At The Motley Fool, we're buy-and-hold investors, but before we can hold a stock, we have to pick the stock. So our analysts are always on the hunt for excellent investment ideas. And every week, some businesses stand out from the crowd, which is why every Motley Fool Money episode ends with host Chris Hill asking his guests -- this time, senior analysts Aaron Bush, Ron Gross, and Jason Moser -- which companies they have their eyes on and why.
Their picks for this episode: Hawaiian Holdings (NASDAQ:HA), operator of Hawaiian Airlines; small Georgia-based bank Ameris Bancorp (NASDAQ:ABCB); and behind-the-app-scenes search company Elastic (NYSE:ESTC).
A full transcript follows the video.
Check out the latest earnings call transcripts for companies we cover.
This video was recorded on Jan. 25, 2019.
Chris Hill: Let's get to the stocks on our radar. Our man behind the glass, Steve Broido, is going to hit you with a question. Ron Gross, you're up first. What are you looking at this week?
Ron Gross: I've got Hawaiian Holdings, HA, operates Hawaiian Airlines, 15th largest airline in North America by passengers carried. Most extensive routes to the Hawaiian Islands, fuel and labor costs remained fairly stable, which has allowed them to increase the bottom line nicely. The stock is at a historically low valuation, however, because of worries about increasing competition. But I think the company's in a pretty good place to combat that. 1.4% yield for those looking for a dividend.
Hill: Steve, question about Hawaiian Holdings?
Steve Broido: This one might be a little bit tricky. When we were in Hawaii, there seemed to be a lot of people going between island to island that lived there. What percentage do you think of that makes up this business vs. me flying here from Virginia?
Gross: It's a smaller percent than people popping in from the mainland and from overseas, but it's an important part. There are some airlines that actually specialize in that island hopping.
Hill: Jason Moser, what are you looking at?
Jason Moser: Ameris Bancorp, ABCB. Ameris' earnings came out on Friday. No surprises, really. It reinforced what they already told us about a month ago when they announced the Fidelity Bank acquisition. Efficiency ratio down to 54% from 60% a year ago. That's important because it's a ratio that tells you they're earning more than they're spending. Big exposure with this acquisition that's going to give them additional presence in Atlanta and Orlando. The stock actually fell 10% on that news a month or so ago, it actually touched under $30. But to me, it was a no-brainer. This is going to make this a bigger, more powerful bank. A good business in an attractive space, one you can plan on owning for a long time to come. As a side note, I'm going to have the very good fortune of interviewing CEO Dennis Zember very soon. We'll have that available for Industry Focus, and perhaps other podcasts, too, Chris.
Hill: Steve, question about Ameris Bancorp?
Broido: Convince me that banks aren't just commodities.
Moser: Steve, banks aren't just commodities. You can trust me.
Broido: Thank you!
Hill: Aaron Bush, what are you looking at?
Aaron Bush: I'm looking at Elastic, ESTC. Elastic is a search company, but it's nothing like Alphabet. They're an enterprise search company. I'll explain that with a couple of examples. Ron, when you're swiping left and right on Tinder it's actually Elastic that powers the search looking for your matches. When, after your Tinder date, you're looking to take an Uber back home, it's Elastic that powers the search to find matches between drivers and riders. They help big companies work to find things in servers, network outages. It's a really big opportunity. The company is growing like wildfire. The stock is expensive, but it's a really cool opportunity, I think.
Hill: Steve, question about Elastic?
Broido: Is the goal for this company to get acquired by somebody like Google?
Bush: I don't think Google would acquire them. This could be a stand-alone business, but still be a pretty massive business on its own one day.
Hill: Three stocks, Steve. Do you have one you want to add your watch list?
Broido: I'm feeling Elastic.
Gross: Honey, Aaron was kidding!