The U.S. government today unveiled a brand-new $50 bill to be distributed this summer. Ulysses S. Grant, whose face has been on the bill since 1913 (the $50 has been in circulation since 1862), will remain, but like the new $20, the $50 has been enhanced with sharper images and colors to thwart counterfeiters. Apparently, the new $20s have thwarted regular people, too, as the government has spent $12 million in advertising to explain the redesign to the public.
The current 1.2 billion $50s in circulation last an average of five years. Then the worn-out bills are given away at every New York Yankees home game. Yes, that's how George Steinbrenner can afford a $183 million team.
In today's Motley Fool Take:
- Genentech's Lucky Day
- Shameless Plug: Credit Center
- Netflix Targets On Demand
- Discussion Board of the Day: Netflix
- Sysco Still Cooking
- Quote of Note
- More on Fool.com Today
Genentech's Lucky Day
By Alyce Lomax (TMF Lomax)
It was an exciting morning in drug discovery today. Genentech
What's all the fuss about? The experimental drug Tarceva, a treatment for small-cell lung cancer. Phase 3 trial results released today showed that the drug improved lung cancer sufferers' survival time in patients who used it after having failed with chemotherapy. That's heady stuff, and a rather major surprise, because a previous trial showed that Tarceva did not improve life expectancy when administered with chemotherapy.
One of the most interesting aspects of this medication is that it is the only one of several promising and similar new cancer drugs, such as AstraZeneca's
Also, chemotherapy is considered a cure that's almost as bad as the disease, so any treatments that are less caustic and increase survival time are a welcome addition to the battle against cancer.
If Genentech had been priced for perfection before, these results could signal more good times ahead. However, Tarceva has not yet been approved, and until approval is in the bag, it remains speculative. Further, even in the event of approval, the companies don't expect it to hit the market until 2005.
The potential, of course, is huge. According to the National Cancer Institute, 30% of cancer deaths are from lung cancer. The World Health Organization says there are 1.2 million cases annually, and this year, there will be 173,000 diagnoses of lung cancer in the U.S.
However, while pricey cancer drugs have been Genentech's bread and butter, the warning is well-taken that a portfolio of expensive treatments can pose a threat when you consider insurance companies' reimbursement policies, not to mention the fact that most patients can't afford high-priced treatments out of pocket.
In recent trading, Genentech's shares had gained 13%, while OSI Pharmaceuticals stock skyrocketed 130%. Although the news is good, the levels of enthusiasm here seem a bit irrational. The full study is expected in June at the American Society of Clinical Oncology's annual meeting, and again, the drug has yet to be approved. Investors jumping on the bandwagon here are taking a risk and may be setting themselves up for an expensive disappointment.
Alyce Lomax does not own shares of any of the companies mentioned.
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Netflix Targets On Demand
By Rick Aristotle Munarriz (TMF Edible)
It's easy to argue that Netflix
Yet, will Netflix be relevant tomorrow? That is the question that has kept the company's short position unusually high and sparked debate over whether the shares are overvalued, undervalued, or priced just right. Video on demand, which could very well make the physical delivery of DVDs obsolete, has always been a theoretical gray cloud.
Right now, video on demand appears laughable. Even broadband connections make quality video downloads a lengthy process, and it remains to be seen how the product will serve up the extra features, Easter eggs, and viewing options of the conventional disc.
Those that have been the most aggressive -- like the five major movie studios, including Sony
No, the success of video on demand will ultimately be dictated by the ability of cable and satellite television providers to make it viable. Yes, pay-per-view has been around for ages, but we'd have to be talking about much wider libraries with more flexible viewing features to make it a worthy Netflix alternative.
Maybe the next Netflix will be, well, Netflix. In an interview with Reuters over the weekend, CEO Reed Hastings again reiterated his desire to be a part of video on demand. While Hastings has made that position known since the company went public two years ago, this time he released a 2005 target for Netflix to make its entry.
The idea sounds promising for Netflix because it now has to take a hit on mailing the rented discs both ways as well as dealing with physical inventory and the buildout of its distribution centers. Netflix has an advantage in that its nearly 2 million subscribers are seen as the early adopters and the ideal target for a more flexible and user-friendly version of video on demand.
How the company fares in its efforts remains to be seen. However, an adamant company bent on assuring that it won't be locked into obsolescence has a funny way of making those gray clouds turn a puffier shade of white.
Yes, Rick has been a Netflix customer -- and shareholder -- since 2002.
Di scussion Board of the Day: Netflix
Will Netflix be able to take its business model to a new level and reign supreme? Or will competitors take a bite out of the tiny upstart with video on demand? With 2 million subscribers already, what kind of momentum can Netflix sustain? All this and more -- in the Netflix discussion board. Only on Fool.com.
Sysco Still Cooking
By Nathan Slaughter
While I've been known to dabble in the kitchen, there can be no doubt that my mother's superior culinary skills are not genetic. The art of cooking seems to be lost on the younger generation. Let's have a show of hands: Who out there prefers mom's cooking to that of your significant other?
My intention is not to incite marital strife, but to point out that home-cooked meals seem to be a rarity these days, with trips to places such as Applebee's
Food titan Sysco
Another solid quarter is now in the books. Third-quarter earnings, released this morning, were in line with estimates, rising 16% to $195.8 million on a 10% increase in sales to $7.03 billion. Inflation of food prices, which has been running in the upper single digits, was partially responsible for the gain, though, higher prices are generally expected to abate eventually. One notable exception is the dairy segment, where milk has reached record highs. More efficient delivery routes were also a contributing factor, reducing operating expenses from 15.1% to 14.4%.
Though food-distribution profit margins have been notoriously anemic, Sysco's immense size and streamlined distribution network have expanded net margins by 100 basis points within the past five years to 3.1%, double the industry average. Last year, free cash flow grew by 40% to $938 million. The impressive credentials, though, have not escaped investors' attention. The stock trades at 28 times forward earnings. Nevertheless, Sysco's 2003 sales of $26 billion account for only 13% of the $200 billion global food-service market, so there is plenty of room left to grow.
Fool contributor Nathan Slaughter enjoys cooking and has a great crawfish etouffee recipe. He owns none of the companies mentioned.
"Before God we are all equally wise -- and equally foolish." -- Albert Einstein
Stock yields are still better than some might suggest. Mathew Emmert has more in Powerful Payouts.... Bill Mann says beware the pitfalls of common knowledge when it comes to your investment dollars. Read on in Is What You Know Actually True?
In other news:
- Buffalo Wild Wings Is Blazin'
- Stanley Nails It Again
- Skeptical of Safeway's Spin
- Poultry Not Paltry at Pilgrim's Pride
For a list of all our stories from today, see our Today's Headlines page.
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