Name That Company

I was founded in Ontario, Canada, as a trucking service company in 1924. Today I’m a holding company for North America’s largest providers of school and inter-city bus transport, municipal transit, ambulance transportation and hospital emergency department management services. I’m in the tour bus business, too. I employ nearly 100,000 people and take in more than $4 billion per year. In the ’90s I shed my solid waste and hazardous waste management divisions and bought Greyhound Lines. I filed for Chapter 11 bankruptcy protection in 2001 and aim to emerge from it this year. Who am I? (Answer: Laidlaw)

Know the answer? Send it to us with Foolish Trivia on the top and you’ll be entered into a drawing for a nifty prize! The address is Motley Fool, Box 19529, Alexandria, Va. 22320-0529. Send questions for Ask the Fool, Dumbest (or Smartest) Investments (up to 100 words), and your Trivia entries to Fool@fool.com.

Be ready for job loss

In recent weeks and months, the Department of Labor has been releasing some sobering numbers. The job market is weak, with May employment numbers showing that 9 million people were looking for work.

Could your job be next? Layoffs can strike quickly, so you have to be prepared for the worst. Your first line of defense: a comfy cash cushion. You can consider this your emergency fund, your opportunity fund, or your “at least this account won’t drop 20 percent in one week” fund. Whatever you call it, several thousand dollars sitting in a safe, liquid investment is ballast in the storm.

The standard advice about emergency funds is that you should have three to six months’ worth of income stashed away in cash equivalents. Those are the boring things you can get at your bank, such as savings accounts, money market accounts and certificates of deposit.

You won’t earn a lot of interest on these types of accounts, and they’re no fun to talk about at parties. (Imagine someone taking a sip of his martini and saying, “I don’t mean to brag, but I just invested in a money market account that pays 1.5 percent.”) But the money will be there tomorrow if you need it.

An emergency fund isn’t just for potential job loss. Sudden, unexpected big-ticket expenses are part of life. Car repairs can cost hundreds of dollars, house repairs often cost thousands, and body repairs … well, you just better hope you have good health insurance.

If you don’t have a reliable source of cash to draw upon during the bad times, you may have to consign yourself to the shackles of credit. Relying on plastic in times of need just makes a bad situation worse. Looking for a new job is no fun; doing so while covering your expenses with a credit card that charges 18 percent interest is a nightmare.

To learn more about how much you should have stuffed in your cash cushion and how you can get some decent rates on money markets and CDs, visit www.fool.com/savings /savings.htm or read “The Consumer Reports Money Book” by Janet Bamford (Consumer Reports, $20).

Go to Church & Dwight

You may not have heard of 157-year-old Church & Dwight Co. (NYSE: CHD), but you likely know its brands: Arm & Hammer, Arrid, Trojan, First Response, Nair, Carters and BRILLO. It may not be a sexy business (though it does market condoms), but it offers stability and diversity, producing cash in both good times and bad. Evidence: It recently announced its 409th regular quarterly dividend — over 102 years’ worth.

Recent acquisitions of Carter-Wallace consumer products and USA Detergents will prove beneficial to the bottom line, while the company introduces new, innovative products to drive sales growth. Profit growth should moderate slightly this year from last year’s 17 percent level as the company digests its purchases, but earnings per share (EPS) should still grow some 13 percent in ’03. Church & Dwight’s gross profit margins should receive an added boost as the company realizes cost savings from its acquisitions while keeping a close watch on its expenses.

Sales for 2003, topping $1 billion, are expected to grow around 5 percent, year-over-year. The largest gains will likely come from high-margin products such as carpet deodorizers, air fresheners and cat litter. Sales of the value-priced Arm & Hammer laundry detergents are also expected to increase.

Recently trading at a little more than 17 times its trailing 12-month free-cash flow (FCF), Church & Dwight presents a not-too-shabby valuation to go along with its solid fundamentals.

Paychex payoff

In the early 1980s, I was working in an advertising agency in New York when I heard an account person talking about a business owned by a friend of a friend. The company was going to have an IPO (initial public offering of shares). It provided payroll services to small businesses, which seemed profitable to me. I bought 100 shares. In the next few years, the stock split regularly, and I sold the new shares several times. Finally, I decided to hang on, and I haven’t sold any shares in the last 15 years. I was young, naive and lucky, and I now own about 4,300 shares of Paychex. My only regret is that I ever sold any shares. — Joan Bruno, Whispering Pines, N.C.

The Fool Responds: True, you’d be a lot richer today if you’d held all the shares, but you still did well. Paychex shares have increased some 14-fold in the past decade alone. But it’s vital to have a good understanding of a company’s strengths, weaknesses and competitive advantages before investing. Investing in companies before they have a public track record can be risky.