Motley Fool Money - Not Too Big To Fail

Episode Date: March 10, 2023

In a wild end to the week, Silicon Valley Bank was shut down by regulators in the biggest bank failure since the Great Recession. (0:21) Jason Moser and Matt Argersinger discuss: - February's jobs report (and potential ripple effects) - The stunning collapse of Silicon Valley Bank - Vail Resorts staffing up to meet demand - How the "Lipstick Effect" is benefitting Ulta Beauty - The latest from Docusign, and Dick's Sporting Goods (19:11) Nell Minow, Vice Chair of Value Edge Advisors, offers a prescription for making stock buyback plans more shareholder-friendly, thoughts on ESG guidelines, and predictions for the Academy Awards.  (35:15) Jason and Matt share two stocks on their radar: InterDigital and Global Industrial Co. Stocks discussed: SIVB, MKL, DOCU, MTN, ULTA, DKS, AMC, DIS, GOOG, IDCC, GIC Host: Chris Hill Guests: Jason Moser, Matt Argersinger, Nell Minow Engineer: Dan Boyd Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi everyone, I'm Charlie Cox. Join us on Disney Plus as we talk with the cast and crew of Marvel Television's Daredevil Born Again. What haven't you gotten to do as Daredevil? Being the Avengers. Charlie and Vincent came to play. I get emotional when I think about it. One of the great finale of any episode we've ever done. We are going to play Truth or Daredevil.

What? Oh, boy. Fantastic. You guys go hard, man. Daredevil Born Again, official podcast Tuesdays, and stream season two of Marvel Television's Daredevil Born Again on Disney Plus. it, people. Buckle up. Motley Fool Money starts now. That's why they call it money. Full Global headquarters. This is Motley Fool Money Radio Show. I'm Chris Hill. Joining me in studio, Motley Full Senior

analyst Jason Moser and Matt Argusinger. Good to be here with you guys. What is this physical togetherness? It's going on. We got the latest headlines from Wall Street. Nell Minow is our guest. And as always, we got a couple of stocks on our radar. But we begin with the big macro. The U.S. economy added 311,000 jobs in February. The report reflected higher participation and higher wages. And, Jason, I'll just start with you. We're going to stick with the big macro for a while here. But just when it comes to this report, maybe not a big surprise that one of the first reactions out of this report went immediately to the Federal Reserve, people talking about, well, what is this portend for the next interest rate hike? will it be half a point, quarter point, that sort of thing? But in terms of the jobs report, this was another strong report. Yeah, it was a strong report. It does look like a lot of the growth

is really attributable to services, leisure, hospitality. I mean, obviously a market, they got hit really hard here over the last several years. It feels like at least, in regard to interest rate policy and what we've seen the Fed doing here over the past year, in relation to how the economy is responding, a lot of people want instant results. I think we live in this day and age where everybody wants everything instantly, right? You buy things online. You want to ship the same day. You buy something online. You want to be able to stream it right then and there. And so it does feel like, I mean, at least in regard to the financial media and many of us,

it's like, well, the Fed is going to push interest rates up by 50 basis points. We want to see the results of that tomorrow, right? We want to see the outcome of that sooner rather than later. And I think in this case, you know, it pays to be patient. And part of that really is just due to the nature of what we've been dealing with here, right? I mean, we weren't necessarily in a credit crisis. We've been in sort of a cash flush crisis, right? Everybody's been flush with cash, and we're trying to ultimately cycle a just tremendous amount of money

that's been added to the system over the last few years. We're trying to cycle that money out. And that does take time. And that means that these interest rate decisions aren't going to have an immediate impact, as they possibly could if it was a credit crisis. But definitely something that I think is delaying challenges that we see in the employment market. I think we will start to see those challenges appear. It's just going to be a little bit more slowly.

And I think, honestly, we're just really starting to see those challenges begin to appear now. Yeah, I agree with that, Jason. And I think the reason investors are hanging on all these data points is because the feds come out and said we're data dependent. Yeah. And so we're just hyper aware now of the jobs report, CPI, PPI, whatever a Fed governor happens to say to some media source. I think with the jobs report, if we go back to that just for a second,

I think there were a lot of questions about that January number going back where it was over 500,000. Is that real? Is that just a seasonal blip? And, you know, if you look at the downward revisions to January and December, there were some downward revisions, but not much. 34,000 jobs across two months. I think a lot of investors thought there were going to be more downwork.

provisions there. And so then you get another print here in February above 300,000. There's no way you can conclude that the job market is weak. I mean, it is strong. It's showing that we have a vibrant economy. People are getting hired. There seems to be there's still more jobs than there are people looking for jobs. And if that's the case, you've got this weird situation now where the Fed kind of has to keep their foot on the pedal because the economy remains strong. Well, and wages are keeping up, too, right? Yes. You know, right? The 4.6% growth, in average hourly earnings, I mean, that's cooled off a little bit, but that's still, that's still impressive.

I mean, even though we're dealing with, you know, some historically very high inflation rates, I mean, again, it kind of goes back to the consumer still having some cash, still having the ability to spend some. And so we're just slowly but surely seeing that cycle through. It just takes some time. This doesn't happen often, but the Jobs Report got overshadowed by another story. And this requires some setup, because it involves a bank that probably a lot of the job. of people are not as familiar with, or maybe not have not even heard of until this week.

But on Wednesday, Silicon Valley Bank announced it was looking to raise more than $2 billion after suffering a massive loss on asset sales. On Thursday, shares of Silicon Valley Bank fell 60 percent as depositors rushed to pull their money out of the bank. Friday morning, shares fell another 60 percent before trading was halted. then SVB was closed by regulators with the FDC, promising that insured depositors will have access to their money no later than Monday morning. Let me just timestamp the conversation that we're having right now.

We are recording this. It is early Friday afternoon. Depending on when people are listening to this, the story probably would have changed. It's not out of the realm of possibility that a larger bank steps in and maybe buys them, Although, what this bank is worth now is anybody's guess. And again, this is unfolding as we're talking. But, Matt, this is raising a lot of questions, including what is the exposure for the rest of the financial sector? Yes.

Great question. Yeah, this story is going to be very fluid, right? I mean, it's going to go through the weekend. We're going to learn a lot about by Monday what ultimately happens to all the assets for this bank. But the story that's not changing that we should be knowing going into this. was we had a period forever of zero to low interest rates. Credit was easy. A bank like Silicon Valley Bank benefited extraordinarily from that era. They were lending to startups. They were flush with VC money. A lot of tech companies parked their capital there, did business with Silicon Valley

Bank. This was a symptom of the times changed. Interest rates rose. All of a sudden, these profitless tech companies, these venture capital companies, bad companies, were taking their money out. I was looking at this number, I can't believe it, since the second quarter of 2022. So really, a few months after the Fed started raising rates last year, up until the end of the year, $34 billion was pulled out of SVV's non-interest-paring deposits. Those are mostly checking accounts. I guarantee you that, of course, accelerated into this year. That's massive.

And so the question I have, and you asked it, Chris, which is right, is this just isolated to SVV financial, the holding company for Silicon Valley Bank? or is this symptomatic of a greater problem? And I would point to other things, not just tech companies, but look at, or crypto, but look at commercial real estate and all the money that's being back to, you know, by office buildings that are now empty. What about car loans that are expensive now? What about credit cards that are at all-time highs, balances?

There are cracks, I think, in the financial system. And this is, you know, this comes out of the Fed raising rates as aggressively as they have. Yeah, I do think, I mean, that is the question, right? Is this something, is this indicative of a bigger problem that we can expect to ripple through the system? And based on what we know today, I hope, I think, and I mean, I certainly hope the answer is no. When you look at Silicon Valley Bank, I mean, ultimately, like I would say, it's competitive advantage over the last decade plus, is that it's been the one funding and banking all of these firms that many others simply wouldn't or couldn't. Right?

They were willing to take on that risk. They were a bit more of a specialty bank in that regard. So it kind of reminded me a little bit of Markell insurance in that regard as a specialty performer. I mean, they did something that most others couldn't do. Now, that comes with clear risks, and we've always enjoyed Marquel because year in and year out, they just write such good business. You see through their combined ratios that they know what they're doing. And it seemed that this really, SVB knew what they were doing as well.

But the problem is they ran into a buzzsaw here in regard to, like you said, the changing macro environment in relation to what they do specifically. Yes. And then you add to that. I mean, momentum can be a hell of a thing. And when a bank run starts, even just the rumor, I mean, it feeds on itself and it moves fast. Yeah, there are a lot of things. I mean, we can't get into the Peter Thiel comments, for example, that kind of accelerate things.

But a good bank, and you mentioned Markell is a good insurance company, a good bank is diversified in its essence. Right. It's not lending to one specific company in a corporate group or one specific types of industry. It's diversified across many industries, many types of borrowers. Clearly, Silicon Valley Bank was way overdone in terms of the areas that are getting hit the artist. And it's in the name. Silicon Valley Bank. I mean, it doesn't take a leap to just wonder what do they do and who do they serve.

It's worked out well-formed for a long time, but we're seeing the downside to specializing in that particular market right now, unfortunately. Yeah, someone reminded me of the... the underrated financial movie, Margin Call. Oh, so good. And Jeremy Irons has the great line where he says, it's not panicking if you're the first one out the door. As we wrap up on this, what should people be watching as this plays out? I mean, I don't own shares of SVB.

So, obviously, people who do, people who have their money with it, they're paying much closer attention to this story. But as we've said, this has the potential to have ripple effects. What should the average investor be watching here? Yeah, I think one of the things that's happened is a lot of good banks, well-capitalized banks, haven't thrown out with the bathwater with this one. And so you look at just some of the big major banks that have just been hit really hard. Those banks are so conservatively run.

They're so overcapitalized now because of all the regulations that have come in since the financial crisis. So if you own some of those banks, I wouldn't be worried going into this weekend about what's going to happen to those. Yeah, I feel like you look at this from two different perspectives. One, this really reminds you that size does matter, right? Big banks, your JP Morgan's of the world, are going to walk out of this just fine. They're legitimately too big to fail. We've learned that lesson. In back to diversification, yeah, it does, SBB would be considered a regional bank.

I think you're right. You're going to see a lot of regional banks get thrown out with the bathwater here just because they're regional banks. Regional banks are not all created equal. Most are not writing books of business like Silicon Valley Bank. Absolutely not. And so they legitimately can be banks that are being ignored, being dismissed, when they really don't have any exposure to this type of investment at all. And they could present some really interesting opportunities. But then, you know, you go back to things like commercial real estate, auto. A lot of banks. is exposed to a lot of that exposure, and it's worth keeping that in mind. But hopefully, this is something that will be limited in its scope.

Earnings news after the break, so stay right here. This is Motley Full Money. Welcome back to Motley Full Money. Chris Hill here in studio with Jason Mozer and Matt Argusinger. DocuSign's fourth quarter results were better than expected. Despite that, shares of DocuSign down nearly 20% on Friday. What's going on here, Jason? Well, I mean, this is a business in transition, and so we have to acknowledge that.

and investors are either going to be willing to be patient and give Mr. Teagueis some time, or they'll move on. Now, personally, I'm willing to be patient. I do believe this is a good business with a quality offering that's playing into a clear long-term trend, but I do believe it is going to take some time for their new CEO, really, to get his legs underneath them and get this business going back in the right direction. Worth noting, they did beat their own internal guidance for the quarter, a revenue of $659 million, up 14 percent from a year ago. So they did see Billings, $739 million. That was up 10% from a year ago.

Total customer growth, up 16% from the year. Enterprise customer growth, even more encouraging, up 24% for the year. And International now stands at about 25% of the business today. That grew 19% for the quarter. And dollar net retention at 107% historically low. They do see some near-term headwinds as they reshape this business. That's to be expected. and then adding to the headline CFO's Cynthia Gaylor, four and a half years will be taking off,

so they are looking to fill that position. It is worth noting they said in the release that Gaylor's planned departure is not a result of any disagreement regarding the company's financial statements or disclosure. So it really does seem like it's on the level. But I think it really all goes back to the forecast here. The guide for the core and for the year, you're talking about high single-digit revenue growth. That's a big problem. it's going to be difficult to get investors excited for that when this historically has been a growth story.

Shares of Vail Resorts on a downward slope this week. Second quarter revenue was better than Wall Street was expecting, but guidance was light. Let's face it, Matt, it's expensive to operate those mountain ski resorts. It is. It is. And you said it. I mean, with Vail, it was really a top-line story versus bottom-line story. If you look at the top line, you know, the second quarter was great fiscal 2020. I mean, the resort net revenue was up 21%. They had record visitation.

You look at the season-to-date totals. They had skier visits were higher. Lift revenue was higher. Retail rental revenue and their North America resorts were up 21%. But it came down to earnings, and they were mostly flat. Guidance, you said, was soft. And that's because of all the things they did last year, they got a lot of criticism going back to the prior winter season

where lift lines were jammed. They didn't have enough staffing. Restaurants weren't really open. It was kind of a COVID rush that they just weren't ready for. So they had to make a lot of investments over the past year to kind of get those resorts cranking again. That included hiring a lot of people, training, investing a lot. So it's really the earnings is what is going to get hit here. I would say, though, it still demonstrates to me.

Vale's got pricing power. Once these investments kind of run through it, I think they're going to get back on a higher earnings trajectory. They did raise the dividend in 8%, which I always love to see, the up-the-share-purchase authorization. So me as a shareholder of Vail, I come away thinking, I might be interested in buying more of this, not less, with the shares down. The lipstick effect, working for the benefit of Alta Beauty. Fourth quarter profits and revenue came in higher than expected. Jason, as a category, beauty products have really held up over the past six to 12 months,

and you see it when you look at Alta Beauty's stock chart. Well, you hit exactly on what I wanted to lead with, is that something we've, I think a lot of us have been saying for a while, beauty is just a very resilient market. Anecdotally, I can tell you, I mean, over the holiday season, I went to an Alta store, personally, physically went into the store to go get a gift card for my daughter. I mean, that place was a zoo. Very, very friendly customer service, especially for a dope like me who knows nothing about makeup. But when you look at the numbers, it's really impressive what this business is doing.

I mean, net revenue $3.2 billion that was up 18.2% from a year ago with comps up 15.6% and gross margin holding steady in this environment, which I think is really encouraging, They did see a 13.6% increase in transactions driven by traffic. Now, they did see the average ticket just increase 1.8%. So, still pretty light, but when we look at the companies like Home Depot and Lowe's earlier, a lot of those tickets were down. So it's, again, encouraging to see that that ticket holding there, and they now have more than 40 million ultimate reward members versus 37 million just a year ago.

So it is a good business that does something very specific. It knows what it's doing. I mean, they are growing not only the physical footprint, but the digital footprint as well. Strong balance sheet, continue to bring that share account down. This is one that's worked out pretty well. Shares of Dick's sporting goods up 12% with a strong close to the fiscal year. Same store sales in the fourth quarter were more than double what analysts had expected. And guidance for 2023 was better than what we've seen.

out of a lot of other retailers, man. Yeah, I mean, it turns out, whether it was cosmetics or sports equipment, and people like to go out and shop, and it's something, you know, Dick's sporting goods, when I think about it, was one of those retailers that I thought wrongly, you know, especially post-pandemic, that, you know, it's just one of those ones that could go out the door. I mean, it's just, it's a tough spot to be in if you're a retailer like this, but Dix has done incredibly well. You mentioned the results.

I mean, earnings were up, they're projecting earnings, I should say, to be up 20% this year, they'd more than doubled the dividend, by the way. And they kind of couched by saying, we have strong conviction in our structurally higher sales and earnings. So this is a business that I'm amazed and impressed, but they are certainly on an upward trajectory. And I think it tells a greater story, having taught about Ulta as well,

that breaking mortar retail is still quite attractive. A lot of customers are going. There's traffic as high. We've seen, you know, if you look at Simon Property Group, the biggest mall owner, their results as well. It paints a customer that likes to go out and shop. Well, and this comes, we talked about this all-earning season, the cautious guidance coming from so many really high-level businesses. The fact that Dick's sporting goods is putting forth the guidance, doing what they're doing with the dividend in an environment when a lot of other strong retailers are saying, we're going to be really cautious here.

Right. No, no, it's great to see that confidence. And maybe it could be a specialty story, maybe. But, no, I think it speaks to a greater story about retail. which is doing well. And as we know on the jobs report, that's where the jobs tend to be going. All right, Matt Argus here, Jason, Jose, Mozer, guys. We will see you a little bit later in the show. Up next, what's the best version of stock buybacks? And what should people expect Sunday night at the Academy Awards? We're going to ask our guest, Nell Minow. So stay right here. You're listening to Motley Full Money.

Welcome back to Motley Fool of Money. I'm Chris Hill. By day, Neil Minow is the vice chair of Value Edge Advisors. By night, she is a film critic. which means she technically qualifies as a superhero leading a double life. She joins me now from her home in Virginia. Nell, thanks for being here. My pleasure. I want to talk about the business of movies and of course the Academy Awards, but I do want to start with share buybacks because this is a topic highly relevant to investors, very much in the headlines lately, in part because of President Biden at the State of the Union

address, talking about investment. increasing the tax on corporations, partly because of Warren Buffett, who you and I and many other investors are big fans of in his latest annual letter, taking a pretty, for him, a kind of a spicy shot at critics of share buyback plans. And it seems like there is some level of recognition that this is something that could stand improvement. And I guess my question for you is, what do you think is the prescription for improving share buyback plans as a structure? Well, I wrote an article called a capitalist solution to the problem of excessive buybacks. So it's something I've given a lot of thought

to. The last thing you want to do is try to fix it through the tax code, because corporations are happy to pass along those costs to employees, shareholders, customers, customers, it will have no effect on them whatsoever. And buybacks can be a very good discipline. You got excess cash, I would a thousand times rather that you buy back stock or declare a special dividend rather than making a stupid acquisition, which is what too many companies will do. Unfortunately, it's gotten completely out of hand. It's short-term financial engineering. And the two things that I would do are, first of all, you do not let the executives sell into a buyback. The whole idea of the is they're telling you the stock is undervalue. So why are they selling at that price? I think it

creates a tremendous moral hazard and a tremendous lack of credibility. And the other thing is, it drives me nuts when it looks like the company's not going to be meeting the EPS targets and therefore not triggering the bonus, what are we going to do? I know, we'll buy back some stock. So there are, you know, two numbers in that calculus. There is the, the earnings, and then there is the number of shares. There's only one of those numbers that is really beneficial to shareholders. So I would certainly, those are two ways that game the system, to allow the executives to sell into it and to not adjust the earnings per share incentive goals. And I think if we fix those two things, then we'll lower the pilot line a little bit on making

buyback so attractive. I want to go back to something you said about acquisition. because, yes, a lot of acquisitions don't work out. And something we talk about on the show from time to time is how capital allocation is such an important skill for executives. But it's one of those things that's pretty difficult to recognize in a potential CEO when he or she is being interviewed, because it's a track record that reveals itself over time. As you indicated, there are companies that do a very good discipline job of returning value to shareholders, either through dividends or buyback plans.

There are others who put aside the acquisitions. They do a bad job at share buyback plans. All of this is context for this question. You have spent so much of your career working for organizations that are advising boards of directors, is there a way to get at someone's capital allocation skill level? How do boards find out that information? Because again, it's such an important skill, and I don't see how it reveals itself unless you have five years of a track record for a CEO before you can say, wow, he or she is

really good or really bad at this. Well, I will just take issue a little bit with one thing you said. really the job of the board to oversee asset allocation. It's kind of a forest and trees thing, and I think the executives tend to look at the trees and you really need the board to look at the forest. When people say to me, well, we have excess cash, what they're saying to me is, we have no idea of what we're doing because we literally pay them the big bucks so that they can figure out what to do with that cash. If they can't find a way to make better products, to improve operations to do better on employee retention and training, then, okay, give the cash back to the shareholders,

but that's not going to help us in the long run. So you do need a track record to figure out about asset allocation. On the other hand, if what they're saying to use, we have no imagination, and we're just going to give you back this cash and let you decide what to do with it. That gives you a little bit of an indicator. We are investors. We don't really pay a lot of a time. attention to politics except when it enters into the realm of investing. And we just talked about one area with share buybacks, but another area has come up with President Biden saying he plans to issue the first veto of his presidency because the Senate has overturned a Labor Department rule that permits fiduciary retirement fund managers to consider ESG factors in their

investment decisions. Obviously, there are ramifications here for retirement and pension plans across the country. When you watch this drama playing out on Capitol Hill, what's your reaction? If you had told me when I got into this business that someday a corporate governance matter would become the subject of not just a veto, but the very first presidential veto of an administration, I would have thought you were nuts. Not that I didn't think that these are important issues. I just couldn't believe they would become as politicized as they have. You know, it's really important to make clear that the ESG rule that is an issue here doesn't say you have to consider. You investment manager to have to look at ESG. It says you may wish to

include these to the extent that they are material. It makes it very, very, very clear that we're talking about quantifiable economic forecasts, financial indicators. Nobody is asking you to do something to warm the cockles of your heart. And yet, ESG has become kind of the new critical race theory. It has just become awoke. It's become something that is just a subject of a tremendous misinformation campaign funded by the oil companies and the Koch brothers. And that's too bad because it is a simple, straightforward way of saying, gosh, maybe the accounting standards that we've had since the days when most of the company's assets were machinery and real estate and we don't value intellectual property. We don't value political risk very well. We don't value

climate risk very well. Maybe we should look at some other indicators to try to figure out how to do a better job. Looking back, we missed the financial meltdown. We missed the dot-com. We missed, the accounting scandals. Maybe we could do a better job. And all of a sudden, now that is considered to be woke. It has nothing to do with being woke. It has to do. with getting a clearer picture of risk in return. Before we get to the Oscars, let's talk about, to me, a pretty interesting story in the business of movies and in particular movie theaters, which is AMC,

the largest movie theater chain in America, has started testing dynamic pricing in some of its theaters with a plan to roll it out nationwide by the end of the year. What is your reaction to this? Because my reaction is, I'm not outraged by this. This is something that has gone on forever in live sports, in concerts, at Broadway shows. There are people who are outraged by this. What's your reaction? I wouldn't say that I'm outraged. I'm a little disappointed. Normally, I am a fan of Adam Aaron,

the CEO. And there's a big difference between a Broadway show, sporting event, and a concert, which is that you are watching a live performance, and it really does matter where you sit in the theater. You want to be up close. You want to be in the back. You want to be in the left or the right. You'll get a different perspective. In a movie theater, I think, you know,

the last thing we need right now is a reason for people to stay home. We want to get people to come to the theater, and therefore, I just don't think it's a good idea. I don't think that the beta test is going to work out very well, and I hope they drop it. Oh, yeah, I should also say, I don't think this is necessarily going to work for them. I just wasn't outraged by it.

In terms of the Academy Awards, am I wrong to assume the ratings are going to be a little higher this year? Should Disney shareholders get excited about more people watching the ABC broadcast? Because, I don't know, last year, there was the rare, I can't believe I'm watching this live moment when Will Smith slapped Chris Rock. Yeah, but a few years before that, we had the I can't believe I'm working. watching a moment where they literally announced the wrong best picture. There's always going to be some water cooler comment, and yet I think most people will wait to watch those clips on YouTube.

I just think the way we interact with live events on television has changed, I think there's awards fatigue. I mean, for gosh sakes, I will be watching. We call that Mommy's Super Bowl in our house, and no one's allowed to talk to me while the Oscars are on, but I'm pretty hardcore, and I'm also old. So I think that the Oscars have not figured out a way to connect with, I'm just going to say, the TikTok generation. They've got some great presenters. They're going to have some wonderful song numbers, but I just don't think the ratings are going to be that great this year. So Alphabet shareholders, maybe get a little excited. Let's get to the three of the biggest awards.

And as always, as we do every year, you tell me who you think should win and who will win. We'll start with Best Actor. Again, last year, this was the category everybody talked about because of Will Smith. Am I correct that all five of these nominees are first-time Oscar nominees? I think you're right. Yes. Yeah. Now, if it were, yeah, okay, so you want to know who I think should win, and I'm going to pick the least likely person to win. Who's that? That's Bill Nye. I thought Living was one of my favorite films from last year, and it's extraordinary story, extraordinary history behind the movie. Bill Nihi broke your heart a thousand times. He's a fabulous actor. I would love to see him win. Nobody saw that movie. That would be my

choice. I think Will Win. That's a tough one, but I think it's going to be Brendan Fraser because nobody loves a comeback story more than the Oscar voters. And everybody loves him. They love the fact that he is being taken seriously right now. He's going to cry all over the stage. They love that. And so I think I did not love the movie, but I loved his performance. And I do think he's great. I have to tell you, I think something really funny I found on the internet yesterday, there was a movie that Brendan Fraser was in where he played a thought-out prehistoric guy called Encino Man. It was a Pauly Shore movie. The classic comedy Encino Man. But one of his co-stars in that movie is also nominated for an Oscar this year, Ki-Wong Kwan,

from Everything Everywhere All at Once. And there's a great clip of the two of them together in the movie. And apparently Pauly Shore has been saying, where's my Oscar nomination? Everybody in my movie got nominated but me. That's one of the great things about the movies. You never would have thought Encino Man would produce two Oscar nominees. But here we are. In the best actress category, great performances across the board.

but this seems like a two-person race between Kate Blanchette and Michelle Yo. And I'll tell you something fascinating about both of those roles. They were both written for men. Really? Yes. Both scripts originally envisioned the main character to be a man, and that tells you a lot about what the different opportunities are for male and female performers in the wonderful world of Hollywood.

So the fact that these women took to... those roles, gave their whole selves to them, made such ferocious, layered, wonderful performances. I think Cape Lanchette has two Oscars already. So I'm hoping for Michelle Yo both should win and will win. And it will be thrilling when she gets up to accept that award. In the Best Picture category, there are 10 films nominated. If the betting odds are any indication, everything everywhere all at once looks like the overwhelming favorite here. There's no question about it.

It's won all the preliminary awards, including the single best leading indicator, the Directors Guild Award. And I can't say enough good things about it. It is a brilliant, imaginative, wonderful film. If it doesn't both dazzle you and make you cry, then you don't have a heart. It is just a fabulous film, and I'd love to see the Hollywood establishment honor. something so innovative. There are a lot of categories, so let's end with this. Fill in the blank, don't be surprised if our, our wins best song. Best song is the worst category every year

just because of the way the nominations were. And in my opinion, and I follow my great mentor and idol Roger Ebert on this, you should not be allowed to nominate a song unless it's actually in the movie over the credits doesn't count. There couldn't be a better example than Not Too Not To in RR, a fabulous song in a great movie, beautiful dance number. And so don't be surprised. You may never have heard of RRR or Not Too Not To, but you will hear about it on Sunday night. One of the best reasons to be on Twitter is so you can follow Nell Minnow, get her thoughts on corporate governance movies and a lot more. Nell, enjoy Mommy's Super Bowl.

Thank you. It's a great pleasure. Coming up after the break, Jason Moser and Matt Argusinger return. They've got a couple of stocks on their radar, so stay right here. This is Motley Fool Money. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against. So, don't buy ourselves stocks based solely on what you hear.

Welcome back to Motley Fool Money. Chris Hill here once again in studio with Matt Argusinger and Jason Moser. The bumper music you hear on the show is courtesy of our man behind the glass, Dan Boyd. And speaking of music, the Wall Street Journal reporting this week that for the first time since 1980, 87 vinyl albums outsold compact discs. And guys, it wasn't close. According to the Recording Industry Association of America, there were 41 million albums sold in 2022

compared to just 33 million compact discs. This warms my age at heart, man. No, it's awesome. It was obviously that was before my time, but I have to say, when I look at the vinyl records that my parents had and my wife's parents had, and they're awesome, they're beautiful. And I want to learn more about them, collect them maybe, and keep them.

All right, let's get to the stocks on our radar, our man behind the glass. Dan Boyd's going to hit you with a question. Jason Moser, you're up first. What are you looking at this week? Yeah, taking a look at a company called Interdigital, ticker is IDCC. Interdigital is a research and development company with a primary focus on wireless technologies, so that plays right into the services that I'm running here at the fool. But the technology itself is everywhere, including.

including smartphones, consumer electronics, IOT products, television, laptops, gaming consoles, yada, yada, yada, yada. I mean, this is a company that makes money from licensing its patented technology and innovations to customers all over the world. And at the end of 2022, they actually held a portfolio of approximately 28,800 patents and applications related to wireless communications, video coding, display, technology, yada, yada, yada. So this seems like a lot of patents.

Dan, so I'm going to dig in and see if there's a real business here. Dan, question about interdigital? Absolutely. Jason, is this the kind of company that just sits on patents? Or is this the kind of company that actually does its own research and development? A little bit of both, but mostly they are in the business of collecting that book of patents and then extracting value from said patents. Matt Argusinger, what are you looking at?

All right, it's global industrial company, ticker GIC. I know it sounds like some kind of front for like an evil corporation or something. It absolutely does. But they're actually a distributor of what's called maintenance repair and operating equipment, MRO. They're one of the leading companies to do that. Mostly serving small, midsides businesses. Think like storage equipment, janitorial supply, safety devices. Basic things business really need to run their everyday business.

They actually supply over 1 million MRO items, and they also have some of their own private label products as well. Very cash flow, heavy business, 3% dividend. Love it. Dan, question about global industrial company? Yeah, so I guess you didn't want to invest in the Acme Corporation this week, did you? It was on my watch list, Dan, but I went with Global Industrial instead this week. Well, all right. Well, at least you have a pretty clear choice in terms of two very different businesses, Dan. Do you got a stock you want to add to your watch list?

Well, I mean, yes. And it's interdigital, and it's not because I'm super impressed by them. that Matt picked the personification of the color beige for a company here. How surprised are you that it's not Ron Gross putting forth this stock? You know, I'm actually more surprised at Jason's pick, because interdigital apparently has been around since 1972 and is as old economy as you get when it comes to tech companies. All right, Jason Moser, Matt, Argusinger, guys.

Thanks for being here. Thanks, Chris. That's going to do it for this week's Motley Full Money, radio show. The show is mixed by Dan Boyd. Drop us an email, Podcasts at Fool.com. That's Podcasts with an S on the end. Podcasts at Fool.com. I'm Chris Hill. Thanks for listening. We'll see you next time.