The 2 Stocks on the MFM Team's Radar This Week
In this segment of the Motley Fool Money podcast, host Chris Hill, Million Dollar Portfolio's Jason Moser and Matt Argersinger, and Total Income's Ron Gross about the companies they're most intrigued by this week, and why.
One recommendation is spice king McCormick (NYSE: MKC). But in a first for the podcast, we have two Fools showing up independently with the same stock: REIT Retail Opportunity Investments Corp. (NASDAQ: ROIC).
A full transcript follows the video.
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This video was recorded on Jan. 19, 2018.
Chris Hill: Let's get to the stocks on our radar. Ron Gross, you're up first. What are you looking at this week?
Ron Gross: I'm going to go with Retail Opportunity Investments Corp., ROIC. They're a real estate investment trust that owns and operates neighborhood shopping centers. They've struggled, along with other retail REITs, because people are, quite frankly, a little bit afraid of retail right now. But they're focused on wealthy West Coast neighborhoods. They're anchored by grocery stores. I think that bodes well for them. Stuart Tanz, CEO, is a top-notch guy. They have a 97% leasing rate. They've increased their dividend every year for the past seven, and the yield is now 4%, which is not too shabby.
Hill: Steve, we have a retail REIT. Question?
Steve Broido: My question is, what product would you never buy online, would only buy in a store, Ron?
Gross: A hot tub.
Hill: You wouldn't buy a hot tub online?
Gross: I don't know. A tractor?
Matt Argersinger: Those are good answers. I would have struggled.
Gross: A hot tub and a tractor.
Broido: Combine them both for a true adventure, I think.
Hill: Jason Moser, what are you looking at this week?
Jason Moser: I'm going to go Emeril on you this week and kick it up a notch with spice maker McCormick. Ticker is MKC. They have earnings coming out next Thursday, the 25th. We have this company on the watch list in MDP still, because it does fire in on a lot of the qualities that we look for in good businesses: strong competitive position, capable leadership, big market opportunities. And I love the value prop they always spin in that they're responsible for 10% of the cost of the food that you're eating but 90% of the flavor.
Gross: Mmm, flavor.
Moser: And I'm OK with that. The stock has kind of been in a little bit of a state of limbo since the acquisition of RB Foods. I'd like to see how that's all coming together. And if for some reason, we get a little bit of an opportunity, we might be giving this thing a closer look.
Hill: You're really hoping they miss, don't you?
Moser: I wouldn't mind at all.
Hill: Steve Broido, question about McCormick?
Broido: We were talking about Amazon potentially moving to Ron's neighborhood. McCormick is a Baltimore company. Are they doing enough to promote Baltimore? You don't really associate McCormick with Baltimore.
Moser: I don't think they are, Steve. I tell you, we went to that factory in Hunt Valley a few years back, and it's off the radar. I think they could be doing a little bit more.
Hill: Do they have Old Bay? When I think about spice and Baltimore, that's it right there, that's the whole ball game.
Moser: They have it all, Chris.
Hill: Matt Argersinger, what are you looking at this week?
Argersinger: This has got to be a first and only, but I have the same exact stock as Ron --
Gross: What?
Argersinger: -- across the table. Retail Opportunity Investment Corp., ROIC --
Moser: Ron hacked Matty's personal computer.
Argersinger: [laughs] We did not collaborate on this.
Gross: No.
Argersinger: But everything Ron said. Plus, we just added it to our Best Buys Now in Million Dollar Portfolio. And REITs, by the way, have sold off recently. They're one of the few areas of the market that aren't participating in this historic stock market rally. So yeah, I like ROIC a lot.
Hill: Steve Broido, do you happen to have a second question about ROIC?
Broido: It's funny you mention it. I have the exact same question for Matty.
Argersinger: Oh, no!
Broido: What product would you only buy at a place that's a shopping center or something like that?
Argersinger: Oh, gosh, I don't know. I can buy everything online nowadays. Maybe a hot tub, like Ron said?
Gross: You're going to double up on my answer also?
Argersinger: Maybe a car?
Gross: There you go!
Argersinger: I don't think I could buy a car online, either. I have to see it and drive it.
Hill: Steve Broido, two stocks. [laughs] You have one you want to add to your watch list?
Broido: I think I'm going with McCormick, based on principle here.
Hill: Anything you'd only buy in a store, Steve?
Broido: Usually shoes -- well, shoes I've bought online as well, but I always do better buying shoes in the store.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jason Moser has no position in any of the stocks mentioned. Matthew Argersinger owns shares of Amazon and Retail Opportunity Investments. Ron Gross owns shares of Amazon and Retail Opportunity Investments. Steve Broido has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Retail Opportunity Investments. The Motley Fool recommends McCormick. The Motley Fool has a disclosure policy.
