This just in: Politicians lie. That's the conclusion of Britain's Economic and Social Research Council, which published a study by Glen Newey of the University of Strathclyde.

"Politics should be regarded as less like an exercise in producing truthful statements and more like a poker game," Newey told the Observer newspaper. "And there is an expectation by a poker player that you try to deceive them as part of the game."

He summed it up nicely, however, with this remark: "Politicians need to be more honest about lying."

In today's Motley Fool Take:

Drug Makers Slip, Slide

Pharmaceutical stocks are ailing for a second day after the Supreme Court ruled favorably on a law called Maine Rx. The law is meant to lower prescription drug prices for the 325,000 uninsured people living in the state of Maine by allowing the state to buy drugs in bulk for a discount.

The Supreme Court didn't stamp the law into being -- several legal victories will be required for that to happen -- but the high court did stop an injunction against the law that had been put in place by a lower court. Pharmaceutical companies are working to kill the law because it could have profitability consequences.

Supporters of the law suggest that it would reduce drug prices for the uninsured by approximately 30%. Nearly 20 states besides Maine are considering a similar law, and if any state has success passing it, it's likely that most -- if not all -- states would pursue such a law. Seventy million Americans don't have prescription drug coverage, so numerous state laws requiring bulk discounts for them would take a bite from total drug profits.

Today's uncertainty and tomorrow's potential loss have caused Pfizer(NYSE: PFE), Merck(NYSE: MRK), Johnson & Johnson(NYSE: JNJ), Bristol-Myers Squibb(NYSE: BMY), and several other industry stocks to fall 4% to 9% in the last two days. But investors' concerns are nowhere near realization.

The secretary of Health and Human Services needs to weigh in on whether the Maine law is acceptable. Regardless, pharmaceutical interests will work to keep the case in court while aiming for eventual victory. A group representing the drug companies initially argued that the Maine law disrupts the protection of interstate commerce as provided by the Constitution, because it forces drug makers to sell drugs at lower prices. The Supreme Court said the group hadn't proven its case, so drug makers need a new tack.

Overall, this is a sensitive topic and one that begs consideration of both sides. Drug makers need to protect profits in order to continue to develop new medicines, and states want to provide the best health care possible to all citizens at affordable prices. For drug investors, the issue could mean months of uncertainty tempered by potential valuation opportunities.

Quote of Note

"Good medicine is bitter, but it cures illness." -- Chinese proverb

BJ's Bad Quarter

Woe is BJ's Wholesale(NYSE: BJ). The warehouse retailer has struggled over the past year in the face of stiff competition from Costco(Nasdaq: COST) and Wal-Mart's(NYSE: WMT) Sam's Club. Employee costs and other expenses have risen steadily, and BJ's has also found itself having a bit of an identity crisis. How can it distinguish itself as the third-largest warehouse club, behind two powerhouses?

Shareholders have undoubtedly pondered the answer to that question, as shares have tumbled from a 52-week high of $45.49 to current $15 levels. BJ's is attempting to reposition itself to better deal with Costco and Sam's Club. It's shelling out more in capital expenditures this year to remodel stores and invest in better quality merchandise.

Today's first-quarter results point to a company still struggling to work out its difficulties. Sales rose an impressive 15.7% to $1.4 billion, with comps up 5.7% (driven largely by BJ's gasoline sales). Earnings, though, tanked to $11.3 million (including a $1.3 million charge for an accounting change). On a comparable basis, BJ's netted $23.1 million in the prior period. Per share, that's $0.16 this year vs. $0.32 last year.

At fault again are rising expenses. Its operating income fell to $19.79 million from $39.06 million, as operating margins shrank from 3.06% to a puny 1.34%. Gross margins contracted, too, to 9.33% from 10.74%. That doesn't leave much at all left over for the bottom line.

As expected, the company increased its capital expenditures this quarter, spending $55.63 million compared to $42.27 million in last year's Q1. That leaves the retailer wholly in the red, free cash flow-wise, with negative $32.4 million.

Were BJ's solid in other areas, this might not be a concern in the short term. But that's not the case here, since the company will just end up tacking on more long-term obligations following this route. It obviously feels it's necessary to spend the green to better compete, but it's risky.

There are no clear signs yet that BJ's management has expenses under control, and we're not far enough along yet in the repositioning to see if it's working out as planned. Given these factors, its current P/E of 11.56 doesn't represent a compelling bargain. Smart shoppers will take their investment dollars elsewhere.

Sources for Stock Ideas

Everybody's looking for stock ideas -- well, OK, maybe not everybody -- but where do start? First and foremost, begin with a source you can trust. But get a good deal, too. Right now, when you subscribe to our monthly gem, The Motley Fool Select, you'll get your first month free! How could you resist?

New Ways to Pay on eBay

eBay (Nasdaq: EBAY) users can now pay for most of their purchases with airline miles and hotel points. It's another smart way for the online auctioneer to not only expand its 31 million-strong active user base, but also to retain more of its existing customers and get them to buy more stuff.

Currently, "eBay Anything Points" can be earned from American Airlines(NYSE: AMR) frequent flier miles, hotel points from Hilton(NYSE: HLT), and from Sprint(NYSE: PCS) long-distance or small-business calling plans. Other businesses are expected to join the program later.

Also, because the points must be stored in a customer's PayPal account, you can expect an increase in the number of users of that payment system and the number of sellers who accept PayPal. When an item is purchased with the points, the seller receives cash as normal.

This really seems like a win-win-win program. Better for the buyers, the sellers, and the companies that partner with eBay. It may not bring significantly more revenue in the early going, but anything that attracts and keeps customers and gives them flexible ways to participate will pay off in the long run.

Discussion Board of the Day: eBay

What do you think about the "Anything Points" concept? We'd love to hear your opinion on our eBay discussion board. Only on

Quick Takes

Shares of Home Depot(NYSE: HD) lumbered up over 10% today after the home-improvement giant reported Q1 EPS of $0.39, up 6% vs. last year's $0.36 and two cents over Street expectations. Enjoy as Jeff Fischer and Rick Aristotle Munarriz duel over Home Depot and Lowe's(NYSE: LOW). For today's Take on the inventory story behind the two competitors, click here.

Pacific Northwest Bancorp (Nasdaq: PNWB) shares jumped over 22% -- about the premium over yesterday's close that Wells Fargo(NYSE: WFC) will pay to buy it. According to reports, the $590 million deal adds $3.1 billion in assets and 58 branches in Washington to Wells Fargo's $29 billion and 188 branches in the state.

WorldCom agreed to pay $500 million into an investors' fund to settle the government's $11 billion accounting civil fraud case against it. Technically, the fine is $1.5 billion but reduces as part of the company's Chapter 11 bankruptcy proceedings. Former MCI/WorldCom CEO Bernard Ebbers has still not been charged in connection with the company's wrongdoing.

Shares -- actually, American Depositary Receipts -- of Swiss orthopedics maker Centerpulse(NYSE: CEP) rose 14% after Indiana-based Zimmer(NYSE: ZMH) tossed in a $3.2 billion bid for the company, upping the ante from British-based Smith & Nephew's(NYSE: SNN) $2.5 billion. There's cash in dem bones, apparently.

And Finally...

Today on

Bob Bobala, Robert Brokamp, Mathew Emmert, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Reggie Santiago, Dayana Yochim