Demand for new residential and commercial construction continues to be weak in many parts of the country, though that will change shortly in California. But maintenance of existing facilities continues to be a growth industry. W.W. Grainger (NYSE: GWW) is the leading supplier of facilities maintenance products. The company posted record numbers in its most recent earnings report. Sales increased 9% to $1.9 billion, operating earnings increased 15% to $174 million, and EPS increased 11%. Based on these figures, CEO Richard Keyser has revised FY 2007 EPS guidance from $4.75-$4.90 to $4.85-$4.95.

Grainger is pursuing a market expansion strategy and a product line expansion simultaneously. The company has added 70,000 new products in its U.S. locations, opened four new U.S. locations, and continues to exit existing low margin contracts as they expire in 2007. Daily sales have increased each month for July, August, and September. Sales in the U.S. increased 9%, dwarfed by the 24% increase in sales in Mexico and the opening of two more locations. Grainger is also entering the facilities maintenance market in China, a smart move given the massive amount of construction in progress in China.

But current numbers are not the only reason to check out Grainger. Motley Fool lists Grainger as a stock to own for the rest of your life, based on Grainger's dividend pay out record. The current dividend yield is 1.5%, with a payout ratio of 26% and YoY quarterly dividend growth in excess of 20%. In order for a company to pay out increasingly higher dividends over the long haul, it must be able to generate sufficient amounts of cash regularly and repeatedly. Grainger has certainly demonstrated it can do that. The stock traded recently at $89.05, up 16 cents.

Bloomberg reporter Katherine Burton's first book, Hedge Hunters: Hedge Fund Masters on the Rewards, the Risk, and the Reckoning, is based on interviews with eighteen of the top hedge fund managers in the world: Michael Steinhardt, Boone Pickens, Jim Chanos and, my personal favorite, Dan Loeb, just to name a few.

The emphasis on the legends may be the book's weakness. All of the managers interviewed are running huge sums of money for institutional investors, and none of these could be characterized as mom-'n'-pop stock-pickin' shops. These firms employ armies of analysts and, with some exceptions, the profiles are repetitive: They look to hire smart people with interesting backgrounds who think independently, etc., etc.

Many of the profiles seem to blend together, and only the interviews with Mr. Chanos and Mr. Loeb could be characterized as truly memorable or insightful. Would-be hedgehogs beware: there is little practical advice here. This is, happily, not a how-to book, and focuses more on the minds and backgrounds of some of the top money managers in the world.

If you idolize guys like Loeb and Chanos, this is probably a book you'll want to pick up. But the vast majority of investors would do just as well skipping this one.

Most mergers are driven by the notion, sometimes wildly mistaken, that the combination will bring both a competitive advantage. Some pairs of companies, however, seem so intuitively right for one another, no bottom-line considerations should be allowed to interfere with their matrimony. Like a toddler and a sleeping cat, the interactions of these two seem inevitable.

Poor Mattel, Inc., (NYSE: MAT). The company with fun as its main product has been repeatedly hammered with product recalls for lead-contaminated toys, just as the Christmas season toy stock build-up is in full swing. Santa won't be lining up this year for Mattel's lead-painted Barbies, Pixar Cars, Fisher-Price toys or "It's A Really Big World" sets. The company's supply chain needs a couple of extra links: China to Mattel to Retailer to Mattel to The Dump. Some see this as tragic, but I see an opportunity for integration.

Waste Management Inc. (NYSE: WMI) has a solid grasp on a seemingly limitless American resource: trash. From the curbside to the rapidly growing U.S. mountain ranges of disposed goods, the company thrives on our discards.

Illinois Tool Works Inc. (NYSE: ITW) manufactures precision engineering components and industrial systems for the automotive industry and the international construction industry. Its Board of Directors recently announced two new executive VPs, Juan Valls for automotive fasteners, and Robert Brunner for international construction. Such personnel moves will allow the company to continue its strong earnings track record, particularly in its international markets. Despite weakness in the North American construction market, Illinois Tool Works posted strong revenue and net income increases, although a significant portion of those increases came from recent acquisitions, 37 companies this year alone, rather than organic growth. 3Q 2007 revenues increased 16% to $4 billion, net income grew 10% to $696 million, and diluted EPS grew 14% to 89 cents. The story is the same for YTD figures.

Illinois Tool Works operates in two business units: North American market and international market. Each unit is subdivided into automotive and construction products and specialty engineered products. All segments within both units, with the exception of the North American construction segment ,which posted a 5% decline, posted increased revenues and operating incomes. International unit revenues increased 26-32%, with no indication of any market slowdown. Based on these numbers, CEO David Speer forecasts 4Q diluted EPS to be the same as 3Q, with FY 2007 diluted EPS in the $3.36-$3.40 range. The company continues to repurchase its own shares, $959 million YTD, and pay out its regular quarterly dividend of 28 cents per share. At its recent price of $56.95, Illinois Tool Works is an affordable way to stabilize an investor's portfolio.

Back in the 1990s, Google Inc.'s (NASDAQ: GOOG) cofounders -- Larry Page and Sergey Brin -- played to their own drummer. Instead of taking gobs of venture capital, the dynamic duo did it on the cheap by themselves. For example, they built a sophisticated server platform using old PCs and free Linux software. And, when cash was low, they used their trusty credit cards.

You could say that Google built a business using old-fashioned bootstrapping.

And if Larry and Sergey can make it work, why not you?

Probably not, but vertical search engine provider Convera Corp. (NASDAQ: CNVR) was recently named by Outsell as a rising star in the Information Industry Outlook 2008 survey. Convera has recently signed contracts with Access Intelligence, Advanstar Communications, and Grand View Media to provide customized search applications for specialist audiences in the medical, mortgage, and kitchen/bath industries. Convera has one product, a search platform for website publishers of trade business publications. By narrowing the search, Convera's search platform helps expand the specialized user base and increase targeted advertising revenues. Convera makes its money by taking a percentage of the advertising revenues.

Investors looking for a microcap tech growth stock might want to check out Convera. The stock traded at $16 late in 2005, but now trades under $3.00, so one cannot really argue the stock is overpriced. Convera currently has one customer that accounts for 92% of revenues, but that is changing rapidly as Convera continues to sign contracts with more publishers, serving the information needs of more and diverse specialist end users. Presently Convera has at least 16 vertical search sites in operation with 40+ more in the pre-launch stage. The company hopes to have 50 sites in production by the end of FY 2008.

Convera realized $23 million on the sale of Retrieval Ware, is discontinuing nonstrategic activities, shedding staff, and cutting costs in order to shrink operating losses until the company becomes profitable. Net losses from continuing operations in 2Q FY2008 were $6 million, a 40% reduction from net losses one year ago. Every portfolio needs a couple of pure spec stocks. Convera just might be one.

Most mergers are driven by the notion, sometimes wildly mistaken, that the combination will bring both a competitive advantage. Some pairs of companies, however, seem so intuitively right for one another, no bottom-line considerations should be allowed to interfere with their matrimony. Like a slot machine and a blue hair with a pocket full of quarters, these two were meant for one another.

George Carlin has a famous rap (NSFW) about Americans and our love of stuff, which drives our need to build more places to put our stuff. That's always struck me as an integrated business plan. Two seemingly perfect partners for such a business are Dollar General (NYSE: DG) and Public Storage (NYSE: PSA).

Dollar General is a leader in recreational shopping for the denominationally challenged. If you have a hankering for neon-colored plastic, something covered in polyester fur, food with the half-life of uranium-235 or clothing with the style of Piltdown Man, DG is your go-to source.There you'll find shelf after shelf of non-essentials, the kind that end up in storage sheds. Currently, the 8,260-store company is in the process of merging with Buck Holdings LP.

If this deal falters, though, how about a merger with Public Storage? PSA (I'm a little uneasy with a company whose stock ticker is the name of a prostate cancer screening test, by the way) is a REIT with direct and indirect interest in over 2,000 self-storage developments in the U.S., containing, I'm sure, a great deal of material from Dollar General. The merger would be an excellent opportunity to double-down on America's seemingly inexhaustible need for more stuff.

The earnings crunch continues to roll along, and here are a some highlights of this past week's earnings coverage from BloggingStocks:

• Aetna Inc. (NYSE: AET) beat expectations and raised its full-year guidance.
• Amazon.com Inc. (NASDAQ: AMZN) beat estimates by a penny and offered a poor outlook.
• American Express Co. (NYSE: AXP) delivered a positive surprise, with profits up 10%.
• Amgen Inc. (NASDAQ: AMGN) beat estimates, but revenue was flat.
• Anheuser-Busch Cos. (NYSE: BUD) beat expectations on strength of international sales and partner brands.
• Apple Inc. (NASDAQ: AAPL) blew past expectations. See our conference call live blog.
• Avery Dennison Corp.'s (NYSE: AVY) net sales up, EPS down, both due to the Paxar acquisition.
• Baidu.com Inc. (NASDAQ: BIDU) beat expectations, but wariness about its growth potential lingers.
• Boeing Co. (NYSE: BA) beat expectations but lowered its guidance.
• Bristol-Myers Squibb (NYSE: BMY) beat expectations on the strength of Plavix sales.
• CNH Global's (NYSE: CNH) profit nearly doubled, beating estimates by 15%.
• Coach Inc. (NYSE: COH) beat estimates by a penny, but offered a conservative outlook for the holidays.
• Comcast Corp. (NASDAQ: CMCSA) met EPS expectations but cut its cash flow forecast.
• Countrywide Financial Corp. (NYSE: CFC) reported a $1.2 billion loss, but predicts a profit in the next quarter.

Ted Allrich is the founder of The Online Investor and author of the just released book: Comfort Zone Investing: Build Wealth And Sleep Well At Night. In this weekly column, he'll offer advice to investors who are just getting started.

The market took a 370 point punch in one day and is trying to come off the ropes. Investors naturally wonder if a recovery is possible as they remember all too well the nightmare of 2000 to 2002 when the Dow Jones Industrial Average lost almost 38% of its value. Or maybe they recall the crash of October 19, 1987 when the DJIA dropped 508 points in one day, losing 22.6% of its value. Could that happen again?

Of course it can. Anything can happen when emotions take over and investors push the panic button, not even knowing why, just doing it because everyone else is. It's only in retrospect that historians try to justify the actions. No one knows if a drop of historic proportions will occur again, especially right now, today or this week, since we are in dreaded October for a few more days. But we do know certain facts that affect the market.

Former Green Bay Packer great Max McGee, age 75, died this past Saturday evening in a tragic fall from his roof as he was cleaning off the autumn leaves. Max McGee is a legend, as he will always be remembered as the football player who scored the very first Super Bowl touchdown on January 15, 1967. It was a 36-yard pass from Hall of Fame quarterback Bart Starr. Max made a tremendous one-handed catch on the play. NFL Films has shown the play thousands of times.

The stories about Max are also of legendary status. Known as a "social" gentleman, Max was out all night before the Super Bowl, thinking he would not play even one down, as he was winding down his illustrious career. Early into the first quarter, the starting wide receiver separated his shoulder. Coach Vince Lombardi screamed, "McGee, get your %^& in there!!!" Having forgotten his own helmet in the locker room, Max borrowed a teammate's and went on to catch seven passes for 138 yards and two touchdowns: the game of his life. He should have been named the MVP of the game, but back then, those awards went to quarterbacks. Max McGee forever cemented in the hearts of pro football fans, one of the gutsiest and greatest performances in NFL history. Max McGee went on to a very successful business career as a principal partner launching the Mexican restaurant chain Chi Chi's. Max was also the radio voice of the Green Bay Packers from 1979-1998.

That part of Max is all well-documented and known. What I want to share, as his next-door neighbor, is the stuff of real legend -- the private Max McGee, the extremely generous Max McGee.

The New York Times is reporting that if Merrill Lynch & Co. (NYSE: MER) CEO Stanley O'Neal left he would be entitled to $159 million in retirement benefits ($30 million) and stock and option holdings ($129 million). This does not include any severance payment the board might award him. Add that to the $160 million Merrill paid him since he took over almost five years ago and you get a $319 million investment in its CEO by Merrill's shareholders.

If these numbers turn out to be right, I think Merrill is getting a better deal than did Home Depot's shareholders. For instance, at Home Depot (NYSE: HD), former CEO Bob Nardelli got $450 million -- a $210 million going away package plus $240 million in salary and other compensation -- and its stock was down 8% during his six-year tenure. By contrast, Merrill's stock is up 59% since O'Neal took over on December 2, 2002 -- creating $20.9 billion in additional shareholder value.

This sounds good in an absolute sense but it's not so great when viewed relative to other investments. Merrill's return under O'Neal is 9% less than that of the S&P 500 during the period and 217% below the return of competitor Goldman Sachs Group (NYSE: GS) since December 2002. If we credit O'Neal for the 59% return, then his $319 million pay generated a 65.5x return on investment -- including the additional $4.4 billion in shareholder value created by Friday's announcement that O'Neal was probably leaving -- which caused Merrill's stock to rise 8.5%.

The BEA Systems (NASDAQ: BEAS) board may think that their company is worth $21 a share. After consulting with their bankers at Goldman Sachs, that is the price they put on the company in a public letter to Oracle (NASDAQ: ORCL). The larger company has made an offer to buy BEAS for $17.

Oracle, as might have been predicted, says that $21 is absurdly high and has threatened to withdraw its offer.

Yesterday, Carl Icahn, who owned 15% of BEAS, told the company that it should take the highest best offer and be done with it. Reuters writes that he demanded in a letter to the BEA board that it let shareholders vote on the best bid that emerges from an auction. "It's completely insane to lose a stalking horse," Icahn said in an interview with the news service, referring to Oracle. He said he is prepared for a proxy fight to make his point.

Icahn is often right in these matters, but in this case he is especially right. BEAS is a fairly ordinary company.The company has not traded above $17 since early 2002. And, no other bidder has emerged at $17, although there was some speculation that IBM (NYSE: IBM) might step in. It would appear that other companies think that Oracle's current price point is rich and generous.

The BEAS board is wrong. If Oracle leaves the field, the stock will probably drop back to $12, where it traded in August. There will be no winners then, only losers.

Douglas A. McIntyre is an editor at 247wallst.com.

Back on May 23rd of this year I wrote a post for AOL's Bloggingstocks, that Apple (NASDAQ: AAPL) would become bigger than IBM (NYSE: IBM). At the time of that article, Apple's market capitalization was just under $100 billion and IBM's was at $158 billion. Apple had a long way to go to capture the title away from Big Blue and frankly, I conservatively wrote it would happen within 2 years. I was wrong: it has happened in 5 months. Today, Apple's market cap is a sterling $161 billion while IBM's has remained stagnant at $157 billion. The power of growth investing. Explain please!

IBM is an excellent company, well managed and has the respect of the technology world. There is no question that Big Blue is a mainstay and that millions of enterprises and governments rely on IBM's products every day. The problem with IBM is its growth is slow and there has been no visible acceleration. Apple on the other hand, has become the go-to, consumer electronics/technology giant. Apple has a line up of exciting, gotta-have products and the expanding margins to boot.

Apple has built a relationship with the consumer and that franchise is virtually impenetrable. The iPod and iPhone have defined their respective spaces. iPod has sold over 110 million units globally, and is still in a massive growth phase. The attendant iTunes store is the gift that keeps on giving. More than 2.5 billion -- that's billion -- tunes have been sold via iTunes. Talk about a franchise.

The iPhone is just in the beginnings of its cycle. The iPhone was met with high anticipation and a ton of hype, and has lived up to it. Apple has put forth a modest goal of 10 million units by year end 2008. I estimate that 10 millionth iPhone will be sold by April/May 2008. It also has the gift that keeps on giving: monthly royalties from the telecom carriers that will provide service. In the United States, it is AT&T (NYSE: T). 10 million units represent about 1% of the globally sold 1 billion cell phones per annum. Seems conservative for a "revolutionary" product. It is!

The Leopard operating system was released today at a retail price of $119 for installs to existing Mac Computers and, of course, it comes installed in new Macs. The Mac has blown away all estimates as it sold 2.6 milllion units this past quarter. That number is 400,000 ahead of the June quarter's outstanding numbers.

The add-on software and accessories sales for Apple gear is also part of the gravy. Coupled with 180+ retail stores that are user-friendly, Apple can control the entire transaction from soup to nuts and also builds customer loyalty along the way.

To put Apple's market capitalization gain these past 5 months into perspective: Apple's grew its value the size of Dell Computer (NASDAQ: DELL) in the 5 months! By the way, Apple will surpass its next target in the market cap game within the next 12 months. That target is Cisco Systems (NASDAQ: CSCO), another very well run technology giant. Cisco currently has a market cap of $200 billion....

Georges Yared is the CIO of Yared Investment Research and the author of Baby Boomer Investing...Where do we go from here?"

English band Pink Floyd is set to release a 16-disc box set in December that features the band's entire studio catalog as CD reproductions of the original vinyl records, Billboard reported yesterday. Unfortunately, the set is limited to 10,000 copies and will be available in the United States only as an import. It is unknown whether the box set will be reproduced in digital stores or not and Apple Inc. (NASDAQ: AAPL)'s iTunes Store has created complete digital box set's for catalogs in the past.

This news is not very descriptive about availability for the new album, but it has me wondering how many physical box sets are to be produced as the music industry moves closer and closer to fully embracing digital outlets. With the releases of s new Bob Dylan retrospective set and the coming Led Zeppelin catalog set, both available on iTunes and as physical CDs, what is the market for the CD versions? The Pink Floyd physical-only set (as far as is known at this point) takes this further with a price tag of $250.

A cursory glance at iTunes will tell you that the catalog is already available from iTunes Plus as DRM-free (Digital Rights Management) tracks, including the previously released 40th anniversary edition of Pink Floyd's debut album. With that knowledge, this box set seems marketable only to serious collectors and importers. The price tag and difficulty of availability make it hardly an item that the casual listener and even devout fan can seriously consider checking out. One has to wonder if EMI has a similar plan in store for The Beatles when that remastered catalog is available.

Welcome to the 34th installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions and just a bit of everything else when it comes down to a very hot topic these days: Wal-Mart.

As I hinted on earlier today, Wal-Mart's moves to gain further footage into the arena of online grocery shopping are becoming more evident. Although the world's largest retailer dabbles in online grocery shopping inside the non-perishable food category already -- just like online-only competitor Amazon.com (NASDAQ: AMZN) -- the difference is that Wal-Mart has over 3,000 physical customer locations in the U.S. alone.

And, therein lies a possible powder-keg opportunity. Could Wal-Mart expand beyond the online grocery delivery business that it currently offers from its Sam's Club division and market this time-saving service to the general customer population for all items located in the grocery sections of its Supercenters? Would this work logistically and become the first nationwide online grocery ordering success story?