Motley Fool Money - Netflix, Amazon, and the Future of Sports Media

Episode Date: April 20, 2018

Amazon gives Wall Street 100 million reasons to be bullish. Netflix produces another great quarter. Wells Fargo gets a billion-dollar fine.  And Mattel’s CEO jumps ship.  Ron Gross, Jason Moser and David Kretzmann analyze those stories and share 3 stocks on their radar. Plus, best-selling author Jim Miller offers his thoughts on the business of ESPN, Disney, and the future of sports media.  Thanks to Blooom for supporting MarketFoolery.  Get a month free with blooom401k.com/fool and use the promo code “fool”. Learn more about your ad choices. Visit megaphone.fm/adchoices

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See what you could be doing to make your 401k better by getting a free analysis at Bloom. 4101K.com slash fool. That's Bloom with 3-0s, 401K.com slash fool. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Full Money Radio Show. I'm Chris Hill.

And joining me in studio this week, senior analyst, Jason Moser, David Kretzman and Ron Gross. Good to see you, as always, gentlemen. Howdy? How you do? We've got the latest headlines from Wall Street. We'll dig into the business of ESPN with bestselling author Jim Miller. And as always, we'll give you an inside look at the stocks on our radar. But we begin with the two big numbers of the week, 100 million and 1 billion.

In his annual letter to shareholders this week, Amazon CEO Jeff Bezos revealed the company has 100 million members in its prime. service. And on Friday, Wells Fargo agreed to a $1 billion fine as punishment for home and auto loan abuses. Let's start with Amazon, Jason. This is the first time they've ever disclosed the number of people who are in the prime service. Did this surprise you even a little bit? Well, I always figured at some point we would get an actual number from Jeff Bezos. I think he was just looking for a meaningful number. And 100 million seems kind of meaningful. So, you know, nice timing there. I mean, I think we've said it for a while.

And Amazon is obviously a recommendation in many of our services, but the prime membership is just the pot of gold at the end of the rainbow for this company. I mean, that is what dictates this company's strategy. So now we have a good idea of how big that pot of gold is. In regard to the shareholder letter, I mean, I cannot recommend enough that everybody listening read it. Because he just every year, it's always a good one. This one, he's talking more about high standards. And I actually called on every high school in the country. You have a free day here for teachers just to teach these high school students one day. Take that letter.

I'd be a good class. I think it would stoke a lot of good discussions for kids that need to be thinking about high standards in these days. Another thing that stood out to me in our colleague, Mattie Arger-Singer and I were talking about this yesterday, today is the bullet point India. Anytime you actually have a country as a bullet point in the letter, you know it's probably kind of important. And with India, and we think about how many prime subscribers that are, we've got a lot more to come because India is just getting started. And that's a country with 1.3 billion people and a GDP per capita of only around $1,800 today. So big opportunity. Yeah, and the e-commerce opportunity in India is really just heating up. You have Walmart trying to

supposedly acquire Flipkart, which is, I guess, either the leading or second leading e-commerce company in India. So that'll be just a fascinating, competitive battle in the coming years. Something else that stay out to me besides Jeff Bezos talking about, what do you learn from handstands in the letter? A little teaser there to go read it if you haven't already. Just the inroads that Amazon is making into the connected home, they have the echo devices, they have the fire TV. They recently acquired Ring, which is a security doorbell camera. So, when you're looking at companies making inroads into the connected home, I think Amazon's at the top of the list.

It will be interesting to see now that the cat is out of the bag, do they continue to update us on the prime number? And if so, how often? Because obviously, analysts will now be foaming at the mouth trying to get at that data on a quarterly or even annual basis. But we'll see. I could see Bezos say, sorry, psych. That was a one time time.

That is a conference call that they just do not give a lot of information on. So I bet we'll hear them ask that question a lot. probably won't get as many answers, but maybe more now than we did before. When they hit 200 million, that's all here. Am I the only one who thought that number was higher than it? I mean, if you had asked me to guess, I wouldn't have guessed 100 million. I might have been close. I will say that we had, our estimates in million-dollar portfolio were at around 100 million.

I mean, that was published. So it actually took us by surprise that we were so close. Nice job. Thank you. Let's move on to Wells Fargo and Ron. Look, $1 billion for Wells Fargo. I know they've got the money. I know they can pay this fine.

But I kind of think that the optics of this are actually the problem here for them. I think that's fair. And I think the optics have been bad for quite some time. The other big number is 570,000 clients that got car insurance but didn't need it. That's pretty bad. And, you know, Buffett's obviously a big shareholder of Wells Fargo and has been for quite some time. and he thinks about culture and leadership in very strong ways. And he's maintained his trust to a certain extent, I think, in Wells Fargo.

Obviously, the stock has taken a hit as a result, and I think it should have. As you mentioned, this billion dollars is not going to be like any big deal. It's 0.4% of the company's market cap, so it can handle that. But it's more about, A, as a consumer, do you want to be a client of Wells Fargo? And then as an investor, do you have a desire to be a shareholder? I think in a lot of cases, the answer is no. Yeah, I think generally speaking, the answer is no. I think that the one thing that Wells Fargo has really working in its favor, beyond just

leading the mortgage market, right? Because it's very easy to own that mortgage and then offer all sorts of free banking services to go with it. It's just that once you get a banking relationship established, it's just that once you get a banking relationship established. It's sticky. Nobody wants to take the time to get yourself out of it and go open another bank account and make sure that all of your bills are being paid from the right of it. It's a hassle. They will, I think, benefit from that. Probably five years from now, we'll look back and think, eh, it wasn't that big of a deal after all. But I tend to not like

investing in companies that have to pay fines this size. And honestly, this isn't the problem. This is just a symptom of what has been clearly a bad culture for a long time. Well, and it's not the first fine. Right. Like, it would be one thing if this, like the first time this happened when this, when the fake account story first broke, there was genuine surprise because of Wells Fargo the reputation that the bank had. This is now no longer a surprise.

This is now a pattern. Yeah, and what maybe is even more important than the fine is back in February, the Federal Reserve passed down a punishment that said, Wells Fargo will not be allowed to be any bigger than it was at the end of last year until they proved that they've got their act together. So, as an investor, you've got to keep an eye on that, that you now have kind of a regulation that is constraining growth on purpose because of how you screwed up in the past. So, buyer beware. Wells Fargo has been a tremendous performing investment for Berkshire Hathaway for a long, long time. I will be interested to see in the coming years,

as Warren and Charlie sort of ride off into the sunset, if that status doesn't change at one point, point or another, and they decide to maybe take those gains and move elsewhere. Well, hopefully we're going to have Becky Quick from CNBC on the show next week as our guest in advance of the Berkshire Hathaway meeting. I'm assuming that there are going to be more than a couple of questions that come up at that annual meeting about Wells Fargo. Netflix added nearly seven and a half million subscribers worldwide. That is just one of the highlights from the first quarter report that Netflix issued earlier in the week

and shares up about 6 percent, David. Pretty darn rootin-tootin as far as a quarter goes. And remember, Netflix just raised prices at the end of last year. And the company grew revenue over 40%. That's the fastest revenue has grown since the fourth quarter of 2011. So the company is actually accelerating its growth as it gets larger, which is an incredible feat. I don't know. You're almost speechless.

I'm almost speechless because Netflix continues to do this quarter after quarter to the point where the only thing I find surprising about Netflix results is the fact that management, for some reason, continues to feel the need to say, hey, we were surprised by this. Like, really? You were surprised by your own growth? I feel like the Quickster debacle gave Ree Hastings a lot. And I think a little dose of humility is one of the things he took away from it. And it's made him, I think, a better CEO. And honestly, just more pleasant to listen to. So when you hear him say, hey, we were surprised to, I think there's a little dose of humility there. But yeah, I mean, it's just, it's the standard.

Right? Internet TV. That's Netflix. And everybody really still is chasing after them. And the biggest question mark with Netflix, I think, clearly remains how much they're spending on content. Increasingly, they're spending more on marketing. They're spending about $8 billion on content this year. They're expecting to burn $3 to $4 billion in free cash flow this year alone. They have $4 billion in net debt. They said they're going to tap the debt market again. So the ultimate question here is at what point do those skyrocketing content costs? plateau? Is it 12 billion? Is it 15 billion? We don't really know. And I don't know if management honestly knows at this point either. And that's kept idiots like me, or maybe I should say value investors like me out of the stock for years to come. Is it time for me to call, say, uncle, and say,

I was wrong. Clearly, the stock is telling me I was completely wrong, but I don't think the final chapter has been written yet. Netflix has been a scary one to get behind, though, because of those metrics David was just talking about. But it makes you wonder. And I mean, Amazon really, I think, is similar in that regard. I mean, people have always great about those profits, or lack thereof. I feel like you've got to have a price to member metric or a price to subscriber. Well, and to go back to something David mentioned about Netflix recently raising prices. I mean, that's one other ripple effect of Amazon sharing this $100 million prime number, is now people can look at that and say, okay, well, what happens when they decide

to bump up the price of prime, $10, $20, which absolutely everyone who's a prime member will pay. Yeah, they will. They will pay it, Chris. I demand it. You're just standing up with your wallet out saying, take my money. Listen, I've said more than one occasion that they could quadruple the price of prime, and I pay it happily.

That's you. That's it out. Speak for yourself, here, Buster. On Friday, shares of Mattel hit their lowest point in more than nine years after CEO Margot Georgiatis left the company after just over one year in charge. And let's be clear, Jason. She was not pushed. pushed, she jumped. That tells me, she got there, looked around, and decided this thing

might be going to zero. Yeah, this thing is just the worst. I mean, losing that Disney deal, looking back now, I mean, that really, I think, was the beginning of the end for Mattel. And it's amazing to think about this. I mean, this is a company that probably played a role in all of our childhoods at one point or another. And we're sitting here debating it now, 45, 50 years later. It's just amazing to think about. But we cannot, I cannot overstate it. how much trouble this company is in. And honestly, they need a deal. They need a deal and they need it now because their balance sheet is becoming a big-time liability. And I think that the dynamics of the toy market are not going to change back. I mean, that window just continues to get

smaller as kids move on to devices and whatnot at younger ages. I just, Mattel is in a big, big bind here. Well, the man that they named to take over as CEO in the past, he's sold a couple of his companies to Disney. And I think him stepping in a CEO and just the situation that Mattel is in, this really raises the likelihood that they'll sell out to Hasbro, Disney, some other company, but I think they're looking for an acquisition at this point. Jason, you mentioned in regards to Wells Fargo, like you don't want to be a shareholder of companies that are getting these types of fines in terms of Mattel. I think it's also maybe a corollary of that is if you've got four CEOs in four years, you might have a problem.

That's a good observation. Coming up, we've got three stocks and three new flavors of M&Ms. You decide which one you like better. Stay right here. This is Motley Full Money. Thanks to Bloom for supporting this week's episode of Motley Full Money. Do you have a 401K? Do you remember how frustrating it was deciding what to invest in without any professional help?

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Bloom only takes five minutes, and then your retirement is safe. until you cancel. And they link to your existing 401k so you don't have to move your money. Bloom is so simple. Here's the thing. The hardest thing about Bloom is remembering that there are three O's in the name Bloom. So go to Bloom 401.com slash fool and enter the promo code fool for your first month free and see the difference that Bloom could make in your retirement. Welcome back to Motley Fool Money, Chris Hill here in studio with Jason Moser, David Kretzman, and Ron Gross. You can catch Motley Fool Money every weekend on radio stations across America, and I'm happy to welcome a brand new affiliate in Spokane, Washington, KXLY, A-L-L-A-L-L-A-L-L-A-L-L-W. Hello, Spokane.

Intuitive Surgical Increased sales of its Da Vinci robotic surgical system in the first quarter, and consequently, shares of Intuitive Surgical, increased about 7% this week, David? Yeah, it's all about this razor and blade model. Their total revenue this quarter grew 25%. They sold 185 of those Da Vinci surgical systems, which is up from 133 a year ago. The number of procedures performed on those systems increased 15%. And recurring revenue from instruments, accessories, and services now makes up 73% of intuitive surgical's overall revenue. Companies basically printing cash at this point. They're generating about a billion dollars in free cash full annually. They have no debt. to a half billion dollars in cash on the balance sheet. So very strong business model. And they're

trying to expand their systems to cover more, different types of surgeries, just increase adoption of those systems in general. So probably still a lot of growth to come. We should re-label this show, stocks that Ron missed. I'm just thinking about accessories on a robotic surgical system. And all I can think is like maybe they'd be dazzle it. They just add a little bling or something like that. Sure, yeah, a little add-ons. Make it look a little better. Lower corporate taxes are helping a lot of companies, but Philip Morris International does not appear to be one of them this week. Shares of Philip Morris falling more than 15 percent after first quarter revenue

came in lower than expected. What's going on, Ron? Well, obviously, a secular decline in cigarettes is part of the problem, but this was actually worse than expected. A 5.3 percent decline for the quarter in cigarette shipment volume, with Japan, Russia, and Saudi Arabia, actually, being the culprits for the most part. Perhaps an even worse situation, though, is the new technologies that are coming out, which companies, including Philip Morris, are spending billions and billions on to replace cigarettes. Their ICOS device, growth has significantly slowed. It was gangbusters in Japan, which was seen really as kind of a bellwether for how this perhaps could take off. Growth is slowing, so that causes investors to be quite worried.

If your main product is slowing and your thoughts for the future has slowing growth as well, sold off pretty severely, pretty much the worse since they split from Altria back in 2008. So we're going to have to see these billions of dollars pay off, otherwise these stocks are going to continue to be under pressure. I feel like this vaping thing is just quickly becoming such a bad move. I mean, because it seems like it's worse for you than smoking. And, man, say what you will about cigarettes, but I don't recall those things exploding in your mouth.

And like the vaping things can, and people are getting this powerful. popcorn lung. I mean, it's not good. Whatever Skechers shared in its first quarter report was overwhelmed by the company's guidance for what's coming in the second quarter. Shares of the sneaker company falling 30 percent on Friday. 30 percent, David. How bad was this guidance? It hurts. I mean, for this latest quarter, revenue grew 17 percent. Operating income increased 20 percent. Their global same store sales actually grew nine and a half percent. And believe or not, Skechers now has over 26 hundred store.

stores worldwide. And they're opening another 450 or so this year. So the company's growing quickly. But yeah, like you said, Chris, the guidance for this upcoming quarter was weak. They're just guiding for 4 to 6 percent revenue growth, earnings be flat or up 13 percent. So management is saying that their guidance for the year as a whole hasn't changed. They're saying it's just an issue of timing of distribution and orders moving from the second quarter to the third quarter. But the company's gone through this in the past, so I think the market's a little skeptical. Do you feel like opening more stores is the answer? I mean, in all seriousness, I feel like more and more, like you can buy your shoes online,

obviously, have them shipped to you for free. I kind of look at J.P. Morgan is another company where I guess they're going to be opening more branches here locally, which to me, is the answer more banking centers? I don't think so. Well, I go back to something that Ron said earlier this morning when we were sort of planning this week's show and just the idea that, look, I get that guidance wasn't great and I get that the stock is selling off. If the stock is selling off 30%, I want to see that the CEO's been arrested or something like that. Unless a stock is irrationally, exuberantly priced,

no quarterly report, unless there's fraud involved or some major thing, should wipe away a third of a company's value. I haven't delved into this, but sometimes those types of sell-offs create opportunities for patient, longer-term investors. Yeah, I think longer-term, this could be an opportunity. Skechers has in general been a well-run company. You have Robert Greenberg at the helm. He's been head of this company for 25 years or so. He owns the majority of the company. The company's still producing. Strong Free Cashflow has over $600 million in cash, no debt. So the company is okay. They'll probably be buying back a lot of stock this quarter with the stock lower.

But it's going to be volatile, that's for sure. Mars Chocolate is bringing back its Eminem's limited edition voting campaign asking consumers to vote for a new flavor. It kind of seems like a page out of the Mondalese Orios playbook. Here are your options, guys. Crunchy mint, crunchy raspberry, or crunchy espresso? Apparently, they figured out that people like crunch in their M&Ms. I don't know. I love M&Ms.

I don't think I'm voting for any of these, Ron. Yuck, but mint is okay, but definitely not raspberry. I think I'd go espresso, but I mean, that was the first thing that came to mind was Oreos. Just don't go down that rabbit hole, guys. I'd go with espresso. So let's go to our man behind the glass, Steve Brodo. Steve, any one of these three you want to vote for? Because the winner is going to be rolled out into sort of a longer campaign.

I'm going strong to the hoop with mint. Really? Mint all the way. Can we all agree, Raspberry is just a bad move altogether? Absolutely. Mix it. All right, guys, we'll see you a little bit later in the show. Coming up, we're going to talk Disney, ESPN, and the future of sports media with best-selling author Jim Miller.

Stay right here. You're listening to Motley Full Money. Welcome back to Motley Fool Money. I'm Chris Hill. James Andrew Miller has written best-selling books about Hollywood, Saturday Night Live, and the United States Senate. He's also the creator of Origins, a podcast that explores the beginnings of creative endeavors. Season one focused on HBO's hit comedy, curb your enthusiasm. But Miller is probably best known for writing the best-selling book, those guys have all the fun, inside the world of ESPN. For a long time, ESPN, was the goose laying golden eggs for its parent, the Walt Disney Company. But as the network plows money into an expensive new morning show, as well as its brand-new streaming app, ESPN is at a bit of a crossroads. Earlier this week, I sat down with Jim at his hotel in Washington, D.C., and I asked him how I, as well as all other Disney shareholders, should feel about James Petaro,

the new guy in charge of ESPN. You should feel like there's much stronger connection between Bristol, Connecticut, ESPN's headquarters, and Burbank. John Skipper, I think he was a loyal employee to Bob Eiger, but I think he was a bit of a rebel. I think there were certain things that Skipper disagreed with. Skipper and Eiger kind of didn't agree on, and I think the biggest one there is the NFL. I don't believe that ESPN has a $15.3 billion deal with the NFL that's coming up in a couple of years. I believe I'm on TerraFirm as suggesting that Skipper wouldn't have just blindly said, okay, let's do that again.

ESPN now is the fourth worst schedule, right? I mean, when we were growing up, every single team in the NFL had three great stars, at least two or three, like great players marketable players you know there's just not enough great product at the nfl and at the same time that there's not enough great product they've expanded it so thursday night football which i think is one of the worst inventions since liquid prel i mean it is just it is the epitome of greed and the nfell owners should be ashamed of themselves because not only is that is a deleterious to the schedule, but the recovery time for the players, the burgeoning rate of injuries, I mean, there's just, it's a big bowl of wrong. But at the same time, they've done it, and they've gotten

away with it, and there's Fox paying enormous amounts and money for it. So I think what ESPN is saying is, wait, we got Monday net football. We're paying $2 billion a year, technically, $1.9, plus $100 million for the wild card when they get it. And we got the fourth worth schedule, and that's for like 17 weeks of programming. Give me that $1.9, and I'll do that $1.9, and I'll do, something else for 17 weeks. I may not get exactly the number, but here's the real key, which when I actually, not to brag, but I broke it in a story for Hollywood Reporter. ESPN now has distribution agreements that are wholly independent of them having the NFL. So it used to be in, you know, in the late 90s and 2000s, that they were able to garner those

monthly subscription rates because they had the NFL. Now they can actually get that money without having the NFL. Now that's not to say that certain cable companies wouldn't grab pitchforks and start protesting. But in terms of the actual language, that's not there anymore. That's a big, big signal to them that they have margin for error and they can be a little bit more creative. So to get back to your question, I'm sorry to be long-winded about this. Patero is not going to take on Eiger about that, like the way Skipper would have. In terms of the rights that sports have been able to command from television networks, do you see that continuing to rise the way that it has?

Because people have talked about and written about the sports media rights bubble, and it still hasn't popped yet, but at some point, some network is just going to completely pass. It's one of the great paradoxes, isn't it, Chris? Because it would be like me saying when Amazon hit $100 a share. Now, this thing's got to, I mean,

this thing is just not... How can this go any higher? It's $100 a share, and they're not making any profit. And, you know, I, of course, listened to that and didn't put, buy any Amazon for my kids' copies, Thank you very much. But the truth is there is this weird disconnect, which is that we keep on lamenting and the networks continue to lament the rising acquisition costs. But there it is. I mean, look at the last NBA deal. It's enough to make you a Volshevik. How was ESPN able to pay that money and Turner? But at the same time, look at the NBA numbers. And not to mention the fact that, look, ESPN,

produce as 8,760 hours a year to produce. So at some point, something like baseball's tonnage, it's just great because you just, like, four games a week and three games a week and whatever, it's like you just have these live events, which further distinguish yourself in the marketplace. They spent over $20 billion on college football in, like, you know, in less than a decade. I mean, those big, that big 10 deal was crazy. And Fox did too.

And Turner spent a ton of money. And what CBS spent on NCAA and Pac-12 and everything else. So everybody says it's crazy. But at the same time, what was that joke at the end of Annie Hall that, you know, his cousin thinks he's a chicken and everybody says he's crazy, right? Yeah, but we need the eggs. We need the eggs. And so the question becomes, like I think the end of,

your question is kind of provocative, which is, is there going to be a network that's going to just say no moss? And I think to a certain degree, CBS and NBC have decided that they're not going to just go blindly for everything that they can't. Fox seems more willing to do that, although I think their debt threshold is changing. But as long as that happens, as long as you have all these bidders, and by the way, you have now Silicon Valley coming in, Facebook's starting do it. Amazon paid for Thursday night football. So in a way, it doesn't even matter just what the four or five competitors are saying, you got these other people that are driving the price up. You know, so I'm not sure it stops.

I'm curious since you mentioned Bob Eiger, as you and I are sitting here, earlier this week, Netflix reported their earnings, their stock continues to rise. And now, Disney's market cap is somewhere in the neighborhood of $150 billion, and Netflix has, in relatively short order, I haven't completely caught up to them, but their market cap is around $130 billion. To what extent, if any, do you think that matters to Bob Eager? To what extent of any do you think he's looking at Netflix and watching them creep up and views them as not just a threat, but maybe a primary threat. Well, I don't think he's doing it from an ego point of view,

but I do think he has fully appreciated what streaming means to the audience. I think it's something it means to the customers. He wants to be in that business. He is trying to do things to move to that kind of world. He understands that it's here to stay. I think some of his critics may have said, why didn't you see that earlier?

But I think in fairness to Bob, He's arguably one of the great media executives of the past quarter century, what he's been able to do since Eisner left. So no one can bat a thousand, no one can anticipate everything. But I think that he isn't going to just sit around with his arms folded and let Netflix ride off into the future, particularly given what we all know, which is that kind of formula, that kind of recipe in the marketplace,

is something that the customers, they've already decided they're good with it. They like it. It's comfortable. I was on the treadmill this morning, and on the menu in front of me, there was an option for Netflix. It's not just a TV, where you have a little button on your treadmill,

and you raise the channel or you can go lower. There was Netflix. I mean, that's the way it is seeped into the fabric of our daily life and the way that people are just used to binging and they love having it there. Look, they raised their prices like a dollar a month the other. Nobody noticed. Nobody cared.

Are you kidding me? Who cares? So, you know, I don't know if, by the way, I don't know if Iger sits around fretting about market cap so much because, as you know, much better than I, in the marketplace, the stock market there are some crazy market cap stories that all of a sudden everybody goes, wait, why didn't I short that?

The market cap was 300 million. And, you know, it's like, I mean, that's part of the legacy of the late 90s, right, in the crash around 2000. So I'm not sure if he pays that much attention to that, but he does pay attention to the business model. Pretty soon the Supreme Court's going to issue a ruling on sports betting. If you're ESPN or Fox Sports, what are you hoping for? What are you preparing for? It's like renting a tux and you're looking at your closet and you've got the tuck's ready, you got the shirt pressed, and you're like, am I going to wear it or not?

I mean, there are certain companies that are, you know, already have it on, and they're like tying their bow tie, just to push the metaphor a little bit more. I think that ESPN has had a somewhat tortured relationship with gambling. You know, it used to be that you couldn't even mention spreads. Then they started mentioning spreads. Scott Van Pelt himself was, on his show, was very adept at it. Every once in a while, I love it so delicious, where Al. Michael's late in the fourth court every Monday night football game. There'll be a field call on this. Yeah, a couple of people were interested in that.

A couple of people, like, because you saw the spread dissipating. I think it's probably coming. I mean, not to be able to, I'm not trying to predict the Supreme Court, but I think that given what's happening in the rest of the world, and that's a topic that where I think there is some knowledge that we gain from the rest of the world and how they've been able to engineer this and put some safeguards on that are desperately needed. I think that a lot of companies now are preparing for it and it's going to be like the wild wild west when it happens, man.

There are plenty of people and I am one of them who at the end of the day, done with work, you know, kids are in bed, that sort of thing, want to relax. I'll listen to one of your podcasts or flip through one of your books. Thank you. What do you do for fun? What do you do to just kick back and relax? I'm trying to learn how to do that. I'll admit.

Are you one of those people who only needs four hours of sleep a night? I think that I'm not one of those people who only needs four hours of sleep or night. I'm one of those people who gets only four hours of sleep. I probably should, it's one of my goals to learn how to sleep more and learn how to unwind. I have a tendency to, you know, work pretty late. that's a problem. My biggest problem is I used to be able to read a lot, just stuff that I want to read, and I don't get as much time to do that as I'd like or as I used to.

My youngest child is unfortunately going off to college, and I've officially started the morning period. and I'm not looking forward to it. I would say the only silver lining and a big dark cloud to be selfish is that I have a tendency to put my children's needs above my own and my schedule revolves around them.

So now with them out of the house. No, I really want to be a smart architect about time management in a different way. But I love the idea, this concept of relaxation, Chris. It's a very interesting concept. I think I want to get into that. You can check out origins wherever you get your podcast. And if you want to hear more from Jim Miller, good news.

We took the entire conversation I had with Jim and published it as a bonus episode in our Market Fullery podcast feed. So when you're done listening to Motley Full Money, you can head over to Market Fullery and hear Jim's thoughts on. on Saturday Night Live, including the one person that he believes could follow in Lorne Michael's footsteps. But don't go just yet. Coming up, we'll give you a few stocks you can put on your watch list. Stay right here. 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 yourself stocks based solely on what you hear. Welcome back to Motley Fool Money, Chris Hill here in the studio.

once again with Jason Moser, David Kretzman, and Ron Gross. Our email address is Radio at Fool.com. Question from Dimitri, who asks, one company that's come across my radar that intrigues me is a company called Boston, Omaha. It's tiny compared to Berkshire Hathaway, and while it's been public for less than a year, it has already doubled in price. One of Warren Buffett's grand nephews is one of its CEOs, and the company seems to follow the Berkshire model pretty closely. Has Boston Omaha come across your radar at all? I wanted to get your take before I take the plunge. Ron, I'll be honest, I've never heard of Boston, Omaha before. But it does seem like it may fall into the quote-unquote Baby Berkshire category.

Yeah, you've got to be careful with that whole Baby Berkshire thing, because sometimes people think any conglomerate can fall into the category of Baby Berkshire. But I think it's more of a cultural title than it is a business model one, where you have to kind of think like Warren Buffett or you have to think like Tom Gainer over at Markell. It's not just about a diverse set of businesses. Yeah, I think I agree with Ron. You want to be careful here because people have been saying similar things about Sardar Baglari of Baglari Holdings. Not me.

That stock has gone nowhere over the past five years. I think people are also saying similar things about Eddie Lampert when he took the helmet sears. And I don't think that's gone so well. I have to check in on that story. But you want to like the company for the sake of the company and not just that. aspirations of following one key person or another. I was reading through the Markell shareholder letter recently. One of the things I love about those guys, they constantly refer to it as, quote, your company.

Nice. You know? I mean, it's just, they're talking about your company. They really take a lot of pride in them. I don't know if we were helpful to Dimitri, but in the broader skier things. What was the company we were talking about? Boston, Omaha. Boston Red Sox?

Yeah, I love them. I mean, they're great. Off to a hot start. Before we get to the stocks on our radar, and, of course, our man on the other side of the glass, Steve Brodo is going to hit you guys with a question. Also, I've got to give a shout-out to the other guys on the other side of the glass this week. Clay Deckerd and Ash Pomeroy visiting us. Love it when we have visited us.

Yes. Thanks so much for visiting and hang out with this week, guys. All right, Ron Gross. What's on your radar this week? Steve, I'm going to go with an oldie but a goodie. It's Home Depot, Tigger Sybil, H.D. Have you heard of it? I have.

I have indeed. Obviously, the leader in the home improvement industry. Sorry, Lowe's huge scale gives it a great competitive advantage. Returns on capital increased over each of the past five years, currently at 34%. Payed a dividend for 124 consecutive quarters, increased that dividend for the last nine years. Just raised at 16%, 2.3% yield. Guidance is strong. Stock is very reasonably priced for a company that puts up results like Home Depot does. Steve, question about Home Depot? What do you think of their HDX branded products. I have not partaken of them myself, but I believe they are selling through very nicely. Jason Moser, what's on your radar this week? I'm going to go with a twofer, actually,

because earnings season is in full swing here next week. We have Facebook, ticker FB, and Twitter, ticker TWTR, earnings coming out on the same day, Wednesday, April 25th. So you get Twitter in the morning, Facebook in the afternoon. It's just very interesting to see how the narratives have changed on these two companies over the past year. Facebook, obviously, in crisis mode here with the whole data concern. I mean, let's be clear, man. Everybody's going to keep lobbing up pictures of their sandwich that they just ate whatnot. I think they're going to be all right. But really, Twitter has been pretty fascinating. A couple of upgrades this week. And I think they've been along the lines of the message we've been communicating in

a million-dollar portfolio. And this is a very powerful network that isn't going to get disrupted anytime soon. So I think Jack Dorsey has done a good job of really sort of patiently building out a business here that's starting to perform. Steve, question about either Facebook or Twitter. What is the likelihood that Facebook buys Twitter? I think that ship has sailed. Facebook tried to buy Twitter many, many moons ago before Twitter went public. I think at this point, Facebook would have a very difficult time convincing regulators

that that would be in the best interest of people. David Kretzman, what are you looking at this week? Well, JMO cheated a little bit there. My stock is Facebook, ticker FB. So, Steve, I hope you have some more questions on Facebook. I agree with Jamo. I think the pessimist. with any potential regulatory pushback is already priced in. Facebook is growing faster and more

profitably than Alphabet, but trading at a lower valuation compared to Alphabet. The company is printing cash, about $17 billion in free cash flow a year and counting, almost $42 billion in net cash. I think the company is going to be fine. Any new regulations or a slap on the wrist, I don't think is going to change the powerful business model that they have. Steve? Given what we've heard in the news recently with Facebook, do you have any concerns about your privacy and anything you post on Facebook? I was actually one of the 87 million or so users that was impacted by this Cambridge Analytica scandal, I guess.

But, no, I'm not personally concerned. I think if you're online, you should understand that that data is not yours necessarily. It's going to be shared if you're using a free platform. So I'm okay with it. But I'm a millennial. I can't believe people know my birthday than that I love pizza. This is tragic. Yeah, absolutely.

Steve, you got one you want to add to your watch list? I think I'm going to go with Home Depot. Nice. All right, Ron Gross, Jason Moser, David Kretschman, guys, thanks so much for being here. Thanks, Chris. That's going to do it for this week's edition of Motley Full Money. Our producer is Matt Greer. Our engineer is Steve Broido.

I'm Chris Hill. Thanks for listening. We'll see you next week.