FOOL ON THE HILL An Investment Opinion
Practical Thinking on Wal-Mart
By Brian Graney (TMF Panic)

Could an investor in 1980 have predicted that Wal-Mart would be worth $260 billion today? Tom Gardner asked this valid question months ago, and the time has finally come to properly examine it. Using a broad, five-step valuation methodology, it is possible to explain Wal-Mart's business growth over the past 20 years. However, the ultimate answer to Tom's question lies within the valuation process itself.
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RULE BREAKER PORTFOLIO A QuickNews Extra
Break Down: Lernout & Hauspie Speech Products
By Brian Lund (TMF Tardior)

Lernout & Hauspie Speech Products makes four types of software products that have good potential for future revenue: voice recognition, transcription services, text-to-speech, and translation. The technology has gotten much better in the last two years, but still has a way to go to become widely accepted. When the company's four products are combined, they become a killer mobile Internet application that breaks down numerous communication barriers. Lernout & Hauspie is positioned to lead this industry.
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Nike Hopes to Woo More Women
By LouAnn Lofton (TMF Lou2)

Nike announced today that it will form a new unit to focus specifically on its women's line. Women's shoes and apparel currently contribute about 20% to revenues, and Nike wants to up that to a third. A new higher-end line and greater attention to its current women's offerings should help with that goal. With interest in women's sports at an all-time high, Nike is making a smart move into this growing market.
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RULE MAKER PORTFOLIO A QuickNews Extra
Accounting for Cisco and JDS Uniphase
By Richard McCaffery (TMF Gibson)

Two of the hottest companies in the markets today, Cisco and JDS Uniphase, use very different methods to account for acquisitions. Cisco uses the pooling method, which ignores the enormous premium it has paid for companies like Cerent. JDS uses the purchase method, which allows investors to see exactly how much it has spent for companies like E-Tek. Not only does the purchase method provide better balance sheet visibility, but pooling can vastly overstate key profitability measures such as return on equity.
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MP3.com Settles With Sony
By Nico Detourn (TMF Nico)

MP3.com's settlement with Sony for "past acts" brings it into harmony with another of the "Big Five" record labels. But not everyone is singing a happy tune. A hearing for damages remains scheduled for next week, and outstanding issues between the recording industry and the online economy will likely remain in heavy rotation.
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Mercator Dealt Another Blow
By

Mercator Software shares have plummeted recently. Now, news of revised earnings has sent the company lower. Nevertheless, the company remains on track to profitability and its revenue momentum continues. If the company has answered its credibility issues with changes at the top, these recent events will mean little to the long-term future of the company.
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FOOL PLATE SPECIAL An Investment Opinion
Myriad Genetics Reports
By Tom Jacobs (TMF Tom9)

Myriad Genetics' annual numbers lead to an examination of the larger story of this biopharmaceutical company. Myriad clearly and truthfully calls itself "emerging" -- rare among its biotech peers -- and declares its reliance on the new frontier technologies of genomics and proteomics. Armed with this knowledge, the Foolish investor can apply tools to evaluate Myriad's drug discovery and development prospects. At this stage, tooth-combing the quarterly report numbers takes a back seat.
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BREAKFAST WITH THE FOOL
Medtronic's Quarterly Sales Pace Slows
By Brian Graney (TMF Panic)

Cardiovascular and surgical devices maker Medtronic (NYSE: MDT) reported earnings of $0.25 per share for the fiscal first quarter last night, up from $0.21 a year ago and in line with the First Call mean estimate. The results excluded a penny per share charge related to an unidentified arbitration judgment during the quarter.
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Today's Market Movers

Ups

High-speed Internet access and service provider DSL.net (Nasdaq: DSLN) shot up $3 3/32, or 99%, to $6 7/32 today on news that IBM (NYSE: IBM) will offer the company's digital subscriber line (DSL) services and products to its small-business customers. DSL.net's service will be included as part of IBM's Small Business WebConnections offering in certain U.S. markets. Financial terms of the deal weren't disclosed.

Online brokerage Ameritrade's (Nasdaq: AMTD) shares rose $1 1/8 to $17 1/16 following news reports that Rule Maker American Express (NYSE: AXP), according to analysts, might be interested in buying the company. American Express already operates its own Internet brokerage. The rumors may signal renewed investor interest in companies such as Ameritrade and E*Trade (Nasdaq: EGRP). The latter rose $1/8 to $17 1/4 today.

High-speed telephone-line modem maker Efficient Networks (Nasdaq: EFNT) jumped $6 1/32 to $50 on news that its SpeedStream ethernet router and SpeedStream 5260 high-speed model passed operability tests with telecom equipment company Advanced Fibre Communications' (Nasdaq: AFCI) products. The companies joint product offering has begun deployment with various telecoms. Advanced Fibre's stock rose $2 1/16 to $42 3/8.

Fibre Channel storage router manufacturer Crossroads Systems (Nasdaq: CRDS) continued its recent run of upbeat trading sessions, adding $3 1/16 to $10 1/2 today. The company said it demonstrated server-free backup technology at the Intel (Nasdaq: INTC) Developer Forum using the next-generation InfiniBand system for improving data transfers between peripherals and servers.

Downs

Taiwan-based broadband Internet access and services company GigaMedia (Nasdaq: GIGM) lost $2 1/8 to $10 7/16 on news that second-quarter losses expanded to $0.24 per share from $0.15 a year ago. (No estimate was available on First Call.) Revenues jumped 124% to $2.9 million from $1.3 million in Q1, while expenses grew 53% to $16 million.

Portland forest products company Crown Pacific Partners (NYSE: CRO) fell $1 7/16 to $18 9/16 after the company said it's no longer considering a sale because of "current market conditions." The board did authorize a look at other options, including the sale of nonstrategic assents and the conversion of the company to a real estate investment trust (REIT). "An outright sale would not reflect what we believe is the inherent value of our assets," said CEO Peter Stott.

Terabit router company Avici Systems (Nasdaq: AVCI) moved back $10 3/4 to $131 1/4 as Lehman Brothers analyst Mark Sue opened coverage of the company with a "neutral" rating. "While we are enthusiastic about Avici's prospects," Reuters quoted Sue as writing, "we believe current share price levels may already reflect the impressive and open-ended nature of the company's market opportunity."

E-business consultant Scient's (Nasdaq: SCNT) shares lost $6 7/8 to $38 3/4 as Credit Suisse First Boston analyst David Sturtz started coverage of the company with a "hold" rating.

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