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


Rich Smith

You know the old saying, "There's just no pleasing some people"? Seems a lot of those people work on Wall Street. Yesterday, Motorola(NYSE: MOT) did its darnedest to please everybody by issuing a bang-up earnings report. It boosted sales 26% year-on-year. It quadrupled its Q3 2003 earnings (to $0.20 per diluted share). It retired $450 million in long-term debt. Wall Street's response was to erase more than $2 billion of Motorola's market cap, dropping the stock 4.9% in after-hours trading. The apparent reason: Motorola "missed estimates" by a penny. Once more, that was "missed by a penny" but "lost $2 billion in market cap." That was one pricey penny.

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(NYSE: SNE) have been putting out recently. It seems that Motorola's mere 15% increase in shipments since Q3 2003 didn't qualify.

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!(Nasdaq: YHOO) Finance's database, just a glance at the previous 12 months' numbers reveals that Motorola has an enterprise value-to-free cash flow ratio of 14. This company is far cheaper, on an "owner earnings" basis, than its P/E would suggest. Cheap enough, in fact, that while this here Fool will never buy other than a Nokia(NYSE: NOK) phone, he could perhaps now be persuaded to pick up a few shares of Motorola stock.

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


Seth Jayson (TMF Bent)

Looks to me like the folks at Colgate-Palmolive(NYSE: CL) are feeling a bit edgy. Witness the preemptive headline in today's release "earnings in line with previous guidance." Of course, the corporate flacks had good reason to be watching out for investor reaction. Lowered guidance back in September sent the stock crashing to a 52-week low, and it hasn't recovered much since then.

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(Nasdaq: NFLX), Amazon.com(Nasdaq: AMZN), Blockbuster(NYSE: BBI)?

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.

Among peers like Clorox(NYSE: CLX) and Procter & Gamble(NYSE: PG), only Gillette(NYSE: G) has better margins. All of them trade at much higher earnings multiples -- for now.

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:

Interested in "boring" overlooked values like Colgate-Palmolive? Take a free trial of The Motley Fool's Inside Value and Income Investor to find birds of the same feather.

Seth Jayson is pretty sure he uses Colgate toothpaste, but at the time of publication, he had positions in no company mentioned. View his stock holdings and Fool profile here. Fool rules are here.

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


Rick Aristotle Munarriz (TMF Edible)

While Monster Worldwide(Nasdaq: MNST) is always good for a pricey Super Bowl ad or a clever marketing stint, I think the best product placement has to go to its rival. At the end of every episode of The Apprentice, as the canned contestant rolls away, a Yahoo!(Nasdaq: YHOO) HotJobs ad is perched prominently on the cab. In other words, you just got fired by Donald Trump, so here is a great site to help you land some work.

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(Nasdaq: GOOG) or InfoSpace(Nasdaq: INSP)?

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.

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