The stock market shook off Sunday's new terror warnings for financial institutions around New York City and Washington, D.C. After opening down, the major indexes eventually made their way back to even by late afternoon. It was a welcome sign for long-term investors.
Homeland Security Secretary Tom Ridge said any attacks "would not undermine the greatest economy in the world" and would largely be "iconic" in nature. That doesn't make them any less frightening. But while we may be on edge, we don't need to panic with our money, no matter how much the market may get spooked in the future. Our financial institutions may be under alert, but your portfolio doesn't have to be.
In today's Motley Fool Take:
- P&G's No Gamble
- Shameless Plug: Motley Fool Visa Card
- Satellite Radio Comes Around
- Quote of Note
- Will Investors Go for Google
- Discussion Board of the Day: Google
- More on Fool.com Today
P&G's No Gamble
I went shopping at Costco
When consumers hear the names Procter & Gamble, or rivals Johnson & Johnson
One company producing tremendous results because of this brand loyalty is Procter & Gamble. One look at P&G's robust fourth-quarter results proves my point: The company's earnings shot up 44% from last year and its earnings per share landed $0.02 above the analysts' consensus estimate ($0.50 vs. $0.48). Net sales were up an impressive 19%, and P&G's "organic" growth (which excludes the impact of acquisitions and divestitures) was a solid 10%. While revenue growth was healthy, the real star of the quarter was the company's gross margin improvement. P&G counteracted commodity price increases with restructuring, volume efficiencies, and an effective cost-reduction program.
The icing on the cake for Procter & Gamble was its expectation that fiscal 2005 first-quarter earnings will be at the upper end of the current $0.69 to $0.72 per-share range. The company's cost-conscious nature and mass buying strategy should also aid future results. Consumers might be cutting back on some luxury and other discretionary spending items, but they will always need to purchase P&G's line of basic goods. I see the shares, which carry a dividend yield of 1.92%, as a great purchase for income investors.
Fool contributor Phil Wohl spent more than 12 years on Wall Street and now concentrates his writing on more fictional characters. He has no stake in any firm mentioned above.
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Satellite Radio Comes Around
We call them earnings reports, though in the case of fledgling satellite radio upstarts XM Satellite Radio
However, the potential is clearly huge as the two companies have a massive potential market to carve between themselves. Both service providers have been growing their subscriber base quickly -- as well as widening their already deep lineup of programming channels. This week, it will be XM announcing its June quarter results.
With more than 2.1 million subscribers, market leader XM's growing popularity is not the problem. The rub lies in the red -- the company posted a loss of $584.5 million last year. Yes, the fundamentals are improving, above and beyond the user count. The deficits should continue to narrow. The average acquisition cost for each new subscriber is falling. Both XM and Sirius have a long way to go, but at least they are heading in the right direction.
We'll know a little better how well XM is sticking to that path after it reports Thursday.
Other familiar companies will be posting earnings this week. From Sara Lee
Longtime Fool contributor Rick Munarriz would gladly broadcast his opinion on more than 100 channels of digital radio -- if only someone would listen. He does not own shares in any of the companies mentioned in this story.
Quote of Note
"There are some things you learn best in calm, and some in storm." -- Willa Cather, American novelist
Will Investors Go for Google
Google has stepped one step closer to its IPO, having brought live the site where investors will be able to bid for shares of the Internet search concern. Soon, investors will be able to bid on shares of GOOG and, given the expected price range, bid hefty prices indeed.
The long-awaited site has Google's trademark look about it, just like every other innovation Google releases. As we all know through our summer reading, the Dutch auction angle makes Google's IPO unique. (For more on Dutch auctions, read this commentary from longtime Foolish analyst Bill Mann.)
Last week, Fool contributor Tom Taulli eyed Google's astronomical per-share range and market cap. His contention was that when there's mania, "no price is too high" for shares of a company as popular -- and hyped -- as Google.
While I can understand that point of view -- turn the clock back 5 years and it was definitely the rule, not the exception -- I'm not sure I agree in this case. I doubt Google will attract the same brand of salivating investors of yesteryear.
Sure, I'm a loyal Google user, and I've been fascinated tracking ways it's grabbing more Internet real estate by providing new and improved services. (Goodness knows I've written about these moves enough!)
While I have often marveled at Google's Web savvy and questioned whether Yahoo!
Despite the undeniable emotional appeal of Google, I sincerely wonder who the big spenders are who will shell out for a piece of Google at a projected market cap of $29-$36 billion. Is no price too high? Despite the old saying, "How soon they forget," I feel the high market caps of many flamed-out IPOs gone by likely stuck with investors; a few years of recession, and for some of us, joblessness, likely cooled some "Viva Las Vegas" sentiment as well.
So when it comes to this IPO, I do wonder, "Who's gonna go for Google?" In what is expected to be a few short weeks, we're going to find out.
Read more Foolish coverage about Google:
- How Will Google Grow? by Tom Taulli
- Wall Street Ticked Off by Google, by Selena Maranjian
- Google IPO? No Thanks, by Bill Mann
Alyce Lomax does not own shares of any of the companies mentioned.
Discussion Board of the Day: Google
Can't wait to get in on Google? Or do you think all the hype is lunacy? Discuss the upcoming IPO with other Foolish investors on the Google discussion board.
More on Fool.com Today
In other news:
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