Motley Fool Money - Motley Fool Money: 01.31.2014

Episode Date: January 31, 2014

The stock market stumbles. Facebook connects. Chipotle serves up big earnings. And Google surprises.  Our analysts discuss some of the week's big stories. Plus, Leigh Steinberg talks about his book, The Agent: My 40-Year Career Making Deals and Changing the Game. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Thanks for being here. I'm Chris Hill joining me in studio this week. From Motley Fool 1, Jason Moser. For Motley Fool Supernova, Matt Argusinger, and for a million-dollar portfolio, Mr. Ron Gross. Good to see you as always, Jens. Hey, glad to be here. Earnings Paloza rolls on. We've got the latest results from Facebook, Apple, Visa MasterCard, and

It is Super Bowl weekend, so we will dig into the business of pro football with our guests this week. As always, we will share a few stocks you can put on your watch list. But we begin this week. Before we get to earnings-peluzer, Ron, let's start with the market in general. We're wrapping up the first month of 2014, and we do take the long view. But increasingly, if you look at the coverage of the market and you hear the rumblings out there, there is genuine concern when people consider the Dow is down more than 4 percent

in one month, the S&P 500 down about 3%. What do you say to someone who says, wait a minute, what's going on here? I would say things weren't great in 2013 either from many different perspectives, metrics-wise, economics-wise. And we had a 32% increase in the S&P. So go figure and go try to predict where the stock market will go based on the data you see. It's very tough to get it right. But listen, emerging markets is kind of the thing of the month.

We're worried about emerging markets, whether it's Turkey, Argentina, and the market. Argentina, India, what have you. The taper is feeding into this, obviously. The stimulus will go away. People were, I think, looking for a reason to take some money off the table. After such a strong year like last year, you know, remember we used to have the January effect? I want that back. Stocks are supposed to go up in January. What do you think, Maddie? Well, I, and Ron just mentioned the taper. You know, I, speaking of the Fed, you know, Ben Bernanke had his last meeting this past week, and the Fed didn't do anything. They stuck to their plan to reduce their, you know, reduce their subsidy.

essentially by another 10 billion. And I just think that was the right move. I think the Fed looked at the data, the data for the U.S., and overall, looks pretty good. We do have these emerging market chitters, but I kind of applauded them for not doing anything because it sickened me sort of the end of the week when I started to see a lot of pundits say, hey, I can't believe the Fed didn't do anything. I mean, we've got these problems in emerging markets. Certainly they want to help us out here, and that was just seemed ridiculous to me. Yeah. What's interesting is that the vast majority of SMP 500 companies have beaten expectations this earnings season. You would expect to see the market rally.

on that. So, the weakness is interesting to me. I think people aren't buying it necessarily. There's been a lot of share buybacks. Share accounts have come down. That makes earnings per share go up. It makes it look like a beat when perhaps it's not. Revenue growth isn't where it should be probably. But yet, you know, the headline is that companies are beating. Yeah, I mean, I think Ron keyed in on something that's pretty interesting there. There were plenty of bad metrics last year. We still had a stellar year in the market. But it makes me think of a question I took earlier this week on Ask a Four, where someone was asking, why don't we utilize stop losses in our recommendations. And stop losses, basically, order to your broker to basically

say, we'll sell this stock if it gets down to this price. See, I kind of cap my losses and just cut bait, move on. But, you know, the answer to that was, that's just not the way we operate. As long-term investors, you know, the way the world is getting smaller, the Internet is bringing basically everybody together, and the flow of information is so fast now. I mean, volatility plays a much bigger role today in the market than I think it probably ever has. And when you look at something like a stop loss, you're taking the chance of selling at a loss based on just some basic noise out there that is more or less meaningless, where we're not giving ourselves the chance really to hang on for three, five, even ten years and really recognize some substantial gain.

So I think it really shines a light on why foolish investing works so well. Yeah, I wonder all the people who had stop losses on Chipotle over the years are feeling right now. Probably not so good. We will get to Chipotle in a little while, but let's start with Facebook. The Facebook shares hitting an all-time high this week after fourth quarter profits came in higher than expected. And Jason, once again, the story, mobile ad revenue, the story here, virtually non-existent when the company went public. And now it's more than half their revenue. Our man behind the glass there, Steve Broido, was loving that noise.

This pump is literally jumping up and down. He's thrilled. I mean, if you're an investor in Facebook, you've got to be really happy, and I think you have to be excited about what the future holds at this point. I'll count myself among the early skeptics, really, of Facebook. And I've certainly changed my tune based on the work I've done on the company and really what I think they're capable of doing because, you know, the company turns 10 years old next week. And when you look at this next decade, I think that, you know, Mark Zuckerberg knows it is going to be a focus on engagement. They've got a user base of 1.3 billion plus people that are coming to that site on a constant basis. I mean, weekly active users were 757 million for the quarter and they now make fully more than half of their revenue from mobile like you mentioned.

And so I think when you look at what Facebook is doing today, the market opportunity that's out there with mobile advertising alone poised to hit around $45 billion by 2017, Facebook is going to get their share of it. And advertisers go where the eyeballs are and the eyeballs go to Facebook. Ron, pretty amazing when you consider, as Jason said, next week, Facebook turns 10 years old as a company. And it is now, as a result of the stock moving up this week, it is now the 20th largest public company. Yeah, it's really interesting.

actually now the largest company in a million dollar portfolio as well. Not the largest company, our largest allocation. It's almost 10% of our portfolio now as a result of the increase in the stock, which gets a guy like me a little nervous. I was going to say, how you're sleeping? But we still think it's undervalued. We still think it's got plenty of room to grow. The sizing is a different matter. I'll have to think that through. But we still think there's plenty of room ahead. All right. A stock moving in the other direction. Shares of Apple down around 10% this week.

First quarter results, you sell 51 million iPhones, and it's just not enough anymore. It's not a new record there. And of course, they also sold 26 million iPads and 4.1, 8 million max, which were also a big year over year. But again, yeah, they sold about 10 percent, fewer iPhones and analysts we're expecting. The revenue for the current quarter looks a little bit light, and that is enough to shave about 40 billion off the stock or off the company's market value in the past week. The problem with Apple, obviously, is a perception problem right now.

It has nothing to do with how they're doing as a business. How they're doing as a business is phenomenal. I mean, we're talking, the iPhone didn't exist in 2007. Now, about 500 million people around the world have used the iPhone. I mean, it's amazing. So I think right now it's, can Apple innovate? And I get antsy when I hear that because I think that's absurd. I mean, we're sitting here watching a movie on a three-inch piece of glass, which we were

capable of doing just a few years ago. It's incredible. Tim Cook said some interesting things on the call. talks about new product categories that Apple might be getting into. The only problem there is that he said that a few times in the past. Since he's actually been CEO, he's kept mentioning, hey, our pipeline's stuffed. We're entering new product categories. I like the fact that they're buying back stock.

They've bought $50 billion back in the last quarter. They've gone through about 50% of their authorization. They're obviously seeing value in the stock, not as much as someone like Carl Icon. Who calls it a no-brainer? Right. Until the perception changes with Apple and until Tim Cook can really deliver on his call of having more product categories, I think the stock is that. is going to stagnate. Ron, Tim Cook really does need to deliver because he was specific

this time. He said, by the end of 2014, we're going to have a new product and people are speculating, well, it could be a smart watch, it could be some other form of wearable technology. It could be a new TV. But they've got to have something. They got to have something. And I know they've got to have something because I'm getting sick of hearing myself say, this company's got to start growing again. They've got to introduce new products. As an investor, if I keep hearing myself say the same thing, quarter after quarter, almost a year after year, after year, things got to change or I have to move on to another investment.

Imagine how our listeners feel. He's on a short leash with me, not too short. I'll give him the rest of the year, but he's got to make good on that promise. Google's fourth quarter profit rose 17 percent on higher ad revenue. The stock hitting a new all-time high run. I'm assuming this is also part of why the million-dollar portfolio service you're running is having a pretty good week. Yeah, it was a great week with Facebook and Google.

Google and a few others. 17 is the number for Google. 17% increase in revenue, 17% increase in profit, 17% growth in their core advertising business. It was a really strong order. I don't think people were expecting it to be that good. They're jettisoning finally their Motorola business, selling it to Lenovo, which they've wrung up about $2 billion of operating losses since 2012 by owning that business. They'll keep some of the important patents.

They'll get rid of that hardware distraction, and they'll focus on their business. core business. But for all the praise we give Google and deservedly so, I think we should take just a moment and dwell on this because the Motorola acquisition was massive, and they are selling it to Lenovo for a fraction of the price. And even if you factor in the patents, this is a pretty big swing and a miss. I would have to agree with that. But what are you going to do? You get rid of it and you move on, but they burnt up a lot of cash there without a doubt.

Coming up, forget stock market predictions. We have got Super Bowl predictions. This is Motley Full Money. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, Matt Argusinger, and Ron Gross. Earnings Paloza rolls on guys. Chipotle up more than 10% on Friday after a strong fourth quarter report. Jason Revenue was up. Do I have this right that same store sales? We're up more than 9%. Isn't that kind of crazy to think about it? It's 9.3% for the quarter, which is, I mean, that's phenomenal even for a fast-growing company like Chipotle. I mean, it just shows that really the traffic was going through the stores in what's not even really seasonally their busiest quarter. But, I mean, the market likes to focus on that same store sales number. And because it was so

robust, I think that's part of the reaction of the stock today, obviously. Something I focus on in the call quarter-in-quarter out, because they focus so much on throughput. They give us a lot of great insight as to their throughput statistics and how they're doing. And they really are continuing to knock that ball out of the park. I mean, you look at your peak times during the day, during the lunch hour, they picked up an average of six transactions per hour. The peak dinner, they picked up an average of five transactions per hour. That just means that when you see that big, long line at Chipotle, you know that you're going to get through it pretty quickly and still get a great experience. But yeah, I mean, they just continue to really do everything well. The cost of

food is rising a little bit. They've hinted at more than likely we'll see a price increase in the third quarter of this year. Thankfully, they have a little bit of price. pricing power to be able to do that. The balance sheet is creeping up on $1 billion in cash now, and this is just a self-funding business. And it's a little known fact that the word pizzeria was mentioned 13 times in that conference call yesterday. That's right. They've got that little investment at a pizza place in Denver. Yep. Pizzeria locale. They're going to be opening a couple more this year. They already said, so it's definitely something that they are having fun with. They're working with the

founders of that of that pizzeria locale. It's a minority investment today with really, I think, the opportunity to bring it under that Chipotle umbrella fully, sort of like the shop house is developing as well. Yeah, the numbers are just incredible for Chipotle. My only concern, I guess, is that I feel like the more restaurant chains I'm going into now, I'm seeing the model play out. Oh, yeah. I mean, we have it in DC, we have kind of a small franchise called Sweet Green.

I don't know if you guys have ever been to it. It's started by... That sounds way too healthy for making it. It is salads. It is mostly salads, but it's started by a couple Georgetown University guys. You go in there, and it is essentially, I'm in Chipotle, but they're making salads. Yeah, same with Roti, Roti Mediterranean. That's right. Elevation burger is the same thing. I mean, they literally are running that same model.

I have not been in a store that runs it as well. And it's beyond just the incredible efficiency. It's also just the idea of focusing on natural foods and healthy eating. And that's exactly the reason I sold the stock $250 a way. Well, at least you can take solace in the fact that apparently, Finally, David Einhorn is still actually short this stock. And I just read in November, the end of November, it's confirmed at least up to that point. He was still short this stock, so I imagine he's not too happy. He didn't put a stop gain on it.

A stop gain. In the other direction, Amazon down about 10% on Friday after fourth quarter profits came in lower than expected. But, Maddie, the big story seems to be that Amazon is considering raising prices on the Amazon Prime membership service. It's $79 a year. They're talking an increase of anywhere from $20 to $40 on top of that. Good move? I think that is a good move. If you think about it, they've had Prime for about nine years.

There's never been an increase yet. We know shipping costs are higher now. We know a good thing is that the average Amazon customers ordering more per order, so we're getting more things shipped. And also, we didn't have streaming movies nine years ago. Now in Amazon Prime, you can watch 40,000 movies and TV episodes. So it's an incredible, in my mind, it's an incredible bargain for $79 a year. The idea of raising that $20 to $40, I don't think is going to have a big impact,

and it'll do a lot for the business. We've seen Costco, which I know Ron's a big fan of. I mean, they've been able to sort of raise their membership fee about 10% every five years or so. No problem at all there. I think it's a great move for Amazon. But, Jason, it's got to be communicated correctly because it's the sort of, as we've seen with other companies, if you botch a price increase, then you're going to pay for it. Interesting.

I mean, I asked the question on Twitter earlier. today, just, I mean, people, how they felt about that. And, you know, one of the responses there was that they felt like they were doing this to appease Wall Street's expectations. Now, I don't think that's it at all. I mean, I think Jeff Bezos has made his position very clear. He doesn't care what the street thinks. I do think that I think they will raise the price to $99. I think there's a big perception between the difference of $99 to $100. I think that $20 of incremental income for each prime subscriber would be tremendously beneficial, and that $99 still makes the consumer feel like they're getting a good deal.

I wonder, you know, and one thing that wasn't addressed on the caller, they haven't really talked about, is the idea of, and they mentioned it in the past, by the idea of maybe doing multiple, like different tiers. Yeah, like Costco does. Well, and Netflix talked about the same thing, too, right? A price tiering structure, and I think it opens their world up to more potential customers because it's not just a one-size-fits-all model, maybe at this point. I'm not concerned about current prime members renewing.

I think everyone I speak to really enjoys their prime membership. I'm concerned about new acquisitions. when they're trying to get new people and they see that price approaching 100, that worries me a little bit. Visa and MasterCard, the two dominant players in the credit card space, both stocks down a little bit this week after their latest quarterly reports. Ron, I'm curious on your take, it looked like Visa's quarter was a little bit better than MasterCard's, but both stocks getting hit up just a little.

Just a little bit. But I agree with that. Their numbers came in a bit better, especially the operating expense numbers. MasterCard was a bit heavy there. Some rebates came in higher than analysts were expecting, and that hit the bottom line where they really were only able to grow about 3 percent, whereas Visa had stronger profit growth of almost nine. Shares of Under Armour up around 30 percent this week.

Fourth quarter profit, up 35 percent, Jason. And it's the 15th straight quarter that revenue has increased at least 20 percent, and they're just crushing it up in Baltimore. Yeah, I was coming through the release in the call to try to find. something to like harp here about. It just all really looks good for Under Armour. I mean, 35% top line growth free, sporting retailer. I mean, that's pretty phenomenal in and of itself. But you sort of see what they're selling. I mean, accessories have done very well, but they made, I think, great strides in footwear. And, you know, 25% growth in footwear is significant because when they

first got into that market, I don't think many people gave them a chance going up against Nike. They've really been focusing hard on building out that running shoe department. They understand that's a big market opportunity. And to top it all off, they demonstrated little pricing power. I mean, gross margin was up a full percentage point there. Inventory levels keep in check and revenues outpacing. So, yeah, a lot of great things here for Under Armour shareholders. All right, we've got just a couple minutes left in the wake of talking about sports apparel.

The Super Bowl is this weekend. Our man on the other side of the glass, Steve Rotto, he's actually going to the Super Bowl. Steve, how excited are you? That is correct. I'm very excited. It's going to be a great time. And you have some under armor core layer gear. Cold and windy probably, but I did buy some long underwear, some not under armor.

Oh, Steve. I bought them with their Amazon, though, so. Oh, there you go. You won for two. That's good. All right. I want one prediction about the Super Bowl. It doesn't it have to be about who is going to win the game.

It could be about the game itself. It could be about one of the prop bets, the commercials. Give me something around. One prediction for the Super Bowl. The over under, I think, is about 47. take the under. Take the under. You think the weather...

Defense of struggle. Yeah. Defense and struggle outdoors. Okay. Maddie, one prediction. Okay, I say this as a somewhat frustrated New England Patriots fan. Mark my words, Denver fans. At some point in the game, Wes Welker is going to drop an important pass.

Just waiting. Yeah. I think you're right on that one. I think we got to talk about the Super Bowl within the Super Bowl. A lot of talk here about the second screen phenomenon in Facebook and Twitter going at it this year. I think Twitter comes out on top as the way. winner of the Super Bowl. Interesting.

Steve, Royna, one prediction. I know you're a big sports fan. I think it's going to be a pretty tight game, but I think the Cowboys are going to pull it up. Right on. Drop us an email, Radio at Fool.com. Send us your prediction for the Super Bowl.

And just send some words of encouragement that Steve stays warm and doesn't freeze his butt off out there. All right, guys. We'll see you later in the show. next, we're actually going to head to New York City to talk about the business of pro football with sports agent Lee Steinberg. Stay right here. This is Motley Full Money. You know, we're just strutting for fun, strutting our stuff for everyone. We're not here to start no trouble. We're just hitching in the Super Bowl shuffle. The sack man's coming. I'm your man, Jen. If the quarterback's slow, he's going to get bent.

We stop the run. We stop the past. I like the dumb guys on their end. Welcome back to Motley Full Money. I'm Chris Hill. Over his 30-year run as a sports agent, Lee Steinberg, represented over 150 professional athletes, including the number one overall pick in the NFL draft eight times. His clients included Hall of Famers Troy Aikman, Steve Young, and Warren Moon. He talks about the ups and downs of his career in his new book, The Agent, My 40-year career, making deals and changing the game. He joins me now from the Super Bowl Radio Row. Lee, thanks so much. much for making the time. Oh, it's my pleasure. It is the Bronx Zoo here. I'm sure it is. So I appreciate

your spending a few minutes with us here at the Motley Fool. I want to start in terms of your book with your career. You had such a successful career in a business where many people fail. What do you think led to your success during your run? Well, first of all, I had to go. fortune of being a dorm counselor and an undergrad dorm that the freshman football team lived in. In the 1975, Steve Bartkowski was the very first pick in the first round of the NFL draft, and he asked me to represent them, and we ended up getting the largest rookie contract in NFL history. But the approach has been athletes' role models, retracing their roots to the high school community where

120 of them have set up scholarship funds. Then at the college level people like Eric Caros and Troy Aikman, Steve Bion, Group Let's have all endowed

have all endowed scholarship funds. And then at the pro level, it's foundations like war guns where he has 131

single mother she's moved into homes for the first time to have a home by making the down payment so athletes can be role models and that's what I profile athletes that that would be willing to do things like well I have Lennox Lewis a heavyweight boxing champion cut a public service announcement that said real men don't hit women how has the business of sports agents changed during the 40 years that you've been around it. I have to believe there have been some significant changes. I started back in 1976. Each team got $2 million as its share of the national television contract. That figure is now $130 million. So if Rick Van Winkle had gone asleep

back in 1975, he would not recognize this world. $130 million is, what it cost for Jacksonville in Carolina to come into the lead. So they're making as much TV money as it actually cost to buy a franchise 20 years ago. And we have the explosion of big stadium revenue flow from that. We have the explosion of fantasy football. The estimates are 20% of the business computers, which are on during the, football season and businesses are being used for fantasy football. So we're in the midst of a massive, massive occasioned by television.

Even baseball, which always complained about the owners about losing money, have quadrupled their gross receipts since 1994. And so the sports are all rolling in money, and now the rookies in football and in basketball have a salary kit. So it really guarantees that the money goes to proven productive starters, but also that teams will make a huge profit. Now, to the extent that the average person thinks about sports agents, the person who comes to mind is probably not an actual sport. agent. It's probably Jerry McGuire. And you were involved in that. You know Cameron Crow, the director. You were a consultant on the film. How did all of that evolve? So Cameron Crow called me in 1993. He was a writer-director. I'd seen Fast Times of Richmont High, which I liked. And he started

following me around. So he went to the league meetings in 1993. He went to the draft where Drew Bledsoe was the first pick in 93 and then flew up to the press conference. He came to Pro Scouting Day, a number of games with

me, Super Bowl parties and sat in my office forever and I told him stories. Lots and lots of stories. And then he went off and wrote the script. And I had to bet it to make sure the willing suspension of disbelief did not get broken.

And then they descended on my office and took my pictures and magically, Jerry McGuire's head is on my shoulders. And I actually took Cuba Gooding Jr., who played the wide receiver in the film, down to the Phoenix Super Bowl, and made him pretend all week that he was a client of mine to put him in role. actually had to show Jerry O'Connell, who played the quarterback, how to throw a spiral because he had gone to NYU and they did not have football. You're listening to Motley Full Money talking with Lee Steinberg.

His book is The Agent, My 40-year career, making deals and changing the game. I want to ask you about the business of the NFL because for the 30th year in a row, the Harris poll was conducted about the most popular sport, and for the 30th year in a row, the NFL is the most popular sport in America. But Lee, more and more, the more we learn about the effect of concussions. First and foremost, I'm curious, what do you see as the greatest threat to the NFL's popularity right now? The greatest threat to the concussion. I had a crisis of conscience back in the 1980s because I had cracks in the NFL.

at 61st round graphics. And when we went to the doctor, he's too many and what's the magic number? They couldn't tell us. So I started to hold concussion conferences. The first one series was in the 90s. Listen to the neurologist, an issue to set of recommendations,

of which the NFL adopted virtually none. So in 2007, and I did it again, had the neurologist who seemed to be the magic number, exponentially high personality. the chronic traumatic encephalopathy. So at that point, I call that ticking time bomb and an undiagnosed.

I don't believe every single time an offensive lineman hits a defense, you could have an offensive, 10,000-suff-precusticates, none of which have been diagnosed, and the aggregate of which is much worse than getting that 50% of mothers knowing this. Too economic. So the people who play will be very akin to the people who box, knowing the problem they have.

And so I've been pushing fractures, changing, blocking, and tackling techniques for kids and pop Warner, logical devices that are able to diagnose low-level concussive head. Research into nutraceuticals and pharmaceuticals for prophylactically protect the brain from swelling at the time of the head. And ultimately, it's the magic pill. One of the ways that some people manage pain is through medical marijuana. and it just so happens in the Super Bowl this year. We have two teams from two states where marijuana use is legal. And I'm just curious where you think the NFL goes with this in terms of their drug policy.

Ultimately, it will go where the rest of the country between two intoxicants, liquor, alcohol, and marijuana. And IQ tests really judge him, but the fact that he can't, at the time of the test, is shows that he's not that committed to football, but there's no real rationale for people to get aggressive, causes fights, breaks up marriages, accidents, and the other one causes people to watch cartoons and eat monkeys. You're listening to Motley Full Money talking with Lee Steinberg. His book is The Agent, my 40-year career, making deals and changing the game. You are very candid in this book, not just about your success, not just about your wins.

but about how it all came crashing down, divorce, bankruptcy. When you look back and think about among the roles for an agent, it is to help clients keep control of their lives. How did you end up losing control of yours? So there was a series of reverses in the 2000s. My father died a long death of cancer. my two sons were diagnosed with an incurable eye disease. We lost the home due to flooding that had to be not to the ground,

and then I got divorced. And I felt like I could not control or protect anything, and unfortunately just felt a desire to check out. I felt like all over on the beach tethered down with Lilliputian sticking forks in And so I spiraled down in 2007, 8, 9, and in 2010 in March, I decided that there is, that I had to make a change. So I gave my practice away. I went into sober living. I worked a 12-step program and in a unique fellowship.

And I said two things. Number one, I will be sober. and number two, I will be a good father. And that was four years ago. So now I've been refunded and we're back to build a new company that does representation, that does representation and marketing and content supply. You're making a comeback in the business world, and I'm curious for anyone listening who is thinking about

heading into this world as their life's work. Just what's one piece of advice you'd give someone who's interested in becoming an agent? Understand the power that athletes have. They need to not simply focus on dollars in the bankbook, but on second career where we have three players who now are minority owners of teams. You've got Bruce Smith, who retires and has ownership in a luxury host. hotel in Washington, D.C. and as a executive position in a construction company. And second of all, that they need to know that athletes can trigger imitative behavior.

So when we had Lennox Lewis kind of public service announcement that said, real men don't hit women, it did more to trigger behavioral changes in young. rebellious adolescence than a thousand authority figures ever could. All right. Last question, and then I'll let you go. We got Denver. We've got Seattle. You've been around pro football for the better part of the last 40 years.

Who's going to win the game? I think the game centers on whether or not the defensive secondary of Seattle can slow down Peyton Manning, which no one has done, and whether the front can put enough pressure. I mean, ironically, puts Richard Sherman right back into the lineup. Everyone's picking Denver. I'll pick Seattle. I think they're young and aggressive and hungry, and they're probably the only team existing that could figure out the way to slow down the end.

The book is The Agent, My 40-year career, Making Deals and Changing the Game. If you are a fan of football, you've got to pick this up. Lee Steinberg, thanks so much for being here. Thank you. Coming up, 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 back in studio. Once again, Ron Gross, Matt Argusinger, and Jason Moser. Guys, time once again for the stocks on our radar. We'll bring in our man, Steve Brodo, to hit you with a question about your stock. Ron Gross, what do you got? I got LinkedIn. The LNKD reports next week.

Stock is off 16% from their September highs. Last quarter, they issued some weak guidance. 37% sales growth just isn't enough for some folks. Wow. So be very interested to see how they come in versus expectations. We own a position in a million dollar portfolio. We really like it. Think it's a great company.

Steve, question about LinkedIn? First off, I'm a shareholder. My question is, if LinkedIn does not become the dominant way that people communicate about jobs, if it's not, just send me your LinkedIn profile, don't send a resume, no cover letter, just send me your LinkedIn profile. If that does not happen, what happens to this stock? It goes down, Steve. It goes down sharply.

Does it go away? I don't know if it goes away. I think they're not just going to be that. They're going to be other things. They're gathering so much data, and they're going to use it. in many different ways. We don't really know where yet. We have to think 10 or 15 years down the road. But for me, that is their core primary business. And if that doesn't work, we'd be in trouble.

But we've talked before about companies. Facebook is the first one that comes to mind, that have a big network of people, have the ability to build a platform to compete with LinkedIn. It doesn't really seem like we're seeing that play out, though. It doesn't need to be the only place to go. But it should really be the de facto standard, I think, and certainly be the market leader, because it's certainly priced that way from a stock perspective. Matt Argusinger, what do you got? I got Mercado Libre, M-E-L-I.

I think they report either this coming week or the following week, but this is the sort of eBay slash Amazon of Latin America, the biggest e-commerce site in Latin America. Really been hit hard lately, emerging market fears, of course, currency fears, just giving an idea. They're reporting in local currencies about 45 percent revenue growth. In U.S. dollar terms, it's about 26 percent. come down a lot because of that. One of my favorite idea is we own it also in the Odyssey One portfolio in Supernova. Super psyched about it. Steve, a question about Macardo Libre? We seem to have an incredible shipping platform in our country. Does Latin America have that same ability

to get packages back and forth as easily as we do? Great question. Thank you. Thank you. One out of every hundred, he just nails. No, so that is an added cost to them because there's different sort of shipping regimes in each of the country, say, between Brazil, Venezuela. Argentina, Mexico, etc. So that is certainly a risk to the model. I bet there's someone who thinks he's the Steve Broido of Latin America, but he's wrong. There is no

comparison. Jason, we've got about a minute left. What's your stock? I know you'll approve of this. It's Dunkin' Donuts, ticker D-NK-N. Sign me up. Guys, franchise pretty much everything. They've got about 11,000 Duncan stores today. So there is room to grow if you look at it just from the perspective that Starbucks has something like 20,000 Starbucks stores around the world. But what really caught my attention this week, though, is their new D.D. Perks program in which they're basically recognizing the power that Starbucks is built with their app, being able to use that app as tender and getting rewards for frequenting those establishments. And I think Duncan Donuts has that same fierce customer loyalty. And I think they

stand to benefit pretty nicely from this program. Steve, question about Duncan Brands? How do you ensure consistency with the franchise? Well, Steve, I think that in all honesty, it's just a donut. It's not rocket science. And so fortunately, for them. I think they have a pretty good hold on the recipe of those donuts. But by the same token, you know, your quality control is at risk when you franchise everything. Five seconds, Steve. What do you like?

Mercado-Libre sounds pretty interesting. Oh, yeah. That's going to do it for this week's show. Because he's so happy with this question. That's going to do it for this week's show. We will see you next week.