In this podcast, Motley Fool senior analysts Jason Moser and Matt Argersinger discuss:
- February's jobs report (and potential ripple effects).
- The stunning collapse of Silicon Valley Bank.
- Vail Resorts staffing up to meet demand.
- How the "lipstick effect" is benefiting Ulta Beauty.
- The latest from DocuSign and Dick's Sporting Goods.
- Two stocks on their radar: InterDigital and Global Industrial Co.
Nell Minow, vice chair of Value Edge Advisors, offers a prescription for making stock-buyback plans more shareholder friendly, thoughts on ESG guidelines, and predictions for the Academy Awards.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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Chris Hill: The situation is fluid, people. Buckle up. Motley Fool Money starts now.
From Fool Global headquarters, this is Motley Fool Money. It's the Motley Fool Money radio show. I'm Chris Hill. Joining me in studio: Motley Fool senior analysts Jason Moser and Matt Argersinger. Good to be here with you guys.
Jason Moser: What is this physical togetherness? What's going on?
Chris Hill: Yeah. We got the latest headlines from Wall Street. Nell Minow is our guest. And as always, we've got a couple of stocks on our radar.
But we begin with the big macro. The U.S. economy added 311,000 jobs in February. The report reflected higher participation and higher wages.
And Jason, I'll just start with you. We're going to stick with the big macro for a while here. But just when it comes to this report, maybe not a big surprise that one of the first reactions out of this report went immediately to the Federal Reserve. People talking about, well, what does this portend for the next interest rate hike? Will it be half a point, quarter point, that sort of thing? But in terms of the jobs report, this was another strong report.
Jason Moser: Yeah. It was a strong report. It does look like a lot of the growth is really attributable to services, leisure, hospitality. Obviously a market that got hit really hard here over the last several years. It feels like at least in regard to interest rate policy and what we've seen the Fed doing here over the past year in relation to how the economy is responding, a lot of people want instant results.
I think we live in this day and age where everybody wants everything instantly. You buy things online, you want it shipped same day. You buy something online, you want to be able to stream it right then and there. It does feel like, at least in regard to the financial media and many of us is like, all the Fed is going to push interest rates up by 50 basis points. But we want to see the results of that tomorrow. We want to see the outcome of that sooner rather than later. I think in this case, it pays to be patient.
Part of that really is just due to the nature of what we've been dealing with here. We weren't necessarily in a credit crisis. We've been in a cash-flush crisis. Everybody's been flush with cash, and we're trying to ultimately cycle a just tremendous amount of money that's been added to the system over the last few years. Trying to cycle that money out. And that does take time and that means that these interest rate decisions aren't going to have an immediate impact as they possibly could if it was a credit crisis.
But definitely, something that I think is delaying challenges that we see in the employment market. I think we will start to see those challenges appear. It's just going to be a little bit more slowly. I think, honestly, we're just really starting to see those challenges begin to appear now.
Matt Argersinger: Yeah, I agree with that, Jason. I think the reason investors are hanging on all these data points, it's because the Fed's come out and said we're data dependent. We're just hyperaware now of the jobs report -- CPI, PPI, whatever a Fed governor happens to say to some media source.
I think what the jobs report, if we go back to that just for a second, I think there were a lot of questions about that January number. Going back where it was over 500,000, is that real? Is that just a seasonal blip? If you look at the downward revisions to January and December, there were some downward revisions, but not much. 34,000 jobs across two months, I think a lot of investors thought they were going to be more downward revisions there. Then you get another point here in February above 300,000.
There's no way you can conclude that the job market is weak. It's strong. It's showing that we have a vibrant economy and people are getting hired. There seems to be there's still more jobs than there are people looking for jobs. If that's the case, you've got this weird situation now where the Fed has to keep their foot on the pedal because the economy remains strong,
Jason Moser: Wages are keeping up, too: 4.6% growth in average hourly earnings. That's cooled off a little bit, but that's still impressive.
Matt Argersinger: Yes.
Jason Moser: Even though we're dealing with some historically very high inflation rates, again, it goes back to the consumer still having some cash, still having the ability to spend some. We're just slowly but surely seeing that cycle through. Just, it takes some time.
Chris Hill: This doesn't happen often, but the jobs report got overshadowed by another story. This requires some setup because it involves a bank that probably a lot of people are not as familiar with or maybe have not even heard of until this week.
But on Wednesday, Silicon Valley Bank announced it was looking to raise more than $2 billion after suffering a massive loss on asset sales. On Thursday, shares of Silicon Valley Bank fell 60% as depositors rushed to pull their money out of the bank. Friday morning, shares fell another 60% before trading was halted. Then SVB was closed by regulators, with the FTC promising that insured depositors will have access to their money no later than Monday morning.
Let me just timestamp the conversation that we're having right now. We are recording this. It is early Friday afternoon. Depending on when people are listening to this, the story probably would have changed. It's not out of the realm of possibility that a larger bank steps in and maybe buys them. Although what this bank is worth now is anybody's guess. Again, this is unfolding as we're talking.
But, Matt, this is raising a lot of questions, including what is the exposure for the rest of the financial sector?
Matt Argersinger: Yes, great question. This story is going to be very fluid. It's going to go through the weekend. We're going to learn a lot about, by Monday, what ultimately happens to all the assets for this bank.
But the story that's not changing that we should be knowing going into this was we had a period forever of zero to low interest rates. Credit was easy. A bank like Silicon Valley Bank benefited extraordinarily from that era. They were lending to start-ups. They were flush with VC money. A lot of tech companies parked their capital there, did business with Silicon Valley Bank.
This was a symptom of the times changed. Interest rates rose. All of a sudden, these profitless tech companies, these venture capital companies, bad companies were taking their money out. I was looking at this number, I can't believe it, since the second quarter of 2022.
Really a few months after the Fed started raising rates last year, up until the end of the year, $34 billion was pulled out of SVB's non-interest-bearing deposits. Those are mostly checking accounts. I guarantee you that, of course, accelerated into this year. That's massive.
The question I have, and you asked it, Chris, which is right, is this just isolated to SVB Financial, the holding company of Silicon Valley Bank? Or is this symptomatic of a greater problem?
I'd point to other things, not just tech companies or crypto, but look at commercial real estate and all the money that's being backed by office buildings that are now empty. What about car loans that are expensive now? What about credit cards that are at all-time highs? It balances. There are cracks, I think in the financial system. This comes out of the Fed raising rates as aggressively as they have.
Jason Moser: Yeah, that is the question. Is this indicative of a bigger problem? Are we going to expect a ripple through the system? Based on what we know today, I think and I certainly hope the answer is no.
When you look at Silicon Valley Bank -- ultimately, I would say, it's competitive advantage over the last decade-plus, is that it's been the one funding and banking all of these firms that many others simply wouldn't or couldn't. They were willing to take on that risk. They were a bit more of a specialty bank in that regard.
It reminded me a little bit of Markel Insurance in that regard as a specialty performer. They did something that most others couldn't do. Now that comes with clear risks, and we've always enjoyed Markel because year in and year out, they just write such good business. You see through their combined ratios that they know what they're doing.
It seemed that really that SVB knew what they were doing as well. But the problem is they ran into a buzz saw here in regard to, like you said, the changing macro environment in relation to what they do specifically.
Matt Argersinger: Yes.
Jason Moser: Then you add to that, momentum can be a hell of a thing. When a bank run starts, even just the rumor, it feeds on itself and it moves fast.
Matt Argersinger: Yeah, there are a lot of things. We can get into the Peter Thiel comments, for example, that accelerated things.
But and you mentioned Markel is a good insurance company, a good bank is diversified in its assets. It's not lending to one specific company and corporate group or one specific type of industry. It's diversified across many industries, many types of borrowers. Clearly, Silicon Valley Bank was way overdone in terms of the areas that are getting hit the hardest.
Jason Moser: It's in the name: Silicon Valley Bank. It doesn't take a leap to just wonder, what do they do and who do they serve. It's worked out well for them for a long time, but we're seeing the downside to specializing in that particular market right now, unfortunately.
Chris Hill: Yeah. Someone reminded me of the underrated financial movie Margin Call.
Matt Argersinger: So good.
Chris Hill: Jeremy Irons has a great line where he says, "It's not panicking if you're the first one out the door." [laughter]
As we wrap up on this, what should people be watching as this plays out? I don't own shares of SVB. Obviously, people who do, people who have their money with it, they're paying much closer attention to this story. But as we've said, this has the potential to have ripple effects. What should the average investor be watching here?
Matt Argersinger: I think one of the things that's happened is a lot of good banks, well-capitalized banks, have been thrown out with the bathwater with this one. Some of the big major banks have just been hit really hard. Those banks are so conservatively run. They're so overcapitalized now because of all the regulations that have come in since the financial crisis. If you own some of those banks, I wouldn't be worried, going into this weekend, about what's going to happen to those.
Jason Moser: I feel like you look at this from two different perspectives. One, this really reminds you that size does matter. Big banks, the JPMorgans of the world, are going to walk out of this just fine.
Matt Argersinger: They're legitimately too big to fail.
Jason Moser: We've learned that lesson. Back to diversification, SVB would be considered a regional bank. I think you're right. You're going to see a lot of regional banks get thrown out with the bathwater here just because they're regional banks. Regional banks are not all created equal. Most are not writing books of business like Silicon Valley is writing.
Matt Argersinger: Absolutely not.
Jason Moser: They legitimately can be banks that are being ignored, being dismissed when they really don't have any exposure to this type of investment at all. They could present some really interesting opportunities. But then, you go back to things like commercial real estate, a lot of banks exposed to a lot of that exposure, and it's worth keeping that in mind. But hopefully, this is something that will be limited in its scope.
Chris Hill: Earnings news after the break, so stay right here. This is Motley Fool Money.
Welcome back to Motley Fool Money. Chris Hill here in studio. Jason Moser and Matt Argersinger.
DocuSign's fourth-quarter results were better than expected despite that shares of DocuSign down nearly 20% on Friday. What's going on here, Jason?
Jason Moser: Well, I mean, this is a business in transition, and so we have to acknowledge that, and investors are either going to be willing to be patient and give Mr. Thygesen some time or they'll move on.
Now, personally, I'm willing to be patient. I do believe this is a good business with a quality offering that's playing into a clear long-term trend. But I do believe it is going to take some time for their new CEO really to get his legs underneath him and get this business going back in the right direction.
Worth noting, they did beat their own internal guidance for the quarter: revenue of $659 million up 14% from a year ago. They did see billings, $739 million. That was up 10% from a year ago. Total customer growth up 16% from the year. Enterprise customer growth even more encouraging up 24% for the year. And international now stands at about 25% of the business today. It grew 19% for the quarter. And dollar net retention at 107%, historically low.
They do see some near-term headwinds as they reshape this business that's to be expected. Then adding to the headlines, CFO Cynthia Gaylor of four and a half years we'll be taking off, so they are looking to fill that position. It is worth noting, they said in the release that Gaylor's planned departure is not a result of any disagreement regarding the company's financial statements or disclosures. So it really does seem like it's on the level.
But I think it really all goes back to the forecast here, the guide for the core and for the year, you're talking about high-single-digit revenue growth. That's a big problem. It's going to be difficult to get investors excited for that when this historically has been a growth story.
Chris Hill: Shares of Vail Resorts on a downward slope this week. Second-quarter revenue was better than Wall Street was expecting, but guidance was light. Let's face it, Matt, it's expensive to operate those mountain ski resorts.
Matt Argersinger: It is, and you said it, I mean, with Vail, it was really a top-line story versus bottom-line story. If you look at the top line, the second quarter was great. Fiscal 2022, their resort net revenue was up 21%. They had record visitation. If you look at the season-to-date totals, their skier visits were higher, lift revenue was higher, retail rental revenue, and their North American resorts were up 21%.
But it came down to the earnings, and they were mostly flat. Guidance, you said, was soft, and that's because of all the things they did last year -- They got a lot of criticism going back to the prior winter season where lift lines were jammed, they didn't have enough staffing. Restaurants weren't really open. It was a COVID rush that they just weren't ready for. So they had to make a lot of investments over the past year to get those resorts cranking again. That included hiring a lot of people, training, investing a lot. The earnings is what is going to get hit here.
I would say, though, it still demonstrates to me, Vail's got pricing power. Once these investments run through it, I think they're going to get back on higher earnings trajectory. They did raise the dividend 8%, which I always love to see. They upped the share repurchase authorization. So me as a shareholder of Vail, I come away thinking, I might be interested in buying more of this, not last, especially with the shares down.
Chris Hill: The lipstick effect working for the benefit of Ulta Beauty. Fourth-quarter profits and revenue came in higher than expected. Jason, as a category, beauty products have really held up over the past 6 to 12 months. You see it when you look at Ulta Beauty's stock chart.
Jason Moser: But you hit exactly on what I wanted to lead with. Is that something we've, I think a lot of us happens April, while beauty is just a very resilient market.
Anecdotally, I can tell you, over the holiday season, I went to an Ulta store personally, physically went into the store to go get a gift card for my daughter. And that place was a zoo. Very friendly customer service, especially for dope like me who knows nothing about makeup.
But when you look at the numbers, it's really impressive what this business is doing. Net revenue, $3.2 billion. That was up 18.2% from a year ago. Comps up 15.6% and gross margin holding steady in this environment, which I think is really encouraging. They did see a 13.6% increase in transactions driven by traffic.
Now, they did see the average ticket just increase 1.8%, so still pretty light. But when we looked at the companies like Home Depot and Lowe's earlier, a lot of those tickets were down. So it's again encouraging to see that ticket holding there. And they now have more than 40 million Ultimate Reward members versus 37 million just a year ago.
So it is a good business that does something very specific. It knows what it's doing. I mean, they are growing not only the physical footprint but the digital footprint as well. Strong balance sheet, continue to bring that share count down. This is one that's worked out pretty well.
Chris Hill: Shares of Dick's Sporting Goods up 12% with a strong close to the fiscal year. Same-store sales in the fourth quarter were more than double what analysts had expected. Guidance for 2023 was better than what we've seen out of a lot of other retailers, Matt.
Matt Argersinger: Yeah. It turns out whether it's cosmetics or sports equipment, and people like to go out and shop and it's something, Dick's Sporting Goods, when I think about it, is one of those retailers that I thought wrongly, especially postpandemic, that, it's just one of those ones that could go out the door. It's a tough spot to be in if you're a retailer like this, but Dick's has done incredibly well.
You mentioned the results, earnings were up. They're projecting earnings side, I'd just say to be up 20% this year. They more than doubled the dividend, by the way. They couch it by saying we have strong conviction in our structurally higher sales and earnings.
So this is a business that I'm amazed and impressed, but they're certainly on an upward trajectory and I think it tells a greater story, having talked about Ulta as well, that brick-and-mortar retail is still quite attractive. A lot of customers are going, traffic is high. We've seen if you look at Simon Property Group, the biggest mall owner, their results as well it paints, a customer likes to go out and shop.
Chris Hill: Well, and this comes, we talked about this all earnings season, the cautious guidance coming from so many really high-level businesses. The fact that Dick's Sporting Goods is putting forth the guidance, doing what they're doing with the dividend in an environment when a lot of other strong retailers are saying, we're going to be really cautious here.
Jason Moser: No, it's great to see that confidence. Maybe it could be a specialty story maybe. But no, I think it speaks to a greater story about retail, which is doing well. As we know from the jobs report, that's where the jobs tend to be going.
Chris Hill: Matt Argersinger and Jason Moser, guys, we will see you a little bit later in the show.
Up next: What's the best version of stock buybacks? And what should people expect Sunday night at the Academy Awards? We're going to ask our guest, Nell Minow. So stay right here. You're listening to Motley Fool Money.
Welcome back to Motley Fool Money. I'm Chris Hill. By day, Nell Minow is the vice chair of Value Edge advisors. By night, she is a film critic, which means she technically qualifies as a superhero leading a double life. She joins me now from her home in Virginia. Nell, thanks for being here.
Nell Minow: My pleasure.
Chris Hill: I want to talk about the business of movies and, of course, the Academy Awards. But I do want to start with share buybacks, because this is a topic highly relevant to investors, very much in the headlines lately. In part because of President Biden, the State of the Union address, talking about increasing the tax on corporations. Partly because of Warren Buffett, who you and I and many other investors are big fans of, in his latest annual letter. Taking a pretty, for him, a spicy shot at critics of share-buyback plans. It seems like there is some level of recognition that this is something that could stand improvement.
I guess my question for you is, what do you think is the prescription for improving share-buyback plans as a structure?
Nell Minow: Well, I wrote an article called "A Capitalist Solution to the Problem of Excessive Buybacks." So it's something I've given a lot of thought to.
The last thing you want to do is try to fix it through the tax code, because corporations are happy to pass along those costs to employees, shareholders, customers. It will have no effect on them whatsoever. Buybacks can be a very good discipline. You got excess cash. I would've thousand times rather that you buy back stock or declare a special dividend rather than making a stupid acquisition, which is what too many companies will do.
Unfortunately, it's gotten completely out of hand. It's short-term financial engineering. The two things that I would do are, first of all, you do not let the executives sell into a buyback. The whole idea of the buyback is they're telling you the stock is undervalued. So why are they selling at that price? I think it creates a tremendous moral hazard and a tremendous lack of credibility.
The other thing is, it drives me nuts when it looks like the company is not going to be meeting the EPS targets and therefore not triggering the bonus. What are we going to do? I know: We'll buy back some stock.
So there are two numbers in that calculus. There is the earnings and then there is the number of shares. There's only one of those numbers that is really beneficial to shareholders.
Those are two ways that game the system to allow the executives to sell into it and to not adjust the earnings-per-share incentives goals. I think we fixed those two things. Then we'll lower the pilot light a little bit on making buybacks so attractive.
Chris Hill: I want to go back to something you said about acquisitions, because yes, a lot of acquisitions don't work out. Something we talk about on the show from time to time is how capital allocation is such an important skill for executives. But it's one of those things that's pretty difficult to recognize in a potential CEO when he or she is being interviewed because it's a track record that reveals itself over time.
As you indicated, there are companies that do a very good disciplined job of returning value to shareholders either through dividends or buyback plans. There are others who -- put aside the acquisitions -- they do a bad job at share-buyback plans.
All of this is context for this question. You have spent so much of your career working for organizations that are advising boards of directors. Is there a way to get at someone's capital allocation skill level? How do boards find out that information because again, it's such an important skill and I don't see how it reveals itself unless you have five years of a track record for a CEO before you can say, wow, he or she is really good or really bad at this.
Nell Minow: Well, I will just take issue a little bit with one thing you said. It's really the job of the board to oversee asset allocation. It's a forest-and-trees thing, and I think the executives tend to look at the trees, and you really need the board to look at the forest.
When people say to me, well, we have excess cash, what they're saying to me is we have no idea of what we're doing, because we literally pay them the big bucks so that they can figure out what to do with that cash. If they can't find a way to make better products, to improve operations, to do better on employee retention and training, then give the cash back to the shareholders, but that's not going to help us in the long run. So you do need a track record to figure out about asset allocation.
On the other hand, if what they're saying to you is we have no imagination and we're just going to give you back this cash and let you decide what to do with it, that gives you a little bit of an indicator.
Chris Hill: We are investors. We don't really pay a lot of attention to politics except when it enters into the realm of investing. We just talked about one area with share buybacks. But another area has come up with President Biden saying he plans to issue the first veto of his presidency because the Senate has overturned a Labor Department rule that permits fiduciary retirement fund managers to consider ESG factors in their investment decisions. Obviously, there are ramifications here for retirement and pension plans across the country. When you watch this drama playing out on Capitol Hill, what's your reaction?
Nell Minow: If you had told me, when I got into this business, that someday, a corporate governance matter would become the subject of not just a veto but the very first presidential veto of an administration, I would've thought you were nuts. Is not that I didn't think that these are important issues; I just couldn't believe they would become as politicized as they have.
It's really important to make it clear that the ESG rule that is an issue here doesn't say you have to consider, your investment manger doesn't have to look at ESG. It says you may wish to include these to the extent that they are material. It makes it very clear that we're talking about quantifiable economic forecasts, financial indicators. Nobody is asking you to do something to warm the cockles of your heart.
Yet ESG has become the new critical race theory. It has just become "woke," it's become something that is just a subject of a tremendous misinformation campaign funded by the oil companies and the Koch brothers. And that's too bad, because it is a simple, straightforward way of saying, gosh, maybe the accounting standards that we've had since the days when most of the company's assets were machinery and real estate and we don't value intellectual property. We don't value political risks very well. We don't value climate risk very well. Maybe we should look at some other indicators to try to figure out how to do a better job. Looking back, we missed the financial meltdown, we missed the dot-com, we missed the accounting scandals. Maybe we could do a better job.
All of a sudden now, that is considered to be woke. It has nothing to do with being woke. It has to do with getting a clearer picture of risk and return.
Chris Hill: Before we get to the Oscars, let's talk to me a pretty interesting story in the business of movies and, in particular, movie theaters. Which is AMC, the largest movie theater chain in America, has started testing dynamic pricing in some of its theaters, with a plan to roll it out nationwide by the end of the year.
What is your reaction to this? Because my reaction is, I'm not outraged by this. This is something that has gone on forever in live sports, in concerts, at Broadway shows. There are people who are outraged by this. What's your reaction?
Nell Minow: I wouldn't say that I'm outraged. I'm a little disappointed. Normally, I am a fan of Adam Aron, the CEO. There's a big difference between a Broadway show, a sporting event, and a concert, which is that you are watching a live performance, and it really does matter where you sit in the theater. You want to be up close, you want be back, you want to be in the left or the right. You'll get a different perspective.
In a movie theater, I think the last thing we need right now is a reason for people to stay home. We want to get people to come to the theater. Therefore, I just don't think it's a good idea. I don't think that the beta test is going to work out very well, and I hope they drop it.
Chris Hill: I should also say, I don't think this is necessarily going to work for them. I just wasn't outraged by it.
In terms of the Academy Awards, am I wrong to assume the ratings are going to be a little higher this year? Should Disney shareholders get excited about more people watching the ABC broadcast? Because, I don't know, last year, there was the rare "I can't believe I'm watching this live" moment when Will Smith slapped Chris Rock.
Nell Minow: Yeah. But a few years before that, we had the "I can't believe I'm watching this" moment where they literally announced the wrong best picture. There's always going to be some water-cooler comment, and yet, I think most people will wait to watch those clips on YouTube. I just think the way we interact with live events on television has changed. I think there's awards fatigue.
For gosh sakes, I will be watching. We call that Mommy's Super Bowl in our house, and no one's allowed to talk to me while the Oscars are on. But I'm pretty hardcore, and I'm also old. So I think that the Oscars have not figured out a way to connect with, I'm just going to say the TikTok generation. They've got some great presenters. They're going to have some wonderful song numbers. But I just don't think the ratings are going to be that great this year.
Chris Hill: So Alphabet shareholders maybe get a little excited.
Let's get to the three of the biggest awards, and as always, as we do every year, you tell me who you think should win and who will win. We'll start with Best Actor. Again last year, this was the category everybody talked about because of Will Smith. Am I correct that all five of these nominees are first-time Oscar nominees?
Nell Minow: I think you're right. Yes. You want to know who I think should win, and I'm going to pick the least likely person to win.
Chris Hill: Who's that?
Nell Minow: That's Bill Nighy. I thought Living was one of my favorite films from last year. It's an extraordinary story, extraordinary history behind the movie. Bill Nighy broke your heart a thousand times. He's a fabulous actor. I would love to see him win. Nobody saw that movie. That would be my choice.
I think will win... That's a tough one, but I think it's going to be Brendan Fraser, because nobody loves a comeback story more than the Oscar voters, and everybody loves him. They love the fact that he is being taken seriously right now. He's going to cry all over the stage. They love that. I did not love the movie, but I loved his performance, and I do think he's great.
I have to tell you, I think something really funny I found on the internet yesterday. There was a movie that Brendan Fraser was in where he played a thawed-out prehistoric guy called Encino Man. It was a Pauly Shore movie.
Chris Hill: The classic comedy Encino Man.
Nell Minow: But one of his co-stars in that movie is also nominated for an Oscar this year, Ke Huy Quan from Everything Everywhere All at Once, and there's a great clip of the two of them together in the movie, and apparently, Pauly Shore has been saying, where's my Oscar nomination? Everybody in my movie got nominated but me.
Chris Hill: That's one of the great things about the movies. You never would've thought Encino Man would produce two Oscar nominees, but here we are.
In the Best Actress category, great performances across the board. But this seems like a two-person race between Cate Blanchett and Michelle Yeoh.
Nell Minow: I'll tell you something fascinating about both of those roles: They were both written for men.
Chris Hill: Really?
Nell Minow: Yes. Both scripts originally envisioned the main character to be a man. That tells you a lot about what the different opportunities are for male and female performers in the wonderful world of Hollywood. The fact that these women took those roles, gave their whole selves to them, and made such ferocious, layered, wonderful performances. I think Cate Blanchett has two Oscars already, so I'm hoping for Michelle Yeoh both should win and will win. It will be thrilling when she gets up to accept that award.
Chris Hill: In the Best Picture category, there are 10 films nominated. If the betting odds are any indication, Everything Everywhere All at Once looks like the overwhelming favorite here.
Nell Minow: There's no question about it. It's won all the preliminary awards, including the single best leading indicator, the Directors' Guild Award. I can't say enough good things about it. It is a brilliant, imaginative, wonderful film. If it doesn't both dazzle you and make you cry, then you don't have a heart. It is just a fabulous film, and I'd love to see the Hollywood establishment honor something so innovative.
Chris Hill: There are a lot of categories. Let's end with this. Fill in the blank. Don't be surprised if...
Nell Minow:RRR wins Best Song. Best Song is the worst category every year just because of the way the nominations work. In my opinion -- and I follow my great mentor and idol Roger Ebert on this -- you should not be allowed to nominate a song unless it's actually in the movie; over the credits doesn't count. There couldn't be a better example than "Naatu Naatu" and RRR, a fabulous song in a great movie, beautiful dance number. Don't be surprised even though you may have never heard of RRR or "Naatu Naatu," but you will hear about it on Sunday night.
Chris Hill: One of the best reasons to be on Twitter is so you can follow Nell Minow, get her thoughts on corporate governance, movies, and a lot more. Nell, enjoy Mommy's Super Bowl.
Nell Minow: Thank you. It's a great pleasure.
Chris Hill: Coming up after the break: Jason Moser and Matt Argersinger return. They got a couple of stocks on their radar. Stay right here. This is Motley Fool Money.
As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against. Don't buy or sell stocks based solely on what you hear.
Welcome back to Motley Fool Money. Chris Hill here once again in studio with Matt Argersinger and Jason Moser. The bumper music you hear on the show is courtesy of our man behind the glass, Dan Boyd.
Speaking of music, The Wall Street Journal reporting this week that for the first time since 1987, vinyl albums outsold compact discs, and guys, it wasn't close. According to the Recording Industry Association of America, there were 41 million albums sold in 2022, compared to just 33 million compact discs. This warms my aged heart.
Matt Argersinger: No, it's awesome. It was obviously it was before my time, but I have to say when I look at the vinyl records that my parents had and my wife's parents had, they're awesome and beautiful, and I want to learn more about them, collect them maybe, and keep them.
Chris Hill: Let's get to the stocks on our radar. Our man behind the glass, Dan Boyd, is going to hit you with a question. Jason Moser, you're up first. What are you looking at this week?
Jason Moser: Taking a look at a company called InterDigital, ticker is IDCC. InterDigital is a research-and-development company with a primary focus on wireless technologies, so that plays right into the services that I'm running here at the Fool. But the technology itself is everywhere, including smartphones, consumer electronics, IoT products, televisions, laptops, gaming consoles. Yada yada yada.
I mean, this is a company that makes money from licensing its patented technology and innovations to customers all over the world. At the end of 2022, they actually held a portfolio of approximately 28,800 patents and applications related to wireless communications, video coding, display technology, yada yada yada. This seems like a lot of patents, Dan. I'm going to dig in and see if there's a real business here.
Chris Hill: Dan, a question about InterDigital.
Dan Boyd: Absolutely. Jason, is this the kind of company that just sits on patents, or is this the kind of company that actually does its own research and development?
Jason Moser: A little bit of both, but mostly, they are in the business of collecting that book of patents and then extracting value from said patents.
Chris Hill: Matt Argersinger, what are you looking at?
Matt Argersinger: It's Global Industrial Company, ticker GIC. I know it sounds like some front for like an evil corporation or something, but it absolutely does. [laughs] But they're actually a distributor of what's called maintenance, repair, and operating equipment, MRO. They're one of the leading companies to do that, mostly serving small and midsize businesses. Think like storage equipment, janitorial supplies, and safety devices. Things businesses really need to run their everyday business. There's actually a supply over 1 million MRO items. They also have some of their own private-label products as well. Very cash flow-heavy business; 3% dividend. Love it.
Chris Hill: Dan, question about Global Industrial Company.
Dan Boyd: I guess you didn't want to invest in the Acme Corporation this week, did you?
Matt Argersinger: It was on my watch list, Dan, but I went with Global Industrial instead this week.
Chris Hill: Well, at least you have a pretty clear choice in terms of two very different businesses. Dan, you got a stock you want to add to your watch list?
Dan Boyd: Well, I mean, yes, and it's InterDigital, and it's not because I'm super impressed by them. It's just that Matt picked the personification of the color beige for a company here.
Chris Hill: How surprised are you that it's not Ron Gross putting forth this stock?
Dan Boyd: I'm, actually more surprised at Jason's pick, because InterDigital apparently has been around since 1972 and is as "old economy" as you get when it comes to tech companies.
Chris Hill: Jason Moser and Matt Argersinger, guys, thanks for being here.
Jason Moser: Thanks, Chris.
Chris Hill: That's going to do it for this week's Motley Fool Money radio show. The show is mixed by Dan Boyd. Drop us an email at email@example.com. That's "podcast" with an S on the end, firstname.lastname@example.org. I'm Chris Hill. Thanks for listening. We'll see you next time.
SVB Financial provides credit and banking services to The Motley Fool. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Chris Hill has positions in Alphabet, DocuSign, Home Depot, JPMorgan Chase, Lowe's Companies, and Walt Disney. Dan Boyd has positions in Walt Disney. Jason Moser has positions in Alphabet, DocuSign, Home Depot, Markel, and Walt Disney. Matthew Argersinger has positions in Alphabet, DocuSign, Home Depot, Markel, Simon Property Group, Vail Resorts, and Walt Disney and has the following options: short June 2023 $90 puts on Alphabet and short May 2023 $100 puts on Walt Disney. The Motley Fool has positions in and recommends Alphabet, DocuSign, Home Depot, JPMorgan Chase, Markel, SVB Financial, Ulta Beauty, Vail Resorts, and Walt Disney. The Motley Fool recommends Lowe's Companies and Simon Property Group and recommends the following options: long January 2024 $145 calls on Walt Disney, long January 2024 $60 calls on DocuSign, and short January 2024 $155 calls on Walt Disney. The Motley Fool has a disclosure policy.