Welcome to my laboratory. The mad stock doctor is in, and he's about to give life to . Frankenstock!
Yes, I'll be working late in the workshop tonight, fiendishly cutting and pasting attributes from different companies to form one monster of an investment. Don't worry; this won't be too messy. You won't slip on any spilled brains, and you won't get struck by a bolt of errant lightning -- I promise.
The CEO -- Vince McMahon
Let's start with the CEO. Who would make a great chief, you ask? How about Vincent Kennedy McMahon, the man who runs things over at World Wrestling Entertainment
Why are you looking at me like that? You think I've lost my mind, don't you? Here's what I like about Vince -- the man is a fearless entrepreneur. He does what he needs to do to enrich the prospects of his media company, even if that means he has to enter the squared circle and perform some of the scripted matches himself. He doesn't let Wall Street push him around -- he does what he thinks is best for the company, even if it means entering the risky movie business. He keeps a close eye on the compensation he pays to talent, preferring not to overpay, something that Viacom's Sumner Redstone has recently learned. And he has turned a form of entertainment that once had the reputation of being a goofy waste of time into a global phenomenon.
The cash flow -- like KO
I own shares of Coca-Cola
According to the company's latest 10-K, Coca-Cola took in $5.5 billion, $6.0 billion, and $6.4 billion in operational cash flow for the years 2003, 2004, and 2005, respectively. The total amount of capital expenditures and acquisition investments made in those same years adds up to $3.7 billion. That equals a lot of free cash flow, my fiendish Fools.
The earnings growth -- Google
We want earnings growth. For this attribute, I'll take Google's
The search-engine giant booked $105.6 million of net income in 2003. In 2005, the tech star recorded well in excess of $1.4 billion of GAAP green. Hey, now! That's juggernaut growth. Google is, of course, the brand in search -- it might not have a truly defendable moat, since anyone can build a search site, but you can't ignore its intellectual capital's ability to monetize information retrieval. (You might have a problem with its YouTube purchase, however.)
The dividend growth potential -- Mr. Softy
There are many stocks with great dividend growth potential, but one always shoots to my mind first -- Microsoft
The prospects -- like video game publishers
If I were to pick the industry the company would be in, I'd pick video games. Why? Well, if you read the Fool, you know we've been fans of this particular investment thesis for a long time now, since companies like Activision
The long-term stock performance -- like Johnson & Johnson
Check out a long-term chart of Johnson & Johnson
It's alive!
There you have it -- my Frankenstock. Don't be afraid of it, and don't go chasing it up a windmill, either. There are plenty of Frankenstocks out there that occur naturally. Keep researching the markets to find them. As for me, I will return to my laboratory and see what other insane creations I can whip up.
Coca-Cola and Microsoft are Inside Value recommendations. Activision and Electronic Arts are Stock Advisor selections. Take the newsletter that best fits your investing style for a 30-day free spin.
Fool contributor Steven Mallas owns shares of Activision and Coca-Cola.
The Motley Ghoul's Tricks or Treats represents the opinions of each Fool only and should in no way be taken as the opinion of either The Motley Fool, Inc., or any company in question, or as representative of anyone or anything other than that specific Fool's thoughts. So do your homework, and review The Motley Fool's disclosure policy .
