Roundtable: Great Companies From a Motley Crew
Tom Gardner stresses the importance of culture and purpose in his investments. As CEO of The Motley Fool, he plays a key role in defining both. Our purpose is "To help the world invest. Better." One way Fools can do that is by growing the love for investing. And by collaborating together, as an entire company, we can make it happen.
That's why, for the next two weeks, groups of Fools are competing in the first annual Foolympics. There will be feats of strength, such as the water balloon toss, and skill, like the rock-paper-scissors tournament. And to grow the love for investing, our motley band of brothers and sisters from the fictional country of Fooltopia want to share some great companies with you.
Max Keeler (process Fool)
Max subscribes to the Peter Lynch school of investing: Buy what you know. He says his $36 annual subscription to Pandora (NYS: P) is the best $36 he spends all year. Max says he gets about 1,000 songs per year to match his needs (kids, holidays, background music, and his dirty little secret: the love of the pan flute). He sees its Music Genome Project infrastructure as the key to its sustainable advantage. Listeners can personalize their radio stations and get introduced to lots of new music, which keeps them tuned in for the long haul. Max marvels that Pandora hasn't yet optimized its business model and yet is running about break-even right now. Pandora's future is bright, so long as it doesn't alienate its membership base.
Max owns shares of Pandora.
Patrick Martin (writing Fool)
Do you think Microsoft is a has-been, with a forward P/E of 8.8 and a 3% dividend yield? Patrick says think again. Windows Phone 7.5 and Windows 8 feel fresh and new compared to previous offerings, which should breathe some life into the company. And if the surveys that say Windows is the most wanted tablet OS are accurate, then Mr. Softy might actually challenge the iPad's gadget dominance. Patrick also says people shouldn't count Microsoft out of the cloud, either, with products like Azure, Office 365, and Xbox.
Matt Argersinger (membership Fool)
Arcos Dorados (NYS: ARCO) is the largest franchisee of McDonald's restaurants in the world. The company has the exclusive right to operate and franchise McDonald's restaurants in most of Latin America, including Mexico, Brazil, and Argentina. With just 1,755 locations as of the end of 2010, the growth opportunity is huge/vast/ginormous. McDonald's itself has more than 14,000 locations in the U.S. alone! Thanks to economies of scale and increased franchising, Arcos' profit margin should soar over the next few years. It's easy to see why Arcos was Matt's favorite IPO in 2011.
Catherine Baab-Muguira (marketing Fool)
Catherine knows greatness when she sees it. And for Activision Blizzard (NAS: ATVI) , that means good management, a strong brand, and a pipeline of new products. She likes how CEO Bobby Kotick pays close attention to shareholder value, as evidenced in share buybacks and the stock's modest dividend. Catherine's husband waited in a long line to buy Call of Duty: Modern Warfare and then disappeared for the rest of the evening to play the game. That shows the strength of Activision's brand -- and Catherine's patience. But it doesn't end there. Next year will bring another Call of Duty installment and the Diablo 3 release. Yes, it's not great that World of Warcraft subscriptions are declining, but the company seems to be making the best moves possible with that aging franchise. Plus she expects premium subscriptions to Call of Duty Elite and Diablo 3 to take off.
Catherine, Patrick, and David Gardner own shares of Activision. Matt holds options.
Adam Wiederman (marketing Fool)
While everyone is all ga-ga over the new iPhone, it's really Google's (NAS: GOOG) Android system investors should take note of. Android is the dominant smartphone OS and is continuing to grow at a rapid pace. The recent acquisition of Motorola Mobility (with its 17,000 patents) is proof that the company is committed to growing this segment of its business, and will only make its platform stronger. Google remains the dominant force in online search and is taking mobile search by storm. With Chrome, Maps, YouTube, and Google+, Adam sees Google as the go-to source for online activity. What's not to like about that?
David Gardner owns shares of Google.
Phil Biedronski (finance Fool)
Phil's a laid-back Fool from finance and knows where the money flows at Fool HQ. Apparently he's following the money trail in the bedding market, too. His pick is Tempur-Pedic (NYS: TPX) . Phil likes the foam-mattress maker's dominant share of the premium mattress ($1,000+) market. He also knows the growing baby boomer population places more emphasis on the health benefits of a good night's sleep -- and are willing to pay up to get it. As the economy has stabilized and recovered, sales and earnings growth have topped 20% in recent quarters. With a current P/E of just under 23, Phil sees an attractive price for the company.
Alyce Lomax (writing Fool), Elizabeth Venegas (technology Fool), and Max Lancaster (technology Fool)
You may be familiar with Alyce's work on Fool.com and in her socially responsible Rising Star portfolio. Elizabeth and Max work behind the scenes at Fool HQ. Despite their different backgrounds, these two lovely ladies and Max like Whole Foods (NAS: WFM) for many of the same reasons. They see plenty of growth in the company's future. Whole Foods operates about 300 stores today and wants to push that number to 1,000. They love that the company's focus on wellness and nutrition differentiates it from the competition, as does being a good corporate citizen.
Alyce, Elizabeth, and David Gardner are shareholders.
Dan Rittenhouse (writing Fool)
Dan pointed out that while he doesn't own shares yet, he does enjoy Boston Beer's (NYS: SAM) Octoberfest. In fine Foolish tradition, Dan appreciates that founder Jim Koch still heads the company and is the sole owner of its premium shares. Dan also likes the company's passion for quality, like buying back beer from distributors that is past its freshness date. Management didn't build such a strong company by not taking care of its customers. And with less than 1% of the market, Boston Beer has plenty of room to grow.
Matt owns shares of Boston Beer.
Great companies from a motley crew
Wow! What a list of great companies! And these Fools aren't all dyed-in-the-wool investors. They come from diverse backgrounds. However, one thing they do share is the same passion for great companies that Motley Fool co-founders Tom and David Gardner have fostered, and they wanted to pass it along to you to grow your love of investing.
Oh, I almost forgot
I can't leave with mentioning our team leader Eli Robbins, who works in technology, and another member of Fooltopia, Motley Fool co-founder David Gardner. It just so happens that Eli and David like the same company, one that is bringing cleaner-burning natural gas to the transportation industry. To learn its name, simply click here to enter your email address and we'll send you the video presentation, absolutely free.
At the time this article was published The Motley Fool owns shares of Google, Whole Foods, Activision Blizzard, and Boston Beer, and has written calls on Activision Blizzard.Motley Fool newsletter serviceshave recommended buying shares of Whole Foods, Activision Blizzard, Boston Beer, and Google, as well as creating a synthetic long position in Activision Blizzard. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.