As we near five years as a real-money portfolio, we have purchased five companies and sold none -- until last month.

Following our December announcement, on January 28, we sold Campbell Soup (NYSE: CPB). That's right. We sold the soup giant. Ma Soup. American icon. Loved by millions. We still enjoy its soup, too, just not its financials.

We sold because the company has added significant long-term debt, failed to grow earnings for several years, and added fees to its once friendly Drip. By mailing our Drip form marked "Sell all Shares," we closed our Campbell account and received a check days later. Our shares sold at $28.695 for a hefty 43% capital loss. Fortunately, we lost only $230 because we'd only bought eight shares before stopping. We'll frequently revisit lessons that Campbell taught us.

On February 5, we bought our sixth company, Paychex (Nasdaq: PAYX). We went to Paychex's investor relations website on January 30, which links you to There, you can enroll in Paychex's Drip free of charge with a minimum $250 purchase. Enrolling took five minutes -- all Drips should be so easy -- and we owned the stock within a few days. We bought 6.857 shares at $36.45 per share.

Valuations for J&J, Pepsi, Paychex, Intel
Following our Paychex purchase, we still have money saved up that we want to invest, as usual, wherever we see the most value in our holdings. (A reminder: We add $100 a month in savings to the port and dollar-cost average into our positions.) We don't have year-end SEC statements from our companies yet, but let's consider our stocks' valuations based on what we know. Put on your glasses, Alfred:

            J&J      Pepsi       Paychex
2/5 Price   $56       $50        $35
EV          $166 b    $88 b      $10.7 b
ttm FCF     $7.2 b    $3 b est.  $233 m
EV/FCF      23        29          46
ttm P/E     30        32          48
EPS. est.   $2.22     $1.66       $0.74*
2002 P/E    25        30          47*
Yield       1.28%     1.15%       1.25%

EV = Enterprise Value
ttm = trailing twelve months
FCF = Free cash flow (operating cash - capital expenditures)EPS. est. = 2002 consensus earnings per share estimate
*year ended May 2002

We bolded each companies' enterprise value-to-free-cash-flow ratio because it's the most important valuation measure that we can use (if you're wondering what it is, we cover enterprise value and free cash flow in our next two Thursday columns -- stay tuned).

Johnson & Johnson (NYSE: JNJ) looks the most attractive. It expects 16% earnings per share growth this year and trades at 23 times trailing free cash flow. At current prices, I'm most compelled to send money to J&J, so we'll send $100 tomorrow.

Pepsi (NYSE: PEP) has risen 15% since our column last April pointed out that it traded at a forward free cash flow estimate in the low 20s. Pepsi's $3 billion free cash flow figure listed above is still an estimate because we don't have year-end numbers, but it should prove accurate and put Pepsi at about 29 times free cash flow. We'd like a lower valuation. We may not get it, but we'll wait for now.

Paychex is new to us, so we'll buy it slowly. It is more volatile than our other holdings, and using its direct stock plan online, we can buy more at will. We'll likely have good opportunities.

Of our other two holdings, Intel (Nasdaq: INTC) didn't have free cash flow last year and today's price begs patience, while Mellon (NYSE: MEL), as we discussed last week, is measured on other matters. Here's how their simple price-to-earnings estimates stack up:

                 Intel      Mellon
2/5/02 Price     $33.7      $36
2002 EPS. Est.   $0.68      $1.95
2002 Est. P/E    49.5       18.4
Yield            0.24%      1.33%

We'll likely buy more Mellon if it goes any lower. For several years, Mellon has traded between 15 and 20 times earnings estimates and our recent look at its business was satisfactory. For now, we'll wait on Intel.

Meanwhile, all of our companies have strong balance sheets. Pepsi's is the only one that we're less than thrilled about.

            J&J     Pepsi   Paychex   Intel    
Cash&Inv.  $8.2     $2.6     $2.5     $11.5
L.T. debt  $2.1     $2.5       $0      $1.0
2001 date  9/30     9/8     11/30     12/30 

(dollars in billions)

Taking a leave of absence
In closing, strike up the band, because here comes a parade of drivel. We close today on a more personal note -- it's Valentine's Day, after all.

I joined the Motley Fool in January 1995 and became a full-time employee in the summer of 1996. After writing typically at least a few columns a week for the last five-plus years, I'm taking a leave to� (what do you think?) write other things.

I recently put out a book of fiction that was almost all written pre-Fool (it's available on Amazon; all of my profits on sales this quarter, Jan. through March, are going to charity), and I'm taking some time away to continue working on a new book.

While I'm gone, Drip Port columns will continue to run. I've written a handful of new columns, lined up in a queue and ready to go, and we're running some "classic" columns that date as far back as 1996 and were updated to run now. We'll continue to add money to the port each month, per the plan, and any investments made will, of course, be preannounced. Also, significant news affecting Drip Port's holdings will be covered by the Fool.

Were I planning on leaving the Fool indefinitely for new adventures, I'd write a heck of a "look back" article on the past seven years and what we've witnessed on the stock market and here at the Fool. Heck, that could be a book in and of itself. But it isn't time for that, if it ever will be.

Today, I need only say that I enjoy this work tremendously. Why? It is thanks to all the smart readers that the Fool is privileged to have, and the amazing community that you all form. It is also thanks to the Fool itself, which is a uniquely caring operation. On top of that, I've been privileged to work with exceptionally bright and kind people all these years. To our readers, thank you for reading and participating at the Fool. I hope that The Motley Fool has helped you with your finances, and will continue to help you. 

Have a wonderful spring. See you -- in "person" again, not just in prewritten columns -- in a matter of months (likely around three). Be Foolish!

Yeah, Canada was robbed. Anyway, starting this week, if you have e-mail questions that you'd normally send to Jeff Fischer, please direct them to, ask in the Fool's Community or visit the Fool's School. As shown in his profile, TMF Jeff owns the stocks in Drip Port. The Fool has a hip-hoppin' disclosure policy.