IMAX (IMAX) Q4 2018 Earnings Conference Call Transcript

Image source: The Motley Fool.

IMAX (NYSE:IMAX) Q4 2018 Earnings Conference CallFeb. 26, 2019 4:30 p.m. ET

Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks:

Operator

Good afternoon, ladies and gentleman. Thank you for your patience in holding. Please continue to hold. Today's teleconference will begin shortly.

Ladies and gentlemen, thank you for your patience in holding. Please continue to hold. Today's teleconference will begin momentarily. [Audio gap]

Mike Mougias -- Vice President, Head of Investor Relations

[Audio gap] today's call have been posted to the investor relations section of our website. At the conclusion of this call, our historical Excel model and guidance information will be posted to the website as well. I'd like to remind you of the following information regarding forward-looking statements. Our comments and answers to your questions on this call as well as the accompanying slide deck may include statements that are forward-looking and that they pertain to future results or outcomes.

Actual future results or occurrences may differ materially from these forward-looking statements. Please refer to our SEC filings for a more detailed discussion of some of the factors that could affect our future results and outcomes. During today's call, references may be made to certain non-GAAP financial measures as defined by Regulation G of the Securities and Exchange Commission. Discussion of management's use of these measures, their definition, as well as reconciliations for such measures, including adjusted net income, adjusted EPS and adjusted EBITDA, as defined by our credit facility, are contained in this afternoon's press release.

With that, let me now turn the call over to Rich Gelfond.

Rich Gelfond -- Chief Executive Officer

Thanks, Mike, and good afternoon, everyone. We believe our achievements over the past 18 months has set the stage for IMAX to have a blockbuster year in 2019. The story is quite simple. Beginning in 2017, we made a series of strategic and tactical decisions to improve the performance of our business from top to bottom.

We committed to increasing the differentiation of The IMAX Experience, more effectively marketing the IMAX brand and tackling our challenges in China. As evidenced by our box office success in 2018 and into the early parts of 2019, these initiatives have started working. While there's still work to be done, the team is committed, energized and optimistic as we start the new year. I'd like to kick off the call by providing some additional color on these core business initiatives and then move on to our positive outlook for 2019.

First, IMAX with Laser. We're extremely happy with the initial reactions from our exhibitor partners and their continued commitments to growing with our laser technology this year. In just the first 18 months of launch, we signed agreements for over 200 systems. We also installed 35 laser systems between June and December across new and existing IMAX locations.

Driving this activity are some of the largest exhibitors of the world, including AMC, Cineworld and Pathé. Many of these signings represent more than just a technology update. They represent an entirely upgraded IMAX consumer experience. For example, in the majority of these signings, our exhibitor partners are creating an entirely new in-theater IMAX experience, including new seating, entryways and branding.

Next, marketing. As we continue to increase the differentiation of our experience and feature more films with IMAX DNA, it has become increasingly important that we effectively educate consumers on the benefits of seeing their favorite blockbusters in IMAX. With that in mind, reinvigorating the IMAX brand was a key objective last year, and we're encouraged with the progress that we made in '18. And as you may recall, we launched a new brand campaign around how much more consumers can see when they experience a blockbuster in IMAX.

Reflecting this experience is the IMAX blue frame, which helps illustrate the 26% more image you can see on key IMAX films. Seeing studios such as Disney and Warner Bros embrace our new complain and allow us to leverage their iconic IP across their marketing campaigns is encouraging and helps underscore our unique position in the entertainment ecosystem. And with the blockbuster slate of IMAX DNA titles ahead, we expect some of the most anticipated films of the year to leverage the blue frame. Now let me turn to our third key initiative in 2018, China.

Last year, we refined our programming strategy by introducing more local language films into the slate, working more closely with key ticketing platforms in China and launching our new brand campaign. I am pleased to note, last year box office in China increased 16% to $337 million, our highest-grossing year ever in China. More importantly, our box office momentum has continued into the early months of '19. During the recent Chinese New Year, we generated box office of $32 million, a 40% increase compared to the 2018 holiday period, which significantly outperformed the industry, which grew just 1% over Chinese New Year.

Our performance is particularly encouraging when you consider that our 2018 Chinese New Year box office was up 75% compared to 2017. Moreover, our attendance over the holiday period increased 16% compared to an industry decline of 12%. On that note, Wandering Earth, the local language film released over Chinese New Year, has become the highest-grossing IMAX film in China of all time, eclipsing Avengers: Infinity War. The film has generated $45 million of IMAX box office, and IMAX screens accounted for roughly 10% of the total box office over the holiday period.

It is encouraging to see the performance in indexing, and we regularly experience -- that we regularly experience on Hollywood blockbusters carry over to a local Chinese film. Given the high production value, the film was tailored to experience it in IMAX, and we believe this film is a game changer for the future local production of science fiction films and will spur additional projects at this level. Overall, through the first two months of the year, our box office in China is already up 61%, and the Hollywood blockbuster season is just getting started. Before I move on, I would like to mention that we participated in Maoyan's recent public offering and are currently in strategic discussions with Maoyan.

Maoyan is the largest ticketing platform in China, accounting for roughly 60% of all movie tickets sold online in the country. This is more impressive when you consider 85% of all tickets in China sold online. Not only does Maoyan provide a great touchpoint to the consumer, it also collects valuable data and analytics on consumer behavior and trends, which can be leveraged more -- to more effectively market future content to consumers. In the second quarter, we're launching a CRM platform with Maoyan in China and currently discussing other strategic alliances as well.

Looking forward, in addition to our strong start around Chinese New Year, we anticipate a blockbuster-filled calendar for the remainder of the year, and our recent Chinese results are an important counterbalance to the seasonality in the rest of the world. We will kick off the Hollywood blockbuster season with the launch of Captain Marvel in March, which is showing very strong pre-sales and tracking data. And then, of course, Avengers: Endgame in April. Avengers, which is one of the most highly anticipated films of the year, was entirely filmed with IMAX cameras and will leverage exclusive IMAX marketing materials.

Later, IMAX screens will see the launch of key blockbusters, including The Lion King, Toy Story 4, Spider-Man, It: Chapter Two and, of course, Star Wars: Episode IX, to name a few. And looking to 2020, we'll see the launch of Top Gun, Wonder Woman 2 and, of course, Avatar. We also believe the diversity of the upcoming slate is a positive for IMAX. There's a healthy mix of superhero titles, animated films and live-action family films.

Overall, this action-packed slate, coupled with the initiatives we've talked about on this call, should drive increased foot traffic through our global network. On the -- one last initiative I'd like to touch on is IMAX Enhanced. As many of you know, we launched a consumer electronics licensing business aimed at improving the quality of in-home entertainment, which includes streaming on premium television sets and sound systems. Sony and Sound United were launch partners, and we've since brought on several additional partners, starting with when we launched the initiative in April.

Tencent and Fandango are now just two of the prominent partners we recently introduced to the program. IMAX Enhanced is exciting for several reasons. It leverages our existing technology and competencies and has the potential to bring IMAX into the home on a larger scale. We'll provide additional updates on this initiative as we introduce more partners into the program.

And finally, I'd like to welcome Megan Colligan to the team, who joins us as President of IMAX Entertainment. Megan brings extensive experience in the media and entertainment space and has deep industry relationships with studios, filmmakers, actors and streaming services. Megan has spearheaded the launch of major global blockbuster franchises, including Mission Impossible and Transformers, and has most recently consulted for a number of companies, including Amazon. We are excited to have her on the team and look forward to her fresh perspective.

Overall, we believe our achievements in 2018 better position us to capitalize on the exciting years ahead, starting with our optimistic outlook for 2019. We further differentiated our technology, increased the awareness of the IMAX brand and forged new relationships with exhibitors, studios, filmmakers and other strategic stakeholders around the world. I'm encouraged by our strong operating and financial performance last year and believe the developments I mentioned on this call will continue to drive more box office dollars through our network and increase the earnings power of our business. With that, I'm going to turn it over to Patrick.

Patrick McClymont -- Chief Financial Officer

Thanks, Rich, and good afternoon, everyone. Before diving into our financial results and outlook for 2019, I'd like to discuss how we think about our recent performance and where the business is trending. There are three things that matter in assessing the quality of any business: growth, margins and returns. IMAX is now producing improving results across each of these metrics.

First, growth. 2018 marked an inflection point of solid growth following a period of flat performance. Box office for the year increased 6%, and revenue grew 4%, excluding Inhumans. We achieved this by focusing on our core business, launching our new brand campaign and refining our programming strategy.

We expect these strategies to bear further fruit as we capitalize on a promising slate of films this year. While we're not providing guidance on this metric, as a framework for 2019, we estimate box office growing in the mid- to high-single-digit range. Next, margins. I'd like to focus on our adjusted EBITDA margin, excluding the impact of the Inhumans project, which makes comparisons difficult.

Our adjusted EBITDA margin peaked in 2015 at 40.5%. For 2015 through 2017, our margins compressed as we made investments in growing our network and pursuing new businesses. 2017 and 2018 were important inflection points as we underwent a cost restructuring and refocused on our core business. Adjusted EBITDA margins expanded in 2017 and again in 2018.

This year, if we are to achieve the mid- to high single-digit box office growth, we would expect EBITDA margins to return to levels achieved in 2015. Finally, returns. We like to look at returns before the impact of minority interest for the public shareholders in the China business. This allows us to assess the returns of the whole enterprise we are managing regardless of ownership structure.

Our ROIC peaked in 2014. Subsequently, this metric compressed due to the growth and margin challenges previously discussed and by our investments, including in new businesses. 2018 was the inflection point for our return profile as the top line grew, margins expanded and we reduced spend on new business. We will continue our discipline on capital spend, and as we look to 2019, we expect to generate consolidated ROIC this year in excess of 10%.

Overall, the evidence is clear that our important initiatives are working as our growth, margin, return metrics are all in solidly positive trend lines. We are confident these trends will continue in 2019, and our return improvement should accelerate as we continue to execute against these initiatives. Turning to our results for the year, I'd like to begin on Slide 3 of our earnings presentation. Starting with our signings activity.

Our sales team delivered 234 signings for the full year, of which 122 were for new theaters. This included agreements for 12 new screens in the fourth quarter and two upgrades. Overall, our signings were diverse in nature, spanning key markets such as China, Japan, India, Germany, Scandinavia and France. We also installed 67 new IMAX systems in the fourth quarter.

For the year, we installed 172 systems, of which 149 were for new systems. In addition to these new installations, we upgraded 23 systems to IMAX with Laser. As of year-end, 37 theaters around the world now feature our new IMAX with Laser experience. Turning to our financial results, which begin on Slide 4.

Total revenue in the fourth quarter was $109 million, resulting in $374 million for the full year. As a reminder, our 2017 results include the Inhumans television series, which contributed approximately $20 million of revenue in 2017. Excluding Inhumans, revenues in 2018 were up 4% compared to last year. During the year, we also generated $208 million of gross profit, which resulted in a 55.5% gross margin rate, up approximately 680 basis points compared to 2017.

Please note, however, that the year-on-year comparison of our gross margin is less relevant due to the negative impact of Inhumans in 2017. Excluding new business, which is noisy, gross profit was up $5.8 million compared to last year. Moving on to operating expenses, which we define as SG&A plus R&D, less stock compensation, was essentially flat to last year, in line with previous guidance. In fact, this marks the third consecutive year of flat OPEX, which is particularly impressive when you consider that our commercial network has increased nearly 50% over that same period.

SG&A-related stock-based compensation for the year was $22.5 million. Additionally, as we disclosed in the 8-K filed back in December, we recognized exit costs and restructuring charges primarily related to the closure of our VR business of $14.4 million. Adjusted EBITDA for the quarter came in at $36.4 million, producing adjusted EBITDA margins of 37%. This resulted in full-year 2018 adjusted EBITDA of $133.2 million and adjusted EBITDA margins of 40%.

This compares to 2017 adjusted EBITDA of $126 million and adjusted EBITDA margin of 37%. These 2017 EBITDA metrics exclude the impact from Inhumans. Net income for the quarter came in at $2 million or $0.03 per share, while adjusted net income, which adds back the previously discussed onetime restructuring and legal charges and stock-based compensation, was $16 million or $0.26 per share. For the year, net income was $23 million or $0.36 per share, while adjusted net income was $58 million or $0.91 per share.

As Rich highlighted, adjusted net income per share increased 47% compared to last year. During the quarter, we also generated $18 million of free cash flow, bringing our free cash flow generation for the year to $53 million. During the fourth quarter, we repurchased 1.2 million shares, totaling $25 million for the full year, and we repurchased 3.4 million shares -- I'm sorry, and then for the full year, we repurchased 3.4 million, totaling $72 million. At the China level, IMAX China also repurchased and retired 2.5 million shares, totaling $6.1 million.

This converts to an average repurchase price of $18.77 in Hong Kong dollars. I would like to now provide guidance for 2019, which will be posted to the IR website at the conclusion of this call. Beginning with installations, between new theaters and upgrades, we anticipate installing roughly 185 to 190 systems during 2019. Of this, we expect to install roughly 140 to 145 systems, in line with where we started the year in 2017 and 2018.

We expect our installations for the year to follow historic patterns and be weighted toward the back half. For the first quarter, however, we expect four less sales-type installations than we had in Q1 last year. For the full year, we expect to upgrade 45 screens to laser in 2019. Between new theaters and the upgrades, we expect approximately 140 new IMAX with Laser systems to be in-service by year-end 2019.

Moreover, our robust backlog provides solid transparency into our ability to maintain a healthy rollout of theaters in the years ahead. With regards to OPEX, we remain actively focused on cost containment and will continue to look for additional opportunities to reduce costs and drive more earnings through the P&L. With this in mind, we expect total OPEX for the year, which includes SG&A, plus R&D, less stock compensations, to be essentially flat compared to 2018. This would mark our fourth consecutive year of flat OPEX.

On the new business side, we do not expect any material impact on the P&L in 2019. Wrapping up the 2019 outlook, SG&A-related stock-based compensation is expected to be around $22.5 million for the year. We also anticipate our full-year effective tax rate to be approximately in line with last year. To close, we are very pleased with the positive momentum we have witnessed over the past year.

Our accomplishments in 2018 strategically position us to capitalize on what is already looking like a strong 2019. And with the robust results coming out of the Chinese New Year, we are pleased with how the year has kicked off. With that, I'll turn the call over to the operator for Q&A. 

Questions and Answers:

Operator

[Operator instructions] We'll take our first question from Eric Handler with MKM Partners.

Eric Handler -- MKM Partners -- Analyst

Thank you very much. Good afternoon.

Rich Gelfond -- Chief Executive Officer

Hi, Eric.

Rich, I wonder if you could talk a little bit about, for your installations this year, how much is going to be China-driven, how much is the rest of the world, and as far as the pace of signings that you're seeing right now or maybe your backlog of signings that could occur in the next 12 months, where are you seeing the most -- where is the busiest or where are the most signings occurring right now.

So I'll talk first about signings, and then Patrick will go into the installation question. On the signings activity, remains very strong, I'd say, at the moment, consistent with the last several years. We have still a significant amount of activity in China going on, and from a lot of players, not just concentrated in one player. The Middle East is looking very strong, and we have a lot of things going on there that I could see coming in fruition in the next couple months.

Japan is still very good, where we've seen some of our highest PSAs in the world. Other Asian countries like Korea, there's a lot of activity. It's pretty good. As I said, trying to think if I'm missing anything East -- Western Europe, there's still things going on.

So kind of consistent with what we've seen before but kind of the same gestalt around it. Patrick?

Patrick McClymont -- Chief Financial Officer

Sure. Eric, on the installations, China looks like it will be 90 to 95 theaters in 2019, and the balance for new theaters up to 140 to 145 will be consistent with what we saw in 2018.

Eric Handler -- MKM Partners -- Analyst

OK. And just -- in case I missed it, how much do you expect to be straight sale, how much JV, how much hybrid? And then I do think it was very interesting, Patrick, that you're looking into ROIC analysis and just curious what you're using for your weighted average cost of capital there.

Patrick McClymont -- Chief Financial Officer

Well, I'll answer the second one first. In the ROIC, I don't need a cost of capital to calculate that, right? It's just the straight ROIC relation. In terms of how we think about deploying capital, I think we've consistently said, as we look at projects, we want to see something -- the theaters, for example, when we think about deploying capital in a JV, we've talked about that we wanted to be on a path to achieving a 15%-plus ROIC. And then on the -- in terms of the mix, we're not providing specific disclosure or guidance around how the mix will unfold for this year.

We've got a combination this year between new and upgrades, and we've got a mix between the different types. Generally speaking, it should be consistent with what we've seen historically, but we won't be giving a specific guidance on that.

Rich Gelfond -- Chief Executive Officer

Right. OK. Thank you.

Operator

Thank you. We'll take our next question from Alexia Quadrani with JP Morgan.

David Karnovsky -- J.P. Morgan -- Analyst

Hi. This is David Karnovsky on for Alexia. Just regarding your box office outlook for mid- to high single-digit growth. Just is there any additional color you can provide on that in terms of breakdown by region or just any guidance you can give around the cadence as we go through the year?

Rich Gelfond -- Chief Executive Officer

Again, we've said before that predicting movies is sort of like predicting the weather. So I think it's very difficult to be specific as to regions or whatnot. But our China business, as I said, is up over 60% for the first two months, and that's really before you've started to open any new Hollywood blockbuster. So that's an area, I think, we expect to see some significant growth.

I mean, Captain Marvel's opening day and date in China on March 8, I believe it is. And the tracking and the presales, as I said, are quite strong. Avengers, on a global basis, it was one of the best movies in -- box officewide in years, and I think you'll see the same global event in that. Lion King is -- some people are talking about that -- those numbers being better even than the Avengers numbers.

So -- and again, global, I'd say. And then you look at Spider-Man, Aladdin, Dumbo, Star Wars. And one of the interesting things about Star Wars is this one actually has an ending rather than a setup for a sequel, and I think that should drive growth there. So we haven't pinpointed it by region, but we've actually seen footage from a number of these movies, and we're feeling quite bullish about the box office.

David Karnovsky -- J.P. Morgan -- Analyst

OK. And then can you just maybe discuss the wider significance of Wandering Earth? What does the success of this movie mean in terms of not only how China's consumers view the IMAX experience but just also local filmmakers?

Rich Gelfond -- Chief Executive Officer

Yes. So I think you have to look -- when you take a step back, China's total box office was around 9 billion US dollars last year. So that means within that ecosystem, when they model out the kinds of movies they can make, they could afford better special effects, better acting, better production values, and so that's the first thing. The kinds of movies that people like to see in IMAX are really higher-quality productions.

The other thing is it's a new genre, so sci-fi hasn't really worked in China until now. So I think when you have freedom to go into more genres and you have more money to have higher-quality box office and you take into effect the fact that IMAX is doing better not only in Tier 1 cities on a movie like Wandering Earth but in the lower-tier cities, I think it bodes very well for that market for us.

David Karnovsky -- J.P. Morgan -- Analyst

OK. Thank you.

Operator

Thank you. We'll take our next question from Vasily Karasyov with Cannonball Research.

Vasily Karasyov -- Cannonball Research -- Analyst

Thank you very much. Good afternoon. I wanted to ask a follow-up question on the box office expectations. If you were to point out the area where you think the most risk is concentrated, which geography would it be and what time period? If not a quarter, but would it be first half of the year, second half of the year, China, U.S.

or other international?

Rich Gelfond -- Chief Executive Officer

There's no such thing as a risk-free movie slate, but I think the kind of global movies there are this year -- and remember, Q1 was, in a way, the riskiest so far because we haven't really opened a blockbuster. Captain Marvel is the first one. And Q2 is back to back to back. Again, I don't want to overstate it because I'm not pretending to predict movies, but I don't really see a big risk across this year in the titles that we're involved with.

I think -- I don't think there's much of a risk in Avengers 2 filmed with our cameras -- Endgame, I mean. I don't think there's much risk in Lion King. I don't know if you saw the recent commercials on the Oscars, but the scope and scale and the look of that is just terrific. As I said, because this is the last of the series, I just don't see a lot of risk in where Star Wars is.

I think, again, there's a comment which I'm going to caveat because it's the movie business. You always could be wrong. But I think across -- these are the kinds of titles that play across regions. I guess the other thing I should mention is, in China, over the summer season, there's a movie being released that was filmed in part with IMAX cameras, and what we've looked at, again, it's harder to predict in China, but the slate looks pretty good over there also.

So I'm just not worried about much right now.

Vasily Karasyov -- Cannonball Research -- Analyst

Great. Thank you.

Operator

Thank you. We'll take our next question from Steven Frankel with Dougherty.

Steven Frankel -- Dougherty and Company LLC -- Analyst

Good afternoon, Rich. These tweaks to the China tactics clearly have paid off. Have you learned anything from that that you could apply either to the rest of the world or to North America? Or do you think these were really China-specific changes?

Rich Gelfond -- Chief Executive Officer

Well, I think there is one that we could certainly apply to the rest of the world, and that's more data analytics. Because of the way the platforms work in China, there's more targeted marketing that's available, and I think we intend strategically to do that in different areas of the world. More targeting -- targeted marketing efforts and more ways to identify audiences, and we're definitely going to do that in the rest of the world as well as China. That would be the one thing I would say.

I'm also hopeful in China. One of the problems in China is that you can't start marketing a movie until it's dated. But some of them were recent movies like Captain Marvel is already dated to go day-to-day with us in China. So we could start the marketing efforts earlier than we could have before.

Patrick's been spending a little more time than I have. Are there any other lessons you think from China that we could apply abroad?

Patrick McClymont -- Chief Financial Officer

Well, I would say programming flexibility is a concept that we've used elsewhere in the world. And particularly, you saw it a lot at the end of the year and the beginning of the year where we had strong performance from movies that had legs, but we also reintroduced certain films. We had great business, for example, with Bohemian Rhapsody in Japan. We just played in that market for a period of time.

I think the approach of being nimble in China has taught us that we can be nimble in every market. We don't always need to do it, right? We only need to do it when we've got these big blockbusters that Rich just went through. But during certain periods, having that flexibility, and now we can point to our exhibitor partners that it works, it delivers more value for them, is an effective strategy.

Steven Frankel -- Dougherty and Company LLC -- Analyst

OK. And maybe some qualitative commentary on what the impact of the A-List has been on your -- or subscription programs, in general, on your business.

Rich Gelfond -- Chief Executive Officer

Well, we've seen our indexing in North America go up for many of the blockbuster movies. I know as a matter of fact, for Alita, we were about 13% of the U.S. box office, which is -- traditionally, our indexing was around 10%. So this -- throughout the last number of movies, we've seen it go up.

So that would be one qualitative thing I would say. I think it brings more people into the IMAX theaters. AMC has shared with me some data, and I don't know if it's public or not, and you can ask them on their conference call in a few days, but it's shown a lot more people are going to IMAX theaters as a result of the A-List program. I also think over time, because many of the exhibitors in Europe have subscription programs in slightly different forms, you'll see more of these programs that I think they'll inure to our benefit.

Steven Frankel -- Dougherty and Company LLC -- Analyst

OK. And you traditionally have given out PSAs. I know you've talked about trying to get away from that, but for consistency's sake, just to finish out 2018, could we have what the PSAs were by region for the quarter?

Patrick McClymont -- Chief Financial Officer

Yes, Steve, we have moved away from that for all the reasons that we've talked about. It's simply an output. It's not how we think about growing our business. That's not how we think about managing our business.

We're very focused on driving as much box office as possible through the network and as much revenue. And on a go-forward basis, as we grow, if we're deploying capital, it's all about return on invested capital. So that's really where we're focused on. So we have moved away from the PSAs.

It's still -- there's data that's available in our historical model, it's out there, but it's not something that we focus on.

Steven Frankel -- Dougherty and Company LLC -- Analyst

OK. And then maybe one last one. As part of the change in China, you were going to be more proactive of kind of pushing the customer toward maybe a hybrid, maybe a sale in a particular place as opposed to be starting with JV every time. How has that kind of mix changed with this new policy? Has there been a material change in what's being installed or what's being signed?

Rich Gelfond -- Chief Executive Officer

Yes, it has changed. I'm trying to get the data here as for the numbers, but I don't have it at my fingertips. But we've definitely moved more away from JVs and toward hybrids and sale deals. And it's partly because we're more discerning in that area, especially below Tier 1 and Tier 2 cities.

But we've been successful at that and increasing the number of sales in hybrids and decreasing the JVs as a percentage of the deals we do.

Steven Frankel -- Dougherty and Company LLC -- Analyst

OK. Great. Thank you.

Operator

Thank you. We'll take our next question from Chad Beynon with Macquarie.

Chad Beynon -- Macquarie -- Analyst

Good afternoon. Thanks for taking my question. First, no one has touched on the lasers, so congrats on the signings and everything that's out in the market now. Can you talk about anything you're seeing from a visitation or a pricing standpoint so far? And could you just kind of remind us what the approach is for your partners that have lasers, if they've adjusted pricing or if they're kind of waiting to see just the initial demand there?

Rich Gelfond -- Chief Executive Officer

It's certainly too early to say. By the way, I misspoke in my remarks. I said we had signed 200 deals in 18 months. It's actually eighth months.

So I just wanted to clarify that. But it's really too early. The number in North America, we only have like 10 open in North America, and we did 35 all year, and most of those were in the fourth quarter. So, I mean, it's just too early to tell.

Chad Beynon -- Macquarie -- Analyst

Is there any adjustment on the economic -- I'm sorry, go ahead, Rich.

Rich Gelfond -- Chief Executive Officer

Yes, there was an adjustment on the economics. On the JVs, generally, we have a higher take rate when it's laser. But, I mean, you just can't use three weeks' data or a month's data to say what a trend line is. So that -- we'll let you know over the next year or so when we see what the impact is.

But especially, it's film by film, you can't tell what the attendance would have been and what it's -- I can tell you, our indexing is a little better, but again, it's such a small number, I hesitate to attribute it to that.

Patrick McClymont -- Chief Financial Officer

The survey data, exit surveys, people going through the experience is overwhelmingly positive. The other partners absolutely are very positive on it, and then the actual end consumers have experienced it. So far, the reviews are very strong.

Chad Beynon -- Macquarie -- Analyst

OK. My follow-up is around streaming platforms. Last quarter, you kind of put a carrot out there kind of talking about what your business can do for some of the streaming platforms, and we haven't heard any update there. So wondering if you still have those views and if there's anything to announce or how we should think about that in 2019 and beyond.

Rich Gelfond -- Chief Executive Officer

So I am in L.A. the last month, and Megan and I have been meeting with most of the streaming platforms and updating our discussions. I think a lot of them are still in the business of figuring out what their strategy is and the ways that they see that coming. The only difference might be that Megan has somewhat of an expansive view on what we could do with the streaming platforms, which would include different forms of alternative content, not just standard showing a movie.

And we've started to tee that up, and we've had different degrees of positive reactions to that.

Chad Beynon -- Macquarie -- Analyst

OK. Thank you very much.

Operator

[Operator instructions] We'll take our next question from Mike Hickey with Benchmark Company.

Mike Hickey -- Benchmark Company -- Analyst

Rich, Patrick, congrats, guys. Great quarter, great year, and definitely a lot of success in China. Sorry if I missed this, but were you specific to any changes that you've made in methodology of film selection? It seems like you missed a few big films before. It seems like you're picking the ones -- the right ones now.

So I'm curious if there's any difference in your approach.

Rich Gelfond -- Chief Executive Officer

Yes, the difference is, well, in China, specifically, during the holiday period, we're programming three films at a time. So even this Chinese New Year, we had three films, of which Wandering Earth was one of them. And it didn't open as the NO. 1 movie on the first day.

But the ticketing platform, Maoyan, which, as I mentioned earlier, we're trying to develop a broader alliance with, the consumers rate the movie on the day it comes out, and Wandering Earth had, by far, the highest rating. And then the exhibitors changed over, and we changed most of our schedule to Wandering Earth and it took off. So that was one way of going about it and changing our approach. I think another reason we got involved in China with Maoyan is we're going to try and get a little bit more data upfront, testing data, to help supplement the way we think about it.

I think in North America and outside China, we have such good relationships with our studio partners that those are discussions with projects years out. And I think as you know, Megan just joined. I think she'll get involved in looking at that. And I think the process will be largely consistent.

And then over time, we'll see if she wants to tweak it, but that's been working pretty well for us.

Mike Hickey -- Benchmark Company -- Analyst

Cool. That's helpful. Thank you. The last one for me.

As I think you had made an effort to get your cameras into the China filmmaking process, just sort of curious how that's developing for you.

Rich Gelfond -- Chief Executive Officer

Well, it's gone pretty well. We're releasing our first film that's used a fair amount of IMAX footage this summer, and we've been talking to a lot of filmmakers. Megan's going over in mid-March to meet with some people. And we're trying to increase the amount of DNA in IMAX films, so that's going pretty well for us.

Patrick McClymont -- Chief Financial Officer

The film is called 800. That's been announced that our cameras are in that. And then there's others that have not been announced yet, but we anticipate announcing sometime this year. So we're starting to make progress over there.

Mike Hickey -- Benchmark Company -- Analyst

Good. Glad to hear that guys. Best of luck.

Rich Gelfond -- Chief Executive Officer

Thanks.

Operator

That concludes the Q&A portion of the call. I'd like to now turn the call over to Rich Gelfond for closing remarks.

Rich Gelfond -- Chief Executive Officer

Yes, I just wanted to sort of follow up on my opening comments. In 2016, we noticed some trends, particularly in China, and we responded with a strategy of more differentiation, launching the Laser product. We raised our marketing spend and raised our marketing game. I think it took a little while to take hold, but a lot of that took hold in '18.

And as Patrick said, you saw margin expansion and revenue growth and different things. We think when you layer that on top of the 2019 film slate, we're in a really good place. And just qualitatively, I would say I have not seen the IMAX organization as pumped as we are in '19. Overall, we feel really good about things.

And thanks, operator.

Patrick McClymont -- Chief Financial Officer

Thanks, everybody.

Operator

[Operator signoff]

Duration: 48 minutes

Call Participants:

Mike Mougias -- Vice President, Head of Investor Relations

Rich Gelfond -- Chief Executive Officer

Patrick McClymont -- Chief Financial Officer

Eric Handler -- MKM Partners -- Analyst

David Karnovsky -- J.P. Morgan -- Analyst

Vasily Karasyov -- Cannonball Research -- Analyst

Steven Frankel -- Dougherty and Company LLC -- Analyst

Chad Beynon -- Macquarie -- Analyst

Mike Hickey -- Benchmark Company -- Analyst

More IMAX analysis

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

10 stocks we like better than IMAXWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and IMAX wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of February 1, 2019

Hot Tech Stocks For 2019

tags:CTXS,KOPN,BLIN ,AMSWA,

Streaming provider Netflix (NASDAQ:NFLX) is undoubtedly one of the most successful growth stories in the technology realm. The company has exceeded 30% year-over-year growth in revenue in each of the last five quarters. Even more impressive is the company's subscriber growth, which has surpassed 19% in every quarter going all the way back to the end of 2012. Those additions have accelerated recently, growing an average of 24% over the past four quarters.

That growth has added up, with Netflix now boasting 125 million subscribers globally. As impressive as the number is, the company may just be getting started -- one analyst believes Netflix will continue its strong membership growth, with subscribers topping 360 million by 2030.

Image source: Getty Images.

Just the beginning

Nat Schindler of Bank of America Merrill Lynch is reiterating his buy rating on Netflix, and raising his target price to $352. "We believe," he said, that "Netflix still has a considerable opportunity ahead if it can achieve reasonable penetration levels internationally. Netflix will face varying levels of competition, regulation, and economic conditions in each individual market it participates in, but its content scale should allow it to become the dominant streaming player in virtually all markets."

Hot Tech Stocks For 2019: Citrix Systems Inc.(CTXS)

Advisors' Opinion:

• [By Logan Wallace]

  Get a free copy of the Zacks research report on Citrix Systems (CTXS)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Ethan Ryder]

  CIBC Asset Management Inc lowered its stake in shares of Citrix Systems (NASDAQ:CTXS) by 5.0% in the first quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The firm owned 19,564 shares of the cloud computing company’s stock after selling 1,023 shares during the period. CIBC Asset Management Inc’s holdings in Citrix Systems were worth $1,816,000 as of its most recent filing with the Securities & Exchange Commission.

• [By Max Byerly]

  Get a free copy of the Zacks research report on Citrix Systems (CTXS)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Ethan Ryder]

  LogMeIn (NASDAQ: LOGM) and Citrix Systems (NASDAQ:CTXS) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.

• [By Stephan Byrd]

  Aviva PLC cut its stake in Citrix Systems, Inc. (NASDAQ:CTXS) by 8.9% in the second quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The institutional investor owned 70,292 shares of the cloud computing company’s stock after selling 6,834 shares during the period. Aviva PLC’s holdings in Citrix Systems were worth $7,369,000 at the end of the most recent reporting period.

Hot Tech Stocks For 2019: Kopin Corporation(KOPN)

Advisors' Opinion:

• [By Joseph Griffin]

  Here are some of the news headlines that may have effected Accern’s rankings:

  Get Kopin alerts: Global Microdisplay Market Report 2018-2023 eMagin Corporation, Kopin Corporation, LG Display Co., Ltd., AU … (ittechnology24.com) Price Performance Review on Shares of Kopin Cp (KOPN): Move 3.12% (parkcitycaller.com) MAMA Cross Spotted in Kopin Cp (KOPN) Shares (fisherbusinessnews.com) Is Kopin Corporation (NasdaqGS:KOPN) Generating Enough Return on Equity? (derbynewsjournal.com) Hot Stocks- Vicon Industries, Inc. (NYSE:VII), Kopin Corporation (NASDAQ:KOPN), Mannatech, Incorporated (NASDAQ … (journalfinance.net)

  Shares of Kopin traded up $0.03, reaching $3.34, on Monday, Marketbeat Ratings reports. The stock had a trading volume of 101,064 shares, compared to its average volume of 263,988. Kopin has a fifty-two week low of $2.80 and a fifty-two week high of $4.60.

• [By Max Byerly]

  Press coverage about Kopin (NASDAQ:KOPN) has been trending somewhat positive on Friday, according to Accern Sentiment Analysis. The research group scores the sentiment of press coverage by analyzing more than 20 million news and blog sources in real time. Accern ranks coverage of companies on a scale of -1 to 1, with scores closest to one being the most favorable. Kopin earned a news impact score of 0.03 on Accern’s scale. Accern also assigned news coverage about the company an impact score of 49.0174305760064 out of 100, meaning that recent press coverage is somewhat unlikely to have an impact on the stock’s share price in the immediate future.

• [By Joseph Griffin]

  News articles about Kopin (NASDAQ:KOPN) have trended somewhat positive on Wednesday, according to Accern. The research firm scores the sentiment of press coverage by analyzing more than 20 million blog and news sources. Accern ranks coverage of publicly-traded companies on a scale of negative one to positive one, with scores closest to one being the most favorable. Kopin earned a daily sentiment score of 0.11 on Accern’s scale. Accern also gave headlines about the company an impact score of 45.9996934088004 out of 100, meaning that recent press coverage is somewhat unlikely to have an effect on the stock’s share price in the near term.

• [By Stephan Byrd]

  Taiwan Semiconductor Mfg. (NYSE: TSM) and Kopin (NASDAQ:KOPN) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, earnings, risk, valuation, analyst recommendations and institutional ownership.

Hot Tech Stocks For 2019: Bridgeline Digital, Inc.(BLIN )

Advisors' Opinion:

• [By Stephan Byrd]

  Get a free copy of the Zacks research report on Bridgeline Digital (BLIN)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Joseph Griffin]

  Here are some of the headlines that may have impacted Accern’s rankings:

  Get Bridgeline Digital alerts: Zacks: Bridgeline Digital Inc (BLIN) Given Average Recommendation of “Buy” by Analysts (americanbankingnews.com) Bridgeline Digital Shares Shoot Ahead on New Customer (baystreet.ca) Bridgeline Digital sees shares soar after its web analytics software welcomes a new user (proactiveinvestors.com) Procurement Services Provider Chooses the Bridgeline Unbound Insights Product for Web Analytics Solution (finance.yahoo.com)

  BLIN traded down $0.12 during trading on Tuesday, hitting $1.04. 455,300 shares of the company’s stock traded hands, compared to its average volume of 548,370. The company has a current ratio of 0.98, a quick ratio of 0.98 and a debt-to-equity ratio of 0.53. Bridgeline Digital has a 12-month low of $0.79 and a 12-month high of $4.45. The company has a market cap of $4.92 million, a price-to-earnings ratio of -4.33 and a beta of 0.14.

• [By Alexander Bird]

  Here are the top performers from last week…

  Penny Stock Current Share Price Last Week's Gain Staffing 360 Solutions Inc. (Nasdaq: STAF) $2.58 96.35% IZEA Inc. (Nasdaq: IZEA) $1.65 85.19% ShiftPixy Inc. (Nasdaq: PIXY) $3.35 78.38% MER Telemanagement Solutions Ltd. (Nasdaq: MTSL) $3.31 41.07% IsoRay Inc. (NYSE: ISR) $0.60 38.64% TransGlobe Energy Corp. (Nasdaq: TGA) $3.74 37.76% Actinium Pharmaceuticals Inc. (OTCMKTS: ATNM) $0.27 26.31% Blonder Tongue Labs Inc. (NYSE: BDR) $1.56 24.58% Bridgeline Digital Inc. (Nasdaq: BLIN) $1.51 24.51% Cel-Sci Corp. (NYSE: CVM) $0.91 24.03%

  While these penny stocks generated strong returns last week, they're unlikely to produce the same level of profit again anytime soon.

• [By Ethan Ryder]

  Headlines about Bridgeline Digital (NASDAQ:BLIN) have trended somewhat positive on Sunday, Accern Sentiment reports. The research firm ranks the sentiment of news coverage by analyzing more than twenty million news and blog sources in real time. Accern ranks coverage of publicly-traded companies on a scale of negative one to positive one, with scores closest to one being the most favorable. Bridgeline Digital earned a daily sentiment score of 0.17 on Accern’s scale. Accern also gave media coverage about the software maker an impact score of 46.3358005969314 out of 100, indicating that recent news coverage is somewhat unlikely to have an impact on the stock’s share price in the immediate future.

Hot Tech Stocks For 2019: American Software, Inc.(AMSWA)

Advisors' Opinion:

• [By Stephan Byrd]

  Get a free copy of the Zacks research report on American Software (AMSWA)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Motley Fool Transcribers]

  American Software Inc  (NASDAQ:AMSWA)Q3 2019 Earnings Conference CallFeb. 20, 2019, 5:00 p.m. ET

  Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks:

  Operator

• [By Stephan Byrd]

  Get a free copy of the Zacks research report on American Software (AMSWA)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

Looking To Invest In A Reliable Store Of Value? Comparing Gold Versus Bitcoin

&l;p&g;&l;img class=&q;dam-image getty size-large wp-image-1128694181&q; src=&q;https://specials-images.forbesimg.com/dam/imageserve/1128694181/960x0.jpg?fit=scale&q; data-height=&q;719&q; data-width=&q;960&q;&g; Horizontal row of silver coins and gold coins.

As the fiscal position of the United States continues to deteriorate at the same time that foreign countries are scaling back on their purchases of U.S. Treasuries, many investors are rightly worried about where they can hide from a potential decline in the value of the dollar and are looking to invest in a reliable &a;ldquo;store of value.&a;rdquo;

A store of value is an asset which can be stored and reliably retrieved at a later time with its purchasing power intact. Some investors seeking this protection prefer gold, and some prefer bitcoin. Some even prefer both gold and bitcoin.

Unlike the stock market, bonds, and real estate, gold and bitcoin share several features in common. Neither generates any income. Both are perceived to exist in limited supply. Both are purchased by investors who are worried about depreciating fiat currencies. But as a store of value, gold is much more likely to be the superior option over the next five to ten years for the following reasons:

&l;/p&g;&l;ul&g;&l;li&g;&l;em&g;&l;strong&g;Properties&l;/strong&g;&l;/em&g;: Gold is tangible, transportable, and can be purchased or sold anonymously. As a precious metal, gold has unique properties due to its rarity, its durability, its fungibility, its beauty, its resistance to corrosion, its divisibility, and its malleability. Gold is easy to hide and store in any number of places, and it is a highly liquid asset. While the threat of gold theft certainly is a risk, losing one&a;rsquo;s gold is difficult, and losing one&a;rsquo;s gold to a hacker is impossible. Unlike gold, bitcoin is not tangible, and, for that reason, it can be sent across the world seamlessly and inexpensively. It can be purchased or sold anonymously through decentralized transactions that require no intermediary. Like gold, bitcoin is also fungible and divisible. However, it is possible to lose one&a;rsquo;s bitcoin by losing the private key of a bitcoin storage address. Bitcoin can also be stolen by hackers, particularly if bitcoin is stored in an exchange. Indeed, epic stories exist where bitcoin holders have lost millions of dollars worth of bitcoin due to ineptitude or hackers or both.&a;nbsp; Just recently, Gerald Cotten, CEO of QuadrigaCX, &l;a href=&q;https://www.forbes.com/sites/dantedisparte/2019/02/05/quadrigacx-how-to-lose-140-million-in-an-instant/&q;&g;died with the passwords of 115,000 investors worth an estimated $140 million in cryptocurrencies&l;/a&g;.&l;/li&g; &l;li&g;&l;em&g;&l;strong&g;Limited Supply:&l;/strong&g;&l;/em&g; Gold&a;rsquo;s supply is limited, supporting its role as a store of value. The worldwide supply of gold increases by about 1.5% each year. Gold&a;rsquo;s unique properties, mentioned above, make gold a superior store of value compared to other precious metals such as silver, palladium, and platinum. Gold has emerged as the clear winner store of value after thousands of years of competition against other commodity currencies. A futures market for gold exists, which increases the supply of paper gold, but futures can be settled with physical gold, limiting the extent to which the futures market can influence the physical gold price over the long-term. Bitcoin&a;rsquo;s supply increases are also limited, in theory, but bitcoin can be &a;ldquo;forked&a;rdquo; by dissatisfied bitcoin developers. A fork is a point of divergence in the blockchain, and at its most extreme can lead to a permanent split of one currency into two. Thus far, bitcoin has begotten multiple children including bitcoin cash and bitcoin gold, and other forks could take place in the future. Besides the possibility of a series of future forks for bitcoin itself, a seemingly endless supply of new cryptocurrencies has been launched in the last couple of years, any one of which could eventually replace bitcoin as investors&a;rsquo; favorite cryptocurrency. Unlike gold, bitcoin has not endured thousands of years of competition against other cryptocurrencies. Finally, a cash-settled futures market for bitcoin has been launched, which means that a limitless supply of fiat bitcoin can be created by futures market participants.&l;/li&g; &l;li&g;&l;em&g;&l;strong&g;History and Stability:&l;/strong&g;&l;/em&g; Gold has been used as a store of value for thousands of years. Since Roman times, the purchasing power of gold has been stable enough that people say an ounce of gold can always be used to purchase a good suit. While one might argue about the definition of what a &a;ldquo;good suit&a;rdquo; is, the idea behind this adage is that the purchasing power of gold has remained constant over a long period. Barring discovery of an enormous deposit on Mars, gold&a;rsquo;s purchasing power should not change significantly. Meanwhile, bitcoin investors are, for the most part, investing in technological disruption. Bitcoin investors are hoping for fantastic profits, expecting that bitcoin will supplant gold and the U.S. dollar as the world&a;rsquo;s pre-eminent monetary asset. If bitcoin bulls are correct, bitcoin will indeed generate fantastic returns. However, this investment thesis makes bitcoin a speculative asset rather than a store of value, which is why bitcoin&a;rsquo;s price went up in price by 1,331% in 2017 only to go down by 72% during 2018. While bitcoin might be a profitable investment in the long-term, bitcoin&a;rsquo;s price is just too volatile to reliably serve as a store of value.&l;/li&g; &l;li&g;&l;strong&g;&l;em&g;Official&l;/em&g;&l;/strong&g;&l;strong style=&q;font-style: italic&q;&g;&a;nbsp;Support:&l;/strong&g; Central banks and governments across the world own gold as a reserve asset. Moreover, since the Financial Crisis, central banks and governments have been buying more gold in order to diversify their currency reserves and reduce their reliance upon the U.S. dollar as a reserve asset. Central bank gold purchasing has accelerated recently, which suggests that the use of gold as a settlement asset among countries is likely to increase in coming years. If central banks are buying gold because they believe gold can serve as a store of value, why should investors act differently? Meanwhile, central banks and governments do not own any bitcoins or any other decentralized cryptocurrency. Indeed, the bitcoin bull case assumes that bitcoin usage will destroy central banks and the banking system. Because bitcoin operates perfectly well without any central authority, even the IMF has acknowledged that &l;a href=&q;https://www.imf.org/external/pubs/ft/fandd/2018/06/central-bank-monetary-policy-and-cryptocurrencies/he.htm&q; target=&q;_blank&q;&g;crypto assets represent a potential threat to central bank money&l;/a&g;. In response, central banks have been considering the introduction of central bank-issued cryptocurrencies, such as &l;a href=&q;https://www.bis.org/publ/qtrpdf/r_qt1709f.htm&q; target=&q;_blank&q;&g;FedCoin&l;/a&g;. It seems impossible that central banks would buy or hold a cryptocurrency that central banks would not issue and control themselves.&l;/li&g; &l;/ul&g;

While bitcoin may be an attractive opportunity for some investors, it should not be considered a reliable store of value in your portfolio.&a;nbsp; With bitcoin, you should only invest what you are prepared to lose if the bitcoin price should go to zero. If bitcoin does not succeed in supplanting gold as a store of value, bitcoin is likely to have little to no value whatsoever. This warning alone prevents bitcoin from being considered a store of value.

Meanwhile, gold does not appear to be going anywhere right now except into the vaults of foreign central banks. With the U.S. dollar likely to depreciate in the coming five to ten years, the dollar-denominated gold price would likely appreciate accordingly. For multiple reasons, gold deserves a place as a reliable and liquid store of value in most people&a;rsquo;s investment portfolio.

&l;em&g;Disclosure:&a;nbsp;This article is for informational purposes only and is not a recommendation to buy or sell a security. Adam Strauss owns&a;nbsp;gold trusts in some of his funds.&a;nbsp; The views are those of&a;nbsp;Adam Strauss as of the date of publication and are subject to change and to the &l;a href=&q;https://pekinhardy.com/disclosures/&q; target=&q;_blank&q;&g;disclaimers&l;/a&g; of &l;a href=&q;http://www.pekinhardy.com&q; target=&q;_blank&q;&g;Pekin Hardy Strauss Wealth Management&l;/a&g; and &l;a href=&q;http://appleseedcapital.com&q; target=&q;_blank&q;&g;Appleseed Capital&l;/a&g;.&l;/em&g;

Deutsche Bank lost $1.6 billion on a single trade involving Buffett, WSJ says

Embattled German lender Deutsche Bank lost $1.6 billion on a single bond trade that involved insurance from Warren Buffett's Berkshire Hathaway, according to The Wall Street Journal.

The bank bought a $7.8 billion portfolio of municipal bonds in 2007, according to the report. Deutsche Bank bought default protection on the bonds from Berkshire the following year, paying $140 million in the transaction.

In the decade after its purchase, Deutsche Bank managers delayed the recognition of losses on the trade, sparking an internal debate among executives and the bank's auditor, the newspaper reported. The trade had become an albatross for the firm, which ultimately chose to sell the bonds at a loss and retire its Berkshire insurance, recognizing the $1.6 billion loss in 2016.

show chapters Deutsche Bank reportedly considered restructuring Trump loans over default concerns    2 Hours Ago | 01:20

The bank's executives debated up until last year whether it should have restated previous earnings based on the wrong-way trade, ultimately deciding not to.

"This transaction was unwound in 2016 as part of the closure of our Non-Core Operations" unit, a bank spokesman told the Journal. "External lawyers and auditors reviewed the transaction and confirmed it was in line with accounting standards and practices."

Read the WSJ story here.

Mcdonald’s Corp (MCD) Position Lessened by Benedict Financial Advisors Inc.

Benedict Financial Advisors Inc. lowered its holdings in shares of Mcdonald’s Corp (NYSE:MCD) by 1.8% in the 4th quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The institutional investor owned 28,903 shares of the fast-food giant’s stock after selling 516 shares during the quarter. Mcdonald’s makes up 2.5% of Benedict Financial Advisors Inc.’s portfolio, making the stock its 7th biggest holding. Benedict Financial Advisors Inc.’s holdings in Mcdonald’s were worth $5,132,000 as of its most recent SEC filing.

Other large investors have also added to or reduced their stakes in the company. Highwater Wealth Management LLC purchased a new position in Mcdonald’s during the 4th quarter valued at approximately $38,000. Strategic Wealth Partners Ltd. grew its holdings in Mcdonald’s by 47.9% during the 4th quarter. Strategic Wealth Partners Ltd. now owns 207 shares of the fast-food giant’s stock valued at $38,000 after buying an additional 67 shares in the last quarter. New Capital Management LP grew its holdings in Mcdonald’s by 33.1% during the 4th quarter. New Capital Management LP now owns 221 shares of the fast-food giant’s stock valued at $39,000 after buying an additional 55 shares in the last quarter. Tower View Investment Management & Research LLC grew its holdings in Mcdonald’s by 20.6% during the 4th quarter. Tower View Investment Management & Research LLC now owns 375 shares of the fast-food giant’s stock valued at $67,000 after buying an additional 64 shares in the last quarter. Finally, NuWave Investment Management LLC grew its holdings in Mcdonald’s by 2,485.2% during the 3rd quarter. NuWave Investment Management LLC now owns 698 shares of the fast-food giant’s stock valued at $117,000 after buying an additional 671 shares in the last quarter. Hedge funds and other institutional investors own 69.20% of the company’s stock.

Get Mcdonald's alerts:

Shares of MCD stock opened at $179.97 on Tuesday. Mcdonald’s Corp has a 52-week low of $146.84 and a 52-week high of $190.88. The company has a market cap of $138.74 billion, a P/E ratio of 22.78, a price-to-earnings-growth ratio of 2.41 and a beta of 0.52.

Mcdonald’s (NYSE:MCD) last issued its quarterly earnings results on Wednesday, January 30th. The fast-food giant reported $1.97 earnings per share (EPS) for the quarter, topping the Zacks’ consensus estimate of $1.90 by $0.07. Mcdonald’s had a negative return on equity of 104.38% and a net margin of 28.18%. The firm had revenue of $5.16 billion during the quarter, compared to analyst estimates of $5.16 billion. During the same period last year, the company earned $1.71 EPS. Mcdonald’s’s quarterly revenue was down 3.3% compared to the same quarter last year. On average, analysts anticipate that Mcdonald’s Corp will post 8.18 earnings per share for the current fiscal year.

The firm also recently declared a quarterly dividend, which will be paid on Friday, March 15th. Investors of record on Friday, March 1st will be paid a dividend of $1.16 per share. This represents a $4.64 dividend on an annualized basis and a dividend yield of 2.58%. The ex-dividend date of this dividend is Thursday, February 28th. Mcdonald’s’s dividend payout ratio is currently 58.73%.

Several research firms have weighed in on MCD. Zacks Investment Research upgraded Mcdonald’s from a “hold” rating to a “buy” rating and set a $208.00 price target for the company in a report on Wednesday, December 5th. Robert W. Baird restated a “buy” rating and set a $200.00 price target on shares of Mcdonald’s in a report on Wednesday, October 24th. Morningstar set a $190.00 price target on Mcdonald’s and gave the company a “neutral” rating in a report on Wednesday, October 24th. SunTrust Banks raised their price target on Mcdonald’s to $200.00 and gave the company a “buy” rating in a report on Wednesday, October 24th. Finally, Piper Jaffray Companies raised their price objective on Mcdonald’s to $194.00 and gave the company an “overweight” rating in a research note on Wednesday, November 28th. Seven analysts have rated the stock with a hold rating and twenty-four have given a buy rating to the stock. Mcdonald’s presently has an average rating of “Buy” and an average target price of $192.35.

In other Mcdonald’s news, VP Robert Lane Gibbs sold 22,036 shares of Mcdonald’s stock in a transaction on Thursday, January 31st. The stock was sold at an average price of $180.95, for a total transaction of $3,987,414.20. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, Chairman Andrew J. Mckenna sold 30,000 shares of Mcdonald’s stock in a transaction on Thursday, January 31st. The shares were sold at an average price of $180.27, for a total value of $5,408,100.00. The disclosure for this sale can be found here. Insiders have sold a total of 129,775 shares of company stock valued at $23,249,437 over the last three months. 0.22% of the stock is owned by corporate insiders.

ILLEGAL ACTIVITY NOTICE: This piece was posted by Ticker Report and is owned by of Ticker Report. If you are reading this piece on another site, it was stolen and reposted in violation of U.S. and international copyright & trademark legislation. The legal version of this piece can be read at https://www.tickerreport.com/banking-finance/4162804/mcdonalds-corp-mcd-position-lessened-by-benedict-financial-advisors-inc.html.

Mcdonald’s Company Profile

McDonald's Corporation operates and franchises McDonald's restaurants in the United States and internationally. Its restaurants offer various food products, soft drinks, coffee, and other beverages, as well as breakfast menu. As of December 31, 2017, the company operated 37,241 restaurants, including 34,108 franchised restaurants comprising 21,366 franchised to conventional franchisees, 6,945 licensed to developmental licensees, and 5,797 licensed to foreign affiliates; and 3,133 company-operated restaurants.

Recommended Story: Do You Need a Fiduciary?

Amazon’s HQ2 Saga Continues While Capitol Hill Targets Buybacks

On this episode of Motley Fool Money, host Chris Hill together with Motley Fool analysts Jason Moser, Andy Cross, and Ron Gross hit on this week's biggest stories in the market. NVIDIA (NASDAQ:NVDA) shares popped 10%, but shareholders should temper some of their excitement. Coca-Cola (NYSE:KO) and Pepsi (NASDAQ:PEP) both reported, and the market really seems to prefer the blue team this time around. Under Armour (NYSE:UA) (NYSE:UAA) is getting its act together but still has some big challenges ahead. Activision Blizzard (NASDAQ:ATVI) remains crushed amid competition and layoff concerns. And, as always, the guys share some stocks on their radar this week. Also, Chris Hill talks with corporate governance expert and movie critic Nell Minow about Capitol Hill's new interest in buybacks, Facebook's (NASDAQ:FB) big governance problems, and some predictions for the Academy Awards.

A full transcript follows the video.

This video was recorded on Feb. 15, 2019.

Chris Hill: It's the Motley Fool Money radio show! I'm Chris Hill. Joining me in studio this week, senior analysts Jason Moser, Andy Cross, and Ron Gross. Good to see you as always, gentlemen! We've got the latest headlines from Wall Street. We'll talk stock buybacks and get an Oscars preview from our guest Nell Minow. And, as always, we'll give you an inside look at the stocks on our radar.

Guys, just when you thought the Amazon (NASDAQ:AMZN) HQ2 nightmare was over! This week, Amazon announced it is dropping the deal to build a second headquarters in New York City due to rising political protests. The one here in Northern Virginia is still on. That means, among other things, Jason, that the second headquarter location close to Ron Gross' house is still very much --

Ron Gross: [laughs] Back on the table?

Andy Cross: And mine!

Jason Moser: It's still on the table. It always struck me as odd that they chose New York to begin with. It just didn't seem like it was really in the center of the conversation. But they went with it, and now they're not going with. It seems like a lot of political back-and-forth. I don't know that I necessarily have an opinion on that. It does seem to me, the political concerns are perhaps a little bit more short-sighted. It seems like in the press that the story is being communicated that Amazon was going to get all of these incentives. It's important to remember, these incentives were based on conditions. There were conditions where they had to meet certain numbers regarding hiring, and then they would receive these incentives. It wasn't like New York was just giving up all of this stuff. There was a performance bonus involved with all of this.

With that said, it does sound like it went down to the final hour and they couldn't make it work, so you just move forward. It ought to bring a few more jobs here to Virginia, I would imagine.

Hill: Like you, I was a little surprised when they split it between northern Virginia and New York City. But Andy, you were saying before we started taping, you weren't surprised?

Cross: Yeah. Actually, according to the Brookings Institution, New York has one of the largest tech forces in America, followed by Washington, D.C. Those two big markets have lots of tech people that Amazon could hire. To me, for this one, it seemed like Amazon was pushing what they wanted, and they got a little pushback and they didn't like it, so they said, "Hey, we're taking our jobs elsewhere."

Gross: Which is their prerogative. I don't think this hurts Amazon in any way. I hope it doesn't hurt those communities that are going to not have the capital investment that Amazon was going to bring. But I don't think Amazon misses a beat.

Moser: Yeah, I think you're right. This doesn't hurt Amazon. New York needs Amazon more than the other way around. It was really interesting to read the stories about all the real estate speculation that began as soon as this decision was made. Judging from what I was reading, real estate agents were taking requests, purchases were being made sight unseen via text message and whatnot. And lo and behold, now it seems like they're not necessarily going to have that same business landscape that they thought they might have. I'm sure there probably are some real estate investors/ speculators that are feeling a little bit of the pinch right now.

Hill: Well, fingers crossed that they pull the trigger quick. I'd really hate to think that in six months, we're still talking about taking this story.

Gross: Yeah, I'm fatiguing on the whole thing.

Hill: [laughs] Alright, let's get to the week's earnings news. Shares of NVIDIA up nearly 10% this week. Fourth quarter profits came in higher for the chip maker. Andy, it's been a rough 12 months for shareholders. I'm wondering, is this a representation that NVIDIA turned things around? Or was this a stop-the-bleeding situation?

Cross: I think it's the latter, Chris, it's stop-the-bleeding. I think investors looked at this and said, "OK." They're talking about how the inventory hangover from the crypto boom, which drove a lot of their gaming sales revenues and growth over the last couple of years, which caused problems when that market suffered last quarter, and the stock fell from $280 down to $130 over the course of a couple of months. They said that will play out mostly through this first quarter. While the growth picture for NVIDIA will probably basically be about flat this year, investors are saying, at least that crypto boom hangover has now passed. We still have the China concerns, but that's a good sign for NVIDIA and for the shareholders as well.

Hill: In terms of NVIDIA's management, safe to assume you like this strategy of downplaying expectations for 2019?

Cross: I do, yes. They're still the leader in these high-end graphics cards. AMD and Intel are coming after them and very competitive. NVIDIA has this lead. Jensen Huang, who owns 3% of the company, more than the $3 billion, the CEO and the founder of the business, continues to innovate. They have some pricing power, although they started saying, "Listen, we're going after the mid-tier pricing." I still think they're downplaying a little bit of the potential across all of their units. Gaming was down but data center was up, visualization was up, automated was up. Their other lines of business continue to drive the growth in NVIDIA. If they can get through the gaming side on the crypto craze from last quarter, that's a good sign for NVIDIA.

Hill: Coca-Cola and Pepsi both out with fourth-quarter reports this week. Both dealing with foreign-currency headwinds, but investors seem more confident in Pepsi's business, Ron. On Thursday, shares of Coca-Cola had their worst day in over a decade.

Gross: Oof. Neither company is knocking it off the ball over the last year, but I think Pepsi, at least the perception is that they've reacted to changing consumer preferences a bit better. Partly through acquisitions like SodaStream and Bare Foods.

While they both lowered guidance, Coke's was more serious. It was based on lower revenue growth, slowdown in emerging markets. Pepsi's were more like currency headwinds, tax rates, making investments to actually grow the business. So I think investors gave Pepsi a pass while Coke got slammed.

Hill: When you think about acquisitions, Pepsi has the Frito-Lay business. They can make acquisitions in the salty-snack industry in a way that Coca-Cola probably is never going to.

Gross: It's not there. They're willing to spend the money, as they have recently with Bare Foods, to go with those changing consumer preferences. People don't like sugar anymore, it turns out, and --

Hill: Whoa, whoa, hold on!

Moser: Hold on a second, now!

Hill: Some of us still like sugar!

Gross: Perhaps some people no longer like sugar as much as they once did. Pepsi is reacting to it. Now, Coke is, too, let's not forget. Coke is actually going to be introducing the Orange Vanilla Coke in the near future. I'm not sure I like the sound of that. I think people like the taste of orange vanilla together. Is that a Creamsicle? Yeah, that's a Creamsicle, maybe that works. But, as we go toward healthier items, I'm not sure that's the way to go.

Cross: Orange Julius, baby!

Moser: As I was sitting there enjoying my Quaker oatmeal this morning and watching Pepsi's stock go up a little bit based on this call, I decided to go ahead and at least look through the call and see if we could get a little bit more information as to what they're going to be doing with SodaStream. I'm still a little bit baffled by that one. Unfortunately, there is no real information. They just basically acknowledged that the acquisition was made in the call. Didn't talk anything about any strategy whatsoever. Maybe that's just new leadership trying to get a grip on the fact that they own this thing now. I'm not sure that Indra Nooyi necessarily had a plan for it, either. But to me, that's going to be the big question of 2019. What are they going to do with that business?

Gross: But, Jason, you can make seltzer in your home!

Moser: [laughs] I understand that, Ron. I still won't do it.

Gross: [laughs] You need more of a strategy than that?

Moser: Hey, I'm a seltzer guy, but I'd rather buy the 12-packs at the store.

Gross: By the way, neither of these stocks are expensive. 19X, 20X, depending what the guidance looks like going forward for both. While Pepsi is outperforming from an operating perspective right now, both could be a decent play.

Hill: One more thing on the acquisition front. We talk about Pepsi and their acquisitions. It was last summer that Coca-Cola bought Costa Coffee for around $5 billion. That's the U.K.-based coffee brand. It seems like they need to make that work sooner rather than later.

Gross: For sure. As we know, many acquisitions actually don't go the way they're supposed to. This is an important one. They took a stake in the energy drink Bodyarmor, which they want to make work. They're thinking about maybe releasing their own energy drink.

Hill: To compete with the one that they bought?

Gross: They've got plenty of them. Maybe they should release a flavored seltzer drink. I don't think we have enough of those in the marketplace right now.

Hill: Shares of Under Armour up a bit this week after fourth-quarter profits and revenue came in higher than expected. Jason, if you're looking for bright spots -- and as a shareholder, I am -- it does look like Under Armour is doing a better job of managing their inventory.

Moser: I agree with that. Going into this quarter, the biggest question for me was revolved around North America. North America has been a real weak point for the business here over the past number of quarters. That doesn't really seem to offer all that much encouragement. To put it into context, Under Armour reported North American sales down 6%. Their competitor, Nike, just reported sales up 9%. We're seeing the tale of two different athletic companies here. Nike's stock has responded accordingly.

With that said, it was ultimately a mixed-bag quarter for Under Armour. There were some things to like about it. We know they do have a very strong international business. Those sales were up 35% ex currency. Gross margin actually up 160 basis points based on not only a little bit of pricing power there, but also wringing out some efficiencies in the business. To your point, they're getting inventory levels back in check very quickly. I attribute that to Kevin Plank taking this seriously, bringing on a CFO and COO who can help him guide this business, take it to the next level. They also hired a chief culture officer, Tchernavia Rocker, who has 22 years of experience at Harley-Davidson. Encouraged, having her on the team. They're building a long-term sustainable place where people want to be. That's been one of the big red flags with Under Armour for a while, is can Kevin Plank assemble a team of people that want to stay there and work for him? It seems like maybe now he's starting to figure out how to do that.

Hill: We talk about pricing power from time to time. It's interesting to think back a few years when Lululemon was starting to rise, had good success selling the high-end yoga pants. One of the things we talked about on this show was, once a Nike and Under Armour get in there at a lower price point, that could spell doom for Lululemon. You look at just Lululemon and their strategy of not really discounting, being more of a premium brand, that appears to have paid off in ways that Under Armour's discounting strategy and being in outlet malls all over the country really hasn't.

Moser: Yeah, there's no question that Under Armour could one day become like Nike in that regard, everybody wearing Under Armour clothing whether it's for casual nature or athletic nature. But really, Under Armour was founded based on that performance equipment. It was the compressed and the wicking shirts and all that. So for them to make that move into being more things for more people is a bit of a trick. They seem to have gotten away from their real specialty to begin with. Again, if they can get back to managing that business, focus on running a tight ship. Growth will come if you make good decisions. But don't make decisions based on just wanting to grow the company. That's what they've been doing these past several years.

Cross: One thing Lululemon has done so well, Chris, since you mentioned it, they've enhanced and built that community in the local areas where they have their stores around yoga and events. That's been very valuable for them, to be able to enhance their brand. Like Jason was saying, the focus for Under Armour is in this area. The focus for Lululemon has been in that area, and it's done really well for them. The stock's done very well, at least relative to Under Armour, in the past couple of years.

Gross: It's interesting from an investor perspective. It's very, very difficult to predict a company like Lululemon's success down the road. There's fashion involved, there's consumer preferences, there's changing wants and desires from consumers. Whereas a company like Nike is a little bit easier to predict the future on because of their bread-and-butter business. That's why I think fashion retail, specialty retail, if you can predict a year or two out in these things, more power to you.

Cross: The golf business for Nike had its ups and downs. It was flying high at one point during the heyday of Tiger Woods, and then it totally collapsed.

Moser: If you rewind 20, 25 years ago, even further, 30 years ago, we look at Nike back then. It was obviously a much smaller operation. Would not have been easy to predict the success they've come to know today. That's all just to say that with Under Armour, I know that Kevin Plank, his goal is to supplant Nike and become the No. 1 brand. But you have to remember, one of the biggest variables in that equation is time. It's going to take a while to get there. You can't discount the fact that Nike's been at it for a long time. Under Armour will be, too.

Hill: Shopify's (NYSE:SHOP) fourth-quarter loss was smaller than expected. I guess that's something, huh, Andy?

Cross: I guess it is. Stock investors in Shopify aren't quite caring so much about the profit picture right now. It's really about the growth. Their sales were up 43% for the subscription solutions. The merchandise volume, which is all the volume across Shopify's platforms that are sold, was up 54% in the quarter. Monthly recurring revenue up 37%. Those are all a little bit lower than last year's quarter. The growth is definitely slowing. But for a $20 billion company, that's to be expected. The operating profit margin expanded a little bit on an adjusted basis. Same with the income per share.

Just look at the Cyber Monday and the Black Friday sales last year. They did $1 billion across those periods of all the merchandise volume for Shopify. This year, it was $1.5 billion. More traffic going through Shopify's platform.

Hill: Is this a business that eventually, when they get to the point of profitability, it's reasonable to expect they stay that way? Certainly in Amazon's past, they had a profitable quarter here, and then it was right back to being losses quarter after quarter.

Cross: That's because of the investments that Amazon's making. Shopify certainly is. I think what investors are seeing is, the growth is still there on the sales line. They're starting to see that profit curve start to show up. When that all starts to take off in the next couple of years, the profit picture should be much healthier, and I imagine much more consistent.

Hill: Shares of Activision Blizzard still hovering around a two-year low this week. Fourth quarter results were not great and guidance for the first half of 2019 was weak. Ron, they've got some great game franchises, but they have got real problems.

Gross: I know my colleague last week, Aaron Bush, had a very forceful opinion about this. But just because it was forceful doesn't make it right. Love you, Aaron! It's really about the changing video game model here. Fortnite is the face of that changing model, but it's not the only game in town there. It's about the free battle royale game and the switch to those kinds of gaming experiences. Activision does not have a strong presence there. They're going to lay off 8% of the workforce. Interestingly, they're going to boost the number of developers by 20% and put them into some of their biggest games like Call of Duty, World of Warcraft, Diablo, but not necessarily move into this battle royale space to go head-to-head against Epic Games and Fortnite and the new Apex Legends, which is taking the world by storm. Activision doesn't necessarily plan to do that.

Cross: Speaking of Fortnite, they launched their merchants tour on Shopify's e-commerce platform last quarter.

Hill: Restaurant Brands International (NYSE:QSR) is the parent company of Burger King, Popeyes, and Tim Hortons. Fourth quarter results looked good at well, two out of three, Jason.

Moser: Getting hungry just from that read-in, Chris. I look at these types of businesses, these big restaurant companies, and I think a lot of them are pretty decent income plays if you can find well-run operations. Restaurant Brands is one of them. It has some compelling brands there. Perhaps maybe second-tier brands, we would consider here, with Burger King and Tim Hortons and Popeyes. But, the numbers are the numbers. Systemwide sales growth was 6.8% for the quarter with Burger King showing the way. Good, healthy mix of store growth and actual sales numbers. Positive comps for all three. Popeyes was closer to flat.

I think when you look at this company big picture, it's around 25,000 restaurants today worldwide. You compare that with something like McDonald's (NYSE:MCD), where they're somewhere in the neighborhood of 37,000, there's clearly the opportunity to grow the footprint there. I'm going to say the C-word here -- China's the wild card. They just signed a master franchise joint venture that's going to result, hopefully, in 1,500 new restaurants over the next decade. That's important to note, the next decade. That doesn't seem like they're going to go in there guns ablazin' and just open 500 stores a year. But there's a big opportunity there.

Hill: You're saying an American business thinks that there's a growth opportunity in China?

Moser: I'm just putting it on the table for listeners! We just put it out there, they get to decide. But I think at the end of the day, Restaurant Brands company pays a 3.1% dividend yield that should continue to grow over time. The nice thing about these restaurants, people have to eat, and most people are out there looking for some kind of a compelling value. They're covering the gamut, right? From Burger King to Tim Hortons to Popeyes. We can't discount the fact that they may roll another concept in there at some point, too.

__

Hill: Later this month, there will be drama at the Academy Awards. But there's already drama in America's corporate boardrooms. So of course, we turn to the only guest who can discuss both. Now Minow is the vice chair of ValueEdge Advisors. She is also the film critic known as the Movie Mom. She joins me now. Nell, good to talk to you!

Nell Minow: Thank you! Glad to be back!

Hill: Before we get to the movies, let's start with the topic of stock buybacks. This is something that comes up on a pretty regular basis on this show, usually in the form of us discussing Company X announcing a billion-dollar buyback plan. It's now gotten the attention of the folks on Capitol Hill. Senators from both sides of the political aisle are coming forward with their plans to limit companies' ability to buy back stock. This is something you just wrote an op-ed on. How big a problem is this and what do you think the solution is?

Minow: I think it's a big problem, and I can tell you the solution is not what senators Schumer and Sanders are proposing, which is Looney Tunes. They want to prohibit buybacks at companies that are not paying $15 an hour minimum wage. This is crazy because, of course, that's very skewed according to the sector and has nothing to do with anything.

The reason that buybacks are a problem is, it's sometimes the case when a very useful financial instrument gets completely distorted and out of hand and starts to cannibalize the financial system. We saw something like that back in 2008. In this case, we have the tax cut bill, which everybody promised us was going to go to strategic investment and R&D and doing better at compensating employees. And, of course, it went straight to buybacks, with last year having a record trillion-dollar buyback number. Most of that was in maybe 20 companies, but still.

It seems to me that the very last thing that I want a board of directors to do with excess cash is to overpay for an acquisition, which of course happens quite often. But my second least favorite thing for them to do -- getting a D rather than an F -- is a buyback. That's basically their way of saying, "We're out of ideas. We have nothing. We have nothing here. We have no ideas of how to improve our products or improve our operations or improve our marketing or do better by our employees. We're just going to give you back the money that you've invested."

My particular problem with buybacks is that companies never adjust their EPS targets. So, really, the insiders are getting a triple-dip. First, of course, they get the increase in the stock price, and they're all large stockholders. Second, very often -- and this has been documented by SEC Commissioner Jackson -- they sell into the buybacks. So, while they're telling the market the stock is undervalued, so it's a great thing to do to buy back stock, they're selling into it, which is certainly at the very least a mixed message. The third thing is, there are two ways of meeting an EPS target: You can increase your earnings or you can reduce the number of outstanding shares. Companies don't reflect that when they do a buyback. They get an extra windfall in their incentive compensation because they've met their EPS goals.

Hill: How much of this could be helped by simply providing more transparency? Again, a lot of companies just come out with their quarterly earnings report and say, "Oh, by the way, we've allocated a couple of billion dollars for a buyback plan over X amount of time." It seems like if they went a couple of steps further in terms of saying, "Oh, by the way, here's how we're going to be evaluating opportunistic buying," because for a long time, Warren Buffett was very clear in terms of essentially setting a book value target for when he would buy back shares of Berkshire Hathaway.

Minow: Exactly. In the piece that you mentioned, I talk about a study that really shifted my timbers, and really is part of what got me interested in buybacks in the first place. The study was a couple of years ago, where they interviewed directors and said, "Explain to me what exactly your calculus was for deciding that a buyback was an appropriate thing to do right now." They all said, "Huh?" They really had nothing. And in terms of their disclosure, as you said, they almost never give any specifics about why they think it's the best possible use for their corporate assets. So, yeah, that would be important.

I'm proposing in my piece two absolute requirements. I would not allow a buybacks unless the companies did two things. One is, as I said, adjusting the EPS target so that you're not getting any double dealing there. The other is, I would not let the insiders sell into the buyback. In fact, I'm very hard line about it, I would not allow them to sell any of their shares or their exercise option shares for up to three years following the buyback just to make sure that their decision about buying back stock is made for the long-term benefit of the shareholders.

Hill: It's not often that the world of corporate governance involves a high level of mystery, intrigue, and blackmail. That's at the heart of Jeff Bezos' allegations against the National Enquirer. If you are a member of Amazon's board of directors, what would you be thinking about these recent developments? What would you be saying when it got to be your turn to speak in the boardroom?

Minow: I would stand up and cheer. I think it's absolutely terrific, what he did was wonderful. It has no effect whatsoever on his ability to lead the company. Pretty much everything was already out. He and his wife had already separated. It was already public knowledge that he had a girlfriend. This other stuff is just trivial. There was nothing abusive about it, there was nothing furtive about it. So, I think it's absolutely fine. Good for him. In the past, when we've seen CEOs get into trouble over extramarital relationships or any kind of relationship, it's been a problem when, for example, they paid them in some way, they brought them on as consultants, or there was some kind of an abusive structure, where he was the supervisor -- I'm going to say "he" because it usually is a he -- something like that. But in this case, what he did in his own time was fine, and he handled it, I thought, in an exemplary fashion.

Hill: You were recently quoted as saying that Facebook needs independent directors. What do you see as the primary problem at Facebook that independent directors helps fix?

Minow: Let's just talk about this first -- is it possible for Facebook to have independent directors as long as the CEO and founder has the controlling amount of the stock? I think it is. It's a little tricky to make that work, but it can happen, and I'll tell you how it can happen.

But the reason I think it's so important is, the single stupidest thing that anybody can do, whether it's an individual or a company, is to enter into some consent agreement with the government and then violate it. That's a slam dunk. Not just for the government to come after you, but also for your shareholders to come after you. It's unfathomably stupid, and that's what they did with regard to their commitment to the government on privacy. That's an issue of tremendous importance to their consumers. I think that Facebook is a lot less sticky than they think. It's already lost a lot of people, and exactly the people they need, the younger people. Basically, it's a lot of grandmas showing pictures of their grandchildren on there now. I think it's a tremendously risky moment for Facebook.

Now, how to have independent directors? There's only one way to do it, and that is to say that the non-Zuckerberg shareholders get to put some number of directors on the board; in other words, that he doesn't get to vote at all on those candidates.

Hill: Next week is the 10th anniversary of Motley Fool Money, which means that you and I first started talking around 10 years ago. When you look back at the world of corporate governance over the last 10 years, what do you think has been the biggest change for the better?

Minow: Biggest change for the better is definitely much more active, engaged, involved and capable board members. Boards have really stepped up to the plate much, much, much more than they did 10 years ago, partly because of changes in the law, partly because of changes in the culture. That has been very encouraging.

Hill: Before we get to the Academy Awards, I want to ask you a question about your job as a film critic. This week, the first teaser trailer for the movie Frozen 2 was released. I'm sure it's going to rake in a billion dollars. Increasingly, we're seeing these tentpole movies, many of which are sequels or remakes. I'm curious, in your job as a film critic, is peak happiness for you when you watch not just a great movie but a great original movie? Or is it just about how good it is, regardless of whether or not it's a sequel, regardless of the source material?

Minow: I'm going to tell you something that I think will really shock you. You've seen The Maltese Falcon, I assume?

Hill: Yes.

Minow: A classic by any definition, one of the greatest movies of all time. Do you know that was the third version of that movie?

Hill: Oh, no, I did not!

Minow: An earlier one starred Betty Davis.

Hill: [laughs] Well, now I have to go find that version.

Minow: [laughs] So, I'm hesitant to say that remakes and sequels can't be good. There's always the examples, The Maltese Falcon or The Godfather 2. Generally speaking, no. And the reason is risk assessment. If you're going to invest $75 million in any project, you want to minimize your risk. By having a known quantity, where the audience is already prepared, already interested, that's something that people like to invest in. That's always going to be something. We're seeing now all these gender-switched versions. That's the new trend. I'm happy to see that. I'm happy to see if they can find something new. I'm happy to see that Mary Astor is going to do a better job in the movie than even Betty Davis, which I would never have anticipated.

But, yeah, I certainly see so much of the same thing over and over and over that I'm always looking to be surprised and always very happy when I am surprised.

Hill: Let's get to the three biggest Academy Awards: Best Actor, Best Actress, Best Picture. As we always do, let's go through who you think should win and who you think will win. With Best Actor, you've got Randy Malik, who played Freddie Mercury. He's a first-time nominee and he's up against everyone else in the category who's either won an Academy Award before or has been nominated before -- Christian Bale, Bradley Cooper, Viggo Mortensen, Willem Dafoe, it's his fourth nomination. How do you see this playing out?

Minow: This is one of the toughest ones to call. I would definitely have said Christian Bale in Vice. He's won the preliminary awards. But he's been so Looney Tunes in his acceptances that sometimes I wonder if the Academy just wants to make sure that it's a good show. I was at the Critics Choice Awards when he gave his long, looping, crazy speech. He's probably still going to win, but that's because I think the rest of the lineup just isn't strong enough to beat him.

Hill: In Best Actress, it looks like Glenn Close is the betting favorite. Who do you think should win and who do you think will win?

Minow: Well, Glenn Close fits into one of the Academy's favorite categories, which is, Why Hasn't She Won An Award Before. She currently has the record for the most nominations without a win. The Wife is a great performance and a good movie. It's not her best performance by any means. But, again, I think she's the strongest one in the category. At the Critics Choice Awards, where I vote and where I was, it was a tie. Glenn Close and Lady Gaga. They turned out to be longtime friends. They were holding each other and weeping, it was very moving. So, that would be my hope for this Oscar, that we have another tie. But right now, it looks like Glenn Close.

Hill: There are eight films nominated for Best Picture. This is another category where it seems like one is the overwhelming betting favorite, and that's Roma. Is it Roma's to lose?

Minow: It's Roma. I'm telling you, people up there with your Oscar pools, this is the closest thing to a sure bet, other than Regina King as Best Supporting Actress, that we have this year. Roma has won all the preliminary awards. I think it may just win the Big Four. It may win director and cinematographer and best foreign, as well.

I am not a huge fan of Roma, so I'm not that enthusiastic about it, but I think it's the clear front runner. If it were up to me, the best film of last year isn't even on this list, and it should have been, and that's If Beale Street Could Talk by the same writer-director who did Moonlight. I thought that was one of the best films of the last five years. If you haven't seen that, I highly recommend it!

Hill: When it comes to the Academy Awards, any category, please fill in the blank. Don't be surprised if ____.

Minow: [laughs] Don't be surprised if Black Panther wins some of the lower-tier awards. They just could win production design, costume, and they certainly deserve it. Black Panther should have been nominated for more awards. It should have been nominated for Best Supporting Actor. I think it's going to pick up some awards for the crew.

Hill: One of the best reasons to be on Twitter is so you can follow Nell Minow and get her thoughts on corporate governance, movies, and a lot more. Nell, thanks for being here. Here's to the next 10 years.

Minow: [laughs] Absolutely! I'll be here. Bye bye!

__

Hill: Our email address is radio@fool.com. Great email this week from Juan Carlos Parra, who writes, "Hey, guys! Just wanted to tell you that I've been listening to your show every day while I'm delivering at work. I'm 22 years old and I just dipped my toe into the world of investing. I figured I could learn a lot by listening to your shows from the beginning, so I've started listening from the first episode of Motley Fool Money. I have to say, it's funny hearing your predictions. It's like I'm from the future."

Gross: That's awesome!

Cross: Well done!

Hill: That's fantastic! And hey, congrats to Juan Carlos for starting his investing journeys!

Moser: That's a great age to begin going!

Hill: It really is! All right, let's get to the stocks on our radar this week. Our man behind the glass, Dan Boyd, is going to hit you with a question. Ron Gross, you're up first, what are you looking at this week?

Gross: All right, Danny, I've got American Tower, AMT, which is a real estate investment trust or REIT. It's one of the largest owners of multitenant communication towers in the world. They provide a critical part of the infrastructure powering the digital revolution that we talk about so much. Great unit economics, really strong competitive advantage. A combination of a nice yield and dividend growth. They've grown that dividend the past 23 consecutive quarters. The dividend yield currently stands at 1.9%.

Hill: And the ticker symbol?

Gross: AMT.

Hill: Dan, question about American Tower?

Dan Boyd: Astute listeners will know that Ron has yet to sway me on any of these "stocks on our radar" segments.

Gross: [laughs] Is there a question here?

Boyd: You bring me communications towers?! Not even the communications towers themselves, but the company that owns them?!

Moser: Is there a -- well, I guess there is a question there.

Gross: It's a REIT, Dan! Did I mention that?

Boyd: You did! I'm still wondering why!

Hill: I think I know how this is going to play out. Jason Moser, what are you looking at this week?

Moser: I guess this is one that you probably want to steer clear of for now -- Zillow, ticker ZG. Earnings coming out on Thursday. I guess my biggest question is, when are these guys going to start reporting some meaningful profitability? I know they want to focus a little bit more now on this new-home segment of the business they have, but it's such a tiny fraction of the business at this point. It's losing money. It's just fluff. Don't even worry about it. I don't even know if it's going to be that much of a driver anyway.

Zillow is still really all about the premiere agent business, and that growth is actually slowing a little bit. We know that we're not going to get any firm numbers on how many agents they have, so focus on the growth in the agents that are spending more than $5,000. CEO Spencer Rascoff mentioned that churn was a bit high in 2018. They hope that it abates in 2019. But still, you look back at the course of this company's public life, and the financials are just atrocious. They have yet to report anything even close to profitable. I can't help but think, if we have a recession or a bad housing market, it's not going to play out well for these guys. I really just want to see some kind of light at the end of the tunnel there on Thursday.

Hill: Dan, question about Zillow?

Boyd: Well, this is great because, Jason, I'm a Zillow shareholder!

Gross: [laughs] Finally, maybe I win one!

Boyd: So, maybe not much of a question as just a request for commiseration, please.

Hill: Andy Cross, what are you looking at?

Cross: Dan, when you're on your next trip to Bermuda or the Cayman Islands, you have to put your money someplace. Go with Bank of N. T. Butterfield & Son, NTB --

Boyd: That's made up.

Cross: It's not made up. One of the oldest banks in Bermuda. They report earnings next week. The stock took a thumping after it reported a decline in deposits and some trouble with their Deutsche Bank Trust acquisition. I'm looking for some insights on how the deposit growth is going and what's going on with the Deutsche Bank acquisition.

Hill: Dan, Bank of N. T. Butterfield?

Boyd: Andy, what does the T stand for in N. T. Butterfield?

Cross: That's a good question, Dan! I know what the N stands for, it's Nathaniel. He's the founder's son from Bermuda when they founded the bank.

Hill: Three stocks. Dan, you got one you want to add to your watch list?

Boyd: I do, Chris, I'm going to head down to Bermuda.

Gross: Oh, come on!

Boyd: Hang out in the sun --

Gross: Now it's personal!

Cross: Collect that 4% yield!

Moser: It really felt like Ron was a shoo-in.

Gross: I was this close!

Moser: Now it's personal!

Boyd: Next time, buddy! Next time!

Hill: Guys, thanks for being here! Our engineer is Dan Boyd. Our producer is Mac Greer. I'm Chris Hill. Thanks for listening! We'll see you next week!