The Best One Yet - Grammarly hits $1B, Tootsie Roll is 110% in on candy, and Waze becomes Google’s secret weapon

Episode Date: October 11, 2019

Your other map go-to, Waze, is owned by Google’s parent, Alphabet, and it’s the company’s potential future profit puppy. Tootsie Roll is 100% focused on candy, less focused on its latest earnings report. And our Unicorn of the Day is Grammarly, the AI-powered company (or is it a feature?) that just hit a $1B valuation.Learn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks Daily. It is Friday. October 11th, Friday. Great day. Really good one. What are you feeling? I guarantee you there's no other pod that covers the three stories we're about to cover. This is an insane mix. How are you feeling about today's snacks? The best one, yeah. Best Snacks daily we've ever done, three stories. Waze is the first company. It's a navigation app. You're probably using it right now while you listen to snacks. It's actually Google's Secret Weapon. It's owned by alphabet. Future Profit Puppet. Could be a profit puppy.

Second story is Tootsie Raw. The old school snack candy is, is actually a publicly traded company. And it goes against every single trend we talk about on Snacks Daily. We're going to unwrap Tootsie Roll for you. It doesn't matter. The stock's still up. Third and final story is the unicorn of the day. Grammarly. Nick, the company's been doing really good recently.

Well, we rehearse this. The company's been doing well. It's been doing pretty well. It has a $1 billion evaluation for correcting people, just like Nick just corrected me. So Snackers, before we jump to all three stories, we got to talk about food trends. Jack, what is your favorite food right now? Now. Food? Dates. Doesn't even matter. Doesn't even matter because we just got the report on what the cool foods are going to be next year. Food trends are a thing. The first food trend I remember is bacon back in

2012. It was bacon wrapped bacon. You had perfume-scented bacon. There was the bacon on the candies off. Then kale and quinoa-ish. Summer of 2015, you couldn't get out of a kale of a quinoa bowl. Everybody's wearing those kale t-shirts. And then assay and cauliflower are the two power foods now. Big spring movement. 2019. I know what you're thinking over here. P-protein? Meatless meat is powered by yellow pea protein. Tea proteins like the cool kid, they get the table and no one can sit with them. None of that even matters, though, because the newest plant food, aka chicken from the tree,

according to the Wall Street Journal, we got three of them that are about to hit. 2020, get prepared. All right, here they are. First three. I admit, they kind of need a rebrand on this. Breadfruit. Breadfruit. All right, kind of need a new name on that one.

Second is monk fruit, which was eaten by monks in China. Sugar substitute. I hear they're both kind of starched. And the last one, Beobab. Which kind of just needs a better spelling on this thing. Here's what entrepreneurs are planning to do to get these on our menu. Start with powder and beauty products. Right, that's a good place.

You can kind of like begin to test them before you eat. Then add them to some smoothies because people won't even notice that they're in there. Everyone's looking to say they have the best smoothie. Then the dried fruit added to granola. You know what's going to happen here. You are going to taste this, feel this, touch this, wear this stuff by the time January. Snackers, breadfruit, monk fruit, and Beobab. Real things, they're coming to the menu.

Snacks about the hair ain't food. It's egg candy. They don't reflect the views of the rob of her family. It's all informational just so you know. We're not recommending any securities. Nope. It's not a research report or investment advice. Not an offer or sale of a security.

Right. Snacks is digestible. Business news for you. Robberhood Financial LLC. Member Fenra slash SIPC. For our first story, Waze is killing ride hailing. With carpool. Very nice move here, Ways.

Carpooling. Now, Ways is owned by Alphabet. It's one of its other bets. It's not just another bet, though. we'll get this in the takeaway. It's more than just another. The other bets are so much more interesting, though, than Google's search, which is Google's main profit club. Classic. Can we talk about how Waze came to end up in the Google company? Founded in 2006.

Good year. Ways, W-A-Z-E, was acquired by Google in 2013 for almost a billion dollars. And here's what Waze is doing as an app. It's crowdsourcing information on all the drivers out there on the highways who are using Ways. Yes. It is letting the drivers do the work for them. Yes. And then it gives you live, real-time, travel. traffic and super accurate ETAs. Todd is sitting in traffic over there. Boop, he's going to make a notification of it. Julie sees a cop. She's going to let you know. Yeah, you can push a button and let the drivers know there's a cop at exit 13. And when you're using the app, you know it's basically a bunch of car like emoji driving around. It's kind of creepy, but it's kind of cool. Super annoying, though.

It is so like optimizing your route. It's going to take you on a micro detour to save you like 30 seconds on your ET. Yeah, it's something you're making a left down alley. You're afraid like the Joker's going to pop out and take your family. Please keep me on the main roads ways. It's like the busy world of Richard's scary, but it's an app. Now, you might have known all that if it's an alternative to Google Maps and Apple apps. Right. But it also has a carpooling feature. So you're going to type in your destination and Waze is going to indicate if there happens to be someone out there, another human being who also needs a ride. I mean, it's only like three or four minutes out of the way. Yeah, if you work at like General Motors, there's probably 50,000 other people going to

general motors. Yeah, you might be like, if you go three minutes out of the way, Tom will give you $5 to give you a ride. And Waze is going to facilitate all that. We know you're thinking two things here. One, great dating app opportunity. Second, H-O-V. Yes. H-O-V lane. This is a ticket to the fast lane. Get another Wazer in your car. Here's one thing that shocked Jack and I about Waze. It's the monopoly situation when it comes to digital maps. Navigation apps are controlled by one company in the United States. Alphabet. Alphabet. Alphabet. Alphabet. The company that owns Google, the parent company of Google, which owns Ways to. Think about it. It has Google Maps, which controls 70% of the navigation app market. But guess what? 10% of that market is Ways. And it also owns Ways. So that's

80% right there that Alphabet owns. In case you're wondering, Apple and MapQuest have like a little bit. I can't believe MapQuest is still in there. Still remember my dad printing it out and sticking on the dashboard. But Snackers, 75% of smartphone users use navigation apps regularly. I use them every day. So this is important and one company controls like all of it. In hindsight, Jack and I are looking at this and wondering, how did U.S. regulators allow Google to acquire Ways, which gave it such control and monopoly of the market? So, Jack, what's the takeaway for our buddies over at Waze? Waze is one of Google's secret weapons. And that's because high engagement can mean high potential revenues. And users are using this thing every day. Emphasis on the potential,

by the way. Yeah, here's the thing. An analyst at Royal Bank of Canada just said that Google Maps and Ways are some of the least monetized assets that Alphabet owned. That means alphabet could start monetizing them, which means you could put in a destination to ways and suddenly reminds you there's a McDonald's maybe only a quarter mile away. Yeah, you might have a lot more Frappuccinos because your app told you that you want a Frappuccino. That's how you turn it into a profit puppy. Ad sales. For our second story, Tootsie Roll was scheduled to report its earnings yesterday.

They didn't. But they didn't. But we're excited to tell you about a company that never gets reported on in the news. Jack and I jumped in snacks down this. And that is shockingly a public. publicly traded company. Okay, so get this. The stock of Tootsie Roll is actually up 28% in the last year. Even though its core business goes against every trend we talk about on snacks daily. Every single We're talking about like literally the candy company where you get it in your trick or treat bag and you're

kind of disappointed. Have you heard about this whole like healthy eating organic foods? Maybe you're living it. Plant based meats. Your friend is like scared deerless of like gluten. Even though candy sales are not on the up and up in the United States. Nope. Tutsy Roll is 100. 110% candy. They are completely focused on candy. Their sales actually slipped to like $515 million last year. Doesn't matter. They're only making candy.

Blow pops. Boom. Charleston Chews. Nice. Double bubble. Not a fan of it. Sugar Daddy. That's like an inappropriate name.

Sugar babies. That's another candy. Doesn't even make sense. None of these appeal to me, by the way. Not exactly. I would trade all of these for a Reese's being a bike up. I like the brown wrapper. I think it's classic.

Anything in it, I'm not a big fan. So it's candy competitors like Hershey's and Mars. they're both diversifying to, you know, catch a trend somewhere else. Hershey's just bought a popcorn company because it's noticed that its chocolate sales aren't living their best life. And Mars, which owns M&Ms, invested in Kine bars, the healthy-ish snack bar. They also invested in pet food. And we're not talking like pet desserts over here. We're talking like the wholesome breakfasty kind.

Now, on the bright side for Tutsi roll, going all in on candy, an OECD report came out yesterday. That's a report by all of the economically developed countries in the world. Yeah. 60% of people in those countries are overweight and 25% are obese. So that's a good trend. Great if you're tutsy roll. So it's a publicly traded stock, which means it has to be honest and open with the public about its financial information.

But it turns out when Jack and I looked into this, they have a fascinating corporate structure and they kind of do things their own way. Well, the Gordon family is the majority owner of the company for the last 60 years. And basically, they've kind of gone around owning this company kind of like the older person who family business. It's like the older person who gets on the bus and is like, I'm not going to swipe my metric card and pay for this thing. I'm older. I'm just going to do my own thing.

So a recent CEO, the former CEO, was 95 when he passed away in 2015. Unfortunately. And then this is like kind of a charming story. You know who ended up taking over? His wife. His wife. Ellen. Ellen's great.

She's 87 and she's still running this company, baby. She is the CEO of publicly traded Tutsi Root. What are you doing with your life? Somebody's drinking her oval team. What are we doing with our life? The company basically does the bare minimum, though. That's true. There is no earnings call after earnings reports like most companies.

Yeah, most companies, they want to talk about what happened in the earnings. They don't do that. There's no stock analysts that give professional opinions of like where the stock should be. Because stock analysts are like, there's not much going on here. It's just candy. Tutsi roll. This is wholesome and adorable. So if we look at all these trends against Tutsi Rol and there's very little financial

information on them, why is the stack up? Sounds like a good segue. Jack, what's the takeaway for our buddies over at Tutsi Rull? The stock's up because of the dividend. This is an 123-year-old company, but it's raised the dividend. It pays to shareholders every year for 50 years. Tootsie Roll is a mature business. Yeah. There's still movie theaters that like its candy. Doing what they're doing. It's got consistent and reliable cash flows coming in from sales. It's got like a bare-bones operation where they're pumping out sugar, maximizing profit, and distributing that to shareholders as quarterly dividends. Every quarter, if you're a shareholder of Tootsie Roll, you get a check, a cash check in the mail. Thank you for being an owner of.

You're not looking for big revenue growth. You're just looking for a treat. For our third and final story, we've got our unicorn of the day. It is Grammarly. Grammarly just raised $90 million of fresh cash. That check from venture capitalists, and now it's worth over $1 billion. And this is, if you haven't used it, it's artificial intelligence spell check, basically. It reads everything that you write, and it lets you know if you effed up somewhere.

Remember clipy, like the paper clip? Microsoft Word. It's like that, but like kind of the cooler older cousin. And it tripled users from two years ago to 20 million users today. They also like to brag, especially in this day and age with the Ubers and the lifts out there, that they've been profitable from the start. Now, classic unicorn situation. Unicorn, by the way, privately held companies.

So the stock is not available on stock. Right. And they use a freemium model to make their money. That means you get a free version and they try to sell you the premium version. And if you want the premium version, you're going to pay $30 a month. But you're going to get some other things besides just like spell. spelling grammar and figuring out if it's it's, it's or it's. They'll do a plagiarism check.

They'll be like, yeah, you plagiarized and the teacher's going to notice. That's great. Or if you're the teacher, like, wow, everyone is plagiarizing in today's class. They also have an emoji tone check for 35 different tones. Yeah, so this thing pops up. It shows you an emoji face. Yeah, it's like you're about to send a message to somebody. It appears to be about brunch.

Is this a friendly sentence? Because it looks like a friendly sentence. Is it like, oh, brunch? Yeah. Or is this a joyful invitation to brunch? Oh, brunch! It'll be like, this is actually an aggressive brunch invitation. Okay, brunch.

Or finally the annoyed. Okay, let's go to brunch. Okay, brunch. We've done 35 emails trying to schedule this thing. Let's just commit to a place. So it recognizes tones and we'll be like, is that the tone you are gone for? So Grammway is also mastered another skill not related to grammar, and that's the reason for its success. Search engine optimization.

So when you like go into Google and you search for something, something like, I don't know, when to use an M-Dash versus a regular dash. Or if her name is Chris, where do I put the apostrophe? Is it Chris? Is it Chris's? I did that like Chris. Is it Chris apostrophe? Three times with Chris today. Guess what? If you search either of those, a Grammarly article appears right at the top

of Google, and that's not even an advertisement. And that's because they're using keywords in their articles that are attractive to Google, and then Google helps put them at the top of their search. So then, Gramerly will kindly explain to you that you put the apostrophe after the S, or maybe before the S, I'm not sure. But there's a huge get Grammarly button somewhere in the article, and that's how they capture new customers. It's because of SEO search engine optimization. So, Jack, what's the takeaway for our buddies over at Gramerly?

If you're just a feature, you should probably be acquired. And features, they're easy to scale, but they're often like one hit, one focus companies. And when you're looking at Grammarly, it's kind of doing one thing. Gramerly seems like more of a feature than an entire company. It's like a friend who pops out and was like, yeah, yeah, you could bold that. And I would use a synonym there. So Gramerly is usually in our lives through a Chrome browser extension or a plug-in to Google Docs. It also syncs with Microsoft Word.

Which makes you realize you're using these other products mainly, like Gmail to actually sculpt the email or Microsoft to use Word. But Gramerly just kind of pops in as a feature along the way to help you out. I'm thinking this could be a good acquisition. And if it could be a good acquisition, who could be a good acquire? Well, if Google acquires it, then they could like forbid you from using it with Microsoft. Jack and vice versa. Very true. Or if like DocuSign acquires them, then when you're looking through legal contracts, if you're the lawyer, you're like, oh, wait, this stuff's good to go or not good to go. Can I tell you? Can you please tell us? Facebook. Could acquire this. Bold move. And it would be like, this post feels like a foreign government meddling in an election. I think that's an aggressive emoji, Jack. Snackers, we'd love to hear who you think should get their hands on grammar. tweet us at Robin Hood Snacks. We're curious.

Of course, it could stay independent and do the IPO. That's definitely an option. Jack, can you whip up the takeaways for us before the weekend? Waze is one of Alphabet's secret weapons. And it hopes people like cancel their $30 lift and carpool instead. For five bucks. Yeah, better deal. Tootsyrolls candy biz goes against all trends, but the stock keeps rising. It's basically a Willy Wonka super fan and that's because it's into dividends and those keep rising. Gramerly is that naggy feature that alerts you that your sentence is kind of a run-on sentence

and you should probably cut it because it looks really bad. It may be a feature more than a company and that's why it could be a really nice acquisition for someone else's company. Let us know who you think. Snackers, time for our snack fact of the day. This one's sent him by Jason Ashby. Again, I think he's got two in the last. Knoxville, Tennessee. Not too shabby, Jason. Peyton Manning Country. On your game, great snacker over here. There's a study that suggests that when CEOs use humor in their earnings calls, the stock price performs better. Yeah, the analyst stock recommendations and revisions following the call tend to be more positive if the executive speaking tends to be funnier.

Now, this study actually looked at 85,000. conference calls. We know what you're thinking. Like, oh, what did they do? Listen to a few conference calls? Over 13 years. It's pretty intense. A little bit of comedic relief really does a good job making you forget about those losses. Jason, thanks for sending that one in again. Now, Snackers, before we let you go for the weekend, we got to say congrats to Jesse, who won our Corona Heart Seltzer, renamed the Corona Heart Seltzer because that's not a great name idea. Came up with a phenomenal name. Got about 52% of the votes on Twitter. This was a big winner. Seltz on the beach, took away, ran away with T-Boy

Tuesday. Not unbasic beach. Selt's on the beach. Snackers. Hope you have a fantastic weekend. Jack, should we do this on London? Amen. Let's do it. The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, Inc. or any of its subsidiaries or affiliates. The podcast is for informational purposes only, is not intended to serve as a recommendation to buy or sell any security and is not an offer or sale of a security. The podcast is also not a research report and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC member FINRA SIPC.