In this segment of the Motley Fool Money podcast, host Chris Hill asks Motley Fool senior analysts Aaron Bush, Ron Gross, and Matt Argersinger which companies they have their eyes on this week and why. They've chosen private equity manager KKR (NYSE:KKR), wrestling entertainment icon WWE (NYSE:WWE), and ski resort operator Vail Resorts (NYSE:MTN).
A full transcript follows the video.
This video was recorded on Oct. 5, 2018.
Chris Hill: Let's go to our man behind the glass, Steve Broido. He's going to hit you with a question as we get to the stocks on our radar. Ron Gross, you're up first. What are you looking at this week?
Ron Gross: It's just a radar stock for me, it's a recent recommendation by Fool analyst Mike Olson. It's KKR, Kohlberg Kravis and Robert, some of you may remember it as. The ticker symbol is... KKR. One of the world's top private equity investment managers. Really remarkable long-term track record. Employees own more than 40% of the stock. I like to think shareholders and employees are nicely aligned there. Stock is $27 a share. My friend Mike thinks that could be worth $36 a share. It has a 2.4% dividend yield at the moment. So, it's something I'm taking a look at.
Hill: Steve, question about KKR?
Steve Broido: How do I evaluate a company that's business is owning and managing other companies?
Gross: Based on that track record, what kind of after tax and fee returns are they putting up for their investors?
Hill: Aaron Bush, what are you looking at this week?
Aaron Bush: My stock is WWE, ticker WWE. I think there's a trend. I hope Matt doesn't ruin it.
Matt Argersinger: I'm going to ruin it!
Bush: Aw! I took a look at this stock recently and I was really impressed. First of all, I didn't realize just how huge and growing this brand was. The numbers it generates on TV are impressive. It upsells to its network really well. It's one of the most popular YouTube channels in the world. Its toys sell better than Marvel and Star Wars.
Bush: Yeah! But what blew my mind the most was, in June, they renegotiated or renewed their domestic TV rights for 3.6X the rate they were doing before. That's a snap-your-fingers, instant multi-bagger moment. They're continuing growing overseas. They have new contracts up for renewal. I have a feeling we're going to see more moves like that. The explosiveness isn't over.
Hill: I had no idea wrestling toys were selling like that. Steve Broido, question about WWE?
Broido: Do pay per view experiences still happen? I haven't heard about pay per view in years.
Bush: It still exists, but they largely have shifted away to the network, where they have about two million subscribers for about $10 bucks a month.
Hill: Matt Argersinger, what are you looking at this week?
Argersinger: I'm looking at Vail Resorts. The ticker symbol, appropriately, is MTN. I love this business. I've owned it for a long time. Of course owns some of the most irreplaceable assets in the country. Vail, Breckenridge, Park City, Stowe, to name just a few. This stock rarely goes on sale, but it's currently off about 15% from its recent high and now yields 2%. That rarely ever happens with this company. So I'm very interested in it right now.
Broido: Where's the money in skiing? Is it the rental? Is it the renting of the boots and the skis? Where's the money come from?
Argersinger: They make money from skiing, but obviously, that can be very seasonal and cyclical. The resort, the amenities, the restaurants, the hotels, the activities, all that stuff around skiing makes them a lot of money.
Hill: And the goggles. Don't forget the goggles. Vail Resorts, WWE, KKR. Steve, you got one you want to add to your watch list?
Broido: I may take a look at KKR.