Amazon's Next Move Toward Being Indispensable? Live Sports

Featuring Amazon's latest play for your attention, a look at GM's controversial restructuring, stocks that have plenty of room to run, and more ------------------------------------------------------------------------------------------------------------------------------------------------------ [View this email in your browser]( Hi, there! We Fools heard that Stock Up might be landing in your promotions tab. Not to worry, it's a quick fix. On your phone: Click the three dots in the upper right-hand corner, tap "move to", then tap "primary." If you're on a computer, just drag and drop this email into your primary tab. On to this week's regularly-scheduled programming, featuring Amazon's latest play for your attention, a look at GM's controversial restructuring, stocks that have plenty of room to run, and more. – Katie Carrera, Stock Up Editor Amazon is Serious About Live Sports --------------------------------------------------------------- In recent years, Amazon.com ([NASDAQ:AMZN]( showed that it is willing to spend quite a bit of money on the rights to stream live sports events. It agreed to pay the NFL $50 million for 10 Thursday Night Football games in 2017 and may have shelled out more when it renewed that contract. It also signed a deal with the Premier League to stream 20 soccer matches in the U.K., with the broadcast rights costing between $23 million and $38.5 million per game. But Amazon could be about to make its biggest sports move yet. The retail giant reportedly made an offer for 21st Century Fox's 22 regional sports networks, which have an estimated value of around $20 billion. They're available because the U.S. Department of Justice is requiring Disney to divest the regional sports networks shortly after it acquires them as part of its $71 billion deal for many of Fox's assets. (Read: Anti-trust concerns.) Disney wants to get a buyer lined up before it closes to ensure there are no hangups with the rest of the deal. Amazon could be that buyer. So, why sports? Sports remain one of the few must-watch television events. Last year, Sunday Night Football was the most popular regularly scheduled program in the U.S., and 85% of the top broadcasts were sports events. Amazon wants to capitalize on the popularity of live sports to increase the incentives for people to sign up for its Prime service, which includes access to streaming video. Expensive sports rights could be a loss leader for potentially bringing in, and keeping, those valuable customers. But there's another key reason — most sports broadcasts have built-in commercial breaks. Amazon can use that time as a testing ground for its burgeoning ad business. Not so fast Regional sports networks, however, are a different (and arguably more complicated) business than what Amazon has done up to this point. [Read the rest of the story here](. --------------------------------------------------------------- Watch: Warren Buffett's Investment Strategy — AKA More Banks --------------------------------------------------------------- [Warren Buffett's Investment Strategy: More Banks]( Industry Focus: Financials host Jason Moser and Fool.com contributor Matt Frankel, CFP, give a rundown of the bank stocks Berkshire Hathaway added during the most recent quarter and why Buffett and his stock-picking team seem to be big fans of the industry. --------------------------------------------------------------- General Motors' Restructuring, Explained The automaker's decision to halt production at five manufacturing plants in North America, a move that will likely eliminate 14,000 jobs in the United States and Canada, has rocked communities and drawn the ire of President Trump among others. The transparent goal? Boost General Motors ([NYSE:GM]( free cash flow in order to add cushion for the company in the event of a recession. [One of our auto contributors took a look at why GM opted to restructure now](. - GM is worried about a recession: Auto sales are cyclical, and during a recession the pace of sales could drop significantly. Like every automaker, GM has high fixed costs no matter how many vehicles it sells. That means any decline can have an outsized impact on profit margins. CFO Dhivya Suryadevara said that the restructuring could allow GM to remain profitable through a severe recession. Given that the current stretch of economic expansion is growing old by historical standards, a recession seems likely sooner rather than later. - GM wants to lead in future technologies: The company has an aggressive electric-vehicle development program underway and is spending extensively to develop self-driving cars. So far, GM has positioned itself well. The electric Chevrolet Bolt was the first long-range, mass-market-priced vehicle, and the company aims to deploy self-driving taxis in 2019. If forced to cut spending (perhaps because of a recession), GM could fall behind rivals. The shift allows it to preserve funding for these expensive programs. - The factories likely were not profitable: Three of the five North American factories were ones that produced finished vehicles. (The other two are smaller facilities that make transmissions.) A general rule of thumb is that auto factories break even when running at about 80% of capacity — with capacity meaning two shifts a day, five days a week — but with sedan sales falling these factories have had their production cut. For example, Chevrolet Cruze sales have fallen by more than half over the last five years and the Lordstown, Ohio, factory that produces them is only operating on one shift. By moving now, GM is aiming to keep the products it hopes can win the future funded no matter what the economy might have in store. --------------------------------------------------------------- FEATURED PODCAST --------------------------------------------------------------- [Rule Breaker Investing]( Improving Business Through Fair Trade with Paul Rice Host and Motley Fool co-founder David Gardner talks with Paul Rice, CEO of Fair Trade USA, about how the rise of Conscious Capitalism and Conscious Consumerism mean that businesses will thrive by serving all stakeholders, including the environment and those at the very beginning of the supply chain. [Subscribe on iTunes]( --------------------------------------------------------------- These 3 Stocks Have Doubled but Should Still Have Room to Grow We asked a few Motley Fool contributors to offer up their ideas for companies that have found success, but still have plenty of room to run and continue rewarding shareholders. [For more on each of these companies, check out the full article here.]( - Trex Company ([NYSE:TREX]( The eco-friendly decking maker has seen its share increase 217% since the beginning of 2016. Even with incredible gains, Trex is still a growth stock. Last quarter its profits surged 47% on 19% sales growth, putting it on track for another year of double-digit sales and profit growth. - Canada Goose Holdings ([NYSE:GOOS]( The luxury winter outerwear maker went public in 2017 and has seen its share price increase nearly 300%. By connecting directly with consumers, Canada Goose has been able to thrive in a rocky retail environment. Moving to build its own distribution (physical stores and e-commerce) has increased revenue and boosted margins, creating strong momentum. - ConocoPhillips ([NYSE:COP]( The U.S. oil giant's stock has rebounded from its 2016 low amid an oil-price crash. Over the past few years, though, the company repositioned its business so that it could thrive on lower oil prices — giving it plenty of upside. The focus on expanding cash flow could increase shareholder value, even if prices remain volatile. --------------------------------------------------------------- Quick Reads - [Retirement plan balances are going up:]( But the increase in average 401(k) and IRA balances doesn't necessarily mean American's are set for their golden years. - [3 stock ideas for the risk-averse:]( The degree of risk varies with each investment, here are three companies that could be appealing to those with a lower tolerance for it. - [I'll have a burger and fries:]( McDonalds is enjoying plenty of growth, but it's also spending to modernize its restaurants — initiatives that could help propel the stock to new heights. - [Don't wait for a SpaceX IPO:]( Investors have been talking about the possibility for years, but the company recently secured a $250 million loan that makes going public even less likely. --------------------------------------------------------------- TWEET OF THE WEEK --------------------------------------------------------------- [Tweet of the week: How many millionaires do you know who have become wealthy by investing in savings accounts? 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