Please ensure Javascript is enabled for purposes of website accessibility

3 Stocks on the Motley Fool Money Radar This Week

By Motley Fool Staff - Jun 22, 2017 at 2:23PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Our analysts explain what stocks they're following in the near future.

In this segment of the Motley Fool Money show, the team shares their takes on companies to watch this week, including salt giant Compass Minerals (CMP -0.32%), organic food player United Natural Foods (UNFI 0.60%), Advance Auto Parts (AAP -1.64%), and O'Reilly Auto Parts (ORLY 5.02%).

A full transcript follows the video.

This video was recorded on June 16, 2017.

Chris Hill: Let's get to the stocks on our radar this week. We'll start with our man Ron Gross. What do you have?

Ron Gross: Hold on tight here, Compass Minerals, CMP, leading producer of salt for highway de-icing, also a growing agriculture and fertilizer business. They have a unique asset, which is the largest salt mine in the world in Canada. They also have the largest dedicated rock salt mine in the U.K. 4.2% dividend yield, has increased that yield every year since going public since 2003.

Matt Argersinger: Salty!

Hill: Steve Broido, question about Compass Minerals?

Steve Broido: What's your favorite mineral, Ron?

Gross: Potash, obviously.

Hill: Jason Moser, what are you looking at?

Moser: Checking out United Natural Foods, ticker is UNFI. They are a national distributor of natural and organic groceries. We talked about all of these companies that are getting sold off thanks to this Amazon - Whole Foods deal. United Natural Foods is no exception, but they have a very diverse supplier base, for example, Hain Celestial accounted for 5% of their total purchases in 2016. The interesting thing is that Whole Foods Market accounted for about 35% of their net sales in 2016. So I'm trying to determine how this deal is actually going to affect them, because I could see it being a catalyst in the long run, helping them out if Amazon is going to grow out that consumer base with this Whole Foods acquisition. So I'm going to dig a little more into this one.

Hill: Steve, question about United Natural Foods?

Broido: Do you personally pay a premium for organics at the store?

Jason Moser: I personally do not, no. I don't really care if it's organic, I'm just going to cook it, and if it's good I'm fine with that.

Hill: What about you, Steve? Do you pay up for organics?

Broido: Not usually but sometimes.

Hill: Matt Argersinger, what are you looking at this week?

Argersinger: I'm going negative this week.

Hill: Nice.

Argersinger: The next industry to be disrupted in my opinion is going to be auto parts retailers, so I'm looking at Advance Auto Parts, ticker AAP, and O'Reilly Automotive, ticker ORLY. If you think about it, you have mobility disruption, which is going to take a lot of private vehicles off the road, and then you have the rise of electric vehicles, which have vastly lower moving parts in each vehicle, and I think that's bad news for the do-it-yourself auto parts guys or manufacturers or mechanic --

Hill: Or gal.

Argersinger: Or gal. So that business looks really suspect to me right now. These two stocks in particular are trading at pretty high valuations.

Hill: Steve, question about either O'Reilly or Advance Auto Parts? 

Broido: It's a broader question. Gas-powered cars go away altogether, we move to electric cars, how long is it going to take for that transition to happen?

Argersinger: Faster in other countries, but probably by 20 years here in the U.S., they're off the roads.

Hill: Compass Minerals, United Natural Foods, auto parts, do you have a stock you want to add to your watch list, Steve?

Broido: These all sound a little weird, but I might go with Ron's mineral company.

Hill: It was the potash that won you over, wasn't?

Broido: It was the potash.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

United Natural Foods, Inc. Stock Quote
United Natural Foods, Inc.
$38.45 (0.60%) $0.23
Compass Minerals International, Inc. Stock Quote
Compass Minerals International, Inc.
$44.13 (-0.32%) $0.14
O'Reilly Automotive, Inc. Stock Quote
O'Reilly Automotive, Inc.
$608.18 (5.02%) $29.07
Advance Auto Parts, Inc. Stock Quote
Advance Auto Parts, Inc.
$180.23 (-1.64%) $-3.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.