cards that's more troubling. And I think the chip technology is, you know, we're going to start to see that implemented in a wider measure. It's hitting the numbers now. They've had to lower their guidance. I think their red card credit card business is going to be impacted here. I'm hopeful it's a short-term hit, though. I think in the end, maybe a year from now,

we'll look back and Target will be back to doing the business that it used to do. But for now, it is showing up in the results. But in some ways, Jason, it seems like the most troubling thing for Target at this moment in time is the fact that this story doesn't appear to be over. It seems to be continuing to evolve. And so I don't know that the end is in sight anytime soon. It may very well not be. I mean, I think Jeff keyed in on something there that's pretty important to remember to it. If it wasn't Target, it's going to be someone else. I mean, between MasterCard and Visa together, they were responsible for more than 120 billion transactions last year alone. So this is just the way we do things now. And so,

you know, Target needs two things to happen here. Number one, they really need to up their game in responding to the customer, in sort of communicating with the customer how to deal with this. And then, two, this may sound bad, but they really just need another big company to get hacked. That'll take the spotlight right off of Target. But, I mean, it's a risk we take every single day whenever you buy anything. I mean, and this is just it's something that's going to up the credit card company's games, the banks' games, and make them work to make it more secure. This week kicked off the official start of earnings season and Bedbeth and Beyond.

fell more than 10% after third quarter results came in lower than analysts were expecting. Jason, you looked at their numbers. Not all that impressive. No, no, it wasn't at all. I mean, I got to say, I mean, there are some things that concern me with Bed Bath and Beyond. For as well as they've done for as long as they've been able to do it, I think that they are a little bit asleep at the wheel here in sort of prioritizing their e-commerce strategy because I'm not necessarily convinced that they actually have an e-commerce strategy.

And I think we had talked about this before, but just in combing through the call, I mean, the word e-commerce was used once, the word online was used once. And I think mobile was maybe used three times. When you look out there and you see companies all the way from Amazon, which is the obvious e-commerce player out there, you know, down to companies like Wayfair.com, which is a private company, but still they're selling basically the same stuff that Bedbath and Beyond is selling. So those companies are, you know, they're building those businesses for the future, for e-fair. e-commerce. And the concerning thing with Bedbath and Beyond right now is that they don't seem to be doing that. And if they are, they're keeping it a pretty good secret. And then to top it off, I mean, they've spent $170 million on a share buybacks last quarter. The share is basically at all-time highs. And I feel like with a company like this that really needs to focus on getting

some return on their investment, they need to be doing something else with that cash. On the flip side, Macy's hit an all-time high this week after announcing it is laying off 2,500 employees and closing five stores. Ron, we've talked before about Macy's being really great at managing their store footprint, maximizing money per square foot, all that sort of thing. And yet, I'm not a shareholder, but I think I'd be a little disconcerted that this is the reason the stock is going up because they're cutting costs because they're laying people off. But they're not laying people off because things are going poorly. They're laying people off because things are becoming more efficient and they don't need the same kind of workforce

as they have in the past. So if you're an employee, not so great, I actually used to work at Macy's back in the day. We'll talk about that another time. No, let's talk about that now for a second. What department were you in? I worked in the bath shop and I would fold towels for three, four hours a day when I was in high school. You know, it's very easy to picture that. Picture you folding towels? Yeah, I was not good at it. Three to four hours a day, I think, you know, a lot of boxes. Not every day.

So there was a pile that there were two piles of towels, then your boss would say, Ron folded those. And then mess it up again and refold it. So at home, are you the towel folder at home? I still remember how to fold a good towel. I'm not going to lie. All right. Back to the business.

So they're actually able to raise guidance because they're cutting costs. They're becoming more efficient. They've cut people like Ron. Yeah. Same store sales for November and December were up 3.6% pretty good, especially when we're seeing other people, other companies doing worse. They'll save $100 million per year approximately due to these restructuring. And they're making some good consolidations. They're putting together the Midwest and their North regions. And they're making some right moves for the business.

I'll also add to that. I mean, the one thing that I took away from that release is Macy's is redistributing. They're sort of reallocating a lot of the resources to their online business. So, I mean, it's good to see because they're going where their consumers really want to be. And those typically that direct the consumer model, those are higher margin sales anyway. So to see them doing this, I think, you know, it's a net win. We've talked before about the great run that the market had in 2013. And one of the results of that is it's harder to find opportunities if you're an investor. Is retail now maybe one of the best, if not the best industry for investors to find opportunities? Because, Jeff, let's face it, a lot of them are struggling. What I love about retail is you get

a lot of news flow from them. You get, from most companies, a monthly sales report, same store sales report, and a lot of times they get hit on short-term news, and then you can find a bargain. You can find a deal when something falls 15, 20 percent because they had a week month or a week quarter. Even Bedbeth and Beyond trades at about 12 times forward estimates, and it's grown double digits the past one year, three-year, five-year annualized. So it's grown well. I agree with Jason. They've done well in the past, but the challenges are different in the future, and are they steering the ship the right way? I'm not so sure. But the stock looks reasonably price. If it fell much more, it may be worth picking up.

Coming up, the big IPO of 2013 is having a rocky start to 2014. This is Motley Full Money. Welcome back to Motley Full Money. Chris Hill here in studio with Jason Moser, Jeff Fisher, and Ron Gross. Shares of Twitter down around 15 percent this week. And Jason, maybe that is because was for the fourth time in two weeks, the stock was downgraded by analysts. You look at the valuation, though, it doesn't seem that crazy to downgrade the stock. No, I don't think it necessarily is. And, I mean, to be clear, I'm a Twitter shareholder. Now, I bought shares back around 40s.

So, I mean, looking at the valuation today, you know, we were making fun of Facebook back when it was around 30, 31 times sales when it first went public. And to look at Twitter now, I think it actually just broke below 50-time sales. So that kind of gives you some context there. It is a very richly valued stock for a relatively unproven business. But, you know, I mean, there is something to this platform. I mean, I think there is something to the service itself. The question is, you know, how optimistic are these expectations for the company that give the stock the price today?

I mean, for right now, it seems like they're pretty darn optimistic. But we're going to see, I think, for the coming quarters, at least, a company that continues to plow more money back into the service for research and development and whatnot. But I think that when you look at investing from our perspective here, when we lengthen our timeline, all of a sudden, you look at Twitter and think, well, it's not necessarily so insane evaluation the longer your timeline gets. And I think that Twitter is a great company, like a lot of these social media stocks, it's one that if you have interest in, it's one that you want to build over time, because

there's most certainly going to be more volatility. There's a lockup period coming up in May. Normally, I think those things are overestimated, but it's good to know there are going to be about 450 million shares when that lockup period expires. So there will be more volatility. I'm certain the stock will go lower at some point. But I think you have to look at this business in the context of five and ten years, and then ask yourself, how do you think it's going to do over that course of time?

Later this year, Steve Bomber will exit the corner office, and Microsoft will have only its third CEO in company history. Ron, it's not going to be Alan Malali. This week, Malali ended months of speculation by saying he won't be leaving Ford Motor for Microsoft. I suppose there's a chance he was listening to the show last week. What you mean when I predicted that he would take the job? Yes. That one? Sorry if predicting the future's a little dicey. Yeah, I was a little surprised. I thought he was going to eventually decide it was a good move for him. I understand the reasons. They're having trouble finding just the right person who both fits the needs of the company and wants the job because it's not necessarily going to be an easy job.

It's a huge company in transition. I think the frontrunner is probably an internal candidate right now, such in Adela as their head of cloud and enterprise group, and that he may be where they're looking now. You can always email us. Radio at fool.com is our email address. I got a question from Mark Lacey in Boise, Idaho. He writes, especially following a market that rose 30% last year, how should one consider hedging? What are generally the details of a hedging plan? Jeff, you run Motley Fool Pro as well as Motley Fool Options.

Yes, Mark, great question. Everyone settle in. Let's talk for the next 10 minutes about put ratio spreads and things like that. So when you think about your market exposure or your portfolio, what you really want to be thinking about is your market exposure. And from Motleyfool Pro, for instance, has been 70% net long or exposed to the market the past couple of years, and yet has performed better than the market. And obviously, it's made that return with less risk because we've only been 70% invested. So the first thing I would say, Mark, if you're 100% invested or even more, and we

certainly hope you're not, we hope you're not using margin. But if you're 100% invested and not quite comfortable doing so, look to raise some cash. at everything you own and sell the least favorite things that you own. Look at your companies and always think, as Jason just said, in terms of three years or so as a start, look at the valuation. Do you think that company is going to grow enough value in the next three years to give your stock a healthy return? If not, sell those stocks that you don't like. Maybe when you're down to 80 percent invested or 70 percent, you'll feel comfortable and you can then stay invested that way and wait for opportunities

for your cash. That said, if you really want to hedge, stay 100 percent invested. and hedge, a really quick way to do that is to just short the S&P 500 or short the Russell 2000 to whatever allocation you want, 10%, 20%, whatever you want to do to bring your exposure down from 100% to say 80% or 70%. The good thing about shorting the index is there's no question it'll go down when the market goes down and you'll make money on your hedge. It's a very liquid trade to get into and out of. And you'll still keep all your stocks to appreciate when the market goes up.

And the hedge just becomes a small drag during that time. Jeff, are you a fan of any of those reverse ETFs that will kind of do that negative job for you rather than actually having to go out and short an index? It's a good question around in the long run, no, because they frequently have tracking problems. And they compound daily, so their losses will compound daily. And it's not a one-for-one loss that you'll get, like one plus one equals three. So better to go out and actually short that index. Exactly. You can use a reverse or inverse ETF for short periods, a couple months. at a time, but you generally don't want to use them for long periods. So, in other words, don't

use them at all. We've got about a minute left. We've got another question from Brian in Boston. Guys, I know you're well aware of how much buzz there's been about Bitcoin. I'm curious about what your thoughts are. I can't seem to get on board with it, but I know there's been some serious money thrown in it over the past year or so. I would love to hear your take. Thanks and Happy New Year. Just a few seconds left. Ron, one thought on Bitcoin. I share his sentiment. I can't seem to get on board with it either. I kind of don't get it yet. And I'm not, clearly not an early adopter of things like this, but I need to wait and

say. Jeff? I think it's a fad. It'll never be universal and it'll lose value over time. That's my guess. Jason, you get the final word? I think it's overcoming that hurdle as a medium of exchange, but really you need to be concerned as a store of value. It's one that you could really, you could lose very quickly, so I'd probably steer clear. All right, guys, we'll see you later in the show. Coming up next, we are heading to Las Vegas for a report from the Consumer Electronics Show. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. This week, more than 150,000 people descended upon Las Vegas for the Consumer Electronics Show, the largest consumer technology trade show in the world. So we sent a few fools to check out the action. Matt Argusinger is a senior analyst for our Motley Fool Supernova Investing Service. And he joins me now from the floor of the Consumer Electronics Show. Maddie, how's it going? Hey, hey, Chris, how you doing?

Yeah, I'm here at the Consumer Electronics Show in Vegas. We're at the South Hall right now, which is one of three massive halls in the Las Vegas Convention Center. You know, I'm staring at looking behind me. I've got InvenSense. I've got 3D systems around the corner, lots of companies here, acres and acres of floor space with pretty cool stuff, I've got to say. So there are a lot of different industries. I want to touch on a few of them, but first, so far, what is your headline for the for CES 2014?

I think the headline for me is probably things are just getting smarter. And Things is probably the optimal word because every company here, whether you're as big as Intel or Panasonic or Samsung or as small as this company called Cursell over on the corner, which I have no idea what they do. But everyone's doing wearable tech, everyone's doing home smart technology. So in other words, it's, it's, I live my life and I've got my phone. I've got, you know, my TV, which are already, already smart, but I've got, I don't know, I've got my toaster, which knows exactly how burnt I want my toast and, you know, what time of day I want it.

I've got my washing machine connected. I've got my car souped up, so it's connected to all my devices, including things like Pandora Radio. So it's essentially, it's connecting all these things together, making them smarter. You know, John Chambers of Cisco had a, that was kind of the point of his, talk, his keynote address this week was, you know, there's just this $14 trillion market out there right now for things that are going to get connected over the next few years. And I would say that's probably the headline for me as I look at all these companies. So from the standpoint of the financial media, smart homes are getting a lot of attention, a lot of coverage. Is it ever too

much? Do you ever look at the smart homes and think, wow, this is more complicated than it needs to be or when you're walking around the floors at CES, are you seeing things that you think, no, that absolutely makes sense and that would be additive. That'd be worth paying for to have in my home. Well, I think my joke is that as all these things get smarter, especially around the home, I feel like it's essentially rendering us humans dumber. I don't know if that's actually going to happen. It might probably already is. But no, you know, I think there are things that are happening that we look at right now and we're saying, you know, that it might not make sense. It might not make sense to have, to, for my dishwasher to be smart about, you know,

the amount of water or energy it needs to wash my standard set of plates. Or, you know, it might not be necessary for me to be able to connect Pandora to every single device, including my fridge, by the way. There's smart fridges here that actually connect to music devices like Pandora or Spotify and things like that. So we look at that right now and say, that's, why would I need that? I don't really need something like that. But I could seriously see in a few years, we'll look back and say, oh yeah, how come my fridge couldn't play music every time I walk in the kitchen? Or how come, you know, my thermostat couldn't adjust to that perfect level every time I come and sit down and watch TV and my TV turns on.

Some of this stuff might, it just seems out there right now, but it actually probably is going to make sense in the near future and it's going to be just standard features in a lot of products that it's not right now. No, I think you're right. We're absolutely in a position where the machines are getting smarter and it just will inevitably lead to the rise of the machine. So let's just enjoy ourselves before that happens. Wearable technology...

That's right. Before the robot revolution takes over. Exactly. Wearable technology is another growing industry. You've had the chance to talk with some executives, Alan Crock, the CFO in Vincense. What was your big takeaway from talking with him? Well, his, yeah, that was a good interview. I mean, his thing is that it's just there's so much disruption happening now.

I mean, and so many new things coming out with mobile and wearable tech. And there's just going to be a lot of losers in this space because, you know, there's practical things. Like right now, you know, if I want to, you know, if I work out, if I go running and I can have technology that, you know, helps me measure my heart rate and tells me, keeps track of all my distances and helps me improve, you know, on a fitness level, that makes sense. But then there's some things like, you know, do I really need, you know, a sports jack? it right now that also serves as my phone and maybe even plays music. I don't know. That seems a little out there. But his point is with InvenSense, which is pretty exciting, is that they're the guts of that technology. And so whatever consumers want, whatever they ultimately want and whatever

ultimately wins in wearable computing, you know, he's, InvenSense should be a part of that. And that's essentially what they're trying to. They want to just try to make the best accelerometers and gyroscopes to go into whatever, you know, whatever the wearable thing that's actually going to work that's actually going to be marketable in the near future. And there are going to be a lot of losers in this space. I mean, I, you know, we talk a lot about, I think Under Armour is one you want to pay attention to, you know, because they obviously have been doing, they've been making fitness clothes for decades. Nike, of course, is another one. These are the companies that know what athletes and human beings want and desire. Those are the ones that are going to be winners early on. All these

smaller companies who are making these devices steer clear for now, for sure. Well, you raise an interesting point. And I think it's part of why technology may be a tougher place to invest in or a more challenging space because there's more competition, right? So 10 years ago, chances are non-traditional technology companies like Nike and Under Armour, even the automakers. You have nine of the top 10 automakers in the world who are at CES this year. Is that a good thing? it seems like that's a good thing for consumers, but I'm wondering if you're sensing any frustration on the part of particularly the smaller technology companies

because it's tougher for them to compete. I agree. I mean, like for example, we walk down the 3D printing section of the convention center, which is actually just right around the corner from us here. And you've got 3D systems and stratacists, which are humongous. You know, they take up a lot of floor space,

but really nearby, you've got like, I counted over two dozen. in other smaller 3D printing companies. And I doubt many people think there are that many out there, but there are plenty of out there that are trying to compete. The problem is there are a lot of companies like 3D systems who have made so many acquisitions and have gained so much scale. So if you're looking to invest in smaller technology companies,

very hard, except that what you can count on is there's going to be a lot of consolidation in the market. So a lot of these little guys are going to get bought up. And 3D systems has made over two dozen acquisitions over the past two years, and they're buying up these smaller guys. So if you have a good technology, there's a chance you might get bought out, but again, you're playing a roulette with a lot of these companies now

because a lot of them will fail, ultimately. You're listening to Motley Fool Money talking with Matt Argusinger, senior analyst for Motley Fool's Supernova Investing Service. He's on the floor of the Consumer Electronics Show in Las Vegas, Nevada. You mentioned 3D printing. You've had the chance to talk with, I think, the CEO over at MakerBot, which is a division at Stratus. That's right.

Where is this industry going? I get that there's consolidation and probably more of it to come. But in terms of appealing to consumers or appealing to businesses, is there a dual track that these companies like Stratis and 3D systems are on? Or do you think they are leaning more in one direction than the other? That's a great question. So, yeah, we spoke with Brie Pettis, who's the founder and CEO of MakerBubes. And I, you know, I joke with, you know, Matt Greer, our producer, because we're, we, after we talk to him and we've seen some of the stuff that 3D systems coming out, there's really, there's two ways the industry can go. You know, you hear wonderful things like, oh, you know, 3D systems or Strasis is making medical devices or implants. Obviously, that those have huge implications for a lot of people, a lot of industries. At the same time, you know, you walk back and forth and you see all these little plastic chalk cheese. I mean, I think I've seen enough, I think I've seen about 100 plastic bunnies.

printed by either a 3D system printer or a MakerBot printer. Now, you know, and MakerBot, by the way, has a whole, you know, a new whole line of these small little plastic toys that they've come out with that you can actually buy. But I'm thinking to myself, why on Earth? Who on Earth is going to buy this stuff? And do I really want to get a 3D printer so I can print, you know, a small plastic figurine that I'll probably throw away in a month? It's just, that's the big misconception or perception right now is that there are a huge huge, industrial corporate implications for a lot of these technologies. At the same time, on the consumer level, I'm not sure there's more I can, there's a lot I can do right now. I mean, you know, like we saw, for example, you know, with one of the 3D printer systems,

they were making shoes, you know, printing shoes that people could wear. They looked terribly uncomfortable. They looked like they would never fit me. And I don't think I'd want to go out and actually spend nine or 12 hours printing a shoe when I can go down, you know, down to my local store and buy one. So that's kind of the trouble I have with the industry. I just don't know if it's still just going to this sort of cheap plastic chotchkes-type things, or is it actually have real-world implications? They certainly do, and it's just hard to see that right now.

I don't want to get too personal, but did you actually have your head scanned at the 3D Systems booth? I actually did. They have their new sense technology, which is kind of interesting. So, yeah, 3D systems guy came around and he had this device that he was holding in his. hands. He kind of walked around me, 360, and took, I guess, a 3D scan of my head. And they're right now in the process of printing a 3D sculpture of my head. And we're going to have a Rex Moore, a fellow fool pick it up for us tomorrow because he'll be here for another day and we'll get a chance to look at that. So yeah, I don't know. Well, that seemed to be relatively cool. Again, how

how remarkable is something like that or how profitable is something like that be? I'm not sure right now. I look forward to seeing that on your desk because I can't imagine your wife wants that in your home. Oh, yeah, you know, yeah. You also had the chance to talk with one of the executives at Pandora. And I think for a lot of people, Pandora is a technology company that can really get their head around because it's, relatively speaking, a mature company. It is in some ways disrupting or certainly attempting to disrupt the radio industry, the music industry. You take your pick. What was your takeaway from Pandora? And did it change the way you feel about the stock? I've been a fan of Pandora. I'm a big user of Pandora. And so we got to speak to CFO, Mike Herring, friend Pandora.

And I have to say, I came away even more optimistic about their opportunity because, you know, he leveled with us. He said, you know, there are basically two markets we're going after. There's the mobile ad market, which is obvious. I mean, they're already basically the third biggest generator of mobile revenue on the planet, believe it or not. Many people don't know that about Pandora. They're just behind Google and Facebook. But the terrestrial radio market is still a $15 billion bogey. And a lot of people look at terrestrial radio and say, oh, that's got to be on the decline, certainly traditional radio.

But it's still $15 billion in advertising dollars per year. and Pandora has a tiny, tiny fraction of that right now. And they think that's a huge, huge potential market for them. They think they can grab a big share of that eventually. And then I also asked them about Sirius XM radio. I know the satellite radio. And what kind of, what did that mean for their business? And he was pretty blunt saying that, listen, with connectivity the way it's going,

with cars and everything, it's not, the satellite, the idea of having satellite radio is not going to be as important as it is today. If I'm driving in Yuma, Arizona, right now, I probably need a satellite radio to get any kind of stations or, you know, whatever. But that's not going to be the case in the near future of that. So Pandora will be able to compete right along with them, and that could actually eat into satellite radio's edge a little bit. All right, before I let you go, so many technologies, and I love the fact that you talked about how that one executive said, look, there are going to be a lot of losers in this space because that's the reality of the Consumer Electronics Show. there's always some eye-popping technology, but a lot of companies can develop the technology

and not really create the sustainable business to let it succeed. So I'm curious, what's one gadget or technology that you saw that you thought, not only is that not impressive to me, I'm certain they're not going to be around in a year or two. And on the flip side, what's one gadget or type of technology that you were blown away by that you absolutely have to have. Good questions. Let me ask, I'll answer the latter one first. I think I think TVs are going to make a bit of a comeback. I mean, I think, you know, the idea of buying a TV, it has been all that exciting because it really hasn't been a lot of innovation in that space. But I have to say, Samsung, a few others, they've come out with some pretty slick TVs, the 4K TVs, the bent,

Bendable TVs. Now, they're not really bendable. In other words, I can't, I can't go up to the TV and bend it, but the TV actually bends by, you know, you press a few buttons and it'll bend. And it really creates a better, really intriguing visual experience, I have to say. So I haven't bought a TV in probably five years. But I've actually looked at some of those TVs and said, you know what? I think it's my time I bought a new TV. So that would be my little bet that I think TVs are going to make a little bit of a comeback. back. On the losing side, I have to say, just continue to go walk up and down in the 3D printing space. I can't emphasize it enough. There's just a lot of players in this space. And I think you're going to, I actually think you're going to see a lot more IPOs in the space as well. But man, you have to pick very carefully here. I think even if I look at 3D systems, 3D systems is a $10 billion company. And they, but the real, the measurable market opportunity for 3D printing in general right now is about $5 billion. So they're already twice the size of what people think is the addressable market. And they're the biggest leader and the biggest player, probably the most stable company to invest in. But any smaller 3D

printing companies, stay clear, be very careful. I've seen a lot of these. Everyone seems to have their own little cube, but they're at their booth of printing and stuff in 3D. But it's a hype game for me to a large extent right now. Matt Argusinger is a senior analyst for the Motley Fool Supernova Investing Service. And when he's not working, hard at research. We'd like to have him on this radio show. Maddie, get home safe. All right. Thanks, Chris. To get more of Matt's take on CES and to get the latest scoop on our Supernova investing service, just go to CES2014.fool.com. That's CES2014.com and enter your email address.

Up next, we'll give an inside look at the stocks on our radar. This is Motley Fool money. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against. So don't buy ourselves stocks based solely on what you hear. I'm Chris Hill. Joining me in studio, once again, Jason Moser, Jeff Fisher, and Ron Gross. Guys, before we get to the stocks on our radar, got to mention we have a special free report.

The Motley Fool's Top Stock for 2014. Speaking of stock ideas, it's a free report from our chief investment officer, Andy Cross, and you can get it just by sending an email to topstock at fool.com. That's all one word, topstock at fool.com. Ron Gross. We'll bring in our man Steve Broido from the other side of the glass to hit you with a question. What do you got this week? I got Intel. I-N-T-C. They report this week as earnings season starts to heat up. They've clearly been slow to mobile to get into the mobile market. People are focused on declining PC market.

They've stayed away from Intel. But we don't think it's over yet. We think they're making a big push. Their new Hezwell processors look really strong. 11 times free cash flow, 3.5 percent dividend yield. Stock looks good. Steve, question about Intel? Isn't it pronounced Intel and not Intel? I'm from New York. I think Ron did it both ways, so it's sort of like data and data. I don't want to speak for you, though, Ron. No, you feel free.

Jeff Fisher, what do you got this week? GenTech's ticker is GNTX. They make auto-dimming mirrors and other glass-related products for cars and now airplanes, too. But their main business is those mirrors and rear display cameras in automobiles. Their margins last quarter were at record strong numbers, which is what we always watch for on Gentex. We own Gentex and Pro. It's been a good stock. But we're watching the margins to see if they can continue to hold up. Steve?

Is there a retrofitting opportunity here, or is it just contingent of me buying a new car with cool mirrors? You know, that's a great question. You could retrofit one of these mirrors onto your car. And once you have one, it's hard to go back to the one that you have to flip. It makes a big difference. It's probably only a few bucks, Steve. I think it's worth it. I'm in.

Jason Moser, Stock. Yeah, I can't get the Looney Tunes Roadrunner song out of my head ever since I started researching this company. It's called Roadrunner Transportation Services, but it's an asset light transportation and logistics provider, which basically means that rather than owning all the trucks for shipping, they more or less work with third-party contractors that own release all of the trucking equipment and actually provide Roadrunner with a dedicated freight capacity. So they run a very asset-light business model, which means higher margins, and a variable cost structure, which means that when times are bad, they're not paying these heavy fixed costs like something like a restaurant might.

But they focus on the small to mid-sized shippers, which is generally an underserved market. And it's just a business that I'm going to keep looking into. It's pretty cool. And the ticker symbol? Tickrissor is RRTS. Steve, question about Roadrunner? How do you keep quality control in check when you're outsourcing so much? I think that's probably one of the biggest challenges they have there.

That's what I thought. Enough said. Is that pronounced Thot? Steve, somewhat related to Jason Stock. Were you a fan of the Roadrunner, or did you ever feel sympathy for Wiley Coyote? You know, the lack of narrative in those was just killing. So I didn't know. I was not a big fan.

I wanted to storyline better. Words being spoken. Meep. Roadrunner, Jentex, Intel. One of those stocks you like more than the others? I think Intel sounds pretty interesting now. Have you heard of Intel before this? I had indeed.

It's a small little company. Most people haven't. All right, Ryan Gross, Jeff Fisher, Jason Moser, guys. Thanks for being here. Thanks, thanks. That does it for this edition of Motley Full Money. The show is mixed by Birthday Boy Rick Engdahl. Our engineer is Steve Broido.

Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.