If you wanted drama, you've got it in New York tonight, where the Boston Red Sox try to overcome what had looked like the grimmest of playoff appearances by doing something no baseball team has ever done in the history of the majors: win a seven-game postseason series after being down three games to zero.
In fact, until last night, no team had ever even forced a seventh game after being down 0-3. Add to it that this is the Red Sox and Yankees -- mortal enemies -- who took seven games and then some to decide things last October, and you have the makings of something we may have never seen before in sports.
Enjoy the ride. Or, for you Red Sox fans, please put away all sharp objects and consider sedatives. Just in case.
In today's Motley Fool Take:
- Motorola's Missing Penny
- Discussion Board of the Day: Ask The Headhunter
- A Bargain in Aisle Four
- Quote of Note
- October Means Monsters
- More on Fool.com Today
Motorola's Missing Penny
You know the old saying, "There's just no pleasing some people"? Seems a lot of those people work on Wall Street. Yesterday, Motorola
Motorola even went so far as to predict precisely the same fourth-quarter revenues and profits that the Street had (officially) been looking for: mid-$9-billion revenue and about $0.24 in per-share profits, which would equate to roughly 20% year-on-year earnings growth. Official expectations aside, analysts were reportedly disappointed when, upon opening the earnings statement, they found no "special prize" inside -- something along the lines of the cell phone shipment numbers that rivals LG, Samsung, and Sony
The Street's reaction seems especially peculiar in light of the fact that Q3's superb results were no fluke but just the continuation of a strong resurgence at Motorola. Over the past nine months, sales are up 36% over last year, and net margins are better by half after increasing from 2.1% to 3.4%. Result: Profits are up by well more than 100% per diluted share ($0.37 year-to-date). The company looks well on its way to notching GAAP profits in the low $0.60s for the year.
Now granted, with a share price in the upper $17s, that gives Motorola a pretty lofty P/E ratio of about 30. Companies that richly valued aren't often given a whole lot of slack when they underperform. But come on! That P/E completely understates Motorola's true cash profitability. Even without considering this quarter's strong performance, which hasn't yet been entered into Yahoo!
There's plenty more to know about a big business such as Motorola. Read all about it in:
Fool contributor Rich Smith owns shares in Motorola rival Nokia but not in any other company mentioned in this article.
Discussion Board of the Day: Ask The Headhunter
Do you have a favorite job site? Why do you think online recruiters are doing so well? Are you ready for your next job interview? All this and more in the Ask The Headhunter discussion board. Only on Fool.com.
A Bargain in Aisle Four
Looks to me like the folks at Colgate-Palmolive
But there's little reason for such pessimism about this toothpaste 'n' soap seller. True, today's bottom line for shareholders, $0.58 per share, came to less than last year's $0.63, but there are good reasons for the difference. The prior-year quarter saw a much lower tax rate, and this year's was abnormally high. The spread on that line alone was 7%. Ouch.
Furthermore, the company put out more for commercial spending, lowering operating margins but gaining market share in overseas economies such as the UK, Russia, and China. Collecting consumer recognition at the cost of competitors big and small can pay off handsomely in the future, and, of course, it's nice to remain solidly profitable while doing so. Are you listeningNetflix
Top-line growth of 7% (5% without foreign exchange benefits) may not seem too exciting, and it will probably hold back the Street for a while. Let's face it, this is one of those "inevitable" businesses. That's why Foolish value and income investors would be wise to look again at the firm's copious free cash flow -- in the neighborhood of $1.5 billion per year -- and nice dividend yield.
In short, this is one of those bargain opportunities that comes along only periodically with what is otherwise a pretty steady company. It looks like a great time to stock up on a consumer staple.
For related Foolishness:
- See why Colgate-Palmolive made a Fool's list of blue-chip bargains.
- This is why the firm's stock was washed away.
- Get a load of Procter & Gamble's rising tide.
Quote of Note
"We don't know what we want, but we are ready to bite somebody to get it." -- Will Rogers
October Means Monsters
While Monster Worldwide
Yet let's not deny Monster its due. The company reported a "monster" quarter last night. Earnings rose by 55% to $0.17 a share while revenue grew by 33%. While intriguing acquisitions helped results, even Monster's organic top-line growth was a healthy 27%.
Things are only going to get better, as the company expects fourth-quarter earnings to grow to $0.19 a share from its $0.10 a share showing last year.
With employers turning to the Internet to help streamline their recruiting efforts -- and potential employees taking advantage of the platform to distribute their resumes virtually -- it's hard not to like the prospects of leading career sites like Monster, HotJobs.com, and CareerBuilder.
That begs the ultimate question: Will the headhunters come? Just as Yahoo! was able to grow its online might by acquiring HotJobs.com, can Monster expect to be courted by the likes of Google
That isn't likely. If there wasn't a wave of consolidation when the online job specialist was going through some growing pains, shareholders are unlikely to accept a buyout offer these days. The stock has tripled off of last year's lows and the prospects continue to improve.
If this were a job interview, how could you not hire Monster?
Longtime Fool contributor Rick Munarriz thinks that he would rather go to work than bang on his drum all day. He does not own shares in any of the companies mentioned in this story.
More on Fool.com Today
Insider ownership is easy to screen for, but more nuanced than you might think, Paul Elliott says in Profiting With the Insiders.... In Is Marsh Ringing the Value Bell?, Rogene Calvet asks: Does a troubled global insurer offer a buying opportunity?... The best way to invest for the future is to make sure that you don't depend on it going exactly right, Bill Mann says in You Don't Know The Future.
In other news:
- The Grinch Visits Electronic Arts
- Mondavi Uncorks Big Gains
- Let Them Eat Cheesecake
- Will This Takeover Plan Turn Into Gold?
For a list of all our stories from today, see our Today's Headlines page.
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