Some 36 million Americans will travel 50 miles or more this holiday weekend. We hope you're not one of them. Wouldn't it be better to just lie around in your turkey-induced stupor reading from the Fool archives or exploring the rest of our site?
Well, when you've had your fill of pumpkin pie, we'll be here for you. Although we will not be publishing The Motley Fool Take on Friday. We'll be too stuffed to write. And the stock market is only open until 1:00 p.m., so we hope you take the day off from your portfolio, too.
In today's Motley Fool Take:
- AT&T Wireless Not A-OK
- Quote of Note
- Cree Settles Family Feud
- Shameless Plug: Motley Fool Hidden Gems
- Around the H&R Block
- Discussion Board of the Day: Tax Strategies
- More Fool News
- And Finally...
AT&T Wireless Not A-OK
How big a problem is this? GSM/GPRS represent 3 million of the company's 22 million customers, and half of all new customer additions are for this service. These are the high-revenue customers who want Internet access and instant messaging.
Some retailers are able to cram activations into the system sporadically, so it is not an all-or-none proposition. But stories of activation problems have reached the news media, so AT&T Wireless' image is being tainted during the holiday season. The company will also issue credits, which will reduce earnings.
AT&T Wireless' problems may also include the inability to easily switch customer phone numbers. Although not named specifically, AT&T Wireless is the only major-six wireless carrier not to use TSI Connections services for switching customers between rivals. Although no serious financial problems should result from this, it has the potential to also tarnish the company's image.
Cell-phone sales are expected to be extremely strong this holiday season, and there is no shortage of competitors -- Verizon
Competitor sales representatives will augment slogans like "Can you hear me now?" with "Do you want activation now?" It will be a powerful sales message during this peak selling season.
Unlike the Grinch's experience, the village will not be happy without their material goods. Eventually, AT&T Wireless will correct its problems -- but when? Expect new activations to be negatively affected and AT&T Wireless' stock to suffer.
The company carries a hefty $10.6 billion in total debt, though it also has $4.3 billion in cash. The market capitalization of $20 billion prices the stock at an extremely high 53 times training earnings. Investors are certainly looking for good news ahead. At $7.40, the stock is well off its all-time high of $27.30 but more than double the all-time low of $3.15 reached in October 2002. Year-to-date, the stock is up 30%.
Quote of Note
"Wherever life takes us, there are always moments of wonder." -- Former President Jimmy Carter
Cree Settles Family Feud
The family feud that has weighed heavily on Cree's
The terms of the deal are very favorable for Cree. Not only will Cree not forfeit any payment to either Eric or his wife (also party to the suit), the company has accepted Eric Hunter's resignation. Further, both Eric and his wife have been barred from further pursuing the matter, effectively closing this chapter in both family and company history.
Last month, Cree shares got a big relief when the Hunters dismissed the allegations of federal securities fraud and unfair or deceptive trade practices. Cree shares are bouncing off their August low of $11.70, after the June lawsuit cut the legs off a high in the mid-$20s range, leaving investors to wade through the volatility.
The settlement agreement removes a major distraction, allowing management to turn its focus back to business. It also lifts the weight off the heavily shorted stock of a company that has turned in an otherwise bright performance in recent quarters.
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Around the H&R Block
Why eat out when you can feast at home? Originating new home loans during a buoyant mortgage market has given H&R Block
As the country's leading tax-filing specialist, we have always known that H&R Block can blow the roof off its earnings in the April quarter, but posting back-to-back profits in the July and now October periods is enough to make the company's bean counters write off their smiles as appreciable events.
If this boom keeps going, who knows if the H&R in the company's moniker will start to stand for Home & Remodeling -- or House & Refinancing? (Sixty-one percent of its second-quarter revenue came from its mortgage operations.) So, while folks who frequent our popular Tax Center know H&R Block well, maybe it's time to work up an appropriate introduction to our Home Center as well.
Last week, tax software specialist Intuit
Last night, the company raised its fiscal-year projections. It is now looking to earn between $3.65 and $3.85 a share this year. That implies bottom-line growth of at least 16%, not too shabby for a company trading at just 14 times the low end of its profit guidance.
While rising interest rates may cool off the purebred housing stocks, H&R Block has its seasonal yet never cyclical tax business to look forward to. As far as homes go, the sturdy one seems to be the one built with Blocks.
Discussion Board of the Day: Tax Strategies
April may be at the other end of the calendar, but tax planning is a year-round affair. So, are you making any tax moves before the end of 2003? What changes are in store come 2004? Can you really amortize smiles? All this and more -- in the Tax Strategies discussion board. Only on Fool.com.
More Fool News
- Kodak's Fuzzy Strategy
- IVAX's Latest Success
- WSJ's Berkshire Shellacking
- Climbing Around Dollar Tree
- FDA Pleases Praecis
- Pinnacle Grounded
- Blazin' GDP Revised Up
For a list of all our stories from today, see Today's Headlines.
Today on Fool.com, the market surge of 2003 may bring good vibes to glum investors, but Bill Mann sees a downside, in The Bull Disaster of 2003.... Meanwhile, in The Erectile Olympics (don't ask), Viagra, Levitra, and Cialis face off. Who'll win the gold?... Tom Taulli says the NASD's IPO Proposal Is a Dud.... And Skip Breakfast? Not if Kellogg CEO Carlos Gutierrez has anything to do with it!
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, Tom Taulli, Dayana Yochim