Motley Fool Money - Retail Report Card and CES Innovations

Episode Date: January 11, 2019

Costco and Target report big holiday numbers. Macy’s tumbles on disappointing December sales. Bed, Bath, and Beyond goes above and beyond. Activision Blizzard loses control over Destiny. And Taco Bell goes on a health kick. Analysts Aaron Bush, Andy Cross, and Ron Gross discuss those stories and weigh in on Ford Motor, Constellation Brands, and Interactive Brokers. Plus, analyst Rex Moore joins us from Las Vegas to talk self-driving cars and other cutting-edge technologies at CES. Thanks to LinkedIn for supporting The Motley Fool. Go to linkedin.com/fool and get $50 off your first job post. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Joining me in studio this week, senior analyst, Andy Cross, Aaron Bush, and Ron Gross. Good to see you, as always, gentlemen. Hey, Chris. We've got the latest headlines from Wall Street. We'll get a report from the Consumer Electronics Show in Las Vegas. And as always, we'll give you an inside look at the stocks on our radar. But we're going to begin with the big macro. The government shutdown is now three weeks long with no signs of an ND site.

We've got more evidence of an economic slowdown in China. Ron, obviously, we are business-focused investors. but how should we be feeling about the big macro stuff these days? You know, this furlough. It's a human story, but there are real economic implications here. Just the paychecks that are being foregone right now represent a loss of more than $2.2 billion in consumer spending. So you had housing, transportation, food, health care, all getting hit, and that will reverberate through the economy for sure. Andy, we're seeing more and more CEOs come out.

maybe not as strongly as Fred Smith at FedEx did a couple of weeks back, but more and more CEOs coming out and talking about their ability to plan in 2019 is getting harder and harder. Yeah, I think it has to. When you start thinking about a government shutdown, the trade issues continue to be forefront for so many of the global companies wondering what is going to happen with the trade issues. So this uncertainty, CEOs and chief financial officers don't like planning because it's so difficult to do when they don't know what's going to happen over the next, even the next few months. So when you start thinking about where interest rates are going to go and all these uncertainties for

them, they start saying, hey, listen, we can't plan as aggressively as we would like to. The largest uncertainty to me is less than the U.S. and more just what's going on with China and the slowdown there. I mean, we saw Apple a week ago lower its guidance, and that was a pretty big deal. But I think there's a chance that that might just be the first step of many. I mean, if you think about Nike, Starbucks, Tesla, like all of these big consumer-branded companies that also operate in China, they could get hit, especially if a lot of those companies' growth stories are dependent on China in some way.

And I don't think the news about GDP growth rates or any of that really is the biggest existential deal. But when you pair on trade tensions and even thinking about a story this morning in which another Huawei executive in Poland was detained. I can totally see how those pressures could escalate and how at some point China could retaliate even harder on companies operating in China. You know, and we also got some consumer price information this morning that shows inflation is not necessarily something to worry about right now, which may give the Fed some leeway here

if they want to kind of pull back on the tightening and let the economy go a little further, which of course Trump and others would love to see. the pressure on the Fed chief is pretty significant. Well, and to go back to one of the companies that you mentioned, Aaron, you look at Starbucks. On Friday, Goldman Sachs comes out with a downgrade of Starbucks, but it's basically tied to an economic slowdown in China. And it really does seem like a time for investors to look at the stocks in their portfolio and ask the question, okay, how much exposure do we have in China here?

Because for the longest time, China has been the great opportunity for so many businesses. Now it seems like the risk factor is a little higher, Andy. Yeah, I think so, Chris. If you can look into your portfolio and look at the global exposure you have at the individual level to those companies and just make sure you understand what that exposure is to your portfolio. I think long term China continues to be such a massive economy and such a massive population that for so many consumer branding companies, like the ones Aaron mentioned, it's still an attractive market.

But there's certainly these trade tensions and some of the macro slowdowns will impact that in the short term. And on a macro level, China is so difficult to figure out because they're notorious for kind of playing with the numbers. So it's really hard to understand until you actually see someone like an Apple kind of slowing their sales or purchases from suppliers. So sometimes we have to play catch-up rather than being able to look at the macro data. All right.

Let's move on to retail. December numbers starting to be announced by a slew of major retailers, Target, Costco, bedbath and beyond, out with some very encouraging. holiday sales figures. Ron, not so much with Macy's. Macy's was tough. Everyone was hoping for a real strong holiday season, I think pretty much across the board. That was signaled by a number of retailers, from the big box to the department stores to the specialty retailers. And Macy's, for whatever reason, had a bit of a stumble in the middle of December. Beginning was okay, and Christmas seemed to be okay.

But somewhere in the middle, things took a turn for the worse. It's caused them to have to lower guidance, both on the top line and the bottom line. Of course, that has reverberations throughout all of retail, and Macy's stock in particular, just gets completely smacked. So I think there is worry that some comments coming out of Macy's about them needing to clean house in terms of inventory will cause them to have to be promotional, which again will have implications for other retailers. in turn will have to become promotional as well, lower prices, lower margins, and therefore

lower earnings. Overall, Chris, the MasterCard spending Pulse Report for November and through Christmas, retail sales were up 5.1% to $850 billion. So very good, very strong in home improvement, which was up 9% over the year. Department sales, on the other hand, department store sales, were down 1.3%. So you're seeing pockets of growth here, but companies like Macy's, which Started off strong, but then kind of fizzled near the end of the year into the Christmas period. Bedbath and Beyond shares up 30% this week. Is that, I mean, should we start to be curious about this? Or does that just seem like a dead cat bounce? I'd be careful rather than curious here. It's the whole expectations versus results game that we talk about often. Things were really, really bad and the report was a little bit better than expected. So the stock really popped. My guess is that this is a true. trade for most folks. I don't think people are looking to bedbath as a long-term, great company

to hold like we look for here at The Fool. It's more of a trade for some people. As you said, a dead cat bounce. Stock's only seven times earnings, so theoretically it's a value investment, but I think of it more as a value trap. I think that pretty much any news around these big box stores is just noise. They're all fading in relevance. Really? Oh, yeah. Totally. And like, sure. I mean, if you look at Bedbath and Beyond, you as an example, but also these other companies, their traffic growth is falling.

And a lot of the growth that they actually are showing in sales is from digital. It's pretty easy if you have a budget to get customers. But if you think about how this plays out over time, someone like Bed Bath and Beyond cannot compete online, you know, with the wayfares or the Amazon's world. There's just no way. And over time, you'll see the same thing with Macy's. You'll see the same thing. Target seems to be stabilizing somewhat, but at the end of the day, they won't be able to compete

the same way, too. So, over the past five years, even with Target, maybe as like the best example, their stock has been more or less flat. I don't expect when looking at any of these stocks there to be anything better than flat over five years from there. Well, I think there are those players, though, Ulta Salons, Home Depot. If you call those big box retailers, that buying habit from that consumer, granted, their online business, they've had very smart digital strategies, but those companies have been able to

buck the trend when it comes to retail. I agree. There are some exceptions, but I even think that a lot of the exceptions that a lot of even fools think of as they're doing okay, if we look over the next five to ten years, I don't think it's going to play out as well as we think. Shares of Activision Blizzard down 10% on Friday after the video game maker announced it will be transferring the publishing rights of one of its franchise games to Bungy, the studio that produced it. Aaron, help me out here. So this is meaningful and not great for Activision, but let me first back up a little bit and add some context. So eight years or so ago, Bungy was thrilled to stop working with Microsoft. They were behind Halo. Their games were huge, but they were disgruntled

working for a larger organization that put pressures on them, and they wanted to move on. And when they did, Microsoft kept the rights to Halo. Bungi announced a new partnership, a 10-year partnership it with Activision, and which the deal was that they'd launch four destiny games with expansions, but as soon as they started operating, it was pretty much a struggle right out of the gate. And if we fast forward all these years through today, Bungie's now made two destiny games with expansions, but there have been more issues and negative reactions than I think Activision wanted. And a lot of the narrative going on right now is that Activision is being too oppressive

and its expectations. You see similar concerns around with electronic arts and all these other big publishers, just that they're putting pressure, making people disgruntled. And I think that we're seeing that with Blizzard, the Blizzard side of Activision 2 in some way, and recent executive changes there,

connect to this as well, I think. And that's not awesome. But I don't think that they're the only ones totally to blame there. And I think they need to be careful on how this plays out, but it's not 100% their fault. fault. But whatever the case, the end result is that Bungy is paying Activision to cut their contract early and to take the rights to destiny. It was pretty predictable that Bungy would move on.

What I didn't see happening was that they'd also take the rights to destiny. That leaves a decent size hole in Activision's portfolio of games. We don't know exactly the financial terms on that. So it will take time for Activision to fill that void, but I do think that they will, because they'll just reinvest in making new franchises. I just need to know. Are you a gamer, Aaron? Is that a thing that you do? Yes.

I'd be proud of that. I was just curious. I've been following this stuff for a long time. It's super interesting. And I have played Destiny, but yeah, it wasn't that great. And here we are. They have improved, but it's true. showing now. It wasn't that great, but apparently, as you said, it's great enough to be meaningful

in terms of revenue for Activision Blizzard. And you look at, you know, this is not the only split that Activision Blizzard has had in the last six months in terms of talent. When we think about brain drain, a lot of times it's in Silicon Valley and it's, you know, an executive leaving Google to go to Facebook or vice versa. But it seems like Activision Blizzard really has a creative problem on their hands right now. Yeah, I think, I think some of the of that is overrated because there always is talent leaving different studios to go elsewhere. But when I start to see it at the executive level, even their CFO recently left, I think maybe to go to Netflix even. I think it was Netflix. I think so. That's when I start to think that

there are bigger moving pieces that are problematic and need to be solved. Coming up, one restaurant chain is making a surprising bet this year. Stay right here. You're listening to Motley Fool Money. Hey, it's a new year. You want to set your team up for success. You want to make that perfect hire. Where are you going to find that person? Well, when it comes to posting your job, you should go where you have access to an engaged community that people visit every day. LinkedIn. Most LinkedIn members, they're not checking job boards on a regular basis, but nine out of ten LinkedIn members are open to and interested in new opportunities like yours. With most of the U.S. Workforce on LinkedIn. Posting on LinkedIn is the best way to get your job opportunity in front of more of the right people. It's no wonder a new hire is made every eight seconds using LinkedIn. So find the right people for your business this year at LinkedIn.com slash fool. And as a bonus, you get $50 off your first job post. That's LinkedIn.com slash fool. Terms

and conditions apply. Welcome back to Motley Fool Money. Chris Hill here in studio with Andy Cross, Aaron Bush, and Ron Gross. One note before we get back to the news, guys, Motley Fool is looking for some summer interns. We're looking for investing interns, editorial, software development, much more. Come spend the summer at Fool Global Headquarters. It's a good place. Beautiful in Alexandria, Virginia. All the details can be found at Careers.fool.com. That's Careers.fool.com. Interactive brokers in the spotlight this week when the company announced that founder Thomas Petterfey is stepping down as CEO. Not a household name, Andy, but a pretty incredible story in terms of one man's life and the company that he built.

Pretty incredible. He was born in 1944 in Budapest, Hungary, and came to the United States, 1965, and didn't speak a lick of English as a software engineer, built interactive brokers. They have near 500,000 institution, individual accounts. use him here at the Motley Fool. Maybe many listeners do as well. He has really revolutionized and institutionalized this ability to drive trading costs down at the individual level. And they've been very successful at Interactive Brokers. He's now handing this over to the president of Milan Gallic, who has been with him at Interactive Brokers for decades. And this was actually Rich Griefner, one of our analysts here, actually said this, I expect this to

happen to be very smooth. So it's not a huge surprise. He's 75 years old. Owns a, has a meaningful stake in this business. So I expect the transition to be smooth. Something to watch out if you are a shareholder of interactive brokers. Shares of Constellation brands taking a hit this week after the company announced guidance for 2019 would be lower due to weak wine sales. Aaron, Constellation brands, they've got a portfolio of wine labels, spirits, beer, probably best-known. for Corona. They are also already writing down their investment in canopy growth, the cannabis company up in Canada.

Yeah, that's the bigger part of the story to me, I think. And really, this is all about expectations versus reality. I don't think anybody's too surprised what's going on and like their core business. But writing down their investment in canopy growth already, that's news. So canopy growth is the world's largest medical cannabis company. It has tons of of brands in the recreational space, too. They've continued to make lots of big deals. And so as that industry grows, canopy growth will be a relevant player. It will be one of the largest players. I think that needs to be respected. But it takes time to scale, and it takes time to get there. And I think a lot of the valuations that we've seen in the stock market,

a lot of the deals that we've seen companies like Constellation brands make with companies like this, they really were pricing in that much more would happen. faster than it could in reality. And I think this write-down is probably the first of many for different companies out there in this enrolling in 2019. Well, so they made a $4 billion investment in Canopy growth. It's a lot of money. I think we were all surprised. Not that they made the investment, but that it was that big. You mentioned we're going to see more write-downs from more companies. Is it safe to assume

we're going to see more write-downs with this company? Because they invested $4 billion last year. They just wrote down 160 million. What are the odds that at one other point in 2019, Constellation Brands is going to come out and say, oh, by the way, we're writing some more of this down. It's certainly possible. I mean, the deal hasn't been there for very long, so I don't know how much they'd write down so quickly. But, I mean, the deal was premised on being able to move fast and build something big quickly. So it is possible, but I don't know to what degree a write-down could be. Young Brands is the parent company of KFC, Pizza Hut, and Taco Bell. This week, Taco Bell announced a commitment to vegetarian customers, including a dedicated menu for vegetarians, new items specifically for that menu. And Andy, I think we all smiled at this story. But I should point out, Taco Bell is the only quick-serve chain in the United States that is certified by the American Vegetarian Association.

Chris, this is very good news for the Cross family. That's fake news. This is real news because my family is pretty much vegetarian. So when you think about Taco Bell going after this market, apparently you can create 8 million certified veggie combinations at Taco Bell. That's enough if you ate one meal a day to eat a new meal for 22,000 years. But here's why this is interesting. That's why this is interesting is there are now, by some estimates, somewhere in the neighborhood

of 6% of Americans are now classified as vegans. That's up from 1% just a few years ago. So as more and more of us are thinking about this style, Young Brands and Taco Bell recognizing this. It's about a third of total Young Brand sales. Taco Bell is about a third. So saying this is an opportunity to go after this market, like no one else is really doing as boldly as they are.

So I applaud this move. I think it's a good one for them. Aaron Bush, back in your college days, I believe you were known to hit Taco Bell Now and then? Geez. Yes. The binge of the bell. It's the game in which you and your friends can spend $10 every single meal at Taco Bell, which

goes a long ways. And you can't eat anything else but Taco Bell. And the last person standing wins. I think wins is in air quotes. Ron, just one quick thing on a business note. You think back to the fall of 2016 when Yum Brands spun off Yum China as its own stock, that really has worked out well. I mean, Young Brands shares have nearly doubled since then. It's much better as a pure play. It allows investors to differentiate between the two companies.

And clearly, as you say, it's been a good investment and they've performed well. Ron Gross, Andy Cross, Aaron Bush, guys, we will see you a little bit later in the show. But up next, we're heading to Las Vegas. We're going to check in on the scene at CES. So, stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. This week, more than 170,000 people descended upon Las Vegas for CES, the largest consumer technology trade show in the world. Motley Fool analyst Rex Moore is one of those people. And he joins me now, not just from Sin City, but you're on the trade show floor, Rex? I am right here in the middle of it, Chris. It looks like more than 170,000 people, to be honest. It's a zoo. Thank you for joining us from the middle of the zoo. Let's start with your headline for CES this year.

Well, I mean, one of my areas of coverage is auto technology, and I think once again, autos are dominating out here. Self-driving cars are huge. But I think what people have to remember, you know, they hear about it and they think of the auto companies and what have you, but there is so much technology behind the scenes here that people, investors should be paying attention to. Let's talk about vehicle to everything communications.

They call it V2X. So when all the cars are connected and everything, you've got to have these cars talking to one another, and this kind of ties back into 5G. When that gets rolling out, that will enable all of this communication. You're talking about charging technology. You're talking about batteries. How about software companies? The constant downloads, the updates, the firmware pushes.

There are so much going on behind the scenes in so many areas that we have to look out for as investors. Rex, I'm reminded of when Apple unveiled Apple Pay for the first time. And Tim Cook went out of his way to talk very directly about security, because he knew that security was so important in terms of people's money. How much is security part of the conversation and part of the presentations that you're seeing when it comes to self-driving cars? Because as someone who's been driving for a long time, that's number one on my list. Yeah, and we didn't rehearse this ahead of time, did we, Chris?

But I'm going to tell you, I'm going to tell you my inbox has been flooded with companies that are offering, security for self-driving cars and connected cars. So it's a huge, huge part of the equation. Over the last five years, automakers have had an increasingly large presence at CES. Pretty amazing when you consider that next week, they're going to have their own show in Detroit. With all the automakers at CES this year, did you get a chance not just to kick the tires of anything, but do you get to take anything out for a spin? Well, I actually did. And it's a company that really I'm kind of intrigued about. And I think it's one to watch in the self-driving space. It's from a company called Yandex. And you've probably heard of it. A lot of people probably have it. But it's the Google of Russia, so-called. And I was in one of their self-driving cars. And they're actually offering rides here in Las Vegas the first time in the U.S. and they do not have driving. behind the wheel to act as a safety backup.

So that kind of shows you how far along their technology is. And the company intrigues me because it does have that Google business model. And if you think about Google's market cap, I'm going to talk roughly here, about $750 billion. Bidu is another with this ad revenue generated business model. They're about $50 billion. Yandex is around $10 billion. So I think somebody looking for a smallish cost, company that may have some upside, might want to look at that. Of course, there are the geopolitical

situations going on right now, but still, it's an intriguing company. What was your comfort level when you were in the vehicle? I was perfectly comfortable. I've been in maybe half a dozen self-driving cars by now, and so it's really, it kind of stands out for how boring it is. It just drives along like a good driver. You know what? That's what I think we all want. when it comes to self-driving cars. We want boring, predictable, and safe. Yes, and it reminds me I also stopped into the BMW booth, and they've got a concept car ready for when self-driving really is ubiquitous,

because we won't need to sit like we do in the cars nowadays, and they've got such an incredible luxury-looking inside there and a bunch of entertainment options. So I think everyone's going to look back on the age of non-self-driving and say, oh my gosh, I don't want to go back to that. All right, let's move out of the vehicle industry and into just sort of in-the-home consumer technology, because for those who haven't been to CES, there are so many companies that are presenting, and similar to the BMW concept car that you mentioned, there are a lot of companies

that are presenting concept gadgets that aren't really ready for production. others are a lot closer to production and will have these devices out later in the year. As you walk the trade show floor, have you seen a gadget, some type of technology that you thought to yourself, boy, if they're giving those away for free, that's the one I want to take home with me. Interestingly, have you heard of this company called Procter & Gamble? Don't tell me Procter & Gamble is there. Are they really? Well, look, they're over 100 years old, right?

but they didn't get to be over 100 years old by not being innovative. And they are here. I actually took a tour of their booth, and there are some incredible gadgets that I would like to have. For instance, I'm of a certain age. I have maybe some spots on my skin. They have an AI-powered wand that will scan your skin, take the color samples,

and then you rub it back over the skin, completely covers up your skin spots, for instance. So consumers, I think, are going to be really pleased within the next decade or so at some of the stuff coming out. It's interesting because Tim Cook gave an interview recently where he was talking about health and how important health as a category is for Apple as a business, which is pretty amazing when you consider that in terms of how Apple makes their money, it's an iPhone company. How much is health and sort of self-care a part of what you're seeing on the trade show floor?

Because I have to say, I'm a little gobsmack that Procter & Gamble produced the gadget that you want to take home with you. Well, so am I. I didn't expect that. But yes, digital health and AI-powered health care. They have their own huge area here at the show, and they have for a few years. now. Obviously, as we see the aging demographic, we'll only see that getting bigger and bigger. So more to look forward to in the future for us. All right. I know you're busy. I know you've got a lot that you're doing there, so I'll get you out of here on this. When our colleague David Kretzman was at CES a year or two ago,

he said that the strangest thing he saw was a smart rubber duck. Forget smart fridges and smart microwave ovens, someone was producing a smart rubber duck. What's the weirdest technology you've seen so far? Haven't seen any smart ducks, but how about a self-driving motorcycle? I mean, that's weird, right? What are you going to do? Like sit on the motorcycle and go to sleep? I don't think so, but BMW actually had a working model out. It was running around in the lot all by itself. And to be fair to them, they say this is not anything they're planning to produce. They're just trying to learn from the technology. But that is a very strange site indeed. Rex Moore, live from Sin City. Thank you so much for being here. Enjoy the rest of CES and get

home safe. I will. Thank you, Chris. Coming up, we're going to dip into the Fool mailbag. Plus, we've got a few stocks on our radar. This is Motley Fool Money. Fever, Las Vegas, with your neon flashing and your one-on-arm band that's crashing, all those homes down the drain. Beaver, Las Vegas turning deep. That's 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 once again with Andy Cross, Aaron Bush, and Ron Gross. Our email address is Radio at Fool.com. Question from Maddie Peering in New York City. She writes, as a fairly recent grad, I've started to take a stronger interest in my investment portfolio. Currently, it mostly consists of ETFs. But I wanted to get your thoughts on stocks such as Salesforce and Oracle.

I've found these two systems to be lifelines in my current company, as well as many of my friends. Also, at first glance, they seem to be reasonably priced and cost. growing. We'd love to get your thoughts on investing in them or what you see in their futures. A great question and kudos to Maddie for taking hold of her financial future. Aaron Bush, Salesforce, Oracle. What do you think? I mean, first of all, I just want to say congrats on having that level of awareness. There's totally value in looking around at your daily life and finding companies that are relevant. I think in particular in this case, you're starting to see the investment merits of enterprise

software companies in general. They're increasingly relevant. They're mission-critical. They're very sticky. And software at scale is very profitable. The next step I'd challenge you to think about is which of these software companies is defining the future. Sometimes, typically, it's smaller companies still ramping up, but sometimes it is the larger companies that fit the mold, too. And I'd say Salesforce in particular is one of those companies that fits the mold. It's the world-leading provider of customer relationship management software. It has a massive backlog of companies that want to work with it. It continues to improve its platform.

Oracle is more legacy. It probably isn't defining the future as much as Salesforce. A lot of that's because it started back in the 80s. It's had a tougher time taking advantage of the cloud and new database technologies like what's coming from MongoDB, for example, are potentially threatening. That said, it still is a respectable company, and a lot of businesses rely on it. It has resources to reinvest. But if I had to pick one of those two, I'd probably lean towards Salesforce. Agreed. Like Salesforce, Aaron, it's 112. a billion-dollar company. Oracle's 170 billion, so they're catching up to it. It's from a valuation perspective, more expensive, but it's also growing far faster at 25, 30 percent a year.

Question from Ted Sloan in Lawrenceburg, Kentucky. I'd love to hear your analysis of Ford Motor. I keep hearing about how they're implementing a turnaround strategy and getting a jump on the electric car boom and sitting on a pile of cash. And yet, their share price cratered in 2018, and I have followed it all the way down. Andy, a year ago, shares of Ford Motor. We're closing in on $14 a share. By the end of 2018, it was below 8. Unfortunately, the turnaround is still in the works, and it's not over as Ford continues to announce these billion-dollar initiatives, whether it's electric cars or cost-cutting, which has been the big initiative, Jim Hackett, as he's come on board as CEO, and they announced a continued trying to restructuring. the European operations, which has really struggled. So, unfortunately, the stocks reacted to that news, and you look at it as a, oh, it's a potential value play here. I think it's much less about the future with Ford, and I would probably at these levels not be looking to buy the stock

today. More than a decade ago, I recognized it as a potential value play, and I can commiserate with the question. It's been tough. I abandoned it years ago, and I think it's just going to flounder. On last week's show, We did our preview of 2019 for investors and included our reckless predictions for the year. Some of those predictions were about business, but Ron, you made a different kind of prediction. You bet I did. There's going to be more definitive signs of previous life discovered on Mars in 2019. And that's going to build off of the work done by the Mars Curiosity rover that earlier in 2018 found some organic molecules.

And we'll figure out where those actually came from. build on that. They're not going to be any signs of actual Martians running around, but I think we're going to see signs of some previous life. And that led to this email from Ashwin Vasavada in Los Angeles, California. He writes, hi guys, I was doing my usual Saturday morning routine listening to the show. And out of the blue, Ron Gross makes a reckless prediction about finding more evidence of life on Mars in 2019. As the lead scientist on the Curiosity rover mission, and longtime listener, I could not have been more thrilled. You guys keep doing what you're doing, and our team will do our best to keep the rover firing on all cylinders.

That is just awesome. I've had the pleasure of doing this show for maybe nine years or so, and that is by far the best email that we've ever received from my perspective. So thank you very much for listening. No, that would have been a great email if it was just from anybody at NASA. But the lead side of the person running the Curiosity rover mission. Does that mean I'm right? No, not necessarily. I don't think he said that, did he?

I'll look at the email again, but I'm not seeing that. Keep the emails coming. Radio at fool.com is our email address. Let's get to the stocks on our radar, and we've got a little extra time. So our man behind the glass, Steve Broido, is going to hit you with a question, but we've got time. You want to hit one back to Steve. Go for it.

I'm not prepared for that. Ron Gross, you're up first. What do you got? I'm going to go with Markell, M-KL, a stock I added to in late December. It's a recent best by now in our Stock Advisor Service. A specialty insurance company's stock is down 15% from its September high due to market weakness and also an investigation into some loss reserves into a small division of theirs, which frankly I'm not concerned about. They consistently generate great returns both from the insurance side of the business as well as

the investment side. Dirty little secret is that insurance companies don't always produce profits on the insurance side. Sometimes they just come from the investment. side, but they do both really well. They invest in both public and private companies in their investment business. I love to see that. Really stellar management led by co-CEO's John Kirshner and Tom Gaynor. Steve, question about Markell? So I know they insure some odd things. What's one of the more unusual things that Markell insures? Ballet Studios is a good one. Dude Ranches. I'll go with Dude Ranches. Do you have a question for Steve? Steve, when's the last time you went to a dude ranch? I was a small child. It was in Arizona and in Tucson, I think. Outside of Tucson.

Nice. I didn't like riding the horse. I was a little too small. That's a big part of it. I'm no dude ranch expert. Any truth to the rumor, Steve, that you were the inspiration for the movie City Slickers? No. No. It is a rumor. It is out there, though. Andy Cross, what are you looking at? Delta Airlines symbol D.A.L. reports earnings on Tuesday. It's really had a tough running. The stock over the last month has gone from 56 to 4.000. It's underperformed all the other airline peers.

Its revenue per seat mile estimates for the quarter continue to go down. They said one thing in October. It's now different than what they said back then. They just continue to lower that to the lower end of the guidance. So looking to see what Delta is going to say about the profitability of the business. It's a cheap stock. We've added to it recently in a couple of our portfolios of the Motley Fool, and its debt pictures under control, and airlines are now finding real purpose and a better way to run now.

So long-term, I like Delta, looking to see what they say about the upcoming year and their upcoming quarterly results. Steve, question about Delta Airlines? Do you find any airline comfortable? I flew recently, and the experience is just miserable, and it seems like across the board it's uncomfortable, unless you're doing first class or business, which is a little too rich for my blood. I tell you, we flew British Airways over to London last year. and it was fantastic. Even in coach, it was great. Aaron Bush, what are you looking at this week? I'm looking at Interactive Corp, ticker IAC. IAC, who's now chaired by Barry Diller, has a pretty wild history.

I was looking into it. In the 80s, it started as a broadcast company backed by Liberty Media and had controlling stakes and ventures like Home Shopping Network, USA Network. It then took its winnings and started to simply just invest where it saw opportunity. So they bought Ticketmaster, which later sold the Live Nation. They acquired Expedia, which later spun out, and they had huge gains from that. The same goes for Lending Tree, TripAdvisor, Match back in the day. And much of that is sold off, but today they own over 80% of Match Group,

which became the Top Dog and Online Dating by compiling lots of different brands. They own over 80% of Angie Home Services, which more recently became the Top Dog and Home Service marketplaces by compiling lots of brands. They own various online publishing properties like Vimeo, investipedia, dictionary.com. So an interesting mix of companies, but I feel pretty good about what they have in their portfolio. But what is most striking to me is just their track record, being able to take their winnings from all these companies and reinvest it in other companies defining the future and being able to make billions repeatedly off of it. So I'm really

interested in Interactive Corp. Steve, question about Interactive Corp? So it sounds like an excellent holding company. Do they do anything themselves or do they just own other businesses? It sort of ebbs and flows over time. So they do own partial stakes in companies, but they also do own, like fully own lots of companies, too. And they have a mix of buying companies outright and starting things up internally. So it's an interesting incubator, accelerator, big acquire of sorts. Interactive Corp, Delta Airlines, Markell, three very different businesses, Steve. You got one you want to add to your watch list? I think Interactive

of course, sounds pretty fascinating. Those are some big names. There are some big names. Steve, one bit of news from the airline industry that may peak your interest, may change your mind in terms of your flying habits. I don't know if you saw this, but United Airlines is putting out a cookbook. It retails for $30. If the airline food really swings in your direction, does that get you interested? As long as it's a snack box that costs $44. Ryan Gross, Andy Cross, Aaron Bush, guys. Thanks for being here. That's going to do it for this week's edition of Motley Full Money.

Our engineer is Steve Broido. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.