You know what they say: If you want something done right, let the dog handle it.

Hm. That doesn't sound right. Must be a U.K. thing.... The British army is celebrating the heroic deeds of one if its bravest soldiers, Buster the springer spaniel. A trained explosives sniffer, the four-legged fighter dug up a cache of arms during the raid of an enemy camp in Safwan, Iraq.

Buster's bust included AK-47 assault rifles, grenades, ammunition, and bomb-making equipment. The army then arrested 16 of Saddam Hussein's supporters. Good boy!

In today's Motley Fool Take:

Avoid a Biotech Burnout

When biopharmaceutical hopeful Antex Biologics(AMEX: ANX) filed for bankruptcy this week, it reminded investors that of roughly 400 publicly traded companies in the life science biotech universe, 116 -- almost 30% -- have less than a year of cash left and are sweating blood.

Come to think of it, sweating blood is just the kind of biotech advance that could save them from death spiral financing, a fire sale, or bankruptcy. There's an idea!

Many of these companies secured venture capital, went public, or sold additional shares for megabucks in the 1999-2000 biotech bull market boom. Those that lacked a compelling story, waited too long, or couldn't raise enough cash fuel for years of drug development are now scrambling for a suitor or financing on any terms. Case in point is Immune Response's(Nasdaq: IMNR) $2 million in convertible debt. Converts typically pay low interest because of the equity kicker, and today low is lower. Immune Response is paying 8%. Can anyone say, "Shylock?"

To find the universe of blood-sweaters, I cheerfully divided most-recent-period cash and equivalents by the last 12 months' cash burn (the last four quarters of negative free cash flow, or net cash from operations minus capital expenditures). As I expected, not one of the 20 in the most dire straits sells for over $2.00 a share. Nine trade only on the OTC bulletin board, and one on the Pink Sheets. This reflects their pain and the market's judgment that they are near death.

Yup, stocks are low-priced for reasons -- as we said this week in our April Fools' investing lesson about penny stocks.

How can you know if your current biotech investment may one day end up in the penny heap? Consider this. Let's take a biopharmaceutical company without an approved drug -- a company like Antex. If you invest, you are speculating -- betting that its lead drug in development will succeed and reward you, big time, against the possibility of complete failure and flameout. Even if the company has a late-stage drug, it's important to remember that, on average, 40% of the drugs companies move to Phase 3 human trials (usually the crucial trials to provide data for FDA review and approval) fail to gain approval, and that even approval doesn't guarantee marketing success.

But, there's informed speculation and dumb-as-rocks speculation. To improve your odds of avoiding Antex's antics, add this handy factor to your thinking: Keep track of your company's cash burn and survival term, and make sure there's at least enough cash to survive until the FDA decides on the lead drug. Cash to survive a few disappointments is even better. You may want to own the next Amgen(Nasdaq: AMGN), but it took the 23-year-old company a decade to see a penny of free cash flow.

Here's more on biotech cash burn and survival term, and some help performing the easy calculation. And drop by our Biotechnology discussion board, where the DNA flows freely!

Quote of Note

"Words are, of course, the most powerful drug used by mankind." -- Rudyard Kipling


Try this one on for size. Last night, Dell(Nasdaq: DELL) announced it will reiterate its comfort with earlier financial guidance during today's spring analyst meeting in New York. So, in a nutshell, the "news" is that the company has no news to report tomorrow, so it will report that news today.

Why are we even covering this non-news event? Well, it's Dell, dude! And, more importantly, no news is great news for the company because it set the bar pretty high for itself in mid-February.

By revealing that revenue will climb by 18% and that it will nail its earlier projections, which called for 35% in bottom-line growth, Dell has done what so many of its peers can't -- stand and deliver with a spurt in shipments and beefier net profit margins.

Last month, rival Gateway(NYSE: GTW)warned its revenues would take a 15%-17% hit in the March quarter. Rival? Gateway? It sure sounds funny because Dell's smoking everybody lately, with the possible exception of an improving, focused, cost-efficient Hewlett-Packard(NYSE: HPQ).

Five years ago, Gateway sold more than half of Dell's throughput. Dell's $9.5 billion in sales for the March 2003 quarter will be nearly 12 times larger than Gateway's output for the same period.

Times may change, but Dell keeps moving forward just the same.

Discussion Board of the Day: Dell Computer

Is Dell really the all-weather tech stock? What do you think of Dell's move into the printer business? Where does the company go from here? All this and more -- in the Dell Computer discussion board. Only on

Schwab's Banking Breakdown

According to a recent Reuter's story, venerable brokerage Charles Schwab(NYSE: SCH) is tied up in regulatory red tape in its quest to open an online banking unit.

This is unfortunate, as the company could use another revenue stream to offset the volatility caused by its investor clients and the stock market's whims.

Schwab had hoped to have the bank up and running by the beginning of this year, but now, it doesn't know when it will happen. The controller of the currency has granted preliminary approval, but Schwab is still waiting for the rest of the process to play out.

Schwab first applied for its bank license back in May 2002, so this obviously wouldn't have helped its poor fortunes over this last year. Still, it's a logical move for Schwab, and one that will likely be successful. Once it's operating, the online banking unit should help the company in both good markets and bad.

This isn't a case of a Peter Lynch-type "diworsification," with Schwab adding services and getting into a business it knows nothing about. Rival E*Trade(NYSE: ET) proved it could be done by opening its own online bank back in 2000. It now has more than $17 billion in assets.

Schwab's existing client base will appreciate the ease and convenience an online bank provides. The company can also market its offerings across several different business areas. New clients may choose it over others, thanks to the online banking arm.

The benefits are all there, and Schwab's poised to spend the capital to become a banker. While the unit's assets will build slowly and take some time to add incrementally to overall results, investors will probably cheer when it's officially open.

Too bad the government is the only thing standing between Schwab and banking success.

Shameless Plug: Run, Bulls, Run!

A team of Fool analysts, including David Gardner, has selected the most bullish prospects for 2003. Our research doesn't stop with best-case scenarios, either. All prospects in Stocks 2003, our annual compendium of stock ideas, come with "When to Sell" indicators, too.

Quick Takes

Alan Greenspan is a man after our own Foolish hearts. Speaking at the JumpStart Coalition's annual meeting, he made a compelling case for early financial education. "Improving basic financial education at the elementary and secondary school level will provide a foundation of financial literacy that can help prevent younger people from making poor decisions that can take years to overcome," said Greenspan. He couldn't be more right.

More food companies are being drawn into the investigation of Ahold's(NYSE: AHO) U.S. Foodservice division and its potential accounting irregularities. Kraft(NYSE: KFT), General Mills(NYSE: GIS), and H.J. Heinz(NYSE: HNZ) have received requests for information from the SEC. All three supplied food to U.S. Foodservice and are cooperating with investigators. Last week, rumors circulated that Sara Lee(NYSE: SLE), ConAgra(NYSE: CAG), and Campbell's(NYSE: CPB) are also being questioned.

U.S. jobless claims spiked to their highest levels in nearly a year last week. First-time claims for unemployment benefits rose 38,000 to 445,000. That marks the steepest one-week increase since an 86,000 bump during the week of Dec. 7, 2002. Forecasters expected claims to come in around 410,000. The last time claims were this high was the week of April 13, 2002, when they measured 452,000.

Treasury Secretary John Snow has some advice for airlines: Cut costs and quit relying on the government for bailouts. Speaking at the Orlando Chamber of Commerce, Snow said, "... don't depend on us to solve these problems." This follows White House statements yesterday that the current airline aid packages in Congress are "excessive." The airlines responded with more whining.

And Finally...

Today on

  • For updated stories throughout the day, bookmark our ever-changing News section.
  • Jeff Fischer says the stocks of these generic drug makers may be worth prescribing.
  • Wrestling Wal-Mart is no fun for grocers. LouAnn Lofton gives you the play-by-play.
  • Yet another suit between tobacco companies and states. This time, California is the defendant.
  • A massive earnings warning nails hospital software provider Cerner.
  • In Fool's School, don't get stung by bad data during your pre-mortgage credit check.
  • In Hot Topics, one Fool Community member says don't rush into the market, and don't chase stocks because they rose in the short term.

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