New rules for overtime pay for workers went into effect today, marking the first time the federal overtime law has been changed in more than 50 years. Of course, there's a reason the law hasn't been changed in 50 years -- it's a political lightning rod. Both sides argued the merits and demerits of the new rules today. Once you figure them out, you can figure out whether they will affect any companies you invest in -- not to mention your own salary.
In today's Motley Fool Take:
- Wal-Mart's Long, Hot Summer
- Wanted: Foolish Writers
- FedEx Flies
- Discussion Board of the Day: Ask the Headhunter
- WWE's Secret Weapon
- Quote of Note
- More on Fool.com Today
Wal-Mart's Long, Hot Summer
Investors digested word today that Wal-Mart
When it comes to Hurricane Charley, sure, many people likely rushed to their local Wal-Marts for everything from bottled water to candles to batteries. Apparently that wasn't enough to offset the fact that the retailer had to close 75 stores for a period in the affected areas, while a total of 200 stores in some way felt the hurricane's wrath.
Meanwhile, back-to-school sales apparently are not materializing as hoped. One might wonder how much of that has to do with the fact that the long Labor Day weekend heralding the end of summer has shifted this year, to occur in September instead of August.
It wasn't too terribly long ago that I reported on Wal-Mart being one of the discounters that doesn't quit. At that time, Wal-Mart felt "optimistic" about the consumer and the back-to-school season, despite leeriness over high gas prices and such factors that might depress shoppers. Rival Target
Despite it all, Foolish colleague Steven Mallas made excellent points recently when he explored Wal-Mart's same-store sales, which already weren't as robust as some might have hoped. However, he pointed to the high same-store sales figures last year, which included the benefits of child-care tax credits. He also indicated that Wal-Mart investors shouldn't get caught up in the weekly and monthly machinations of the retailer unless a definite trend begins to form.
The same goes here. Despite the possibility of a slow back-to-school season, it still behooves investors to watch the big picture and avoid pessimism over short-term movements. What's perhaps more interesting here, of course, is the perceived connection between Wal-Mart's sales and consumer confidence, another example that it has been an unpredictable summer for retail.
Alyce Lomax does not own shares of any of the companies mentioned.
Wanted: Foolish Writers
Do you read the Fool's content and say to yourself, "I could have written that!" Do you post thoughtful arguments on our discussion boards? Do you have an opinion on everything from Amazon.com to Wal-Mart? Then we're looking for you. We're seeking the best and brightest minds out there to contribute to Fool.com. We're taking applications for both full-time positions and freelance Fools. Visit jobs.fool.com and check out the listings under Editorial and Writing.
It may be a fairly slow news day today, but FedEx
FedEx said it now expects earnings of $1.00 to $1.10 for the first quarter and $4.40 to $4.60 for the year. This compares to its previous guidance for quarterly earnings of $0.90 to $1.00 and yearly earnings in the $4.20-to-$4.40 range.
It's not too surprising investors felt jubilant regarding the news. After all, this isn't the first time in recent history that FedEx, a Motley Fool Stock Advisor pick, upped its guidance; it also did so in June.
Today, FedEx cited strong demand in international express, ground, and less-than-truckload service. Despite risks such as the high price of oil, FedEx said it still expects strong demand for its services. It also said it will increase capital investments to $2.0 billion to $2.1 billion to expand capacity in those areas.
Major rival UPS
In that article, Rich also indicated that shipping and delivery companies give us an idea of overall economic health. Meanwhile, longtime Fool Rick Munarriz has pointed out that maybe high gas prices will cause a higher tendency to shop online, an interesting thought that can't be ignored. Why drive all over creation when you can pinpoint what you're looking for on Amazon.com
Now that FedEx has earnings growth of 25% to 30% on tap for the year, it may indeed be a good time for investors to consider FedEx, which has a history of delivering more money. Meanwhile, in general, it was heartening news for investors who found reason to sweat over Wal-Mart's
Alyce Lomax does not own shares of any of the companies mentioned.
Discussion Board of the Day: Ask the Headhunter
Have you been checking out the job sites such as Monster.com? Need a new job? How do you nail a difficult job interview? All this and more in the Ask the Headhunter discussion board. Only on Fool.com.
WWE's Secret Weapon
The tradition of the foreign object is one of the greatest in rasslin' history. While anything will do -- a Coke
If you're a World Wrestling Entertainment
The 9% sales surge didn't match last quarter's timing-juiced, 20% revenue spike, but it was better than last year's ring-rope flat trend. The $81.6 million included some disappointments, including a 14% decrease in comparable pay-per-view buys, a 1% drop in revenue from live events, and a 20% drop in average crowd size in North America.
At the final bell, the firm brought in $0.11 per share in earnings, a 175% gain over the prior-year quarter. How did it make a comeback like that with sales continuing to slide in its primary events? By putting costs in a headlock and expanding sales in key, higher-margin areas.
Stronger international numbers and better television revenues provided a soothing ice pack for the wearied events segment. This quarter, WWE put up a 33% gain in branded merchandise and 128% spike in home video sales. Let's pin that down: Live and televised events carried gross margins of 39%, a 5% improvement. But the branded/video products put up a 10% margin improvement, to 44%. Keep in mind that this still accounts for only a fifth of the firm's revenue pie, but stealthy improvements here could provide big rewards for investors with their eyes wide open.
The firm managed $35 million in free cash flow (FCF) last year and more than $9 million so far this year. That puts it at an enterprise value-to-FCF ratio of around 15. That's cheaper than the market as a whole, which is unsurprising given guidance for decreasing revenues and earnings. But Fools should keep an eye open. If this proven contender gets much cheaper, it may soon hit the mythical territory of the good company at a great price.
Quote of Note
"More men are killed by overwork than the importance of the world justifies." -- Rudyard Kipling, British author
More on Fool.com Today
In Outsourcing Pays Off at Home, Rich Smith says outsourcing can benefit Americans by driving down prices and stimulating job growth.... Ben McClure says competition, rising costs, and political meddling is hammering drug makers in Rethinking Big Pharma.
In other news:
- Kreme-Filled Earnings
- Is Monster Ripe for a Takeover?
- A Primer on Stagflation
- Big Profits Not So Boring
For a list of all our stories from today, see our Today's Headlines page.