In this segment from Motley Fool Money,Motley Fool analysts Jason Moser, Matt Argersinger, and David Kretzmann share the companies they have their eyes on this week, and why: Boston Beer(NYSE: SAM), Skechers(NYSE: SKX), and Grubhub(NYSE: GRUB).
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A full transcript follows the video.
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This video was recorded on April 21, 2017.
Chris Hill: We'regoing to go to our man, Steve Broido,behind the glass. Also joining us this week,special guestKeith Fredrickson visiting from New York City. [applause] Thanks for coming by, Keith! All right, Jason Moser, you're up for,Steve will hit you with a question. What's on your radar this week?
Jason Moser: Sticking with the health theme,looking atBoston Beer,ticker is SAM.
Hill: [laughs] I'm sorry, the "health theme"?
Moser: Well,it makes you feel good. We've really talked a lot about the headwinds that they've beenfacing in the craft industry, as more and more craftbrewers pop up around the country,and I don't think that threat is abating anytime soon. I expect to seea lot of the same here in this coming quarter with fallingdepletions, just them trying to figure out new ways to get products out to consumers. It'sreally difficult in this space when you have so many options, andBoston Beer is in that twilight zone,not quite small enough to be craft andnot quite big enough to compete with the big boys. They have to figure out a way to do that. And I actually think Jim Koch, if he's not too proud,has the opportunity here, perhaps, to be the Buffett of craft beer, andstart bringing the smaller, regional players inunder their umbrella, give them thedistribution, give them that capital, the public markets, give these public companies, therecould be an opportunity there. But, theearnings slated for Wednesday, it's one we're watching.
Hill: And the ticker symbol?
Hill: Steve Broido,question about Boston Beer?
Steve Broido: Is there a low-end opportunity for them? Is there a PBR somewhere-likeopportunity for Boston Beer?I think of them as being very classy beers.
Moser: They are classy. I think, really,the opportunity is figuring out a way to convince those PBR and Bud Lite drinkerswhy they should be drinkingSamuel Adams instead. I think the biggest challenge there,it's going to require a little bit lower pricing, whichcould play out on the company's profitability,in the near run, at least.
Hill: Do you think they want to buy Juicero?
Moser: [laughs] I would imagine they'll take a pass.
David Kretzmann: Might be a discount.
Hill: David Kretzmann, what are you looking at this week?
Kretzmann: I'm looking atSkechers, ticker SKX. This is a global shoe company, knownespecially for the casual, work, and walking shoes. They have over 2,000retail stores worldwide, including 550 in China. They're stillworking through some of the retail headwindsdomestically in particular, but that international businessmakes up about half of revenue today, and it's stillgrowing. They reported results this week. It was their first $1 billion-plus quarter in terms of sales. They have a strong balance sheet, over $500 million in net cash. And it's just trading at 16 times earnings,so I think the expectations are low. ButI think the company might be able to top that.
Hill:Steve, question aboutSkechers?
Broido: Do you wearSkechers shoes yourself?
Kretzmann: I do. The companyis getting into athletic shoes, running shoes in particular, and they have the highest ratedrunning shoes on Amazonand the lowest price point. I'm a happy customer.
Hill: MattArgersinger, what are you looking at this week?
Matt Argersinger: Well,if you believe all those things I saidin the earlier segment aboutpeople spending a lot more time at home,then I think we should all be taking a closer lookatGrubHub, ticker symbol, appropriately, GRUB.I think most people know thatGrubHub enables people to order fooddelivery from over 50,000 restaurants in over 1,000 cities, and it takes a nicepiece of every transaction. The company grew revenue37% last year and is very profitable.
Hill: Steve, question about GrubHub?
Broido: How doesanyone make any money here? It seems likeGrubHub gets a cut, thedelivery people get a cut, everybody gets a cut here,who's making money?
Argersinger: Middle men areeverywhere, Steve, I know.GrubHub does a good job. You'repaying for the delivery, you're paying a smallportion of the menu cost. Restaurants like it because it builds their business, so they'll make it up in volume in most cases.
Hill: Steve,you can wear your Skechers, walk to pick up asix-pack of Boston Beer, and while that's happening,GrubHub is going to deliver something to your home. Do you have one of these three stocks you want to add to your watch list?
Broido: I might look at Skechers.
Kretzmann: All right!
Hill: If you could haveOlive Garden delivered viaGrubHub, are you going that route?
Argersinger: There you go!
Hill: I didn't know if the in-restaurant diningexperience was part of the attraction of the Olive Garden for you.
Broido: The in-storepick up experience is also delightful.
Kretzmann: Aslong as you're wearing your Skechers shoes while you pick it up.
Chris Hill has no position in any stocks mentioned. David Kretzmann owns shares of Boston Beer and Skechers. Jason Moser owns shares of Boston Beer. Matthew Argersinger owns shares of Boston Beer. Steve Broido has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Boston Beer and Skechers. The Motley Fool has a disclosure policy.