At The Motley Fool, we’re buy-and-hold investors, but before we can hold a stock, we have to pick the stock. So our analysts are always on the hunt for strong new investment ideas. And every week, some businesses stand out from the crowd, which is why every Motley Fool Money episode includes host Chris Hill asking his guests — this time, senior analysts Andy Cross, Ron Gross, and Jason Moser — which companies they have their eyes on, and why.
Their picks for this episode: chipmaker Xilinx (NASDAQ: XLNX), which specializes in field-programable gate arrays; medical device maker Integra LifeSciences (NASDAQ: IART); and Wix.com (NASDAQ: WIX), which offers a platform for easy website creation.
To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. A full transcript follows the video.
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The author(s) may have a position in any stocks mentioned.
This video was recorded on May 10, 2019.
Chris Hill: Time to get to the stocks on our radar. Our man behind the glass, Steve Broido, is going to hit you with a question. Ron Gross, you’re up first. What are you looking at?
Ron Gross: This one’s a little different for me. I have Xilinx, XLNX. Reprogrammable semiconductor chips known as field-programmable gate arrays. Selling into the artificial intelligence market is huge. The cloud data center market is huge. The company has been 150-bagger since it went public in 1990. Raised their dividend every year for the past 14 years, currently around 1.2% yield, so not knocking it out of the park but pretty good. Plus, I think we’ve got some nice appreciation potential. I think this would be a good total return play.
Hill: Steve, question about Xilinx?
Steve Broido: When will I have a robot in my home? That’s a serious question! I’m not kidding! I want a robot!
Gross: Do you have the iRobot vacuum?
Broido: No, I’m talking about a robot, like Twiki from Buck Rogers.
Gross: [laughs] I think in your lifetime, you will.
Hill: Jason Moser, what are you looking at?
Jason Moser: I’ve told you before I’m working on this augmented reality report. Lot of different companies I’ve been looking through. Integra LifeSciences is one of them, ticker AIRT. I’m finding a lot of data to support the notion that AR is going to be a big part of the future of surgery. Integra is a diversified medical technology company supporting a lot of verticals that utilize that AR, including neurosurgery and orthopedics, among others. This is a smaller company, $4.5 billion market cap. That could also be seen as an opportunity really to grow. That’s what I’m digging into for the report.
Hill: Steve, question about Integra Life Sciences?
Broido: How important is the FDA to all these businesses that are doing medical kind of stuff? It seems critical.
Moser: It’s utterly critical. The FDA does wield a lot of power in those relationships.
Hill: I don’t know about any of our listeners, but I’m really hoping after those two high-tech companies, Andy comes up with Potbelly. Just something like, “Yep, I’ve got a stock on my radar. They make sandwiches.” Andy Cross, what are you looking at?
Andy Cross: Not quite. Steve, if you’re looking to build your website, look at Wix. They report earnings next week. It provides services for individuals, more than 140 million registered users, to create websites. They have an ad business. They also have a subscription business as well. Registered users were up 19% last quarter. Premium subscribers grew 24%. I’m looking for that to continue to drive the revenue growth more than 25% in the quarter.
Hill: Steve, question about Wix?
Broido: Who is their biggest competitor right now?
Cross: What’s really interesting is, they’re more on the low-end side.
Gross: My son used it last week for a project!
Cross: There we go, Ron, yes! Whereas Shopify and Shopify+ are much higher-end, with a little bit higher tools that shop owners can use to provide commerce services. Wix is starting to play more and more into that business, but they’re a little bit more in the lower end with their ad business and their subscription business.
Hill: Steve, three very different businesses. Wix, Xilinx, Integra Life Sciences. You have one you want to add your watchlist?
Broido: The only one I actually understand is Wix.
Gross: [laughs] That’s fair!
Cross: [laughs] Perfect!
Hill: Is your son looking to sell stuff through this website? Or is it just for school?
Gross: It was a school project. We needed to rebrand something, so he rebranded the Washington Redskins, and had to create a new website around that.
Hill: Nice! He should expect a call from Tribune Media Services so that they don’t have a redux of what happened with Tronc.
Gross: [laughs] Understood!
Andy Cross has no position in any of the stocks mentioned. Chris Hill has no position in any of the stocks mentioned. Ron Gross has no position in any of the stocks mentioned. Steve Broido owns shares of SHOP. The Motley Fool owns shares of and recommends IRBT, SHOP, and Wix.com. The Motley Fool recommends Xilinx. The Motley Fool has a disclosure policy.