It's the same old story all over again -- but it never gets old. Today, it's FleetBoston Financial in the crosshairs of New York Attorney General Eliot Spitzer and the SEC. Just another once-revered fund management company alleged to have allowed big investors to trade in and out of funds at the expense of the little guy.

We're about building our own stock portfolios here, but most of us own funds in one form or another. Never has it been more important to keep an eye on your investments, and the other on the goings-on in mutual fund land. Don't make rash decisions, especially in taxable accounts, but consider steering clear of tainted fund families. It's your money.

In today's Motley Fool Take:

No Place Like Home Depot

By W.D. Crotty

Home Depot (NYSE: HD) is a veritable Fort Knox. Today, the world's leading home-improvement retailer reported double-digit increases in year-over-year sales and earnings, higher margins, and a growing cash position. Expect more of the same in 2004.

Yesterday, Lowe's(NYSE: LOW) reported a stunning 20.1% increase in fourth-quarter sales. While Home Depot's revenue only improved 14.5%, its total sales are still more than twice its rival's. Moreover, Home Depot's earnings increased at a faster clip: 40% vs. 27.6%.

How does the Big Orange do it? For one thing, the cash-rich company earned $4 million in interest, while debt-financed Lowe's paidout $180 million. Cash is king, and when it comes to home improvement, Home Depot is the gold standard.

And consider the company's sales momentum. Same-store sales increased by 7.6% in the fourth quarter -- a far cry from last year' s average of 3.8%. Even Lowe's managed just a 7.3% increase in the latest quarter. Clearly, Home Depot can still compete for the gold.

Operating margins are headed in the right direction, too. Sequentially, they improved from 8.3% to 10%, besting Lowe's 9.7%. When premier retailers such as Wal-Mart(NYSE: WMT), Target(NYSE: TGT), and Williams-Sonoma(NYSE: WSM) all have lower operating margins and command higher price-to-earnings multiples, is it not time to call Home Depot the value play in retail?

As for innovation, its do-it-for-me segment is growing at 3.5 times the company average. At the same time, new technologies such as self-checkout and wireless scanners are speeding the checkout process and reducing operating costs. Women now have national Do-It-Herself Workshops. And, via a GSA contract, the company does business with the U.S. government nationally.

Don't get the wrong idea; not all Home Depot's cash is asleep in the vault. Management repurchased $3.6 billon worth of outstanding shares over the last two years and, while the $0.28 dividend is modest, the stock still yields 3.8 times more than Lowe's. The company doubled its investment in technology and store upgrades last year, and opened 64 new stores in the fourth quarter alone.

Despite all that free spending, cash on the balance sheet increased from $2.2 billion to $2.8 billion in 2003. Also, long-term debt dropped from $1.3 billion to $856 million. Talk about a cash monster!

CEO Bob Nardelli sums it up like this: "The Home Depot is a company with a proud past and a bright future." I'd say that and more, if I had the keys to Fort Knox.

Fool contributor W.D. Crotty owns shares of Home Depot.

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J&J, Guidant Join Forces

By Alyce Lomax

What's that ticking? That's actually the sound of the countdown to Boston Scientific's(NYSE: BSX) FDA approval and subsequent launch of its much-touted Taxus drug-eluting stent, which was all over the news yesterday. So, surprise! Today, competitors Johnson & Johnson(NYSE: JNJ) and Guidant(NYSE: GDT) announced a deal to co-promote J&J's Cypher stent.

The deal may not be a shocker -- given Boston Scientific's been flexing its muscles -- but it's jam-packed with interesting angles. Despite this linkup with a rival, Guidant still plans to launch its own drug-coated stent in 2006 (depending on the success of upcoming clinical trials, of course), though this deal will boost its own earnings for the time being. Meanwhile, the partnership settles patent disputes between itself and J&J, making it that much easier to gain approval for its own stent. It also gives Guidant immediate entry into the market.

What's in it for J&J? A doubled field team and the addition of Guidant sales personnel to its own sales force. Also, it will have access to Guidant's "bioabsorbable" technology, which could add up to an improved J&J stent down the road. However, as Jeff Fischer pointed out back in November, that exact feature -- that the drug released by its stent won't linger in the body -- was Guidant's real differentiating characteristic before. Hmm.

Yesterday, Boston Scientific (which partnered with Angiotech Pharmaceuticals(Nasdaq: ANPI) on Taxus) was slinging some fighting words at an analyst meeting. In the past, it was surmised that Boston Scientific and J&J could share close to a 50/50 split in their takes of the market, but Boston Scientific said it believes Taxus could conquer as much as 65%. J&J's Cypher is currently the only game in town here in the U.S. The market for stents is widely expected to reach $5 billion by 2005.

Another company that plans to enter the fray is Medtronic(NYSE: MDT) and its partner in stents, Abbott Laboratories(NYSE: ABT). Medtronic's product is in about the same stage of development as Guidant's; the latest development is enough to make one wonder whether Medtronic will just stay on the sidelines.

So, the stent wars heated up over the last few days, adding up to some surprising allies. It's good to see J&J's making a bid to stay in the game, and now Guidant gets in the game early. Sounds like a good time to bolster the defenses, with Taxus approval anticipated within the next 10 days. Stay tuned for the next strategic move.

Alyce Lomax does not own shares of any companies mentioned, but she welcomes feedback on your stance on stents.

Quote of Note

"In the End, we will remember not the words of our enemies, but the silence of our friends." -- Martin Luther King Jr.

Go West, Netflix

By Rick Aristotle Munarriz (TMF Edible)

If you want to see The Good, the Bad and the Ugly, you can rent it from Netflix(Nasdaq: NFLX) -- or you can just glance over the company's mid-quarter update.

The Good? Once again, growth has outpaced expectations. Netflix initially guided investors to expect revenue of between $94 million and $99 million. Now, it's raising both bookends by $2 million. Moreover, the company is looking to close out next month with 1.86 million to 1.94 million subscribers, which is also higher than previous expectations.

The Bad? While Netflix closed out 2003 in profitable fashion, it had already braced shareholders for a narrow first-quarter deficit. But, to borrow from another Clint Eastwood epic, the loss is going to be A Fistful of Dollars more than the $1.2 million to $3.7 million expected. Netflix is now looking to post a quarterly loss of at least $5.6 million and possibly as high as $8.1 million. The shortfall might be explained away as the acquisition cost of the company's heady market penetration, but the market isn't buying.

The Ugly? While the shares moved higher initially, they ultimately dipped in after-hours trading. Often, Wall Street will look beyond a bit of red ink to focus on sensational growth; however, stocks that come so far, so fast are priced with high expectations. We first highlighted Netflix in the October 2002 edition of TMF Select -- now Tom Gardner's Motley Fool Hidden Gems -- at a split-adjusted $5.45 a share. It's still a gem, but it's not exactly hidden anymore.

For all that, the fear of competitive threats from the likes of Wal-Mart(NYSE: WMT) and Blockbuster(NYSE: BBI) are overblown. Clearly, Netflix has had little difficulty growing its empire despite the entry of two heavy hitters. That said, shifts in technology -- high-speed online delivery in particular -- can prove to be worrisome down the road.

The company's working on it and that's a good thing. Not having a solid game plan for tomorrow would be best described as -- help me here one last time, Clint -- Unforgiven.

Longtime Fool contributor Rick Munarriz has been a satisfied Netflix user since 2002. He also owns shares. The stock also offered a 180% gain last year in Motley Fool Stock Advisor newsletter.

Discussion Board of the Day: Great Movies

With so many Oscar-worthy flicks hitting the rental market these days, have any that you would care to recommend? What was the best Clint Eastwood film of all time? It wasn't Space Cowboys, was it? All this and more -- in the Great Movies discussion board. Only on

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