Domestic diva and convicted felon Martha Stewart resigned today from the board and as chief creative officer of her eponymous company. She'll stay on in the newly created role of "founding editorial director," but with 10 to 16 months of expected jail time and a 40-hour-per-week menial prison job, it remains to be seen just how involved that'll be.

Poor Martha. At this point, we can't even come up with a good housekeeping joke. We're tapped out and just feeling sorry for her now.

In today's Motley Fool Take:

GE Envisions InVision

By Seth Jayson

Score one for the treasure hunters of Tom Gardner's Motley Fool Hidden Gems. Back in January, community member Daniel Hong profiledInVision Technologies(Nasdaq: INVN), a leading manufacturer of explosives-detection equipment for passenger-cargo screening in airports. He argued that it possessed several characteristics that made it worth a close look despite its predicted 25% decrease in revenues for 2004.

Among the reasons: 1) a lock on the current market; 2) good potential for new explosives-detection applications, such as cargo screening; 3) continuous-revenue service contracts in a security-obsessed world; and 4) high insider and low institutional ownership. Best of all, the firm was already producing substantial free cash flow.

It looks like General Electric(NYSE: GE) agreed. The company announced this morning that it would be adding InVision to its ever-expanding stable of businesses. For their part, InVision investors woke up to a nice treat. The stock rose 20% to reach the roughly $50 per share that GE will be shelling out for the privilege of taking a lead in the homeland-security market over defense rivals Lockheed Martin(NYSE: LMT) and Northrop Grumman(NYSE: NOC).

The buyout price represents a near 35% gain over InVision's $37 per stub when we checked it out last January. That's a phenomenal return in two months, to be sure. But it also hints at the heartbreak that can accompany successful small-cap investing. Who knows what InVision stock might have been worth a couple years from now had GE not gobbled it up?

But I won't be shedding too many tears for the InVision investors. Given the pounding that other successful small caps have been enduring over the past couple weeks, many of us would opt for the misfortune of a premium buyout.

Fool contributor Seth Jayson owns no stake in any company mentioned above. View his Fool profile here.

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Ba d Days Ahead for Electronics Boutique?

By Rich Smith

Last week, video game retailer Electronics Boutique(Nasdaq: ELBO) posted strong sales and earnings growth for its 2004 fiscal year. However, there may be a time bomb hidden in those impressive numbers.

Revenues grew 21%, comprised of 17% growth in hardware sales and 33% growth in video game software sales. Profits rose 26.8% to $1.80 per share before the effects of an accounting change, but including the effects of a services agreement termination. Yet even if you took out the positive effect and included the negative accounting change effect, earnings would have increased by more than 5%.

Most of the company's sales growth came from opening new stores. While comparable-store sales were flat for the year, and rose only a modest 2% for Q4, the company increased its store count one-third to 1,528.

I find that torrid rate of growth worrisome. When a company increases its store count by 33% but grows revenues at less than two-thirds that rate and earnings at just a bit more, you have to wonder whether the growth is really worth the effort -- and what will happen when the company has nowhere left to grow.

Faithful readers of Motley Fool Select, now Hidden Gems, may recall a similar story of hyper-growth followed by a hyper-decline in profits: Lone Star Steakhouse(Nasdaq: STAR). That chain, too, grew rapidly in both store count and revenue, only to hit a wall in 1998. Back then, Lone Star was expanding strongly in Australia. Coincidentally, Electronics Boutique says that in 2004 it "strengthened its leadership position in Australia." Not that I consider doing business in Australia to be the mark of Cain for a business, mind you -- I just find the coincidence unsettling.

Assuming Electronics Boutique hits the high range of its earnings guidance for 2005, it will post only an 8% increase in profits over 2004. That, despite a promise to open another 400 stores in fiscal year 2005.

I repeat: They will have 26% more stores than they currently have, but earn only 8% more profits than they just finished earning.

Tick, tick, tick.

Rich Smith owns no shares in any company mentioned in this article, but he is sure that his little brother -- a devoted gamer -- accounted for roughly half of Electronics Boutique's sales growth in fiscal 2004. The Fool has a disclosure policy .

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Wal-Mart's Taxing Decision

By Alyce Lomax (TMF Lomax)

Many of us dread the Tax Man. However, Wal-Mart(NYSE: WMT) cited tax refunds when it said today that March same-store sales are tracking along the high end of its expected 4%-6% range. Among the popular items were electronics and lawn goods, to name a few. In addition, some Easter merchandise already appears to be moving.

This year, Wal-Mart is one of a few retailers offering to cash tax refund checks, with the obvious hope that many of us are lazy enough to appreciate the one-stop shopping approach.

As for taxes and Wal-Mart, the behemoth already wants some of its customers to think of it when they think taxes, period. It already has some H&R Block(NYSE: HRB) and Cendant's(NYSE: CD) Jackson Hewitt kiosks in its stores so Wal-Mart shoppers can get their taxes done while they're shopping.

If Wal-Mart's talking a tax-boosted March, then investors might expect some other retailers to benefit. If electronics are a hot choice for spending tax refunds, one might wonder if some of those tax dollars might be taken to Circuit City(NYSE: CC), Best Buy(NYSE: BBY), or even online retailer AMZN). Other possible beneficiaries could be other big-box retailers like Target(NYSE: TGT), Home Depot(NYSE: HD), Lowe's(NYSE: LOW), or even warehouse stores like Costco(Nasdaq: COST).

Today, however, many retailers' stocks fell, theoretically linked to Dollar General's(NYSE: DG) earnings miss. While Wal-Mart was one of the laggards in today's trading, it has said that it believes retailers will enjoy a pleasant first half of the year due to fatter tax refunds than in previous years.

That may be true, but it remains to be seen whether most people who get tax refunds will turn around and buy electronics and other merchandise at Wal-Mart before and after the April 15 tax deadline.

And Wal-Mart tends to be one of the places to look for clues of consumer sentiment. So, watch for any signs that cautious sentiment seems to be brewing. After all, the Madrid bombings and repeated data supporting continued slim pickings when it comes to new jobs might be grating on some nerves. Let's hope some people don't start thinking the mattress is the best place for their refund dollars.

Alyce Lomax does not own shares of any companies mentioned.

Qu ote of Note

"Moral indignation is jealousy with a halo." -- H.G. Wells

Mo re on Today

Mathew Emmert diligently looks out for dividend-paying stocks in his monthly newsletter, Motley Fool Income Investor, and while not all companies meet his stringent cuts, he's got a few up his sleeve he wants to share with you. Check out why Johnson & Johnson fills the prescription for growth and income investors.... As the price of oil continues to hit new highs, oil stocks should benefit. Salim Haji has one Canadian oil company that's sitting pretty in Unearthing Values in Oil Stocks.... Finally, dividends may be back in fashion, but Don't Be a "Yield Pig." Take it form Bill Mann, a high dividend pay-out doesn't make a good investment.

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