The Mouse That Roared

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From Cool Global Headquarters, this is Motley Cool Money. It's a Motley Cool Money Radio Show. I'm Chris Hill, joining me in studio this week for Million Dollar Portfolio, Jason Moser, from Motley Fool Income, Investor James Early, and from Motley Fool Deep Value, Mr. Ron Gross.

Good to see you as always, gentlemen. Good to see you, Chris. Hi, you grills. Earnings-palooza-rolls-on this week.

We will head to Australia to talk with our man Joe Mager about investing down under. We will dig into the business of Valentine's Day, and as always, we'll give you an inside look at the stocks on our radar. But we begin with the big macro. The jobs report for January cap, the greatest three-month jobs gain in 17 years.

Unemployment ticked up slightly to 5.7% Ron, but these numbers are pretty amazing. Yeah, I really like this report despite the fact that the unemployment and the broader range of unemployment, the US$6 number ticked up. For good reason, actually, because the labor participation rate actually increased. So it's good to see people, instead of leaving the workforce, coming back in.

Plus, we saw wage increases, which we keep saying has been the real linchpin. As unemployment has ticked down over the months, we haven't seen wages do anything. We're now in an analyzed increase for wages of 2.2%, not fantastic, but also not terrible. So I think this report is really strong.

James, the biggest wage increase since 2008? Yeah, I mean, that's great. That's what the Fed wants. I think everybody's going to be watching.

What does the Fed do now? At what point do we start seeing a rate increase? Traditionally, I think we would see it. But I don't think the Fed feels the same pressure now, because if you look at the rest of the world, or Europe and Japan, mainly even some of what China is doing, everything else is so low.

So why? What's the reason to jacket break so quickly? I think they're going to consider that. Jason, when you broaden the lens and you look at the rest of the world, I mean, the US economy's just looking so much stronger these days.

It really is. I mean, we've seen that through a number of the automakers who reported. Toyota just brought out a fairly decent report. I mean, most of that was currency, but North America is shining as far as auto sales and it's shading up to be the year of the truck.

It's really interesting to think about though, because with gas prices so low, with the economy recovering, with the consumer maybe feeling a little bit more confident, if they are buying all these trucks, it just sort of begs the question of when gas prices do go back up. Are they going to start complaining about the fact that they've got a lot of credit to fill their tank? But yeah, I mean, on the whole, it's nice to see the unemployment situation improving like that. And I think wages are really the biggest key to it.

It is funny. I mean, I mean, I speak low by countrymen, but gas prices move around so quickly. It's funny when you see a sudden plummet and everybody goes out and buys these massive SUVs. I mean, six months later, they're going to pay the gas bill.

It's just kind of strange. I think we should get a different hobby. But for those that do, I think what we'll first see is we'll first see the word removed, the word patient or patients removed from their statement. That'll be a telegraph that interest rate hikes are coming and we'll probably see it sometime later this year.

Let's move on to earnings. Twitter's user growth in the fourth quarter was just 1.4 percent, the lowest on record for their company. But if they didn't deliver the users, they sure did deliver the money, Jason. Fourth quarter revenue up, 97 percent and stock rising more than 17 percent on Friday.

Yeah. I mean, what cost a low on no-no needed to do with this earnings announcement was to communicate the value of tweets beyond that core platform of Twitter and mission accomplished. I mean, they did that and I think that we saw how the market felt about that and what the socket did on Friday. Now, the user growth, I think it's slowing.

They offered a couple of reasons for that. They also shed some light into the current quarter that they have seen tremendous uptake in users. But I think that this all sort of lends itself to it. They initially went to Twitter when public, they made it a user growth story and the market really made it a user growth story because it was always comparing Twitter to Facebook.

And I think that's misguided. I mean, I think that analysts who are looking at it from that perspective aren't looking at it from the right perspective. Twitter is certainly more of a niche service and to think that they're going to have the same user base as Facebook, I think is just absurd. It's making real money.

Or is it more like going from $1 to $2 in revenue? I'm not quite sure what you mean. It's not just a couple of billion. It's not just a couple of billion.

$2 sounds pretty good. I mean, are they, you know, are they pro? It's overall. Yeah.

I mean, is it how viable is this business model for the long? Well, I think that's the question. Certainly, it's an ad-based model at this point and they are proving out value there. Now, it's fair to say that 2014 brought a couple of big world events in the Olympics in the World Cup.

They're not going to replay, obviously, 2015, but they do see an opportunity in the cricket World Cup, which when you look at the popularity around the globe as far as cricket goes, it's one of the most popular sports in the world. You made that up. Google it. Or better yet, Twitter it.

Well, speaking of Google, they also announced a new deal with Google that will bring tweets into Google search results. Right. It seems like a good deal. It's also adding more fuel to the idea that Google is just teeing up to buy Twitter someday.

And, you know, that's been a rumor that's been out there for, I think, virtually the entire time Twitter has been public. We know that Facebook tried to buy Twitter before Twitter went public. It could certainly make for a wonderful sort of ancillary service under one of those two platforms. I do think they're going to continue to try to go it alone because it would be a size the acquisition regardless.

But again, they made almost a one-and-a-half billion dollars in revenue this past year. They're guiding for clearly better than two billion calls to two-and-a-half billion that next year. So yes, they are making money. I think it's just a matter of really framing the discussion with this company so that we're focusing on the right things, not just us.

Who has two thumbs and is now on Twitter? Ron, Ron, you know. Ron, you know. Ron, Ron.

Which is clearly the sign of a Twitter top. A sizey contribution to the service. Shares of the Walt Disney Company hitting a new all-time high this week after first quarter revenue and profits came in higher than expected. The Bob Iger was quoted as saying, calling it yet another incredibly strong quarter.

He's not just talking to his book, James. This was unbelievable. Chris, there's nothing like a stock that makes you feel like an idiot every time you think about it. And Disney is that stock for me.

I remember looking at Disney when it was $40 a share years ago and thinking, well, it's good. It's just a little bit too pricey for me. Big mistake. These guys are firing on all cylinders in every way.

Even Studio Entertainment, which was down just a little bit. That was the only thing that was down basically. It was down because Frozen was just so great last year. So that's a perfectly good reason.

46% more money from product sales. That's amazing. The amazing thing, big picture-wise, is this company was founded in 1923. Companies that are almost 100 years older, mathematically not supposed to grow this quickly, at least in a traditional MBA finance valuation class.

Nobody in their right mind would model this kind of growth for such an old company, but just really shows you that you can find a great company and you can ride that way for a long, long time. And the stock up, 12%, it's acting like a growth stock. James, I'm not really trying to pile on here, but my daughters, they had to wear with all the buy Disney two years ago. They were sitting on a nice clean double at this point in a market smasher.

So Hannah and Aisley, well done. And you think about it. You mentioned Frozen last year, and obviously the ripple effect moves into the consumer products division. But if you look at what the studio division has teed up coming in 2015 with another Avengers movie, a Star Wars movie at the end of the year, another Pixar feature, another Disney animated film, it seems like it could be just a repeat of last year.

You're a shareholder. I am a shareholder. I'm the only one. I'm the only one.

I'm not a shareholder. You don't want to make things as not like the others. We'll get into the business of Valentine's Day later in the show, but maybe for Valentine's Day, the three of us will just chip in. We'll buy you a share of stock.

LinkedIn also hitting a new all-time high this week, fourth quarter revenue up, 45% and Jason on Twitter, LinkedIn's user base is really growing. Yeah, LinkedIn's making real money, right, James? Not just that fake Twitter money. No, I think that investors who think that LinkedIn is coming up on sort of a ceiling or their growth is slowing.

I don't think they fully understand the potential market opportunity here. And then so LinkedIn has done a tremendous job, really, of defining more or less this new professional networking space. And it's the name to go to, but closing in on 350 million users, sales groups, 44% for the quarter. I think what's really interesting is we've always talked about engagement as a big challenge for LinkedIn, because it just didn't seem like it was that engaging at the beginning.

But they are engaging with users. I mean, unique users grew 24% or 23%. And that was supported by 34% growth in page views, which means more users clicking on more pages, which means better engagement. It's coming down to the advertising bottom line as well.

So I think that when you combine that along with the opportunity that their sales navigator product offers them, the talent solutions product, it brings about $1 billion a year, but they see this as a $10 billion pipeline for the business ultimately. So I think there are a lot of reasons for investors in LinkedIn today to be very encouraged about the future. If the business opportunity is that big, just in that subset of their industry, doesn't that just give Facebook even more of a reason to double down on what they're doing? Because they recently rolled out their own sort of Facebook business or something like that, their version.

I mean, if the market opportunity is that big, Facebook's going to go out for it. Absolutely no reason they shouldn't. I mean, if it's a significant market opportunity out there in a way to diversify your business model and then, hey, give it a go. And I think you're right, they probably will try to capture some of that market.

But they are playing catch up where it's involved with LinkedIn. And it seems that the surveys time and time again show that individuals want their personal profiles and their professional profiles separate. So I'm just not quite sold on Facebook being able to turn our thinking on that just yet. I was talking with our recruiting team here at the Motley Fool the other day.

And one of them mentioned something that I had not really clued into, maybe one of you guys had. And it is this phenomenon of younger people who grew up with Facebook. So people in sort of their late 20s, maybe 30 years old, that sort of thing, basically changing their name on their Facebook profile so that they're basically instead of using their last name, they're using their middle name as their last name so that when recruiters are doing background research, they don't find their Facebook profile and maybe some of the photos that they now regret posting. It's a big problem.

It's actually a big problem with colleges as well when applying for college. The admissions will often ask for your Facebook password so they can check out your Facebook password. And that raises all kinds of privacy issues, I think. And that's been in the news as a debate.

I'm so glad we don't have to deal with that. That probably lends itself a little bit more to something like a Snapchat with that ephemeral content that just sort of disappears so to speak after 10 seconds, right? Ephemeral, AP English for the win. Coming up, an iconic retailer, rise off into the sunset.

Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money, for sale here in Studio with Jason Moser, James Early and Ron Gross. Guys, on the face of it, Activision Blizzard appeared to have a pretty strong fourth quarter, record profits for the video game maker.

Ron, they also announced a stock buyback plan. Usually, that's a nice combination and yet shares falling on Friday after the report. What gives? The stock, I think it's rebounding.

So I think people have had time to digest a bit. But the guidance was weak. That's where the Lynch payments here. 2014 was really strong.

2015, they've come out and they've said both on a revenue and earnings per share basis, it will be weak. And it's based on things that are largely out of their control, largely currency, translation, and a higher tax rate. So on one sense, you can't really blame them for those things because they don't have any really power over them, except for maybe some potential hedging. So whether you blame them or not, really, is the question.

It does impact cash flow, and that's what investors look at. So even though 2016 is supposed to be better, investors are saying, well, why do I want to hold a stock now that is going to have a difficult year? I can get back in later. Stock sells off.

But when you look at the bigger picture, the company continues to put up really fantastic numbers, increasing the dividend to 15%, buying back stock and to pay back a quarter billion dollars in debt in the first quarter. The company is really doing quite well, balancing remains strong. So if you want to own a solid company that produces a solid cash flow and you don't mind the ups and downs, this is a good one for you. Last week we talked about Caterpillar.

I think of that as a company that deals with currency issues, given how much of the stock much business it does outside the United States, I guess I never put activation blizzard in that same category. Yeah, about 50% of activations revenue comes from overseas. So it has quite an impact. Fourth quarter revenue for ExxonMobil fell 21%, but profits came in higher than expected and shares up more than 4% this week.

And James, when you look at what has happened to the price of oil over the last six months, this does seem like one of those situations where bigger is better. Yeah, Exxon certainly benefited from size from having other places to go, focusing on natural guess liquids, other things like that. And that's part of the narrative is how great Exxon is now, how they don't have to spend as much CapEx as their peers to get more oil. I'm going to cushion that a little bit.

Anytime you see such a big company, I see it as water ballooning, you can always squeeze one thing and expand into place else. And big companies can do that in their numbers and their accounting. So I don't bind to the hype as much, but I do think just about every oil stock is still attractively priced right now on a price earning basis. Obviously, ExxonMobil's stock not down nearly as much as some of the smaller players in the oil industry.

Is this almost a safe haven stock for 2015? Yeah, it's the more conservative man's way to play or woman's way to play a big oil company. If you want something more aggressive, Chevron would be a pick. It's cheaper on a PE basis, but CapEx is probably a more important part of their future.

Exxon doesn't have to spend as much. So yeah, I think it fits the situation. Chipotle's fourth quarter profit rose 52% same store sales up more than 16% and it just wasn't good enough, was it, Jason? No, it wasn't.

And I called this out as my stock in the week, Gladys, stock on my radar last week and expressed the possibility that this could happen. I mean, this is your classic long-term versus short-term thinking here. And Chipotle had a wonderful quarter by virtually every metric. But the market picks out little metrics that they expect to be met and there was maybe some margin concerns, perhaps a little bit lighter on the comp side than the market was expecting.

The stock sold off quite some of it, a bit percent, a bit percent, something like that. I don't see any reason really for that. I mean, I think this is a business that's still operating wonderfully, maintaining their strategy and hearing to food and integrity. And we talk about victims of your own success and this, I think, was one of those situations.

The long-term picture doesn't change really. I think the thing that we have to keep our eye on with Chipotle is just going to be their supply chain, their food supply chain, and the food costs as a percentage of overall sales. I mean, that did go up, I think about 110 basis points over the same quarter last year to 35%. So that's something that's going to continue to, I think, maybe pose a challenge for them.

I think they can deal with it because they develop such a good oil customer base. But it's good, of course. Well, and as we were talking about earlier in the week, you look at the vast casual space, whether it's Chipotle, Panera or others, even despite the growth that it's had over the last 15, 20 years, it's still only about 5% of the entire restaurant space in the United States. Yeah.

And when you think about the fact that they only have about 1,700 Chipotle stores today, they're going to basically be able to double that. Attack on additional restaurants with the shophouse with Pizza Real Cali, and you can see that there's still plenty of growth to be had here, which is a team stays in place. I'm happy, Cheryl. After 94 years in business, Radio Shack is calling it quits.

The electronics retailer filed for bankruptcy this week, and speculation quickly turned to what will become of Radio Shack's thousands of locations, according to a Bloomberg report, Amazon is considering buying some of the stores. And if that idea sounds familiar to our listeners, Steve Broido, it's because of something Ron Gross said on this very show over a year ago. I think Amazon is going to acquire Radio Shack. Wow.

And they're going to use the sites at showrooms. They're going to use them as places for their lockers. They can go pick up stuff, Amazon stuff. They're going to use it as a place for returns and service.

And that's going to get a nice cheap asset there. That was January 3rd, 2014, our reckless predictions for the year and... Even a broken clock is right twice a day. We actually don't have confirmation.

Truth be told of the Amazon deal. What we do have confirmation about is standard general, the hedge fund coming in, going to buy 1,500 to 2,400 stores and then partner with Sprint to open up store within a store. The Radio Shack name will still exist if you need your batteries out there. You'll still have a place to go in a couple thousand stores, but the rest of the stores will be closed.

I'd like to think listeners heard it here first. Up next, we're going down under the top of Joe Maker about investing in Australia and China. Stay right here. This is Motley Fool Money.

Welcome back to Motley Fool Money. I'm Chris Hill. Joe Maker is the lead advisor of Motley Fool's Real Money Portfolio Service in Australia. He joins me now from Sydney.

So good to talk to you again, my friend. How are you? Hill, great. How you got me?

A long time listeners actually have been emailing me recently saying, when is Joe Maker going to be back on? I was in the happy position of being able to tell them, you know what? He's coming real soon. I want to talk about investing in Australia in a minute, but let's start with China because you and your colleague Matt Joss just got back from a research trip you did in China.

Let's start with the headline. What was your biggest takeaway as an investor? Yeah, why do China is a country of big, objective positions? So you get the most ruthless form of capitalism I've ever encountered operating under a communist country.

The people are very rude. They're very warm to one another and very caring and supportive families. And so you kind of have to take that when you're there and you just see there are two different speeds of economy and two different phases of people. And there's a lot of ambition and I respect that.

The big punch line takeaway was that the economy is slowing down though. And I think probably a lot harder and faster than most people expect. So everybody knows, you know, we all know that the economy is slowing down because the government says it's slowing down. Of course, it's the worst-case secret in finance.

So nobody trusts the numbers and Chinese government publishes. You know, in the third and fourth quarter, they were supposed to grow 7.3, 7.4% GDP. But when we looked at 147, they were companies, we didn't see that. We saw the median sales companies drop 2%.

And we saw receivables and inventory going faster than sales. And those are classic red flags. And then once we got on the ground, we see all kinds of instructions floating down. I mean, literally, you know, at one point, I saw 53 cranes in two minutes while writing on the train, every one of them was idle.

And these construction projects, massive, massive projects, fitting completely idle. So there's a lot to be concerned about there. I was going to say, if people are reluctant to trust the numbers coming out of the Chinese government, they may be more apt to trust the numbers being reported by publicly traded companies in the United States. And just last week, I mean, you mentioned the construction reminds me of Caterpillar.

We talked about that on last week's show and how one of the headlines for Caterpillar was construction falling in China. I know just from following you on Twitter that part of what you guys were investigating was the ghost cities for people who are unfamiliar with the term. First, what constitutes a ghost city? So both city is a giant Chinese city that was built way in advance of population moving in with the idea of being that people would move from the countryside into one of these cities because cities like Beijing and Shanghai are so, so filled and so huge that they need new major urban population.

There's just one problem, which is that some of them never filled up. So you have these cities that it looks like I am legend, you know, where it is this vast expanse of urban wasteland and there's no one there. It's very creepy looking and obviously a major defalication of resources, which you really worry about if you're a country like Australia, which makes it live in selling resources for that construction. So some of the ghost cities are, there's one that's a replica of Paris, so some of them are kind of creepy like that.

And then some of them are like the one we went to, which is a model financial district and it's supposed to be a replica of Manhattan, but just to frame this thing. So this ghost city is 40 miles outside of Tianjin, which is a city that I'm guessing most people listening haven't heard of. It's actually about twice the size of Sydney and you've never even heard of it, which gives you a sense of scope of China, right? The Tianjin is a 30 minute bullet train ride out of Beijing.

So we're talking about a new financial center, it's built 40 kilometers outside of the city, it's a 30 minute train ride from the biggest city. So that doesn't seem all that rational, not an urban planner, but that seems like a bit of a reach. And when you get there, yeah, there aren't a lot of people, and there are many businesses that have relocated. Yes, it was a pretty stunning sight just to see the lack of everything.

You pull up, and there are some people there. But it's like if you were in Manhattan and you just somehow turned back a clock on the dolins and you made two-thirds of them unfinished and you just wiped away 99% of the people. Half the people walking around were security guards. At this point it's well known that China has ghost cities and I think they are sensitive to that.

So we wanted to get a lot more footage and photos than we did, but there was an intimidating number of security guys walking around who looked like they might not have appreciated Western guys like me walking around with a camera. We could get some footage, but I mean it is the survey. You've got dozens of unfinished skyscrapers just sitting there and the unfinished part, right? Because it means that they weren't even close to filling up the demand.

I have to say the one we went to was one of the more famous ghost cities, but we went to the bullet train from Ken-Gen to Beijing to Shanghai. It's a 1,300 kilometer ride. It's pretty far, right? You can see a lot of countries like that.

I can't begin to guess the number of massive idle projects that we saw basically in the middle of nowhere. Eight massive apartment complexes, most of them either unfinished or mostly empty. And that's very, very concerning if you are an Australian, again, focused on feeding that over to the past. On last week's show, one of the companies we talked about was Apple and their record setting quarter.

And a big part of the story for Apple is China. And the fact, Joe, that they're selling iPhones at a much higher price point than Samsung is selling their Galaxy phones. Apple's revenue in China grew by 70%. You were just there.

How much from your observation? How much more room to run does Apple have in China? A lot. A whole lot.

And so here's the good news. When I was saying all that stuff about construction, China is overbuilt for sure. Like there's an estimate that they've got about 49 million empty homes in China, which is about six years' worth of urban migration. So another way of saying that is China could go six years without building another home and feel probably just fine.

So that's an issue if you're Australia. But the Chinese consumer is moving in the right direction. And I think the government is very keen to push consumers on. And you need to see it.

You know, the Chinese people are extremely ambitious. They're hungry. And they have seen such improvement over the past 20 years. They all have this energy and enthusiasm for better lives.

And you can see it in what they wear and the phone's scary. I can't begin to guess the number of iPhones we saw. We weren't shocked when we heard that they posted great results in China. And you know, there's a big demand for top-notch brands there.

You get on the subway. And frankly, people on the Shanghai subway are dressed much better than the ones on the DC Metro, including me when I would take a metro. But people are just very stylish, very focused on looking good. And that spirit and that desire for top-notch brands is very real.

And I think that will continue to be the case. And just the sheer size of the market areas can fill up a lot. Now, of course, there's also been, you know, you probably heard a coach and insert luxury brand here that has struggled in China recently. And the reason for that is because it's a big anti-corruption drive.

So that's a bit of a wild card. Basically, you had officials getting bribed with things like handbags, with bottles, a giant walker. And that has been squashed or it's been pushed back pretty severely, like President Xi. And I don't see that turning any time soon.

But people aren't getting bribed with iPhones. That's a consumer-led purchase, not a government official-led purchase. And so that's why you're seeing strength, map, and not from other literature. I'm going to ask you about another tech company that's been in the news recently, and that's Google.

And I know it's a company you've followed for a long time because this week, Twitter announced a new deal. We talked about this a little bit earlier in the show where tweets are going to be brought into Google search results. But part of the narrative, Joe, is this is just sort of adding fuel to the fire. The idea that Google will some point in the future by Twitter.

If Larry Page calls you up and asks your opinion, should Google buy Twitter? No. I thought they should three years ago. But at this point, I don't see any reason to.

I mean, they just got the milk without having to buy the cow. So what they really wanted was to have all those tweets, which were real-time. You know, I look at our new Twitter. I mean, that'd be great to get real-time news.

It happened so fast and it spread so quickly. Google wanted that because they don't have real-time as down. So if they're able to get that from Twitter without having to buy the whole thing, that's incredibly valuable. It improves their results, essentially, and improves the rationale.

So great deal for Google. If they bought Twitter, I think they would really struggle to monetize it at a price. But I think it would make sense. Now, of course, Google has paid prices before, but I thought it would be ridiculous for things.

It turned out to be visionary, YouTube being one, double-click being another. And it grow some acquisitions considerably. I think both of those, I mean, YouTube in particular was one that didn't really have a revenue model when they bought it. And through Google's scale engineering and ad planning, they were able to turn it into a monster.

I'm sure Google could do more with Twitter than Twitter is doing with Twitter today, especially because they did some Android integration. But for right now, the Google's general, I'm just happy to get those tweets in the search stream and search results without having to buy both of things. All right, we got just a minute left. We talked about construction commodities.

If that is not where the opportunities are for investors in China, what is one industry we should all be watching over the next year? Is it mobile? Is it something else? Well, I think e-commerce is going to continue to be a big quote driver there.

I think you're going to see something like 500 million Chinese come online over the next decade or so. I think that's a pretty big population of e-commerce online users. It's hard to figure out exactly how to play that because of the convoluted structures of some companies. Alibaba, for example, I don't feel warm and fuzzy when I look at their corporate governance.

But something marginally left convoluted like I do, I think it's interesting. And I think Google, unfortunately, is probably going to be muscled out of China for a long time. So something like that, I think it's a good way to play it. And also you're avoiding any construction headwinds.

Because even though it is overbuilt, essentially, but I don't think it'll have anything negative in particular of something like a buy deal with the other online leaders. You can follow him on Twitter. You can read more by going to fool.com.au. Joe Maegar, always good to talk to you, my friend.

Thanks for being here. Absolutely. Thanks for having me. Coming up, we'll give you an inside look at the stocks on our radar.

This is Motley Fool Money. As always, people in the program may have interest in the stocks they talk about and how the Fool may have a formal recommendation for against. So don't buy ourselves stocks based solely on what we hear. Welcome back to Motley Fool Money, Chris Hill here in the studio.

Once again, with Jason Moser, James Early and Ron Gross. Guys, before we get to the stocks on our radar, radio at Fool.com is our email address. That's radio at Fool.com. We'll dip into the Fool mailbag for a second.

Question from Lawrence Chi, who writes with Disney's recent spike to over $100. Do you think they're thinking about splitting the stock under what circumstances does a company split its stock? We'll deal with the second question in a second. But Ron, since you did so well with the Amazon record check prediction, look into your crystal ball.

Do you think Bob Iger and his team at Disney are thinking, maybe it's time to split the stock? I think actually, once we start to get a little bit above $100, it may be approaching $100, $30, they'll start to talk about it. It really means nothing. Actually, you can have the price of the stock double the amount of shares.

It makes it more attractive to the everyman, to the individual investor, supposedly. But it really shouldn't. It's kind of smoke and mirrors. In the days where people traded in odd lots, which is 100 shares, perhaps it was more important today.

You don't need to do that. They probably will do it at some point, but it isn't necessary. Beyond the smoke and mirror that Ron referred to, James, what is the best reason for a company to split its stock? The best reason would be that there has been some, I believe academic evidence showing that between $50 and $80 is an optimum quote unquote optimum stock price simply for psychology reasons because maybe it feels affordable but not too expensive.

As Ron said, the pizza is still the pizza. Same size. The company just chop it into as many different pieces as you want. But in these days, you don't need to buy, you can buy lots.

You can even buy fractional shares through many brokers. There's not really the reason to split the stock. Valentine's Day is just around the corner and Cupid may be working hard, but Cupid doesn't work cheap. According to the National Retail Federation, the average American will spend $142 this Valentine's day on candy, flowers, apparel and more.

That's up 6% from last year. We're all married in this room. Ron, hopefully I'm not tipping something off for your wife and maybe listening, but was that the figure you were looking to hit? That's good.

I wish. You know, Spa Day is expensive nowadays and I find that's a typically good go-to gift. Yeah, it's hard to screw that one up. Let's go to our man behind the glass.

Steve Brato, before we get to the radar stocks, you're a big guy when it comes to Valentine's Day. What do you have planned this year for your lovely bride? I didn't know it was February yet. Glad you were reminded me.

We're going to be in the Dominican Republic next week on vacation, so we'll be celebrating there. I'll have a lovely time. Fantastic. You didn't actually directly address the questions.

That's exactly right. He's got a couple of weeks to figure it out. I'm going to be in the middle of the stock on our radar and Steve will hit you with a question. Ron, growth through up first.

What's on your radar this week? JM Smucker, S.J.M. hit my radar this week. This is a stock I recommended back in 2009 for Inside Value.

The reason it jumped on my radar is because they announced they were acquiring big heart pet brands for $5.8 billion. This is obviously the JM Jelly Company, the Jeff Peanut Butter Company now moving into Meow Mix and Kibbles and Bits. Very interesting. I've never thought of your name, Meow Mix.

Very interesting diversification strategy, trying to get some growth from a company that recently had lack of growth. I'm going to be looking at it. And the ticker? S.J.M.

Steve? You can do whatever you want, Steve. Just stay away from the chocolate. J.M.

What's on your radar this week? Can I just say first, a small glow? I just happen to notice that for three in a row, my radar stock has actually been doing pretty well with Verizon, One Oak and an advertising company. It's no female health.

No female. Oh gosh. Apollo investment management today. Let's see if this can make it a 4P.

10.6% yield. This is a recent II re-recommendation of my service. Makes risky loans going to do well because it's harder for big banks to make these loans now. Ticker?

A.I.N.V. Steve, question about Apollo? Interest rates rise, what happens? These guys are so high.

Get higher interest rates on the loans they make also. Jason Moser, what do you got this week? Yeah, we didn't cover it on the show here, but I've got a call out under armor. They announced earnings this week along with a really interesting set of acquisitions where they bought a couple of social apps.

One is called My Fitness Pal, the other one called Indo-Mondo. It's an international app, but essentially what it does, it's opening up under armor to being more than just an apparel and sports sporting goods company. And Kevin Plank, the quote that he offered up the following day is really what caught me here. He said, that's what really led to getting behind wearables.

For the first time we can say we're number one in the world, I want my team to know what that feels like to be the largest in the world, the largest health in fitness digital community in the entire world. And he also wants Nike and Adidas to make sure they know what it feels like to be number two. And to me, it's just one of those things. Yeah, you have a phenomenal driven leader here.

This is a company that's performed very well for us here at the Fool. And I think it's going to continue for some time to come. And the ticker? You, A.

Steve, question about under armor? Under armor shoes. Did that thing work or not? It did.

I actually have a pair of under armor running shoes and I like them a lot. Steve, you got under armor, J.M. Smucker, Apollo investments, any of those peaking your curiosity? I know Apollo, I love dividends.

Yeah. All right, Ron Gross, James Early, Jason Moser, guys. Thanks for being here. Thank you, Chris.

That's going to do it for this week's edition of Motley Fool Money. The show is mixed by Rick Engdong, our engineer, Steve Broido. Our producer is Mac Rear. I'm Chris Hill.

Thanks for listening. We'll see you next week.