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In today's Motley Fool Take:
- Disney Turnaround?
- Discussion Board of the Day: Disney
- Will Blockbuster Bust Netflix?
- Shameless Plug: Hidden Gems
- Marvel's Plush Deal
- Quote of Note: Donald Trump
- More on Fool.com Today
By Rick Munarriz (TMF Edible)
Mickey Mouse is flashing that wide signature smile again now that Disney
The entertainment giant saw its fiscal third-quarter profits rise by 21% to $0.29 a share on a 17% spike in revenues. With theme park attendance improving and ESPN a bulwark sporting 10 consecutive quarters of subscriber growth, weaknesses at ABC and the multiplex box office were easily overcome.
The company has earned $0.88 a share through the first nine months of its fiscal year. That's refreshing relative to last year's showing -- and the year before that -- but it's only a marginal improvement on the $0.85 a share that Disney earned three years ago during the same period.
However, Disney is targeting double-digit growth through at least 2007, hitting record operating profits again by fiscal 2005. The company also continues to pay down its debt, paving the way for share buybacks and a likely dividend hike. That should keep the lynch mob away.
Yet Disney continues to leave many spectators scratching their chins. It continues to hold off ordering its third cruise ship, despite the fact that bookings are running 30% ahead of last year and the Disney Cruise division's 25% in operating margins are as tempting as the upbeat outlook by rival fleets like Carnival
In commenting on its intention to produce sequels on the characters it owns from Pixar
In sum, it's refreshing to have to reach to poke holes in Disney's boat right now. Yes, ABC is struggling with profitability, and attendance at the California theme parks has been running sluggish since the quarter ended, but with so many parts in the Disney machine, you never expect to have them all coasting along. The company is putting out more good news than bad, and that's probably the clearest indication that a turnaround is afoot.
What did you think of Disney's report? Are you distressed to find out that ABC will need a smashing new season to achieve profitability? Should the company go ahead and flesh out its cruise ship fleet? All this and more in the Disney discussion board. Only on Fool.com.
By Alyce Lomax (TMF Lomax)
Today, the inevitable happened. Blockbuster
This is a move that feels long overdue. Back in May, Blockbuster's answer to Netflix was to provide a monthly rental program in which customers paid a flat fee for a similar rental structure, which included having a specified number of flicks rented at any given time without late fees. However, it still required that customers bring their DVDs back to the bricks-and-mortar Blockbuster they rented them from.
Part of Netflix's major claim to fame has been the innovation and convenience of its Internet-and-mail-order hybrid, under which customers would log onto the Net to order movies, which they would receive via the U.S. Postal Service and easily pop back into the mail when done.
Blockbuster Online's version represents a $2 discount to the monthly fee Netflix charges for three movies out at one time. In addition, USA Today pointed out that Blockbuster's online catalog includes 25,000 titles, a vast improvement to the in-store model, where most emphasis is placed on a glut of new releases and more obscure or older films get short shrift. In a new twist, it will provide two free movie rental coupons for its stores per month with the service.
Obviously this could build quite a roadblock for Netflix. Incidentally, though, some Foolish community members have tried Blockbuster's service during beta testing, and its pros and cons have been thoroughly discussed on our Netflix discussion board: Lots of folks seem to think the Blockbuster version isn't that different.
However, much like Motley Fool Stock Advisor pick TiVo
Though both stocks dipped today, this is hardly a move that is unexpected (especially given the beta test). Many are banking that the power of branding may ultimately mark Netflix as the winner in online, all-you-can-eat DVD rentals. However, what may be the clearer differentiator will be continuously tapping into what works for movie watchers, a feat that Blockbuster and bricks-and-mortar rivals like Hollywood Entertainment
Here at the Fool, many have come to Netflix's defense. Here are a few articles:
- Netflix's Growing Pains, by Phil Wohl
- The Last Word on Netflix, by Daniel Hong
- Netflix Retains Edge, by Seth Jayson
Alyce Lomax does not own shares of any of the companies mentioned.
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By Steven Mallas
Marvel and Sony
Speaking of potential overexposure, the release mentions that -- big surprise! -- Spider-Man will be the initial focus of Russ Berrie's retail attack. The plan is to make Peter Parker and his companion persona as cuddly as Mickey and Minnie or Time Warner's
As I previously mentioned in a piece about Marvel's entanglement with Disney, I would love to be able to say that I hold stock in the Incredible Hulk and Daredevil. But it merits some closer attention, especially since it got walloped recently on its latest earnings report. This villainous correction will probably give a lot of investors out there a second shot at this stock. There will be more movies down the line, more plush merchandise, more video games. Marvel will eventually regain its momentum, although it will probably take some time.
Fool contributor Steven Mallas owns shares of Disney, but none of the other companies mentioned
Quote of Note
"A little more moderation would be good. Of course, my life hasn't exactly been one of moderation." -- Donald Trump
Back in 1999, the Fools in the Rule Breaker portfolio were short Trump, waiting for bankruptcy. This week, the wait is over. We revisit David Gardner's private meeting with Donald Trump in 1999.... Speaking of shorting, today we've got the dos and don'ts of shorting with Columbia's Bruce Greenwald in The Art of Shorting.... Worried about the declining market? Tom Gardner has some sage words for investors -- declining prices can be your friend.... Do you know your FICO score? Dayana Yochim doesn't -- yet.... Finally, Bill Mann has a CEO who was indicted, convicted, and paid a bonus!
In other news:
- Baby Talk at Toys "R" Us
- Bally's Looking Unfit
- Federated's Slow Strides
- eCollege Takes an Incomplete
For a list of all our stories from today, see our Today's Headlines page.
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