A survey published today in London's Daily Telegraph newspaper says Britons spend an average of 54 minutes a day gossiping at work. In addition, they flirt an average of 16 minutes, spend 14 minutes surfing the Web, nine minutes emailing friends and family, and three minutes shopping online.
The Motley Fool 50 didn't do too much today, either, falling 0.77%.
- Flying Donuts and Beanie Babies
- Quote of Note
- The Next Panera?
- Shameless Plug: Motley Fool Credit Center
- Chopping Down the Learning Tree
- Discussion Board of the Day: Help With This Stupid Computer!
- Brocade's Beating
- Quick Takes: Martha Stewart Living Omnimedia, Wal-Mart, Household International
- And Finally...
Flying Donuts and Beanie Babies
Krispy Kreme Doughnuts
While chewing on today's news, I was reminded of a story I wrote on Krispy Kreme 15 months ago. At the time, I was puzzled how a company whose future growth rate was so well known could carry such a high valuation (its trailing P/E ratio was over 100). Today, the stock is 20% higher and its P/E has drifted down to 68.
I compared the donut king with the auction king, eBay
True, they would be in for quite a fall if their earnings took a hit similar to the one so many tech companies absorbed over the past couple of years. Both are volatile and risky, and are not recommended for new or conservative investors. But the lesson here is that great long-term business performance can provide its own margin of safety.
-- Rex Moore (TMF Orangeblood)
Quote of Note
"It has become appallingly obvious that our technology has exceeded our humanity." -- Albert Einstein
The Next Panera?
Today, shares of Cosi
The creative New York-based restaurant concept is an interesting mix of coffee hangout, sandwich shop, dessert parlor, and late-night bar. Those who've visited one of its 79 locations, concentrated on the East Coast, can testify to Cosi's great food and inviting atmosphere. Imagine the coffee shop in Friends, but with mood lighting and an extensive menu.
Restaurants are rarely good investments because of intense competition and high capital costs for expansion -- but Cosi has enough differentiation to make it worth a Fool's attention.
Here's a quick rundown of the company's financial position:
On a post-IPO basis, it has 16.6 million shares, which at $7 yields a market cap of $116 million. With trailing annual sales of $78.7 million, it has a price-to-sales ratio of 1.47. That may look cheap compared to Panera Bread
Back in 1998, Panera was in a similar position in its growth curve and still spilling red ink. But through store expansion over the past three years, Panera has become profitable, and since then the stock has appreciated tenfold. Could Cosi do the same? Yes, but we'd take a wait-and-see approach to this business.
Weakening U.S. consumer spending doesn't bode well for restaurants in general. Also, after six months, insiders will be filing to sell some of their shares, which could weigh on the stock. In addition, from a fundamental perspective, we'd wait for Cosi to generate positive cash flow from operations before giving the stock any further consideration. That's probably at least a year away, during which time a Fool can better get to know management and follow its ability to execute on its growth plans.
Shameless Plug: The Motley Fool Credit Center
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Chopping Down the Learning Tree
Want an exciting job working with computers? Want to make big bucks in the growing field of information technology (IT)? Want to acquire new tech skills, land the trophy wife (or hubby), and have potential employers lining up to hire you? Well, then, go back to sleep. Dreams work better that way.
IT training specialist Learning Tree
This may come as a shock to you. If you figured that your nephew who's taking time from his day job to become a Microsoft
eWeek is reporting that corporate budgets will be spending even less -- possibly as much as 15% less -- on IT next year. The industry's attrition rate has also shrunk over the past few years as those who have been able to find work stick around.
So, it's no surprise to see the top line at Learning Tree plummet by 23% to $174.2 million in fiscal 2002. The IT dream has become barricaded beachfront property. Companies aren't spending to update or retrain their employees, and those looking to upgrade their abilities to "better deal" with their current jobs just don't see the near-term payoff.
However, let's not completely diss the retooling and re-schooling of the country's workforce. More diversified adult education establishments such as Corinthian Colleges
While upgrading career skills has been a sound practice for employees and a sound investment for Corinthian and Apollo shareholders, not everyone is moving to the head of the class. Learning Tree's bark is worse. Then IT bites.
Discussion Board of the Day: Help With This Stupid Computer!
How good are your computer skills? Need help? Care to share the help? All this and more -- in the Help With This Stupid Computer discussion board. Only on Fool.com.
The market's punishing Brocade Communications
What's behind this brutality? A lowered first-quarter sales and profit outlook, of course, announced late yesterday when Brocade met expectations with its fourth-quarter earnings. The storage area networking company's 2003 Q1 ends in January, and things aren't looking so promising right now.
Sales will come in between $120 million and $125 million, far below the expected $152 million. Also, it expects merely to break even with last year's earnings. The Street had hoped for a profit of $0.07 a share. In its 2002 first quarter, sales were $123 million, with earnings per share of $0.05.
An IT spending desert continues to parch Brocade. Its four biggest customers make up around 73% of its revenues, so when they aren't buying, it hurts. The company, though, doesn't expect the current weakness to extend past the first quarter. For its sake, we should hope not.
Besides sales, another area of concern -- though it went unmentioned by the company yesterday -- should be its ballooning accounts receivables. A peek at the numbers shows that revenue for fiscal 2001 increased 9.6%, while over on the balance sheet, accounts receivables shot up 42%. Brocade made sales, but it's still waiting to collect all the money it's owed. This type of situation is always a red flag.
Shares are currently trading at around 21 times earnings, despite the stock's drop. We hope things improve for Brocade once the IT spending market firms up. But for us, even though it's gotten the beat-down, Brocade still looks expensive.
Only one media outlet attempted to explain the 15% rise of Martha Stewart Living Omnimedia
You may have noticed labor protesters in front of your local Wal-Mart
Shares of Household International
Today on Fool.com: Bill Mann explains how to determine the price of a merger.... In Fool's School, invest in your health.... If your tax bracket varies from year to year, you have some tax-saving options, in our Tax Center.... Post of the Day: Amazon.com.
Bob Bobala, Robert Brokamp, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Jackie Ross, Reggie Santiago, Dayana Yochim