The first two have benefited from a huge demand for combat boots. Before U.S. actions in Afghanistan, the military ordered about 5,500 boots per month. Now, it's up to 85,000. Sunglasses maker Oakley provides laser-protection goggles to Special Forces units.
And you may want to look into companies that manufacture camouflage uniforms. According to Slate, the Pentagon has "simply goofed" by sending too many woodland camouflage outfits to Iraq, and not enough sand-colored desert fatigues. It's asking manufacturers to help correct the imbalance.
In today's Motley Fool Take:
- A McLeaner McDonald's?
- Quote of Note
- Is Your 401(k) Normal?
- Shameless Plug: Brokers, Brokers, Brokers!
- Bars on Six Continents
- Discussion Board of the Day: Sony
- Quick Takes: Tommy Hilfiger, Computer Sciences Corporation, Gap, more
- And Finally...
McDonald's owns burrito joint Chipotle (perhaps best-known for the frequent visits from fave TV dad and sometime-rocker Ozzy Osbourne), as well as Donatos Pizzeria and Boston Market. All three chains are tiny compared to its namesake Golden Arches restaurants. While they added about $1 billion in revenue for 2002, they're still money losers, with the company bleeding around $60 million on the concepts for each of the last two years.
The burger purveyor will attempt to sell about half of the business, according to one source. Any deal may contain a clause giving it the right to buy back its stake in five years. Private equity groups are said to be interested, though no possible price for the restaurants was floated.
Selling part of its Partner Brands would appear to be a good move now for McDonald's, contingent, of course, on the price it gets. The company is battling waning sales and other difficulties in its vast empire of burger shops and needs to focus its attention and funds there.
The three Partner Brands restaurants are distractions, albeit small ones, but their money-losing status doesn't help. They still need to be watered with cash and expanded, and McDonald's can't afford to give them the attention they need. Potentially, the company could sell half, let others grow the brands, fix its own internal issues with the namesake restaurants, and then buy back its stake in five years when things are (hopefully) better.
McDonald's, not surprisingly, refused to comment on the rumors, but investors appeared to cheer them a little with shares up around 2% on a generally down market day.
"The institution of the family is decisive in determining not only if a person has the capacity to love another individual, but in the larger social sense, whether he is capable of loving his fellow men collectively. The whole of society rests on this foundation for stability, understanding, and social peace." -- Daniel Patrick Moynihan (1927-2003)
Have you ever lain awake at night, wondering how much everyone else has in their 401(k)s, worried that you're not keeping up? A report from the Employee Benefit Research Institute and the Investment Company Institute might ease your troubled mind -- or make you fret even more.
According to their survey of 14.6 million 401(k) participants (which accounts for a third of all account holders), the average 401(k) balance in 2001 was $58,785, a 4% drop from 2000. Though the stock market declined 12% over that period, diversification and continued contributions propped up overall retirement assets.
Of course, the "average" doesn't apply to everyone. Older workers saw bigger declines, while workers in their 20s saw balances rise 16%, partially due to the size of contributions relative to the size of balances. Also, 11% of workers had account balances greater than $100,000, and 45% had balances less than $10,000.
Although the study's results were announced this year, they reflect numbers as of the end of 2001 (apparently, it takes a while to survey 14.6 million accounts). Since that time, the Standard and Poor's 500 has declined an additional 24%, so the current average balance of 401(k) accounts is surely much lower.
So, how do your retirement assets stack up? And more importantly, will they be enough to pay for the retirement you want? You can begin answering that question by fiddling with our retirement calculators, or check out our How-To Guide on retirement planning.
Finally, keep in mind that a 401(k) may not be the best place for all your retirement money (as explained in this article), especially if your employer doesn't match your contributions. You might build a better nest egg by also opening a Roth IRA. If you do it before April 15, the contribution will count for 2002, permitting you to make another contribution for 2003.
Brokers, brokers, brokers everywhere. But how do you choose one that works best for you? How do you compare different fees and services? How do you pat your head and rub your stomach at the same time while chewing gum? Relax. Our Broker Center is here to help (though you're on your own for the gum-chewing, head- and stomach-patting thing).
British hotel giant Six Continents
Now that you're acquainted with Six Continents' hotel chains, meet the other side of its business -- bars. It owns more than 2,000 pubs, primarily in Great Britain. But don't get too cozy. Its shareholders voted on a demerger last month that will spin off the pub business into a separate company, Mitchells & Butlers. Once the demerger is complete, Six Continents will change its name to InterContinental Hotels Group. Pity, because the name "Six Continents" is pretty cool.
It's a perfect example of the parts being worth more than the whole. In recent months, serious bidders have shown interest in buying both the pub business and the hotel operations. Today, Six Continents rejected a buyout offer of $4.4 billion for the pubs group as being insufficiently attractive. Also, several firms have recently attempted to buy the hotel group, including Marriott
What's interesting about these bids, and their rejection by Six Continents, is that the company's market cap currently sits at $4.3 billion. That's right -- it rejected a bid for a portion of the company valued at more than the market prices the entire thing. Six Continents sits at a price-to-book ratio of just over one-half.
Why so cheap? Tough to say. The company's share price has slid more than 50% in the last two years. Plus, it has larger Middle Eastern exposure than nearly any other hotel chain, and hostilities there haven't helped business. Revenues and earnings reflect this: Revenues are down by 40% to about $5 billion per year over the same time period, and earnings from operations are down by about 28%.
But the owner of some of the largest, most successful hotel chains in the world priced at half-book value, when it still makes plenty of cash in a time that isn't exactly geared toward the hotel business? At a time when other firms are willing to pay substantially more for the company or parts thereof? Doesn't make much sense.
Should Sony ditch its music business to focus on its core products in consumer electronics and video game systems? Will there be less than five major labels three years from now? Where do you see the future of prerecorded music going? All this and more -- in the Sony discussion board. Only on Fool.com.
Shares of Tommy Hilfiger
Computer Sciences Corporation
There is life after Internet entrepreneurship, after all. Gap
In the final quarter of 2002, the U.S. economy grew by only 1.4%, according to the federal government's final estimate of gross domestic product. Most economists anticipate things won't prove much better for the current January-March quarter. Well, duh! But, you know what they say, "Economics is the painful elaboration of the obvious."
Today on Fool.com:
- For updated stories throughout the day, bookmark our ever-changing News section.
- Jeff Fischer explains why generic drug maker Mylan is attractive for its size, success, and cash.
- Infrastructure rocks and heads roll at Sony Music.
- Mondavi slashes earnings estimates, partly due to competition from a popular new $2 wine.
- Warning: Investing may be dangerous to your wealth. Selena Maranjian explains.
- Foolanthropy 2002 results: We raised more than $100,000 together!
- In Fool's School, read how our Fool Community can help you.
Bob Bobala, Robert Brokamp, Mathew Emmert, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Jackie Ross, Reggie Santiago, Dayana Yochim