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In today's Motley Fool Take:
- Apple Speeds Up
- Shameless Plug: Money After 40: Building Wealth for a Better Life
- DirecTV Deletes TiVo
- Quote of Note
- Harley Looks East
- Discussion Board of the Day: Harley Davidson
- A Bulletproof Stock?
- More on Fool.com Today
Ap ple Speeds Up
By Alyce Lomax (TMF Lomax)
Let's remember why the full name is Apple Computer
Recently, portables have been where it's at for Apple, when it comes to the average buyer. In the second quarter, portables represented 48% of Apple's sales. As Fool contributor and fellow Mac enthusiast Tim Beyers noted not too long ago, wireless connections available at a steadily increasing selection of venues have helped create an environment where portables are going to gain popularity.
The new Power Mac G5 computers will have plenty of giddyap -- they include two microprocessors, with some models able to speed along at 2.5 gigahertz, or 2.5 billion cycles per second. (However, some Apple watchers tap processor supplier IBM
While Apple's computer sales have lagged the rest of the computer market, it's picked a good time to upgrade. An improving job market may be the extra nudge that convinces some computer users to buy a new system with processing muscle. Plus, when there's more business (and more marketing and other creative materials being generated), there's more reason for those "creative" types -- Apple's traditional bread and butter -- to start creating.
However, those creative types had best not be starving artists. Mac users can expect to shell out from $2,999, $2,499, and $1,999 up for the dual 2.5 GHz, 2.0 GHz, and 1.8 GHz Power Mac G5 machines, respectively.
Meanwhile, the occasional theory that gets batted around -- that the widespread popularity of the iPod and iTunes might actually boost esteem of Apple's computer lines -- doesn't sound so crazy. (Plus, anybody venturing into an Apple store for iPod gear is instantly exposed to its computer wares.) Also, in recent months, Microsoft
It seems Apple's moving aggressively according to many trends. This week, it also launched AirPort Express, a device that will allow users of both Macs and PCs to wirelessly stream music from iTunes to their home stereos, but it also hinted heavily at the imminent launch of iTunes in Europe.
The question remains whether the Power Mac G5 might still struggle, faster or not, considering the strong interest in laptops right now. However, an attempt to jump-start the computer line while Apple's positive buzz is at a fevered pitch is a savvy, strategic move. As they say, strike while the iron's hot.
Alyce Lomax does not own shares of any of the companies mentioned. When she finally replaces her iMac, she'll likely shell out for an iBook
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DirectTV Deletes TiVo
By Rich Smith
Yesterday was a bit rough for shareholders in Motley Fool Stock Advisor pick TiVo
As the day progressed, things only got worse for the world's premier purveyor of digital video recorders and DVR technology. DirecTV refused to comment while the markets were open, keeping hope alive and allowing TiVo's stock to bob over and under the -10% mark. But after market close, the satellite TV provider confirmed the analyst's suspicions.
Result: At last report, TiVo had lost nearly 15% of its market value in a single day, and was trading just 30 cents off its 52-week low. Ouch.
Investors certainly have cause to be concerned. DirecTV plays a major role in TiVo's business plan. In its Q1 earnings announcement, released just a scant two weeks ago, TiVo credited DirecTV with producing three out of every four new subscribers that TiVo signed up in the first quarter. And DirecTV was not just a big provider of subscribers -- it was the main engine of TiVo's revenue growth. While independent TiVo subscriptions jumped an amazing 84% in Q1, subscriptions garnered via DirecTV rocketed an astounding 400%.
Still, let's step back a moment and reflect. Sure, DirecTV is no longer a TiVo investor. But will this really hurt TiVo's business? DirecTV suggests otherwise, averring that "the sale does not signal a change in the companies' partnership" and "our relationship with TiVo is strong." Moreover, DirecTV is still projecting that over the course of 2004, it will double the number of its subscribers with TiVo-equipped set-top boxes to 2 million.
It could well be that DirecTV's sale means no more than the company's PR department says it does; that yesterday's news was just a continuation of a plan, handed down by DirecTV owner News Corp.
If DirecTV proves true to its word, therefore, then in a year's time, I suspect yesterday's 15% plunge in TiVo's stock price will look like nothing so much as a gigantic buying opportunity offered to investors.
Fool contributor Rich Smith owns no shares in any company mentioned in this article.
"America is too great for small dreams." -- Ronald Reagan
By Rick Aristotle Munarriz (TMF Edible)
Does the thought of Harley-Davidson
Harley plans on making its motorcycles here and then working with Zongshen to sell them in China. It won't be easy. China's economy isn't at the point where the masses can pay up for a pricey Harley. What's worse, China imposes a substantial duty on imports. That duty is scheduled to drop from 50% to 30% by next year but will still make a difficult task more daunting.
Still, isn't it easy to ponder the possibilities? It's not just the massive population at play here. We're also talking about a country where two-wheelers -- motorized or pedal-powered -- rule the road.
And other American companies are already entrenched in China. McDonald's
If this group can break into China, Harley-Davidson has a pretty good shot of making this work. Its products are already in demand. As for pricing, it remains an issue, but an improving economy in the rapidly developing nation should help on that front.
With Harley coming off its centennial celebration last year, one was right worry about its near-term prospects. Even the company seemed nervous, lowering prices and extending the warranties on its 2004 models. But roads circle the globe -- and Harley-Davidson's journey is just getting started.
What do you think of Harley-Davidson breaking into China? The company surprised analysts by kicking off the 2004 year with a healthy first quarter. Will the rest of the year prove to be as rewarding? All this and more in the Harley-Davidson discussion board. Only on Fool.com.
A Bulletproof Stock?
By W.D. Crotty
The big gainer today on all three exchanges is a heretofore-obscure little maker of body armor, DHB Industries
What's propelling the stock higher -- today, at least -- is word of a U.S. Army order for $239.4 million in body armor, which brings total defense orders to $381 million for the last eight months and the company's backlog to $415 million. Those are staggering numbers for a company that has trailing annual sales of $260 million.
Of course, the news is barely news to subscribers of Motley Fool Hidden Gems. After all, DHB has been on Tom Gardner's Watch List and has long been a favorite topic of discussion among the small-cap-obsessed Hidden Gems community members.
Like many gems, DHB is also a market leader in a rapidly growing industry -- one that you expect to be dominated by usual suspects General Dynamics
By comparison, a vast majority of DHB's sales come from the rapidly growing body armor market. The stock sells for -- even after today's explosive gain -- a price-to-earnings ratio in line with the group. With a solid 48.4% ROE, DHB is still not overpriced when compared with its peers.
But is it the next Taser
That said, DHB gives you strong free cash flow, growing revenue, and exposure to a market with rapid growth potential. Likely, that's what caught Tom Gardner's eye back in the day. Now, with word of the recent government orders, this one looks to be running away with the armor business. That can only be good news for shareholders.
Fool contributor W.D. Crotty does not own stock in any of the companies mentioned.
It's been one year since a "bear scare." Rex Moore asks, "What have we learned?" in Battling the Bears.... And Ben McClure officiates the battle between Cisco and Juniper in the Internet router war. Want to know which tech company he has coming out on top? Check out Cisco vs. Juniper for the answer.
In other news:
For a list of all our stories from today, see our Today's Headlines page.