Stocks 2018 Preview

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That's why they call it money. Oh, best day of all I've got free. But you can get up to the beat. From Fool Global Headquarters, this is Motley Fool Money.

It's the Motley Fool Money Radio Show. I'm Chris Ellen joining me in studio this week from Million Dollar Portfolio Jason Moser from Hidden Gems. Abby Mallon, from Supernova. David Kretzmann.

Happy New Year, everybody. Hey, 2018. Here we go. It's our 2018 preview show.

We're going to dig into a few stocks to watch, CEOs and more. And as always, we'll give you an inside look at the stocks on our radar. But David Kretzmann, let's start by going a little broad. What is an industry you're watching this year?

And what is your question about that industry? I'm going with the reefer madness, Chris. I'm talking about marijuana. And I guess the questioner questions I have here, first, are legitimate markets forming within the marijuana space?

And following up from that, are there legitimate companies emerging that can benefit from those markets? Canada is set to legalize recreational marijuana sometime this year, as possibly as soon as July. There would be the first major country to do so. So that could really legitimize the marijuana space and give companies a legal, you know, a legal, legitimate opportunity to compete.

You are seeing some states like California now that 2018 is here, that have legalized recreational marijuana. But there is the growing question mark with Attorney General Jeff Sessions opening the door for the federal government to intervene in the states that have legalized marijuana to some capacity. So that's why my overall question here is there's clearly an opportunity here, potentially multi-billion or tens of billion dollars opportunity here. But with very few legal, legitimate markets, I still wonder if companies can succeed this year.

I would say, Jason, other than Bitcoin, we probably got more questions last year about marijuana stocks than any other industry. David, is Canada sort of the first tipping point for you, the legalization in Canada? Yeah, because you already do have a fair amount of marijuana companies in Canada that are bracing for this recreational marijuana push there, because there already is some medicinal marijuana sold in Canada, and obviously in some states in the US, but right now it looks very overheated. Just looking at four of the bigger cannabis or marijuana companies in Canada right now combined their market value is $14.5 billion.

They're trailing revenue over the past year as $100 million. So these companies are trading for 145 times revenue, and that's just looking at four companies. There are a ton of other startups that aren't even selling anything yet. So there's a lot of excitement here, and I think there will eventually be an opportunity here.

But I just wonder if these very early companies are going to be the ones to actually benefit. Yeah, I mean, I actually am on board with this. I think legalizing marijuana makes perfect sense for a lot of reasons. I think the big problem early on though, and investors need to at least keep this in mind, is sort of the disconnect between the states that want to do it versus the federal government, which is still playing hardballs.

I think eventually that risk goes away as administrations change. So it's not like you need to jump into this thing headfirst right now, but I definitely think it's a market worth keeping on it. Yeah, I think Canada is where you want to look first, because if they do legalize it on a national level, that really gives us an idea of how that competitive space shapes up. Abby Mallon, same question for you.

What are you watching this year and what's your big question? Reflecting back on 2017, I think we saw a lot of headlines, death of retail, retail apocalypse, things of that. And we've definitely seen a lot of store closings. But I think something to think about is that people are still buying.

So consumers spent almost 20 billion online over the five days between Thanksgiving and Cyber Monday. This is up more than 15% from last year, according to Adobe Analytics. And I also saw a stat about the purchase of luxury items that's quadrupled since 2014, according to Walker Sand's communication. On top of that, we've seen a little bit of M&A activity.

So I think something kind of interesting that's been going on. Coach has formally changed their name to Tapestry. And they sort of transitioned to more of a holding company structure. So they now have its coach, Kate Spade and Stuart Weitzman, all under one conglomerate, sort of more in that LVMH luxury category.

And Michael Korsbot, Jimmy Chue for Shoes. And then I think you've seen a lot of younger companies starting up looking for customers in new ways. So one that I've looked at recently was Stitch Fix. They make a box of five products and mail it out to their subscribers, either on demand or on a schedule.

And people can pick and choose out of that box what they want to keep. So I think you've seen a lot of changes in this area. And I think aside from just who's going to win, I think whenever you see a big transition like this, it leaves space for what are those other opportunities when things, one door closes, one that opens. And I think something really interesting to think about in this regard is sort of what's going to happen to that retail space with all these brick and mortar locations closing and leaving a lot of space behind.

So in terms of commercial real estate, should I be optimistic about it for the opportunity that lies ahead with more mall closings? Or is this just an area to stay away from? Well, I think it's interesting. According to PwC, the US has about 23.6 square feet of retail space per person.

So that's twice the amount in Australia and about five times the amount in Europe or Japan. And I think that definitely seems heavy. It definitely seems bloated, especially as people are moving more to online. But people aren't buying less things.

There has to be warehouses. There has to be some sort of means of connecting those dots. And I think it's going to be interesting to see how those physical spaces sort of play out. Jason, another question.

Look at that health care and specifically telehealth. I mean, my question really is, I wonder if 2018, will this mark the year where telehealth really starts to get buy-in from the consumer, particularly the aging population. And when I say aging, Chris, I'm not talking about you and me. I'm talking about our parents.

I mean, we are aging. We are, but we're not quite there yet. I think you and I have probably bought into this concept. I mean, there will be regulatory hurdles to clear.

They are clearing them now. But I think we are starting to open our minds to this sort of evolution in healthcare as we have a shortage of doctors. We're figuring out new ways to sort of scale healthcare and add efficiencies to a system and die in need of it. So we've talked a lot about Teladoc on this show over the past couple of years.

I think that's one company that's going to continue to benefit. But the market here, according to Ives World Research, is projected to hit about $3.5 billion in revenue by 2020 versus around $750 million today. So it's a big opportunity. And I think really the question is sort of centers around getting the buy-in from the consumer.

I think this is your word happens. David, the market's been on such a great run for so long. And investors out there are certainly forgiven for thinking that it's no longer an opportunity to find upside. But we know that there's always upside out there in the market.

Where should investors be looking, whether it's in terms of an industry or an individual stock, if they're looking for upside in 2018? One company that I'm going to be watching closely this year is Disney, a little hidden gem you might have heard of. This is really the beginning of the company's big push into direct consumer streaming platforms. They're going to launch their standalone ESPN Plus app.

So really add on content from ESPN that you don't get on the linear ESPN stations today. And I think this will be interesting because obviously they're looking to acquire 21st Century Fox making a bigger push into their own original content for a standalone Disney streaming service launching in 2019. So I think this year we'll get a preview of how the company can stack up against Netflix when it comes to the user experience with a streaming platform. Considering that Netflix has a 10 plus year head start fine tuning a streaming platform for users.

So Disney certainly has a lot of strong content, but they need to prove that they have the wherewithal to put together a compelling user friendly streaming platform. But looking at over the past couple years, the stock is really treaded water. It's still today training lower than it did at different points in 2015. Oh, I know.

Yeah. It's been a fun road as a shareholder the past couple years. But training for less than 20 times during is I think if they can crack that nut with the streaming platform this year with the ESPN, then I think the market could get that higher multiple. I think the stock could do well.

Jason, what about you? Well, you know, I'm a big fan of the payment space. I think that the war on cash is real. And I think that PayPal is a company that's going to continue to benefit from this space for many, many years to come.

It's a wonderful repeat high margin business. Big tailwinds just in the move towards electronic payments mobile on a global scale. And to me, there was one catalyst over the end of the year that I think will help this company out, that Synchrony Deal, where essentially PayPal unloaded a credit portfolio off of its balance sheet and sold at the Synchrony. And this is going to free up a lot of cash flow for PayPal to invest more on the business and products and figuring out new ways to bring that offering to consumers.

So the stock today trades around 30 times free cash flow, but I think we also have to pay attention to the fact that their cash flow number is going to cease a little bit of a boost here in the coming years because of the deal. And it's a 90 billion dollar company. A strong business, profitable, makes a lot of cash over the course of a year. So it's just a wonderful trend, I think, in electric payments, electronic payments, and PayPal is certainly one of the biggest players in the space.

Easily one of my favorite business quotes of 2017 was the Visa executive who came out and said, we are at war with cash. I just want to remind listeners, when we use that phrase, that's not from us, that's a Visa executive saying, let me be very clear, we're looking to take cash out. Well, and we capitalized on that, right? I mean, the war on cash basket.

We talked about it on market full rate in the middle of the year. And I think it's a lot of the time that the market's going to be a little bit more than the other that basket of stocks with Visa, MasterCard, PayPal, and Square, a very nice little risk spectrum there, so to speak, of companies that are all playing into this trend. And at the end of the year, the portfolio, that basket of stocks out before the market handling. I think it's up to keep doing the same thing this year and years to come.

Adam Allen, what should investors look to for upside in 2018? Yeah, I think you said it well when you said the market's been on a tear and as an analyst on a small cap service. It's been definitely getting harder and harder. And so I think one place to look for opportunity is anywhere that there's a lot of volatility.

So something that I've recently started looking at more is recent IPOs. Just because when things have less clarity, I think that there's more room for opportunity and in that space. So just as an example, I started falling grab hub back when I went public in 2014. And I've always kind of liked this idea.

I liked the mission of the company to deliver food. I think it's exactly where our sort of society is going. But I think when it first went public, people really weren't sure about whether or not this would work or how these competitive factors would play out. And just looking back two years after the IPO, Grub was down more than 28% from its IPO price, but the SMP had climbed 11%.

And it really wasn't until March of 2017 when the market started to really accept this. And since then it's been sort of up and up with everything else. Coming up, reckless predictions. A few stocks on our radar.

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That's A-U-D-I-B-L-E dot com slash F-O-O-L or text the word Fool to 500-500. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, Abby Mallon and David Krantzman. Time to get to some reckless predictions.

We're not going to make a reckless predictions. Jason, I was reminded by our producer Mac Greer before we started taping. Your reckless prediction a year ago this time, you were in the ballpark because your reckless prediction was Starbucks buying Panera Bread. I forgot about that.

I guess I should take at least half of a victory match. I mean, Panera Bread is no longer stand alone public companies. So yeah, we'll do a partial credit for that. It's not.

I'll take it. Let's take whatever I can get. Nicely done. What's your reckless prediction for 2018?

It can be about business. It can be about anything else. Yeah, I guess. I mean, it's kind of in line with last year's, I guess, but I didn't craft it this way.

But I am going to call this. I think Chipotle, Mexican Grill ends up going private after all. This isn't done. I know they're currently looking for a CEO, but I mean, we got to the point where you're like, you can eat a Chipotle and then like fart and then report it on a website that you got food poisoning.

And then you can materially move the stock. I mean, this has been two years since they had this problem. And Steve Elts clearly was not up for fixing it. And so now you've got this company where no matter what they do, they can't seem to do anything right, even if they do something right.

And you've got no ownership in the company with the founder, no real insight ownership to speak of. And you've got a 10% or so position from the lack of the person capital. I just feel like this is a prime opportunity to try to pique some equity interest in this company. And honestly, I think it's probably the better bet.

I don't know that a new CEO can really turn this thing around fully, but I think at least if they go private, it gets them out of that public market spotlight and it lets them sort of make some better decisions. And maybe they take a page out of that Panera playbook and give things turn around in 2018, I guess we'll see. Yeah, for anyone who thought activist investor Bill Ackman and his team, we're going to really help out. That didn't work out.

David Kretzmann, your reckless prediction. Kind of along similar lines of Jason, although I won't be quite as vulgar. I look at Target, and I see the company getting squeezed on both sides from Amazon and then Walmart. I think I won't be surprised if this year they try to acquire Wayfair.

This target has actually been pushing more and more into furniture on their own. And I think going after Wayfair could be a way that they really start to differentiate themselves, both in terms of e-commerce and just the breadth of their offerings compared to Amazon Walmart. And they could pull it off. They're still producing about $4.5 billion in free cash flow year.

Wayfair right now valued at about $7 billion. So they wanted to do it. And I think they'll get increasingly desperate just as they start with compete with these bigger players. Well, that'd be fun.

Amazon being Amazon, we had Walmart buying Jet. I would love to see Target by Wayfair just for the optics of it. Absolutely. It'd be a lot of fun.

Abby Mallon, what do you got for reckless prediction? Yeah, I think mine's right along the same path as David there to try and compete with Amazon. I would like to see eBay by Etsy. Nice.

Isn't there a lot of Etsy stuff on eBay right now? And by Etsy stuff, I mean arts and crafts. Yeah, sure. So I could have said the old man in the road.

There is. I think part of that is that it's just sort of an obvious pair. I think they could help each other out, both in Etsy's looking to expand more internationally. I think eBay could help them there.

And then they're both sort of in that search functionality, machine learning, things like that. So I think that could be an interesting pair. Let's bring in our man Steve Broglick behind the glass because we're going to get to radar stocks in a second. But Steve, three reckless predictions.

You got one you want to bet on there? I'm betting that the market will not continue to rise 1% every day for the rest of the year. It seems like this market cannot go down and I'm betting that trend will not continue every day. Fair enough.

Let's get the stocks on our radar. Jason, what are you looking at? This week I was talking with my guy Rory in Ireland. Works with Rubicon.

We're talking about Calvo Growers, C-V-G-W. And they are one of the leading distributors of Avocados. And in this age of avocado toast, Chris, I mean everybody loves avocados. Chances are if you buy an avocado from the store, it is coming from these guys.

No one likes it when we hear the shortage of avocados. And to me, it's a profitable business. They're cash flow positive. It's a little small cap.

I don't know if it's on Yall's radar in Hidden Gems Addie, but we should probably talk about it some more. Steve, question about Calvo Growers? Is guacamole overrated or underrated? Oh, you can never get enough guacamole.

I mean it is so underrated. And the beauty of it is in my house, I really am the only one that genuinely loves it, so I get it all. It's a beautiful thing. Abby, what do you got?

Yeah, I think right in time with New Year's resolutions and being healthier and active. Stock, I'm thinking on my radar this week is MindBody, ticker, and B. So they are business software built specifically for that health and wellness market. So things like Spas, fitness studios, yoga studios, massages, haircuts, all the above.

And they help their clients manage logistics, including consumer facing things like websites and apps and appointment scheduling to back end tasks like payment processing and arranging staff schedules. Steve, question about MindBody? It seems like the first quarter of any year is always very critical for health companies. With the cold weather, are there is there risk there?

I don't think so. I think part of their mission especially is that fitness is a habit and routine. And I think hopefully while you see a new influx of people, right at the New Year, I hope that builds habits. David Krenzmann, what do you got on your radar?

I'm looking at alarm.com ticker ALRM. This is a company that was founded about 15 years ago focused on home security systems. But they're increasingly becoming the platform for connected devices. So whether it's a connected doorbell video, camera, thermostat, things like that, they already serve over 5 million subscribers in the US.

They sell through over 7,000 service providers, increasingly a subscription-based business with high retention rates. I think there's a lot to like. Steve, question about alarm.com? What percentage of companies like alarm.com have customers that never use the products?

I mean, it's like I subscribe to alarm.com. I don't turn the alarm on. I'm busy. I'm not saying this personally.

We're heavily fortified in my household. But what percentage of the people that use these services just don't use them? I don't know the exact percentage, but they are increasingly looking at the data to find what is the optimal engagement to keep people re-reacting. To keep people retain on the platform.

Three stocks. You've got one for your watch list? I think I'm going with the health-related abby choice. All right.

Abi Mallon, David Kressman, Jason Moser. Thanks for being here. Thank you. Up next, our stocks 2018 preview rolls on.

Stay right here. This is Motley Fool Money. Look around. Here's a brown.

Here's a place in shape. Welcome back to Motley Fool Money. I'm Chris Hill. Joining me in studio from Motley Fool Pro and Options, Jeff Fisher.

And from Total Income, Ron Gross. Thanks for being here, guys. Hey, you doing, Chris. Let me start with the opening question that I had for the last group that was sitting at this table.

Ron, one industry you're watching in 2018. And what's your question about that industry? Okay. I'm going to go with industrials.

I'm surprised. I think things look good for industrials right now. The global economy relatively strong. I think the new tax plan that was just passed will be a nice boost for these folks.

I think an upgrade cycle is in need where people have to replace their old equipment. I think if Trump gets an infrastructure bill through on the heels of this tax plan, well, that's gravy for industrials as well. And I also think valuations are not as stretched in that industry as they are in some, for example, technology. In terms of the infrastructure bill, it isn't the lead time for, and whenever anyone says industrials, the first company I think of is Caterpillar.

Sure. So isn't the lead time for a company like Caterpillar in terms of ordering equipment and delivering all that? Isn't it like years out? It's definitely a long lead time, but we've seen a turn in agricultural mining commodities over the last year or so.

And in fact, you'll see stock prices. If you look at Caterpillar, stock prices, you see that goodness reflected in the stock price. But I think there's still a lot of room to run for infrastructure stocks like Chicago Bridge or Jacobs Engineering. And then yes, the Diers and the Caterpillars as well.

In a lot of cases too, you can lease that equipment on pretty short order. Ron, are you bullish on energy as well? I'm curious. Do you put that into industrials?

I do, but it's harder for me to analyze. And I've always shied away from energy because it's more, it's even more commoditized than those industrials. And it's hard for me traditionally over the years to get a handle of where we are in the cycle there. So I traditionally just stay away almost like put it in the same category as I do banks.

It's very hard for me as an analyst to analyze those things. Jeff, what about you? Industry you're watching and question that you have about it? So you know, Chris, the year has changed, but the world hasn't changed really.

And I'm still fascinated as I think most of us are by artificial intelligence leading to automation and convenience for consumers and smart homes and smart cars. All those things that are going to unfold unfold in the coming years. I think you have to be invested in the leaders there. But I'm going to say for this gene therapy.

I was a lead in for no reason. It was. I like to have two answers to every question. I think I do today.

Gene therapy, immunotherapy, biotech writ large is still changing rapidly and it's exciting. So whereas AI and automation may really improve our lives, biotechnology may, if it needs to, save your life down the road someday. But there are so many companies there that are working on it, but I'm looking at the Spyder S&P, BioTech ETF, tickers, XBI. It's equal weighted.

It's an average company that it owns. It's $13 billion market value, but the median market value is only $1.5 billion. So this ETF owns a lot of smaller companies like Puma BioTech and Bluebird Bio. It's a great way to buy 109 biotechs and just let it be.

Yeah, I love that because while of course BioTech comes with its own set of risks, the big question I had for the industrials was geopolitical instability, which if something goes wrong, which, hey, eventually something's going to go wrong. And this globe we live in, industrials are going to get smacked around much more than a biotech stock would as a result of something going on with North Korea or what have you, because that's kind of an insulated, it's kind of a binary. Is this FDA program working? Is it not?

Is this drug and work? Is it not? It's not as affected by geopolitical instability. It's a category killer that makes a smart home suddenly work across the board.

Right now you have to piece it together bit by bit and it pays to just wait because the technology is advancing so quickly. So I think they were early. Let's talk CEOs. Who is the CEO to watch this year?

And it can be because that person is on the hot seat or because they're just at an interesting place in an interesting time, Ron. This guy needs a win bad and he's just not going to get it unfortunately. And that's Eddie Lambert of Sears, both a largest shareholder and the CEO. In my opinion, he has destroyed shareholder value at this company.

He shares her down 90% over the last five years. Revenives and profits have been decimated. He has bought back a ton of stock for the company over the years, but he did not invest in stores. He did not invest in e-commerce.

He's basically been selling off assets such as real estate to try to keep this thing afloat. Balance sheet remains a mess. They keep announcing store closures. Who's working with famed value investor has announced his retirement from the board.

I hold out little hope for Sears and I don't think Eddie Lambert is going to be able to turn this. What about you, Jeff? Well, all these men are having trouble at GE, IBM, Ford, Under Armour. All male CEOs who need to get it right.

But even Spiegel at SNAP needs to have a good year. GE and IBM and Ford, they all have time. Under Armour has time as well. Snap, arguably, may not have that much more time.

It's falling off the radar in a lot of cases. Even the very young people I speak with do not view Snap. You speak with young people? Yeah, we have some friends who are 20s and late teens.

That age now where kids are that age. You are too wrong. I guess. So the children I speak with who may be my own children.

Anyway, Snap is not as important to them. Instagram has taken over. And Facebook has still shown staying power. Yeah, Snap has a $17.5 billion market cap, Chris, on revenue last year of $700 million, which indeed is up from $400 million the year before.

So revenue jumped nicely. But their operating loss is epic. $3.2 billion operating loss. And that's $1.3 billion spent on R&D and $1.9 billion spent on SG&A sales general limit.

Only $83 million spent on CapEx, $83 million on CapEx. So I don't know what they're building here because all they're spending is just evaporating. The company is extremely unprofitable and doesn't have a path to get to profitability. So he needs to turn that around.

Do you think someone buys Snap or because Facebook would be a logical buyer except for the fact that they have Instagram, which is so popular? Exactly. Facebook has copied Snap in so many ways they don't need to buy them. And when a company is struggling this much, as Twitter has in the past, why step in and buy it?

So you mentioned General Electric a moment ago. I think John Flair and the new CEO there, I think he's going to be fun to watch this here. And I don't know if he shares that stock, but he was CEO for about an hour and a half. He just started making big sweeping changes at GE.

He's got a low bar to hurdle, but that's a big job. Yeah, he's only going to focus on three industries, healthcare, industrials. Let's move over to stocks, which have had such a great run for so long and for their foreround, for one reason or another. Some of these stocks out there have got to be on a short leash.

When you look at the world of stocks, what do you see? And it could be in your own portfolio that you think, I'm not giving this thing any leash at all. Well, this isn't in my own portfolio, but Wells Fargo is not a short leash for me. And I think it's a shame because what is good for Warren Buffett is usually good enough for me.

And interestingly, Buffett, who owns about 9% of the company, has recently come out and he said, Tim Sloan, the new CEO, has my faith. So Buffett is sticking with this company, which has had such a really bad 18 months in terms of wrongdoings and lawsuits and fake accounts and mortgage problems. And they've really done a terrible job to destroy their brand, which was really a favorite one at one point. So I think the culture is so negative and it's so pervasive throughout the culture that I'm not sure the CEO is really going to be able to turn that.

And as a result, I wouldn't really want to be part of that ride with them, even if Mr. Buffett is sticking with it. Yeah, it's amazing because a lot of us at the full soldar shares, we just couldn't see a path to owning them if we don't trust management. And so let's get out.

There are better things to buy. I think for us that was the right choice and we did buy things that have done better, but I'm fascinated by it sticking with it when integrity is so key to him. Yeah, I was just thinking about how we're what four months or so away from the Berkshire Hathaway annual meeting, maybe a little bit longer than that. But I have to believe that a lot of the questions at that meeting are going to be specifically about this because it's been such a big holding for so long.

Yeah, for sure. I mean, actually, I think he did sell some stock recently, but that was only so he wouldn't go above 10%. I'm still for really technical reasons there, but he has faith in the new guy. And I think that's fair.

The new guy theoretically isn't responsible for the sins of the old, but this is going to be a tough one. Wasn't he around though? He was around. So you never know how deep it goes.

Jeff, what do you have on a short leash? So you try to only own stocks that you of course want to own for years and years and even when they hit some turbulence, you're confident enough to let them go. But a large company that's so many people own and it's a large holding for so many of us that I want to keep a close eye on is Apple. And the reason is such an incredibly large business to keep afloat and it's so reliant on the iPhone that if Apple does something to harm their iPhone brand or space in the world.

You mean something battery related? Oh, it could be that. Could be software related. Yes, very timely topic.

It would be very hard if not impossible to replace that lost revenue if the iPhone starts to go into decline. So that's why you have to keep a close eye on what they're doing. Now that doesn't mean every quarter matters. Like iPhone sales do fluctuate and they dip.

That doesn't mean you have to run for the hills. But if they're making the wrong moves in your opinion and they're potentially bringing the business to a lower level, you've got to really consider what you do with your stock. Let's go to the other end of the spectrum. Ron, what's a stock that you could fall asleep on?

I never worry about specialty insurer, Markel, which we talk about a lot on the show. But I think a lot of investors still are not familiar with Markel, which is often called a baby Berkshire Hathaway. It's such a well-run company, both operationally and culturally. Tom Gaynor, CoCio, a fantastic investor, great steward of investor capital.

Stocks up 150% over the last five years, but that is not something I worry about. I think the company continued to put up great numbers, grow book value year after year, very methodically, conservatively by investing capital and doing a good job on the insurance side as well. It's just one I just never worry about. Jeff?

I love this question, Chris, because every year I look at everything in my portfolio and I ask this very question, am I comfortable enough to keep it on a loose leash? For the most part, that's true, Visa, Oracle, Amazon, Square. Another one in that list is Facebook. They may have a disappointing year this year, perhaps, because Zuckerberg and company plan to spend a lot to try to get the content under control.

But I'm going to let that happen if it happens and wait it out as long as traffic trends remain steady. As long as people keep visiting the site, ideally traffic goes up, then I'm just going to let Facebook go and see what's ahead in the years to come. The Socks rate is 29 times forward estimates for next year, so it's not unreasonable. Coming up, if you didn't get everything you wanted this past holiday season, we have got just what you're looking for.

Details next. This is Motley Fullman. We need this, no, in mantle of Covid, please. The unborn grass last waiting for its cold to turn to green.

The small bird sings us off the all where you see. It's so wide as no. As always, people on the program may have interest in the Socks, they talk about animal reform recommendations for against. So don't buy your socks based solely on what you hear.

Welcome back to Motley Fullman. Chris Hill here in studio with Ron Gross and Jeff Fisher. Before we get to reckless predictions and stocks on our radar, I'm happy to announce something that frankly Ron listeners have been asking for this for a while and it is the unveiling of our brand new Motley Full podcast shop, which you can find at shop.full.com. We've got podcast t-shirts, ball caps, coffee mugs, which I hold in my hand right now, which always makes for good radio.

And in the spirit of Warren Buffett, good stuff at a good price. I love it. Not just listeners, I've been wanting some swag myself and we can never get enough around here. Well, you know what you can do?

You can go to shop.com. I will. You betcha. It does have fun stuff and it's cheap.

Yeah. Right. Ten bucks for a couple. It's not cheap.

It's like Wallach sales, but Jeff is. All right. Let's get to reckless predictions for 2018. It can be about business.

I should point out that on last year's show, you made a prediction. We're on S&P 500 up 15%. You were in the ballpark. Too shabby.

We were up around 20%. I'm in the ballpark. Jeff Fisher nowhere near the ballpark said 2017. The market will be down.

You weren't even in the parking lot at the ballpark. It was a reckless prediction. I remember Ron said I bet plus 15% and I took the opposite. I'll say it'll fall 15.

It felt reckless at the time. And it was. You also bet a dollar on it. Have you paid off?

Oh, no, I haven't. I do have to buy me a mug. Ron, what do you got? Let me take you back, Chris, to a simpler time.

1998 where McDonald's made an investment in Chipotle. And then Chipotle was discussed earlier by Jason. By 2005, McDonald's had a 90% stake in Chipotle. And in 2006, Chipotle went public and later that year, McDonald's completely divested itself of that company.

So my prediction is that now that McDonald's has successfully turned its business, it will now look for a new distraction, a new way to destroy shareholder value. Or not. And it will acquire Chipotle. This year, it will be announced.

You know what? If Steve Easterbrook became not just the CEO of McDonald's but the CEO of Chipotle do, I know a lot of investors including myself who would be interested in that. You gotcha. Jeff, what do you got for reckless prediction?

So I was going to say Amazon buying Target, but that doesn't feel so reckless anymore. That news is kind of bouncing around. Target's a $35 billion company, Amazon's $600 billion. So I'll just say, I think the S&P, which rose about 20% as you said, Chris, will rise 20% again this year.

Again, that's just a reckless prediction. I'm not like, I don't make market predictions. No, I'll throw it over to this prediction. 20% again.

9% I'm on record to say. 9%. You're like official. I'm like an average mean.

It's returned to the mean of where we've been historically. You guys got another dollar on this too? I don't know. Double or nothing.

I mean, Steve, right out on our man behind the glass. A couple of reckless predictions there. Either of those seem likely to you. No.

No, but how do you really feel Steve? Alright, let's get to the stocks on our radar and Steve will hit you with the question. And you know what? We've got the time.

So if you want to hit him back with a question, you can do that too. Ron Gross, what's on your radar? I tried to find one that maybe Steve hasn't heard of before. It's CH Robinson Worldwide.

CHRW is the ticker symbol. They're a transportation service and logistics company. And what that means is they match customers who need to ship something with a vetted network of transportation providers. They, for example, handle Microsoft's entire logistics network.

But they also find transportation for mom and pop businesses as well. They're a market leader. You have the only 10% share. They've committed to return 90% of future profits to shareholders through dividends and buybacks.

They have increased their dividend for 19 consecutive years. The stock is up 30% over the last six months, but it's not too late. And we get a dividend yield of 2%. Steve, question about CH Robinson Worldwide?

Yes. How do all these logistics companies work together? So you've got UPS, you've got FedEx, you've got DHL, you've got all the shipping companies, you've got transportation. Aren't they all have to be communicating together somehow?

Yes. Technology, thankfully, is a major part of this business. And some are truckers. Some are brokers that match up companies with transportation companies.

And there's technology that sits right in the middle of that. You have a question for Steve? You want to hit him back with it? Steve, anything fun during the holidays?

I went to North Carolina with my family. We had a good time. It was cold, but we had a good time. Nice.

Alright, Jeff Fisher. I'm here with the company based here in Virginia, $2.4 billion market value. They create software platforms and frameworks for other companies to then put together their own apps and their own programs. So they're making coding software, which is difficult, easier, or even easier.

Their goal is to make coding software easy. They have 160 million in sales, about 1,000 employees. They're growing at a good clip, good management, with a lot of stock in the game themselves. And it's a recent Tom Gardner selection a few months ago as well.

And the stock is doing extremely well, so you have to be careful with that. But I think it's mainly because at one billion a month ago, it was under price now. It's two and a half billion. So the stock is really taking off.

Given what they're doing in the digital space has a bright, long-term future ahead of it. So one to be on your radar. Steve, question about Appian? First, full disclosure, I just bought some shares of Appian yesterday.

Well, you're happy today. Very happy today. But can coding become too simple? Is that possible in this space?

I don't think so. I mean, my instinct is no. I mean, the easier the better. If I could make my own website, I would in a second, but I can't.

Do you have a question for Steve? Steve, what's your biggest goal for 2018? I need to get in better shape. I'm dying up here.

You're going to take advantage of that mind body. I'm talking about earlier. I've got to get better shape. Alright, we can help you.

Alright, Jeff for sure. Ron, thanks for being here. Thanks, Chris. Let's go do it for this week's edition of Motley Fool Money.

Our engineer is Steve Broido. Our producer is Mac Greer. I'm Chris Hill. Thanks for listening.

We'll see you next week.