John Kerry and John Edwards embarked on a two-week bus, boat, plane, and train trip this morning that will have them campaigning in 21 states during the next two weeks. Doing some quick math, that's more than one state a day. We, on the other hand, are planning a weekend that is heavy on hammock time. Glad we're not running for president.
Here's hoping your weekend is exactly as relaxing or productive as you want it to be.
In today's Motley Fool Take:
- Will Marvel Maintain Its Strength?
- Shameless Plug: Get a Broker
- Washington Post's Educational Advantage
- Discussion Board of the Day: Cheap Air Fares
- Target Cleans House
- Quote of Note
- A Nanotech That Deserves Respect
- More on Fool.com Today
Will Marvel Maintain Its Strength?
I probably have more than 2,000 comic books stored away, most of them collected when I was teenager. It's a very rare occasion that I actually take one or more from the boxes and reminisce, but when I do I instantly recognize the story. It's very Hollywood, actually: Hero taken to the brink, only to summon the courage at the last second to sidestep the villain's dastardly plan, thus clutching victory from the jaws of defeat.
After a lengthy period of thumping the market and contemporaries, Motley Fool Stock Advisor pick Marvel Enterprises
Marvel's cost of sales, as well as taxes, provided the one-two punch that sent it reeling. Marvel spent more than $62 million to do business during the second quarter, a 266% increase over last year's $17 million. And with losses finally behind it, Marvel's effective tax rate jumped higher and farther than The Hulk's signature leaps, to 32% from 16% a year ago. In total, the Feds took more than $15 million from Marvel's bottom line.
That's not to say there wasn't good news in the report. Marvel's sales jumped 73% to $155 million. And Marvel revised upwards its total 2004 guidance. Still, the revised numbers show a decline in income on higher sales -- mixed news to say the least.
As with its many comic book heroes, Marvel now appears to be entering a period where it will be tested repeatedly, and the company will likely have to squeeze pennies to make investors happy. Yet there's reason to be hopeful. In a post to our Marvel discussion board Fool contributor Rich Smith points out that Marvel's stock may be vastly undervalued on a cash flow basis.
Indeed, free cash flow has been one of the company's major strengths, and there's no reason to think this won't continue. Moreover, films starring Elektra and the Fantastic Four are in the works, and deals for new episodes in the X-Men and Spider-Man series have apparently been inked. Don't count our hero out just yet.
For more Fool coverage of Marvel:
- A battle royale over royalties has led Marvel to sueDisney
- Marvel's share repurchase plan might not pack the wallop investors want.
- Spidey has been a hit with summer moviegoers.
Shameless Plug: Get a Broker
If you want to buy stocks, you're going to need a broker. And who wouldn't want to own stocks? There is no place over the past 100 years where your long-term savings would have fared better than the stock market -- not in bonds, not in real estate, not in gold, and certainly not in Beanie Babies. Our Broker Center makes it super-easy to pick the right broker for you, so check it out!
Washington Post's Educational Advantage
Media giant Washington Post
The wave of advertising spending that lifted ad revenues 15.5% at Gannett's
With help from political spending in advance of November's election, broadcasting revenues from the company's six television stations rose 10% to $90.2 million. This is in line with similar advances of 10.3% at Gannett, 10.7% at New York Times
The cable division also had a 10% increase in revenues. Both digital cable and cable modem Internet services have been completely rolled out and are available for all of the division's 712,000 basic cable customers. Around 17,000 digital subscribers have been added over the past year, bringing the total to 220,400 -- for a penetration rate of 31%. This trails Cablevision's
The education segment, though, continues to shine the brightest. Some might recall using Kaplan's materials to study for the SAT, but that is only the tip of the iceberg. In addition to test preparation, the company's wide-ranging services include learning centers, book publishing, software, professional licensing certification, and continuing education, and both undergraduate and graduate degree programs. Thanks to Kaplan's growth (both internally and via acquisition), operating income soared from $3.5 million to $29.4 million.
The long-awaited rebound in advertising spending has yet to fully reach Washington Post's core print business, but other divisions have picked up the slack. Aside from newspaper and magazine publishing (which despite a small drop in revenues experienced a surge in income thanks to a 14% pickup in ad spending at Newsweek), every other segment posted double-digit increases in both revenues and operating income. That revenue diversity will help keep the company on an even keel until the choppy advertising market settles.
Fool contributor Nathan Slaughter owns none of the companies mentioned.
Discussion Board of the Day: Cheap Air Fares
Will AMR's hike send its rivals scrambling, or will the carrier be left with little choice other than to kick off another sale once its low-cost peers fail to follow suit? Where are flight rates headed? Where can you find the best bargains? All this and more in the Cheap Air Fares discussion board. Only on Fool.com.
Target Cleans House
The sale, which involves 257 locations in several states in the west and south, comes just a month after Target announced it would unload its Marshall Field's stores to May Department Stores
The sale of Mervyn's has been in the works for some time and will likely be cheered by investors. To see why, just look at the firm's latest sales figures: Target's name brand same-store sales rose an anemic 2.2% in a difficult June, while Mervyn's showed just a 0.2% gain.
The question now becomes, what will Target do with its new cash? The company had $622 million in cash and equivalents on hand as of May 1 and $9.6 billion in long-term debt. The official line is that the proceeds will go to a $3-billion-dollar buyback of stock and to reduce debt levels. Another possibility, though, is that the extra money could lead to an acquisition. Talk has been swirling the last few weeks that Target is mulling the purchase of Canadian discount retailer Zeller's.
The acquisition may be worth considering, since the retailer does appear to need room to grow. The company expects to have about 1,300 stores in the U.S. by the end of this fiscal year, and it seems it will eventually reach the limit of its potential domestically. Further, updates of existing stores will only take sales so far. Through a Zeller's purchase, Target would immediately gain a major foothold in Canada, where competitor Wal-Mart
Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.
Quote of Note
"History will be kind to me for I intend to write it." -- Sir Winston Churchill
A Nanotech That Deserves Respect
Tom Gardner expects his Motley Fool Hidden Gems recommendations to face a bumpy road. They are small and have little analyst coverage. In a word, they are "hidden." But hidden is usually a good thing in investing.
Hidden Gems recommendation Flamel
To be fair, the company did miss the earnings estimates of the three analysts that follow it. One expected a $0.20 per-share profit. The lowest estimate was a $0.06 per-share loss. The actual loss was $0.07 per share. Shucks!
Flamel and its peers in the Merrill Lynch
Flamel uses its polymer chemistry expertise to make new and already-marketed drugs safer and more effective. It is the ability to work with FDA-approved drugs -- which would have greatly reduced development times -- that makes near-term revenue and earnings possible.
Remember the three analysts? They expect the company to earn anywhere from $0.20 to $1.63 per share in 2005. Yes, that is a wide range. But, the growth of revenue and earnings at Flamel could be explosive -- and that is one reason it is a Hidden Gems recommendation.
The company's Medusa nanoparticle technology improves the delivery of native protein drugs through a more evenly controlled release of the drug. The technology also avoids side effects and enables a longer span of time for drug release -- both of which are a significant advantage. Bristol-Myers Squibb
The company's microparticle Micropump allows small-molecule drugs to have extended delivery times. Generic-drug company Biovail
Today's stock action is not indicative of any change of fortune at Flamel. In fact, the company announced the start of construction for a new manufacturing facility. Flamel is clearly getting ready for the future.
The company has a more than respectable $101 million in cash. That's plenty considering the latest quarter's loss was $1.6 million. The stock isn't getting respect in today's trading, but Flamel's long-term future looks like a gem.
Fool contributor W.D. Crotty does not own stock in any of the companies mentioned.
More on Fool.com Today
In The Tech Stock Opportunity, Whitney Tilson argues that the tech sector is fertile ground for value investors.... In Freddie Mac: No Housing Bubble, Salim Haji gets the scoop on why Freddie Mac thinks that the U.S. real estate market today is rational.... Rick Munarriz takes a closer look at DreamWorks, Disney, and Pixar and sees potential for rewards and pitfalls in Animation Niche's Overdrawn.... Bill Nygren shares why he stands behind certain solid stocks in Matt Logan's 5 Stocks for the Next 10 Years.
In other news:
- TransAct Decides Not to Act
- Is LookSmart Looking Up?
- The Volatile Sock Market
- Unfair Airfare Warfare
For a list of all our stories from today, see our Today's Headlines page.