Snowflake, Homebuilders, Money Girl, and More

In this episode of Motley Fool Money, Chris Hill chats with Motley Fool analysts Jason Moser and Andy Cross about the latest headlines from Wall Street. They go through some recent IPOs of note. They've got news from the homebuilding industry, a big deal in the semiconductor industry, stocks hitting all-time highs, and stocks going down on rumors. They also share some stocks to put on your watch list and much more.

Also, Chris chats with Laura Adams from the Money Girl podcast about her latest book, Money‑Smart Solopreneurs: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers.

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.

This video was recorded on September 18, 2020.

Chris Hill: We've got the latest headlines from Wall Street. Money expert Laura Adams is our guest. And as always, we have a couple of stocks on our radar. But we begin with the biggest software IPO ever; Snowflake (SNOW -0.44%), a cloud software business, went public on Wednesday at $120/share, and by the end of the day it closed at $255/share. Jason, Snowflake has immediately become a $60 billion company, so you tell me, on the spectrum of "This makes sense," to "This is crazy," where is Snowflake right now?

Jason Moser: Man, that's a tough one. Let's just start with Snowflake has a lot going for it; I'm going to try to be as glass half full here as I can. It holds tremendous mindshare in its market as a quality offering. The native cloud architecture the business is built on, the multi-cloud strategy is ideal, operational simplicity, customers are happy using it. That said, this is not a buy at any price business, in my opinion, and so maybe it's more toward the crazy side of the spectrum. I'd say, it's certainly unbridled enthusiasm maybe, it's in the business of cloud database management systems. And anytime you talk about cloud, people get excited, and that's understandable. But when you look at this market, Gartner estimates that this database management systems market exceeded $55 billion in revenue in 2019. It's on track to reach close to $100 billion in 2023, and close to $115 billion in 2024, as more of these management systems move to the cloud.

All of that said, clearly, it's a very big market opportunity. Today Oracle, Microsoft, AWS, IBM, and SAP together hold 85% share of this market by revenue. So, Snowflake is a small company. I mean, it's on track to probably bring in somewhere in the neighborhood of $500 million in revenue this year; that pegs the stock at around 120X sales, not profitable, of course. So, again, it's a good business, they've got a lot going for them, but I think there is one key challenge they're going to have to deal with here, and this is based on customer feedback, it actually is in the business model itself, so that actually is pretty concerning, it's their pricing strategy. Typically, these SaaS businesses, one of the attractive parts of SaaS businesses is that they are subscriptions, right? It's reliable, you know, customers can predict how that's going to impact their budgets. And Snowflake prices a little bit differently, they price on a consumption-based model, which makes price predictability very difficult and that's something that actually bothers their customers a lot. So, I suspect we'll see them work on that here in the coming year. Neat business, they're good at what they do, it's not a buy at any price though, and the valuation today is begging for interested investors to just be patient and wait.

Hill: Andy, can I interest you in a $60 billion unprofitable business?

Andy Cross: Hey, it's a heck of a business with plenty of growth ahead of it, but I think this is just, again, the excitement around the IPO market. We've seen it now. We've seen more and more IPOs, we've seen the SPAC market really warm up, which is a special-purpose acquisition company market warm up. I mean, there are a lot of SPACs coming out, much more than there were in the past couple of years. So, I think the IPO market that went through this freeze during the COVID quarantine in February, March, and April has clearly thawed and there are a lot of investors chasing a lot of dollars very quickly. And you see this in the result of something like Snowflake on day one. We also have to remember, Fools, day-one trading isn't really individual day trading, but certainly on these IPO markets there's so much algorithm dollars chasing those and pushing those prices. So, be patient, make sure you're buying for the long term when you're investing in these businesses.

Hill: Shares of Adobe (ADBE -0.94%) fell a bit this week despite the fact that Adobe's third quarter profits were higher than expected and revenue was a record $3.25 billion. Andy, I feel like Adobe has entered that atmosphere where only a perfect quarter is going to move the stock higher. [laughs]

Cross: Yeah, that's true, Chris. It was a really nice quarter, CEO Shantanu Narayen said that -- this was the line in the call that really got me going -- which is he said, content creation and consumption are exploding in a world where connecting visually has become even more essential. I think that's so true. You saw this in Adobe's business. Really across the board their revenues were up 14% to a record. EPS was up 25% on a non-GAAP level, that was far ahead of estimates, they've done a really nice job managing their cost savings. The big growth in the digital media segment, that's their Photoshop, the Lightroom, Illustrator, Premiere Pro was up 19%; now, a full 72% of revenues. Creative Cloud and Document Cloud growth. Digital media annual recurring revenue was up 24%.

The digital experience, which is the advertising business, was up 14% if you back out some of the changes they're making in their Advertising Cloud business on their transactions, they're kind of moving away from one-off transactions and moving much more to subscriptions. So, 93% of their revenues are now coming from subscriptions. So, their performance obligations are healthy.

But still, Chris, like you said, a really nice quarter, very nice growth, beating the estimates, continue to be a leader in the space, it's just that there's so much now pricing to these companies, if you're not absolutely really [laughs] exceeding by a mammoth amount and really guiding to big growth in the next quarter, the stock is just not going to move. And I'm OK with that. I think long-term Adobe is a great business, we own it in our top stock service and recommend it. And I just think they really continue to get it done, and playing in a space where innovation and growth is super-important.

Hill: I'm glad you mentioned Shantanu Narayen, he's been CEO for nearly 13 years, doesn't really get the media exposure, the accolades of other big tech CEOs, but the stock is up 10X in value since he's been in the corner office. You got to be so thrilled, if you're a shareholder, that he's running things.

Cross: Chris, absolutely. It's one of those business that just get more and more efficient, they focus on the rate growth, they make these acquisitions that are timely and appropriate and they get them into the Adobe network, they make changes to that platform, they continue to get more and more efficient in the way that they are spending and marketing using AI and attribution technology and analytics to really drive sales and renewals across their Adobe.com platform, which they continue to build out. So, he's really pushed them in the right direction, encouraged them properly, and it shows in the results.

Hill: From software to housing, shares of Lennar Corp (LEN 0.77%) (LEN.B) hovering around an all-time high this week after third quarter profits came in higher than expected. The homebuilder showed improving gross margins too. And Jason, you never want to read too much into a single company's earnings report, but with a homebuilder of Lennar's size, I have to feel that this indicates some amount of strength in the housing industry.

Moser: Yeah, absolutely. I mean, biggest home builder by revenues. And again, you mentioned the margins, I think that really is the big story for the quarter. The company itself, they're really focusing on margins and controlling the construction costs, right? Certainly, in a pandemic economy where cost-controlling is more important now than ever. And they're doing a good job of that, they're reducing the years' owned supply of home sites, for example; that's down to 3.8 years from 4.4 years a year ago. And then when you look at the actual performance, the numbers there. I mean, listen, revenue was relatively flat, earnings were up 33%, so that tells you a lot right there. Deliveries up 2%, new orders were up 16%. They have a strong backlog still, which is good. And again, it does show that the fundamentals in the housing market really do remain strong. I mean, record low interest rates and there is actually an undersupply of new and existing inventory. And so, I think that you'll continue to see Lennar perform well as long as they continue to focus on controlling those construction costs, which really does seem like a priority.

The stock hasn't really done much for investors over the last five years; it's been an underperformer. But you stretch that out longer, over a 10-year timeframe, for example, and the stock has really performed very well and it has outperformed the market. So, it does feel like, when you're able to get into a business like this at the right price and then just hang on -- I mean, housing is a very reliable, sort of, market there, and Lennar is definitely one of the key players in it.

Hill: Nvidia (NVDA 0.03%) wins the prize for the biggest deal of the week. Nvidia is buying fellow chipmaker Arm Holdings in a cash and stock deal worth $40 billion. Andy, Wall Street seemed to like this deal, what about you?

Cross: It may be the second biggest deal next to the Snowflake [laughs] IPO, I guess. But from an M&A perspective, yeah, this has been in the news for the past couple of weeks, so it wasn't a huge surprise, Nvidia acquiring Arm Holdings, which is another chip company, for about $40 billion. Nvidia's market cap is $300 billion, so it's about 13% of the value. It's certainly the largest one Nvidia's has made next to their Mellanox acquisition last year, which was $7 billion. It really combines these two powerhouses in the chip business. Combines Nvidia's GPU and AI strength with Arms CPU system and their ecosystem. Arm provides 70% of the world's population with these chips, including, like, Apple and Qualcomm chips. Their strengths are smartphone and laptops and routers, wearables, industrial applications, while Nvidia's are in graphics, gaming, AI, robotics, and auto. And pairing these together really opens up the market for Nvidia.

Now, it's a very large acquisition, they have to digest this company. It really helps SoftBank, I think SoftBank's had some struggles here, [laughs] and they bought Arm Holdings a few years ago for about $31 billion, so they're getting that off their balance sheet. They will now be one of the largest owners of Nvidia with the stock deal, even more than the Founder Jensen Huang. So, it does combine them. But these big acquisitions, Chris, always are a little bit tricky to, kind of, get into the works, even though Nvidia is talking about how it will be accretive. And I think it really does certainly expand the development platform, but we'll have to really watch closely how it plays out as they bring the two together, because powerful technology integration operations are always a little bit tricky with these big acquisitions.

Hill: Amwell (AMWL 12.92%), a Boston-based telehealth company, went public on Wednesday, and shares rose nearly 30%. Jason, I've never heard of this company, what do I need to know?

Moser: [laughs] Well, that's the difference between me and you, Chris, I have heard of this company ...

Hill: Why do you think you're on the show?

Moser: [laughs] A very good point. I think the opportunity for Amwell is really set up. I think they have a great opportunity in what is clearly becoming a very attractive market and a big market in healthcare and telemedicine, they just need to execute. And that's really the big question, right, will they be able to do it? And they're going up against much bigger, and honestly, better capitalized competitors. I mean, Teladoc Health clearly has had just a fascinating year, and the merger with Livongo is going to make that an even larger company.

So, when we look at a company like Amwell, when we talk about that path to profitability, that's the big question. And I think based on their size and the competitive jockeying in the space, you know, as I like to say, you better pack a lunch, because I think that's going to take a while. But Amwell is a provider of telehealth services. I think in simplest terms, it's Teladoc Health's biggest rival. But for the company itself, the numbers that they're turning in, in 2019 they brought in about $150 million in revenue, and that represented 31% growth, not bad. They have +2,000 hospitals and health systems in their network. They have 5,000 multidisciplinary providers covering all 50 states with 24/7 coverage every day of the year. So, it really is firing in on the merits of telemedicine and access to healthcare anywhere anytime.

And the nice part about the business model, 84% of revenue is recurring. Co-founders own 50% of the business, so they certainly are bought in. I think the big question for Amwell, what does this business look like, what does the growth look like post-COVID? They certainly are going to have to make some acquisitions like Teladoc Health has made, in order to build out that network and its capabilities. But clearly as we've seen with Teladoc Health, it's an attractive market with big opportunity, and I suspect Amwell is positioned pretty well to take advantage of it.

Hill: Shares of FedEx (FDX 0.01%) hitting an all-time high this week after first quarter revenue came in at a record $19.3 billion. And Andy, FedEx is talking pretty optimistically about what's coming this holiday season.

Cross: Chris, this is a stock, between January 2018 and January 2020, fell from a high of $274 to about $155, so more than a 40% drop. And since this year year-to-date it's up 60%. So, I don't know another business that's rebounded like this. Revenue was up 13.5%, as you mentioned, crossing over $19 billion. It was the best-performing growth quarter since 2017, highest first quarter since 2016, and their net operating margin expanded to 8.2% from 6.1%. EPS was up 60%, Chris. So, the two things that are really driving this business are the dramatic reduction in air traffic cargo capacity from a loss of the commercial airline business, so that's really dropped off, and that's been the benefit of FedEx. And then, of course, the acceleration in e-commerce pulling shipment volumes ahead by three years. So, as you really think about the drivers behind FedEx, they've been a beneficiary of this, they've taken advantage of it, they start to think about some pricing surcharges going ahead into the year in the holiday season, as you mentioned, very attractive. So, this is a company that Fred Smith and the team have really turned the tide over the past few months to the beneficiary of so many of us who rely on FedEx to get packages sent to our door every day.

Hill: They're hiring 70,000 seasonal workers; that's up from 55,000 last year. You go back a couple of weeks, UPS talking about how they're adding, I think, somewhere in the neighborhood of 100,000 seasonal workers. It is nice to see that level of optimism from two big shippers like UPS and FedEx.

Cross: Yeah. And then the real another interesting point I found in the call is the preparation that FedEx is going on for -- whenever we do get a vaccine, it is going to be a distribution real challenge, if not nightmare. So, they're preparing around this, including what they're calling FedEx SenseAware ID, which transmits the location every two seconds so you understand where it is. So, when I think about the FedEx business and what is going to drive the value of it, they have really turned and gotten this business moving in the direction that consumers are going to demand.

Hill: Rollercoaster week for Dave & Buster's (PLAY 2.55%), on Thursday shares fell 26% on reports of a potential bankruptcy; on Friday, the stock rose more than 15% as some analysts on Wall Street called the previous day's sell-off an overreaction. Jason, I'm not rooting against Dave & Buster's, but their business model depends on people getting together with their friends in-person at malls.

Moser: Yes, it does. And to clarify, their food and alcohol is 41% of sales and amusements represent the other 59%. So, it just counts on people being there, and that's been a big problem recently, of course. Now, this story, this bankruptcy story really stems from some language in the 10-Q that they just filed, their quarterly report, where they actually used the two words "going concern," and anybody in investing knows when you see a business talking about [laughs] going concern, that's never a good thing, it's ultimately they're wondering, are they going to be able to stay in business? And given their reliance on customers being there, it's certainly understandable.

You know, if this were, like, March or April, I think I'd be a little bit more concerned, but it feels like we're on the backend of the most traumatic impacts from this pandemic, on the economy at least. So, they are able to get stores open again. Over the course of the quarter they reopened 81 stores, and ended the quarter with 84 stores opened. They have $750 million in long-term debt but they have $224 million in cash on the balance sheet. And noted in the call that right now the average weekly cash burn is approximately $3.3 million. So, I think things are starting to improve, I don't think bankruptcy is something that's going to happen with Dave & Buster's here. You know, they may still have some work to do and they may have to pay up for a little bit of additional financing, but I think that they're going to still be in business when all of this stuff settles down.

Hill: She's a Personal Finance Expert and the award-winning host of the Money Girl podcast. Her latest book is Money‑Smart Solopreneurs: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers. I don't know about you, but I wasn't familiar with the word "Solopreneur" until I picked up Laura's book and read a statistic that really surprised me.

[...]

More than 30 million small businesses in America, 85% of them, have no employees. Why do you think there are so many people, and I say this as someone who would never think to start his own business, why do you think there are so many people going this route?

Laura Adams: It is a shocking statistic and I don't think many people realize we even have that many small businesses in America, much less, as you said 85% nonemployee, so that means it is a one owner person, ergo solopreneur. And why? I think that there are a lot of people that want to be in business for themselves and I don't think that having employees is necessarily their dream. Maybe they come out of a company where they were managing employees, maybe they're tired of a very dense structure and think, wow! I can do this on my own, I have talents, I have abilities, I also have other business owners to lean on, other freelancers, independent contractors. As the number grows, the ability to leverage each other is greater, and therefore you really don't need your own "employees" those W-2 people to make it work, you can really lean on other people who have said, yeah, I'm going to go into freelance work, I'm going to be an independent contractor, however you want to define these terms.

And as you mentioned, the term really doesn't matter, you're a business owner, whether you're in it by yourself or whether you have employees, that's one of my points of the book. But I think a lot of people are looking for simplicity.

Hill: You and I were talking over the Summer when you were telling me about your book, one of the things I said to you was, there are a lot of books that have come out over the last few years that fall under the umbrella of "Follow your passion!" And that's great, I'm not knocking those books, I think inspiration is important however you can get it, but what I love about your book is it's essentially saying, hey, if you want to follow your passion, you're going to run into a bunch of issues that have nothing to do with your passion, and here's a guide for how to navigate around them and through them so that you can be successful. You've written books about money and personal finance, what was the origin of this book?

Adams: This book really came out of questions that I have been getting over and over for years, really, and I've seen this trend of people wanting to be in business for themselves, whether it's a side business, whether they want to keep the day job or whether they want to ditch the day job completely and go 100% on their own, there's this trend. And so, I've been getting a lot of questions, hey, Laura, how do you incorporate? Do I need to incorporate? What is a business bank account, do I really need it? You know, all of these, kind of, nitty-gritty questions about getting started.

As you mentioned, there are people who jump into it and have no idea that, hey, I'm going to have self-employment taxes and I'm going to have all these obligations. They're kind of like the, you know, you've heard the expression, Ready! Aim! Fire! -- Aim! Fire! Ready! There are a lot of people who are doing it backwards. They're saying, well, I'm just going to jump in and we'll work it all out later. Then you have people who are very cautious and they are not going to do anything until they fully understand the process. And so, I've seen, kind of, two camps, people who don't go into business because they're afraid of, oh, my gosh! What are the regulations? What do I have to do? They're kind of letting the analysis keep them from moving forward. And there are other people that just jump in and it can kind of burn them, because all of a sudden they wake up and they go, whoa! I owe a lot of taxes from my income last year or I didn't realize I was supposed to be doing this or that. So, you got a range of experience levels and motivation too.

So, as you mentioned, yeah, your inspiration and your passion is wonderful, but if it's not backed up by some just basic fundamental knowledge and principles to stay out of trouble, you may end up regretting the decision.

Hill: Let's get to some of the stuff in the book, I'm sure a lot of people, when they're starting out, despite the best intentions, they're going to make mistakes, they're going to stumble. What are some of the common mistakes that people make? And for people who haven't taken the leap, either to start their own business or a side-hustle, how do they avoid them?

Adams: When you're just starting out, you really don't realize the tax liability, I find that's the No. 1 mistake. People say, I didn't put anything aside that first year for taxes, I maybe put a little bit aside, but I had no idea what the burden would be. So, that's mistake No. 1, not really having a grasp on what your tax liability will be. Not paying quarterly estimated taxes, many people don't even know what that is, they don't know that they're supposed to be paying tax as you go. You know, you think about our paychecks, when we're a W-2 employee, taxes are taken out every week, you know, you're keeping up with it literally on a weekly basis. As a solopreneur or small business owner, it's up to you to make sure that you are paying that as you go. Typically, that happens quarterly. So, that's a huge mistake, because all of a sudden, you've made a little money from last year, Tax Day rolls around and boom! you realize I've got a big burden, you may not have that much in savings. And so, you end up going into a hole right away and that can cause people to accumulate debt in year No. 2 of business. So, that's a big one. And it's pretty easy to get around if you got a little help maybe from a software program that you're using or an accountant, they can help you estimate what you're going to owe, so you know what to put aside.

Hill: I'm glad you mentioned that, because that leads to my next question, which is, maybe it is just because it seems this way, but it really does seem like if you are starting out, you have more tools at your disposal to help you along the way, whether it's software, whether it's apps. In terms of people staying financially organized, what are some of the better tools and apps that are out there?

Adams: I'm a big fan of the Intuit product, so QuickBooks is a great one. If you're self-employed, they have a version called Self-Employed. And it is amazing for keeping you on track. It actually has a tax component, so as you're making money and those deposits are going in, it will show you what you owe per quarter. So, it's a great way to make sure that you're not falling behind. It's going to show you profitability, it's going to also keep up with any of the independent contractors that you're using. So, any 1099s that you need to send out as a solopreneur. So, that's a great one. There are so many great programs, as you mentioned.

You know, I would say also, if you are thinking about anything to do with writing, Grammarly is a program that I love, it's just a great way to, kind of, up-level your communication, making sure that everything that you're putting out with your website and all of your literature is correct, having an editor is great, but there are a lot of great online programs too. And I think that anything that's a time-management type of program that you can use, Slack is a great program that you can work with other freelancers and maybe independent contractors, if you're working with them frequently. That is a great way to have project management within your business. So, it really depends on the type of work you're doing, but there are so many great tools out there to keep you organized.

Hill: It really seems like if you're going to go out, start your own business, start your own side-hustle, that knowing who you are and what makes you tick, knowing yourself is more important than if you just have a "regular job." It seems like you would have to know, for example, when you're at your most productive and then schedule accordingly.

Adams: So true. It is important. If you're not really, kind of, tapped in to how you work, your energy, your skill level, whether you're good at networking or not, it can be more challenging when you're on your own. And I do think that managing your time as a small business person is really one of the biggest challenges. I mean, it's important for all of us, but when you're on your own, you've got a lot more opportunity to get sidetracked if you're not really disciplined. And one of the things I recommend in the book or some ways to make yourself more productive, especially if you are dealing with a day job and a side-hustle, now you're juggling more and you're going to have to be incredibly efficient to do both things well. So, you have to master your time. And matching that with your energy level, that's a great hack.

So, for instance, I'm a morning person. I get up and I have lots of energy in the morning. I focus that time on the really hard stuff, because I know my brain is working and I'm kind of firing on all cylinders. Mid-afternoon, you know, I'm feeling a little less sharp, and so I might leave that for doing billing, for administrative type of work that needs to be done. And understanding, OK, I'm at my best in the morning, so hey, if I got something important to do, let's just put it off until tomorrow morning, we'll tackle that first thing. So, that's an example. You might be a night owl and really get a lot done in the wee hours. But as you mentioned, knowing how you work and your capabilities is key to success.

Hill: You and I met in-person last year, but I've been aware of you for more than 10 years, for as long as I've known you because of the Money Girl podcast, you've been living the solopreneur life. Did you ever have a regular job or is this just one of those things where you just, sort of, knew coming out of college that this is the path that you were destined for?

Adams: Chris, I have had regular jobs, sort of, here and there during my career. But I'll tell you, for most of the time I've been doing both, I've had W-2 and that 1099 work. Why? I really enjoy the diversity of it. I love being able to do different types of work. I get bored really easily. So, having different types of projects, kind of, feeds my energy and my interests. But there have been times where I've been 100% W-2, you know now I'm a 100% solopreneur, I've been that way for years. But for a lot of people, I think having more than one occupation not only does it give you more to do mentally, but you're providing multiple streams of income. And more than ever right now, that can be something that will help people feel more secure in an uncertain time. So, if you're not sure what's going on with your job, your industry right now, there's never been a better time to start a venture on your own. And it's a great way to test ideas too. So, testing ideas, testing that income that might be out there, diversifying interests and money is always a good thing and it's also a great way to prepare for full-time entrepreneurship. So, you need to make sure you've got a financial cushion, at least some fair amount of savings if you're going to go full-time. I never recommend just jumping completely from a W-2 job into a business if you're not really prepared for it.

So, it's a great time. If you've got multiple streams of income, get your savings straightened out, you know, beef that up, then when you do have the inclination and maybe the customer base to go full-time with your business, you're going to be ready for it.

Hill: The book is Money‑Smart Solopreneurs: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers. Whether you have your own business, you're starting a side-hustle or you know someone doing either of those things, get this book.

You can listen to Motley Fool Money every week on radio stations across America and on platforms like Apple Podcast, Stitcher, Spotify, and now Amazon Music. You can find all of The Motley Fool's podcasts on Amazon Music. We added the podcast to that platform this week, so check us out there.

Guys, Halloween is just six weeks away, but we already have some scary news. Peeps, the iconic marshmallow candy company announced they will not be producing customized Marshmallow Ghosts and Jack-O-Lanterns for Halloween this year due to reduced capacity. And the same goes for Christmas and Valentine's Day 2021. Andy, I don't even like Peeps and I'm disturbed by this news.

Cross: [laughs] Peeps are the cornerstone at my family around Easter and Halloween. Luckily, we ordered a whole bunch, so we still have some supplies. I think their shelf lives are pretty long. So, yeah, [laughs] I'm sure a lot of people will be a little bit disturbed by that. I actually found the news from that James Cromwell, the actor from Babe, L.A. Confidential, I think on Netflix, The Crown, he was in that, but very respected, and a vegan, has written a letter and joined the drive to try to make Peeps vegan to get rid of the ingredients that make them a little bit not as appropriate or tasty for vegan. So, I found that news, kind of, inspiring as someone as a family who does not like to eat too much meat.

But yeah, I think this is another [laughs] distribution challenge that so many businesses are facing over the COVID quarantine and it'll be a little sad for some kids at Halloween, I think.

Hill: Now, let's go to our man behind the glass, Dan Boyd. Dan, before we get to the stocks on our radar, thoughts on the story about Peeps?

Dan Boyd: Chris, can I enter the hot take zone for a moment?

Hill: Absolutely.

Boyd: If you're an adult who likes Peeps, you're a psychopath.

Jason Moser: That's a bold statement.

Cross: It sure is.

Moser: That's a bold statement. I mean, I will say, like, you know, I'm not going to go out and buy Peeps to eat them. Really, the other purpose that Peeps serve in, you know, just good old-fashioned microwave fun. I mean, you stick one of those in the microwave, you let that thing go on for a couple of seconds. I mean, you know, listen, that's entertainment.

Hill: [laughs] Our email address is [email protected], for any thoughts you want to share about any hot takes we have on the show. Let's get to the stocks on our radar. Jason Moser, you're up first, what are you looking at this week?

Moser: Sure. Earnings-palooza! has wrapped up, of course, but next week we will see earnings from Nike, ticker NKE. Tuesday, the 22nd, earnings come out. And they've been holding their cards close to the vest in regard to guidance. But they have noted that they do expect for the full fiscal year, they expect revenue to be flat, perhaps up a little bit versus the prior year. And it does sound like they are planning for a more robust back half of this year. So, really, for me, it's going to be getting a better idea of how they're dealing with the pandemic economy and how their margin picture really looks, because they are conceding a little bit on pricing these days. And then finally keeping up with inventory and that supply chain, because that's a concern for all retailers these days.

Hill: Dan, question about Nike?

Boyd: Yeah. If people aren't playing as much team sports as they have been because of the pandemic, how's that going to be affecting Nike sales moving forward?

Moser: Well, it definitely could play out. It sounds like it is playing out. But, hey, listen, for all of the team sports that we're not playing, Dan, you know, it's been a wonderful Summer weather-wise. I mean, people should be out there playing disc golf, for example. I mean, that's a wonderful outdoor sport where you don't need to be a part of a team. And, hey, listen, team sports aren't everything, right? There's still plenty of ways to get out there and get some exercise; regular golf, for example, Dan. Maybe you and I could go play regular golf one day.

Boyd: Maybe, Jason, maybe.

Moser: Or disc golf. I'm not picky.

Hill: Andy Cross, what are you looking at this week?

Cross: I'm looking at Freshpet, Dan; FRPT. Specialized in providing refrigerated foods and treats for dogs that humanizes pet food, Dan. Uses fresh meat, veggies, fruits, building out its kitchen networks. A $4.3 billion business, growing 29%. Pets are part of the family now, Dan. Pet food is a $30 billion market. And Freshpet is really trying to provide so many households that own dogs and cats better food for their pets. And they're looking to expand their market, grow beyond the 22,000 retail locations they have and they're building out their e-commerce platform. So, I'm just really watching the growth picture and the profitability picture as they start to really become more and more profitable. So, it's Freshpet, FRPT, as a watchlist stock.

Hill: Dan, question about Freshpet?

Boyd: Andy, OK, so I don't have dogs, I have cats. Cats, the thing is, they don't like cold food, so refrigerating cat food, there's like a step of putting it in the microwave to warm it up before they'll actually eat it. Like, what has Freshpet got for me that doesn't need that extra step?

Cross: Well, Dan, they really specialize in dogs, so I can't really help you there. But I know I have a dog and we spend a lot of money on Freshpet every week.

Hill: What do you want to add to your watchlist, Dan?

Boyd: Well, I'm not adding Freshpet with that kind of specialization in dog nonsense, that's for sure, I'm going Nike.

Moser: Just do it!

Hill: All right. Jason Moser, Andy Cross, guys, thanks for being here.

Cross: Thanks, fellas.

Moser: Thank you.

Hill: That's going to do it for this week's show. Our Producer is Mac Greer, our Engineer is Dan Boyd, I'm Chris Hill, thanks for listening, we'll see you next week.