Motley Fool’s “The Best Stock Idea I’ve Ever Seen”

By Travis Johnson, Stock Gumshoe, February 29, 2008

OK, so this one is quick and dirty. No, not that kind of dirty! Get your mind out of the gutter, it’s not even Noon yet.

It’s not from an email ad, but from something else — I have recently noticed that the folks who write the free articles for the Motley Fool seem to have gotten more and more aggressive about pushing their premium newsletters in the free articles. They’ve always mentioned them, and often teased some ideas, but it seems to me that the push must be increasing. Maybe their venture backers are anxious for them to get more profitable, or position themselves for an IPO or something when the market turns later this year (if it turns). Just my speculation.

But anyway, there was a genuine teaser in a Fool article I read the other day — this one from Tim Beyers, one of their analysts whose work I like and who has been around for quite a while.

The article was entitled, teaserly enough, “The Best Stock Idea I’ve Ever Seen.”

And unlike almost every other Fool article I’ve ever read, it didn’t name the stock — in true newsletter ad fashion, it teased a few clues and offered a free trial subscription to Motley Fool Stock Advisor, whence the idea came.

So what are those clues? Here they are, as written:

“Free cash flow exceeded $100 million last year.”
“Revenue is up more than 20% over the same period.”
“Operating margins are expanding dramatically, and net margin is north of 25%.”

He also notes that the stock was originally a pick of David Gardner back in July 2002.

So what are we dealing with here? Well, perhaps not surprisingly, it’s the same one they were teasing in January 2008, in a more traditional email ad that called it the “Best Stock of 2008.” Not as hyperbolic as the “Best Stock Idea I’ve Ever Seen,” but still enthusiastic.

Yes, it’s Marvel Entertainment (MVL)

And yes, I still own shares. They’re priced about the same, at $25+, as they were back in January when I last wrote about them, and they’ve been in the same mid-$20s range for a little while as we wait for the release of Iron Man. Earnings were very good when they were released last week, but the bad news is that they will probably only produce a maximum of one of their own self-financed films in 2009 (instead of the planned two), largely due to the writers strike. They still plan to average two per year, so I guess they must be planning on catching up in the out years.

The money from Iron Man and the Hulk, if it comes in as hoped, will really hit the company about a year from now, when all the DVD sales are in and the murky Hollywood accounting is laid a bit more bare for us, but we’ll certainly know a lot more about the company’s potential as a film producer by the time the second weekends of Hulk and Iron Man are released in just a few months (Iron Man is coming out on May 2, Hulk about six weeks later).

So — I still own shares of this one, and I know there are some among the Gumshoe faithful who like it and some who hate it. I know Tim Beyers thinks it’s the best idea ever, but of course he’s not in charge of your money and I’m sure that, like the rest of us, he’s been wrong before. Jim Cramer, who I still hear in my sleep sometimes, thinks “The trade has been made. The money’s been made” and that you should sell.

So what do you think? Like the idea? Hate it? Irritated that the Motley Fool is more aggressively teasing their newsletters in their free articles? Any opinions welcome.

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28 Comments on "Motley Fool’s “The Best Stock Idea I’ve Ever Seen”"

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Brad
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Brad
February 29, 2008 12:08 pm

Slightly more irritated that the Motley Fool is more aggressively teasing their newsletters in their free articles than I used to be. Used to frequent their forums 4 – 5 years ago, but have moved on.

I can appreciate the fact they are trying to make a dollar, but why not get to the point and stop sending these 20 page ‘alerts’ out?

rks
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rks
February 29, 2008 12:31 pm

Love your site. Thanks for the great work.

Larry
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Larry
February 29, 2008 12:50 pm

Just looked at your site and looks interesting. Will have to read when I have more time, as it appears that you are the genuine article and actually know what you are talking about.

Noah
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February 29, 2008 1:12 pm

MVL is going to be big. I collected comics as a kid and I know all the stories. MVL is making this transition to the big screen very well. It’s a well run business and it will have years and years of blockbuster movies. I’m Long and Strong on this one, boys!

Bill
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February 29, 2008 1:31 pm
I subscribed to MF’s Hidden Gems for several years but became frustrated with their tracking. Unless you buy every stock they recommend you can’t match their published returns. More to the point, how exactly they calculate their returns is a little misleading. It seems to based on open positions starting from when MF initially recommended each stock. Okay, but I’d like to know how their picks perform on a yearly basis. A 30% return sounds great unless it’s mostly based on stocks picked three or four years ago. Also, MF rarely says anything about selling a position. It’s very difficult… Read more »
robert
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February 29, 2008 4:08 pm

Lately Cisco is a dud.

The FOOL boys used to tout it on their radio show yearsss ago.

And that was when it was flying very high, and people were kicking themselves like we all should do re Google before it went over fifty or whatever.

Anyhow, CSCO was the first thing that came to mind.

Marvel sounds like a comic book, and I’d better buy
a liitle as I won’t have to kick myself so much if and when it goes skyward.

Bob K.
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Bob K.
February 29, 2008 7:19 pm

Thanks for all your work. You have saved me a lot of time and money chasing after these teasers, most of which will never make a cent.

Lou P
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Lou P
February 29, 2008 8:53 pm
I recently renewed my subscription to ‘Stock Advisor’ and, yes their self promotion and continual long and sometimes (often?) misleading articles are irritating. Out of 24 picks in the last 12 months, 14 are losing money, some substantially. Brother David has 8 out of the 14 including the worst performing and Tom Gardner has done somewhat better. So why do I subscribe? First because their approach is long term and they don’t have their readers jumping in and out of the hot idea of the moment. The flip side of that is that,imho, they tend to hold on too long.… Read more »
Sniper
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Sniper
February 29, 2008 8:53 pm

The only 100% guaranteed way to double your money is to fold it over and put it back in your pocket.
No charge for that advice unless you want to send me (Normally $500.) only $79. But you have to reply within the next 24 hours or the deal is off.

Gravity Switch
Admin
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February 29, 2008 9:02 pm

Sniper, I’m afraid that if I sign up for your service you’ll just send me endless emails promising that if I sign up for the extra special $5,000 service that’s reserved for the privileged few, you can teach me how to QUADRUPLE my money.

Thanks for the comments, gang. Good stuff.

RON
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RON
March 1, 2008 2:34 pm
More and more complimentary accolades are being given to the Gumshoe. TOTALLY DESERVED. What people recognize is that there is so much “fluff”, “spin” and “dishonesty” in the stock market world. The Gumshoe lays it all out….”the real deal”. He will never promote this…but he has some hefty expenses too….and CONTRIBUTIONS ($100) can help him continue this great FREE service. So, guys and gals, give what you can….because you know it’s worth it ! NOTE NOTE NOTE: I don’t know the Gumshoe, nor am I related to him, nor do I work for him. I am just an investor (like… Read more »
Sniper
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Sniper
March 1, 2008 7:40 pm

You’re right SG. I can show you how to quadruple your money but, as you say, the fee for my service rises drastically. If you act now, I can guarantee you a reduced rate of only $2,500 for the first month.(Normally $5,000.)
Kidding aside, you do a great job and the fee you ask for is well worth every penny.
Best Regards,
Sniper

Fencer
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Fencer
March 2, 2008 9:43 am

I tried the Fool for a year but all their best tips are mucho extra – services never mentioned in their promos, which stress their honesty, never doubted, their success rate, hard to prove.
They’re not alone in this but if these tipsters who spend “months touring the world to search out stocks for us”, another quote, are so successful, why do they need our lousy dollars, or pounds in my case? They should have all retired long ago.

Daniel Victor
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Daniel Victor
March 2, 2008 7:41 pm

I used to read Marvel Comics.I quite like the films,but think it unlikely that they will grow quickly now.
The problem with Motley Fool becoming so commercial is what it does to their credibility as a critic.

Dave
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Dave
March 3, 2008 4:52 pm

Dang!! Owned 1000 shares of MVL in early 02 at 7 bucks a share or so. Traded it for a few weeks and made 50 cents a share. Thought I did good. Thats why investors get rich while traders get brokers rich paying commissions…..

Tom Beach
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Tom Beach
March 8, 2008 5:41 pm
David and Tom Gardner are sincere and sometimes even right about their picks. They do push for subscriptions. Understandable. They are not the worst of the lot. When you finally get tired of all the hoopla and BS, like I did, you finally go to Hulbert Financial to see how these geniuses selling info really did when it comes time to count your pennies. Most of them are not so hot. Hulbert sort them for you. Give you their short and long term track records. Pay his price, get the goods for a lot less than subscribing to dog after… Read more »
tariq khan
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tariq khan
March 26, 2008 10:59 am

You write beautiful articles with a wonderful wit. Congratulations to you for an innovative approach.

Limerick rose
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Limerick rose
April 10, 2008 10:16 am

So agree with Fencer , you join and then they irritate you by suggesting more newsletters. If you subscribe to something you shoud get everything they are offering..as a result of this ( and their bad stock performance -1.6 in the past year) I won’t be subscribing again.

Gravity Switch
Admin
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April 10, 2008 10:25 am

Thanks folks. Some good points in those comments — and Tom, I agree with you, Hulbert is the only independent verification for the actual performance of newsletters, though that performance also assumes that you buy and sell every pick at the time that they make the recommendation, of course. Unfortunately, Hulbert is so intensive about data collection that they only cover about 200 (maybe 300, I’ll have to check) newsletters out of what must be many thousands of newsletters that are currently available.

Jan
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Jan
April 13, 2008 12:58 pm

Have Gumshoe locked in tight. Thankfully, a researcher of the “research.” You’re saving me money with every read.
Keep it up. Off to donate, so you can pay your web bill.

Nico
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Nico
May 3, 2008 12:51 pm

Please donate $2 to Gumshoe. Sometimes we feel that if we are not donating at least $100, then it won’t make a difference. I’m sure Gumshoe would prefer to get $2 than nothing. Every little bit counts.

Arkanphel
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Arkanphel
May 26, 2008 7:55 pm

the mighty gumshoe. thanks for saving me before i even start subscribing with some worthless newsletters

sam
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May 27, 2008 12:56 pm
I subscribe the to the oxfordclub.com which ranks 3rd in risk adgusted returns for 5 years by hurlburt. If you think cramer is a joke then consider this site….they recommended amzn when it was about 30 in late 2006 before the 25 percent trailing stop was hit at around 90 at the same time when cramer was saying that amzn was a bookstore with high PE ration. Hint: do the opposite of cramer and we will do fine. Just look at his recommendation of BSC less than a week before its stock price dropped about 90 percent from 60 a… Read more »
sam
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May 27, 2008 12:58 pm

keep up the good work of giving us the stocks of those teaser newsletters. If a make a big win, I will gladly donate to your site.
Note: my email is fake because I value my privacy.

sam
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May 27, 2008 1:34 pm

Just became a new subscriber. I like the info about those newsletter teasers. I just discovered this site a couple of days ago. Though, I hope I dont get any spam and “offers” like so many other websites. Keep up the good work. 🙂

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Admin
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May 27, 2008 2:09 pm

Thanks Sam. There’s advertising on the site here, as you’ve probably noticed, but I have never shared the email list with anyone.

Jan
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Jan
June 10, 2008 9:41 pm

I am so pleased to find your site. I’ve been doing my own “gumshoeing” for years — as a sort of riddle game. But when I’ve finally located the stock, I don’t know enough about stocks in general to know whether it’s a good investment or not. I’m delighted to read sound advice from a smart and principled source.

Kingsley
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Kingsley
June 16, 2008 8:51 am

I am new to investing but I must confess this is the most interactive site for clean information for newbie investors.
As Jan said, as a newbie you may find a sector without knowing if it is a ood investment or not but this is a site for sound advice.
Once again, great site, KEEP IT UP

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