Cathedral Candle Co., the Fool's new favorite private company, makes a mint in a very low-margin business.

Speaking of which, the Norwich Bulletin reports that a counterfeit quarter turned up in a vending machine at a local prep school. Apparently, "The discovery comes less than two weeks after school officials notified police of an 'altered' $1 bill, also pulled from a school vending machine."

A Secret Service agent on the scene confirms our hunch that counterfeit coins are rare enough to be collectables. Talk about a roundabout way to make a buck!

In today's Motley Fool Take:

Netflix, TiVo, and XM Satellite

Television software service, TiVo(Nasdaq: TIVO), just surpased the million-subscriber mark, a milepost it hadn't expected to reach until the holidays.

XM Satellite Radio (Nasdaq: XMSR) , which reported third-quarter earnings this mornig, is also celebrating the million sub mark, and movie rental service, Netflix(Nasdaq: NFLX), recently passed the mark, too, and now has 1.3 million subs.

What's interesting is how differently these subscribers are being valued by the market.

TiVo has an enterprise value of about $550 million, which values each of its subscribers at $550. XM Satellite has an enterprise value of $3.0 billion, valuing each of its subs nearly 6 times higher, at $3,000. Netflix's enterprise value is $1.3 billion, valuing its subs at $1,000 per head.

A month of TiVo costs $12.95, and though many subs pay a lifetime rate of $299 and won't pay more until their TiVo box needs replacing, we'll focus on the monthly charges that many pay. (And lifetime subscriber revenue is recognized on a yearly basis by the company, in much the same way as monthly payers, over four years.) A month of XM satellite radio costs $9.95, and a month of Netflix is $19.95.

These figures imply that the market is valuing a TiVo subscriber at 42 months of future revenue (the company has $550 in enterprise value for each sub). Meanwhile, XM's share price implies that a typical subscriber today is worth 301 months of future service ($3,000 for a sub paying $9.95 a month), or about 25 years worth of sales. Netflix's share price values each sub at 50 months of future revenue, or about 4 years.

The immediate takeaway is that TiVo subscribers are relatively undervalued by the market, and XM subscribers are outrageously valued. Both companies obtain similar additional revenue up-front from product sales (the TiVo box or the XM radio), cancelling out arguments that this revenue accounts for any of the difference.

Part of the reason for the stark contrast is relative growth rates. XM is growing subscribers at a record-breaking pace, claiming adoption rates that top the Internet's early rates. TiVo's service has taken several years longer to reach a million subscribers. Netflix, however, has reached the million mark in relatively short order, too. But XM expects to double its subs to 2.4 million in 2004, while TiVo and Netflix haven't made projections that ambitious. Netflix aims for 5 million subs in 2007.

Still, even if you double XM's subscribers, at the current share price each would be valued at $1,250 at the end of next year, or a whole 10 years worth of service (before any price increases). This is a valuation "lead-time" per subscriber that even Time Warner's(NYSE: TWX) AOL never saw in its early days. It might be that investors are paying much more for the industry's barriers to entry, but still.... Meanwhile, valuing a subscriber at four years of revenue (before subscriber growth), as Netflix and TiVo shareholders are doing, is about normal.

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Mixed Bag for Retail

October's a transition month for retailers, bridging back-to-school and the holidays. It's a time to clear fall goods and slowly start rolling out winter offerings, while making sure inventory levels are positioned for holiday demand. Unless you're lucky enough to be Wal-Mart(NYSE: WMT) or Costco(Nasdaq: COST) and benefit from the rush of Halloween candy and costume buying, October's usually ho-hum.

The latest rash of same-store sales reports for October reflects this, with discounters racking up big gains, and others announcing more varied outcomes. Wal-Mart and Costco both notched solid same-store sales increases -- Wal-Mart's were up 4.5% and Costco's, 11%.

For specialty retailers, an unseasonably warm October kept some shoppers from shelling out for winter coats and sweaters. The tax-rebate spending that spurred earlier months' results also trickled out, leaving retailers dry.

Abercrombie & Fitch (NYSE: ANF) suffered a particularly painful October, with comps nosediving 14%, leading the teen retailer to lower expectations for its third-quarter earnings. Rival teenage fashioneer Wet Seal(Nasdaq: WTSLA) also experienced an ugly month, with comps dropping 9.7%. The story was the same for Aeropostale(NYSE: ARO), whose comps were off 6.8%. And we saw what happened to American Eagle(Nasdaq: AEOS) yesterday.

So, where were the teenagers shopping? They all appeared to be snapping up the concert tees, Goth looks, and 1980s kitsch at Hot Topic(Nasdaq: HOTT). There, same-store sales climbed 11.2%. Hot weather apparently doesn't hurt Hot Topic.

Gap (NYSE: GPS) , coming up for the first time during its recovery against a month of positive comps, eked out a 1% gain and raised expectations for the third quarter. Ann Taylor(NYSE: ANN) raised Q3 guidance, as well, following its 3.9% comps increase.

As usual, it was baby boomer retailer Chico's FAS(NYSE: CHS) that blew everyone else out of the water. Same-store sales for the Florida-based Chico's jumped an astonishing 20.6%, much better than the 12.7% expected.

All eyes now turn ahead to what retailers hope will be a very lucrative holiday shopping season. Early guesses are that folks will be spending more this year than in recent years, which is cause for cautious optimism. We'll just have to wait and see.

Costco was Tom Gardner's May 2002 recommendation in Motley Fool Stock Advisor.

Quote of Note

"If you can't get rid of the skeleton in your closet, you'd best teach it to dance." --- George Bernard Shaw

Wendy's Big October

Fast food seems to be making a fast buck these days, despite high-profile campaigns exposing the expanding waistlines of America. On Wednesday, Wendy's International(NYSE: WEN) reported same-store sales had jumped 7.6% in October, with folks lining up for its new Homestyle Chicken Strips.

Wendy's, of course, is not the only fast-food restaurant that's got customers lining up. McDonald's(NYSE: MCD) has been another popular meal pit stop, as its sales have been sizzling lately.

I've been a big proponent of the healthy food initiatives that fast-food companies have been working to establish. Given the recent media attention to the growing health epidemic of obesity, as well as diet crazes like Atkins, it seems extremely prudent to revolutionize menus with a healthy spin.

Speaking of restaurants and health, Reuters reported Wednesday that several Democrats plan new bills requiring restaurants like Wendy's and McDonald's to display the fat, calorie, and sodium content in their menu items. The idea being that while most people get the concept that fast-food is fattening, they don't realize just how much, and if they did... well, they might more readily reach for the carrot sticks or the protein bars than hit the drive-thru at Taco Bell -- or any of the franchises at Yum! Brands(NYSE: YUM), which actually reported flat same-store sales for October today (Pizza Hut sales fell 4%, while Taco Bell's rose 4%; KFC's were flat).

Legislation may seem like ominous news. However, human nature has shown that while additional knowledge gives people added tools to make their decisions, it doesn't always deter them from the things they deem comforting or enjoyable. And fast food may very well be one of those things. With its low prices and convenience, it lends perceived benefits especially when money or time is tight, and many of these factors seem to be at work right now.

So it may not be time to hit the panic button, but investors do need to monitor the effects of the campaigns on public opinion about food and health going forward. Fast-food companies need to continue to strike a balance between offering healthy new options without losing their old identities, which are why they became popular to begin with.

So far, plans seem to be working, judging by success at Wendy's and McDonald's, complete with good sales numbers and soaring stock prices. Just remember, this is no time to forget about the fat police.

Discussion Board of the Day: Television Banter

What do you think of the fall season prime time lineup at Fox? Any other shows you're watching? Do you need more or less reality television in your life? All this and more -- in the Television Banter discussion board. Only on

Mor e Fool News

For all today's stories, see Today's Headlines.

And Finally...

It seems so obvious. But when has that ever been cause for people either to do something about it or resist some pricey study to confirm it. Point being, kids who learn less about money when they're young are less inclined to know much about money when they're old. Don't take chances -- take Selena Maranjian's advice instead: Teach Your Kids About Money. That way, they'll have Time to Build Wealth . Because as Jeff Fischer sings, time is all you need.

Bob Bobala, Robert Brokamp, Paul Elliott, Mathew Emmert, Jeff Fischer, Jeff Hwang, Tom Jacobs, LouAnn Lofton, Alyce Lomax, Bill Mann, Selena Maranjian, Dave Marino-Nachison, Rex Moore, Rick Munarriz, Reggie Santiago, Dayana Yochim