Motley Fool Money - Retail Surprises, Sports Betting, and Royal Marital Advice

Episode Date: May 18, 2018

Macy’s surprises. Walmart slips. Home Depot sells off. PayPal makes a big buy. And Campbell’s Soup gets a shakeup. Our analysts discuss those stories and dish out some marital advice for the royal wedding. Plus, Villanova sports law professor Andrew Brandt talks about the Supreme Court’s decision on sports gambling. Thanks to Molekule for supporting our podcast. Get $75 off your 1st order at http://www.molekule.comand use the promo code “fool”. Thanks also to HelloFresh. Go to HelloFresh.com/MF30 and use the code MF30 to get $30 off your first week of deliveries. Learn more about your ad choices. Visit megaphone.fm/adchoices

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when you go to hellofresh.com slash MF30 and use the offer code MF30. Also, thanks to Molecule, the world's first molecular air purifier that reduces symptoms for allergy and asthma sufferers. For $75 off your first order, visit molecule.com. That's molecule with a k, m-o-l-e-k-u-l-e.com. and enter the discount code, Fool. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money Radio Show. I'm Chris Hillen, joining me in studio this week, senior analyst Jason Moser, Matt Argusinger,

and Ron Gross. Good to see you, as always gentlemen. Hey, hey, hey. We've got the latest headlines from Wall Street. We'll talk to Andrew Brandt about the Supreme Court's decision on sports betting and As always, we'll give you an inside look at the stocks on our radar. But we begin with the retail industry, starting with Walmart. First quarter profits and revenue, both came in higher than expected. Online sales in the U.S. up 33%. But, Ron, they are spending a lot of money.

Yeah, it was mixed, and you nailed it on the head. Beating expectations on the top and bottom line, that's great. Com sales up 2.1 percent, also strong online sales. Last quarter, they actually disappointed on the online sales growth, and the stock took a slam. Now, up 33 percent, really good to see, and that's important. Online grocery also showing good, strong growth numbers as well, but margins are under pressure. We've got higher freight costs, we've got price cuts to remain competitive, and that's taken a bite out of profit. Operating income was actually down in the U.S. by about 3 percent, so a mixed bag overall. They're also many, obviously going to be spending a lot of money in India.

That's right. A ton of the money. $17 billion, I think. Something like that. Flip cart doesn't come cheap. That's right. And I wonder, though, if Walmart is focusing too much on what they're trying to do in India and elsewhere and at the expense of their domestic operation. Because I know we can tout the online growth a lot. But I just wonder, you know, they still have this tremendous store base here in the U.S. that's responsible for still, you know, 80 percent of their over global revenue. And I just wonder, you know, if they're taking the eye off the ball a little bit there. Doug McMillan, you look at him as CEO for the last four years. The stock is only up about 12 percent,

but it feels like the moves that he and his team have made, have made the company more than 12 percent stronger than it was four years ago. I think that's fair, and you might be pointing out a nice value investing opportunity. Nine times EBITDA is not expensive for this type of company as long as they continue to put up these kinds of numbers. But I would want to see margins turn. And it's going to be competitive. for quite some time. So we actually might not see that for a while. So that value investment could be a little bit of a value trap for a while. Let's move on to the malls. We had reports this week from Macy's, JCPenney, Nordstrom. It's pretty rough out there. Although Macy's did surprise a lot of people, and that stock's

up more than 10%. Right. Well, Macy's with comparable sales, up 4.2%. On the flip side, he had Nordstrom, which was just up 0.6%. And J.C. Penny, which was just up 0.2%. And it's a real mixed bag. And I was looking at this very long-term chart of the sales of department stores. This is courtesy of the U.S. Census. And if you look at it, I was surprised at this. But department store sales, so this includes the Macy's of the world, the Nordstroms of the world.

Sales actually peaked in 2000. So we got to go back 18 years ago. And, you know, if you go back to 2000, I mean, most people still hadn't heard of Amazon, let alone shopped on it. And we've kind of had this narrative of all this e-commerce rise with the last two decades is really just kick the teeth in at a lot of these department stores. But really, I think it's more of a phenomenon of consumer behavior. It's just people who have decided not to go to malls,

and specifically, they're not going to department stores. And so we can talk about the death of malls and the demise of traditional retail, but you can see retail sales in general have continued to rise over the last two decades, and I mean, e-commerce is a part of that, but I feel like these companies are just slicing and dicing a smaller and smaller pie. I tell you, in line with what you're just saying there, it shocked me actually a little bit to see this week that BJ's wholesale club is going to go public again after being taken private a little while back. We talk about Costco

and really how they've done such a great job in running that bricks and mortar store in what is becoming more and more an online environment. To me, there are just so many red flags with that BJ's club IPO file. I mean, I don't understand exactly what they think they're going to do here, but they really do have their work cut out for them between Costco. And don't forget that Walmart has Sam's Club as well. So is it possible that what's going on with BJ's, simply the company that took them private is looking for an exit strategy? I think it's more than possible. I think it's very, very likely. Department stores are not dead. There's always going to be department stores. But the

problem was it got out of hand, and there were too many stores and the footprint was too large. So kudos to Macy's who kind of did what they had to do and closed 100 stores and laid off thousands of employees. And that hurts and it's painful. But if the business isn't working, you have to make those tough decisions. This last quarter showed some pretty good results. for Macy's, and it'll be interesting to see if they can follow it through. You know, I'll just note the Nordstrom was down about 10% on Friday, the $46 a share, so that $50 take-private deal by the family is looking pretty good right now if you're a shareholder. That was going to be my next question.

It seems like with Nordstrom, for as good a business as that has been over the last 20 years, it seems like a stock that you'd be crazy to buy just because it's all about the Nordstrom family and their attempt to take it public, right? Pretty much. And that puts kind of a value on the business that you can kind of see. It's 15 times earnings, I want to say right now, which is not expensive. But when you look at Macy's at eight times, it gets a little pricey up there. And it doesn't look to me like it would probably, it would be a market beater over the next few years. The last thing on JCPenney, and I'm sorry to end on this note, but are we getting into Radio Shack territory here?

It really seems like this business has been so challenged for so long that it's almost a real estate play at this point. I don't know if it's any kind of play, to be honest with you, because I think, I just think the mall business, the department store business itself is shrinking, and JC Penny is just the worst of the worst. Let's move on to Home Depot. First quarter report got hit by weather and shares of Home Depot falling a bit this week. Jason, interesting to note, though, they had a bad April. It was just flat out bad, and they didn't lower it. guidance one bit?

No, I mean, it was, I think the narrative that this was somehow a week quarter from Home Depot is, I mean, I think it's laughable. But I mean, maybe that's how opportunities arise, right? I think that longer-term focused investors probably look at it that way. And I mean, when you look at the numbers that Home Depot continues to lob up there, given the size of the company, they continue to grow comps for five percent, growing the U.S. Combs, growing that top line. I mean, just all in all, a very well-run business.

And the nice thing about Home Depot is it does make up for those weather-related occasions, right? It serves its purpose in good weather and in bad weather. So then it becomes really just kind of a timing issue maybe based on the expectations that Wall Street sets up. But you want to look at something that is going to be a nice sort of long-term catalyst for a business like this. Go back to 1995, 17 percent of homes were less than 10 years old. And 33 percent of homes were greater than 40 years old. Now, fast forward to 2016, only 8 percent of the homes in U.S. were less than 10 years old, and 51 percent of the homes were more than 40 years old. And that trend is going to continue. So just connecting the dots here in plain English,

that means our houses are getting older, a lot older, and we're not really backfilling that with a lot of new homes. And that just means that Home Depot and Lowe's, too, should see a lot of business coming in in the next few years, five years even. So I just think there's a great catalyst for a business that has remained somewhat Amazon-proof to this point. I like that data point that Jason has about the age of houses in general. What I do worry about, though, is that the house flipping trend is another trend that's kind of taken off. We've seen fits and starts of it over the last, you know, certainly in the last housing boom, but I feel like it's come back in a big way to the point where a lot of, there's

hedge funds now that have gotten really big into house flipping. Oh, I'm sure that'll work out. Great. And Redfin's doing it. And Zillow, correct. Yeah. And so, you know, that to me, right there, that's just, that's phenomenal business for Home Depot because you're going in, you're wrecking the these houses and rebuilding them up from the inside. Is that sustainable, especially with eventually mortgage rates rising? We'll see. How much of the house flipping do we need to blame on the House Hunter-type shows?

I think a good chunk. I like those shows. They're entertaining. They do such a good job of making it seem like schmose like us can actually do it. I can do that. I'm getting nervous because I'm seeing more and more of these mortgage commercials that are going out of their way to be creative to get you a moment. mortgage, and that's what got us into trouble last time, and we better be careful. Coming up, the royal couple is preparing for their wedding, and fortunately for them, we're here to help. Stay right here. You're listening to Motley Full Money.

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Welcome back to Motley Full Money, Chris Hill here in studio with Jason Moser, Matt Argusinger, and Ron Gross. New radio station to welcome this week to the Motley Full Money family, WUVR News Talk in Lebanon, New Hampshire. Hey, all right. Coast to coast. We love it. Welcome to the family. Mixed fourth quarter report for Take Two Interactive. The video game makers' profits came in stronger than Wall Street was expecting, but overall sales for light. Maddie, the NBA playoffs are getting good ratings, but Take Two's NBA game was not exactly flying off the shelves. No, no. There's something called Fortnite that might be. might have.

I went through, this is great. I went through the conference call. We've been talking about this for a few weeks now, but Fortnite was mentioned 17 times on Take 2's conference call. To the point where Strauss Zeldnick, the CEO of Take 2, I felt like he was getting a little frustrated because he started out saying, yeah, Fortine's great, it's a hit, it's bringing in new players, the industry, it shows how robust our industry is.

We love when other game makers have huge successes. The youngsters are coming in. But by the end, he was saying, hey, look, it's a hit. And, you know, hits by their nature tend to be unexpected. But hey, we got Red Dead Redemption 2 coming out this summer. Watch out for that hit. But you're right. You mentioned revenue was lighter than expected, down year-over-year, actually.

And I like to focus on what Take-2 calls recurrent customer spending, which is spending after the facts. Customers buy the game, and what do they do after that? Well, things like virtual currency, add-on content, in-game purchases, that was up 42% year-over-year. And I think with companies like Take-2, and I do this with Activision in Electronic Arts as well, is you kind of tend to look at three-year rolling periods for these

companies, it smooths out all the boom and busts from blockbuster hits. If you look at Take-2's three-year rolling revenue, it's up 17 percent. I think that's the right metric to look at. So, solid growth, for sure. Can we come up with a better name for the metric recurrent customer spending? Does it roll off the tongue for you? The other companies call it digital spending. That's Take-2 is taking a different tack. Shares of PayPal up on Friday, which is a little surprising because this comes after PayPal announced it is paying more than $2 billion in cash for a Sweden-based fintech company called IZettle. Jason, Wall Street likes the deal, but what in the world is IZettle? Well, IZettle is basically referred to as the square

of Europe. So just think square and then Europe, and now you have a good picture as to what they do. It's interesting. We've talked, I guess, for the last probably decade or so, about the payments industry and how MasterCard and Visa have been the ways for investors to win in this, really attractive space. Everybody knows I love it. I think the next decade, we're going to watch PayPal and Square really duke it out for a lot of share in this space. So MasterCard and Visa will work out well, but I think investors need to keep an eye on PayPal and Square. And I think that PayPal recognizes what Square is doing, particularly for the small business owners here in this country. Not only that, but they are certainly expanding

globally. So I think PayPal is trying to get out in front of this. They are paying a lot for IZettle. I mean, it is not a cheap deal by any. means, I think IZEL probably annualized bringing in somewhere in the neighborhood of about $150 million. So you do the math there. That's a lofty multiple. But with that said, PayPal is going to do what they do best here. They've done it with Zoom. They've done it with Venmo. They just, they get these guys into their family. They let them keep on doing their thing. And they give them exposure to that massive network and expertise that PayPal has. And you remember what all that long ago, we talked about that deal with Synchronic where PayPal was unloading

that receivables portfolio. We were questioning what might they do with this account? Cash? Well, this is a good idea here, I think. You've got a business with a big balance sheet, strong cash flows. It probably is a decent investment on PayPal's that part. So why do you think we're seeing a little bit of a disconnect? If they're paying such a lofty multiple for IZettle, I mean, shares of PayPal is still up. So clearly, I just think you're looking at clearly the trend towards electronic payments. That's only strengthening. And then I think when you add the global opportunity to that, I think It's a big win for everybody involved.

Campbell Soup's third quarter loss was bad enough, but the company also cut guidance for the full fiscal year. Shares of Campbell Soup falling on Friday to their lowest point in more than five years. And Ron, CEO, Denise Morrison, said, I'm out of here. As our producer Mac would say, woof, this is a bad, bad report. And Denise Morrison did not have a successful seven years at this company. this quarter just kind of puts an exclamation point on it. Organic sales were basically flat on weak performance of soup, which, you know, I'm no analyst, but if you're a soup company,

you should probably have some stronger sales of soup. Wait a minute, aren't you an analyst? Oh, yeah, I am an analyst. Gross margins weak, higher food costs, higher steel and aluminum prices, actually, hurting them thanks to the tariff situation that we see ourselves in right now. Their fresh food segment has been pretty much a disaster. They've had to write down about $600 million from that business, which was largely an acquired business. As you said, new CEO search underway. I think they'll, by necessity, undertake a strategic review, perhaps look to sell some brands. But what's interesting is the Doran's family owns really about 40 percent of this company, Doran's family and their affiliates. So any major

change is going to have to get through that family. Stepping back a little bit from Campbell's, I'm just kind of starting to get fascinated by looking at the consumer staples, consumer household goods businesses. Because you mentioned Campbell's, but Kellogg, P&G, Clorox, all these companies are just, I mean, they've been butchered. And they're down near the 52-week lows. And the valuations look really compelling. And I guess it's the idea that these distinctive brands don't really matter so much anymore to the consumer. But I have to say, you're getting some of these businesses and you look at the dividend yields at very low

valuations. Well, and within that group, you look at packaged foods and you see, you Campbell's down 40% over the last year. Craft Hines down just about the same amount. General Mills down more than 25%. I mean, it's almost like it's teen apparel. How bad is the packaged food industry right now? I think what Matti says, it's not about the brands, because if look at Campbell's, their soup sales were down about 2%. But private label soups are up 11% across the board. So soup is still selling. It's just not Campbell soup that's selling. The average cost of a wedding in the UK is $37,000, but this weekend is no average wedding guys. Prince Harry and Megan Markle getting married.

And the costs are estimated to be north of $45 million. We're all married in this room. Producer Matt Greer, Steve Broido, both married as well, although not to one another. And I have to believe if you took the costs of our six weddings together, they don't come close to a fraction of the cost of the royal wedding, nor should it. But can we offer some advice for the happy couple? Because they're going to be, financially, I feel like they're good. I feel like they're good.

But, you know, we're all experienced, married people. Ron, we'll just start with you. Any advice for the happy couple? There's a crown jewel joke in here somewhere, but I'm going to steer clear and just say, when I get home from a long day at work and I get into the castle, my wife appreciates when I take my shoes off. So take the shoes off. Don't forget to take the garbage out, mow the lawn, happy life, happy wife, or vice versa.

Do you think Prince Harry's going to be mowing the lawn? You know, you've got to do what you've got to do. Jason? Yeah, listen, I don't know Prince Harry from a hole in the wall, but I can tell you what has gotten me 17 years with my lovely wife. You know, my mom taught me how to cook when I was a kid, and I suspect with all of that money, they're probably going to be ordering it out a lot. But I think that Prince Harry, get yourself in the kitchen every once in a while, whip up a nice dinner for your wife, show her that you love her by giving her a good meal.

Eat at home. That's love right there, Chris. That is love. Maddie? I am going to stick with the crowns. I'm going to say, don't wear the crowns too often. I heard they're heavy. It causes neck problems, back problems down the road.

Just wear it once and then, you know, look at them. I mean, let's go to the person that we all want to hear from. That's our man behind the glass. Steve brought us. Steve, some advice for the happy couple? I would say, keep your finances separate. That's what I would say. And I would also say is, you know, if he wants to go down to tractor supply to pick up some hay for the horses,

If she wants to go down to tractor supply to pick up some, maybe a shovel to do some planting around Windsor Castle, keep that separate. Just keep it separate. I really hope, now that you mention it, I really hope at least one of them is interested in gardening. I do, too. I mean, they've got so much property, right, don't you think? There's a lot to do. The only thing I'll throw in in this sort of dovetails with what Jason was saying was, you know, every once in a while, just surprise your spouse. Just surprise them with something.

Just do something a little unexpected. On the good side. not like, oh, surprise. I just crashed the car or something. Yeah, my wife noted the other night to one of my daughters. She says, you know, your father, he's trying to like tell me all the good things I do. She's like, you know, your father, he'll bring home flowers unprompted for no reason whatsoever. And I thought to myself, you know what, I do that every once in a while.

I was patting myself on the back there. Hey, bring her some flowers for no reason whatsoever. You think there's a pre-nup on something like this? I don't know. I don't know. But hearing Jason buying flowers unprompted for his wife just reminds me that not all-hero all right, guys. We'll see you later in the show. This week, the Supreme Court rock the sports world and the business world. Andrew Brandt will help us sort things out. Stay right here. This is Motley Full Money. Welcome back to Motley Full Money. I'm Chris Hill.

This week, the U.S. Supreme Court cleared the way for states to legalize sports betting. Here to help us make sense of it all is Andrew Brandt, director of sports law at Villanova University, a veteran columnist, a former general manager, and a former sports agent. Andrew, always good to talk to you. Sports law, and this is at the United States Supreme Court that involved the world. In the history of the court, you can probably list. So this strikes down a federal law from about 25 years ago that had prohibited most states from authorizing sports betting. Let's start with this. Did either the ruling or the fact that it was not a close decision, did either of those surprise you?

three single level, the leagues won against New Jersey, and that statute you mentioned was up a year ago in May, 2017, on appeal to the United States Supreme Court Pellate Law. So once that happened, I'm like, they're going to do something about this. They're going to do something whether New Jersey specific or to the past by the statute you mentioned from 1992. And lo and behold, I was there, Chris, sitting literally two feet behind Chris Crith's arguments. And you hate to read the tea leaves on these things because you never know, but in the camp of New Jersey. And they weren't really talking about sports gambling. What they were talking about was states' rights and giving states an opportunity, having it a monopoly to Nevada based on an antiquated law from 25 years ago.

Now I'm just wondering if somewhere in the world there's a sports book that offers odds on Supreme Court decisions. I would think so, yes. Because you could have put some money down after being there. Yeah. Mark Cuban, who is the owner of the Dallas Mavericks, came out immediately after the decision and said that everyone who owns a major sports team is going to see the value of the team double. And I get why he says that because he owns a pro sports team.

But I'm wondering if you agree with that. I agree, I think saying double when these franchises. But it's a good day. And here is someone saying that who's part of the NBA, which opposed, opposed this result. You know, I kind of facetiously asked this for the last six months, and do the leagues want to win this case and set up a fit? Now it's over. I mean, there's no more appeal, and they are faced with dealing with the states,

absent some kind of Hail Mary in Congress. So we've seen in the secondary ticket market, we've seen teams, offer sort of their own secondary market so that they can compete with the likes of Stubhub. Are we a couple of years away from seeing betting windows at stadiums and arenas? Why not? Listen, the Supreme Court are justices. They're not laying out a structure. If we look to Europe, you know, right away within two weeks in New Jersey, and to me, that's just the beginning. why wouldn't we see it at MetLife Stadium? There's nothing holding that back.

So I think that's where we are. And we're only limited by our imaginations because we could easily see something like in-game betting down where you're betting on the next play, the next touchdown, the next basket, the next hit, the next goal. I want to go back to something you had said about the pro sports leagues. They were looking for essentially a federal law.

And I'm curious if that is the next thing that we're going to see is some attempt by the four major pro sports to get together and really push for federal legislation. I can think of a couple of problems with that, one of which is pick whatever your favorite pro sport is in America. there are a couple of owners who are lightning rods within their sport. So sometimes it's hard for owners in a given sport just to get on the same page about anything. Getting them from different sports all to work together, that really seems like a challenge. Hard lobbying about a sided. And New Jersey's now, in reaction to this, Senator Warren Hatch in Utah introduces a bill which mirrors. Good luck with that. You know what we got going on in this world? You think Congress is going to

fetch the court's betting legislation? Yeah, I don't see that happening. Speaking of tea leaves, you mentioned, obviously, New Jersey was the state that brought this case forth. While this was working its way through the courts, we saw other states like West Virginia and Pennsylvania and Mississippi already passed laws in their states, essentially saying, if we get the green light from the Supreme Court, we're ready to go. As many as 20 other states are considering various levels of legislation like this. How concerned, if at all, are the people in Las Vegas? If you're a casino owner, are you looking at this and seeing some percentage of your sports book business walk away? I think so. I'm asked this question a lot the past few days.

What is Nevada's stance on what's happening? On the one hand, yes. Another hand, they are the gold standard. So whatever benefit, and there is some, maybe I'm having a hard time quantifying it, but benefit to New Jersey looking to Nevada, to Pennsylvania looking to Nevada, to New York and Connecticut and Mississippi, looking to Nevada to figure out what's the risk of take in terms of taxes,

in terms of controls on all these things. are really going to be up to the way Nevada did it. I mean, they have the gold standard. I think it's kind of mixed bag for them. Well, isn't that place where people go on vacation for show Las Vegas. Yeah, I like the comment from Carolyn Goodman, the mayor of Las Vegas, who said, well, anyone can gamble, but here in Las Vegas, it's a party. So they do have that going for them.

I have to believe that the likes of ESPN and Fox Sports and anyone involved with that type of media outlet has got to be excited about not just the potential for more sponsorships here, but also the potential for more programming. I just think that we are, it sounds like we've had gambling for a while, in-game, how are leagues going to deal with it, how our network's going to do it? One thing I've advocated, Chris, is I think each league, a CGO. and then probably the best place to get them is either from Nevada or from Europe, who have been handling these issues for years and years.

You know, the whole idea is it wasn't working because we have $150 billion sports betting industry that's illegal. So if you make it legal, you have more controls, and you regulate and you tax, and you bring it out of the darkness. Is it a foregone conclusion that this, I don't want to use the word absolutely, but as close to absolutely as possible increases engagement for live sports viewing. Absolutely. I mean, that's really what's why I'd say. I don't know if the leagues really wanted to win this case.

I mean, everyone listens. That happens in fantasy, and it's going to have to tune in to games. There's research from Nilsson that the average NFL fan who's a non-better 16 games a year makes sense, their home team. The average NFL fan who's, that's a big difference. The NFL knows that. So what should we be watching for as this plays out over the next six to 12 months? If the ship has sailed on the leagues getting together to push for federal legislation, what should we be watching for? State-by-state approach, as I mentioned, far ahead of every other state is the state that's been in litigation with the Open Monmouth Park.

I think by the NBA final. That soon? That soon. A million dollars have gone into making it a Nevada-style sports book. It is ready to go. That soon. You get to these states in the state committee levels. I put the next group of states right where I am in Pennsylvania, Delaware, West Virginia.

And then I'll look, you know, a bunch of on-deck circle after that. 50 states ever? No. I think by NFL season, besides New Jersey. And maybe by this time next year, 10 to 15. Last thing, and then I'll let you go. The one big area of sports in America that we haven't talked about is college sports. Does this decision and the amount of money that is going to be flowing into all of the various endeavors related to sports betting on pro sports,

does this in your mind speed up the timeline for paying college athletes? One thing I'll be interesting to watch is if these states, are they going to pull out NCAA championships? abuse and nefarious influence. I think some of that's overblown now legal. So the theory is that it's regulated. You can follow Andrew Brandt on Twitter. You can check out his Business of Sports podcast. Andrew Brandt, thanks so much for being here. My pleasure, Chris. Up next, we'll give you the inside look at the stocks on our radar. This is Motley Full Money. I want to say thanks to molecule, the world's first molecular air purifier that reduces symptoms for allergy and asthma sufferers. Molecule has introduced a breakthrough science that is finally capable of destroying

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It has a clean and sleek design from the materials used on the device, like its sleek, solid aluminum shell to a filter, subscription service where filters regularly arrive on your doorstep when you need them. For $75 off your first order, visit molecule.com. That's molecule with a K, M-O-L-E-K-U-L-E.com, and enter the promo code, Fool. 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 Full Money, Chris Hill, here in studio with Jason Moser, Matt Argusinger, and Ron.

Gross. A couple of housekeeping notes before we get to the stocks on our radar. Our podcast swag shop, which you can find at shop.fool.com, a couple of new items, including women's cut t-shirts now in stock. Also, we've gotten great feedback, Jason, from our listeners, people tweeting photos of some of the swag they bought, also offering some feedback on the shipping costs, which we have worked to alleviate. So you can check all that out at shop.fool.com. Also, if you're going to be in the D.C. area at the end of the month, we are having a listener meetup in Washington, D.C. on May 30th, just drop us an email, Radio at Fool.com, if you're around and interested, and we will send you all the info. That's May 30th, just email radio at fool.com. Let's get to the stocks on our

radar, and our man behind the glass, Steve Berto, is going to hit you with a question. Ron Gross, you're up first. What are you looking at this week? I got Retail Opportunity Investment Corp, R-O-I-C. They are a REIT focused on Retail shopping centers, which rightfully so has some investors nervous. Stock has not been strong, we can say. But I think they've got great properties and affluent areas, really strong management team. They are grocery store anchored, which I like. Great dividend, as most REITs typically do.

They've increased that dividend each year for the past seven years. Now stands at 4.5 percent yield, and I think the stock itself has some nice upside. Steve, question about Retail Opportunity Investment Corp? If I'm looking at companies like this, am I just? just looking at the yield. Is that all I'm looking at, or am I looking at more? No, you can look at cash flow for sure, and there's some certain metrics that REITs have. We won't get into the nitty-gritty. But you want to make sure the cash flow is strong. And be aware that because they distribute most of their cash in dividends, they constantly need to raise equity or debt to fund future acquisition.

So you want to keep an eye on the balance sheet as well. Jason Moser, what are you looking at? Yeah, not a new name. Listener is probably familiar with Teledoc, ticker T-D-O-C. A little bit of a question I had going into this most recent quarter's earnings, they have a different part to the business here they've introduced for a fee-only sort of member. Like, they have a membership model, but then they also have just a fee-only model. And I wanted to know really the incentive there. Why wouldn't you just try to make everybody a member of your plan? And so I contacted investor relations. They gave me a lot of great information. And the bottom line,

the fee-only model is really about attracting these big millions of, you know, you know, users' bases with health plans like Aetna or Blue Cross Blue Shield. So the economics simply make more sense. It gives Teledoc a chance to really grow that base out. And we're just seeing this big move towards virtual health care and telehealth. And Teledyoc is helping lead the way. So continue to really love what these guys are doing. Steve, question about Teledoc?

When is my primary care doc a virtual one? Well, it can be right now, actually, Steve. If you go to Teladoc's app, you can enter all of that information and boom. It's like magic. I was really hoping, Steve, was just going to ask you a medical question. I would come up with an answer. It might not be the right one, but I'd come up with an answer. Can you look at this thing on my shoulder?

Matt Argusinger. What are you looking at this one? Also, one I've mentioned in the past. Arcos Dorados, ticker A-R-C-O, exclusive operator and franchisor of McDonald's restaurants in most of Latin America. It's off to a great start to 2017. Comparable store sales, excluding Venezuela. You can't do that. Gained 9.8% in the quarter.

Revenue up 5.5% to 800 million. Arco's is EBITOM margin, which reached a six-year high in 2017, expanded again in the first quarter. That brought in $68 million in adjusted earnings up 12.5% over last year. Argentineas faces some trouble right now. See that? It's always volatile in Latin America, but this is one of the cheapest stocks I see. Steve? How old is too old for a happy meal?

Oh, man, I don't know. I think I could go for a happy meal right now. Arco Sturadox, Teled, Retail Opportunity Investment Court. Do you want to add one of those to your watch list, Steve? I'm going to take a look at Ron's reet. Nice. All right. Score.

Ron Gross, Jason Moser, Matt Argusinger, guys. Thanks for being here. Thanks, Chris. 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.