Thanksgiving and the holiday season can be stressful, and time can be a scarce resource. However, investors of Bank of New York Mellon (NYSE:BK), Markel (NYSE:MKL), Textainer (NYSE:TGH), and eBay (NASDAQ:EBAY) can rest easy this holiday season. In this segment of The Motley Fool's financials-focused show, Where the Money Is, financial-sector analysts Matt Koppenheffer and David Hanson discuss these four companies and tell viewers why "boring" can be better.
Full transcript below
Matt Koppenheffer: All right. Our focus for today.
I was thinking about this yesterday, that as we move into the holidays -- generally speaking it’s a bad idea for people to be checking their stocks on a daily basis -- but as we get into the holidays, family is around, there’s a lot of things to do. If you’re not cooking, you’re probably helping somebody cook, you’re probably cleaning something up, you’re watching the kids, you’re cleaning the house, getting ready for in-laws to come in. Even with your smartphone, you may not have a chance to indulge yourself in checking stocks on a daily basis.
It got me to think, what are some stocks that you could buy and forget about, and not feel like you have to -- again, you shouldn’t feel like you have to check your stocks on a daily basis. Make it monthly, or make it quarterly, even, if you can -- but what are a couple of stocks that we see out there right now, that feel like good stocks. I keep saying “stocks.” I should be saying “companies.” Good companies that we could buy and not feel like we constantly have to check up on. David, what have you got?
David Hanson: All right. You want to go back and forth? One, one, one, one? That’ll work?
Koppenheffer: I’ve only got one.
Hanson: Oh, you’ve only got one? I’ve got two for you.
Koppenheffer: I only told you one. Always trying to one-up me ...
Hanson: All right, I’m going to go with ...
Koppenheffer: I could pull another one out of my ... head.
Hanson: Out of something.
I’m going to go with a company that we don’t talk about a lot, but it is in the financial sector. I’m going with Bank of New York Mellon. We rarely talk about this bank because it’s pretty darn boring. You’re not going to interact with Bank of New York Mellon every day.
If you’re hearing about it in the news, it’s probably because they are the trustee in this Bank of America lawsuit with all these private investors, and that kind of highlights what they do. They’re a custodial bank. They do all this behind-the-scenes stuff for Wall Street banks, for asset managers, for big mutual funds, pension funds. They provide a lot of boring services, but they’re necessary services.
As we get more of a global economy here, and things become more interconnected, companies like Bank of New York Mellon are going to continue to be needed. They’re somewhat heavily regulated now. They did get dinged in the financial crisis, but it’s a heavily regulated bank, helps Wall Street banks over there -- and your boy Warren Buffett, over at Berkshire Hathaway, owns about 2% of the company. He likes it. I think Bank of New York Mellon is a bank that you can feel comfortable with, and sleep well at night.
Koppenheffer: My boy. My boy. Yeah, I’m actually feeling sleepy, just hearing you talk about Bank of New York Mellon.
The one I have is a little bit less sleepy. It’s eBay. We’ve talked about it on the show before. It may surprise some people that we’re talking about eBay on a show about financials, but 40% of eBay’s revenue -- more than 40% -- this past nine months comes from its payments division. Obviously, a lot of that in the payments division is PayPal.
I think this is a really good business. PayPal has got the digital payments, digital transfers dialed in. I’m very excited about this business, going forward. For me, and for a lot of other people I know, in terms of getting money back and forth between friends, between family members, it’s pretty much a no-brainer. You just say, “Send it to me over PayPal,” and it’s as easy as that.
PayPal has been branching out. It’s got this deal with Discover, trying to get into brick and mortar stores, trying to expand its presence that way. Just recently, PayPal signed up with one of my favorite private companies, Uber, and now you can pay for your Uber ride -- it’s a private car service, like a taxi service -- with PayPal. I actually got a $15 off coupon.
Hanson: I did too.
Koppenheffer: That was pretty sweet, I’ve got to say.
Hanson: That’s nice.
Koppenheffer: The reason I’m saying this as the “buy and forget” is because this is still a business on the come. This is still a business that’s building, that’s growing, and you do not want to be watching this on a daily basis, because there’s going to be a lot of this along the way.
Hanson: For those of you listening, Matt’s doing a zig-zag.
Koppenheffer: Oh, yeah. I’m wiggling my hand up in the air.
What we want to think about is Point A to Point B, and Point B is when PayPal is much bigger, handling a much larger volume of payments, is accepted at a lot more merchants. But what we don’t want to worry about are those squiggles in between.
Hanson: I think that’s a good pick. This is one that’s been on my radar. I’m going to take Thanksgiving time ...
Koppenheffer: It is a good pick, David.
Hanson: I’m going to take the weekend to look into eBay a little bit more, because it’s down 5% this year, when the market’s up over 20%, so it’s been a pretty big laggard. You mentioned the partnership with Uber; also went out and bought the company that controlled Venmo, which was an up and coming peer-to-peer payment system. I think there’s a lot to like at eBay.
Do you want my other one? Do we have time?
Koppenheffer: Go ahead.
Hanson: I’ll be quick. This is not a financial company, so I’m going to get a little bit interesting here for our listeners.
Koppenheffer: I don’t know if you’re allowed to do that on this show.
Hanson: Are we allowed? We’ll have to clear it with legal afterwards. Going with Textainer. You’re going to say, “What? What is that?”
Koppenheffer: No, no, no. I know what it is. I’m falling asleep again.
Hanson: Ticker is TGH. This is the largest leaser of intermodal containers.
Koppenheffer: Is it leaser or is it lessor?
Hanson: Lessor? Leaser? Either way. Either way it’s a good company.
Koppenheffer: I’m sure there is a -- WTMI@Fool.com, that’s our email address -- I’m sure there is a listener right now that’s saying, “You guys just screwed that up.”
Hanson: Leaser, lessor. Intermodal containers are those huge metal boxes you see on ships, in shipping yards, on the back of trucks. They’re the biggest leaser of this. It pays almost a 5% dividend. This is basically a play on global activity and shipping across the world, here. This is one that you can sit back, watch the business.
Again, it’s going to have its ups and downs, but I think this is a good play on the global economy, if you will.
Koppenheffer: OK, I told myself I wasn’t going to mention this company because we talk about it all the time, but since I can’t let you one-up me two to one here, I’m going to say Markel. You can buy Markel, have it in your portfolio, check back on it five years from now.
What I love about this business is the options that it has to deploy its capital. It’s got a great insurance business, it’s a great insurance operator. It’s got Markel Ventures, where it’s buying whole companies, similar to what Berkshire Hathaway does. A great investor in Tom Gayner there at Markel. Then of course, if they wanted to pay dividends, buy back stock -- lots of options there at Markel. Great, well-run company.
Koppenheffer: Boom. Two to two.
Hanson: All right.
Koppenheffer: No one-upping from you.