Motley Fool Money - Motley Fool Money: 02.01.2013

Episode Date: February 1, 2013

Research in Motion unveils a new Blackberry. Amazon hits a new high. And Facebook's earnings fail to connect. We discuss those stories and talk with ESPN NFL Business Analyst Andrew Brandt. Learn more about your ad choices. Visit megaphone.fm/adchoices

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We've got a big show. We're going to break down the latest earnings from Amazon, Facebook, Exxon, Mobile, and more. For Super Bowl weekend, we'll talk about the business of football with ESPN business analyst Andrew Brent. And as always, we've got a few stocks on our radar. But we begin this week with the big macro and Ron, really two big stories this week. The jobs report that came out Friday morning, 157,000 jobs added, unemployment at 7.9%. But earlier in the week, the GDP, which I think surprised a lot of people, down slightly,

0.1% first drop in three and a half years. Of the two, which do you think is more impactful? That's too much economics for me, Chris. Is it impactful a word? Is that real? Yeah, I just said it. Okay, okay. I think the GDP headline is more troubling than the reality. It was largely based on the fact that federal spending for military was down 22%. Now, we can't sweep that under the rug because military spending is a big part of our GDP.

However, I don't think that is a trend, at least not to that magnitude. So I think signaling that perhaps we're falling into a recession, which is the definition would be two quarters in a row of negative GDP, I don't think we're there. So I think that's a bit more headline risk than anything else. The job numbers were just good enough to say to the markets, hey, we're not falling back. We're creating some jobs. Unemployment hasn't moved, but the Fed will continue to ease. So don't worry.

Free money. The gravy train continues. Free money for ever. The stock market likes that. James, what do you think? Yeah, at least the shrinking economy was kind enough to produce more jobs. I mean, that's the main thing. I go with a jobs number, not with a GDP number.

Joe? Yeah, and to zoom in, what I really like was the upward revisions from November and December on the jobs numbers, definitely a positive sign. Shares of Amazon hit a new all-time high this week in the wake of fourth quarter earnings. Earnings were much lower than expected. The company lowered guidance for 2013, Joe. It cannot be killed. I was just going to say.

And yet the stock in an all-time high. It skin is Teflon. Yeah, you know, I'm an Amazon bull, but even I would say that was a surprising response. What the market really liked, and I did too, would say gross margins were the best in a fourth quarter since 2001. They jumped four percentage points year over year, which in retail land is phenomenal. Yeah. But they fell short on guidance. They fell short on volumes.

Third quarter volume grew about 40%. It was only 32 this quarter. I mean, all in all, still a great quarter. order, they're growing twice, the rate of overall e-commerce, so strong, but not amazing. Ron, how much of this is Jeff Bezos, the CEO? It seems like he is increasingly one of these almost superstar CEOs that to the point Joe is making, he's going to get the benefit of the doubt. Yeah, I was going to call him Benefit of the Doubt, Bezos, Teflon Bezos, wherever you want to go.

Benefit of the doubt Bezos. You like that? I think it's a lot of it, but also Amazon is a great company, and much to his credit, obviously. But it's producing amazing numbers. It's got a really bright future. So they're willing to both give him the benefit of doubt and to sing the praises of a great company. Joe, when you look at the stock on an all-time high, do you get interested or does it just scare the hell out of you? I think Amazon's going to hit a lot of all-time highs. I don't think that's necessarily a bad thing.

But I personally... They're going to do it without you as a shareholder? No, I am a shareholder. I'm going to be a long-term one. But I would hold out for price below 260. I mean, it's a volatile stock, so you could afford to be a little bit patient and pay, instead of an insane valuation, just a wacky valuation. You got a pretty specific number

there with 260. I'm a nerd. I'm impressed. ExxonMobil's fourth quarter profit rose 6% to just shy of $10 billion, James. Nearly 45 billion in profit for the entire year. Those are just astronomical numbers. But the stock

was flat, Chris. We all want excitement in life, but sometimes it just doesn't work. that way. At least they regained the title of a largest company. They did. They did, but it was kind of a block order. I mean, you know, refining profits were up again. And if you're new to oil companies, they basically make money through your ways. By producing oil,

by refining oil and then by oil price rising. So, well, the price is rising. Production, however, dropped to a three-year low. And that was the big thing is, where are these guys going to get more production? They're going to have to go out and buy more sources of oil. And yet, Joe, this is, among other things,

this is a stock that is an absolute dividend machine. Yeah, they paid 80 billion in dividends over the last decade. So when people compare Apple and Exxon in terms of market cap, there is that other thing you might want to keep in mind. James, does the fact that they keep paying out these dividends, does that get you more interested than anything on the production side? Of course it does. I mean, I love dividends. I wouldn't bet against an energy company long term. We're just going to need more and more energy. It's a company. I wouldn't bet against. I'm just not pouncing right now. Yeah, James is right that they're definitely going to struggle to replace the reserves they have.

Exxon, because it's an older company and very well managed, has low-cost reserve. So their margins are very high, but it's going to be really tough for them to kind of not just replace what they have, but do it in a way that is nearly as probable as what they've done in the past. Facebook's fourth quarter results had something for both bulls and bears. For the bulls, revenue came in higher than expected, earnings per share higher than expected. But for the bears, Ron Gross, operating margins fell. from 48% to 33%. That's a huge job. And at least in terms of the stock, the bears are winning this week because Facebook shares down about 5% for the week.

Very true. My fellow value investor, Joe Maker, is going to jump down my throat for this, but I'm going to say, I don't think you buy Facebook because of this quarter's margins, next quarter's margins, or even the quarter after that. You buy it if you believe Zuckerberg can take 1 billion users and create an empire. Investors call that optionality. Joe probably I call it ridiculous. But it is the reality of if you want to be an investor in Facebook at 50 times EBITDA or 13 times sales, the valuation just doesn't make sense. You have to believe in many different options in future. We have a section of our portfolio for high growth companies with optionality, and we

have a small position as part of that allocation. I'm in a limited position to criticize after just saying that I like Amazon, which is wildly expensive. versus 13 times sales, so I'll give you that. Yeah, well, at least you guys have, you know, profits. But what I would say with Facebook is that what troubles me in terms of the optionality argument is that payments and the non-advertising revenue coming in was flat year over year, which is not what I would expect for a company that has a growing user base.

And in theory, is coming up with new ways to monetize that base. Now, they can come up with more ways to monetize it on advertising. I think they have and they're going to keep going to. But that's something I would watch. And the margins took a beating. I mean, the mobile ads are costly. Yeah, but they're also investing significantly for the future, not unlike Amazon has done, but I don't think Zuckerberg gets the same benefit of the doubt. Yeah, I was just going to say, I mean, it's a slightly unfair comparison only because Bezos has been running Amazon

and running it more successfully for a much longer period of time. That said, it does seem like we're looking at mirror images in terms of the stocks where Facebook is doing better than expected but takes the margin hit. it and the stock gets punished. Amazon, seemingly every bit of news from their quarter was bad with the exception of the margins. And as you said, Ron, Teflon-Bezos gets the benefit of the doubt. The fact that we're talking about optionality is a warning sign, to me. Yeah, well, it's also. Yeah, and when we're talking about a specific number, I like looking at gross margins

specifically because they're the closest thing on the income statement to reflect a competitive advantage. So when you see that widening, that's definitely a good sign. And people saw that with Amazon and they got excited. goes in the other direction, they get scared. This week, mercifully, at long last, research in motion finally unveiled the new Blackberry Z10 smartphone. And Joe, I think it says everything about what people think of the smartphone that shares of research in motion down more than 25 percent this week.

I think you said it all. I mean, you have people out there in the media saying, look, this is make it or break it. It's all riding on this one device. That seems a little bit like hyperbole. And yet, when you look at the fact that there. Their market share globally when it comes to smartphones in the last two years has gone from 20% down to 5%. That's when I think, you know what?

It really is all riding on this phone. Yeah, I think so. If this is not a big hit, they're going to need to just sell the company. Otherwise, it doesn't really have much of a future independently. I mean, the Blackberry tent is going to be a big hit with CTOs because it's got superior security requirements. It's definitely a better hit if you're trying to sell it to the CTO. But the problem is, same thing like we've had at the Motley Fool, where originally we were, were told, you know, we're not going to support iPhones or Apple devices. But when we all just

showed up with them, they eventually had to come around with that in Android, too. And so now the company supports, you know, these other platforms, which are lower security. But ultimately, that's what consumers and employees are demanding and enterprises are having to adjust. And that's definitely a negative for BlackBerry. And our producer, Matt Greer, was the lone holdout at the company. He was. He had a BlackBerry. And then finally, it was our IT people coming to him and saying, you know what, we're not supporting BlackBerry anymore. We're not supporting Mac anymore.

You're going to have to pick a brand new phone. They're changing the name, right? They are changing the name. That makes sense. It sounds like Sony changing its name to Beta Macs. I mean, the BlackBerry, you think of this antiquated phone that it's on its way out. It's like they're – I mean, I guess what else did they have going, right? Right, exactly.

Yeah. If you're going to bet, bet big. Starting next week, it will officially be Blackberry. The ticker symbol is changing from Rim to B-B-B-R-Y. Ron, I'll just give you the last word. If nothing else, Blackberry seems like you. It's potentially a value stock. Do you look at it that way, or do you just want no part of this company?

A value stock has to be in an industry or a specific business that is not in perpetual deterioration for it to work. Otherwise, it's just a trap. And I think this is a trap. Coming up, one of America's worst CEOs is retiring. Boy, are we going to miss him. Stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here in studio with Joe Maeger, James Early, and Ron Gross. Guys, kind of a mixed bag quarter for Harley Davidson. Higher sales of motorcycles in the U.S. and abroad,

but lower fourth quarter profits on lower revenue, James. I know you're a gearhead, so what you make of the quarter? Well, earnings were down 33%. And arguably, they did everything well except to sell motorcycles. It still wasn't great. Harley does have something like half the U.S. motorcycle market, but its customer base is aging, which is a pretty big problem, even though it's gaining market share and expects to ship more motorcycles,

next quarter. So long-term, I'm not a bull. I used to have a motorcycle last time I rode one. I got hit by a school bus, actually. Is that true? It is true. Who was at fault? School bus was. Okay. Was this recently? No, this was years ago. It totaled the bike. It totaled the bike, but I'm okay. But, you know, it was not a Harley. I can't believe you got hit by a bus. He didn't see any. And I was going to speed limit, too. Kaching. Yeah. No, there's this statute of limitations if it's a school bus. Trust me, it sucks. Or not a statute, whatever, some kind of a cap liability or something. Where were we? Anyway, we'll edit this out of post-production. Don't worry. Back to Harley for a second.

James, we were talking about this before the show. When you look at Harley's competition, it's almost entirely comprised of private companies, Viper, Triumph, etc. Whether it is Harley Davidson or just any company in general, does that put a company at a disadvantage because it seems like I would, if I were working at Harley, I would feel slightly disadvantaged, despite the success that the company's had, that their competition is working under a different set of rules. Well, yeah, the private company is not in a fish bowl that the public company is. Public company might have a little bit better access to funding, which could be an advantage. But private company is going to be more nimble. But with Harley, you know, they've got

so much market shares, probably less of a factor with them than with some other company, for instance. Shares at a five-year high? Are you interested? I'm not interested. I am not interested. On Thursday, the U.S. Justice Department blocked Anheuser-Busch InBev's proposed $20 billion purchase of Grupo Medello. When the news broke, shares of both companies fell between 5 and 10 percent. But, Joe, shares of Constellation brands fell more than 20 percent. The beer companies really getting hit. First, what is going on with Constellation brands that they're getting hit that bad?

So to keep it simple, they were going to acquire the full stake instead of the half-stake they have now. for the rights to import Corona into the U.S. And Corona is a huge brand in America and incredibly profitable. So that's why they're getting kicked in the teeth. We talked about this earlier. The Justice Department really, over the last few years, seems to be taking. Flexing its muscles when you consider this, when you consider the fact that Anheuser-Bush's growth over the last any number of years

has come primarily through acquisitions, the AT&T, T-Mobile purchase. What do you make of that? Well, as kind of a free markets guy, I'm not wild about it. But it's not surprising that you're going to see consolidation in these industries because they're low growth, they're capital intensive, and distribution is a big deal for beer. And we've talked about this on the show before, but the economics of making beer are really terrible. You know, it's fun if you're a hobbyist, but if you're trying to sell it, it's really tough to do. And that's why these guys keep merging together. And this is actually, you know, good news for some of the

other players out there, like Samuel Adams or Boston Beer Company, a lot of the private labels or a Molson Coors. But as a consumer, I don't know there were any, realistically, any better off because this was denied. I know this just happened on Thursday, but do you think... Or challenged. Do you think that this ultimately goes through and Constellation Brands gets made whole? I think this could go through, unlike the AT&T-Mobile deal where there were just going to be too many concessions. I think there could be a lot of asset sales here to make it happen.

Yahoo's fourth quarter earnings came in higher than expected, but chairs down around 4% this week. Ron, Marissa Mayer, the relatively new CEO, I think she's getting high marks from just about everyone. But I'm wondering, even though the stock is up under her tenure, it seems like she's doing about everything she can, and it's still not enough to move the needle. Yeah, well, I give her an A plus plus for changing the perception of Yahoo. She's really done a fantastic job. And she's perhaps stem the tide of some deterioration. But we don't have a really good understanding of where we go from here. She said she wants Yahoo to be a powerhouse in mobile, and she wants to use customized content, use partnerships. But there's no real meat on the

bones there. The business, you know, it's a very competitive business out there. So how they make this happen and how they monetize it all remains to be seen. So, I mean, she's doing a great job so far. But she's got a lot of work to do. That was profound. Thank you. How do they make a dent in mobile, Joe, when they don't have an operating system? They don't have a device. What do they do? Pass.

Pass? Yeah, I'll pass on that one. No, I mean, they're in a very difficult position. I think one thing they talked about on the call, which is smart, is that they're trying to just improve the user experience at the point where they actually touch customers. They don't actually power their own search anymore. That's done by Bing and Microsoft. And that's smart, but ultimately they are going to have to move further upstream towards the customer. or either own more relationships or more of the technology.

And right now, it's tough to see how they're going to do a better job on the technology side. So it comes down to how are we going to make more money on the relationships? And again, like Ron was saying, we need to start seeing some traction there. Ron, just last thing when it comes to Yahoo, we talked earlier about Facebook, and it appears, I'm wondering if you see it this way, but it appears that both of these companies, Yahoo and Facebook, are essentially limited in their regard. not obviously in the same business, but it seems right now that both of them are sort of

in this box where they are sort of nice businesses, they're doing what they can, but the growth opportunities really are limited for both of them. Well, it's hard to see, to be honest with you. And this might be a subtle difference, but I think Yahoo has to reinvent itself and Facebook is still inventing itself. And there is a difference to those two things. CNBC, Forbes, and Businessweek magazine are just a few of the business media outlets who named Aubrey MacLendon as one of the worst CEOs of 2012. This week, Chesapeake Energy announced that McClendon will retire his CEO on April 1st. And James, I'll just go to you first.

Shares up about 10% when the news broke. How bad is this guy? He's bad, Chris. I think everybody agrees. He sort of had the board in his pocket, and he's run the company as he wants to. I think he sort of owns the town. which has to be operates anyway. It's just how he is. I don't think many of us here at Motley Fool have a lot of sympathy for him. So for the better. Many being zero. I think this is one case where activist investing really did a good job here as Carl Icon and Southeastern asset management came in and demanded changes to the board and really created these philosophical differences in quotes that Aubrey said is the reason he was leaving. That's a nice

euphemism for saying it's time for him to go, and he's still taking $53 million with him, I believe, as an exit. That's his package? Which kind of doesn't sit well with me. I feel terrible for that guy. Well, again, I don't feel bad for him, but just from an ego standpoint, it seems like it is a little bit of a kick in the teeth when the stock pops like that once you're walking out the door.

Yeah. Well, I'm sure. Do a few more. So that kind of money kick you in the teeth? Yeah, you can actually. All right. Joe, James. Ron.

So coming up, the business of football with ESPN analyst, Andrew Brandt. Stay right here. You're listening to Motley Full Money. Welcome back to Motley Full Money. I'm Chris Hill. It is Super Bowl weekend, so we're going to talk about the business of football with Andrew Brand. He is the NFL business analyst for ESPN, and he joins me now.

Andrew, thanks for being here. Yeah, happy to be with you guys. If the NFL collectively were a stock and I were a shareholder, How would I be doing right about now? How is the business of the NFL? Well, these are salad days for the NFL. It's a nine and a half billion-dollar business and growing. A few things that are portending really good economic health, the NFL.

Number one, you have the most recent franchise sale, the most recent valuation of a billion dollars for the Cleveland Browns, and Forbes had ranked the Browns number 20 overall in their recent evaluation. So you have a billion-dollar franchise, In the most recent sale, you have record television contracts kicking in not until next year, where ESPN and NBC and CBS and Fox have all re-upped, and those deals run through 2021. And maybe most importantly, you have a 10-year collective bargaining agreement with the Players Association. That's your most important partner.

That's your most prized product is the players. They're in place. There's going to be no more stoppages and we no more lockouts, no-whoil. strikes at least till 2020. So nothing to worry about there. Now, there are issues looming ahead. We'll talk about that, obviously, on the safety side. But overall, great health and half the country is going to watch their product on Sunday. If the NFL were a publicly traded entity, it would have to file documents with the SEC listing, among other things, competitive threats. And it seems like right now one of the competitive threats the NFL would have to list

is head injuries. How big a problem are head injuries specifically right now? Is that, in fact, the number one risk the NFL is facing? I would, you know, there's a lot of ways to hit this, Chris, and to a lot of angles, you know, we can get to the liability risk and the money risk. A conceptual angle, this really bubbled up about 2009 when Roger Goodell and the Players Association had D. Smith were called in front of Congress. And those were kind of blistering hearings where they were compared to gasp the tobacco industry for being callous and being lax and not approaching this head injury issue. And statistics started coming out about brain trauma and players that have reached certain ages and dementia and all these things. So that really bubbled up. And since then,

there has been a positive trajectory. I don't think anyone can ignore that. where there's been stepped up enforcement for these violent hits. There has been increased attention on independent neurologists. There's been more protocols, baseline testing, all the things they're trying to do, which a lot of people feel is still not enough, to combat this sort of perception that football doesn't mix well with the brain, especially years later.

One of the things we were talking about earlier in the week, one of my colleagues was out in Las Vegas at the Consumer Electronics Show last month. And one of the big trends in technology right now is sensor technology, sensors that you can put in your home for personal health. And he had footage of football helmets that had sensors built in. Now, on the one hand, that seems like a positive thing that it may be able to detect brain injuries a little bit. earlier, that sort of thing. On the other hand, as you know, Andrew, players are bigger and stronger than ever before. And I'm wondering, you know, where are we in terms of the safety equipment? Because it seems like the equipment's never been better, but the players have never been bigger and stronger. Are we, from a safety standpoint, still where we were maybe 20 years ago?

Yeah, I think we're advanced, but the question is when you start talking about the sensors, are we as advanced as we need to be? Are we at a point where we are using the technology that's out there? The helmet was created whenever, 1940s, to combat skull injuries, and it certainly does a good job of that, with its protection, with its coating, with everything that's a design for a helmet. But there has not been anything to my knowledge that, can prevent shaking of the brain, which is a concussion.

So how do you prevent that? And what you mentioned seems to be getting some attention, these sensors, where in some ways you're on the sideline with monitoring G-force, and you see if the guy even by the second quarter has reached a level of G-force where it's becoming dangerous, you take him out. Now you throw that whole paradigm into the competitive. competitive issue. And what if reaches that G-force in the third quarter going into a tight fourth quarter? Do fans want that? Do teams want that? Do leagues want that? Does the union even

want that? So this all has to be wrestled with. You're dealing with an inherently violent game that they're trying to make safer in every way they can. The question is how? And you have this complete dichotomy going on right now where players, more than anyone, are objecting to what I'd called the sissification of football, yet former players are suing the NFL about football being too violent. Sometimes you're not sure where to come out on this. It's an inherently violent sport. They're trying to make it safer, but I keep saying inherently violent. How do you make a violent game safer? You're listening to Motley Full Money talking with Andrew Brandt, NFL business analyst for ESPN. So where do you think we're going 15, 20 years from now? Is the NFL,

20 years down the line going to look more like flag football or the pro ball, or is it going to go in the direction of rollerball, the movie from the 70s with James Kahn, where they basically said, you know what, it's a really violent sport, and that's part of what's made it the number one sport in America, and we're just going to keep going down that path. Hard to believe football will look differently. It has looked this way for so long, and yes, players do get. get bigger and stronger. And in 30 years, saying, hey, wow, these players are really bigger and stronger

than they were in 2013. I think where we're going is increased testing and increased knowledge. We sort of now have studies about brain dementia inactive players or in active living people to brains that have been donated for research after death. And as this science and technology catches up, we can transfer that knowledge into protection. whether it's sensors that you brought up, whether it's some other kind of technology. You know, I think beyond all this, Chris, I just hope we can protect players from themselves. Having been an agent, having been a team executive, I just worry because players know you start making an issue of a head injury, you're going to sit out, and if you sit out, you may not make the team.

If you may not make the team, you may not make any money. You have to move on to something else. And that's a problem. We're not talking about stars here. The average player knows if he's out with a head injury that could affect his viability to play for his career. You're listening to Motley Full Money talking with Andrew Brandt, NFL business analyst for ESPN. As you mentioned, you've worn a bunch of different hats in your career. You've worked in the front office with the Green Bay Packers.

You've consulted with the Philadelphia Eagles. You've been an agent. At the Motley Fool, we focus on money and investing. And we hear all the time these horror stories about athletes just squire. wandering and their money, the millions that they've made in going bankrupt. Is there a common mistake? Is there a single sort of biggest mistake that players make with their money? And if so, what is it? Yeah, it's a great question. I've seen it a lot. I think the generic mistake everyone makes is what I just talked about with concussions.

They think it's not going to end. They're invisible, they're young, they think it'll go forever, they think we'll have an income stream at that level for more than they will. And they want to buy, and the hardest thing from an agent, and even from a team point of view, is trying to encourage delayed gratification. Young players want it now. They want the house, the call-hung with a big contract. They want to buy a house. They don't want to rent a house.

They want to buy a nice car. They don't want to start. And they want to get there because they see their peers doing it, and they see this, I've been waiting, you know, how many years to get the house. to this point. Now I want to do it. The problem is, and I've dealt mostly with football, unlike basketball and baseball, as people should know, these contracts are not guaranteed. And you may have a $4 million number on your contract next year, and that can turn to dust. Just to figure out how quickly it goes, I always tell guys, it's not what you make, it's what you keep.

I tried at the Packers very hard to get guys to take their salaries year-round, as opposed to only the 17 weeks of the season, which is the way the contract structured, very few would do that. I just want to encourage balance spending throughout the year. Very few. They want it now. So how do you instill a deferred gratification mentality? That's the hardest part.

You write for ESPN, but you also teach at Wharton. You teach at Villanova Law. I'm curious, what is the mindset of the average student that you're dealing? with these days with respect to sports business in general. Is there a greater interest now than there was maybe 10, 15 years ago? Do they have the same types of concerns regarding the future of sport? Because while the NFL certainly has an uncertain future with respect to the safety concern, there are basic solvency issues with other professional sports like hockey. But I am curious, What's sort of the temperature of the average student you're dealing with right now?

Well, the numbers, my Twitter, my email about getting into sport. I say guys, mostly males, want to get in the agent business. And I try to tell them that it's not all glamour, my profile guys that are demanding. And it's a lot, you know, 80% of that job is recruiting. And I guess what I tell students is try to separate yourself, try to find that special thing about you that separates you from the, pack, the worst thing you can do with a sports employer and say, I love sports, I stay up all night watching Sports Center, and, you know, that's a given. It's a given that you love sports. It's a given that,

you know, you've seen every game Derek Cheater's ever. How are you different? That you've probably talked about is just that it's becoming so popular in sports now is analytics. So you have statisticians getting into sports. There's a growing area. Again, and not as sexy as running around with high-profile athletes, but a growth area. Do I have this right that you were among your clients when you were an agent? You were Ricky Williams agent? I was.

I started working with Ricky Williams when he was a minor league baseball player in between summers at UT at University of Texas, and then he course blew up as this incredible college football player. Heisman Trophy, the whole thing, and signed him, and then I was running around with a rock star all over the kind of, country. But right before the draft, he decided for reasons that I had to respect that he wanted to go with a guy named Master P. I'm with Ricky as his watershed guy. And he moved to P and I moved to Green Bay. And that's where I went to the Packers.

Do you ever wonder how it would have played out differently if he hadn't dropped you as his agent? Yeah, I mean, I try not to sort of look back that much. But it was. was basically fired by this client. I really liked him and really do. He's one of the more interesting athletes I've ever met. Still is. From my experience, 25 years around pro athletes, it's rare you get a guy that can talk about a ton of things besides sports

that most of his friends were not and has interest in things like, you know, wonderlust for travel and yoga and natural healing, you know, That was Rick. We will wrap up with a round of buy-seller hold. This is more violent than professional football, and it's got a rabid following. Buy-seller-hold mixed martial arts. Bye. I see, again, I'm around a lot of young people, and I see the effect it has on them.

It's hot, it's exciting. It's got a boxing. You work for the Green Bay Packers. This guy is one of the team's all-time greats. Buy-seller-hold, another comeback by Brett Farve. Well, you live through every year of whether you can play a cell. That's a strong sell, okay. This is an ongoing source of debate when it comes to athletics.

Buy seller hold paying college athletes. To believe that, how do you translate it down to the third string tackle or the women's volleyball player or the men's rest? So I'm going to give it a small buy with limited. And finally, she was just here in D.C. for the inauguration. will be performing at the Super Bowl. Buy seller hold, Beyonce. I'm buying. I was there yesterday at the press conference. It was the most crowded press conference at the Super Bowl.

Just, you know, these sports writers watching Beyonce up there. Strong buy, lip-sinking or not. When he is not molding young minds at Wharton and Villanova, he's writing about the business of the NFL for ESPN. Andrew Brandt, thank you so much for being here. Pleasure, Chris. Coming up, we'll give you. an inside look at the stocks on our radar. You're listening to 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're here. I'm Chris Hill, joining me in studio once again, Joe Magar, James Early, and Ron Gross. Guys, before we get to the stocks on our radar, one bit of news for any college students out there who are interested in investing and finance, the Motley Fool's blog network has started a campus challenge whereby any student interested can write for our blog network on behalf of your school. We've just kicked this off. We've got students from Georgetown, University of Texas, Cal Berkeley, Tulane. You can earn money. And to find out the details, just drop an email to blog at fool.com.

That's blog at fool.com. We just started the campus challenge. It runs through March 7th. And it culminates in a live taping of the Motley Fool Money Radio show at the Kogod School of Business at American University in Washington, D.C. So exciting. Yeah, we got to dress up for that one. We'll be there. All right, Ron Gross, a stock on your radar. And we'll bring our man Steve in to hit you with a question.

All right, Steve. I've got an arbitrage opportunity for you in American Greetings, ticker symbol, AM. There is an acquisition offer on the table from the CEO and his family for 1750. The stock is 16. The street just doesn't want to recognize and close up that gap. You can make 9, 10 percent easily in a few months. If the deal falls through, I think the stock is $16. still worth 22, so you'll do even better.

Steve, question? Where do they stand in the e-card business? Because if there's one thing I love, it's a good e-cards. They have multiple assets in that regard, some for free, and somewhere you pay. James Early, your stock? I don't know if I can top quick money like Ron Gross is offering, but I will go with Cisco systems. Sometimes you just get tired of recommending the same regular dividend-type stocks.

So this is a tech stock, which is kind of cool, 3% yield, 75% to 80% market share or thereabouts in switches and routers. This is the core business. Internet use continues to grow. This company is disciplined and its use of cash and over 30% upside by my model. Steve, question about Cisco systems? What can we learn from the FlipCam debacle? Sometimes acquisitions don't go over so well, Steve. And sometimes you just keep making bad acquisitions. As a long time, Cisco shareholder. Yeah, we've seen that movie over and over. Joe McGar, we got about a minute left. What's your stock this week? Chubb, ticker is CB. It's a conservative,

well-run insurance company. They cover a lot of different things on the business side and personal. They pushed through some pretty strong price increases yesterday, which is great, which has me excited about a lot of insurance companies. Shub in particular had a terrible quarter because of Hurricane Sandy, but overall, it's a phenomenal insurer over the long-term, great business. Someone in an attractive price right now, 1.3 times book, not a great price, but an attractive one for such a good business. Steve Bruner, what do you think? What's the possibility that beach properties will be uninsurable in the next 10 years? It's definitely getting very expensive to ensure them.

And if you're thinking about buying beach property, factor in the cost of that. Steve, American Greetings, Cisco Systems, Chubb, you got a favorite? Would you like to beat James' model? I don't know. I might have to go with American Greetings. It does sound like an arbitrage opportunity, which is glorious. And as Steve mentioned, he's a sucker for a good e-card. Joe Mager, James Shirley, Ron Gross. Guys, thanks for being here.

That's going to do it for this edition of Motley Full Money. Thanks again to our guest this week, Andrew Brandt, Business. analyst for ESPN. Our engineer is Steve Brodo. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.