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.

Considering our U.K. friends also get an average of four to five weeks of paid vacation each year, it's a wonder they have time to powder their wigs, sic their dogs on children, and be so darn funny.

The Motley Fool 50 didn't do too much today, either, falling 0.77%.

Flying Donuts and Beanie Babies

Krispy Kreme Doughnuts (NYSE: KKD) cranked out another tasty earnings report today, showing a sugary profit of $0.17 per share for the fiscal third quarter. That's a nifty 55% increase over the year-ago period. When you mix in a 10.1% rise in same-store sales, it's clear the company has created a recipe for success.

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(Nasdaq: EBAY), saying I was able to justify the latter's valuation because it seemed to have many more growth options available to it. Let's look back over the 15 months since I wrote the story. The S&P 500 and Nasdaq indexes are down about 20%, while Krispy Kreme and eBay are up 20%. Yes, two of the stocks most criticized on a valuation basis have hammered the indexes over a period when the economy has taken down many a company. Why? Because their businesses have not faltered and they've consistently delivered on their promises.

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(Nasdaq: COSI) made their debut on the Nasdaq. Last night, underwriter William Blair priced them at $7, allowing Cosi to raise $38.9 million. The shares rose 8.5% today to $7.60.

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(Nasdaq: PNRA), which trades for 3.8 times sales, but it's expensive compared to the industry's average price-to-sales multiple of 0.4. Plus, Cosi isn't yet profitable; it's currently burning about $3 million from operations per quarter. In all likelihood, it is about a year away from profitability.

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.

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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(Nasdaq: LTRE) is being educated by the school of hard knocks right now. Fourth-quarter revenue fell and profits were halved for the company, as the soft economy continues to slap upside the head the myth that IT is a growing market.

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(Nasdaq: MSFT) certified computer whiz was a lock for a monster payday, it just isn't going to happen anytime soon. It's still not a job hunter's market, and it won't be until the economy bounces back.

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(Nasdaq: COCO) and Apollo Group(Nasdaq: APOL) are doing just fine, actually. It is not the problem; IT is.

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!

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Brocade's Beating

The market's punishing Brocade Communications(Nasdaq: BRCD) today by taking more than a little off the top. Shares have been clipped by 27%, knocking them down close to a new 52-week low and miles away from where the company was trading three years ago.

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.

Quick Takes

Only one media outlet attempted to explain the 15% rise of Martha Stewart Living Omnimedia(NYSE: MSO) today. Reuters say it's because investors "warmed to the possibility the homemaking advice company could survive," no matter what happens to Martha herself. However, The Motley Fool crack research team scoured the streets of America and found no warmed investors.

You may have noticed labor protesters in front of your local Wal-Mart(NYSE: WMT) today. "Behind that smiley face is a single mother who makes $7.50 an hour," one told the Associated Press, "and can't afford health insurance for her family because Wal-Mart charges her $400 a month for it."

Shares of Household International(NYSE: HI) dropped 5% on news its deal to be acquired by the British bank HSBC Holdings(NYSE: HBC) might fall through. However, Reuters quoted analysts who believe the $14 billion transaction will still work out.

And Finally...

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