Motley Fool Money - Motley Fool Money: 09.12.2014

Episode Date: September 12, 2014

Apple introduces a smartwatch.  Lululemon reports fashionable earnings.  And Activision Blizzard meets its Destiny.   Our analyst discuss those stories and share some stocks on their radar.  Plus, we talk with Adam Tanner, author of What Stays in Vegas:  The World of Personal Data  - Lifeblood of Big Business - and the End of Privacy as We Know It. Learn more about your ad choices. Visit megaphone.fm/adchoices

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From Motley Fool 1, Jason Moser, from Motley Fool Income Investor, James Early, and for a million-dollar portfolio, Ron Gross. Thanks for being here, guys. Thank you, Chris. We have got the latest on retail stocks, grocery stocks, video game stocks, and more. We will head to Las Vegas to learn how the casino industry is using big data to bring back customers. And as always, we'll give you an inside look at the stocks on our radar. But we begin with the biggest fruit company in the world. This week, Apple unveiled the much-rumored smartwatch that everyone's been waiting for.

They also introduced two new versions of the iPhone as well as a mobile payment system called Apple Pay. Ron Gross, a lot of stuff coming from Apple. A lot of stuff. What is the big headline for you? These things always worry me because they always overpromise and underperform, and then it's another one of those where they just didn't get it done. In this case, I liked what I saw. I think the stock has responded well. To me, the biggest deal is the larger iPhones. It brings people back into the iPhone family who need the bigger phones that they just didn't have. And we need

that to see the growth to support the stock. But then the other things are what I'll put in the interesting category. Payments are really interesting to me, not because of the revenue or the profits, I think, that will drive down to the bottom line, but because it strengthens and widens the ecosystem, if you get merchants all around the world or around this country, iPhone friendly, that's a big deal to support that system. I predict success for the Apple Watch, just because I predict failure internally, and I know that I thought the iPad was going to flop. Internally, you mean within yourself? Within myself. Yeah, I couldn't understand how somebody would buy an iPad. So likewise, I can't really understand what somebody would buy. I'm a little

underwhelmed by the watch. However, like, I'm sure that the world is moving towards wearables. I'm fairly sure I can make that bet. And this is the first salvo that Apple is making in that. And it'll be an evolution. Five, ten years from now, I think we'll be thinking differently. I think that's a good point. Salvo, huh? Salvo, yeah. It's the first time. I saw where they sold out of the six plus. So I think to Ron's point there, obviously, there was a market for the big screen phone out there, and that's the proof right there. It's already sold out. Yeah, I think we had talked about this earlier in the week, and I was prepared to be under-impressed by this watch offering, and they scored there like, I am under-impressed, unimpressed, rather. I mean, it just

wasn't something to me that I almost feel like they did this because it's what was expected. I would have been more impressed had they come out with something completely different, like, hey, you know, you thought we were going to bring a watch to the market, but no. We're also jaded nowadays. You could get a computer. that you can wear on your wrist that has power, more power than we could have ever dreamed of. And we're like, ah, we're not that impressed. But it's interesting because this was a two-hour event. And for example, when talking about Apple Pay, Tim Cook, the CEO at Apple, was very mindful that security was on everyone's mind.

And he spent a lot of time talking about the security of their mobile payment system. On the flip side, though, Jason, when it came to the smartwatch, there was no mention whatsoever of how much battery power it had. And in the press availability they had after the event, that's the first thing the reporters were asking, well, wait a minute. He didn't talk about battery power. And lo and behold, it's a watch that you have to charge every single night. Right. And that's a good point. I mean, the first question we all ask is, what is this watch going to do for me that my phone doesn't already do?

And really, there's nothing there. I mean, other than just a few little biometric kinds of things. And maybe, you know, there are health nuts out there that'll want that. That's fine. I mean, I looked at this and I thought, you know, this was the first time Apple brought a product to the market where I, I absolutely have zero interest in getting one at all. Like, if you gave me an Apple, I'd literally give it back. I don't even want it.

I wouldn't wear it. So to me, I think this is going to be interesting to see sort of the evolution of wearables. I think this is the first effort if, you know, it's an iteration that will continue. He said it first. I'm going to steal that word. But I think it is something they will use this to get better. I think they'll get feedback from customers. Do people really, what extent do people buy Apple products for the functionality versus the fashion?

Well, I think it's a good question. Samsung phone, you get a better computer, you get everything a little bit. I mean, Apple's good. It's certainly up there, but it's as much the image as anything else, right? Right. And I mean, I think that's the point, really, because at some point you have to say, well, this better do something that my phone doesn't do because it's tethered to my phone. And I have to have that phone in order to use the watch. It certainly limits their market opportunity there because we know that the world runs on Android, not on Apple. Ron, I'll wrap up with you on the stock, because certainly we saw a little bit of ripple

effect, certainly when it came to mobile payment, eBay, parent company of PayPal, their shares dropped about 6% from the time the event started to the following morning because people are looking at Apple pay as a threat to PayPal. But when you look at Apple, the stock, how does it look right now? Stock's about 101 right now. We have it fairly valued at about 107 prior to this announcement. We're firing up the Excel spreadsheet just to take another look. But as of now, we're at 107, 110 around there.

Shares of Lulu Lemon Athletica up 15% this week after second quarter results were better than expected. Was it a good quarter? Was it low expectations or a bit of both? I think it was a little bit of both. I mean, you've got to love the power of low expectations, right? And they certainly benefited from that tailwind. But, you know, I think that this was a quarter that shows that this Lulu Lemon ship is not sinking. I think there are some good indicators here that this is a company that's in a bit of a turnaround phase. I think it was mismanaged for a long time. And I think that Laurent Pot Devon is doing some good things to get this brand back in order. The first thing I go to is the direct-to-consumer sales. with these retailers, and they did not disappoint there. Direct-to-consumer represents more than 16% in their total sales. Now, that segment grew close to 30% for the quarter. You know, you compare that to something like Under Armour. Under Armour grew that segment 38% for the quarter. It represents 31% of their sales. So I think that shows there is still some room for Lula Lim to get better in that segment. But, you know, the stock was really, there was a lot of, there was a lot of pessimism

baked into that stock price, which explains the pop. And I'm still cautiously optimistic, for these guys. Alta Salon, cosmetics, and fragrance. Not exactly a household name when it comes to business, but the beauty products retail company certainly got Wall Street's attention this week. Second quarter profits came in higher than expected, and shares of Alta Salon up 20% on Friday. James, you're a stylish guy. What do you think of this? Emphasis on ish. You got to give credit we're creditors to do it. And by the way, whenever I think of this company, I want to say ultra, But I guess they left the R out for savings or something. But, you know, I read an interest, comps were up 9.6%, by the way,

compared to a 5.7% consensus. But there was a Market Watch article citing some kind of, I think it was a co-an analyst saying that Ulta has the highest customer satisfaction of any brick-and-mortar store they cover it, like 86%. So it's just amazing how rabid these fans are of these products. But, hey, you know, give them credit. Now, this is a volatile stock. They've had a similar smackdown at the end of 2013 by sort of a roughly similar percentage drop, and now they're back up.

So it's risky. Yeah, I think I would agree with that. There's a lot of growth built into this stock price. We actually sold it, I guess, unfortunately, depending on how you look at it, a while back when we saw growth slowing. And if growth slows, the stock price is not supported. But these numbers are pretty stellar. The margins on cosmetic products are incredible. Yeah, and they're supposedly recession-proof as well, too.

alcohol and cosmetics. But do you like when women wear a lot of makeup? I mean, I don't. I think makeup is advertised to two women. I just think it's an honest, honest. I'll go on record saying I would vote for no makeup or at least less makeup. I would too. This is compelling.

See, James appreciates natural beauty. Moving on to groceries. Kroger's second quarter profits up nearly 10% and they also raised guidance for the full fiscal year. That's a good combination. We like to see that, Jason. So why did the stock dip this week? Well, I think this number one, I mean, this is a pretty predictable business.

I mean, these grocery stores run on really razor-thin margins, and they are fairly predictable in the repeat sales. You know, they just sort of a known quantity at this point. I think we're in a bit of a new phase here with the grocery business, too. I mean, we're seeing a lot of these sort of smaller plays in something like you look at Whole Foods or Trader Joe's, Wagmans, the Fresh Market, all these other little concepts out there that are starting to up their game. offer more of an experience, you know, better products, the organics, the naturals, and things like that. Kroger certainly plays more towards the value side of things. And I think that's why their acquisition of Harris-Teter was wise, because it does give them sort of, you know, a step into that demographic

where they're competing a little bit more against Whole Foods and those types of stores directly. You know, the stock has had an unbelievable last five years, up 150 percent just killing the market. And there is going to be some growth. I think it's going to have to be via acquisition, than anything else. And so I think it's a stock that was priced around 18 times earnings. It doesn't yield a very strong dividend at this point. So I just, I think a lot of the success was already baked into it. Coming up, what's better than one piece of advice? 300 pieces of advice. We'll explain. Stay right here. This is Motley Full Money. Welcome back to Motley Full Money. Crystal here in studio with Jason Moser, James Early, and Ron Gross. Apple was not the only California-based tech company

with a big product launch this week. Activision Blizzard on Vellon. their latest video game, Destiny. It cost a reported $500 million to make. Ron, they got big franchises already. Call of Duty, World of Warcraft, Skylanders. Is Destiny going to be the next big thing for them? It appears it will be. It's the largest launch that they've had in history, and they keep doing that.

Each time they launch something. It seems like every launch is the biggest one ever. It's really amazing. This is not an easy business. It's similar to the movie business where you have to keep. reinventing the next blockbuster and they're doing it. They're doing a great job. Stocks up 30% this year. We own it in a million dollar portfolio and it's done really well. And you mentioned some of their other franchises. We have new releases coming for Skylander, Call a Duty War of Warcraft.

There's a lot more coming. So this is the spike they need to get it done. Keep that growth moving forward and they're doing a great job. I think it's interesting because we talk frequently about things like people lining up outside a store, sleeping. on the sidewalk overnight to get the new iPhone or the new gadget or whatever. This was a game that they released at midnight Pacific time, 3 a.m. Eastern Time. We have colleagues here at the Motley Fool who set their alarm clocks for 3.30 a.m. so that they could wake up and download. Are they in the tech department here?

I'm not going to say. This week, McDonald's submitted a filing to trademark the term McBrunch. I guess they did that with our friends down the block at the U.S. U.S. Patent and Trade Office. James, McDonald's just had their worst monthly same store sales drop in more than a decade. Does this, one, is this going to help? And two, does this give us an indication of where they think they need to go to boost sales? Anybody who's over 35 will get my analogy, McDonald's is starting to remind me of Melrose Place. I used to watch 902 and a little bit Melrose. Before Heather Locklear joined? This is the problem. So Melrose got desperate for

ratings and somebody was getting blown up every other episode like find out who dies next time I mean come on even even I'm above that after a while I just had to stop watching so the fast and greasy segment is really struggling it's just no doubt so so McDonald's is is doing what they can know it's true who hasn't been to McDonald's and gotten shut down for for breakfast because you missed the the time slot it's ridiculous right but I think this is not going to cover up the band-a-the-boo I don't think that tacking on a Mick in front of something necessarily communicates quality in this day and age, right? I mean, McDonald's played on their brand for so long, and that was a big advantage.

I think that today, it's almost becoming a weakness now. The fact that we're sitting here making fun of the McBrunch, I think, is testimony to that. And I'm sure our listeners probably can relate to what we're saying, too. Well, sticking in this same industry, one of our listeners pointed out Burger King's latest menu option in Japan, which is something referred to as the black burger. It's, and the photo is amazing because the, imagine a burger where the buns are completely black. They've been darkened with bamboo, charcoal.

It looks like Batman. The burgers are topped. The burgers are topped with a sauce with squid ink in it. The cheese is black. Black dairy just does not seem appealing. Well, I mean, this is a very cultural thing, right? Black dairy, I think mold, right? It's for Japan only, right?

And Burger King says, look, this is the third time we've done this, which indicates to me maybe this is their version of the McRib. I don't know. I think maybe they look at the McRib the same way we're looking at this. For the 10th consecutive quarter, Radio Shack posted a loss, shares down more than 25% this week. They say they are exploring options, including a sale or an investment of some sort. Who's going to give them money, Jason? But hey, listen, they're nothing, if not consistent, right?

I mean, that's failure 10 consecutive quarters. Let's not sneer at that. You know, we give Radio Shack a hard time here. And, you know, I was watching this past week how the stock played out just based on the headlines of, oh, wow, there may be a cash infusion. They may get a hold of some cash. The stock sky rockets. And I'm thinking, nowhere did I see anyone asking that question, well, what do you think they're going to do with that cash? Because that's really the point, right?

It's not getting it. It's what are you going to do with it? And we were talking earlier in the week about this. You know, their cash burn has been nothing short of phenomenal. When you look at 2009, in 2009, they had $908 million in cash on their balance sheet. Today, they've got $30 million left. I'm not thinking that throwing a little bit more cash their way is necessarily the solution, but I could be wrong. They're down about 95% over the past three years.

Ron, this is a stock that is absolutely in a category. we like to call deep value. Deep value trap. And you run the million dollar portfolio, but you also run a service, MDP, deep value. Yes, sir. Any interest in shares of Radio Shack? None, because one of my criteria for that service is I don't pick stocks that are going out of business. And this is probably going out of business.

Although, in our prediction show at the beginning of the year, I did predict that Amazon would buy best buy, by Radio Shack, and use them as a delivery site. And I think if memory serves me correctly, we categorize that as make a reckless prediction. Yes, it was out there. We'll say. 89 cents to share, Ron. We'll say.

12 and a half percent today. I'm feeling a new service here. It's a shorting service, deep value trap. I mean, there's something there, guys. Let's talk after. But to that point, given Jeff Bezos track record as CEO of Amazon, given the deep pockets that Apple has, and it would be a drop in the bucket for them to buy Radio Shack, and maybe they're going to open more Apple stores just for the real estate. If either one of those

companies bought Radio Shack, would it change your opinion? Of Radio Shack? As if they change the business model completely, sure. It's a hundred million dollar market cap. It's pretty affordable, right? Yeah. Darden Restaurants is the parent company of several restaurant chains, but it is the olive garden chain that accounts for more than half of Darden's revenue. First quarter same store sales at Olive Garden were down, but I'm happy to say that help is on the way.

The Starboard Value hedge fund is Darden's second largest shareholder. This week, they came out with a 300 slide PowerPoint presentation on how Olive Garden can improve their business, and it did include tips on how to cook pasta. Ron, you know these folks at Starboard. Back of the day, I knew them quite well. I've done a number of transactions with them. They're actually great guys. Listen, if you owned 8% of a company that was struggling, you'd put together a slide presentation, too, as many slides as you needed to get this done.

They're trying to take over the board. The company's offered them four board seats. They want all 12 board seats replaced. They really want to take control of this company. They certainly have a lot of suggestions. Some of them more, or should I say less funny, such as introducing technology and improving sales of alcohol and improving food quality and brand image. other ones a little bit more funny like cooking pasta and breadsticks. But at what point do they undermine themselves?

Because they did include advice like add salt to the water when you're making pasta. Limit the number of breadsticks. I love those guys. But that's a little bit funny. But is that Olive Garden's proms that they're losing money on breadsticks? I would say that I think we're highlighting that, but I would imagine the presentation did not. I got news for you. We're not the only ones highlighting that.

If you just do a news search on Darden, you'll say that there are plenty in the media. I will say my former hedge fund in New York is also an investor alongside Starboard in this as well, Barrington Capital. And I think these guys really do see the potential to enhance shareholder value, as we like to say. And Starboard thinks they can get $20 per share or more if these things are implemented. James, you're a healthy person. You're anti-carbs. You have to be completely on board with this limit breadsticks. Yeah, yeah.

I mean, the first place I would go if I wanted to pack on weight is Olive Garden and just load up on pasta. All right, guys, we will see you a little bit later in the show. Coming up, we will dig into how big data is driving innovations in the casino industry. We're heading to Las Vegas. Stay right here. This is Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hilt.

What happens in Vegas stays in Vegas. right? Not so fast, says our guest this week. Adam Tanner is a fellow at the Institute for Quantitative Social Science at Harvard, and he's the author of the brand new book. What Stays in Vegas, the World of Personal Data, Lifeblood of Big Business,

and the end of privacy, as we know it. Adam, thanks so much for being here. Thank you for having me. I don't think I'm alone in being someone who sort of expects that my data is being collected. Certainly Facebook, Google,

Amazon. They know a lot about us. I think a lot of people are used to that. And I'll just use myself as an example. I'm not going to Las Vegas every year. So, you know, why should I be worried about what casino companies like Caesar's entertainment are doing? The book is really about the world of personal data. So Las Vegas is an interesting form and to look into how it works. And the book goes all sorts of other places through the United States. But Las Vegas is interesting for a couple of different reasons. One is that public records are the basis for a lot of the data brokers and for the marketing that takes place. And so in a place like Las Vegas, more people are married there than anywhere else. And that's an important

component of records that marketers can then get. In Las Vegas, there's very sophisticated use of loyalty programs. And you may not be a member of a loyalty program in a casino in Las Vegas, but you are likely a member of an airline loyalty program or a supermarket one or a car rental chain or hotel and so on. And so the sophistication that they've shown in Las Vegas in this department is pretty advanced, and it's interesting to look at how they've done it and what kind of level of detail that they have on individual customers. In other areas, Las Vegas is also pretty advanced areas such as video surveillance. A big casino might have 3,000, 4,000, even 5,000 cameras looking both of. that the customers and at the staff.

And so there are a lot of interesting issues that spill over across whatever part of the United States or even worldwide you live in. A lot of that's in play in Las Vegas and elsewhere. So you mentioned the level of detail. What does a casino like Caesars know about someone in their loyalty program? So firstly, I should point out that you volunteer to join the program or not. the overwhelming majority of people do, and only then does the data collection begin. So if you walk in, you have to put your cash on the table, you don't join the program. You can gamble anonymously.

They won't know anything about you. But if you join the program, lured by the free drinks, food, rooms, maybe bonus chips, and so on, they will know an incredible amount of stuff that you do in the public spaces in the casino. So they will know to the exact penny, how much you've been playing on the sloth. lot machines, how long you've sat there. They may know that you've sat there for three hours and 12 minutes. You've lost $547. The statistical odds say you should have lost $312, so you're having a very poor night. They may know that you like to eat steak dinners because you've often gone to their steak restaurant, and to offset the pain of that big loss that you're having, they may send

over your favorite hostess with free tickets to the restaurant so that you should. still think that that's a great casino. And that's all based on personal data that they've gathered about you. Now, one of the things you write about in the book is something you call the Goldilocks balance. Casinos trying to strike the right balance when they are offering customers' incentives. What are some of the things that go into that determination? Well, because there are these incentives already for quite some time in terms of free meals, free rooms, and so on, many guests come to expect that they should be able to get some kind of incentives for their business. So what the casino needs to do is determine who are the valuable customers. One of the interesting things that

has been done with data that wasn't possible in the past is to quantify over time who are the valuable customers. And for example, they've discovered that some people that traditionally were not thought of as big rollers or important casino customers turned out to be very valuable. So it may be a retired a woman who goes very frequently to a local casino and spends $80, but comes 50 or 100 times a year. Traditionally, that person might have been under the radar, not gotten the special attention from the management, but someone who came and splashed $1,000 or $500 in a single night would. So this scientifically measures who are the most viable clients and determines who is supposed

to get the benefit. So in the olden days, there was a lot more discretion. The manager might come over. The head of the section of wherever you were would say, hey, kid, you've got class. I'd like to give you this coupon for the show tonight. Nowadays, it's much more based on the data as to who are the valuable clients. You're listening to Motley Fool Money talking with Adam Tanner, author of the new book,

What Stays in Vegas, the World of Personal Data, Lifeblood of Big Business, and the End of Privacy, as we know it. You alluded to the high rollers, the whales, as the casinos like to call them, the biggest customers. What are some of the more creative things that casinos are doing to keep their whales happy? Because I totally hear you about how someone who comes maybe once a week is very valuable over time. But let's not kid ourselves. They also want the whales. Right.

And, of course, they want the whales not only on the one occasion, they want them to come again and again. And I've looked at Caesar's, the largest casino company, because they have a CEO, Gary Lovman, who comes out of the world of academia. He was a former junior Harvard Business School professor, and he developed the concept, or he was made famous on this concept of lifetime value of customers. So someone who buys a slice of pizza for a dollar or two is not worth very much right now, but a lifetime, they may be worth $7 or $8,000. dollars and if you buy a car now for fifteen thousand dollars that's fine but over a lifetime that may be hundreds of thousands of dollars so the whole concept was to build a rewards program and build a system of incentives that would get your client from that that the retiree coming frequently to your whale

coming frequently to you to you back again and again and so in the case of the bigger spending casino players the incentives or the rewards would just be much larger you may send a a private plane to go pick up the person, you might have their favorite hoses and sweets and foods and whatever this person wants to bring their business, you may roll it out. And if you're very sophisticated into doing it, you can win their loyalty over the long term. And that's what's the most valuable for a casino. Yeah, Gary Loveman's a pretty interesting person because he's got a doctorate in economics from MIT,

and that's not really the image of a casino boss that I've come to expect from watching Martin Scorsese movies. That's right. The town has changed a lot in recent decades, and there are many sophisticated data analysts in many of the leading casino companies. And so that old personal style where the Coupier would come by and slap your back and say, you know, how's it going?

That that personal style where the manager might have the discretion is a thing of the past, and now it's based on sophisticated business and So that's what Gary Loveman and some of the other people there at Caesars and at some of the rival companies have brought to Vegas, which is very different from the path. You're listening to Motley Full Money talking with Adam Tanner. His new book is What Stays in Vegas, The World of Personal Data, Lifeblood of Big Business and the end of privacy as we know it. What surprised you the most when you were working on this? What surprised me is more the scope of so many people collecting data.

how many, how vast it is across many different layers. And maybe to mention the most surprising data collector of all. I had the opportunity in this past spring to meet Jimmy Page, the former Led Zeppelin guitarist. Now, if you go to Jimmy Page.com, his website, to get beyond the very front splash page, he asks you to give your address, your email, and the exact date of birth. and a few other pieces of detail. So if even Jimmy Page is collecting information about you, there are a few businesses that are not. And I think in totality all these kinds of businesses and the broad picture that you can draw of someone from many different sources of information is quite extensive.

So what should we be expecting in terms of innovations over the next few years from the Vegas casinos? Well, I mean, the Vegas casinos are just one. one of a series of examples of people who are collecting it. And I think more and more you're going to get ever more detailed portraits of consumers. There's one aspect of the model we haven't talked about. I did want to mention, and that is that the casinos not only give you a choice whether or not you're going to share the data, but they give you the guarantee that they are going to keep the data and not sell it to others or rent it out to others.

And that's a contrast with many other companies who are haziest to what they do with data or indeed spread it to others. And I think that's an innovation or transparency about what they're doing with the data that may come to influence others. I think on the long term, those companies that are most transparent about what they're doing are going to win the long-term trust. And so I think they'll grow more sophisticated in Vegas, but at the same time, some of these models of openness and transparency that are not always true in today's economy, that stuff that may inspire other companies and other sectors of the economy. So given all the research you've done and all the writing you've done with this book,

how has this changed your approach to walking into a Vegas casino? What do you know now about going into a casino that you didn't know then? And to what extent of any, is it going to change what you do? Well, again, as I said, Vegas is just one part of a vast data-gathering, economy. And my approach, what I'm trying to do in the book is to encourage everyone to think about it for themselves. Now, there may be some people who are very comfortable in sharing data about all sorts of things in all sorts of forms on the internet and elsewhere. There may be other people are more cautious and want to preserve certain aspects of their life and keep it private. I think just having studied this for the last couple of years and talked to many businesses and profiled them in my book, What's Day's in Vegas. I just, encourage people and myself give thought to when I share data, how I share it, and sometimes even read the privacy policies of companies as dull as they may be to try to figure out what happens with the data that I and others share. Oh, come on. You're going to make me read the

privacy policy? All of that tiny type at the bottom? Can I just scroll to the bottom and click the box saying, yes, I accept? Well, you can go to, there's a part what we do with the data, And that's really the key part. And so you can scroll close to the bottom, get to that part, and try to figure out what they do with your data. And that may then speed you down to that other part. It would be nice if there could be something like a nutrition box where a nutrition label box. We quickly say what we do with the data and have a quick summary of what goes on. And then you could make your speedy next up the click box at the bottom.

But some of these privacy policies are 5,000 words or more. which is quite an onerous read. And I think companies can do a lot more in simplifying at least a summary form of that so that we'll all be informed about what they're doing and then click with some knowledge really of what's happening. I know you covered a lot of industries in this book, but I am curious because I know that you did spend a decent amount of time in Las Vegas. So for our listeners who are looking for maybe a couple of tips, the next time they go to Las Vegas, it could be something in a casino,

it could be a restaurant. Just a couple of Vegas tips from Adam Tanner. There are many fascinating things that I found in my research beyond the strip as well. And so many of the restaurants that I came to most appreciate were further on beyond the strip. And there's a whole very vibrant community of Las Vegas life that has nothing to do with the strip where tourists are. So I think that's an interesting place to explore as well. It's also quite interesting. the vast infrastructure that exists to support the strip and all that you see, you know,

giant mounds of laundry and giant mounds of all sorts of supplies pouring into the casinos to keep this 24-hour wonderland going. And so if you can catch glimpses of that and, you know, enjoy that world as well as the regular Las Vegas world of the locals. I think that's, for me, the most satisfying experience. The book is What Stays in Vegas, the World of Personal Data, lifeblood of big business and the end of privacy as we know it. It is available everywhere that books are sold. Adam Tanner, thank you so much for being here. Thanks very much for having me on. Coming up, we'll give you 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 yourself stocks based solely on what you hear. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, James Early, and Ron Gross. You can always email us. Radio at fool.com is our email address. Radio at fool.com. And you can also follow us on Twitter.

At Motley Fool Money is our handle. And guys, this week, there was one business story that generated more email and more tweets from listeners than any story we've seen in a long time. And I am referring, of course, to Olive Garden's promotion of the never-ending pasta pass. In case you missed it, the pass gives you seven. Seven weeks of pasta salad and soft drinks for $100. Olive Garden sold a thousand of them. They did this in less than an hour.

They had something like half a million people try and access the website, which of course crashed. And our listeners wanted to know just one thing. And that is, of course, what does Steve Broido think about this? Did Steve get one? Where does he stand on this time? Get one. Yeah. Because, of course, he's the man behind the glass.

He is also our resident Olive Garden expert. Now, on last week's show, Steve mentioned that he and his wife were expecting their second baby any moment now. I'm happy to report that their brand new baby boy arrived, safe and sound, and all are doing well in his house. And yet, Matt Greer, our producer and I were talking, and we felt like the never-ending pasta pass is a topic that transcends paternity leave. And so we called Steve to get his thoughts. And Matt, let's roll that clip. Hi, guys, enjoying some paternity leave here. and while I think the pasta pass certainly makes for a great headline, there can be too much of a good thing,

especially for someone like myself who's still recovering from childbirth. Put out a little weight, did he? He's recovering. I mean, I mean, what does he mean? How's his wife, Joe? We, maybe, we, right? Maybe. He might need some comfort food.

Or maybe he just meant that, ah, you know, I was in the delivery room standing. My feet were a little sore. The crazy thing is that people are reselling these on eBay, and they're not supposed to. supposed to be transferable, but the company's going to work with people who buy them over eBay. There's a secondary market for the never-a-old. The secondary market for everything. Let's get the stocks that are on our radar this week. We'll bring in Mac Greer from behind the glass to hit you with a question.

Ron Gross, what do you got this week? We just added eight new stocks to our watch list at million-dollar portfolios. So I grabbed one that I thought maybe people haven't heard of so it would be a little more interesting. And that's Dorman Products, D-O-R-M. and they are a maker of aftermarket auto parts, and it's for kind of the do-it-yourself crowd, and they sell them at AutoZone, O'Reilly, automotive parts, those kind of stores. Highly profitable, good growth. Doesn't look screamingly cheap, but that's why we have it on our watch list.

We're going to dig in. It's a really well-run company. Mack, you got a question about Dorman? What type of work, if any, do you do on your own car? Oh, Mac, I feel like that's a setup. I take my car into the shop. Is that good? I'm with you on that.

Unlike James, who actually knows his way around vehicles. James, what do you got on your radar this? I am going with a company called Financial Institutions. The ticker is F-I-S-I. We always say that in the singular F-I-S-I. This is a very small bank in upstate New York, $380 million market cap, 3.3% yield. They have kept more in deposits than they've lent out,

which is very, very conservative. This is conservative and boring as a bank gets, I like it. It's not exciting, but it's a very predictable company. It's a bank, and the name of the bank is financial institutions. Actually, financial institutions, FISI, is a holding company for a five-star bank, which is the actual operating bank in kind of like Rochester, Buffalo. Actually, not in those markets, but in kind of the rural areas near those markets. And this is where people like still use do-it-yourself car washes and play board games.

I mean, this is a very kind of like small town, America type of place. Mac? How much more transparent do you think the small banks are? are than the big banks? Or do you think you have the same sort of kind of problem where it's really hard to know what's going on? I think they're simpler. And another benefit of the smaller banks is once they, when they're below 10 billion in assets, they have significantly lower, like filing and regulatory requirements. So that's an added benefit. They're just simple. I don't know how much more transparent, but there's just, there's less to show, I guess.

And Jason Moser, we've got about a minute left. What's on your radar? Yeah, so listeners know that I am a big fan of Twitter, ticker TWTR. I'm going with Twitter. this week because I think there are some real reasons investors should be excited about this company. I think they have sort of made a little bit of a turnaround from a lot of the pessimism that was in the market there earlier. They just raised $1.8 billion in a debt offering here that I really think was a good move. This was very low interest debt. It's convertible debt. And what that means is the conversion rate on this debt implies a price of about $77 to $78 per share versus today's price, which is somewhere in the neighborhood of $52 or so. I think, you know,

But the big money is betting on this company growing, and so am I, so are we. Mac, question about Twitter? One person I should follow on Twitter. Wow. One person you should follow on Twitter. Me. I know that. I'm a shameless plug.

Hey. You can't follow Ron Gross because, as we say from time to time on our daily podcast, Mark and Fuller, Ron Gross is not on Twitter. Ron Gross is not on Twitter. He signed up at one point. He doesn't do anything with it. All right. Ryan Gross, James Charlie, Jason Moser. Guys, thanks for being here.

Thank you, Chris. That's going to do it for this week's edition of Motley Fool Money. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.