In this clip from the Motley Fool Money radio show, Ron Gross, Simon Erickson, and Jason Moser share the stocks on their radar this week. For Ron, this is micro-cap specialty retailer Tilly's (TLYS -0.89%), while Simon has selected ski resort company Vail Resorts (MTN -1.09%), and the beer-and-wings sports bar Buffalo Wild Wings (BWLD)is Jason's choice.
The three guys also answer one question apiece from the man behind the glass, Steve Broido, about their chosen company. Listen to find out why these companies are interesting this week and which one in particular will pique Steve's interest.
A full transcript follows the video.
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This podcast was recorded on July 15, 2016.
Chris Hill: Let's get to the stocks on our radar. We'll bring in our man, Steve Broido, from the other side of the glass to hit you with a question. Ron Gross, you're up first. What are you looking at this week?
Ron Gross: I've got a deep value radar stock, not a recommendation just yet. It's a $170 million micro-cap company called Tilly's. They're a specialty retailer, West Coast-inspired apparel. I guess that means California-type clothing. 226 stores, 32 states. Founders control 83% of the company through a class B stock, so be wary of that. But it's only two times EBITDA, one times tangible book value. Looks dirt cheap. The problem is special retail is a terrible business, no competitive advantage. So it may be cheap for a reason. I've got to figure that out.
Hill: The ticker symbol?
Hill: Steve, question about Tilly's?
Steve Broido: Give me some context, what does a $170 million market cap company look like compared to somebody like Nike?
Gross: It is literally a fraction, it's a blip on the radar. I don't have the market cap of Nike off the top of my head, but it's multi, multi-billions, tens of billions of dollars. It's just a flea compared to Nike.
Hill: Nike could probably shake their couches for pocket change and buy Tilly's.
Gross: That's fair.
Hill: Simon Erickson, what are you looking at?
Simon Erickson: Chris, I'm going with the company that is a great business with a very strong competitive advantage, Vail Resorts, ticker MTN. This is one of the best ski resorts. They own a lot of ski locations. It's pretty hard to replicate mountains, apparently.
Jason Moser: Says you.
Erickson: (laughs) The company has been doing great. They've been increasing the number of ski visits and the price per daily ticket at the same time for several years. The interesting thing is the company has always looked pretty expensive, at least on my analysis, but they have opened up a thing called Epic Discovery, which is opening the mountains up in the summertime for things like hiking and zip lining. So, there could be some unlocked value in that, we're taking a closer look in the MDP portfolio.
Hill: Steve, question about Vail resorts?
Broido: Did something change with skiing? It just seems like gravity plus slick things going down. What? What's the deal?
Hill: Where's the innovation, is that your question?
Broido: Yeah, what's the new thing?
Erickson: Well, Steve, that's a great question. You can do it now in the summertime on a zip line which is not actually grounded to the ground anymore.
Hill: There you go. Jason Moser, what are you looking at?
Moser: Sure. One that I have on my watch list in MDP that I'm kind of on the fence with right now, Buffalo Wild Wings, ticker is BWLD. Threw it on the watch list back in November. Stock is a little bit down since then, but I felt like it was rich at the point we added it there. Management has been very conservative with guidance. This has been a very difficult year. The positive same-store sales that we normally see will not be coming back until probably the end of this year, beginning of next year. I think these guys may actually run into a buzzsaw at some point, though, if they're not careful, as more sports take to more and more avenues of dissemination. All of these streaming deals are coming with social media now. That's really what has been Buffalo Wild Wings' bread and butter, so to speak.
It's trying to become more things. They've offered this new Fast Break lunch offering, which is a faster lunch experience. I'm not sure people really want to go there, sit down, eat, and just leave. I think it's more about the experience. There could be some problems there, but I'll be keeping an eye here on earnings in the next couple of weeks.
Broido: Do you find Buffalo Wild Wings comfortable? I've eaten there. It's loud, there's televisions everywhere, it's very frenetic --
Gross: Old man.
Broido: I am an old man.
Moser: I don't disagree. I'm a codger myself, and yeah, I go there probably once every blue moon, and no, it's not comfortable. It's loud, it smells, and they've got beer and wings, which is fine. But it's not a place where I would ever take my family.
Hill: Steve, three stocks. You got one you want to add to your watch list?
Broido: I'm going skiing, I'm going to Vail.
Erickson: All right!