Don't Count Netflix Out Just Yet

In this week's episode of Motley Fool Money, Fool contributors Jason Moser, Ron Gross, and Andy Cross hit on some of the week's biggest business news. Intel's (INTC -2.40%) market cap passed the $300 billion mark on a good report. Netflix (NFLX -9.09%) added some 9 million subscribers this quarter, despite the competition. Slowing birth rates affected Procter & Gamble (PG 0.54%) more than you might expect. Plus updates from Comcast (CMCSA 1.57%), Atlassian (TEAM -1.06%), IBM (IBM 0.06%), Intuitive Surgical (ISRG -1.69%), and American Express (AXP 6.22%), some stocks on the radar, and more.

And Chris Hill talks with sports business expert Andrew Brandt about the NFL's relationship with sports betting, the MBA cheating scandal, and, of course, who's going to win the Super Bowl this year. Tune in to hear more.

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 Jan. 24, 2020.

Chris Hill: We begin with a big company hitting a big number. Intel's market cap crossed the $300 billion mark on Friday after Intel shares rose nearly 10% on a strong fourth quarter report. You tell me, Andy, how good was this?

Andy Cross: Yeah, really nice quarter from the giant chipmaker. Record sales, they were up 8% to more than $20 billion. That was $1 billion ahead of their own guidance. Earnings per share was up 9%. They increased the dividend to up by 5% to $1.32. Now, operating margins were a little ahead of estimates. What's really driving the Intel strength is the data center business. The volumes were up 12% for that business. And the price for the chips were up 5%. And now, the data center revenues make up half of the business. So, the data center growth. As we use more and more need for data centers and the explosion of Internet of Things and all the mobile usage, data centers is big growth for Intel and has done a really nice job getting market share in that space. 

Ron Gross: Back in my day, semiconductors were always these chips, they weren't that exciting because it basically became a commodity business, right? And everyone could make them, and everyone had the ability to either compete on price or not. Is the innovation driving this big growth wave right now?

Cross: Yeah, across when you look at Intel, AMD, Nvidia, there's still price competition, lots of competition out there. But really, the innovation, when you think about all the demand for all the products that require chips and semiconductors -- I mean, the Internet of Things, the Mobileye acquisition by Intel has done really well from them, still memory chips. The PC, the basic PC business, is relatively flat. It's nice, they can maintain some market share. Maybe not as exciting. Really, the growth is in the bigger enterprise data space, which is fueling the growth for Intel in particular.

Jason Moser: Yeah, I mean, as you see more and more this sort of immersive technology future that we jump into, 3D sensing, stuff like that, I mean, I think a lot of this technology, it becomes more specialized. So, to your point, back in your day, when it was --

Gross: It's still my day, by the way. 

Moser: -- all just sort of cookie cutter at all did the same stuff, I mean, now I think you're seeing more specialization there. I think Lumentum is a great example. We talked about that before, and that VSCEL technology for AR, VR, and 3D sensing and whatnot.

Cross: That said, Intel, $300 billion company. All the earnings, they plow back into dividends and share buybacks. The growth is still on the single-digits, so you're not lighting the world on fire here. A lot more growth in some of the more exciting chip players like Nvidia. But pretty stable, and the stock's done really well in the past couple years here.

Hill: Well, and you mentioned AMD. I mean, there was a stretch time where AMD was barely surviving against Intel. And you look, at least from a stock standpoint, AMD has been a much better performer recently.

Cross: I think that speaks a lot of the market opportunity in just the chip business. If you are willing to innovate and change your business a little bit and go more on that side of the exciting chip business, there's some growth there, and it's showing in the stock prices for the chip players.

Gross: I feel like Intel's the kind of company where nobody's sure if they actually own the stock or not. You've got to go back and check your statements. "Oh, I do own some of that."

Cross: That's pretty good. The stock's up like 80% and beating the market over the last five years.

Gross: Not bad. 

Hill: Shares of Comcast down a bit this week despite the fact that Comcast's fourth quarter profits and revenue both came in higher than expected. What's going on here, Ron. I've seen these reports of some analysts on Wall Street being worried about how much money Comcast is investing. It doesn't seem like they're looking to invest an unreasonable amount of money in 2020.

Gross: Well, it is certainly a very capital-intensive business. Capital expenditures decreased 10%, however, to $6.9 billion over the year. So, it is a capital-intensive business, but I don't think that's what's going on here. I think what we've seen is, growth in broadband customers was good, but the company lost more cable TV subscribers than people were expecting. Which, actually, I don't think is that surprising in the world we live in. Lost 149,000 cable customers, but added 440,000 high-speed internet customers. That's just the way the world is moving. Streaming and broadband the new cable, if you will. And they're doing a good job of recognizing that. Not a high-growth business net net at this point. Consolidated revenue only up 2% with NBC Universal actually down almost 3%. I don't know if anyone actually saw the movie Cats, but based on these results, I'm sitting thinking the answer is no. On the other hand, cable communications was up about 3%, so they kind of offset that. That led to an earnings per share increase of 10%. So, not too bad at all. Allowed them to actually increase their dividend by 10%.

Hill: We're starting to get more details on Peacock, which is their video streaming service. It seems like they are going to leverage the content that they have, including the Summer Olympics, which they've already sold more than a billion dollars' worth of ads against, rather than go the route of Disney+, Apple+, and really invest tens of billions of dollars in original programming.

Gross: Yeah, I mean, they're holding out really big hope that Peacock is going to be a big deal for them. I think it remains to be seen. The pricing is interesting, everywhere from zero to if you want to pay up for the no-advertising model. We'll see what happens. Certainly, the content is there. As you said, the capex is big in this industry. I misspoke a little bit, $10 billion was their total capex; $6.9 billion was just for their cable communications sector, obviously the more capital-intensive part of this business.

Hill: Netflix added nearly 9 million net global subscribers in the fourth quarter. Shares of Netflix up a bit this week. And, Jason, Reed Hastings and his team don't appear to be worried about Peacock or Disney+ or any competition.

Moser: I tell you, quarter in and quarter out, that guy just pastes a smile on his face. He's like, "Hey, we welcome the competition! This is a great space to be in, join us!" I mean, who knows how genuine that is. I think he's just the smartest guy in the room, personally. But I think, if you look at Netflix, I think down the road, competition may undermine its pricing power at some point, but you can't discount the head start that they have in this space, and this massive user base that they've built up. I mean, subscribers of 160 million plus at this point. And so, I think, yeah, the big challenge for them is to continue to keep a focus off of content costs, because content costs are certainly going up. But we know it's a business that can handle that. They are tapping the debt markets when they need to. Thankfully, interest rates are low. They don't have to really worry about that. I think maybe the market becomes a little bit more concerned with content costs if or when we see the international growth start slowing down, because clearly, U.S. growth is slowing down. I mean, the U.S. market here is very saturated. And it does look like forecasts for subscribers in this quarter were a bit lower than what the market was expecting and what the company lobbed up last year. So, maybe we start to see some scrutiny there if the subscriber numbers start to slow down. But for now, they continue just to churn out a lot of content that just attracts a very broad cross-section of viewers across the world. And clearly, the market is giving it some credit.

Cross: Well, you have also a company with a market cap of, what, $150 billion, versus Comcast's $200 billion. You have a company that, to Jason's point, has a first mover advantage. I think, really, on the international front, that's obviously where the growth is, but there's some real value in all the content programming they're doing. We see it here, the four of us around the table here, in the U.S. mostly. But internationally, they really have a nice advantage there that I think going forward will be a huge boon for the subscriber base, and hopefully, obviously, for the stock as well.

Moser: I think the biggest mistake, I just see it quarter in and quarter out, is this assumption that it's a zero-sum game. It's just not. I mean, it's not Netflix wins and Disney loses. I mean, we're seeing a rising tide in this market. We're going to see some winners. Netflix is going to be one of them, and Disney's probably going to be another one.

Hill: Real quick, right before we came in the studio, saw that David Einhorn, the hedge fund manager, is increasing his short position on Netflix. Really? He looked out across the entire universe of stocks and said, "That's the company I want to bet against"?

Moser: I think that was my initial reaction, too. I respect him as an investor and the things that he's done -- I mean, to me, I put this in the class of Tesla, Netflix, these are cult stocks you just don't want to be shorting. I don't know why you would short that. I mean, his concerns over debt load, cash burn, future content obligations are all correct. I mean, technically that does make sense. But I think his mistake is this perception that it's an earnings story. This is not an earnings story. So, the market is looking at this company today as a subscriber story. And as long as they keep adding subscribers, I just don't think that is a very wise short position to be taking.

Hill: Good week for Atlassian. Second quarter profits and revenue came in higher than expected for the Australian software company. Shares of Atlassian hitting an all-time high on Friday.

Cross: A really nice quarter. Still, this company continues to deliver really these collaborative software tools, JIRA, Trello now crossed 50 million registered users. Sales were up 37% for the quarter. The subscription sales were up 50%. Really nice growth in the earnings per share. It generates a lot of actually healthy cash flow and free cash flow. So, they continue to innovate their marketplace, which is where developers can go and place apps and buy apps. Crossed $1 billion in lifetime sales for the first time. That's been around since 2012. The guidance continues to be in the sales level around like the 30% level. Scott Farquhar and Michael Cannon-Brookes, who are the co-founders and own a large chunk of stock, continue to build this company for the long term. And the stock's obviously reacted not just positively this week, but over the last couple years, and the stock's up more than 300%, 400%.

Hill: IBM's fourth quarter revenue finally went in the right direction for the first time in over a year. IBM had sales growth. It wasn't much growth, Ron, but a win's a win.

Gross: Up 3%, adjusting for divested businesses and currency. As you noted, broke a streak of five consecutive quarterly declines. Listen, it's all about the cloud, and they had to acquire their way to that revenue growth. Red Hat was acquired third quarter of last year. That business was up 24%. The technology services business, which accounts for 30% of revenue, down almost 5%. So, there's really the story of the old business and the new. Company hanging its hat on the cloud. Actually, guidance was pretty strong. They're thinking that this growth will continue. Earnings per share, when all was said and done, was actually down slightly. But the stock's only trading 10X, 11X times earnings. If you think this Red Hat cloud business is sustainable and will continue, the stock's cheap. Based on the history of this company and the ups and the downs, I'm in wait-and-see mode right now.

Hill: See, I'm having flashbacks to 2011 and 2012, when we would talk about a big company in the tech space, and you would say stuff like that. Only back then, the company was Microsoft. And it took a new CEO in Satya Nadella, coming in in 2014. Ginni Rometty has been the CEO of IBM since 2011. And the stock just hasn't done well under her leadership. I don't own IBM, but I look at what happened with Microsoft and I think, boy, maybe lightning could strike twice with a new CEO.

Gross: Perhaps. Or, do you give her credit for recognizing that this business was going nowhere, going out and spending a ton of money on Red Hat? $34 billion, that could have been a big flop. So far, it looks like it's not. So, maybe she gets credit for turning this business. Only time will tell.

Hill: Fourth quarter profits for Intuitive Surgical rose 22%, but was Wall Street impressed with that, Jason? No. Shares down on Friday after this report. What's going on here?

Moser: You keep setting that bar high, I mean, eventually, you just can't do anything right. But, I mean, I think the bigger picture investment case for Intuitive Surgical is very much intact. I think the market is reacting, and appropriately so, to some real competitive factors that I think are going to keep management's attention here in the near future. But if we look at just the numbers, it just remains a very impressive business. I mean, global procedure growth was 19%. In the U.S., it was 18%. They placed 336 new Da Vinci systems, bringing their installed base to almost 5,600. Total recurring revenue in the quarter was closing in on $900 million, up 24%. And that's 70% to 75% of the business, is that recurring revenue. So, there's a lot of certainty and a lot of clarity in the business and the model and the profitability. So, I think the stock is typically priced appropriately. But they did mention in the call, they talked about some elongated negotiation timelines in regard to getting those machines into new hospitals. And it all comes back to competitive pressures. I mean, they are the leader in the robotic surgery space, but they're not the only one that does it. There's a lot of very well-capitalized companies out there that do the same thing. And we're seeing some new ideas and products coming down the pike here. And so, Intuitive is going to have to answer to that. And that's going to cause some margin pressure, I think, this year, and some questions as to profitability. But still, very, very strong business. 

Hill: I'm not saying they don't have competition, but given the switching costs that a hospital system would have to go through, doesn't that give Intuitive Surgical a little bit of a moat? 

Moser: I think absolutely, it does. And that's a very good point to make. And that's why that 5,600 installed base is such a great advantage. Kind of like Netflix getting that massive base of subscribers. I mean, da Vinci and Intuitive, they really have a massive base of users out there. The switching costs are extremely high, particularly when you consider all that goes into training the physicians on how to use these machines. And to that point, their IRIS augmented reality system entered clinical use this past quarter and is getting a lot of favorable reviews from physicians with boots-on-the-ground experience there.

Gross: I myself have had the opportunity to use a da Vinci machine, not on a patient, but in an operating room. It is unbelievable. But, the amount of training that is required to be good at it and to use it on an actual human being is really quite impressive. It's an impressive machine.

Moser: Were you the guy that stitched up that grape? Was that you? 

Gross: [laughs] That was not me, but that's cool.

Hill: Shares of American Express moving higher on Friday after fourth quarter profits and revenue came in a little higher than expected. They didn't crush this quarter, Andy, but this does cap a really strong year for them. 

Cross: It does, Chris. And the stock's at an all-time high. I mean, it's been a really nice kind of resurgence here, for a company that many of us just thought just has lost to the competition. Bank of America, Capital One, just other companies that may have been a little bit more progressive than American Express has. But clearly, a very nice quarter. Revenues up 9%. It's the 10th consecutive quarter they've seen revenues grow more than 8% when you account for the foreign exchange situation. Earnings per share up 17%. They added 11.5 million proprietary cards during 2019. 70% now of new card members are choosing the fee-based options. So, they continue to have that stability of earnings. Global consumer sales were up 10%. Global commercial services sales were up 7%. The merchant network business also saw some growth, a little bit. Both of those are very profitable. So, you have a very steady business. Sells at 15X earnings. Very nice profit margin. The stock's done fairly well over the last couple years. And like I said, now sits at an all-time high. Berkshire Hathaway owns 152 million shares, or 18.5%. So, clearly done very nice for Berkshire shareholders as well.

Hill: Procter & Gamble's second quarter revenue was lower than expected. Ron, this is a big company, ton of consumer brands that we all recognize. Is the global birth rate slowing down really why P&G's stock was flat? I mean, yes, they sell diapers. They sell a lot of other stuff, too.

Gross: That really is the reason that sales growth was rather anemic, only up about 5%. Weakness in baby products because of the global birth rate. Also saw some weakness in the feminine care segment as well. But there was some strength here, specifically the healthcare segment, skin and personal care categories were both strong. You did see operating margins widen. Earnings per share actually up 16%. Not a bad quarter at all. Stock has performed really well over the last year. 

Hill: Yeah, this is one of those businesses, it's not the sexiest thing in the world, but if you just go to the Procter & Gamble website and just look at the brands, there are so many that are already in your house.

Gross: Yeah, for sure. And many of them are billion-dollar brands. Sometimes these companies accumulate too many, and then they have to start divesting them. But, the company is doing well. They were able to raise guidance. Shares around 24X, which is pretty much in line with Colgate and Kimberly Clark and folks like that. The stock and the company doing a nice job. 

Hill: We are days away from Super Bowl 54. To help us dig into the business of pro football and more, we bring in Andrew Brandt. He's the executive director at the Moorad Center for the Study of Sports Law at Villanova University. He's also a columnist at the Monday Morning Quarterback, host of the Business of Sports podcast. Andrew, do you ever sleep? You've got a lot going on!

Andrew Brandt: [laughs] Yeah, good to be with you, Chris. I always say this to people, because they're always figuring out, "What should we call you? You've got all these titles." And I say, "Listen, I have a lot of jobs so I don't have to have a real one." That's really what I do. I left the Packers almost 10 years ago. I don't say this to be arrogant, I just haven't had a nine to five or nine to eight job since. But I've kind of pieced together a lot of deals with academia and media, trying to sort of peel back for people what goes on behind the curtain. And luckily, I've been able to do that.

Hill: Well, let's peel back the curtain on the NFL. When you look broadly -- we'll get more specific in a minute, but broadly -- how is business for the NFL these days?

Brandt: Well, it's the same answer every year. It's booming. The revenues keep going up. And I think the primary driver of revenue always, probably since the start of the turn of this 2000s century, is media. And media includes broadcast, which it always has included, but now we have other forms of media with streaming on the horizon in a big way. And those deals continue to look really well for the future because ratings are always high. And ratings seem to be at a peak this year, where Fox and ESPN and CBS, all setting records. For games, you can pick your category. For top demographics, for top games, for most people watched, for most people tuning in at any time of the game, it's just all up across the board when media is down everywhere else because consumers have so many options. So, just on that metric alone, business seems to be booming.

Hill: I'm sure if I were to ask someone who works in the front offices at the NFL why ratings are up this past year versus the previous year, I'm sure they would give me a line about, "Well, the game is stronger than ever, and it's all about the players," and that sort of thing. As you were talking, I couldn't help but think about the rise of fantasy football. To what extent is that attributable to ratings going up on TV?

Brandt: Well, I'm going to take it a step further, because this is the first year where we've had not fantasy football only, but real gambling on football, legalized. Supreme Court decision, of course, in 2018. And now, we have legalized gambling in 15 states; many, many more to come. And that increases engagement.

But I think fantasy football has really done a service to the NFL, maybe more than any other sport, where you have this incredible fan engagement at an early age. And they're getting engaged with the sport through their fantasy teams, whether it's season-long fantasy or daily fantasy. And that's bringing them up to adulthood, and then through adulthood. I'm sure you know, I know everyone listening knows, people not only in one or two weeks, but in multiple dozens even, where it's just become such a part of their life. Yeah, that engagement is tremendous for the NFL and has extended now to real gambling even beyond fantasy.

Hill: You and I talked on the show back in 2018, when the U.S. Supreme Court had just cleared the way for states to legalize sports betting, and one of the things you said at the time was that out of the four major pro sports in the U.S., the NBA had taken the lead in terms of embracing this legal landscape, and the NFL had not. That was a year and a half ago. Is the NFL starting to make its peace with gambling?

Brandt: Chris, they were brought into it kicking and screaming, as opposed to the NBA, where I think we talked back in 2015, where Adam Silver had just written an unsolicited op ed in The New York Times saying we need to bring legalized gambling out into light and keep it out of the shadows and make it real. And no one ever thought this would happen at the court level, because New Jersey fought to have this done for years and years and lost at every level. But lo and behold, May 14th, 2018, the Supreme Court rules for New Jersey, opening the floodgates to legalize sports gambling around the country, and taking away the monopoly that Nevada had. So, now there are no pretenses.

But, the NFL -- I've said this many times -- they've been very hypocritical. You know, it was only five years ago they shut down a fantasy football convention with Tony Romo and so many other players because it was in Vegas. Two years ago, they put a team in Vegas, which will start playing in September. Yet, the draft will be there in three months in April, as they kick off Las Vegas. So, they established a franchise before the Supreme Court decision in the mecca of gambling in this country. Their mixed messages have really sort of dissolved now. They're all in. Caesars Palace is the official casino sponsor of the NFL. They have training camps every year for different teams at the Greenbrier Resort in West Virginia, whose primary feature is an ornate casino. So, I don't think there's no pretense anymore. You have owners like Jerry Jones and Robert Kraft who are early investors in DraftKings. You walk into AT&T Stadium in Dallas, you walk through the DraftKings Fantasy Lounge. There's no pretense anymore. The lines have now not even blurred.

Hill: Well, you mentioned Las Vegas. Of course, Las Vegas is still the epicenter of gambling in the United States. But it looks like New Jersey's coming up on the outside. There was a report released this week by the New Jersey Division of Gaming. Sports books in New Jersey are closing in on that of Las Vegas in terms of being the most lucrative in the country. Is it really shaping up to be this .... I don't want to say Cold War, but is it really shaping up to be a battle of these two titans? Or do you expect other states to start to rival what's happening in Nevada and New Jersey?

Brandt: Yeah, it's going to be tough for other states, because as much as I talk about sports gambling, that's just a small slice of gambling, as people in that industry know. It's just a very small percentage of the overall handle. And when you talk about Vegas, or New Jersey, which is a distant second, you have the glitz and the glamour and the shows and the table games, and the high roller rooms. And it's so much more than the sports book. That's the added advantage these resort places have that go way beyond. Now, there's some of that in Mississippi, and there's some of that Louisiana and the offshore. But, again, those places have such an advantage. 

I think the one thing that people ask all the time is, was the legalization of sports gambling good or bad for Nevada? Bad because they lost their monopoly; but good because it's made it so credible. It's no longer the bookie in the back of the barber shop. And now, sports gaming is credible, and therefore Nevada takes even on a more sort of elevated notion in this world. So, I think good and bad for them.

Hill: I've got to find a new barber shop. I don't have a book in the back of my barber shop.

Brandt: I think my dad does. [laughs]

Hill: [laughs] Let's go back to the NFL. This is something you and I have talked about in the past. It's the health issue. In the past 10, 12 months, the NFL has seen some pretty high-profile retirements from the league. Rob Gronkowski from the New England Patriots, Andrew Luck from the Indianapolis Colts, and most recently, Luke Kuechly from the Carolina Panthers. These are all star players, all under the age of 30. And even though their careers are more than double the length of the average career of the NFL player -- because I think that's somewhere still in the neighborhood of about three years -- it's still noteworthy that these are players who are not in serious decline in terms of their performance on the field, but they have made the decision from a health standpoint and from a financial standpoint, "I'm good in terms of money, I'm walking away from the game while I can still walk away from the game." And I'm curious, what if anything these retirements, and any retirements like them, tell you about the future of the NFL?

Brandt: Yeah, I think these are notable. I have a couple comments. One, you noted that they played more than twice the average career. And, they're walking with the top of the game. You mentioned three players. There's no way on God's green earth that the Colts with Luck, the Patriots with Gronkowski, and the Panthers with Kuechly were walking away from them. But, at some point, they would. At some point, it never ends well. I was with a team that walked away from Brett Farve. I mean, this happens in this sport, and it's never pretty. And they're taking the affirmative step to do it before it's done to them. I think it's news because of that. I pushed back on this notion of early retirements, as I wrote in Sports Illustrated, about, these guys had long careers. It doesn't seem like long in, again, the Tom Brady, Brett Farve, 20-year careers. But in the scheme of things in professional football, it's a long career. And they're financially secure. And they decide they're going to opt out. Now, we don't know how much of it is health and concussion and fears about CTE. That can only get inside the heads of those players. But it's not a trend, but I see this more happening -- I see players that get to 28, 29, and they say, "I'm good. I've got money. I put in a good career. We had a good run. I'm going to get out before the health gets me or the team gets me," because, as I always say, 98% of NFL players don't retire, they are retired by their employer.

Hill: Before we wrap up with your prediction on the Super Bowl, I want to switch sports on you and move to baseball for just a second, because even though it's the offseason for baseball, it is very much in the headlines with the cheating scandal around the Houston Astros, swirling around the Boston Red Sox. We've seen managers and GMs that have lost their jobs. To this point, players have not been directly punished by Major League Baseball. Do you expect that to happen at some point, if enough evidence comes forth? I guess I'm asking you to put on your league executive and your lawyer hats on and tell me where you think this is going, in terms of Major League Baseball players.

Brandt: My first reaction is surprise that it only extended to management. And if it's the scheme that Major League Baseball Commissioner Rob Manfred seemed to be to him, and to the powers that be in baseball, I just don't know why the players aren't disciplined. They were part of the scheme. They were not unwilling actors. They participated in listening for the bang of the drum that a fastball was coming. I don't get it. Because, again, I'm used to the NFL world, where not only players are disciplined; there hasn't been any regard for the status of the player that's disciplined. We've had players like Ben Roethlisberger, Tom Brady, Ezekiel Elliott, etc., disciplined heavily. So, I don't get it. I really don't. I understand the severity of the penalties for the organization, for the GM, for the coach, for the draft picks, but I just don't get it. 

You're right, something more could come out to implicate the players. And then we may see player suspensions. Now, it's not players but managers, that the ripples have extended. As people know, the erstwhile coach of the Red Sox, Cora, was involved with the Astros back then. He's gone. The erstwhile coach of the Mets was involved as a player, and he's the only player mentioned. He's now gone as Mets' manager. So, I don't think we've stopped in terms of tentacles that are going to extend from this. It's a major, major scandal.

Hill: Super Bowl 54. Kansas City Chiefs with their prolific offense against the San Francisco 49ers and their great defense. The classic matchup. Where do you see this game going?

Brandt: Gosh, these are two extremely fast teams. It's really the speed that jumps out at you at this at this game. It's going to be so entertaining. As we talked about before, it's going to get boffo ratings. Gun to my head, I'm going to pick the San Francisco 49ers because of defense. I know Patrick Mahomes, and I know the wonderful offense of the Chiefs. I just don't trust their defense as much as I do the 49ers' defense. So, 49ers by a field goal, based on a superior defense.

Hill: You can read him in Sports Illustrated, you can check out the Business of Sports podcast. Andrew Brandt, always good talking to you.

Brandt: Likewise. Always a pleasure, Chris!

Hill: Before we get to the stocks on our radar, and we go to our man behind the glass, Steve Broido, who's going to hit you with a question, as he does -- it is the 20th anniversary of Steve Broido joining The Motley Fool. 

[all clap]

Hill: Shout out to our man behind the glass. 

Gross: Couldn't do it without him. 

Hill: Here's to the next 20!

Steve Broido: Thank you!

Hill: All right, let's get to the stocks on our radar. Ron, you're up first. What are you looking at this week?

Gross: I'm trying to find something that looks cheap, and it ain't easy. So I'm going to go with Tractor Supply (TSCO 2.20%), TSCO. The stock has really underperformed over the last year, which is really the main reason why it looks not to be too expensive. There's a large operator of rural lifestyle retail stores in the U.S. They acquired PetSense back in 2016 as an avenue for growth. I think we'll see margin improvements going forward. Sales growth should continue. Recently announced a new CEO who was the former president of Macy's. I'll leave it to you to decide whether that's good or bad. The company has raised their dividend every year for the past eight. Only 18X forward earnings. They report earnings January 30th.

Hill: Steve, question about Tractor Supply?

Broido: Even if you are a rural lifestyle person, can't you just order your stuff on Amazon like everybody else?

Gross: That's what makes them kind of Amazon-proof, because some of this stuff is so big and so heavy that it doesn't really lend itself to online shipping.

Hill: Jason Moser, what are you looking at?

Moser: Yeah, digging more into Live Oak Bank (LOB 3.24%), ticker LOB. A little shameless self-promotion here, Chris, but earlier in the week, I had the opportunity to interview the president of the bank, Huntley Garriott, on Industry Focus. So check that interview, if you like. It was very fun, very enlightening. This is an interesting bank. It's based on a tech platform. They have no physical branches. They have a very strong presence in lending to SBA-type companies, small business administration loans. I found out that one of their biggest points of exposure, one of their biggest borrowers, veterinary practices, Chris. This is another way to play into my favorite market in pets! Apparently at least. Just, neat business. I want to learn a little bit more about it. Earnings came out this week and the market seemed to approve. So, going to enjoy digging more into this company.

Hill: Steve, question about Live Oak Bank?

Broido: Sure. How do you compete with somebody like Synchrony Financial or Ally, which seems to have a huge footprint?

Moser: I think that's a very good question. And really, Huntley was telling me, it all boils back down to doing something really well. They consider themselves a niche lender, focusing on businesses that other competitors out there in the space don't really know a heck of a lot about, and their technology, the data that they're able to gather makes them a better lender and a better partner over time.

Hill: Andy Cross, what's on your radar?

Cross: Digging back into the IPO space, Datadog (DDOG -3.94%), DDOG. Operates a really fast-growing platform that helps customers monitor their systems, especially tied to the cloud, and look for data insights. The IPO stock price was around $27. Today's around $40, $42. $13 billion market cap. Not making money. Growing exceptionally fast. Revenues growing more than 90%. It's dollar base retention rate is up to above 140%. So, its customers continue to order more and more products. The likes of The Motley Fool Amazon, Twitter, Zendesk, lots of big customers, use their services. So, obviously, very volatile. New stock to the markets. But, exciting growth opportunity. Datadog.

Hill: Steve, question about Datadog?

Broido: What's the value in having a cool name to your company? Datadog is a cool name.

Cross: Well, we work in a place called The Motley Fool, which I think is fairly cool. I'm not a cool person, Steve-O, so I can't really comment on that. But, hey, it sounds cool to me, and the symbol, DDOG, sounds good, too. 

Hill: Datadog, Live Oak Bank, Tractor Supply. You got a stock you want to add to your watch list, Steve?

Broido: Jason has made a compelling argument, so I'm going to check out Live Oak Bank.

Moser: That is a wise pick on, clearly, years of experience, Steve. Good call.

Hill: Jason Moser, Ron Gross, Andy Cross, thanks for being here! That'll do it for this week's edition of Motley Fool Money. Our engineer is Steve Broido. Our producer is Mac Greer. I'm Chris Hill. Thanks for listening! We'll see you next week.