In this segment fromtheMotley Fool Moneyradio show, host Chris Hill asksMillion Dollar Portfolio's Jason Moser andMotley Fool Explorer's Simon Ericksonto tell usabout the companies they have their eyes on. Find out whyHome Depot (NYSE: HD) and Ambarella (NASDAQ: AMBA)made the list.
A full transcript follows the video.
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This video was recorded on April 7, 2017.
Chris Hill: Let'sget to the stocks that are on our radar this week. We'll bring in our man Steve Broido in from the other side of the glass to hit you with a question. And we have enough time, you can hit him with a question back.Jason Moser, what are you looking at this week?
Jason Moser: Alittle company that probably not many have heard of. It's calledHome Depot, Chris, ticker is HD. As you know, we just went through a bigproperty switcheroo here,selling a house, buying a house. In the process,Home Depot got a lot of our money for good reason.
But,when we talk about retail and how the retail space is changing so much, Home Depot is really evolving with it. They've done a great job over the course of time becoming that omnichannel retailer, utilizing that big physical footprint of stores to become an e-commerce player, order online, pick up in store. It's a big market they're addressing. They estimated to be a $550 billion totaladdressable market here in the U.S. between the do-it-yourself-ers and the professionals. They're targeting $5 billion in share buybacks alone this year. So while it's not a stock that's going to double any time soon, I think it's a pretty low-risk holding that should continue to benefit from good weather and bad, whether mortgage rates are high or low. You have to have a place to live, and people typically want it to look somewhat nice.
Hill: Steve,question about Home Depot?
Steve Broido: Is it just me,or does everyone spend far more in there than they intend to? I just walk in there and think I just need a wrench, no problem, and it's a $100 billand I've gotten paper towels and all sorts of other stuff. Is that just how it works?
Moser: Yeah,I think that's exactly how it works, and that'swhere they really try to score. Every time I go in there,I basically lay the law down and tell myself, "I'mnot going to spend more than $100.I'm not going to spend more than $100." And it never works.
Hill: I'm the same way. I walk in there, I'm like Steve, I have one thing I'm looking for --I'm not saying I'm spending $100 every time, but yeah, I'm definitely spending more. Simon Erickson, what are you looking at?
Simon Erickson: Chris,I'm going back toAmbarella. Reason is,the year is 2021,that is the unofficial year I think we'regoing to start seeing self-driving cars make it out to the market. The computer vision aspect of that, which istaking in all the information from around the car and feeding it to the processors is veryimportant for the companies that are racing to meet this unofficial deadline. All of the OEMs are looking forward to this,Ford andGM. We just sawIntelpay $15 billion forMobileye. I really think Ambarella isdefinitely an acquisition target as everyone is scramblingin this race to self-driving cars.
Hill:Steve, question about Ambarella?
Broido: Whatexactly does Ambarella do? I've owned in the past, and I don't think I've ever really known.
Erickson: Sure. It'shigh definition video capture andprocessing for that. It'smaking sense of everything that's around it. Increasingly, that's going into the automotive industry, because they made some acquisitions there. It's making sense of things for computers to process off of. My question for you, Steve, is, if self-driving cars hit the market in 2021, what year would you be tempted to buy one?
Broido: I thinkright off the bat. Bythe time they come to market, I suspectthey will be very, very safe.
Hill: Safer than you as a driver?
Hill: Ambarella andHome Depot. Very different businesses. Do you have a stock you want to add to your watch list, Steve?
Broido: I'dprobably go Home Depot.
Chris Hill has no position in any stocks mentioned. Jason Moser owns shares of Intel. Simon Erickson owns shares of Ambarella. Steve Broido owns shares of Ambarella. The Motley Fool owns shares of and recommends Ambarella and Ford. The Motley Fool recommends Home Depot and Intel. The Motley Fool has a disclosure policy.