To honor the late President Ronald Reagan, the U.S. financial markets will close on Friday, as will The Motley Fool office. Of course, if you just can't be satiated, we have plenty of Fool content to keep you occupied this week. Check out Rex Moore's Battling the Bears column or Seth Jayson's Three Early Summer Sizzlers. Or, as we mentioned yesterday, David and Tom Gardner's new book, Money After 40: Building Wealth for a Better Life, is hot off the presses.

In today's Motley Fool Take:

The Little TiVo That Could

By Alyce Lomax (TMF Lomax)

Despite the TiVo(Nasdaq: TIVO) controversy Tuesday, which took a hunk out of the stock's price, shareholders can't accuse the company of pausing the action. Given a cloudy and evolving future, TiVo's got some changes up its sleeve. Yesterday, the digital video recording company announced several initiatives, including price cuts, to get subscriber growth rolling.

TiVo dropped the price of the subscription for a second TiVo unit in a home by half, to $6.95, and reduced the price of the box to $129 with a rebate. CNET reported that TiVo's Home Media option, once a $99 add-on, is now part of the standard TiVo subscription.

Most interesting, though, is TiVo's admission that it will leverage its skills into online content through the Home Media option. In essence, TiVo will become the bridge between your computer and your television. (Goodness knows, many of us need that bridge!) It will allow you to download digital content, like movies and music, from your PC to your TiVo (and thus, your TV). In the fall, you will be able to transfer content from TiVo to your PC as well.

It's not the first time there's been reason to muse over whether this Motley Fool Stock Advisor pick could possibly pose a challenge to subscriber growth and retention for companies like Netflix(Nasdaq: NFLX), given TiVo's capacity to keep people up to their ears in programming. However, seeing that Netflix has also been eyeing video on demand as the "next new thing," maybe these two really could become home entertainment archrivals one day.

After all, if TiVo's Home Media option allows consumers to stream their video downloads easily from their computer to their television, it ends one of the biggest barriers to digital video downloading right there -- the idea that most people don't want to sit on their PC and watch an entire film.

How much of a boon the musical side of things would be remains to be seen, though it seems that the move could attract those who have avoided adopting Apple's(Nasdaq: AAPL) iPod and iTunes, and those of other competitors.

Yesterday, Fool contributor Rich Smith gave good reasons to remain calm and resist buying into the panic related to the sale of the DirecTV stake. This gives good indication that TiVo certainly isn't asleep at the wheel when it comes to what kind of things it can do to stay relevant in a quickly changing entertainment universe.

Given the competitive forces at work, I certainly wouldn't be the one to say that TiVo is out of the woods yet. However, I do have faith that the company's got some good ideas of where it can take that TiVo box -- that is, thinking out of the box. That's a good thing, because its survival depends on it.

Alyce Lomax does not own shares of any of the companies mentioned. Having purchased her own TiVo last April, she hardly sees the light of day now.

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FedEx Delivers

By Seth Jayson

There's no moss growing on your neighborhood FedEx(NYSE: FDX) truck these days. In addition to snagging some important U.S. Postal Service business from rival DHL Worldwide Express, the firm is finishing up its smart-looking acquisition of formerly private Kinko's.

If you doubted FedEx anyway, today's announcement of increased earnings ought to convince you to look again. The firm now expects to post fourth-quarter earnings of $1.36 per share, including a $0.04, one-time tax benefit, and $0.01 in restructuring costs. That tally compares very favorably to the $0.92 per share earned in the prior-year quarter -- a 48% jump -- or the $1.25-ish results that management had looked for earlier in the year.

Anyone who's been watching the company might have seen this coming. I myself was wowed by the solid revenue increases and margin improvement that drove last quarter's impressive growth.

Now that this has become such a habit with FedEx, I was about to write something clever like, "Maybe this should be a Motley Fool Stock Advisor pick." Turns out I haven't been paying close enough attention. It is a Stock Advisor pick, and has been since February of 2003. Heck, if you had dawdled until March, you'd still be looking at a 46% gain to today, 10 points better than the S&P 500's advance over the same period.

Is it worth taking the leap now? Well, compared to larger competitor UPS(NYSE: UPS), FedEx has a higher P/E. But the firm is also experiencing faster growth and improving margins. That means it's probably a better deal, by comparison. And if it's true that gas-price worries might be fuel for dot-com retailers like AMZN), eBay(Nasdaq: EBAY), and OSTK), FedEx may do even better.

Wondering how to make your investments deliver for you?

Fool contributor Seth Jayson owns no company mentioned. View his Fool profile here.

Discussion Board of the Day: SBC's Free to Lease at Fair Price

The Bush administration's decision to not challenge a U.S. Court of Appeals ruling against the FCC will block "network unbundling" rules previously scheduled to go into effect on June 15. The decision will allow ILECs like Motley Fool Stock Advisor pick SBCCommunications(NYSE: SBC) to lease its infrastructure at a "fair and reasonable" price. Will the higher income encourage the company to invest for long-term, low-cost operations? Discuss it with other investors on our SBC Communications discussion board.

AOL Aims at Business

By Alyce Lomax (TMF Lomax)

Though there may be many people out there who think of instant messaging (IM) as a toy for teens, the truth is it has become an important tool for adults as well, both for social chatting as well as work-related discourse. Today, Time Warner's(NYSE: TWX) America Online unit, which offers the most popular instant messenger client, AIM, said it has teamed up with several companies to offer a more business-friendly version of the software.

AOL has enlisted the services of WebEx Communications(Nasdaq: WEBX) and Lightbridge(Nasdaq: LTBG) to bring us AIM Business Services, which will allow users to fire up conference calls and Web meetings via AIM, as well as share data and information. The service is available as a corporate subscription or on a pay-as-you-go basis.

In recent history, Fool contributors Tim Beyers and Mark Mahorney have commented on instant messaging in a business setting. It doesn't hurt to mention, as they did, that IBM(NYSE: IBM) already has major penetration in business messaging with its Lotus product, which includes NotesBuddy (an integration of email and IM capabilities), or that Yahoo!(Nasdaq: YHOO) has a similar deal with WebEx for videoconferencing for its messaging application. Of course, Microsoft(Nasdaq: MSFT) has set its sights on corporate messaging too.

It appears that 14 million of us use AIM at work, though some companies still frown on IM. According to International Data Corp., 22 million of a total of 188 million IM users use the technology at work. Though I have no doubt that many people use it for work-related functions (I have had several jobs in which IM was perfect for those quick questions that just don't warrant a phone call, email, or the time and energy it takes for a trip down the hall), I do question whether the lion's share of current corporate IM traffic is really for work-related communications.

In addition, while this may be a solid way for AOL to finally get some users to pay money for what has been a popular and free program, I wonder if one of the barriers to widespread corporate adoption is the lack of compatibility among the major IM clients.

For such souped-up IM to work for true business wheeling and dealing, compatibility is key, not sitting behind the walls created by incompatible programs. Most of us would rather stick with the IM client that holds the critical mass of our friends, co-workers, and business contacts. AOL may be making strides in offering important value-added services for the business users it already has, but when it comes to the big picture, there are still obstacles to takeoff.

For more in-depth thoughts on technology, corporate messaging, and conferencing, check out the following articles:

Alyce Lomax does not own shares of any of the companies mentioned. She is much more likely to use AIM than the phone for catching up with friends.

Quote of Note

"Half our life is spent trying to find something to do with the time we have rushed through life trying to save." -- Will Rogers

EMC's Enchanting Expectations

By Tim Beyers

Storage supplier EMC's(NYSE: EMC) cup has runneth over in recent times. Sales are up. Earnings are up. The balance sheet is stronger, and today, during the firm's annual meeting with analysts, EMC's executives happily shared the good news that revenues would likely grow by 30% from 2003 to 2004. That translates into $8.1 billion in sales this year, which is expected to deliver $825 million in profits, after a one-time charge of $25 million from the first quarter. That's more than 66% better than last year's $496 million in net income.

Much of this success has been credited to great acquisitions, and a new strategy to help customers manage information wherever it may be. Indeed, EMC's turnaround has been impressive, placing a spotlight on the firm. A huge first quarter has also boosted expectations dramatically, so much so that EMC, despite its strengths, may be one of the worst stocks you could buy. Or could it? Let's have a look at some numbers.

Everything looks great at first blush: An expected 66% rise in earnings this year easily bests EMC's current price-to-earnings ratio of 43. But that hardly tells the whole story. Estimates for EMC's long-term profit growth -- three to five years out -- are closer to 14% annually, resulting in a price-to-earnings-to-growth, or PEG, ratio of better than 1.6, indicating a stock whose current price already factors in the bulk of future growth.

But P/E and PEG ratios aren't perfect. I'd consider them the equivalent of a level and a tape measure in a toolbox full of screwdrivers, hammers, wrenches, and, with enough room, maybe a miter saw. That's probably why our team at Motley Fool Hidden Gems rarely uses these measures, opting instead to look at cash flow in valuing picks. (To learn more, I urge you to read Rex Moore's excellent feature on why cash isn't a cruel measure.)

How does EMC stack up? It's a close call. A quick check today shows the firm trading at roughly 17 times its enterprise value-to-free cash flow. Annualizing results from this year's first quarter would give EMC roughly $1.35 billion in free cash flow for 2004, which is 81% higher than its total from four years ago. That's roughly 16% growth per year -- near enough to the multiple to call EMC fairly valued on a cash flow basis.

Does EMC appear to be a great business? Yes. Can you sleep your way to profits in some great businesses? Of course. But is every great business a great investment? Most assuredly no.

Fool contributor Tim Beyers thinks he isn't fairly valued on a cash flow basis. C'est la vie. Tim has no ownership interest in any company mentioned, and you can view his Fool profile here.

More on Today

Learn how to avoid investing pitfalls in Selena Maranjian's confessional Profiting From My Mistakes.... Seth Jayson cautions against getting burned by this season's hot stocks in Three Early Summer Sizzlers.

In other news:

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