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February 23, 2001

Closing Market Numbers

DJIA           10439.87    -86.94    -0.83%
Nasdaq          2262.52    +17.56    +0.78%
S&P 500         1245.46     -7.36    -0.59%
Russell 2000     477.15     -0.11    -0.02%
30-Year Bond    98 5/16    +17/32     5.49  Yield

FOOL 50        1,568.28    -11.36    -0.72%

Inside Today's QuickNews

1. Roundup: Foolish takes on Sun, Motorola, Organic Growth and more.
2. Today's Market Movers: Top news and active stocks.
3. Editors' Pick: One great feature you shouldn't miss.

FOOL ON THE HILL An Investment Opinion
Why I Like Organic Growth
By Bill Mann (TMF Otter)

Some of the biggest growth stories in the last decade were actually "growth through acquisition" stories. Bill Mann prefers that companies show proof that they are growing internally as well. Why? Because some acquisitions make companies seem like they are growing faster than they actually are.
FULL STORY

RULE MAKER PORTFOLIO A QuickNews Extra
A Grossly Profitable Business
By Todd N. Lebor (TMF TeeTime)

Gross margins are the first step toward profitability. Makers that command gross margins above 50% usually offer products or services with a high value proposition. Lofty gross margins also provide a cushion for earnings, more control over earnings, and a competitive advantage.
FULL STORY

RULE BREAKER PORTFOLIO A QuickNews Extra
Corporate America's Unsolved Mysteries
By Selena Maranjian (TMF Selena)

Sometimes it's a small piece of a puzzle that stands between a company and its ultimate success. Without the right epiphanies, a promising company may falter. These days companies have some new tools available to help them solve puzzles -- chatty online communities of unofficial experts.
FULL STORY

Sun Slips Up
By Todd N. Lebor (TMF TeeTime)

Yesterday, Sun Microsystems held its regular mid-quarter conference call and announced it had fallen victim to the deteriorating U.S. economy. Earnings forecasts were halved and gross margins will shrink, but management nevertheless remains confident in its competitive position.
FULL STORY

Motorola at a Loss?
By Mike Trigg (TMF Tonto)

Motorola could report its first operating loss in 15 years for the current quarter. While it might be able to blame the troubled economy for now, it's important to look at the big picture. Some businesses that survive difficult conditions should arise with more market share and diverse revenue streams. Motorola has put pieces in place to be one of those companies, but failed to execute once again.
FULL STORY

FOOL PLATE SPECIAL An Investment Opinion
IVAX Attacks Lilly Blockbuster
By Tom Jacobs (TMF Tom9)

The U.S. drug industry lives with this tension: The $500 million and 10-15 years required to bring a drug to market, and the consumer savings from generic drugs. The first filer to the FDA for generic drug approval gains 180 days of market exclusivity. But to do it before expiration of the drug patent owner's rights, the generic must prove patent invalidity. IVAX wants Lilly's $2.3 billion a year Zyprexa before its 2011 patent expiration, and Lilly promises a vigorous defense.
FULL STORY

Take-Two Hopes Oni Takes Off
By Dave Marino-Nachison (TMF Braden)

Big video game companies like Electronic Arts chug out loads of million-selling, heavily marketed games each year. Smaller companies don't have the luxury, so they have to pick their spots with care. Take-Two Interactive hopes its adventure game Oni is one such title it can turn into a franchise lasting years into the future.
FULL STORY

BREAKFAST WITH THE FOOL
Nordstrom Reports, Lowers Forecasts
By Mike Trigg (TMF Tonto)

Clothing retailer Nordstrom beat lowered expectations after the market's close yesterday, attributing the disappointing quarter to slow holiday sales and price cuts to get rid of inventory. The company also said full-year and first-quarter results would fall below forecasts. Management maintains the company is back on track with new strategies in place, but there have been few positive results thus far. Meanwhile, investors will likely wait for several quarters of solid growth before regaining confidence in the company's new direction.
FULL STORY

Today's Market Movers

Ups

Semiconductor maker Siliconix (Nasdaq: SILI) rose $6.06 to $31.13 after Vishay Intertechnology (NYSE: VSH) said it offered to buy the 19.6% of the company it doesn't already own for $172 million. The offer was made in a letter to the Siliconix board and would be done through a tender offer. The deal is expected to be for cash, but Vishay stated that it could offer to exchange Siliconix shares for shares of its own stock.

Software vendor Autodesk (Nasdaq: ADSK) climbed $3 to $36.13 after announcing better-than-expected Q4 results. The company reported pro forma net income of $32 million, or $0.57 per share, compared to $29 million, or $0.48 per share, in the same period last year. That beat the Street's estimate by a nickel. Sales grew to $243 million, up from $227 million. In response to the news, Merrill Lynch analyst Jay Vleeschhouwer raised his rating to "intermediate accumulate" from "neutral."

West Virginia-based bank American Bancorp (Nasdaq: AMBC) was up $5.56 to $19.56 after regional bank Wesbanco (Nasdaq: WSBC) announced it had agreed to acquire the company for $77 million in stock. Shares of Wesbanco dropped $2.50 to $18.75 on the news. Under the terms of the deal, Westbanco will exchange 1.1 shares for each American Bancorp share. The $77 million price is based on a closing price of $22.25 per Wesbanco share. The acquisition has been approved by the boards of both companies and is expected to close in the third quarter.

Downs

Mobile-phone chipmaker Qualcomm (Nasdaq: QCOM) fell $5.13 to $61.81 after indicating that new wireless services might be delayed in Europe, a customer announced declining sales, and an analyst downgraded the stock. First, CEO Irwin Jacobs said phones with 3G standards wouldn't arrive until 2004 or 2005. Second, the world's number-two mobile phone maker, Motorola, issued a warning. Lastly, Deutsche Banc Alex. Brown analyst Brian Modoff cut his rating on the company from "strong buy'' to "buy," citing a spending slowdown for wireless equipment.

Instant photo maker Polaroid (NYSE: PRD) dropped $0.32 to $5.30 after announcing yesterday it fired 11% of its workforce, or 950 employees, in order to cut expenses during slow sales. Half of the jobs will be eliminated in Massachusetts over 12 months. Polaroid will also have to take a pretax charge of $90 million ($60 million for severance packages and $30 million for the write-down of assets). The company also plans to cut its sales, general, and administrative expenses, which grew to 37% of sales in Q4.

Supply chain planning software vendor Manugistics Group (Nasdaq: MANU) declined $2.56 to $33.44 after CE Unterberg Towbin analyst Catherine Moore cut the company's rating to "neutral'' from "buy." Moore's downgrade was based on valuation concerns. A Southwest Securities analyst took a different position today and upgraded Manugistics from a rating of "accumulate" to "buy," citing in part the company's success over supply chain top dog i2 Technologies (Nasdaq: ITWO).

Editors' Pick: One Great Feature You Shouldn't Miss