The 3 Stocks on the MFM Team's Radar
In this segment from Motley Fool Money, host Chris Hill asks analysts Jason Moser, David Kretzmann, and Andy Cross to give us the lowdown on some companies that caught their attention recently. Their picks this week are stun gun and body-cam leader Axon Enterprise (NASDAQ: AAXN), home-improvement retailer Home Depot (NYSE: HD), and Indian online travel agency MakeMyTrip (NASDAQ: MMYT).
A full transcript follows the video.
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This video was recorded on Aug. 10, 2018.
Chris Hill: Let's get to the stocks on our radar. Our man behind the glass, Steve Broido, is going to hit you with a question. David Kretzmann, you're up first. What are you looking at this week?
David Kretzmann: I'm looking at Axon Enterprise, ticker AAXN. This is the company behind law enforcement technology, best-known for the Taser electrical weapons, but they also produce body cams. Most interesting to me, they're moving into software, as well. They have the evidence.com platform, which stores footage that police officers will capture on body cams or from in-car camera systems. They now have over 200,000 accounts on evidence.com, moving them more toward a software-as-a-service subscription business. They're adding more and more layers on top of that. So, an interesting company altogether, growing about 25%, founder and CEO at the helm.
Hill: Steve, question about Axon?
Steve Broido: I'm a shareholder. My question is, when do they move into the private markets? You see a lot of dash cams that people are using, Uber drivers use dash cams. When do they move into the private sector?
Kretzmann: They do have a self-defense business line, but I think the opportunity with law enforcement and military is so big, that'll probably be their main focus for several years to come, at least.
Hill: Jason Moser, what are you looking at this week?
Jason Moser: Talking about retailers that are existing in an Amazon world, the Home Depot earnings come out on Tuesday the 14th. Ticker is HD. Last quarter, they reaffirmed guidance for the year, targeting $120 billion in sales by 2020 with gross margin expansion. I'll tell you, every time I drive by, their parking lot is so full -- no offense, Mac Greer -- it makes Costco jealous. I think you have to love this business. It's a nice 2% plus yield that'll keep on growing.
Hill: Steve, question about Home Depot?
Broido: Do you think Amazon can compete with Home Depot? There's something about, when you need a part, you need something, you feel like, "I'm just going to go to Home Depot and pick it up. I'm not going to order it online."
Moser: I just don't think Amazon is going to be able to compete with Home Depot in that regard. There's something to that, Steve. When you need a joist holder, you need to see exactly what kind of joist holder you need.
Hill: Andy Cross, what are you looking at this week?
Cross: MakeMyTrip, the Priceline of India. One of the largest providers of ticketing and hotel packages in the Indian market. More than a billion people live in India, and they don't have huge penetration in online usage right now. Thinking about what the booking market is, just looking at what's going on with Priceline, MakeMyTrip's bookings are up 70% in the numbers over the last year. Will they continue to see bookings growth? How's that going to be for the revenue stream? In India, the travel penetration is far less than what it is in China. When you compare those two markets, you see a lot of opportunity for MakeMyTrip in India.
Hill: The ticker symbol?
Cross: MMYT.
Hill Steve, question about MakeMyTrip?
Broido: With all of these booking services, how critical is the bundling? It seems like, when you go to Expedia, potentially MakeMyTrip, it's not just a hotel. It's a hotel, plus airfare, plus car, plus this, plus that. How important is that?
Cross: Definitely important. You need to see that across all those properties. Especially in India, the booking market for them needs to continue to grow, and packages are going to be a big part of that, as they are for Priceline, as well.
Hill: MakeMyTrip, Home Depot, Axon. Three very different businesses, Steve. Do you have a stock you want to add to your watchlist?
Broido: I think I might take a look at MakeMyTrip.
Hill: Do you have a trip planned any time in the next six to 12 months or so?
Broido: We're going to New Jersey with the family. I don't think that's anywhere near India, but that's OK.
Cross: Well, if you do make your way to India, you know where to go!
Hill: Never underestimate the staggering drawing power of the Garden State.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Andy Cross owns shares of Home Depot. Chris Hill owns shares of AMZN. David Kretzmann owns shares of AMZN, COST, and Home Depot. Jason Moser has no position in any of the stocks mentioned. Steve Broido owns shares of AMZN, Axon Enterprise, COST, and Home Depot. The Motley Fool owns shares of and recommends AMZN and Axon Enterprise. The Motley Fool owns shares of MakeMyTrip and has the following options: short September 2018 $180 calls on Home Depot and long January 2020 $110 calls on Home Depot. The Motley Fool recommends COST and Home Depot. The Motley Fool has a disclosure policy.
