Checking In on the Retail Sector

Will Alphabet's (GOOGL 1.27%) (GOOG 1.25%) new Pixel phone be a hit? Which major retailer could be the next to drop tobacco products? Are we in for a record-setting Halloween? Motley Fool analysts Maria Gallagher and Jason Moser answer those questions; analyze the latest from Domino's Pizza (DPZ 2.10%), Virgin Galactic (SPCE 22.38%), Shopify (SHOP 4.90%), Microsoft (MSFT 1.65%), Oracle (ORCL 0.49%), and Restaurant Brands International (QSR 1.43%); and share two stocks on their radar: Zillow Group (ZG 4.02%) (Z 3.29%) and Marvell Technology (MRVL 1.56%).

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This video was recorded on Oct. 15, 2021.

Chris Hill: It's a Motley Fool Money radio show. I'm Chris Hill. Joining me this week, senior analysts Jason Moser and Maria Gallagher. Good to see you both.

Maria Gallagher: Good to see you.

Hill: We've got the latest headlines from Wall Street. We will preview next week's events from Apple (AAPL 0.64%), Google, and more. As always, we've got a couple of stocks on our radar but we begin with the big macro. Retail sales in the month of September rose 0.7% which may not sound like a lot, but that was nearly a full percentage point higher than what economists were expecting. Maria, still a lot of X-factors out there in the economy but this was a really nice surprise.

Gallagher: Yeah, this was a great surprise and it's due to a couple of things. We are actually in the highest inflation environment in the U.S. in about 30 years. You see a lot of goods in short supply with supply chain constraints in full effect for goods people want to purchase, such as electronics and cars. However, retail sales are still increasing faster than inflation. So sales are up 14% compared to a 5.4% increase in the Consumer Price Index. It's still really strong consumption numbers out of the U.S. I think it's going to be really interesting to see how early holiday season shopping starts this year because they are telling us to start now due to the supply chain constraints. I wonder how many people are going to take them up on it or what November, December is going to look like in the next couple of months.

Hill: Jason, you think about the factors Maria just highlighted combined with some of the back-to-school shopping season. Again, great to see, particularly since the expectation was for a slight drop.

Jason Moser: I mean, I think she keyed in certainly on the shopping early. People are shopping earlier than usual. I mean, we've seen Amazon (AMZN 1.30%) already starting their Black Friday sales. Target (TGT -0.36%) doing something similar. I mean, this is just going to continue throughout the rest of the year. I think it's one thing I was thinking about, too. It's also worth remembering there are more ways to spend now. I mean, you've got high deposit balances, but I mean, look at the traction that buy now, pay later is gaining over this last year. I mean, it's giving consumers another way to pay, which I think that is stoking some demand there. It's nice to see likely some pull-forward here for early holiday season shopping but if supply chain issues can resolve themselves, maybe it's a bit more sustainable. I think it's something I'm going to keep an eye on, certainly, Goldman Sachs (GS 1.59%) recently cut their U.S. GDP growth forecast for 2022 from 4.4% to 4%. They were citing just basic macro concerns, questions regarding policy decisions in D.C., and supply chain issues. If we see those problems resolve themselves, these numbers could certainly be a little bit more sustainable.

Hill: Speaking of Goldman Sachs, earnings season kicked off this week with the big banks going first. JPMorgan Chase (JPM 1.44%), Bank of America (BAC 1.70%), Goldman Sachs, Wells Fargo (WFC -0.26%), all out with third-quarter reports. Jason, I'm not going to ask you to go through each one individually, [laughs] but let's start here. In your opinion, who looked the best this week?

Moser: Well, if I'm looking at Bank of America, Wells, JPMorgan, and Goldman, I mean, they all performed well, but I think I'd actually give Bank of America the win there. Just the numbers, generally speaking, revenue up 12%, net interest income was up 10%. That was thanks in part to a really healthy boost to deposits. So just talking about those deposit numbers, well, Bank of America grew deposits 15% record investment banking net income $1.2 billion, and they were able to release $1.1 billion in reserves. They continue to really just kill it on the digital platform. They have 41 million customers actively using their digital platform now and I'm one of them. I can tell you just from a customer's perspective, they've really have nailed it on the digital banking front. A lot of things to like about what Bank of America is doing.

Hill: JPMorgan Chase is by far the biggest of the big banks with Jamie Dimon at the helm, any takeaways from either their report or their earnings call?

Moser: You listen to Jamie Dimon talk about the supply chain issues. He said on the call, he didn't think we'll be talking about this stuff in the year. He really does view it as just a temporary bump in the road and that we're frankly, that we're focusing on it a little bit too much. He sees it as dampening a fairly good economy, not reversing a fairly good economy. We'll have to see how his sentiments change or remain the same there as the year goes on. I think, generally speaking, for banks on the bottom line, it remains a very strong environment for investment banking. Still a somewhat challenging time on the lending side, though, between these high deposit balances and low interest rates. That's getting ready to change and that's good because banks are going to have to start weaning themselves off that credit reserves release crush that they've been benefiting from over the last several quarters. Feels like Jamie Dimon sees some light at the end of the tunnel there certainly in regard to the supply chain stuff. So hopefully that will come to fruition.

Hill: Domino's third-quarter profits came in higher than expected but for the first time since 2011, same-store sales in the US were negative. Shares of Domino's down a bit this week, Maria, impressive streak, but it has come to an end.

Gallagher: Yes. U.S. same-store sales were down about 1.9%, still about over two years, it's up about 15%. Like you said, it beat expectations on earnings. [laughs] Strong international growth as well. It had a continuation of really healthy growth within their store openings. They've opened 323 stores in the quarter, 45 in the U.S., and 270 internationally. What I think is actually really interesting about this story, though, is a lot of the reasoning behind this decline that CEO Richard Allison said, was a shortage of workers and a decrease in spending due to stimulus checks. He said that they are actually in the toughest staffing environment they've seen in a really long time. Some stores have had to cut their hours. They are working on increasing wages, increasing investment in technology. I think that that's a trend we're going to see more and more with these businesses that mainly employ hourly, low-wage workers, that they're really needing to step up their wages and their benefits to encourage workers to go back. I'm going to be intrigued to see in this upcoming earnings season how many other similar companies talk about those constraints in terms of staffing?

Hill: You mentioned the store openings that they're doing. I think if you're a longtime Domino's shareholder, you've done quite well. As I said, the same-store sales growth streak is over but one of the many things that Domino's does well is picking new locations like their track record in terms of new locations that they then have to close is really impressive but I'm wondering if they gave any call about the next few months. Just because I look at this report, I think Halloween is in a couple of weeks. For all the talk of Super Bowl Sunday, Halloween is a really huge day for pizza.

Gallagher: He talked a little bit about trying to get more of those staffers back in that they are seeing a better staffing environment in the next couple of months, they have some new oven-baked dips that are out including a baked apple dip. So I think they are trying to lean into the fall festivities. They were trying to show positivity moving forward and not trying to really temper expectations moving forward. I think they were saying it was a blip and we're trying to get back to growth soon and they now have over 18,000 stores at the end of September. Like you said, they're really good in opening stores in good locations and they don't close them that often. I think it's a little bit of a blip, but hopefully not too big.

Hill: One tech giant is leaving China and one space stock is losing altitude. Details after the break. So stay right here. You're listening to Motley Fool Money. [MUSIC] Welcome back to Motley Fool Money. Chris Hill here with Maria Gallagher and Jason Moser. Shares of Virgin Galactic fell 15% on Friday after the company said it would delay its commercial space service to the end of 2022. Virgin Galactic says that it is taking more time to improve its space vehicles, which Maria, I have to believe future customers appreciate. But the fact of the matter is, at this moment, Virgin Galactic is losing the space race.

Gallagher: Yeah. They pushed it back about a month. Initially, they said quarter 3, 2022. Now they're guiding for quarter 4, 2022. I agree that if there's any group that I want to be prioritizing my safety it would be planes and large vehicles. I think that that's not going to hurt their customers too much. But I will say that when they did launch Unity 2022, their first space fight with a full crew, they got about 19 million views via livestream and third-party broadcast. People are still intrigued by this concept. People are still interested. I think people are still going to watch it even if full fight buyouts start at about $450,000. The amount of customers they have is still a pretty narrow window. But they actually really retained their prepaid customers. Not many people are dropping out due to these delays and they are reopening commercial pre-booking for flight. I'm curious to see how many people are going to sign up now that it seems a lot more possible. I feel like the past couple of years it's been this thing that might happen sometime soon and even just pushing it back a month. I do still think that by the end of 2022, this does seem like a real viable possibility. I'd be interested to see how many people sign up now that pre-booking is opening again.

Hill: It will be interesting to see once we get to actual operations and therefore actual results for Virgin Galactic. Because unfortunately for them, this happens just a couple of days after William Shatner goes up in Blue Origin and comes back and they get all of the attention. I understand the drop in this stock because Virgin Galactic has not yet earned the benefit of the doubt.

Gallagher: Yeah. I will say I don't know if you saw what William Shatner said when he came back down. He really raved about the flight, which I think I was someone who made fun of it a little bit and looks like it's just taking an airplane a little bit higher than most people take an airplane. [laughs] I wasn't too impressed by it. But he was so enthusiastic that I think it would make people who maybe weren't sure about it, make them more willing to go until maybe that they go on Virgin Galactic, maybe they go Blue Origin, but I do think he could be a good spokesperson for it.

Hill: Shopify is teaming up with Microsoft and Oracle to help merchants streamline their business operations. Jason, do I have this right, Shopify gets to invest further in their merchant businesses. Microsoft and Oracle get the chance to grow their cloud operations as they compete with AWS. That's how this looks. If that's the case, this seems like a win for everyone involved.

Moser: Yeah. I think you said it exactly. It is a win-win. I like this from a number of angles. I think for a business like Shopify, I'd love to see companies like Shopify and even Square (SQ 5.04%) to an extent, working on building the tools for merchants, particularly in regard to e-commerce. The numbers obviously are impressive when it comes to e-commerce. But I think when you consider Shopify, it's really impressive. To be honest, in 2020, Shopify held 8.6% of the U.S. retail e-commerce market. Now, that was second only to Amazon and their 39%. I think it shows you a couple of things there and that Shopify maintains an impressive presence already in our U.S. e-commerce market. They've picked up a lot of share very quickly. When you look at where Amazon is today, I think that really just demonstrates the opportunity that's still out in front for Shopify. When you see them doing things like this, you look at the tools that they continue to build -- Shop Pay integrations on Facebook (META 2.98%) and Google properties. As e-commerce continues its shift to mobile, this experience is just going to have to get better and better. I think really that is going to be one of the benefits of this tie-up. Integrating these types of solutions with big partners like Microsoft and Oracle, it eliminates, I think, a layer of complexity. Again, it is a win for both of them as well in that they are getting a little bit more to the forefront in a market that historically is centered around AWS.

Hill: Now, I get that Shopify, when you look at it on the surface is not the cheapest stock in the world. But among other things, not that Shopify needed validation, but to strike a partnership like this with legacy tech giants like Oracle and Microsoft, it really seems like the runway is still there for the business and then therefore the stock.

Moser: Yeah. I'm glad you said something about the valuation because it is very easy to look at Shopify just on the surface and say, wow, this is a $175 billion company now go on something like 4 billion dollars in revenue. There is some disconnect there it would seem. But I think you go back to looking at that market opportunity. That's why we focus on those large and growing market opportunities because they represent just so much. It is just so much opportunity for them to capture. So yes, the market is pulling a lot of that forward. But when you see companies that really do dominate and help shape their respective spaces, we've seen this play out with companies like Amazon before. It just, you sit there all along the way saying it's too expensive, and then at some point 10 years down the road, you look back and you're kicking yourself because you never bought those shares. It's a good performance thus far for Shopify. But I think based on those numbers, that market opportunity, it's still out there. It strikes me as one that still has a ton of share to capture. Therefore shareholders, I think, who remain patient should do very well with this one through the years.

Hill: This week, Microsoft announced it is shutting down its LinkedIn operations in China. LinkedIn was the last major American social network operating in China, but Microsoft says the operating environment is more challenging. Maria, it seems like on some level, they just said, "You know what, this is no longer worth it for us."

Gallagher: Yeah. This comes after a Chinese internet regulator told LinkedIn to better moderate its content, gave it 36-day deadline. I think they said, it's too much should try and make it the same as LinkedIn. They are actually going to go back and launch a China-specific version of LinkedIn later this year. There will be no feeds, no ability to share a post, so no social aspect. It will just be more focused on job searching but China is LinkedIn's third-largest market and LinkedIn brings in about 10 billion in annual revenue to Microsoft. It's in their best interest to continue to have some presence in the country and try to monetize it the best way that they can. But I think the way it exists right now with such a social aspect just wasn't working for them but I also didn't realize one, that LinkedIn brought in that much revenue to Microsoft or how big it is. Throughout the world, LinkedIn has over 740 million members, over 55 million registered companies, 14 million open jobs listed on it, and three people are hired through LinkedIn every minute. It is one of the social medias that's really monetized well and shows a really strong use case for users to pay for it, both businesses and people searching for jobs. I thought that was pretty interesting to learn about. I think that it is definitely within their best interest to still have some presence. But I think pivoting and changing the social aspects is really they don't have much of a choice, it seems.

Hill: They don't have much of a choice. But also it seems like it could be a test that Microsoft might not have undertaken on their own. If they launch this in China and it doesn't have the social aspect, Microsoft may end up learning things about how this new version of LinkedIn works. Maybe it gives some insights into how do we improve it in other parts of the world?

Gallagher: Yeah, absolutely. Kind of a test case for seeing what part of the job market is that social interaction and messaging people after you interview with them or something like that and trying to connect with people versus how much of it is just finding the job and applying for it. I think that you're right, that could be a really interesting study for them to do to see how much of this value is in the social aspects, how much value is in the jobs aspect, and trying to make it more efficient worldwide after that.

Hill: Restaurant Brands International is the parent company of Burger King, Tim Hortons, and Popeyes Louisiana Kitchen. Shares are down a bit from their 52-week high, but that could change after next week. Popeyes will unveil a new hot sauce in partnership with Grammy award-winning artist Megan Thee Stallion. Yes, Megan Thee Stallion Hottie Sauce is going to debut on Oct. 19. Moser, this is part of a deal that includes new merchandise, philanthropic work in Houston, Texas. I like this. Not just because it's fun, but we've seen this business strategy work between McDonald's (MCD 0.47%) and musical acts like BTS and Travis Scott.

Moser: Yeah, I'm with you. I think that for whatever reason, these types of relationships, particularly when they pertain to food, they tend to work out very well. It's a matter of getting with the moment. What's that -- the zeitgeist? You want to be a part of that moment and clearly, Megan Thee Stallion is part of the moment that's happening right now. Popeye's and Megan Thee Stallion, to me it's just like chocolate peanut butter. This has the potential to be a Reese's Peanut Butter Cup success. I love these types of deals. Moreover, if I was someone who was asked to participate in something like this and they wanted to make a sauce after me, I would actually go barbecue rub, I would actually go rub. Dizzy Pig, if you're listening and you want to do a JMo rub, give me call.

Hill: Maria, 10 seconds. What are you partnering with if they come to you?

Gallagher: Oh, absolutely Ben and Jerry's. I would make an ice cream in one second and I'm a faithful buyer of all celebrities' Ben and Jerry's flavors.

Hill: [MUSIC] What should investors expect from Apple and Google next week? We'll get into that and more after the break. So stay right here. You're listening to Motley Fool Money. [MUSIC] Welcome back to Motley Fool Money. Chris Hill here with Jason Moser and Maria Gallagher. Time for a round of buy, sell, or hold. I'm going to spot you up with the topic. You tell me if that thing was a stock, would you buy, sell, or hold it? Maria, next week, Google is holding an event to unveil the latest upgrades to its mobile device. Buy, sell, or hold the Google Pixel phone.

Gallagher: I'm going to sell that really quickly. In 2020, [laughs] it only sold 7.2 million Pixel smartphones in the whole year, compared to Apple in quarter 4 sold 80 million iPhones and Samsung sold 62 million phones. Of all of the Google businesses, it's definitely the least interesting to me. Google's done 232 acquisitions since 2004. I think I'd pick a lot of them over the invention of the Google Pixel smartphone.

Hill: Although, Jason, if we're thinking about the Pixel phone as a stock, the market share it has is so tiny. Maybe it's a value stock or a [laughs] really deep value stock.

Moser: Or perhaps a value trap, Chris. [laughs] I am a total sell on this one. I agree with Maria. To me, the numbers just don't really add it up. At 7.2 million phones in the context of 1.5 billion smartphones sold globally in 2019. Clearly, this is immaterial. It does make you wonder, why do they still do it? I don't know necessarily. It seems to me the more valuable part of the business is in the operating system. The Android operating system gives them so much opportunity. I respect and appreciate the effort in wanting to produce a phone, but to me, it seems odd that Google, Alphabet, whatever you want to call it, they haven't really nailed it. Like Starbucks (SBUX -0.35%) hasn't nailed it on the food side. Google hasn't nailed it on the hardware side. You've got to start wondering if it's even really worth their time. But if they're getting incremental share then that's incremental share and just depends on how much it costs for them to continue with these types of initiatives. But yes, absolutely a sell. You'll never see me making any calls or firing off any tweets from a Pixel phone.

Hill: Maria, before we move on, just real quick to Jason's point. I am genuinely surprised that we're in what year 5 or 6 of this experiment for a business that is so successful in so many other ways. It makes me wonder how much longer the Pixel phone has before they just shut it down because at some point, they either need to get much more significant market share. I don't know if they just decided to throw money at this and cut the price so that they can get it into more hands or they need to just shut it down. Are they still doing this in three years?

Gallagher: I think when you have as much money as Alphabet has and you have as much power as Alphabet has, you have a lot of things that are in motion at all times. They can't all be winners and I think at some point, you just have to either accept it or you just have this part of the company that's just trucking along and it's not doing great, but it's still around. I feel like it might be one of those where enough people use it, maybe there are enough people who work in that part of the business that are passionate about it. Maybe they just keep it going or maybe they shut it down. I think for them it's so immaterial that it could go either way pretty easily.

Hill: Jason, the day before Google's event, Apple is having its own event to unveil new product updates, even though Apple just had an event like this last month. Buy, sell, or hold the future of tech company events like these.

Moser: Well, I must admit when you gave me this question, the first thing that went through my mind was the Widespread Panic song "Sell, Sell," because that's what I'm saying here, Chris, sell, sell. These events, I think, have jumped the shark personally. Now, I will say I understand why they're doing and I get it. It is obviously terrific marketing. It gives them a chance to control the narrative on whatever they are introducing. I do understand it, but it is so self-aggrandizing. To me it seems borderline narcissistic in some cases, the way they do these things. I much prefer just the under the radar or companies just keep on sneaking new innovations in front of us in changing the world without having necessarily to get into the spotlight and tell you how great they are because that's ultimately what these events feel like to me at this point. Perhaps they will reformat them or try a different way of distributing them. They can make them more creative and a little bit more enjoyable. But as it stands now, I want to watch these presentations less and less the more they announce them.

Hill: Yeah. Maria, it does seem like the more they do them, the less special they become. Do they need to go the route of just having like one in-person event per year and then just, I don't know, sending out videos otherwise. Are you like Jason, a hard sell on this one?

Gallagher: I'm going to go the opposite. I'm a buy, I think it's fine. I think I always like an event. I grew up my whole life doing theater, so I always loved the chance to see something dramatic happen. Especially the Apple ones, they always have the cool colors. I just think it's a fun way. I think it's smart to stoke excitement. I think it probably is useful for their marketing. They have a different vibe each time and you get people riled up, and then you get the excitement. I do think the more they do the less meaning may have, but I don't think I wonder when they've reached that point where they are now doing too many because I'm someone who I will still tune into a lot of them because I just think they are fun.

Hill: When is the car coming? Because like the rumored [laughs] Apple car seems like the product that is really ripe for a big event. If they are working on that, that's the event I want to see.

Moser: What do you think, Maria? I don't know anything about the car at this point.

Gallagher: I think it would be a very cool event. I would totally watch it. I think they have a really cool light show and they would drive it onto the stage. Or it would come up from the bottom at the stage with a fog machine.

Moser: I agree. I think a car could be a wow type of thing. Maybe that's it. It really needs to be something that focuses on something truly special. To me these things are just telling us about the next iteration of the MacBook or the iPad or the Watch or whatever it may be. It's just like whatever. Next. Give me something special and yeah, I'll be interested.

Hill: In 2014, CVS (CVS -1.62%) stopped selling tobacco products. This week Walgreens' (WBA -0.93%) CEO, Roz Brewer, said tobacco is "under real scrutiny at her company right now." Maria, buy, sell. or hold Walgreens quitting tobacco in the next six months.

Gallagher: I'm going to sell that idea just because it's so lucrative. I feel like realistically instead of completely stopping selling them, it'll be more like they'll add a label, add a different type of restriction. In 2019, they made it so only customers over the age of 21 could purchase slightly ahead of the federal guidelines changing. I think that even though they are trying to say that they are leaning more into their health and wellness-related merchandise. In 2017, 249 billion cigarettes were sold in the U.S. Even though it's decreasing it's such a lucrative business, I don't think that they're going to stop selling it completely, at least not in the next six months, maybe in the next couple of years. Do I want them to? I think that yes. Morally, I think that would be good, but I think it's just pretty lucrative business plan for them to completely cut it off.

Hill: Jason, you're buying this, selling, or holding?

Moser: Yeah. I'm going to take the other side of the coin here and buy. I think that you go back to the beginning of 2015, when CVS had phased out cigarettes from their stores. Now the stock hasn't really done all that well since then. That's a total return of around 4%. You look at Walgreen, it's interesting. It's even worse, down about 20%. I wouldn't attribute that performance necessarily getting rid of tobacco as much as just that's a difficult business. These are also two businesses that are evolving a bit, so to speak. Becoming more modern day healthcare companies and CVS with its acquisition of, what was it? Aetna. You see Walgreen going in that same direction as well. I think it's very difficult for a company to balance being a healthcare company while selling things that are clearly so detrimental to one's health. There is a blueprint out there for the way this has been done. Thanks to CVS. To me, it feels like this is a decision that's almost already been made. They're just trying to ease it out there as opposed to just being a headline that shows up in the news one day. To me, I think they will do it and I think long-term they won't suffer from it.

Hill: There is a blueprint that Walgreens can follow in terms of the way CVS did it, really pivoting and leaning into health. I will point out however, that that blueprint includes the fact that on the day CVS announced they were going to stop selling tobacco products, the stock fell 5%. Because to Maria's point, this is a lucrative part of the business. I think in CVS' case, it meant somewhere in the neighborhood of 2 billion dollars annually in terms of the front-of-store revenue. I think, Maria, it just comes down to, is Roz Brewer and her team at Walgreens willing to take that heat because they have to know it's coming. Don't they?

Gallagher: I think it is interesting to see as consumers get more and investors getting more invested in the idea of a company that does well and is not harming people with what they sell, I wonder how much they are taking that into account and trying to lean into maybe getting different types of investors into their stock or trying to make their company one that you can admire in that way, the way you do with some other companies like Costco (COST 1.01%) being an example of one. I think it will be interesting to see how much stake she puts in that and how much passion her and her team feel for that messaging and marketing.

Hill: Last month, the National Confectioners Association reported that retail sales of chocolate and candy, were more than 40% higher than last year, so Jason, buy, sell, or hold Halloween spending setting a record this year.

Moser: That's a strong buy, Chris and I'm helping the cause. [laughs] We have a standing rule here [laughs] in the Moser household, once Oct. 1 hits, we start buying the Halloween bags of candy, and that's just we have in our house, we are going to enjoy the entire month. Some people like to enjoy their birthday month, we like to enjoy each of the three holiday months, October, November, December, it's a great time of year. I think that honestly we're seeing folks are more and more feeling it's OK to get out there and do things like trick-or-treat or travel and whatnot. To me, I think there's going to be a little bit more enthusiasm behind this Halloween season and perhaps we've seen recently, and if I can help the cause at all, Chris, I certainly will. I have already got on the top and then we're going to go store later today and buy another bag of candy [laughs].

Hill: Maria.

Gallagher: I'm buying, I'm helping the cause, I have a lot of candy fun facts if anyone wants to hear them.

Hill: Lay them on me.

Gallagher: Americans purchase nearly 600 million pounds of candy a year for Halloween, 90 million pounds of chocolate candy is sold during Halloween week, which is more than Easter and Valentine's week, 10% of annual candy sales happen the days leading up to Halloween and the top-selling candy even though chocolate is more popular, the top-selling candy is actually candy corn, and there are 35 million pounds of candy corn produced each year, which is 9 billion pieces. [laughs] If the candy corn kernels [laughs] sold during Halloween were laid out end-to-end, they would circle the earth 4.5 times. Those are my candy facts.

Moser: Those are some very fun facts. Now that you mentioned it because we know Domino's benefits so greatly from Halloween, and that's one of their top five days of pizza sales, I wonder if you've laid each pizza out end-to-end, how many times that would go around the world?

Gallagher: I think that's an important thing we should probably try and figure out, as a team.

Hill: It would certainly taste better than the candy corn that's circling the globe, however many times.

Moser: Candy corn is very controversial item I'm coming to find. Through our shows and responses, that's a very controversial subject.

Hill: Let me just share this nugget in terms of retail spending, because the National Retail Federation believes that overall Halloween spending, so candy, but also costumes, decorations is going to set a record this year. It is going to be north of 10 billion dollars. One retail analyst said in response to that, "The National Retail Federation may actually be underestimating willingness to spend. This means that the biggest risk to Halloween spending in 2021 is not consumer confidence at this point, it is continued supply chain disruptions and the availability of merchandise to meet consumer demand." Jason, we've been talking about people needing to start their holiday shopping earlier this year. I usually do my candy shopping a few days before Halloween, based on this quote, maybe I need to get out there now.

Moser: I think you need to take a page from the JMo playbook and just start your candy shopping Oct. 1, [laughs] like you are really embracing the holiday. I think you're right. I think it's a good point we saw, you're just going back to those bank results. Bank of America, the deposit number, the 15% growth on the deposits, we're just at a point right now where consumers are still at a pretty good financial place, and credit cards are doing well. I think you're right. It's going to be less about the consumer's ability to spend. It's going to be more about just having stuff to actually spend it on.

Hill: Last thing before we go to the break, Maria, I'm sorry to put you on the spot, but we are talking about supply chain disruptions. It's a big theme this year, certainly over the last few weeks on this show, with so many companies talking about it. During our production meeting this morning, you mentioned that you have a Halloween customer idea that's built around that theme and I'd love it if you could share with the dozens of listeners.

Gallagher: Well, listeners, if you decide to do this as well, let me now, but I decided that I want to be the boat that blocked the Suez Canal for Halloween. [laughs] Then, I think it would be very funny to block everyone when they're trying to go places and just say, I'm sorry, I'm stuck, and I think that would be really funny. I don't know if I'm going to actually do it, but it's my idea.

Moser: It's a strong buy. It's a strong, high-conviction buy, I love that idea.

Gallagher: Thank you. [MUSIC]

Hill: Radar stocks coming up after the break, so stay right here. You're listening to Motley Fool Money. [MUSIC] As always, people on the program may have interest in the stocks they talk about on The Motley Fool, may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Welcome back to Motley Fool Money. Chris Hill here with Maria Gallagher and Jason Moser. Time to get to the stocks on our radar, our man behind the glass, Dan Boyd is going to hit you with a question, but first, Dan, we were talking earlier in the show about the upcoming promotion from Popeyes the partnership with Megan Thee Stallion. You're someone who does a decent amount of boots-on-the-ground research at Popeyes. I'm curious, are you excited about this new partnership?

Dan Boyd: There is never not a moment in my life, Chris, where I am not excited for Popeyes. The idea that [laughs] I could get Popeyes will bring me out of depression, it will get me up in the morning. I am always ready for some Louisiana fried chicken.

Hill: Are you going to get the new sauce?

Boyd: I'll try it. Yeah, I love Megan Thee Stallion, I think she's great, I think her songs are great and anything they can do to shake-up that menu up there, I'm always here for.

Hill: Let's get through some radar stocks. Jason Moser, you're up first, what are you looking at this week?

Moser: Yeah, just taking a closer look at Marvell, ticker MRVL, the recent investor day, the term 5G was mentioned 34 times and I really do feel like this is an excellent way to play that 5G movement, a pure-play 5G idea. The growth is really being driven by three key markets for the business, cloud, 5G, and automotive. All three growing better than 20% annually represent a tremendous opportunity for the business. You remember they had a recent acquisition of Inphi, which was the company I had recommended a little while back. I think that will provide some nice tailwinds and they have another acquisition of smaller one of Inovium, and that will give them additional networking solutions for cloud and edge data centers. Ultimately, that's what this business has done thanks to CEO Matt Murphy. They've had this vision to transform Marvell from a consumer-oriented business to an infrastructure-oriented company, and this vision is starting to bear fruit, so I think at around 45 or so times full-year fiscal estimates right now, to me, it seems like a very reasonable price in a market where a lot of valuation seem maybe a bit frothy [laughs].

Hill: Dan, question about Marvell?

Boyd: I can't think about Marvell without thinking about Marvel obviously. Jason, I have a speculative question for you, how many semiconductors are used in the production of a Marvel movie?

Moser: Business cards have thousands, I'd have to believe there will be hundreds of thousands of chips involved with the production of something like that. But that's just a wag as we call it in the business, a wild you-know-what guess.

Boyd: Thanks, Jason.

Hill: Maria Gallagher, what are you looking at this week?

Maria Gallagher: I have reached the age where all my free time is spent looking at homes I can't afford on Zillow, I mean, looking at these estimates. I'm going to spend a little bit more time looking at Zillow Group and trying to understand the dynamics of their iBuying business, I think is really fascinating. Them buying your house then flipping it, and understanding the margins of that and the risks associated with that as well. I think those trends will be really interesting to watch.

Hill: The ticker symbol?

Gallagher: ZG.

Hill: Dan, question about Zillow Group?

Boyd: I am a Zillow shareholder, which is great because it's rare on this show when I actually get to be that for radar stocks. But I bought a house in 2019, and so what I do Maria, is I am glued to the Zillow estimate of my house, whereas I'm not looking for a new house because I can't afford two houses, but when Zillow tells me how much they think my house is worth, I get very excited [laughs].

Gallagher: You sound like my mom. She likes to email my sister links to Zillow estimates for apartments near her to convince her to move to my mom's building. [MUSIC]

Hill: What do you want to add to your watch list, Dan?

Boyd: Like I said, I already have Zillow here in my portfolio, so I'm going to go with Marvell.

Hill: Jason Moser, Maria Gallagher, thanks so much for being here.

Gallagher: Thanks for having us.

Hill: That's going to do it for this week show, we'll see you in next week.