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In today's Motley Fool Take:
- Still Lovin' McDonald's
- Discussion Board of the Day: Christmas Year Round
- eBay Fraudsters Pay Up
- Quote of Note
- A Fantastic Cancer-Drug Deal
- Marvel's Unseen Superheroes
- More on Fool.com Today
Still Lovin' McDonald's
Who's still lovin' the Golden Arches? Pretty much everyone, it would appear. Just when you wonder whether McDonald's
For the month, total systemwide sales increased 9.5%, or 7% if you strip out the benefit of currency changes. Same-store sales increased a slimmer 6.1%. This represents a bit of a slowdown from last year's gains, but it's still solid, especially considering the mileage the firm has been getting from its more modest sales gains. When you squeeze 42% earnings growth out of 9% upticks in sales, you're doing plenty of things right.
For what it's worth, the firm gave credit for increased traffic to its Monopoly giveaways.
I'm betting it's more than that. Need some proof? Consider the meager 2% October comps growth at rival Yum Brands
With a tasty, 1.8% dividend and continued excellent execution, McDonald's looks like it would make a healthy addition to any portfolio.
For related Foolishness:
- Wondering why October had no treats for Wendy's?
- See why McDonald's is no harmful Monopoly.
- Is the run-up over? One Fool thinks not. Another is less sure.
Seth Jayson thinks he will be unable to resist his McDonald's craving today. At the time of publication, he had positions in no firm mentioned. View his stock holdings and Fool profile here. Fool rules are here.
Discussion Board of the Day: Christmas Year Round
Do you enjoy watching the holiday epics even in the lull of summer? Have you already decked the halls before Thanksgiving? Do you feel empty come January? You're not alone. All this and more -- in the Christmas Year Round discussion board. Only on Fool.com.
eBay Fraudsters Pay Up
Today, a New York court ordered eight eBay
According to the Associated Press, the state hasn't conducted a widespread investigation to determine just how prevalent such shenanigans might be. Of course, should such a study be conducted and come up with a negative result, one can imagine that it could deflate the burgeoning market until the industry finds ways to provide safeguards against such conduct, which would be no easy task.
The fact that some sellers might be dirty dealers isn't eBay's fault, and one might hope that many users recognize that any auction includes the "buyer beware" caveat. However, despite this fact, the company does rely on the perception that its service is, for the most part, safe to use.
Meanwhile, maybe it's not the greatest time for a smattering of negative eBay publicity. It wasn't that long ago that some eBay users experienced some glitches with its PayPal service; eBay later took some pains to at least appear to apologize.
Indeed, eBay addresses the reality of such risks in its "Risk Factors" section of its Form 10-K and sums it up thus: "Negative publicity generated as a result of fraudulent or deceptive conduct by users of our eBay and PayPal services is increasing, and such publicity could damage our reputation, reduce our ability to attract new users and diminish the value of our brand name."
While eBay does have some policies in place to protect buyers, certain situations are out of its hands, such as this one. (For more details, really, check out the "Risk Factors" in its 10-K. It's always interesting reading.)
There are upstarts as well as established rivals such as Overstock.com
So there's probably no need to push the panic button here, given the nature of the online auction beast. eBay has enjoyed unrivaled success, and one would imagine that most users understand that there's a bit of risk involved and that if they're not comfortable with a bid, they should bow out. Given its popularity and momentum, it would take a lot of heat to hurt eBay.
Alyce Lomax does not own shares of any of the companies mentioned. She's always thought Risk Factors made good reading.
Quote of Note
"You can't build a reputation on what you are going to do." -- Henry Ford
A Fantastic Cancer-Drug Deal
This partnership is for Medarex's drug MDX-010, which is in the final stages of clinical testing for the treatment of metastatic melanoma. Medarex received $50 million up front and could receive up to another $480 million depending upon product approval and reaching sales milestones. In my article last week, Biotech's 5-Baggers: Part 3, I talked about how cancer drugs are very hot commodities, and the size of this deal is a great example of that argument.
In addition to the hefty milestone payments, Medarex has an option to co-promote the drug in the U.S. If that option is exercised Medarex will receive 45% of profits from sales of MDX-010 in the U.S. Medarex will also receive a royalty on international sales of the drug. The royalty rate was not disclosed, but it is likely in the double-digit range. Despite partnering the drug, with the structure of the deal Medarex has retained significant value for its shareholders.
Choosing Bristol-Myers as a partner was not just good financially for Medarex; it also bodes well for the future development of the drug. Bristol-Myers is one of the world's top drug companies in the oncology field with important drugs such as Erbitux, which was developed by ImClone Systems
Drug development is a long process, so knowing the timeline until the drug could hit the market is important. MDX-010 is in the final stage of clinical testing, and the FDA has already indicated with a Special Protocol Assessment that if the results of the trial are positive that the drug would be approved. Medarex's management has disclosed that this trial will complete in the first half of 2006. I expect that the company would file for approval in the second half of 2006 with the drug getting FDA approval in 2007.
For additional articles on the biotech industry, see:
- Biotech's 5-Baggers: Part 3
- Biotech's 5-Baggers: Part 2
- Biotech's 5-Baggers: Part 1
- The Case for Drug Stocks
- Surviving Biotech's Downturns
Fool contributor Charly Travers owns shares of Medarex but none of the other companies mentioned.
Marvel's Unseen Superheroes
Like many moviegoers, I eagerly anticipated the release of Marvel Enterprises'
Like a movie, a company's story should be simple, clear, and focused on a singular goal (in this case, enhancing shareholder value). Just as Batman's goal is to round up the Joker, a company's goal is to round up cash and put it to good use. A company needs great characters to tell its story, and those characters are its management. In Marvel's case, management is the real superhero behind the company's story.
Until recently, Marvel was akin to Superman beset with a kryptonite kidney stone. It was loaded with debt and seemed incapable of leveraging its 4,700 comic book characters into revenue. However, the company turned itself around, and now fully exploits its brand, as its most recent quarterly results demonstrate.
Now, unlike entertainment behemoths Viacom Inc.
So how does one guarantee a movie's success? Well, it's impossible to guarantee anything in Hollywood. But the deck can be stacked by having a great script and a development team to assist the writer and director in making the story the best it can be. At Marvel Studios, those tasks fall to Avi Arad, Ari Arad, and Kevin Feige. Based on the movies we've seen so far, these guys know how to put a winning package together.
Even better, the average investor can stay apace with the goings-on of these unseen superheroes. At fan sites like Harry Knowles' legendary Ain't It Cool site, insiders post script and movie reviews in advance of their release. These fans are the base Marvel really wants to hit. If they diss Marvel's projects, then Marvel has a problem. For now, however, Marvel's Marvelous Management Men have the situation well in hand, and that's good news for shareholders.
Fool contributor Lawrence Meyers owns shares of Marvel, and at night he solves crime.
More on Fool.com Today
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