Motley Fool Money - The New Retirement Savings Time Bomb

Episode Date: March 19, 2021

FedEx rises on a strong holiday quarter. Nike stumbles on earnings. Williams-Sonoma surges on strong stay-at-home sales. Laser technology company Coherent rises on competing buyout offers. Five Below ramps up expansion plans. Lennar raises the roof. Disney prepares to reopen Disneyland. And Hershey’s introduces a peanut butter cup without chocolate. Motley Fool analysts Ron Gross and Jason Moser discuss those stories and share two stocks on their radar: Teradyne and Titan International. Plus, Motley Fool retirement expert Robert Brokamp talks with Ed Slott, author of The New Retirement Savings Time Bomb: How to Take Financial Control, Avoid Unnecessary Taxes, and Combat the Latest Threats to Your Retirement Savings. To get 50% off our flagship service, Motley Fool Stock Advisor, just go to http://RadarStocks.fool.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

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which makes it so much easier to stay on track. And you can get unlimited expert help at no extra cost, even on nights and weekends during tax season. Visit turbotax.com to get matched with an expert today, only available with TurboTax full service experts. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money Radio Show. I'm Chris Held, joining me this week, senior analyst Jason Moser and Ron Gross. Good to see you, as always, gentlemen. How are you doing, Chris? We've got the latest headlines from Wall Street. Retirement expert, Ed Slott is our guest.

And as always, we've got a couple of stocks on our radar. But we begin with a Bellwether stock. FedEx had what they called an unprecedented holiday shipping season. Third quarter profits and revenue were higher than expected, and shares of FedEx were up 7% on Friday. And Ron, it wasn't just a great quarter. The guidance from Fred Smith was pretty positive as well. Strong report with increased margins, I think, really being the highlight here. Shares are up 214% from the March lows, and it's going to be really interesting because we're starting to anniversary the lows of March 29.

the COVID lows. So it's going to be really interesting to compare how companies have rebounded versus the lows, as well as where they were pre-COVID. But this is a really strong report. Revenue up 23%. Now, that's primarily due to both strong volume growth and higher prices. So you get the double whammy there. And the higher prices were across all transportation segments, which is also pretty strong. As I mentioned earlier, operating margins, really the story here, widened significantly on strength in the ground segment specifically, and that's thanks to higher prices. Growth was partially offset by some costs to support that strong demand, higher labor rates, as we're seeing in a lot of businesses. Now, if you'll recall, there was some severe

winter weather in February down south. That reduced operating income by about $350 million, so not inconsequential at all. Nothing you can really do about it. So it's interesting from just an investor analytical perspective to take that into account. Adjusted earnings almost tripled. As you said, strong guidance citing great momentum, quote, great momentum coming out of Q3. Management said e-commerce will grow faster than they projected just six months ago, estimating 101 million packages per day in 2022, with 86% of that coming from e-commerce. Really strong report. Still trading only 15 to 16 times earnings. Again, it's not a technology companies, so we necessarily shouldn't expect really high flying multiples, but that's not too bad

15, 16 times for a company that finally, I think, has its act together both on the pricing and the cost angle. Ron, you mentioned we're about to come into all of these comps from March of 2020 on. When you hear the guidance from FedEx, I don't know, it sort of gives me optimism that these great digital sales numbers we've been seeing. from retailers like Target and Walmart and others. If FedEx is that optimistic, maybe those retailers should be as well. Yeah, I think it bodes well.

I think you called it a bellwether when we started. And it is specifically from the retail perspective. And I mean, listen, online is here to stay. Yes, stores will open up and yes, folks will go back in, but there'll still be a lot of online purchasing within store pickup. Online is definitely going to be driving. having FedEx's business for forever, I would have to say. And I think they're finally in a good position to capitalize on it. Nike's third quarter was mixed. Digital sales were strong,

but Nike had supply chain issues as well as store closures. You tell me, Jason, what stood out to you, whether it was the third quarter or anything they said in terms of guidance? Well, I mean, I think you use the right word there in mixed. I think all things considered this business has really done what. I think most of us would have expected it to do over the past year. It really almost never missed a beat. The stock is essentially doubled over the past year. But that's not to say that it has been without challenges. I mean, there are some things to keep an eye on in the near term. If we look at the results from the quarter digging into that mixed bag, so to speak, sales were basically flat, excluding

currency effects. However, sales in China were up 51%. So clearly, that's what drove a lot of these results. Nike direct sales were up 16%. But then when you look over at the North American segment, pulling a little bit of an underarmor on us, Chris, here. And I don't mean that in a good way. North American sales were down, actually 11%. But you made the point there in the intro that that was really mainly due to supply chain challenges. There were global container shortages that came into play. U.S. port congestion. So inventory flow was impacted there. Gross margin actually expanded one, 130 basis points, thanks in part to the pricing that Nike is able to maintain on that quality brand. Speaking of tech companies and online, like Ron was talking about, the digital business is thriving. The digital business grew 54% on a currency neutral basis. Thanks really in most

part to North America. That had its first ever quarter with $1 billion in digital revenue. Now, to put that in the context, the ultimate target, for management here. They want digital to ultimately account for half of the overall business. Clearly, they're not there yet, but they're on the right path. Looking at inventory, inventory was up 15%. That's a lot. But again, that goes back to a lot of inventory that was actually stuck in transit. So nothing to really hold against them there. Share repurchases will resume now. They put a hold on share repurchases for a while to get through the pandemic. The balance sheet is in wonderful shape with just about $12.5 billion.

in cash and equivalence thanks to a raise, a bond raise that they performed last year. So all things considered a strong business, a strong brand, not without its challenges, but again, its challenges seem to be more domestic in nature and really don't seem to be business related. This seem to be a little bit more greater economy related. So I think they'll be able to weather that storm. of Williams Sonoma up big this week and hitting an all-time high on Friday after strong fourth quarter results. Profits and revenue both came in higher than expected. And Ron, we can add

William Sonoma to the list of retailers who stepped up their e-commerce game in 2020. Absolutely. Out of necessity, but did a wonderful job. Another COVID comparison shares up 480% from the March lows and up 140% from pre-COVID levels. So it's not just a rebound, It's an actual execution, a really strong execution. 26% comp growth overall. Looking across William Sonoma, Partary Barn, Pardy Barn Kids, West Elm, all of those up around 25 or 26% from a comp perspective. So growth across all of the segments.

E-commerce comparable brand revenue growth of 48% with e-commerce penetration, holding at about 70% of total net revenues, which is really strong. That will probably come down as we reopen more fully, but that's a really strong number. Gross margins widened significantly. Adjusted EPS up 85%. So this is a really strong quarter, and then you look at the guidance where management pointed out favorable macro trends, including high consumer confidence, a strong housing market, continuing shift to e-commerce, continuing working from home for many of us. and they expect 2021 performance to be pretty much in line with their long-term guidance of mid-to-high single-digit net revenue growth. They did a lot of other things since they have such strength.

They increased their dividend 11%. They approved a $1 billion share repurchase program, and they paid back a $300 million term loan, and it's still only trading at 17 times earnings. So this is a pretty nice report. There's a bidding war going on for Coherent, a company specializing in equipment to make and measure lasers. And the bidding war is heating up. Back in January, coherent agreed to be acquired by Lumentum in a deal worth $5.7 billion. Since then, MKS instruments and 2-6 have made competing offers. Lumentum has responded. And the last time I checked, Jason, the top bid is now

$7 billion. And by the time this airs and people are listening to it, there might be another bid even higher than that. What does this company do that they are the subject of the I've never seen a bidding war like this? I mean, Chris, everybody wants stuff that makes and measures. Lasers, right? I mean, come on. That seems pretty cut and dry. I don't know what we're questioning here. In all seriousness, I do, wow, you know, I thought we might have seen the end of things with the most recent Lamentum offer, but apparently now 2-6 has said they wanted a little bit more. Coherent has until 11.59 PM, Pacific time on Monday, March 22nd of this year to come up with a counteroffer.

Why is all of this happening? I think the reason for this back and forth, I think the reason why it continues, it's less about coveting coherence actual business, and it's more about coveting what these companies can do with coherence technology to ultimately bolster and grow their own businesses. It's very complementary technology for what these companies do as they look to gain more share in that photonics and laser market. If you check the call from the very first offer, Lamenta made for coherent, Lamentum management said, listen, we're a leader in multiple growing market segments that benefit from the capabilities of photonics. And so they really are looking to this acquisition as a way to help bolster that capability. And it makes sense. And 2-6 sees it

from very much the same perspective. So here's where we stand on the offers. So right now, 2-6 has an offer in there that consists of $220 per share in cash and around $61 for the 26 share that coherent shareholders would get. Now, that compares to a lamentum deal, which has the same cash component, $2, $220, but it's about $52 for the lamentum share. So there's a little bit of a difference there. I mean, it is true that 26's offer is better. It is slightly better. And because it's slightly better on the equity side, it wouldn't shock me at all to see lamentum. come in with a counteroffer. Again, we'll probably see something either this weekend or Monday. But regardless, it really does seem like these are businesses that covet that technology.

Because coherent on its own, it's a decent business. It's not a business that makes you say, wow. But I think it's really more about what these companies can do with that technology. So from that perspective, yeah, I guess I do understand the bidding war here. Coming up, we've got housing numbers. We almost can't believe. and a new product we don't quite understand. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Full Money. Chris Hill here with Jason Moser and Ron Gross.

Discount Retailer Five Below wrapped up its fiscal year with a strong fourth quarter report. Profits in revenue were higher than expected and same store sales up 14%. Ron, this really was a great 12 months for Five Below as a business and a stock. Absolutely. Another COVID kind of comparison. and shares are up 300% from those March 2019 lows. So again, not just a rebound, but strong execution of the business, including opening new stores and a new concept that we can discuss in a moment.

As you said, comp sales up 14%, net sales up 25%, net income, up 12%. Again, you know, this isn't a high-flying company. This is a discount retailer, and they're putting up very strong numbers. They opened two new stores in the quarter, ended with 1,020. stores in total in 38 states. That represents an increase of 13 percent from the end of the fourth quarter of fiscal 2019. Obviously, the way retailers grow earnings is by opening new stores, as well as increasing that comparable same store sales growth. And they are doing both. Now, they plan to open 170 to 180 new stores in their five beyond prototype. And as

the name kind of suggests, that will offer merchandise above that five-five-dollar price tag, but still at a discounted price. That's a pretty crowded market. I'm not sure of the wisdom of that. Their growth plans are pretty aggressive, in my opinion. We will wait and we will watch. But guidance for Q1 was pretty solid. They approved a share repurchase program of $100 million, but it ain't anywhere near cheap at 44 times forward earnings for a discount retailer. Shares of Lenar up 8% this week. First quarter revenue came in higher than expected for the home builder. And Lenar's guidance. Jason indicates that they don't think the housing market is cooling off anytime soon.

No, not at all. I mean, I don't own shares in any home builders, but if I were looking to add shares of a home builder of my portfolio, this really would be the first one I would look at. I mean, it's the largest home builder in the U.S. by revenue. And to your point, they look at what continues to be a very strong housing market as a tremendous tail when, really, for the rest of the year here. If you go all the way back, even in September of 2020, the language regarding the housing market. Even then, they were really, really optimistic about the way things were shaking out. Interest rates remain low. They noted even in spite of a reason uptick in interest rates, an ever so slight one, of course, the housing market remains very

strong. You've got just this confluence of events here where low interest rates, you've got maybe what appear to be some strong personal savings rates. Now, we'll see how long that lasts. I mean, I think that's obviously a little bit situational, but stimulus clearly that's going through now in household formation, which continues. That drives a lot of demand in the space. And right now, we are seeing a shortage of housing, which plays into Lanar's favor. So when you look at the numbers, earnings up 60 percent. That excludes a one-time game from an investment, but revenue is up 18 percent, deliveries

up 19 percent, new orders up 26 percent. All of the numbers tell you that what they do is in very high demand, and it looks slated to continue with backlog up 25%. So as they continue to do a very good job of keeping costs down, that makes this to my mind one of the more attractive opportunities in the homebuilder space. I think as long as investors who are looking towards that space can really embrace that long-term mentality, because it is one of those stocks. going to ebb and flow with economic cycles. This week, Disney CEO Bob Chapic announced that company's theme parks in California will reopen

at the end of April. They will operate at 15 percent capacity to start. But Ron, there's one more sign of growing confidence from the business community as more Americans are vaccinated. Yeah, this is a really big deal for Disney because parks and consumer products represent about 38 percent of revenue pre-COVID. So it is not inconsequential that these have been shut down for quite. some time. So it's nice to see them open, as you said, at 15% capacity to start. The Disneyland

Resort Hotels will open in phases. The highlight of the story for me is that 10,000 Disneyland employees will be recalled to work. That's a wonderful thing to see. I think that's really great news. Shares have already rebounded on anticipation and investors playing, this reopening of our economy kind of play. But I still think this is a wonderful company long-term. We've got obviously Disney Plus as the growth engine, and with the resorts coming back online, I think things will firm up nicely. We're just a couple weeks away from Easter, an important holiday for the chocolate industry. Yet one of the leaders in that industry is launching a limited run product with no chocolate whatsoever.

Hershey's announced it will be selling a Reese's peanut butter cup with no chocolate. The chocolate is being replaced by a peanut butter candy-flavored shell. Jason, they're calling it the ultimate peanut peanut peanut. peanut butter lover's cup. What are you calling it? Well, Chris, much like Gary Delabate's early call on the iPad, I feel like this is a bit of a stumble. Perhaps my call, history will prove my call to be a little bit more on target. I like to at the very least keep an open mind. That said, I think somewhere right now, chocolate is angry, Chris. Chocolate is angry and it's planning for us revenge. There are certain

things that just don't work without the other. Beavis doesn't work without Budhead. Finiis, he doesn't work without Furb. Sometimes you can get away with it with something like an oops-all-berry cereal, but even then, you really know you're missing out on the support that Captain Crunch gives those Crunchberries. So to me, listen, I'm as big of a peanut butter fan as anybody. So when I'm looking for that true all-peanut butter experience, I'm sticking that kitchen spoon all the way to the bottom of the jiff jar. I'm not going out to the store and buying and all peanut butter Reese. Could somebody tell me, is this a limited release around Easter or is this a hopefully they wanted to be a permanent product? They are starting out as a limited run

product. It's just going to be starting in early April. But I think like all companies with all limited run products, if it's a surprise hit, then yeah, maybe it becomes permanent or maybe it becomes their version of the McRib. And then every April, they just roll this atrocity. out there, but yeah, I don't know who's asking for this. I agree with Jason, but the shell, the peanut shell isn't drinking to me. Guys, we'll see you later in the show. If you've got a retirement account and want to keep as much of the money that's in it as possible, then you're going to want to stay tuned for our next guest. Retirement expert, Ed Slot. Stay right here. This is Motley Fool Money.

Welcome back to Motley Fool Money. I'm Chris Hill. Chances are you've got a retirement account. Maybe even a few. At some point, the state and federal governments are going to want some of the money you've got in those accounts. If you want to keep more of it for yourself, you might want to listen to Ed Slot. He's one of the leading retirement experts in America. He's written several books, including his latest, The New Retirement Savings Time Bomb. He recently talked with the Motley Fool's retirement expert, Robert Brokamp, about traditional

retirement accounts, the benefits of a Roth IRA, and the new threats to the new threats to the money to your retirement savings. So that the ticking tax time bombs, say that three times fast. Ticking tax time bomb is the tax building up in what may be your largest single account, your largest single asset for many people larger than the value of their homes, your IRA and 401K. It's a big bag of tax. And you won't find that out.

Some people know it and bury their heads. But when do you realize it at the worst possible time when you reach in to get yours in retirement and you find out, wait a minute, who's this guy, Uncle Sam? I thought this was my account. And it's a big problem because that's the worst time to get hit with the tax bill just when the paycheck stop and you're the most vulnerable and who knows what future tax rates could be. So your retirement savings are at high risk. That's what I call the ticking tax time bomb.

It's going to go off the minute you need it the most. So I propose a bunch of things you can do now, basically my five-step plan in the book, to move your money from accounts that are, well, I like to say, forever tax to never tax, because I love tax-free. That means you keep all your money. No partners, no co-owners.

All right. So when you're talking about tax-free accounts, of course, people think of the raw. You're a big fan of the Roth have been for many, many years. Many people will follow a rule of thumb that says, well, if I'm going to be in a lower tax bracket in retirement, I should stick with traditional. Is that still a good rule of thumb? No. In theory it is. But in practicality, in reality, almost nobody that has saved any kind of money for retirement is going to be in a lower bracket in retirement. For years, I've had clients tell me this. and doing taxes for over 40 years. I don't do them anymore. But I used to, and people used to be amazed. I would have retirees come in and they say,

how can it be? I have more income now than I was work than when I was working. It's called RMDs, required minimum distributions. And if you do nothing and you've built up a healthy retirement account, guess what? The mandatory distributions from those accounts can exceed. what was your income from working. Not only that, I worry about what future tax rates might be, given our level of deficits and debts. So even a low bracket, even if you say, well, I'll be in a

lower bracket in retirement, who knows what the lower bracket is? And there's another more devious item there. And this involves married couples. Married couples might say, well, we'll be in a lower bracket in retirement. Neither of us will be working. Well, With most married couples, I'm going to go out and make a bold prediction. One of them will die first. When that first spouse dies, and most people leave everything to their husband, a wife, a surviving spouse. So let's say the husband dies first.

The wife inherits everything he had. So now she has everything they had together. Her income is roughly the same income they had together, other than maybe some adjustments for Social Security, except now her rate goes through the roof. Now she's in a much higher bracket because she's filing at single rates. She doesn't get the married joint rates.

That's what I call the widow's penalty. Most people don't look beyond that. So you have to look to the end of when this money will actually be taxed. Now here's the thing I love about the Roth. Let's say I'm wrong about everything. And you're right. I'm a big Roth fan because I love tax-free.

I like to do. get rid of the problem. This is why I love root canals. Why, it gets rid of the problem. I take the pain up front, never have to worry about cavities or anything else. Now I just found out that root canals can go bad and you have to do them again, but maybe a bad example. This is why I love Roth IRAs. Let's say I'm wrong about everything and tax rates don't go up. Maybe they even go down. I doubt. Here's what I love about the Roth or any financial decision. Before you make it, financial decision, or any decision, I guess, in anything, you always want to look to the worst case scenario. What if I'm wrong about everything? So the worst case scenario, if you convert

to a Roth, you've locked in a zero percent tax rate for the rest of your life. And even after the new Secure Act eliminated the stretch IRA, you can still go out another 10 years to your children and grandchildren, all growing tax free. You keep everything. every cent. So locking in a zero percent rate now guaranteed it's not a bad consolation prize. You can't beat a zero percent rate. What do you want them to pay you? So, you know, that's the worst case scenario, which is why I love loss. I never have to worry about what the uncertainty of future higher taxes can do to a person's standard of living in retirement. Who wants that hanging over your head when you have the ability now to make your tax rate zero if you want to.

Right. And just to drive home a point you were alluded to previously, one of the other benefits of the Ross is you don't have the required minimum distributions. If you don't need the money, you can just let it grow and grow and grow. And tax-free money grows the fastest because it's never eroded by current or future taxes. So you'll accumulate more. Imagine, you know, the last few years, people have had these big stock gains. And if it's in your IRA, you, as you said, you have a co-owner. You have a joint owner. If it grows in your Roth, you're the only owner. You keep 100%. That's what real accumulation is. So I'm going to ask you a question. I know is like one of the most common questions you get asked, but I know everyone is curious about it. What about the people

say, yeah, that's the current rule for the Roth? I love that question. What if the government changes its mind down the future and decides to apply tax to it? You know what? That is the number one question I get in seminars. You know, back in the day, I used to go out and do seminars. I would get on something called an airplane, go to an airport, and go into these big buildings called hotels. They were all over the country and people went there. It was back in the golden age. So now we're doing this virtual thing. And every time I did one of these programs, and I would talk about, you know, excitedly about the Roth and tax-free

and keeping more of your money, somebody would always get up and ask the question you asked, but not as nice as you asked it. They would say, yeah, but can you trust the government, and I'm making it nicer than they said it. But can you trust the government to keep its word that Roth IRAs will always be tax-free, that they won't change the laws?

My answer is, and I say it in my book, of course not. You can't trust these guys as far as you can throw them. You know, there's an old CPA tax advisor saying tax laws are written in pencil. They can always change them. That's why you want to take advantage of today's rock bottom bargain basement low rates now. These are the lowest rates you will ever see in your lifetime. Take advantage. It's here now.

Could Congress change the rules? They could, but highly unlikely. Anyway, they would probably grandfather anybody that already paid the tax. Here's why my theory is they won't touch the Roth IRA, because the people in Congress are the worst financial planners on earth. Look at our national deficits. If any financial planner did that, they'd be thrown from a building, okay? But here's why they're such poor planners. They only look short-term. See, that's the secret to the law. Don't look short-term. Yes, there's money due now. Look at the long-term big picture. For example, let's say I was the accountant for the, for the Congress. You remember that movie years ago, Dave, where he became the president. He was like a look-a-like for the president. Yes, I remember that.

He brought his accountant in to talk to the president, and he's a picture sheet of paper and and fixed the whole budget deficit. Remember that scene? Yep, yep, yep, yeah. All right. So if I was that guy coming in, I would tell that Congress or the president sitting around there, I said, you've got to get rid of this. If I was advocating for the government, for bringing in revenue, I would say, you've got to

get rid of this war by IRA. Sure, people pay tax up front. But if everybody did this, you'd have a whole country. of tax-free millionaires with their off. They'd never pay taxes again. And you know what they would say to me? Well, we don't care about. Then we only care about the first two-year budget cycle.

And the way we look at it, Roth IRAs bring in money up front. That's all we care about. Luckily, there's such short-term thinkers and horrible planners. So they use the Roth IRA to fill budget gaps. If you look at the last few tax laws, if you go in the back, after the first like thousand pages, you look, they have to say how they're paying for everything. That's where you always see the Roth provisions, where they expand use. They want more people to do the Roth because it gives them money up front.

In fact, in the last few administrations, I haven't heard it in the latest ground. Do you remember Congress and the budget agendas coming out with the term Rothification? You remember seeing that in the last five years? You know what that was? They wanted everyone to go rough because they wanted the money up front, not realizing they'd get nothing later. So that's a horrible deal for the government, but great deal for us because they're such lousy planner.

So I don't think they're going to kill the Golden Goose that brings them all their money up front. If you want to listen to the full conversation between Ed Slott and Robert Brokamp, you can hear it on Motley Fool Answers. The weekly podcast, the Robert hosts with Allison Southwick. You can find Motley Fool answers wherever you get your podcast. Up next, Ron Gross and Jason Mozer return with a couple of stocks on their radar. That's after the break, so stay right here.

You're listening to Motley Fool Money. Now, who's hot, who not? Tell me who rock. Who sell on the stores? You tell me who flop. Who copped the blue drop? Who juice drop, box? Who mostly dopey down through the blue drop.

The same old pimp. Mace. Change but my limp. Can't stop till I see my name on a blimp. Guaranteeing me yourselves for love or love. 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're here. Welcome back to Motley Fool Money, Chris Hill here once again with Jason Moser and Ron Gross. Guys, a bit of sad news this week. On Thursday, Texas Roadhouse

announced that founder and CEO Kent Taylor passed away at the age of 65. Taylor started Texas Roadhouse in 1993. And today, the restaurant chain has more than 600 locations in the U.S. and abroad. We had the pleasure of having Kent Taylor as a guest at one of our events in 2017. Our colleague Bill Mann interviewed him on stage in front of an audience of more than 500 people. One of the things Bill asked him was about the growing trend of automation in the restaurant industry.

And Ken Taylor talked about how he saw the people working at his restaurants as a lot of the as a genuine asset. Dan Boyd, can we run that clip? So when I have three table stations and they can spend more time with you, our table turns are actually much quicker than our competitors. And so the reality is I can get more dollars or more cents per minute as we look at it off a table. And if you have busers ready to turn the table, then my tables maybe sit empty a minute versus when you have less labor, your table might sit empty for five minutes where you're not making any money on that table sitting empty for five minutes. So I really look at it as how we're churning table turns.

And like, we don't really promote desserts because I don't want somebody sitting there for 20 minutes spending $5 on a dessert. I want them to get the hell out. You know, guys, I love that clip for a couple of reasons. Obviously, Kent Taylor's sense of humor coming out at the end there. But it does make good business sense. I mean, it's part of what made him so great at running and growing that business. But also, Ron, in the face of growing questions, you know, like all CEOs, every quarter he's dealing with questions from Wall Street analysts. And, you know, he would get those questions from time to time about essentially, you know, do you need to employ so many people at your restaurants? You know,

why can't you automate some of this stuff? And Taylor looked at a restaurant much more as a relationship that you have with your customers. And he wants not just friendly people working there on the waitstaff team, but also he knew the economic impact of being able to turn over a table quickly. Yeah. A great guy and a great CEO, and it reminds me a lot of conscious capitalism, where you're worried about all your stakeholders, including your employees and your customers, and not just the pesky analysts or the investors out there who are trying to or hoping that your share price will go up.

So I think he struck the nice balance of being a strong businessman and a strong human being. Guys, we will get to the stocks on our radar in just a second. But for the dozens of listeners who are listening, if you're looking for even more stock ideas and recommendations, you can check out our flagship service stock advisor. You get stock recommendations from Tom and David Gardner. You get their best buys now and a lot more. You can get a 50% discount off of Stock Advisor just for being,

one of the dozens, go to radarstocks.fool.com. That's radarstocks.fool.com. All right, let's get to the stocks on your radar. Jason Moser, you're up first. Our man behind the glass, Dan Boyd is going to hit you with a question. What are you looking at this week? Sure thing. Been digging more into Terradine, ticker T-E-R. And, Dan, if you're looking for a 5G investment, which I think, hey, listen, everybody out there is looking for a 5-G investment these days. Terodyne, this is a company that is playing an important role in the rollout of 5G infrastructure and technology. So the company itself designs and builds equipment that helps its users test new electronics

for reliability and performance. So there's a very good chance that all of that tech you have with you right now has been tested with Teradine equipment at some point or another. They actually also make robotic systems and other tools for industrial task automation, but primarily, this is really a 5G play in the sense of semiconductor testing. Stock is up close to 150% over the last year. I think that's really just the beginning. Management mentioned in the most recent call that in 2020, they saw the beginning of meaningful

5G silicon content. So I think as we roll through 21, as we see the semiconductor shortage start to ease up, as we see 5G really start to roll out. Terradine is going to witness some real tailwinds that I think should keep this winner winning. Dan, question about Terodyne? Yeah, Chris. Jason, thank you so much for explaining what this company does, because I had no idea. I was reading about it and it was just my eyes would glaze over and slide past the words on the page. Just seems like a very, very boring company.

It is. I couldn't agree with you more. And really, that's the beauty of it. It is one of the more boring ideas out there. But when you dig into the numbers, it really is a very impressive performer. Hey, real quick, Jason, the semiconductor shortage is getting a lot of oxygen. Is that warranted or are some companies out there using it as an excuse? No, it's definitely warranted. I mean, we've seen a lot of reasons for the cause, but this is something it is not, there are no companies out there that are immune. I mean, this is something that's real, but it is something that should ease up here in the back out of the year.

All right, Ron Gross. What are you looking at this week? Dan, you want boring? I got boring. For those long-time listeners, I'm putting Titan International, TWA, back on my radar. Truth be told, it never left my radar. I've owned this company for a long time, and it's pretty much been a dud until recently. Titan makes wheels and tires for industrial applications, and shares are up almost 500% over the last year.

Latest quarter showed some real promise, net sales volume up 20%, sales up 15% on a constant currency basis. They made money, Dan. They made $2.7 million, which may not sound like a lot, but positive is positive. Balance sheet has firmed up. The CEO says confidence of U.S. farmers is at record levels. Tailwinds from strong commodity prices. Healthy government payments received this year bode well. Dealers are hungry for inventory as channels have been depleted to the lowest levels in the past 20 years. This company still only has a market cap of $640 million. This could be a good one for this current environment that we're in right now. Dan, question about Titan International?

Wow. Old economy, Ron, back at it again. Tire company founded in 1890 is your radar stock. Unbelievable. The 500% is compelling. I will not lie. But, man, Ron, this is right in your wheelhouse, huh? Yeah, and it's only fair to mention that it's up 500% because it was down in the doghouse. And it was almost left for dead. So not only has it rebound, but it's rebounded. significantly and things I think do bode well for the next, call it 12 to 24 months as folks

replenish that depleted inventory. What do you want to add to your watch list, Dan? As the resident millennial, Chris, I'm going to have to go with Terodyne because I see a little bit more future in 5G than perhaps tire manufacturing. There you go. Brian Gross, Jason Moser. Thanks for being here, guys. Thank you.

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