The growing hubbub surrounding the potential sale of Hershey -- now possibly to Switzerland's Nestlé -- is enough to worry chocolate lovers throughout the U.S. as much as the threat of a looming Major League players' strike gnaws at diehard baseball fans. When you're talking about Hershey, you're talking about the addiction of choice for millions of us. Not to sound jingoistic, but it would just seem un-American for the company to have its headquarters overseas. To all the parties involved, please exercise caution and a little bit of reason.
The Motley Fool 50, sugared up after eating 45 Hershey kisses this afternoon, gained 0.36% today.
In today's Motley Fool Take:
- Nestlé Offers Hershey Kiss
- Quote of Note
- Borders, Barnes & Noble Book Profits
- Shameless Plug: 60-Second Guides
- Investing for Life
- Discussion Board of the Day: Retirement Investing
- Quick Takes: Amazon.com, Identix, Northrop Grumman, Alkermes, more
- And Finally...
Nestlé Offers Hershey Kiss
At first taste, it seems like a sweet deal: Switzerland's Nestlé is reportedly offering about $11.5 billion, or $82 a share, for America's Hershey Foods
But all is not well in Chocolate World. Hershey Trust Co. owns 77% of the company's voting stock, and it decided back in March to put Hershey up for sale. The Wall Street Journal says the trust is now facing stiff pressure from local officials to avoid unloading the storied candy maker. In fact, Pennsylvania Attorney General Mike Fisher is pushing for a temporary restraining order that would block it from selling.
But the Journal also says some of the trustees felt pressure earlier from Fisher to sell Hershey. According to a Journal source, "He started the fire so he could be the one to put it out." At any rate, the story indicates some board members are having second thoughts about the whole NutRageous thing.
Meanwhile, back across the Atlantic, the possible deal is leaving a bitter taste in Swiss investors' mouths. Nestlé may be offering too much for Hershey's sweet Kisses, and its shares lagged the market at midday. And with Hershey trading at $77 -- well below the reported $82-a-share offer -- it's clear American investors may also be viewing this deal as a Dud.
Quote of Note
"You owe it to yourself to be the best you can possible be -- in baseball and in life." -- Pete Rose, former baseball great and all-time hits leader
Borders, Barnes & Noble Book Profits
Surely, you've spent some quality time with yourself, sipping coffee in the café attached to the nearest Borders
Last week, both book retailers reported second-quarter results. Borders, which operates its namesake stores as well as Waldenbooks, reported earnings of $0.04 per share, up from essentially breakeven a year ago. Barnes & Noble reported earnings of $0.02 a share from its various bookstores -- Barnes & Noble, B. Dalton, and Scribner's, among others -- and its stakes in barnesandnoble.com
Let's take a look at the quarterly numbers of the companies, side by side:
Borders Barnes & Noble Market cap $1.50 bil $1.60 bil Sales $763.60 mil $1.16 bil Earnings $3.40 mil $1.40 mil Comps -1.0% 0.3% P/E 13.8 24.9 1-yr. return -20% -45%
What do these numbers tell us? First of all, they show that, although Barnes & Noble has 35% more sales than Borders, the company hasn't been able to convert that to more profits. This is due to the losses Barnes & Noble has taken from its investments in such enterprises as iUniverse.com, Book magazine, enews inc., and Indigo Books and Music.
Borders sticks to books and music and has kept costs low. It even relies on help from Amazon.com for online sales. On the other hand, barenesandnoble.com is losing money.
Despite the better performance of Borders, the market still gives Barnes & Noble a higher earnings multiple. Does the potential of GameStop (which experienced 32% year-over-year sales growth), barnesandnoble.com, and its stable of bookstores warrant the premium? Interested investors should turn a few more pages to find out.
Shameless Plug: 60-Second Guides
Sixty seconds can take you farther than you think. None of us has enough time to do everything we want, and, unfortunately, we put off too many financial decisions. Have you wanted to open up a brokerage account, sock away some money in a CD, start an IRA, or just get out of debt but not had the time to figure out what to do? Don't be daunted. You can take on all these and many more (are you looking for a mortgage?) quicker than you think. Our 60-Second Guides are here to make it easy, so stop procrastinating!
Investing for Life
Adelina Domingues passed away over the weekend. Unless you're a human-facts-and-feats buff, the name probably doesn't ring a bell. The Guinness Book of World Records certified Adelina as the country's oldest living person. The former seamstress was 114 years old when she died in her sleep at a San Diego, Calif., nursing home on Saturday.
Most of us will be hard-pressed to make it past the century mark, but even if we don't, will our savings be there to outlive us? See, many of us fail to take retirement planning seriously. Whether you're living paycheck to paycheck or you're simply a procrastinator, it's as easy as it is costly to put off the future. The fact that Adelina lived 50 years beyond the typical retirement age may be an extreme example of life after retirement, but it's something that can't be ignored.
We have yet to hear about Adelina's personal finances, but you never know.... Oseola McCarty seemed like an ordinary washerwoman of meager means until she donated $150,000 to the University of Southern Mississippi. Her thrifty years of living below her means paid off handsomely, when she used her earnings to save and eventually invest in the stock market.
Compounding is a beautiful thing, if you're not on the borrowing end of the math. Just as importantly, the differences based on return rates widen with every passing year.
If Adelina had earned a 3% annualized return on a $1,000 investment when she was just 24 years old, it would be worth $14,829 right now. But if that rate of return were to double to 6%, that amount would've grown to an impressive sum of $218,447. The stock market has an even kinder historical rate of return. A realistic 10% annualized return on that $1,000 investment 90 years ago would be worth a whopping $7.8 million now.
Granted, taxes and inflation eat away at those ultimate totals, but that makes for an even stronger argument to save and invest early and often. Youth doesn't last forever. For some, like Adelina, retirement might seem like a never-ending story. Take your budgets seriously. You may not have the luxury to live through three different centuries, but you never know what the future has in store for you.
Discussion Board of the Day: Retirement Investing
Is your retirement planning up to snuff? What are the differences and tax implications of the various options today? Doesn't a better tomorrow start with a smarter today? All this and more -- in the Retirement Investing Discussion Board. Only on Fool.com.
Shipping just got cheaper at Amazon.com
Trying to put a finger on the best way to improve homeland defense, Identix
If the "p" is silent in pharmaceuticals, does that make it harm-aceuticals? Alkermes
The mutual fund industry's carnage last month was real. It was a record outflow of green as more than $49 billion was redeemed from stock mutual funds. Bond funds took a good chunk of that back in, with $19 billion in new money. Back in September, what was then a record outflow of $30 billion proved to be a healthy contrarian indicator as the market bounced back. With overall gains in the market the last few weeks, the contrarian indicator may be two for two over the past year.
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