Today, we offer our salute to Rodney Dangerfield, who died yesterday at the age of 82. Dangerfield is an icon for anyone who grows up thinking they "get no respect" yet has enough self-deprecating sense of humor to trudge through life and enjoy it anyway. Dangerfield didn't make it big until the hit movie Caddyshack propelled him to stardom in 1980, when he was already in his late 50s. If nothing more, he proved it's never too late to succeed, as long as you can laugh at yourself along the way.

In today's Motley Fool Take:

Is Stern Worth $1 Billion?

By

Seth Jayson (TMF Bent)



What's the dollar value of 60 months' worth of jokes about Ba Ba Booey's teeth? How about five years' lamentations about a DJ's private parts? Semi-naked strippers spanked on air? Angry, drunken midgets? Obscene phone calls?

To judge by pre-market trading, well more than $1 billion dollars. In the saner moments after the opening bell, only half a billion. What am I talking about? The market cap of Sirius Satellite Radio(Nasdaq: SIRI), which announced that it had finally inked a long-rumored deal with Howard Stern that will take him away from Viacom's(NYSE: VIA) Infinity Broadcasting. Stern has been threatening to leave for sat radio for a long time, especially after Clear Channel Communications(NYSE: CCU)dropped him from several stations earlier this year.

Attempting to keep investor enthusiasm in check has never been one of Sirius management's strong suits, but calling this "the most important deal in the history of radio" is self-deluded BS of the first degree. C'mon, folks. When Stern calls himself "King of all Media," you know that he knows the hyperbole is funny. The key to humor is self-awareness -- unless you want people laughing at you.

But there's a lot that suggests Sirius management has trouble discriminating between hype and reality. A brief glimpse of its deteriorating financials is ample proof.

Before we turn to planet Earth, let me applaud. Nice going, Sirius. Those who are familiar with my previous takes on Sirius and larger competitor XM Satellite Radio(Nasdaq: XMSR) might be surprised by that acknowledgement. But, hey, I like Howard Stern. I am in no way above making, or laughing at, a good doody gag. Sirius' good product will be improved when "Miss America" himself finally hits the orbital airwaves -- well over a year from now. NPR, NFL, the NRA, Howard Stern, and Pamela Anderson? That's fun for the whole family.

But this is about the stock. There's no question about that situation: It's not worth it.

Anyone willing to pay up for this stock today is doing more hoping than thinking -- or maybe just swapping sardines. As we've pointed out in this space many times, despite deals with Ford(NYSE: F), DaimlerChrysler(NYSE: DCX), and RadioShack(NYSE: RSH), Sirius was already horribly overvalued by any metric or feasible growth model. The Stern deal will cost $100 million per year -- adding about 30% to operating costs -- meaning Sirius will need to add 1 million subscribers to break even. As of last quarter, the firm had less than half that many paying customers. And there's evidence that the public's appetite for sat radio isn't so voracious as expected. XM's recent tally was below analysts' expectations.

Those lucky enough to sell their Sirius to the overagitated suckers during the next few days may be sitting pretty. But anyone who holds this for the long term had better hope that future investors -- the ones who will be paying for their shares -- don't care about minor issues like earnings or return on investment.

For related Foolishness:

No, Seth Jayson is not shorting Sirius. At the time of publication, he had positions in no company mentioned. View his stock holdings and Fool profile here.

Discussion Board of the Day: Yahoo!

Do you think Yahoo! should follow Google and Kanoodle into attracting small publishers, or will it only tarnish the company's brand? Is it important for Yahoo! to have a presence where Google goes for the sake of appearing competitive? All this and more in the Yahoo! discussion board.

It's "Show Me" Time at Apollo

By

Rich Smith

With a market cap upwards of $13 billion, for-profit educator Apollo Group's(Nasdaq: APOL) days as a hidden gem -- an undiscovered small cap with explosive potential for capital appreciation -- are far behind it. On the other hand, this company is fast taking on another attribute we look for in hidden gems: It's becoming "unloved." With a stock price that over the past 52 weeks has underperformed the S&P 500, Apollo is certainly less loved today than it has been in months past.

Which got me to thinking: Large cap or no, as unloved as it's becoming, Apollo may be worth a look. So without further ado, let's grab a copy of Apollo's fiscal 2004 earnings release (issued yesterday) and run the company's numbers through our 7 Steps for grading potential gems. Show us the value, Apollo!

Market cap
We've covered this. Apollo is no small-cap.

Enterprise value-to-free cash flow
After you subtract Apollo's cash and equivalents from its market cap, and add back its miniscule long-term debt, the company sports an enterprise value of $12.7 billion. Divide that by its $400 million in free cash flow, and you wind up with an EV/FCF ratio of 32 -- three times our target level of 10 or under.

Projected earnings growth and recent ROE
Despite all the negative news about the for-profit educators engendered by recent lawsuits and federal investigations at peers ITT Educational Services(NYSE: ESI), Corinthian Colleges(Nasdaq: COCO), and Career Education(Nasdaq: CECO), growth in this sector still has legs. Analysts continue to project 25% long-term growth for Apollo. Meanwhile, the company is currently generating a return on equity of better than 27%.

EV/FCF/G and EV/FCF/ROE
Under both of the methods we use to evaluate a company's cheapness -- its EV/FCF as compared with its projected growth rate, or its return on equity -- the company fails the test, scoring, respectively, a 1.3 and a 1.2, while we are looking for something under 1.0.

Insider ownership
Insiders have a high degree of confidence in this company, as demonstrated by the low level of insider selling and the high level of insider ownership (22%).

Share dilution
Share dilution simply does not happen at Apollo. Over the past five years, shares outstanding have risen a total of just 1.1%. Compare that to the ignominious report cards received by serial diluters Intel(Nasdaq: INTC), Oracle(Nasdaq: ORCL), or EMC(NYSE: EMC), and Apollo deserves an A.

Conclusion
Even dyed-in-the-wool small-cap Hidden Gems aficionados have to admire the capital gains that large-cap Apollo shareholders racked up before its recent slide. Considering the company's copious free cash flow generation, its high level of insider ownership, and its almost total lack of share dilution, this is a company to keep on your investing radar. The valuation isn't quite as low as we'd like it to be, but given time, the market may discount Apollo further. Be ready if it does.

While waiting for Apollo's price to come down further, use the time to educate yourself about the for-profit education sector's legal woes. Read all about it in:

Fool contributor Rich Smith owns no shares in any of the companies mentioned in this article. The Fool has a disclosure policy .

Quote of Note

"There is no greater joy nor greater reward than to make a fundamental difference in someone's life." -- Sister Mary Rose McGeady

Wake Up, Yahoo!

By

Rick Aristotle Munarriz (TMF Edible)

When Yahoo!(Nasdaq: YHOO)acquired the pioneer in the lucrative paid search arena, it seemed as though it was just a matter of time before Overture's market leader position, coupled with the marketing muscle of Yahoo!, would leave its rivals eating cyberdust. However, under that assumption, the clock's been running slow.

Overture is still a force to reckon with these days, but one has to wonder how much longer it will be willing to rest on its historical laurels. See, there are two sides to making paid search work. You need the supply of new ads, and market leaders Yahoo! and Google(Nasdaq: GOOG) have fared well on that front of attracting sponsors.

However, you also need the industry's equivalent of demand, and that is page impressions. While arguing that Yahoo! is lacking eyeballs may sound heretical -- I mean, of course, Yahoo! is a traffic magnet in just about every conceivable way -- it did drop the ball when Google launched its AdSense service for small online content publishers last year.

If you ever come across an independent reference site, unofficial fan site, or a renegade blog with text-based advertisements underscored with an Ads by Goooooogle link, then you have been touched by the long arm of AdSense's reach.

Google splits the ad proceeds with the publisher for any generated leads, and everyone is usually happy. While one can argue that the mighty Overture never needed the little webmasters given its established distribution network, the point here is that Google has been carving this market all alone for over a year and plastering the Internet with its brand in the process.

Yesterday, a new player stepped into the game. No, it's not Yahoo!, as it is still tapping the snooze bar button. Kanoodle launched its BrightAds service for small and midsize content publishers.

While BrightAds is less restrictive and more transparent than AdSense, it may suffer on the supply side as it lacks the vibrant high-bidding sponsors that flock to Google and Overture. This isn't to write Kanoodle off as a small fish as it does serve up paid ads on popular sites for MarketWatch(Nasdaq: MKTW), USA Today, and Autobytel(Nasdaq: ABTL).

However, the fact that upstart Kanoodle is now joining Google in toiling away in a sandbox that Overture continues to ignore should be worrisome to Yahoo! investors. Is the pioneer too proud to be a follower?

Longtime Fool contributor Rick Munarriz is a big fan when it comes to the potential of contextual text-based advertising. He does not own shares in any company mentioned in this story.

More on Fool.com Today

The stock market has a back door to returns. Wanna know where it is? James Early discusses some possibilities in 4 Small Caps That Boost Your Odds.... Fannie Mae doesn't have direct contact with consumers. Why is this company so important? Bill Mann explains in What Does Fannie Mae Do?

In other news:

For a list of all our stories from today, see our Today's Headlines page.