Motley Fool Money - Motley Fool Money: 01.14.2011

Episode Date: January 14, 2011

Is Fed Chief Bernanke wearing rose-colored glasses? How did Intel rack up big quarterly profits? Who will be the winners and losers with the Verizon iPhone? And should investors take Ford or GM out for a spin? We'll tackle those stories and talk with Detroit Free Press business columnist Tom Walsh about the North American International Auto Show. Learn more about your ad choices. Visit megaphone.fm/adchoices

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I'm your host, Chris Hillen. I'm joined in studio by Motley Fool's senior analyst, Seth, Jason, James Early, and Ron Gross. Guys, good to see you. Good to see you, Chris. On today's show, we'll look at the winners and losers with Verizon's iPhone. We'll examine the latest earnings from Intel, JP, Morgan Chase and more. And we'll get a report from the big auto show in Detroit. All that. Plus, as always, a look at the stocks on our radar. But we begin with the big macro. On Thursday,

Fed Chief Ben Bernanke said in his speech to the FDIC that he expects the U.S. economy to grow 3 to 4 percent this year. And on Friday, the Labor Department reported the consumer price index rose 0.5 percent. Ron Gross, let me start with you. The estimate for the CPI was 0.4 percent. So inflation's a bit higher. What did you make on the numbers? Well, Chris, those predictions are so imprecise. I'm really not going to split hairs over a .1 percent either way. Let's drill down on what actually happened. So 80 percent of the increase was due to an 8.5 percent rise in the gasoline index. And that shouldn't be a surprise because earlier in the

week we saw when we got wholesale price inflation numbers, we saw a rise in energy prices there. And we also saw a tick up in food prices as well. which also shouldn't be a surprise because that's continuing a trend we've seen. So for the most part, unemployment seems relatively tame except for in these two important areas, which actually has an effect on the working class to a significant extent. So I don't want to belittle it, but for the most part, inflation remains under control. I would say that it's worse than under control. There's a lot of talk about inflation in this country by people who are trying to hide

their general fiscal hawkishness into the guise of controlling inflation. But if you read through the CPI report today, the index for all items, once you get rid of food, which actually didn't go up that much in the most reason period, but energy, which did, once you get rid of that, this is the smallest one-year increase in the history of the index. In other words, deflation is the thing we have to be worried about right now. And what else is interesting is that we had retail sales numbers that came out, and retail sales numbers are typically, otherwise, reported about a thousand different times in a thousand different ways. But you're talking about

retail sales numbers right now are unadjusted for price and they're saying, okay, this, let's see, let me get to this whole thing here. They're saying up 0.6% for last, from November to December. But once you dig into it, you see that, again, a huge portion of that, the lion's share of that increase, what looks like an increase in economic activity is not actually an increase in economic activity except that gasoline prices went up as we, see from the CPI. So these two numbers actually are intertwined and neither of them tells a good story about the American economy right now. So circling back around quick to what Seth said about deflation, that is the bigger concern than inflation. In Bernacki's speech that you mentioned

where he said three to four percent growth for this year, he said the risk of deflation has receded. I'm not so sure yet. I'll go out on a limb. I'll say his three to four percent prediction is going to have to come down as the year progresses. I don't see the economy growing at that James? Yeah, I don't smoke, but I'd like to start smoking what Ben Bernanke is smoking. It seems to make everything appear larger. You know, the issue is how do we get there? We've taken out a lot of debt, and ironically, Moody's and S&P have just announced that they're threatening to remove the U.S.'s triple A rating if our debt keeps growing like this.

Now, considering these are the same agencies that used to give subprime CDO as a AAA rating, you know, maybe that's really saying something. But it is somebody to think about us. We got there at a price. But right now, it's also the fashion to be down on every country that borrow. And unfortunately, the fact is that all of these economies rely on borrowing entirely too much when times are good, but when times are bad, that's what you need. On Tuesday, the event that's been rumored for the past few years finally happened. Verizon announced the iPhone will be available on its network starting next month. Seth Jason, was the event everything you ever dreamed it would be?

You know, I'm going to remember where I was forever on this day, just like I did when those dorks at Apple said I would remember where I was when they got the Beatles. to the iTunes Library. This is... And you did remember, apparently. I have no idea. I don't remember. So they were right. They were right.

I only remember the bombast of the announcement and how Steve Jobs' ego seems to know no boundaries. But anyway, this is good news for people who are on Verizon who don't like their Google Android phones, and there may be 12 or 14 of them, I guess, because Android phones have overtaken iPhones in market share, according to recent reports. And so it will be very interesting to see I own Verizon stock,

by the way. So if this brings a bunch of people to Verizon, that's fine with me for two reasons. One, it will help my Verizon stock, hopefully, and the other is that it will free up the AT&T network, which I use, and I find it be a good network. And we get rid of all these iPhone data hogs, and that'll help out. This will be good for Apple

because they'll sell a lot more phones, but I really think the interesting thing to see will be if Android's success on Verizon has been just because Apple wasn't there, or whether it can stand on its own. James Early? Yeah, obviously It's a big win for Apple.

I would say it's probably priced into Verizon and AT&T to some degree. We're phone companies are fundamentally utilities, and these phones are actually lost leaders initially for these companies. They get you out of these contracts. But the question. Yeah, because they subsidize the price of the phone. An iPhone is a $600 phone unless you buy it from the, unless you buy it with a contract,

because then they pay some of the contract money to Apple. Who are the big losers here? I mean, if Verizon's going to be a winner, if Apple's going to be a winner, I mean, is Google automatically the loser with the Android system? Potentially, but only if they take away a lot of market share. I don't think they can.

And remember, Google doesn't really make a lot of money. I mean, they kind of develop this operating system for free. It's a loss of leader for them. They hope to make up money on ad sales by people using their services on the handsets for search. So I don't know that they have a ton to lose. The Windows phone is the wild card. Windows phone's a wild card. All right.

If I'm an investor, what shareholder do I? I want to be right now in the wake of the Verizon announcement? Do I want to own shares of Verizon, Apple, Microsoft? Is there a dark horse out there? Apple, because no matter what the stock goes up. And not AT&T. Australia is dealing with the worst flooding in 50 years. It's displaced hundreds of thousands of people with dozens more, either dead or missing. James Early, obviously there's a human toll here, but this disaster has big economic consequences too. Certainly, Chris. And And we'll just be serious for a minute here. I mean, this is an area the size of France and Germany now.

Underwater, more cyclones are on the way I've heard, and the worst is yet to come is water washes down from the mountains. We're talking $9 billion in infrastructure costs and three-quarters of a percentage off Australia's six-month GDP figure. But the bigger figure could actually be the commodity ripple effect because Australia is a big commodity country, 11% of global wheat production, and the flooding has damaged at least half that crop. It's also crippled Australia's transportation

infrastructure. Coal prices are at a two-year high because of this. Australia is the number one coal exporter for coaking coal, which is goes to make steel, and number two for thermal coal. And coal is Australia's number one export crop, export products, excuse me, behind UGBootes. The silver lining, though, is that the markets are pretty upbeat. Australia's dollar is now at a one-month low, which is not that bad, coming off of a 28-year high. And the Australian stock market is just humming along. So actually, people are pretty optimistic. But we might not want to be here in the U.S. too much because this, we didn't talk about the food thing much in the CPI numbers, but there's already some evidence that food inflation is going to increase

significantly over the next few months here in the U.S. There were some bad harvests all over the world, and this certainly isn't going to help. Ron? Yeah, I was going to say worldwide increases in food prices is really being a concern overseas, Argentina, Canada, Russia, have seen poor harvest. South America's dry weather has really hurt them, and there's concerns of social unrest, even in some of these areas as food becomes unaffordable. Portugal could be the next country in the EU to get a bailout. On Tuesday, Portugal's prime minister insisted his country will not seek a bailout, and on Wednesday the country sold $1.25 billion in bonds. Seth, Jason, I'll just ask plainly, how likely is a bailout for Portugal?

I think it's pretty likely. Portugal is hovering near this magic 7% yield level that people have talked about is kind of having been the breaking point for Greece. And then Ireland, they're selling these bonds. These seven-year bonds are yielding somewhere in the six and a half percent range right now. So people are hoping, okay, they can limp along. I don't know if they will. This is, the whole bond, bonds seem like they should be simple, right? You buy this thing and you get paid a flat percentage rate. But when you bring in currencies and default risk and everything, it gets very strange, especially the way these euro countries are interconnected. And the question I have is, is why would anybody in their right mind buy solid AAA bonds from the likes of Germany or others, when you could

buy these kind of crummy Portuguese bonds, which seemed to me to have the implicit guarantee that the euro area will backstop Portugal in case of fire. And so that's sort of the game of chicken that's being played right now. And of course, one of the reasons that the euro area wouldn't want to make people think that Portugal's not headed for a bailout is that then people would just kind of move on to Spain. Portugal also accounts for around 50% of the world's cork production, most common use, obviously, being the stopper in wine bottles. We've all got kids, so let's just go around the table.

Ron, how many corks are you going through in a given week? Oh, too many, Chris. I don't drink, Chris. My wife goes through a few. I make up for James'. We really only use them for fishing bobbers, and we head to the fission hole with the straw hat. Really?

Really? You're taking your little girl down to the fishing hole? Not yet. Not yet. All right. Well, she'll learn someday. There's no fish in the coop behind my house. It's too full of fertilizer. All right. Coming up, one month after turning down Google's offer of $6 billion, Groupon is reportedly getting ready to go public. We'll see how good that deal is for investors. Stay right here. This is Motley Full Money. Welcome back to Motley Full Money for investing. Commentary and analysis 24-7. Go to the Motley Fool's website, Fool.com. You can also check out our new daily podcast, Market Foolery. Every Monday through Thursday at 4 p.m.

We'll give you our take on the big stories of the day. Market Foolery. Check it out on iTunes or online at Marketfulery.com. Chris Hill here in the studio with Seth Jason, James Early, and Ron Gross. All right, guys. Some companies starting to report earnings. Let's start with Intel. 48% jump in fourth quarter profits. Ron Gross. How's the chip maker looking to you? Intel looks pretty strong here. Most of the demand was in their chip server business, making up for the flat growth in the PC market and also compensating for their delayed entry into the tablet market. But they raised estimates, gross margins analysts are focusing on for the first quarter look very strong. Emerging market growth they have high hopes for. So Intel looks to be doing pretty well here.

James J.P. Morgan Chase saw earnings increase 47%. Is business that good for J.P. Morgan Chase? No. This is not too bad, but they released $2 billion in loan loss reserves. And these are like cookie jar accounts that you can bolster a release in good times or bad. So they just emptied a bunch of that. Some principal trading help and some card fees help. They lost a little bit on the net interest margin,

which is sort of the normal way banks would make money buying from one source and lending out to another source. So it sounds decent, not quite as good as the headline looks, question is, will they up their dividend? They will need Fed approval for that, so we don't know. Seth? I was reading through both of these earnings reports, and they both said something to me that's interesting about the broader economy. In the case of Intel, you saw good sales in the server division. That's all going to businesses, right? The consumer division sort of weak. And at JP Morgan, you saw financial sort of the investment banking side and actually business

banking growing not as quickly as that. But the retail side, in other words, Main Street, not doing so well. So we seem to be in a situation where businesses may be bouncing back a little bit more quickly than consumers, but the hope, of course, is that that eventually trickles down to us Hoy-Polloy eventually, but we're not seeing it yet, at least not from these two. CoinStar shares were down big on Friday after the vending machine operator missed on earnings and lowered guidance. Seth, do I need to start turning in my change more frequently? Well, the story at CoinStar, for those who don't know about it, it started out as just this place where you could dump your piles of coins into these kiosks,

and they would charge you what I always thought was an exorbitant fee to sort them for you and you get a coupon and get your cash. But the story with them now, the hot story is Red Box, which are these DVD rental kiosks, and they appear to have flubbed up royal in the last quarter with these because they entered a deal where they didn't get the latest Hollywood movies for a month or so, and that meant that they had to do a better job of putting older stuff into the kiosks in order to keep people renting and they appear to have screwed that up. Now, they also said that they didn't do as well with Blu-ray as they thought they would.

And so it all comes down. The stock dropped, something like 25% on the news. And it all comes down to, if you're an investor, do you think this is a one-time screw-up or does this mean a permanent impairment of the business going forward? I happen to think that this business, along with what Netflix is doing is going to be really, really troublesome in the future on costs because Hollywood is waking up to what the content is worth, and is going to start charging them all. If you've been cutting back on Transformers and My Little Pony's, you're not alone.

On Friday, Hasbro said people bought fewer toys than the company had expected during the holiday season, and revenues will decline for Hasbro's fourth quarter and the year. Ron Gross, what did you make in the news? This was surprising to most. We actually owned the stock in a million-dollar portfolio and sold it maybe six months or so ago. So we weren't that surprised. I think estimates were a bit lofty. It'll be interesting to see if this carries over to other retailers relying on the crucial fourth quarter. International remains pretty healthy. It was the U.S. that struggled here. And they did reaffirm their 2011 guidance. We'll see if that has to be revised as they go forward. Stocks off as a result, which I would expect. Hey, don't blame me. I went through two Mr. Potato Headbys this holiday season. Why too? So while my brother got one on sale and we got another one for the baby.

So we did our part for Hasbro. So your brother really likes playing with Mr. Potatohead? I love Mr. Potato Head, actually. It's a lot of fun. They have so many brands, so many different toys and games at Hasbro. What do you think is like the most underrated brand that Hasbro has? I loved Risk when I was a kid and my son has discovered it and we've been playing it together. I love that game. James?

You know, I was going to say, well, they just got the rise to Sesame Street, which includes Elmo. I don't know if that's really underrated, but my son just goes bananas about that. Seth? I'm going to stick with my Mr. Potato Head. It's a cheap toy. It's a lot of fun. The baby just cannot put it down. I'm going to go with Clue, because, Clue, again, a classic board game, and in my house, we got the Harry Potter edition of Clue.

Oh, I didn't know there was such a thing. Oh, yeah. So great to introduce my. I have never played Clue, actually. Oh, my. You want me to bring it in? I'll check it out. Do you see Steve Broido jumping?

Steve Broido? What do you got for? Monopoly, my man. Monopoly is where it's at. Monopoly? Underrated? Do you think that's an underrated brand? I do.

If you visited a casino anywhere in the last few years, there are a gazillion. Not that my dad listens to this podcast. Not that I go to casinos, but if I were to go to casinos, there are monopoly games everywhere. Really? So you can pitch real money down the toilet playing Monopoly. Pretty much. But it's fun. It's all for fun, right?

That's why you're going to casino? Absolutely. Just for the fun. and the free drinks. Groupon made headlines earlier in the week after announcing the companies raised almost a billion dollars in financing from several VC firms.

On Friday, the Wall Street Journal reported Groupon is planning an IPO for this year quote, sooner rather than later. James Early, you're interested in a few shares of Groupon? I am not, I mean, it might be a short bump, but they are playing their cards pretty well right now. The founder has been cashing out in bits and pieces, and I think it's actually smart that Groupon

has been buying these incipient for a knock-offs before they get too big and cost more. But we've got everybody trying Groupon out now. So what I'm not sure about is what the sustainable level of the businesses, and apparently because he's cashing out, neither is the CEO. Well, and you mentioned, and this was part of the announcement when they announced the financing, the next day, Groupon acquired daily deal sites in India, Israel, South Africa. I mean, if you're a Groupon shareholder in the private markets or your VC firm,

Don't you want to see that? Don't you want to see them spending that money allegedly wisely? Well, the whole point of raising money is hopefully because you need to. So when you're raising money to cash out as an owner, you're being awesome for yourself, but you're asking yourself, or you're not begging the question. You're raising the question at the company, what are these raises for, what would the IPO be for? Seems to me that the IPO might be mostly a cash out IPO for the early investors,

venture investors, and others. The problem I always have with Groupon when I think about it is it does not seem like it has the scale, the scale potential that a regular Internet superstar has that we think of. In other words, they need a lot of boots on the ground selling these deals to people. And I really wonder if it could ever be as profitable as a company just like Facebook or Google. All right, James Early, Seth Jason, Ron Gross. We'll see you a little bit later on in the show. Coming up, we'll head to Detroit for a report on the Big Auto Show,

and we'll find out which automakers made the best impression. impressions. Stay right here. You're listening to Motley Fool Money. Just bring me lots and lots of money. Welcome back to Motley Fool Money. I'm Chris Hill. With me in studio is Fool analyst Jason Moser, fresh off his visit to the North American International Auto Show in Detroit. Jason, thanks for being here. How was the Auto Show? Yeah, hey Chris, thanks for having me. So the Auto Show was phenomenal, really, I thought. It impressed me really not only to see Detroit's Big Three in four GM and

Chrysler there, but just all of these companies from all around the globe under one roof and all of these cars and interesting ideas, it was a pretty overwhelming experience. Joining us on the line now is Tom Walsh, business columnist for the Detroit Free Press. Tom, thanks for being here. Happy to do it, Chris. So we want to talk about the auto industry in general in a moment, but first, you were also at the auto show. You've been to a bunch of these.

What were your impressions of this one? Well, this one's definitely more upbeat than the last two have been. Two years ago, it was downright scary. Nobody knew whether these companies were going to survive or not. And last year it was still, they're pretty wobbly coming out of bankruptcy. So now they're making money. GM's done the IPO and paid a chunk of money back to the taxpayers. GM's profitable, Ford's profitable.

Chrysler is, you know, about break-even operational. trading profitable and actually finally starting to show some new product, which they weren't for a while. So the hometown companies are looking a lot better. And as Jason mentioned, the foreign automakers are here in force as well. A few of them have dropped out, and they're starting to kind of come back one by one. Yeah, so Tom, you know, I was there. This is my first show again, and it was really, for me, pretty cool on every front. The one thing that really impressed me about this show, in all of the press conferences that I saw,

it seemed to me that Ford's presentation was just better than any of the others without a question. I mean, they all paled in comparison, really. And I'm wondering, what was your impression there? Did you get that same sort of feel there? Well, Ford is really on a role, and they are just, they really are all on message. Alan Mulali has, the CEO, has that company focused like a laser

on quality, on a strategy that everybody understands and can pair it back to you glibly. And they've done a remarkable job with quality, with marketing, with taking advantage of the goodwill of the American people for not taking a bailout. And they're still riding that train, and they're doing well. There's some question marks about Ford because they've really reinvigorated the Ford brand. and they've increased market share. But now they're really a big car company without a major luxury brand. And now can they really rebuild Lincoln into a viable competitor to Audi Mercedes, Cadillac, Lexus? And Lincoln's really not in that company yet.

You're listening to Motley Full Money? We're talking with Tom Walsh from the Detroit Free Press. Tom, what surprised you the most at the auto show this year? I suppose it's a surprise that, you know, just how giddy almost people were. Because, you know, remember, General Motors lost $82 billion with a B dollars in three and a half years before the bankruptcy. And some of these years were excellent car sales years, 16, 17 million cars sold in the United States. Now, at a level 40% lower than that, GM is making a profit, Ford's making a profit. This is kind of a miracle.

So there's a giddiness about it that in some ways is a little worrisome because, you know, the car market is still not all that great and there's still a lot of good competitors out there. I think the Detroit company has got a little break that Toyota stubbed their toe during the year. And it's going to, you know, it's going to be a tough go going forward. You get a little worried that they're going to fall back into bad habits. I was going to say, how much of that giddiness do you think translates into a better future for Detroit? Well, I think it translates immediately into a feeling of kind of relief that the worst is over, that, okay, we are where we are.

This industry is never going to employ the numbers of people that it used to in Michigan, Ohio, in the heartland. It's never going to pay the kind of salaries, inflated salaries for all levels of workers, salaries and benefits that it once did. So, no, we're not going back to the old days, but there's definitely a sense of relief that some stability has finally returned to the industry and that they can grow it from here and hopefully diversify the rest of the state's economy a little bit better. So, Tom, you know, we've had so much focus on Ford and GM here over the past couple of years. I wonder if I can get your opinion on what story out there that we're still missing.

What are we not seeing in the headlines today? Well, I think the most interesting story going forward may be Chrysler, because it's the one where we really, the outcome is far from certain. General Motors has able to pull off the IPO and return to net profitability for several quarters. And, of course, Ford is doing very well. their stocks up a ton. So while anything can still happen, they both seem to be on a good arc or trajectory. Chrysler was so damaged during the bankruptcy, it very nearly did not get bailed out.

It was like a 4-4 deadlock in the Auto Task Force about whether to even bother. And so when they did with Fiat's sort of taking over and Sergio Marcioni taking over, what had happened in the interim under Cerberus after Daimler dumped their interest in Chrysler was that they had pretty much shut down product development altogether for a year or two almost. So their pipeline was pretty sparse and they really didn't have any new product coming out. Now they're finally starting to get some. The new Grand Cherokee is out there doing well. And they've really come up with about a dozen more either new or,

substantially refreshed products where the interior is much better than the old one and things like that. Now, as Markioni said the other day, now it's up to him to sell the new products, now that he's got him out of the design studio. You're listening to Motley Full Money. We're talking with Tom Walsh, business columnist from the Detroit Free Press. Tom, to what extent do you think GM is hurt by having accepted bailout money that has some referring to them as government motors. And conversely, to what extent do you think Ford has helped by not having taken a bailout? There's no question that GM has been heard as well as Chrysler. I get email

all the time from people saying, I will never buy another general motorist car, blah, blah, blah. I don't know how many people are out there really worrying about that. I think it plays in in some markets, but in GM's case, you know, they've been driving customers away for 35 years for all kinds of reasons, from bad dealerships to look-alike products. So I'm not so sure that taking the bailout hurt them much more, but clearly it didn't help. In Ford's case, the fact that they got through without taking it, it did them a tremendous amount of good, I think. And GM has kind of muddled through okay. They're selling just

about as many cars, maybe a few more, with four brands as they were with eight. Now, the markets crept back up a little bit, and that's helping them, and their market share is going down a little bit. But they seem to be stabilized in this country, and they're still doing quite well overseas, particularly China, Brazil. Jason and I were talking earlier. You talked about Ford and the focus, we were talking earlier about how it seems like Ford just does a much better job of branding. That when it comes to automakers, Ford is Ford and General Motors is. Seems like there's an identity crisis there. I don't even know what it is. Well, you know, there are two very different animals, especially now. Ford is a car brand, right?

General Motors is a holding company with four car brands. It used to be eight. It's a little bit clearer now. Chevy's, you know, 70% of their business. And there was actually some consideration, I think, given to changing the name of the company. But Chevy, Cadillac are legitimate brands. Buick exists primarily because of China. But they're adding to the lineup. Maybe they can, maybe they can save it. So they're kind of different. And to the extent that the GM can work the brands, Chevy and Cadillac and Buick, that's where the focus is. You won't see any ads now. Watch your Super Bowl ads. GM's going to be advertising in the Super Bowl. There's not going to be any of them that will mention GM. They'll mention Chevy or if there's a Buick ad. All of the

advertising going forward will be on the brands because that's what they've done so well at Ford. Tom, one more question before we wrap up with Buy, Seller, Sell, Hold. One of the big auto stories of 2010 was the Toyota recalls. And here we are a year later, and frankly, I'm scratching my head as to whether those recalls were real, whether they were meaningful. What's your opinion on Toyota and the problems real or alleged that they were having with their cars last year? Yeah, I think it's a lot like, you know, the Audi unintended acceleration experience of, what, 15, 20 years ago? I think there's real questions about, you know, whether drivers, it's more the handling of it than the technical problem itself, to whatever degree it really was a technical problem. And I think Toyota blew it on a lot of the handling problems.

And I just think a lot of problems for Toyota came home to roost. The invincibility aura sort of went away. and then even when people said, okay, they're not really on safe cars. But it gave people an excuse to look at the other brands out there and compare. I've heard one analyst say Toyota used to be the default brand. In other words, if you didn't exactly know what car you were going to buy, well, you're going to Toyota dealership because they had something in every category and they were all pretty reliable safe cars.

So that was your default brand unless you had a particular desire. Now, the whole Toyota mess made people walk into other showrooms and say, well, I'll look at this, I'll look at that, and all of a sudden they're thinking, gee, this is as good or better than a Toyota. You know, they're not a bad car company. They certainly should not be underestimated by the competition. But meanwhile, around the world, especially in those emerging markets, you know, I had somebody told me the other day that the competitor that keeps them awake at night is not Toyota anymore. at Tunday Kia. You're listening to Motley Full Money. We're talking with Tom Walsh, business columnist for the Detroit Free Press. All right, Tom, time to wrap up with Buy Seller Hold.

Let's start with, it's a Porsche, and it's got four doors, buy-seller hold, the Panamara. Everybody loves it. Bye. It's that simple? Yep. Sweetest four-door. Sweetest four-door I've ever seen. All right, this summer, the big three automakers will be negotiating new deals with the UA

and this is one idea that might be on the table. Buy seller hold, worker compensation being tied to performance of the company. Some form of gain sharing and how they work that out is the big... Buy seller hold tinted windows. Sell, I've never liked them. Just me. I don't think it's just you. All right, you've worked at the Detroit Free Press since 19.

1982, buy-seller hold, the future of newspapers. And keep watching. The ink-on-paper model may not last. What we do as, you know, write, edit. It will always be a need for that, but whatever platform, who knows what it's going to be. And finally, this is something that some drivers truly dread, and there are cars that can do this for you now. Buy-Seller-hold, Tom Walsh's parallel parking ability.

Again, city, when you have to learn it, you learn it. I wouldn't trust a car, I guess. All right, Tom Walsh, business columnist for the Detroit Free Press. Thanks so much for being here. Thanks, guys. All right, Jason Moser, before I let you get away, how's your parallel parking ability? You know, I lived in Cairo, Egypt for three years, and that's the most traffic congested city on the face of the earth, I think. And there are no garages, so you pretty much have to find a place and make it happen.

So I'm buying my parallel park. You've got some game then. I can do it. All right. You're an analyst on our Stock Advisor service. When you look at the auto industry, what is one question that you have going forward? Yeah, I think that the companies have proven that they have the technology and the vehicles that people want. So for me, it really is going to boil down to the dynamic between the companies and the UAW.

All right. We'll be watching. Full analyst, Jason Moser. Thanks for being here. Thanks for having me. Coming up, we'll dip into the Fool Mailbag and we'll take a 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.

Don't buy or sell stocks based solely on what you hear. I'm Chris Hill and back in the studio with me, our trio of senior analysts, Seth Jason, James Early, and Ron Gross. Guys, we're going to do something we haven't done in a while. We're going to dip into the full mailbag. Let's go to our man Steve Brodo. Steve, what do you got for us? Chris, thanks. I've got an email from Andrew Fing. I'm a weekly listener to the podcast and really enjoy your insights. Can someone please look at

Open? That's Open Table. Am I insane or is this the most overvalued stock of all time? How can it possibly justify a $160 PE and a $1.9 billion valuation? Cheers. Andrew, before we kick it over to the analyst, I'd just like to say there is the possibility that both are true, that it is overvalued and you are insane. We don't want to discount that possibility, but Seth, first, open table, that's the online restaurant reservation place. Yeah, I've been pronouncing it open tabble, all these, all these months. You're very causal. They have applications for even they were one of the first out with a Windows Phone 7 application

where you can look up reviews and just quickly make a reservation. They sell the reservation hardware software system to these restaurants, and they charge them a monthly fee, they charge them a per diner fee as well. and the reason this stock is hot is because all things internet are hot again, as well as they're growing pretty quickly. Their revenues are leaping pretty quickly. They're trading at a huge, huge premium, which presumes that they're going to continue to grow at these nosebleed rates. I have my own problems with the system. One is that I find it easier actually on my phone just to use the services that are on there and make a call.

It's actually faster than open table and easier. The other is that there's something of a backlash for. from restauranteurs, I've read a lot of this online. They don't really like Open Table because it's pretty expensive. So I'm wondering if there is not some kind of open source alternative at some point in time. I think as far as the stock is concerned, you don't worry about the valuation. You need to make the decision. Is this the future of restaurant reservations in the U.S.?

If you think so, you buy it. If you don't, you stay away. James? Yeah, it sounds like they'll spit on your food if it's costing more money. But have you, I mean, I don't eat at restaurants fancy enough to require reservations. What would just call the restaurant? Well, it is quicker, actually, depending on how some people find open table easier. I put the app on my phone and I don't use it all.

I know Ron uses it exclusively. Yeah, I can say, show me all restaurants that have a reservation available at 7 o'clock on Saturday. I get a list and then I can make a choice. It's nice. International growth is a big story here. If they don't expand significantly overseas and the stock is overvalued, we should mention in all fairness that this is a recommendation at a rule breaker service, and they love companies like this that appear overvalued to folks like us,

but if you believe in the story and the growth, then it's a fine company to own. And keep in mind that as far as international goes, they already pulled out, according to what I read in the 10KF, Spain and France, because it didn't work. So this concept doesn't go everywhere. Okay, Andrew, thanks for your question. As always, you can drop us an email, Radio at Fool.com.

In the couple minutes we have left, let's get to the stocks on our radar, Ron Gross, I'll start with you. We've been looking at LabCorp, ticker symbol LH. It's a lab testing services. They have 38 primary labs, 1,500 patient service centers. There's an interesting demographic play here as the aging population increases and require more tests.

They're the dominant force in the space along with Quest. We're not sure it's cheap here. We're digging in a little deeper, so this is not a recommendation, but it's something that looks interesting to us. James? Chris, Duke Energy is a former income investor. a recommendation. It's a big North Carolina electric utility. It just announced it's buying another North Carolina utility called Progress Energy. And the idea, PGN is the ticker. The idea

is lower capital costs. These utilities are coal-based. So lower costs will help offset the future EPA regulations because cap-and-trade recently failed in Congress, meaning the EPA now regulates pollution under the Clean Air Act. So the question is whether Duke paid too much, it's definitely good for progress, though. It's a big step up for this little company. Small company. You like a nice utility, don't you? I do love my utilities, Chris. Seth Jason. I had a different idea, but I'm going to see Ron on his LabCorp and raise him a bio-reference

laboratories, which is a small small little company. The same space, BRLI is the ticker. We have it at Hidden Gems where we own it. Again, has never looked cheap, but has for years been taking market share from the likes of Quest and LabCorp,

which it shouldn't be able to do. It's run by a doctor and researcher who seems to have his finger on the pulse of what doctors need. They develop a lot of new higher priced tests for various diseases and other conditions and they do a great job of selling those and that is the one that I think I would look at. All right, Seth Jason, James Early, Ron Gross. Guys, thanks for being here. Thank you, Chris. Thanks to our special guest this week, Tom Walsh from the Detroit Free Press. Our engineers are Steve Roido and Gail Anya Nuevo. Our producer is Matt Greer. I'm Chris Hill.

Thanks for listening. We'll see you next week.