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HEROES

The Sports Authority <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TSA)") else Response.Write("(NYSE: TSA)") end if %> shot up $1 3/8 to $16 1/2 after competitor Gart Sports Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GRTS)") else Response.Write("(Nasdaq: GRTS)") end if %> announced that it has offered to acquire 70% of the sporting goods retailer for $20 a share in cash. The remaining 30% of Sports Authority shares would remain outstanding and represent a 51% stake in the combined company. The cash and stock deal represents a 32% premium to yesterday's closing price of Sports Authority stock and a 23.8% premium to the May 7 all-stock bid -- now worth $16.15 (as of yesterday's close) -- made by Venator Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: Z)") else Response.Write("(NYSE: Z)") end if %>, formerly known as Woolworth. Some Sports Authority shareholders have sued the company to reject Venator's offer, arguing that the bid "doesn't reflect the intrinsic value" of the company. If Gart Sports succeeds in wrestling Sports Authority from Venator, it plans to combine Sports Authority's 205 superstores with 121 Sportmart stores, which it bought in January. Gart Sports, which gained $2 1/4 to $14 3/4, is 61% owned by retail buyout mogul Leonard Green, who combined Hechinger and Kmart's Builders Square to create the third largest home-improvement chain. Venator also added $11/16 to $20 7/8 on expectations that it will make a cash counter offer, which would avoid dilution of its shares through a stock swap.

Specialty coffee roaster and retailer Starbucks Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SBUX)") else Response.Write("(Nasdaq: SBUX)") end if %> brewed up $4 to $56 5/8 after the Seattle-based company reported a 4% increase in comparable-store sales in the five weeks ended June 28. Consolidated net revenues, which include the results of newly acquired Seattle Coffee Holdings Ltd., rose 33% to $131 million. Starbucks drew more customers to its 1,600-some outlets in the past five weeks than in any period in the last eight months. Customer traffic increased a solid 5% last month -- all of which means the company is very likely increasing the margin between the cost of its invested capital and its return on invested capital as its benefits from operating leverage (which is the ratio of a change in operating income over a change in revenues). Coincidentally, the Fool Portfolio released its buy report on the company last night and plans to buy $13,000 worth of its shares within the next week.

QUICK TAKES: Internet software and portal company Netscape Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NSCP)") else Response.Write("(Nasdaq: NSCP)") end if %> added another $5 5/8 to $41 5/16 after Executive Vice President Michael Homer said the company is considering possible relationships with companies such as Walt Disney Co.'s <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DIS)") else Response.Write("(NYSE: DIS)") end if %> ABC unit, General Electric's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GE)") else Response.Write("(NYSE: GE)") end if %> NBC division, CBS Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CBS)") else Response.Write("(NYSE: CBS)") end if %>, and News Corp.'s <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NWS)") else Response.Write("(NYSE: NWS)") end if %> Fox network, among others... Other Internet-related companies continued to benefit from market speculation over possible investments by major media companies. Online bookstore Amazon.com <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMZN)") else Response.Write("(Nasdaq: AMZN)") end if %> picked up another $9 7/8 to $124, Internet advertising firm DoubleClick Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DCLK)") else Response.Write("(Nasdaq: DCLK)") end if %> surged $7 5/8 to $71 5/8, online ad management software company NetGravity <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NETG)") else Response.Write("(Nasdaq: NETG)") end if %> defied gravity and gained $5 1/2 to $19 1/8, and Internet services firm USWeb Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: USWB)") else Response.Write("(Nasdaq: USWB)") end if %> advanced $2 7/16 to $25 1/8.

Aerospace and commercial aircraft company Boeing <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BA)") else Response.Write("(NYSE: BA)") end if %> rose another $1 to $48 7/16 despite reports that U.S. Airways <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: U)") else Response.Write("(NYSE: U)") end if %> placed orders for as many as 30 widebody twinjets from rival Airbus Industrie. Yesterday Boeing won a nine-year, $1.5 billion contract with the U.S. Air Force... Investment bank Hambrecht & Quist <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HQ)") else Response.Write("(NYSE: HQ)") end if %> rose again, adding $3 3/4 to $37 3/4 on takeover rumors... Book and music purveyor Borders Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BGP)") else Response.Write("(NYSE: BGP)") end if %> tacked on $2 11/16 to $39 5/8 after yesterday's news that J.P. Morgan started coverage on the company with a "buy" rating... Memphis, Tenn.-based AutoZone Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AZO)") else Response.Write("(NYSE: AZO)") end if %> sped up $1 1/4 to $33 9/16 after A.G. Edwards raised its rating on the auto parts retailer to "buy" from "accumulate" with a 12-month price target of $42 a share... Audio Book Club <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: KLB)") else Response.Write("(AMEX: KLB)") end if %>, which direct markets audio books, jumped $3 3/8 to $9 5/8 following yesterday's announcement that it is adding more than 4,500 members per month via the Internet and that its membership has surpassed 340,000.

Drugmaker Warner-Lambert <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WLA)") else Response.Write("(NYSE: WLA)") end if %> moved up $1 9/16 to $73 1/16 as SG Cowen reiterated its "strong buy" rating... Oil refinery and natural gas exploration and production company Tesoro Petroleum <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TSO)") else Response.Write("(NYSE: TSO)") end if %> advanced $1 3/8 to $18 1/8 after Credit Suisse First Boston started coverage of the company with a "buy" rating... Cellular provider Centennial Cellular Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CYCL)") else Response.Write("(Nasdaq: CYCL)") end if %> jumped $2 5/8 to $41 after announcing it has agreed to be acquired by Welsh, Carson, Anderson & Stowe and funds managed by it in a deal valued at roughly $2 billion, including indebtedness of approximately $515 million to be refinanced... Pharmaceutical company Sepracor Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SEPR)") else Response.Write("(Nasdaq: SEPR)") end if %> gained $3 to $45 3/4 after announcing it has received an approvable letter for its Xopenex inhalation solution for asthma from the FDA.

Information technology solutions company Aztec Technology Partners <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AZTC)") else Response.Write("(Nasdaq: AZTC)") end if %> added $15/16 to $9 3/16 after reporting Q4 EPS of $0.05 (before charges) compared with $0.07 in the year-ago period. The company also announced plans to acquire a "highly profitable" enterprise design and implementation company for $54 million... Jewelry retailer Piercing Pagoda <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PGDA)") else Response.Write("(Nasdaq: PGDA)") end if %> rose $1 1/16 to $36 13/16 after reporting a 3% increase in Q1 same-store sales. The company also announced a 3-for-2 stock split payable Aug. 13... Office furniture supplier Herman Miller <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MLHR)") else Response.Write("(Nasdaq: MLHR)") end if %> gained another $1 3/4 to $29 1/4 after late Tuesday reporting fiscal Q4 EPS of $0.42 versus $0.29 a year ago, beating the Street's estimate of $0.35... Mexican broadcaster TV Azteca SA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TZA)") else Response.Write("(NYSE: TZA)") end if %> jumped $1 9/16 to $12 15/16 amid expectations that the World Cup soccer tournament has boosted its audiences.

Chromatics Color Sciences International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CCSI)") else Response.Write("(Nasdaq: CCSI)") end if %> jumped $1 15/32 to $5 25/32 after Janssen/Meyers Associates initiated coverage of the company with a "buy" rating, dismissing "baseless statements" by critics such as Asensio & Co... Server-based, remote access communications solutions provider Digi International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DGII)") else Response.Write("(Nasdaq: DGII)") end if %> climbed $3 to $24 1/2 after announcing late yesterday that it will acquire privately held ITK International of Dortmund, Germany, for $25 million, and privately held Central Data Corp. of Champaign, Ill., for $18 million... Economic analysis and consulting group LEGC Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: XPT)") else Response.Write("(NYSE: XPT)") end if %> rose $3 7/16 to $18 3/4 after agreeing to be acquired by energy industry consultant Metzler Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: METZ)") else Response.Write("(Nasdaq: METZ)") end if %> for $274 million, or around $21 a share.

GOATS

Shares of CompUSA Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CPU)") else Response.Write("(NYSE: CPU)") end if %> got squeezed $11/16 to $16 7/8 today after the leading PC retailer projected an unexpected loss of $0.15 to $0.20 per share for its fiscal fourth quarter ended June 27. That was well below the analyst consensus of $0.07 per share. The loss excludes a one-time after-tax charge of $30 million to $35 million to revamp the company's information technology systems. Back in 1994, its terrible inventory management practices were one reason why the company's junk bonds and stock dropped so much. The resulting information system, then, may have its roots as a transitional system. More to the point, though, same-store sales dropped 8.7% in the quarter while overall sales inched up 3%. For the year, sales rose 15% to $5.3 billion, with comp-store sales up a modest 1.7%. With inventory protection terms from original equipment vendors like Compaq shortening up, CompUSA's working capital needs are very likely in transition. It will have to forecast and move inventory faster if it wants to generate the sort of economic returns investors demand. However, once it gets through that transition and if it can keep incremental investment needs down, investors will hope for another 1995-like turnaround.

Consumer, building, and industrial products distributor U.S. Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: USI)") else Response.Write("(NYSE: USI)") end if %> slid $5 11/16 to $19 15/16 after saying its fiscal Q3 EPS will come in between $0.30 and $0.35, compared with $0.45 last year, due mostly to the negative effect of the strong dollar on exports of its Rexair vacuum cleaners and lower orders for its Ertl toys. To cut costs, toy production will be moved to Asia. The IBES mean estimate had called for EPS of $0.55. Additionally, the company said it would take a $152 million after-tax charge in Q3 and a $28 million charge in Q4 to write-off costs related to its acquisition of Zurn Industries, the discontinuation of its SunLite casual furniture line, layoffs, and the closing of certain underutilized plants. Donaldson, Lufkin & Jenrette downgraded the company to "buy" from "top pick."

Computer-aided design and manufacturing software company Parametric Technology <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PMTC)") else Response.Write("(Nasdaq: PMTC)") end if %> tanked $8 3/4 to $16 1/16 on ten times its normal daily trading volume after saying its fiscal Q3 earnings will be below the Street's expectations of $0.26 per share as revenues come in about 15% below estimates. The company said it is "cautious" about the outlook for the rest of the fiscal year and that Q4 results will be below estimates as well. The Asian financial crisis and "transitional issues" related to a new product launch and a refocus on the needs of major clients were blamed for the shortfall. At least four brokerage firms thought this would be a good time to downgrade the company's shares. Later in the day, the company attempted to stop the bleeding by announcing it had received software orders totaling $3.3 million from Silicon Graphics <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SGI)") else Response.Write("(NYSE: SGI)") end if %> and Britain's GEC-Marconi Electro-Optics. CAD/CAM/CAE competitor Structural Dynamics Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SDRC)") else Response.Write("(Nasdaq: SDRC)") end if %> was a collateral casualty today, losing $2 1/8 to $21 3/8.

QUICK CUTS: Semiconductor inspection and testing equipment maker KLA-Tencor Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: KLAC)") else Response.Write("(Nasdaq: KLAC)") end if %> fell $1 3/4 to $26 after saying its fiscal Q4 EPS will fall below analysts' expectations of $0.34 on a 10% sequential decline in revenues... Telecommunications services provider AT&T Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %> fell $1 7/8 to $54 7/8 on lingering concerns regarding its proposed merger with cable TV provider Tele-Communications Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TCOMA)") else Response.Write("(Nasdaq: TCOMA)") end if %>, which was announced last week. TCI lost $1 1/16 to $38 3/8... Computer workstations maker and Java programming language developer Sun Microsystems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SUNW)") else Response.Write("(Nasdaq: SUNW)") end if %> was burned $2 7/16 to $42 1/2 after being downgraded to "outperform" from "buy" at Salomon Smith Barney.

Glad trash bag and Johnny Cat kitty litter maker First Brands Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FBR)") else Response.Write("(NYSE: FBR)") end if %> lost $4 to $21 15/16 after saying fiscal Q4 EPS would come in between $0.26 and $0.30, missing the IBES mean estimate of $0.40... The American depositary shares of Bank of Tokyo-Mitsubishi <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MBK)") else Response.Write("(NYSE: MBK)") end if %> fell $13/16 to $10 7/8 after market participants took a look at a Japanese government plan to fix the country's struggling banking system and decided the strategy won't be easy to implement. And Rome was built in a day... Year 2000 problem solver SEEC Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SEEC)") else Response.Write("(Nasdaq: SEEC)") end if %> sank $6 1/4 to $6 after saying it expects fiscal Q1 results ranging from breakeven to a loss of $0.02 per share, missing analysts' expectations of a $0.13 per share profit in the period.

For-profit hospital operator Tenet HealthCare Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: THC)") else Response.Write("(NYSE: THC)") end if %> lost $1 3/8 to $30 1/8 after CIBC Oppenheimer downgraded the company to "hold" from "buy"... Telecom equipment maker Advanced Fibre Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AFCI)") else Response.Write("(Nasdaq: AFCI)") end if %> fell another $1 3/16 to $17 15/16 after saying yesterday that it would report lower-than-expected fiscal Q2 results... Theragenics Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: THRX)") else Response.Write("(Nasdaq: THRX)") end if %>, which makes implantable radiation devices for treating prostate cancer, dropped $8 3/16 to $14 13/16 after Dain Rauscher Wessels downgraded the stock to "neutral" from "buy" due to concerns about increasing competition in the sector... Let's Talk Cellular & Wireless <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LTCW)") else Response.Write("(Nasdaq: LTCW)") end if %> tumbled $7 3/16 to $5 11/16 as an analyst told Reuters that the wireless products retailer's fiscal Q4 results will miss the Street's expectations.

Customer service software and management systems developer Mosaix Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MOSX)") else Response.Write("(Nasdaq: MOSX)") end if %> lost $3 to $6 7/8 after saying it expects a fiscal Q2 loss of $0.10 to $0.15 per share, below the Street's estimate of a $0.20 per share profit... Drug and explosive materials detection equipment maker Barringer Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BARR)") else Response.Write("(Nasdaq: BARR)") end if %> bombed $2 3/16 to $7 9/16 after saying delayed follow-on orders from clients such as the Federal Aviation Administration will result in fiscal Q2 EPS (before charges) of $0.10 to $0.14, missing the Street estimate of $0.15... Enterprise asset management software developer Indus International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IINT)") else Response.Write("(Nasdaq: IINT)") end if %> got crushed for $3 3/4 to $7 3/4 after saying its fiscal Q2 EPS will come in below analysts' expectations of $0.12 due to lower-than-expected license fee revenue from its Asian operations and timing issues related to several contracts.

4Front Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FFTI)") else Response.Write("(Nasdaq: FFTI)") end if %> fell $1 1/8 to $11 3/8 after the provider of enterprise help desk support and computer network services sold 3.4 million shares in a secondary offering at a price of $11 per share, which was 14% below its closing price of $12 1/2 per share yesterday... Biopharmaceutical company Gilead Sciences <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GILD)") else Response.Write("(Nasdaq: GILD)") end if %> dropped $5 to $25 3/8 after Donaldson, Lufkin & Jenrette downgraded the company to "market perform" from "buy." Also, Merrill Lynch cut its near-term rating to "neutral" from "accumulate"... Dahlonega, Georgia-based bank holding company Century South Banks <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CSBI)") else Response.Write("(Nasdaq: CSBI)") end if %> dropped $3 15/16 to $32 3/8 after Interstate/Johnson Lane lowered its rating to "neutral" from "long-term buy," citing a higher valuation due to a recent share price runup on unfounded merger rumors.

Telecommunications billing and customer service software firm LHS Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LHSG)") else Response.Write("(Nasdaq: LHSG)") end if %> moved down $3 3/8 to $62 after saying any earnings in its fiscal Q2 will be offset by a $6.4 million charge related to its acquisition of InfoCellular Inc. The Street had been expecting earnings of $0.09 per share... Sandwich maker Schlotzky's Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BUNZ)") else Response.Write("(Nasdaq: BUNZ)") end if %> was sliced $5/8 to $17 7/8 after saying its fiscal Q2 EPS will be between $0.19 to $0.21, missing the First Call mean estimate of $0.24... Semiconductor fabrication equipment maker Lam Research Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LRCX)") else Response.Write("(Nasdaq: LRCX)") end if %> fell $1 3/8 to $18 1/16 after SG Cowen downgraded the company to "neutral" from "buy."

FOOL ON THE HILL
An Investment Opinion
by Alex Schay

Be a Buyer

John Spears, Chris Browne and Will Browne, the partners that run Tweedy Browne's Global Value Fund, believe that the fund's best bargains have been found while sifting through the rubble in Japan -- where the cheapest 10% of companies trade at 60% of book value. However, the "problem" with Japan, which has positively rewarded value investors historically, is that in its recent history the country has shown no sign of returning to growth at all, either positive or negative. The number of analysts that have unsuccessfully attempted to call a turnaround in Japan over the last couple years could probably fill a good-sized Caribbean island.

Today's announcement that Japan intends to get its debt-ridden pagoda in order by implementing a state-owned "bridge bank" scheme has been met with a mixed response. Many feel that the 13 trillion yen (2 million of which has already been used) earmarked for the bridge bank project is simply not enough to boost lending and revive growth since Japanese banks have some estimated 77 trillion yen in bad loans. However, this column's focus is not on the relative merits of the project, or even on speculation surrounding the time it will take for a recovery, but rather, on equity "style" investing and how the economic climate in Japan can provide some insight into the analysis.

To begin with, many of the so-called "distinctions" between value and growth investing are bunk. Often, value investing is done an injustice by casting the terms of the debate within a framework dominated by timing concerns, like the typical earnings expectation life cycle (normally presented in a circle but is presented here in a linear fashion):

Growth 
  
 FALLING     Torpedoed 
   I 
   I         Negative Surprise Models 
   I 
   V         Estimate Revisions 
   I 
   I         Dogs 
   I 
   I         Neglect 
   I 
  LOW        Contrarians 
   I 
   I         Positive Surprise 
   V 
   I         Positive Surprise Models 
   I 
 RISING      Estimate Revision 
   I 
   V         EPS Momentum 
   I 
 HIGH        "Growth" 
   I 
   I                         
   V

CONFERENCE CALLS

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E-mail the Fool News Team
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Contributing Writers Yi-Hsin Chang (TMF Puck), a Fool Brian Graney (TMF Panic), Fool Two Alex Schay (TMF Nexus6), Fool, too Dale Wettlaufer (TMF Ralegh), Final Fool Editing Brian Bauer (TMF Hoops), another Fool Jennifer Silber (TMF Amused), Fool at last