National Organizations to Provide Free Financial Education for Underserved Populations

Thousands of Americans consumers and financial professionals are expected to take advantage of a new financial education program being jointly launched by the Financial Planning Association (FPA), the Foundation for Financial Planning, Certified Financial Planner Board of Standards (CFP Board) and the U.S. Conference of Mayors. The idea is to provide through a series of clinics, free, no-strings-attached, financial advice and education to underserved communities, young adults, and individuals facing special life circumstances or crises.

Marv Tuttle, FPA's executive director and CEO, told Investment Advisor in an exclusive interview in late March, about this program as part of his organization's long-term effort to help educate the American public in regard to financial matters. "We have done I think a pretty decent job of galvanizing our membership community to get engaged in public service and social responsibility, to give back to society through pro bono and efforts that really demonstrate the value of financial planning," Tuttle said. "We're about ready to launch what we call the national day of service program and that will start in October. Our goal is to reach out in 30 different cities throughout the United States in October to work with those four parties to provide one-on-one advice and education to the communities that want to sign up with us.

"We're really pleased that the Conference of Mayors has come on board and Mayor Hickenlooper of Denver is very much behind our having that as a centerpiece of our national conference, which we're going here to hold here in Denver in October," Tuttle continued.

Advisor participation in the "Financial Planning Days" program will be driven by local FPA chapters and for CFP certificants, the CFP Board, while any necessary funding will be provided by the Foundation for Financial Planning.

The CFP Board conducted a similar effort in Los Angeles and Santa Monica during its annual meeting in 2006.

Sal Khan: The best advice I ever got

FORTUNE -- "One of the powerful things Bill Gates told me is 'Learn to say no.' You don't have to make everyone happy. I've also learned by observing how deeply he goes into anything he cares about. How well he knew the nuances of my product was a huge signal that no manager should feel they're above the pay grade.

"But one piece of advice that's driven me the most came from a commencement speech by then-MIT president Charles Vest. He said to keep on moving. Cheesy, but it's amazing how true it is. Don't talk about stuff. Do it. When your organization is paused, and when the spirit of just seeing what happens dies, that's when you should be worried. Before I make a video for Khan Academy, I don't think, Let me go talk to some people and do focus groups. Obviously you have to have some learning, but if it's ruining the tempo of activity, you have to rethink things. At the end of the day, what matters is whether your product works and whether people like it."

Sal Khan

Age: 35

Job experience: Founder and executive director of the nonprofit Khan Academy, a virtual school providing software and 3,000-plus video tutorials in math, science, and other subjects. Most are taught by Khan, who conceived of the idea in an effort to tutor his cousins remotely. Former hedge fund manager; has three degrees from MIT and an MBA from Harvard.

Claim to fame: In November 2011, Khan Academy had 3.7 million unique visitors and 42 million page views; Bill Gates uses Khan's videos to help his three children with schoolwork. Khan Academy has since received donations from the Gates Foundation; it also won $2 million from Google in 2010.

This article is from the January 16, 2012 issue of Fortune.  

Top Stocks For 2012-2-7-19

Record Revenues of $15.8 million, up 116% year-over-year

Record Marketplace Revenues of $9.7 million, up 269% year-over-year

Net Income of $1.6 million, marking first quarter of GAAP profitability

Record Traffic and Mobile Usage

SEATTLE, Aug. 24, 2011 (CRWENewswire) — Zillow, Inc. (Nasdaq:Z), the leading real estate information marketplace, today announced financial results for the quarter ended June 30, 2011.

“The second quarter was outstanding for Zillow(R) with record revenues, traffic and mobile usage. It marks our first profitable quarter on a GAAP net income basis and our fourth consecutive profitable quarter on an Adjusted EBITDA basis,” said Zillow CEO Spencer Rascoff. “We’re extremely pleased with our progress and rapid growth, yet we believe we’ve only scratched the surface of our opportunity.”

Second Quarter 2011 Financial Highlights

Total revenues increased 116% to $15.8 million from $7.3 million in the second quarter of 2010.

Marketplace revenues increased 269% to $9.7 million from $2.6 million in the second quarter of 2010. Display revenues increased 30% to $6.1 million from $4.7 million in the second quarter of 2010.

GAAP net income for the second quarter 2011 was $1.6 million, compared to a net loss of $2.0 million in the same period a year ago and a net loss of $0.8 in the first quarter of 2011.

Adjusted EBITDA was $3.9 million in the second quarter of 2011, or 24% of revenues, representing the fourth consecutive quarter of Adjusted EBITDA profitability. This compares to Adjusted EBITDA of negative $0.2 million in the second quarter of 2010 and $1.1 million in the first quarter of 2011.

2011 Operating and Business Highlights

Average monthly unique users grew 93% to a record 20.8 million in the second quarter of 2011 compared to 10.8 million average monthly unique users for the same period in 2010. July 2011 marked another record traffic month with 23.2 million unique users to Zillow’s websites and mobile applications, a 98% increase from July 2010.

Premier Agent subscribers, which contribute to Marketplace revenues, totaled 13,385 at June 30, 2011, up 180% from 4,777 at the end of the second quarter of 2010.

Zillow operates the most popular platform of mobile real estate applications across iPhone(R), iPad(R), Android(TM) and BlackBerry(R), and extended its leadership position during the quarter. In June, Zillow launched the first Zillow Mortgage Marketplace app on iPhone, helping borrowers instantly and anonymously submit loan requests from any location and connect with verified lenders.

In July, Zillow launched a real estate application on Windows(R) Phone 7, bringing the number of Zillow real estate mobile applications to five. Zillow was used on a mobile device 11.9 million times in July 2011, with 28 homes viewed every second.

Zillow made several database and product improvements during the quarter that benefit consumers and professionals. In June, Zillow introduced Zestimates on more than 25 million more homes and altered its Zestimate(R) algorithm to more accurately reflect housing market volatility and updated home facts provided by millions of users. This adjustment has improved accuracy 33% to an 8.5% median margin of error.

In June, Zillow introduced new construction home search, allowing buyers to browse homes and floorplans of new and planned communities, introducing more ways for consumers to shop for homes and a new distribution channel for homebuilders.

In May, Zillow launched Facebook(R) Tabs to help real estate agents increase their social media presence by integrating their local listings, data and Zillow ratings and reviews into their own Facebook business pages.

In April, Zillow announced the March acquisition of Postlets(TM), an online listing creation and distribution platform for agents and landlords that promotes listings across 13 real estate and social media sites, and is now offered as a free value-add service to Premier Agents.

Quarterly Conference Call

A conference call to discuss Zillow’s second quarter 2011 financial results will be webcast live today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). The live webcast of the conference call will be available on the investor relations section of Zillow’s website at http://investors.zillow.com/. For those without access to the Internet, the call may be accessed toll-free via phone at (877) 643-7152, with conference ID# 88387380. Callers outside the U.S. may dial (443) 863-7921, with conference ID# 88387380. Following completion of the call, a recorded replay of the webcast will be available on the investor section of the Zillow website until September 7, 2011. To listen to the telephone replay, call toll-free (855) 859-2056, conference ID 88387380. Callers outside the U.S. may dial (404) 537-3406, conference ID 88387380.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks and uncertainties, including the statement regarding our belief about our future opportunity. Statements containing words such as “may,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “project,” “projections,” “business outlook,” “estimate,” or similar expressions constitute forward-looking statements. Differences in the Company’s actual results from those anticipated in these forward-looking statements may result from actions taken by the Company as well as from risks and uncertainties beyond the Company’s control. Factors that may contribute to such differences include, but are not limited to, the Company’s ability to maintain and effectively manage an adequate rate of growth; the impact of the real estate industry on the Company’s business; the Company’s ability to innovate and provide products and services that are attractive to its users advertisers; the Company’s ability to increase awareness of the Zillow brand; the Company’s ability to maintain or establish relationships with listings and data providers; the Company’s ability to attract consumers to the Company’s website and mobile applications; the Company’s ability to compete successfully against existing or future competitors; the reliable performance of the Company’s network infrastructure and content delivery processes; and the Company’s ability to protect its intellectual property. The foregoing list of risks and uncertainties is illustrative, but is not exhaustive. For more information about potential factors that could affect the Company’s business and financial results, please review “Risk Factors” described in the Company’s final Prospectus related to the initial public offering of the Company’s Class A common stock filed pursuant to Rule 424(b) under the Securities Act with the Securities and Exchange Commission, or SEC, on July 20, 2011, and in the Company’s other filings with the SEC. Except as may be required by law, the Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.

Use of Non-GAAP Financial Measure: Adjusted EBITDA

To provide investors with additional information regarding our financial results, this press release presents Adjusted EBITDA, a non-GAAP financial measure. We have provided a reconciliation below of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure.

Adjusted EBITDA is a key metric used by our management and board of directors to measure operating performance and trends and to prepare and approve our annual budget. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis.

Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

Adjusted EBITDA does not consider the potentially dilutive impact of share-based compensation;

Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; and

Other companies, including companies in our own industry, may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net loss and our other GAAP results.

About Zillow, Inc.

Zillow is the leading real estate information marketplace, providing vital information about homes, real estate listings and mortgages through its website and mobile applications, enabling homeowners, buyers, sellers and renters to connect with real estate and mortgage professionals best suited to meet their needs. More than 23 million unique users visited Zillow’s websites and mobile applications in July 2011. Zillow, Inc. operates Zillow.com(R), Zillow Mortgage Marketplace, Zillow Mobile and Postlets. The company is headquartered in Seattle.

Zillow.com, Zillow and Zestimate are registered trademarks of Zillow, Inc. Postlets is a trademark of Zillow, Inc.

iPhone and iPad are registered trademarks of Apple, Inc. Android is a trademark of Google Inc. BlackBerry is a registered trademark of Research in Motion Limited. Windows is a registered trademark of Microsoft Corporation. Facebook is a registered trademark of Facebook, Inc.

ZILLOW, INC.
UNAUDITED CONDENSED BALANCE SHEETS
(in thousands)
	June 30, 2011	December 31, 2010
Assets
Current assets:
Cash and cash equivalents	$ 16,161	$ 12,278
Short-term investments	–	1,499
Accounts receivable, net	5,307	3,984
Prepaid expenses and other current assets	670	410
Total current assets	22,138	18,171
Property and equipment, net	5,544	4,929
Goodwill	1,140	–
Intangible assets, net	1,934	888
Other assets	3,146	25
Total assets	$ 33,902	$ 24,013
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$ 2,524	$ 750
Accrued expenses and other current liabilities	2,336	576
Accrued compensation and benefits	1,564	1,349
Deferred revenue	5,647	3,284
Deferred rent, current portion	285	271
Total current liabilities	12,356	6,230
Deferred rent, net of current portion	405	335
Shareholders’ equity:
Convertible preferred stock	4	4
Preferred stock	–	–
Class A common stock	–	–
Class B common stock	1	1
Class C nonvoting common stock	–	–
Additional paid-in capital	99,095	96,152
Accumulated other comprehensive loss	(77,959)	(78,709)
Total shareholders’ equity	21,141	17,448
Total liabilities and shareholders’ equity	$ 33,902	$ 24,013

ZILLOW, INC.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2011	2010	2011	2010
Revenues	$ 15,845	$ 7,334	$ 27,105	$ 12,665
Costs and expenses:
Cost of revenues (exclusive of amortization) (1)(2)	2,713	1,222	4,529	2,384
Sales and marketing (2)	5,630	3,748	11,115	6,865
Technology and development (2)	3,304	2,878	6,299	5,412
General and administrative (2)	2,627	1,483	4,455	2,824
Total costs and expenses	14,274	9,331	26,398	17,485
Income (loss) from operations	1,571	(1,997)	707	(4,820)
Other income	5	25	43	42
Net income (loss)	$ 1,576	$ (1,972)	$ 750	$ (4,778)
Net income (loss) attributable to common shareholders	$ –	$ (1,972)	$ –	$ (4,778)
Net income (loss) per share attributable to common shareholders — basic and diluted	$ –	$ (0.16)	$ –	$ (0.38)
Weighted-average shares outstanding — basic	13,940	12,660	13,645	12,650
Weighted-average shares outstanding — diluted	24,106	12,660	23,604	12,650
_________
(1) Amortization of website development costs and intangible
assets included in technology and development is as follows:	$ 1,234	$ 1,107	$ 2,457	$ 2,077
(2) Includes share-based compensation as follows:
Cost of revenues	$ 46	$ 53	$ 87	$ 107
Sales and marketing	67	111	174	215
Technology and development	90	106	176	201
General and administrative	210	159	366	318
Total	$ 413	$ 429	$ 803	$ 841
Other Financial Data:
Adjusted EBITDA (1)	$ 3,852	$ (202)	$ 4,904	$ (1,397)
(1) See above for more information regarding our presentation of Adjusted EBITDA.

The following table presents a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, for each of the periods presented (in thousands, unaudited):

	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2011	2010	2011	2010
Reconciliation of Adjusted EBITDA to Net Income (Loss):
Net income (loss)	$ 1,576	$ (1,972)	$ 750	$ (4,778)
Income tax expense (benefit)	–	–	–	–
Other income	(5)	(25)	(43)	(42)
Depreciation and amortization expense	1,868	1,366	3,394	2,582
Share-based compensation expense	413	429	803	841
Adjusted EBITDA	$ 3,852	$ (202)	$ 4,904	$ (1,397)

Revenues by Type

The following tables present our revenues by type and as a percentage of total revenues for each of the periods presented (in thousands, unaudited):

	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2011	2010	2011	2010
Revenues:
Marketplace revenues	$ 9,723	$ 2,632	$ 16,604	$ 4,486
Display revenues	6,122	4,702	10,501	8,179
Total	$ 15,845	$ 7,334	$ 27,105	$ 12,665
	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2011	2010	2011	2010
Percentage of Revenues:
Marketplace revenues	61%	36%	61%	35%
Display revenues	39%	64%	39%	65%
Total	100%	100%	100%	100%

Key Growth Drivers

The following tables set forth our key growth drivers for each of the periods presented:

	Average Monthly Unique Users for the Three Months Ended June 30,		2010 to 2011
	2011	2010	% Change
	(in thousands)
Unique Users	20,758	10,751	93%

Unique users source: Internal tracking of Zillow’s website and mobile applications using Omniture analytical tools.

	At June 30,		2010 to 2011
	2011	2010	% Change
Premier Agent Subscribers	13,385	4,777	180%

Investor contact:
Denise Garcia
866-504-0300
ir@zillow.com

Media contact:
Katie Curnutte
206-757-2701
press@zillow.com

Source: Zillow, Inc.

THIS IS NOT A RECOMMENDATION TO BUY OR SELL ANY SECURITY!

Has Akamai Technologies Become the Perfect Stock?

Every investor would love to stumble upon the perfect stock. But will you ever really find a stock that provides everything you could possibly want?

One thing's for sure: You'll never discover truly great investments unless you actively look for them. Let's discuss the ideal qualities of a perfect stock, then decide if Akamai Technologies (Nasdaq: AKAM  ) fits the bill.

The quest for perfection
Stocks that look great based on one factor may prove horrible elsewhere, making due diligence a crucial part of your investing research. The best stocks excel in many different areas, including these important factors:

• Growth. Expanding businesses show healthy revenue growth. While past growth is no guarantee that revenue will keep rising, it's certainly a better sign than a stagnant top line.
• Margins. Higher sales mean nothing if a company can't produce profits from them. Strong margins ensure that company can turn revenue into profit.
• Balance sheet. At debt-laden companies, banks and bondholders compete with shareholders for management's attention. Companies with strong balance sheets don't have to worry about the distraction of debt.
• Money-making opportunities. Return on equity helps measure how well a company is finding opportunities to turn its resources into profitable business endeavors.
• Valuation. You can't afford to pay too much for even the best companies. By using normalized figures, you can see how a stock's simple earnings multiple fits into a longer-term context.
• Dividends. For tangible proof of profits, a check to shareholders every three months can't be beat. Companies with solid dividends and strong commitments to increasing payouts treat shareholders well.

With those factors in mind, let's take a closer look at Akamai Technologies.

Factor	What We Want to See	Actual	Pass or Fail?
Growth	5-Year Annual Revenue Growth > 15%	23.8%	Pass
�	1-Year Revenue Growth > 12%	14.6%	Pass
Margins	Gross Margin > 35%	69.3%	Pass
�	Net Margin > 15%	17.3%	Pass
Balance Sheet	Debt to Equity < 50%	0%	Pass
�	Current Ratio > 1.3	6.66	Pass
Opportunities	Return on Equity > 15%	9.3%	Fail
Valuation	Normalized P/E < 20	28.82	Fail
Dividends	Current Yield > 2%	0%	Fail
�	5-Year Dividend Growth > 10%	0%	Fail
�	�	�	�
�	Total Score	�	6 out of 10

Source: S&P Capital IQ. Total score = number of passes.

Since we looked at Akamai Technologies last year, the company kept its score the same. Slightly slower growth is evident, but the big change is the company's substantial drop in valuation thanks to a 45% fall for the shares over the past year.

With the amount of content on the Internet, Akamai's data delivery technology should be in higher demand than ever. But the company has seen some major setbacks. One of the biggest was the decision from Netflix (Nasdaq: NFLX  ) late last year to go from having Akamai as its sole primary provider for streaming content, instead bringing competitors Limelight Networks (Nasdaq: LLNW  ) and Level 3 Communications (Nasdaq: LVLT  ) onboard as well.

Moreover, even more competition stands in the way of growth for Akamai. AT&T (NYSE: T  ) reportedly uses EdgeCast to power its content delivery network. Cotendo, another upstart, has worked with Google (Nasdaq: GOOG  ) on open-sourcing web acceleration -- a move which prompted Akamai's ongoing lawsuit against Cotendo.

With falling growth and lackluster margins, Akamai deserves the multiple compression it's seen over the past year. Now with Netflix having problems of its own, Akamai needs to pursue business more aggressively and earn the growth that even its somewhat lower valuation still builds into the stock price.

Keep searching
No stock is a sure thing, but some stocks are a lot closer to perfect than others. By looking for the perfect stock, you'll go a long way toward improving your investing prowess and learning how to separate out the best investments from the rest.

Click here to add Akamai Technologies to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Finding the perfect stock is only one piece of a successful investment strategy. Get the big picture by taking a look at our "13 Steps to Investing Foolishly."

Trade This Hot Tech Buyout Rumor

Akamai Technologies, Inc. (NASDAQ: AKAM) — This Internet applications and content provider is rumored to be a buyout candidate.

Bloomberg published an unconfirmed report that recent options activity indicated that the company might be acquired.�

The stock broke from a triple-top on Friday on the buyout rumors.�

I first recommended AKAM on Dec. 31, 2009, at $26, on a list of stocks that I thought would do well in 2010. AKAM went above $45 in June before a three-month consolidation.

S&P reiterated its “hold” rating on AKAM Friday, but there has been very strong buying in the stock since early July.�

�

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Double Your Money on the Rumor AND the News — Learn how to cut through the rumor and manipulation surrounding corporate earnings announcements and bank money-doubling option trades all year long. Download our FREE trading guide here.

We Need Closeout Companies!

Let us discuss about the topic of leftovers and what are the common problems associated with leftovers briefly. Business owners struggle with leftovers. Well, when we understand that no one is going to buy the leftovers for the regular price, we slash the rates to attract the buyer. You will know so much more when you read this article.

If this will not work to get rid of your leftovers then you need to do another alternative which is through contacting closeouts liquidation companies. These companies will send people on your place and purchase your leftovers. They will give you an assurance that they will purchase all the things you want them to procure. You will know more as you read on.

An interesting business idea is to make your own closeouts company. The main idea is to sell the leftovers of other businesses. Also, whatever you sell will be cheaper than what is available in the stores. Your job is to do what it takes and you need to figure out a way to handle things. It will benefit your new business in the end. You will know so much more.

If we do have a store where selling many types of goods and if we will stop selling one type of good, we can put a label that those goods won’t be available in the near future for customers.

If we are closing down your business, we are supposed to sell everything that we have. It is clear that we should reduce the prices in the case we are hurry to sell everything. Before doing that imagine about the worst condition try to minimize it.

I want folks to see my articles about 3rd party logistics. If you’re doing serious closeouts research on the other hand, I’d recommend talk to some of these companies directly for a consultation

How Long Will It Take Tesco to Recover?

LONDON -- Top U.K. supermarket Tesco (LSE: TSCO.L  ) shocked the market back in January with its first profit warning in 20 years. The FTSE 100 firm saw almost 5 billion pounds wiped off the value of its shares at a stroke.

Nine months on, and a disappointing set of interim results later -- a double-digit percentage fall in trading profit -- Tesco's shares languish at the same level they dived to immediately following the profit warning.

So, how long will it take Tesco to recover? Let's have a look at three other supermarkets that have issued profit warnings in the past 10 years.

Morrison's meal deal: four years of indigestion
In March 2004, Wm Morrison Supermarkets completed the 3.4 billion pound acquisition of rival chain Safeway. Within six months, it issued a profit warning for its fiscal year 2005 -- the chain's first profit warning in 37 years.

By June 2005, Morrison had issued no less than five profit warnings, extending the fallout from the acquisition into fiscal year 2006. As the table below shows, it would take until 2008 for Morrison's earnings per share to surpass its pre-profit-warning level of 2004.

�	2004	2005	2006	2007	2008
Revenue (in billions of pounds)	4.9	12.1	12.1	12.5	13.0
EPS (in pence)	12.6	8.1	(9.5)	9.3	20.8
Dividend per share (in pence)	3.3	3.7	3.7	4.0	4.8

Of course, Morrison's bout of severe indigestion from feasting on Safeway is very different to Tesco's current situation.

However, there are perhaps a couple of points worth noting. On the optimistic side, Morrison was able to maintain its dividend despite its difficulties. On the pessimistic side, analysts remained over-optimistic about Morrison's earnings, not only after the first profit warning but also through the following 12 months.

Sainsbury's six years of hurt

J Sainsbury issued three profit warnings for its fiscal year 2005. The company had been chasing higher margins at the expense of the customer experience. Sound familiar?

Sainsbury's directorspeak and actions to remedy the situation in 2004-05 also reverberate in many ways with Tesco's in 2012. Here are some pertinent snippets from Sainsbury:

There is nothing fundamentally wrong with the brand. The problem was that we hadn't delivered it well enough in recent years.

Our number one priority � to make things better for our customers as quickly as possible � to "fix the basics."

Recruitment of 3,000 additional colleagues into stores.

131 stores have not received any investment for a number of years � Customers, representing 20 percent of Sainsbury's sales, are not experiencing the best store environment and these stores will be refurbished over the next two years.

Overall, we think we've made a good start, but there's still much left to be done.

As the table below shows, there was indeed much left to be done.

�	2004	2005	2006	2007	2008	2009	2010
Revenue (in billions of pounds)	18.2	16.6	16.1	17.2	17.8	18.9	20.0
EPS (in pence)	20.7	-3.0	3.8	19.2	19.1	16.6	32.1
Dividend per share (in pence)	15.7	7.8	8.0	9.8	12.0	13.2	14.2

Sainsbury had reckoned it would take until fiscal year 2008 to bring about lasting change. As far as earnings performance was concerned, it took until 2010 for EPS to surpass its pre-profit-warning level of 2004. Meanwhile, the dividend, which was slashed in 2005, had yet to regain its former level.

Carrefour on all fours: five years and counting
French supermarket giant Carrefour has similar revenues to Tesco and, like its U.K. counterpart, is the dominant force in its home territory.

Carrefour issued a profit warning in June 2008 and a second six months later, citing weaker consumer spending, particularly in Europe. An uptick in revenues and earnings in 2010 proved to be a false dawn and the company issued five profit warnings for its fiscal year 2011.

As the table below shows, an improvement is expected in the current year. Nevertheless, the dividend has been cut, and both EPS and dividend per share are forecast to be at around half their pre-profit-warning level of 2007.

�	2007	2008	2009	2010	2011	2012 (forecast)
Revenue (in billions of euros)	82.1	87.0	87.4	91.5	80.5	80.8
EPS (c)	267	186	48	64	56	134
Dividend per share (c)	108	108	108	108	108	59

Foolish bottom line
It took four years for Morrison to get its EPS back to the level before the first profit warning; it took Sainsbury six years; and for Carrefour it's five years and counting.

Tesco may pull a quick-turnaround rabbit out of the hat, but if recent supermarket history is any guide, it could be a longer and rougher ride than I suspect many investors are expecting.

Certainly, Tesco's problems amount to a whole lot more than one period of poor Christmas trading. In the words of the chief executive, the company needs to address "long-standing business issues" in the U.K.

Once on the wrong tack, supermarkets, like supertankers, typically take an age to change course. Tesco's shares may be trading at under 10 times current-year earnings forecasts and offer a prospective yield of 4.8%, but investors need to consider the opportunity cost of a protracted recovery.

One super-investor who is aboard the Tesco supertanker for the long haul is US multi-billionaire Warren Buffett. You can read the full story of Buffet's investment in a free and exclusive Motley Fool report: "The One UK Share Warren Buffett Loves."

Download the report and decide for yourself whether Buffett has bought a blue-chip aristocrat at a bargain price. The report is available for a limited time only but you can have it dispatched to your inbox immediately, simply by clicking here.

Are you looking to profit as a long-term investor? "10 Steps to Making a Million in the Market" is the Motley Fool's latest guide to help Britain invest. Better. We urge you to read the report today -- while it's still free and available.

Further investment opportunities:

• The Market's Top Sectors
• 8 Shares Held by Britain's Super Investor
• How to Unearth Great Oil & Gas Shares

Oracle Gets the Coveted Golden Tombstone

by Brenon Daly

We survey corporate development executives every year to get a sense of their shopping plans for the next 12 months. We’ll have a full report on the survey when we return from our holiday break in early January, but the headline finding is that two-thirds of the respondents expect the pace of M&A at their firms to pick up in 2010, compared to just 5% who see the rate tailing off. We would note that bullishness is echoed by technology investment bankers, who we also recently surveyed. (See our full report on the tech bankers’ survey.)

In addition to getting their outlook for the coming year, we also asked corporate development executives to pick a single deal that stood out to them as the most significant transaction of the year. The 2009 winner? Oracle’s (ORCL) still-pending $7.4bn acquisition of Sun Microsystems (JAVA). Larry Ellison’s big gamble on hardware received twice as many votes as the second-place transaction, Hewlett-Packard’s (HPQ) reach for 3Com (COMS) last month. (HP won the award last year for its purchase of services giant EDS.) Third place was claimed by EMC’s aggressive grab of Data Domain.

From our perspective, it’s fitting that Oracle’s purchase gets the coveted Golden Tombstone for 2009. (As an aside, it’s unintentionally accurate to be referring to ‘tombstones’ in connection with deals this year, if just because the M&A market was as quiet as a cemetery.) After all, 2009 has been characterized by transactions that are cheaper but take longer to close than in years past. Oracle, which announced the purchase of Sun in April but still hasn’t gotten full approval for it, is paying just 0.6x trailing sales for the faded tech giant. It was that kind of year for M&A, and one we’ll gladly put behind us. Here’s to a healthy and happy 2010 when we return from a much-needed break.

Golden Tombstone winners

Year Transaction 2009 Oracle’s $7.4bn purchase of Sun Microsystems 2008 HP’s $13.9bn acquisition of EDS 2007 Citrix’s $500m XenSource buy

Source: The 451 Corporate Development Outlook Survey

Disclosure: No positions

Apple: Verizon Deal? Report CDMA iPhone 4 Coming In Q4

Is an Apple (AAPL) distribution deal with Verizon Wireless (VZ, VOD) on the way at last?

DigiTimes is reporting that the contract manufacturer Pegatron will start shipping a CDMA version of the iPhone 4 in the fourth quarter, and is using plants in Shanghai to produce the products. The report said the company is also “working on gaining orders” for MacBooks and iPads. The item is attributed to “sources from component makers.”

While the report does not mention Verizon specifically, the implication of Apple developing a CDMA handset is clearly that Apple could finally be on the verge of creating a version of the iPhone compatible with Verizon’s network.

Back in March, the Wall Street Journal reported that Apple was working on a CDMA-based phone, and that Pegatron was scheduled to start mass production of the phone in September.

AAPL is up $3.90, or 1.5%, to $271.15.

Try the Stock Replacement Strategy

Do you ever get the feeling that your stock portfolio has been going nowhere fast? Even though stocks are up around 70% from their March 2009 lows, millions of investors still have less than what they started with.�

Let�s analyze how the stock replacement strategy can help you.

Market Size

What do Best Buy (NYSE: BBY), McDonald�s (NYSE: MCD) and Starbucks (NASDAQ:��SBUX) all have in common? They are recognized consumer brands and they are all large company stocks. Which ones do you buy?

The stock replacement strategy solves the investor�s dilemma of which stocks to buy. Since stocks come in three general sizes (large cap, mid cap and small cap) simply owning a corresponding ETF to match your desired market size accomplishes your mission.

Large-cap ETFs like the iShares Russell 1000�(NYSE: IWB) or the Vanguard Large Cap ETF (NYSE: VV) can be substituted in the place of stocks like Best Buy, McDonald�s and Starbucks. For mid and smaller sized stocks, substitutes like the SPDR S&P MidCap 400 ETF (NYSE: MDY) and the Vanguard Small Cap ETF (NYSE: VB) can help you to execute your stock replacement strategy.

Virtually any publicly traded stock can easily be substituted with an ETF that matches its market size.

Growth and Value

Another defining characteristic of stocks is whether they are growth or value oriented companies. Generally, stocks with no dividends, faster growing earnings and higher P/E ratios are considered growth stocks. Conversely, stocks with higher dividends, steady earnings and lower P/E ratios are generally categorized as value stocks.

What�s better? Growth or value stocks? It�s really a matter of preference, but here too, ETFs can be substituted in the place of individual stocks.

Instead of banking your fortunes on a single growth stock like Amazon.com (Nasdaq: AMZN), growth ETFs like the iShares Russell 1000 Growth ETF (NYSE: IWF) or the Vanguard Large Growth ETF (NYSE: VUG) allow you to bank on a group of growth stocks with similar growth characteristics to Amazon.com.

Industry Sector

Let�s suppose you�re bullish on the future prospects of the energy sector. You don�t need to buy Chevron (NYSE: CVX),� Exxon Mobil (NYSE: XOM) or some other energy stock to participate. The stock replacement strategy allows you to invest in energy-related ETFs that own a group of energy stocks. Furthermore, some of these very energy ETFs may even own CVX or XOM!

Corresponding substitutes for CVX or XOM would be the Sector Energy ETF (NYSE: XLE) or the SPDR S&P Oil & Gas ETF (NYSE: XOP).

The stock replacement strategy works well for just about any stock and its matching industry sector.

Benefits of�Replacing Stocks with ETFs�

The most obvious benefit of the stock replacement strategy is portfolio diversification. In other words, you reduce your financial risk to individual companies. Indeed, this is one of the most overlooked secrets of successful investing. It isn�t so much about picking the right stocks, as it is avoiding disasters. And even stocks that are doing well are susceptible to unexpected blowups that not even the best or most intensive stock research can prepare you for. (See Goldman Sachs (NYSE: GS), BP (NYSE: BP) and Toyota Motors (NYSE: TM) ).

Instead of trying to build an investment portfolio one brick at a time, the stock replacement strategy saves you time. How long would it take you to build a diversified portfolio of 500 to 1,000 stocks? Before you could finish, the trading costs would likely bankrupt you.

Lastly, the performance benefits of the stock replacement strategy are unparalleled.

Investment study after investment study continues to prove the vast majority of professionally constructed stock portfolios (active mutual funds) consistently underperform corresponding index funds or index ETFs. So by owning a portfolio built upon index ETFs you can avoid all of that chronic underperformance. You also avoid the higher investment costs associated with those losing strategies.

In summary, the stock replacement strategy can be a win-win for you. �

This article was written by Ron DeLegge, Editor of �ETFguide.com. ETFguide is the information leader on exchange-traded funds because of its vendor-neutral approach and its progressive reporting style. Unique features include an ETF bookstore, a monthly e-mail newsletter and subscription-based ETF portfolios.

Bulls on Stampede! — Thursday’s IP Market Recap

Calls of irrational exuberance be darned — Thursday was fun for everyone but the most bearish traders. The European Union�s announcement of an agreement to combat the region�s sovereign debt crisis sent the markets soaring Thursday, with the Dow Jones up almost 340 points (2.9%), the S&P 500 up about 43 points (3.4%) and the Nasdaq up some 88 points (3.3%).

Every component of the DJIA was up by at least 1% — the biggest winners included Alcoa (NYSE:AA), which was up 9.07% to $11.30, Bank of America (NYSE:BAC, +9.56%, $7.22) and General Electric (NYSE:GE, +6.24%, $17.37).

One of the biggest sector winners Thursday was financials, with several gaining more than 15% on the day. Deutsche Bank (NYSE:DB) was up 17.95% to $47.31, Barclays (NYSE:BCS) up 17.37% to $13.85 and Morgan Stanley (NYSE:MS) up 17% to $19.41.

Several big names reporting earnings rode higher either alongside or on top of the market crest Thursday.

Dow Chemical (NYSE:DOW) slightly missed EPS expectations of 63 cents per share when it reported third-quarter EPS of 62 cents Thursday — nonetheless, the 59% jump in earnings propelled the stock up about 8% to $29.10. Exxon Mobil�s (NYSE:XOM) earnings jumped 41% in the third quarter, from EPS of $1.44 per share last year to $2.13 per share, slightly beating expectations. The stock increased just 1% to $81.88 but has gained about 5% in the five trading days leading up to the report. And US Airways� (NYSE:LCC) third-quarter profits dropped almost 66%, but adjusted EPS of 51 cents per share beat earnings expectations of 48 cents, sending the stock up 3% to $5.83.

Also announced Thursday was the long-awaited decision by Hewlett-Packard (NYSE:HPQ) about whether it would keep its PC division. After saying in August that the company was considering spinning off its Personal Systems Group to move away from the consumer market, Hewlett-Packard, under new CEO Meg Whitman, said it would keep the PSG division. HPQ finished the day up almost 5% at $26.99.

Three Up

• Acme Packet (NASDAQ:APKT): Up 19.05% ($5.63) to $35.18.
• Century Aluminum (NASDAQ:CENX): Up 18.88% ($1.86) to $11.71
• ArcelorMittal (NYSE:MT): Up 15.26% ($2.99) to $22.58.

Three Down

• Quality Systems (NASDAQ:QSII): Down 51.76% ($44.88) to $41.82.
• Avon Products (NYSE:AVP): Down 18.25% ($4.20) to $18.81.
• Hershey Foods (NYSE:HSY): Down 4.04% ($2.42) to $57.46.

As of this writing, Kyle Woodley did not own a position in any of the aforementioned stocks. Check out recaps from previous trading days here.

Tuesday’s Stocks to Watch: AutoZone, DSW

Here are a few stocks to keep on your radar:

• Shares of AutoZone (NYSE:AZO) gained�more than 6%�in early Tuesday trading after the company beat Wall Street’s fiscal third-quarter profit and revenue estimates.
• GT Solar (NASDAQ:SOLR) jumped�more than 11%�after the company beat analysts’ fiscal fourth-quarter profit expectations and said its fiscal 2010 earnings and revenue would surpass current estimates.
• Medtronic (NYSE:MDT) slipped�2.4% after the company missed Wall Street’s fiscal fourth-quarter earnings estimates.
• DSW (NYSE:DSW) rose�12% after the company beat analysts’ first-quarter earnings and revenue expectations and boosted its forecast for full-year profit.
• Cracker Barrel (NASDAQ:CBRL) tumbled nearly 8%�after the company missed Wall Street’s third-quarter revenue estimates and said fourth-quarter revenue would come in below current expectations.

Scandinavian ETFs: We’ve Gotten Too Niche

Imagine my frustration. I had identified what I believed to be an investable macro trend — the rise of the emerging market nouveau riche — and I had found a great ETF to play it, the Claymore Robb Report Luxury ETF. It was a collection of high-end jewelry, fashion, art and high-performance auto stocks; a one-stop shop for investing in the lifestyle trappings of millionaires.

It was the perfect investment for the next decade, and its performance while I held it was all that I could have hoped for.

Alas, no one else seemed to share my enthusiasm, and the ETF never managed to accumulate more than a couple million dollars in assets. Some days, its trading volume was zero; not a single share traded. Not too surprisingly, Claymore closed the fund a couple years ago. It wasn�t profitable to keep it open.

I tell this little sob story because I see it repeated quite often. The exchange-traded fund might be the best invention since the open-end mutual fund in the 1920s or perhaps the best since the stock market itself. ETFs add liquidity to the market, lower the cost of trading and allow for precise tactical allocation.

Alas, it is possible to have too much of a good thing. There came a point in the 1990s when there were more mutual funds in existence than there were publicly traded stocks. And while ETFs still have a long way to go before they reach that level of numerical saturation, they appear to have reached a different sort of saturation: thematic saturation.

Every conceivable investment theme under the sun now has an ETF that tracks it, whether it be South Korean small-cap stocks (SKOR) or the direction of inflation (INFL). Many themes have a leveraged fund too, and maybe an inverse fund or even a leveraged inverse fund. It should come as no shock that many of these funds fail to achieve critical mass. In 2011 alone, the following list of funds died (or are scheduled to die) with a whimper:

• Global Agriculture Equity Index Fund (AMEX:CRBA)
• Global Industrial Metals Equity Index Fund (NYSE:CRBI)
• IQ Taiwan Small Cap ETF (NYSE:TWON)
• IQ Hong Kong Small Cap ETF (NYSE:HKK)
• IQ Japan Mid Cap ETF (NYSE:RSUN)
• Russell Emerging Markets Growth ETF (NYSE:EMGX)
• Russell Emerging Markets Value ETF (NYSE:EMVX)
• Mexico Small-Cap ETF (NYSE:MEXS)
• Global X Oil Equities ETF (NYSE:XOIL)
• Global X Farming ETF (NYSE:BARN)
• Global X Fishing Industry ETF (NYSE:FISN)
• Global X Food ETF (NYSE:EATX)
• Global X Waste Management ETF (NYSE:WSTE)

BARN. Cute, isn�t it?

Some of these funds might have limped along for another couple years were it not for the volatility of 2011, but frankly, it�s hard to imagine anyone missing them. Investors will have to find other ways to speculate on the price of waste management stocks.

Barclays iShares, the company that did more than anyone to make the ETF revolution happen, recently launched a series of new funds that likely will join this inglorious list:

• iShares MSCI Norway Capped Investable Market Index Fund (AMEX:ENOR)
• iShares MSCI Denmark Capped Investable Market Index Fund (AMEX:EDEN)
• iShares MSCI Finland Capped Investable Market Index Fund (AMEX:EFNL)

The Denmark and Finland ETFs are the first of their kind, though the Norway ETF will go head-to-head with an existing competitor, the Global X Norway ETF (NYSE:NORW). I�m not sure what surprises me more: the fact that two fund companies deemed Norway worthy of an ETF listing or that NORW has an average trading volume of 81,000 shares.

Even with iShares� marketing budget, it�s hard to imagine investors embracing these Scandinavian ETFs. This is not to say that Scandinavia doesn�t have its share of world-class companies. Statoil ASA (NYSE:STO) is a respected oil company (it also happens to represent fully 20% of the Norwegian stock market by market cap). Novo Nordisk (NYSE:NVO) is another fine company — that happens to make up 23% of the Danish market.

I�m not a big fan of ETFs so heavily dominated by one company. There comes a point when you might as well just buy the individual stocks and be done with it.

Bottom line: If you�re bullish on Scandinavia, any of these ETFs are worth considering. But should you decide to buy, don�t plan on holding for too long. I�ll be surprised if these funds still are open five years from now.

Oh, and one more bit of advice: Use a limit order when buying. Given the low trading volume on the Danish and Finnish ETFs, it won�t take a large order to move the market.

Charles Lewis Sizemore, CFA, is the editor of the Sizemore Investment Letter, and the chief investment officer of investments firm Sizemore Capital Management. As of this writing, he did not hold a position in any of the aforementioned securities. Sign up for a FREE copy of his new special report: �4 Dividend Stocks to Buy and Forget.�

WYNN, MGM, BOYD Leap After DOJ Ruling

A Department of Justice opinion could open the door to more online gambling run by states. News about the opinion sent shares of companies tied to gambling higher, with Wynn Resorts (WYNN) rising 3.4%, MGM International (MGM) up 4.5%. Boyd Gaming (BYD) rose 10%.

On Friday, the DOJ appeared to reverse its previous position on Internet gambling, saying that the online sale of lottery tickets within the state does not violate the Wire Act of 1960.

Roth Capital Research analyst Todd Ellers sees the big casino operators and equipment makers gaining from the opinion:

“We view the ruling as a significant event for the U.S. gaming and lottery industry that essentially opens the door for states to consider offering internet gaming and lottery products (ex sports wagering)…[W]e believe individual state lotteries and vendors like Scientific Games, Gtech, and Intralot will be the first to benefit from selling virtual lottery tickets online. In addition, casino operators w/ strong brands (i.e. Caesars, MGM, Las Vegas Sands (LVS), & Wynn) would also benefit from operating virtual casinos if authorized by enough states. Finally, traditional gaming suppliers like IGT (IGT), Bally Technologies (BYI), WMS Industries (WMS), Aristocrat, and Konami should also benefit from providing game content and/or technology to host online casinos.”

The Biggest Retail Losers of 2011

The following video is part of our "Motley Fool Conversations" series in which technology editor Andrew Tonner and�consumer goods editor Austin Smith discuss topics across the investing world.

In today's edition, Austin goes over the biggest retail losers of 2011. You may be surprised by some on his list. Watch the video to find out which companies have been hurt this past year and what to expect in 2012.

Please enable Javascript to view this video.

Looking for our prediction for 2012? Check out The Motley Fool's brand new report, "The Motley Fool's Top Stock for 2012." It highlights a company that is revolutionizing commerce in Latin America. You can get instant access to the name of this company by�clicking here -- it's free.� It won't be there forever, so check it out today.

China Steps Up Effort to Derail BHP Bid for Potash

China is attempting to derail BHP Billiton Ltd's (NYSE ADR: BHP) bid for Potash Corp. (NYSE ADR: POT), as Beijing frets over the long-term supply of resources, according to a report yesterday (Wednesday) by the Financial Times.

Fearing that it could have a negative impact on Chinese imports, the state-run Sinochem Group has hired Deutsche Bank AG (NYSE: DB) and Citigroup Inc. (NYSE: C) to help disrupt BHP's bid for the fertilizer company, people familiar the matter told the FT. A Chinese bank, thought to be Industrial and Commercial Bank of China, was also part of the team.

Citigroup, which acts as joint corporate broker to BHP along with Bank of America Corp.'s (NYSE: BAC) Merrill Lynch unit, has asked to be relieved of its role in BHP's bid in order to advise Sinochem on a potential counter-bid.

BHP has responded by hiring three high-powered former advisers to Canadian prime ministers to lobby legislators in its campaign to acquire the fertilizer giant, Bloomberg News reported.

Potash, the world's largest producer of potash - a mineral that is refined into fertilizer and used to enhance crop yields - initially rejected the unsolicited takeover bid of $130 a share calling the offer "grossly inadequate."

The fertilizer company also quickly adopted a so-called poison-pill defense to fend off would-be suitors, though it said it would be open to a transaction if the price were right. Potash stock dropped 1.3% to $150.55 in trading yesterday, 16% above BHP's offer.

Almost as soon as BHP announced its $39 billion hostile bid on August 15, the Chinese government encouraged Sinochem to "take an interest" in Potash, a person familiar with the matter told the FT.

The Sinochem Group controls almost all potash imports into China through its subsidiary, Sinofert.  PotashCorp owns a 22% stake in Sinofert.

China is the world's largest importer of potash. Beijing's latest move is the strongest sign yet of its concern that a successful BHP acquisition could have long-term implications for its food security.

Joining the contest for Potash may indicate China's desire to stop BHP from controlling more valuable commodities after years of escalating tensions over iron ore prices.

BHP and Vale SA (NYSE ADR: VALE), the world's largest iron ore producer, in March signed short-term contracts for record prices with Asian steel mills that effectively scuttled a 40-year-old system of setting prices annually.

China considers access to resources a matter of national security and the growing clout of global iron ore miners, including BHP, has been a matter of serious concern to Chinese officials.

A Chinese counter-bid for Potash could be motivated by the need to secure long-term supplies of fertilizer, as well as an overarching desire to prevent BHP from expanding its reach.

Sinochem, which was founded in 1950 to import oil and chemicals, has a mandate from the government to make "the greater good of the national political stability, economic development, and social progress," its highest priority.

Rather than launch a full takeover, Sinochem could offer to take a strategic stake in Potash in the hopes of easing concerns about the Chinese company's role in the takeover battle, sources told the FT.

Canadian lawmakers have called on the government to establish conditions for any foreign acquisition of the Saskatoon, Saskatchewan-based company.

BHP, based in Melbourne, had no active lobbyists registered with the Canadian legislature until last month. BHP Chief Executive Officer Marius Kloppers was scheduled to be in Ottawa for meetings with lawmakers yesterday.

"I'm obviously anxious to understand completely and fully the type of proposal they are making," Ralph Goodale, deputy leader of the main opposition Liberal Party and his party's only legislator from Saskatchewan, told Bloomberg in a telephone interview.

"They have an extensive public outreach and communications campaign under way in Saskatchewan," he said.

Foreign takeovers of major Canadian companies are automatically reviewed in Canada under the Investment Canada Act, which gives the government power to block any transaction if it finds insufficient "net benefits" to the country.

"This government's position has not been to give a blank check to foreign takeovers," Prime Minister Stephen Harper told lawmakers in Parliament yesterday. "There is a law in place."

News & Related Story Links:

• Financial Times: Sinochem looks to spoil BHP's Potash bid
  
• Bloomberg:
  BHP Hires Canada Prime Minister Advisers for Potash
  
• Money Morning:
  BHP Billiton's Bid for Potash Could Spark Surge of M&A Activity in Agribusiness Sector
  
• Financial Times:
  Beijing eyes counterbid for PotashCorp
  
• Money Morning: Historic Agreement Ends 40 Year Old Iron Ore Benchmark as Miners Get Short-Term Pricing Contracts

Wells Fargo Settles With SEC on Wachovia; Zuni Tribe, Investors to Get $7.4 Million

The SEC said Tuesday that Wells Fargo Securities agreed to pay more than $11 million to settle charges that Wachovia Capital Markets engaged in misconduct in the sale of two collateralized debt obligations (CDOs), including one sold to the Zuni tribe and an individual investor four years ago with “undisclosed excessive markups.”

The CDOs were tied to the performance of residential mortgage-backed securities and were hurt as the U.S. housing market came under distress in late ‘06 and early ‘07. One, Grand Avenue II, was sold to investors by a registered rep with Wachovia Securities in El Paso, Texas.

“Wachovia caused significant losses to the Zuni Indians and other investors by violating basic investor protection rules – don’t charge secret excessive markups, and don’t use stale prices when telling buyers that assets are priced at fair market value,” said Robert Khuzami (left), director of the SEC’s division of enforcement, in a press release.

(Wells Fargo began its merger with Wachovia in October 2008 and completed the deal at year-end.)

The SEC’s order found that, with the first CDO -- Grand Avenue II, Wachovia marked down $5.5 million of equity to 52.7 cents on the dollar after the deal closed and it was unable to find a buyer, according to the SEC. Months later, the Zunis and the individual investor paid 90 and 95 cents on the dollar. Unbeknownst to them, these prices were over 70% higher than the price at which the equity had been marked for accounting purposes, the SEC says.

With the second CDO – Longshore3, Wachovia misrepresented that it acquired assets from affiliates “on an arm’s-length basis” and “at fair market prices” when, in fact, 40 residential mortgage-backed securities were transferred from an affiliate at above-market prices. Wachovia Capital Markets transferred these assets at stale prices in order to avoid losses on its own books.

In agreeing to pay $6.75 million in disgorgement and $4.45 million in penalties – $7.4 million of which will be returned to the investors through a Fair Fund -- Wells Fargo Securities did not admit or deny the findings.

“The settlement relates to actions taken by Wachovia in 2007 in the early days of the credit crisis,” Wells Fargo said in a statement on Wednesday. “The issues presented here were complex, and Wells Fargo is pleased to have resolved this matter with the SEC.”

Acme Packet Shares Got Crushed: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Acme Packet (Nasdaq: APKT  ) plummeted 20% on Wednesday after the communications equipment maker slashed its current-quarter forecast.

So what: Acme's fourth-quarter outlook was so weak -- management expects EPS of $0.26-$0.28 versus the consensus of $0.37 -- that analysts are being forced to lower their growth estimates yet again. Naturally, CEO Andy Ory tried to calm investors' nerves, noting that while results were hurt by "uncertainty in the North American service provider market," Acme continues to perform "very well" globally.

Now what: For the full year, Acme now sees revenue of $308-$310 million, which is off from its earlier forecast of $315-$320 million. Of course, with the stock now down a whopping 70% from its April highs, you've got to think that a good chunk of that pessimism is already baked into the price. Trying to catch a "falling knife" isn't easy, but given its still very strong position in the carrier market, Acme might be worth a shot.

Why You Should Bet Big On Guns

It�s not all that often that I carry a gun into a strip mall. Then again, this isn�t your ordinary suburban strip mall�

That�s because sitting next to Walgreens, in the same storefront that you�d expect to find a Hallmark or AT&T store, is a shooting range. No, the display cases aren�t filled with cell phones; they�re filled with handguns. And behind the (presumably bulletproof) glass are 16 lanes of climate-controlled shooting stations.

The location isn�t the only thing that doesn�t fit stereotypes. For some, the customers may be just as surprising�

There�s the lady in her early �30s putting holes in the paper �bad guy� target 25 feet away � she�d never shot a gun before setting up in the lane next to me. Neither had the couple who rented a pistol to try for fun on a Wednesday evening�

Not everyone there was new to firing a gun. The corporate cowboy in a polo shirt and khakis � stopping on his way back from a day at the office � was showing up for a competitive shooting match taking place that afternoon. Don�t even try shooting here on a weekend unless you�re ready to stand around. The wait for a lane runs about an hour during peak times. In fact, you won�t find the range empty even in the middle of the workday.

�It�s like this every day,� said the range�s manager, looking tired. Clearly, business was booming a bit too much. �I mean, look around � it�s a Wednesday afternoon and this place is packed!� Around the country, the stories are pretty much the same.

Yes, the gun world is changing dramatically in 2012. While Black Friday 2011 was relatively tame by most retailers� standards, it was a banner sales day for guns. The FBI�s NICS database (which provides instant background checks for gun buyers) got nearly 130,000 hits on Black Friday, the most the database had ever received in a single day. Not much later, December set a new record for the most hits in a month. And for the full year, 2011 turned out to be a record year itself, registering more than 16.5 million hits to the NICS database, a 15% increase from 2010.

Clearly, the trend of gun buying is still accelerating at a breakneck pace. But digging a bit deeper into the demographics of who�s buying provides even more interesting results�

It turns out women are driving some of the biggest trends in gun ownership. According to a Gallup Poll from October, 23% of women personally own guns, up from just 13% in 2005. That�s a massive increase in ownership by a group that has traditionally shied away from firearms.

We likely have the media to thank, in part, for the demographic shifts that are going on in the firearms business. Gun-centric TV shows such as Top Shot and Sons of Guns are giving publicity to gun ownership for recreation and protection. At the same time, guns are becoming a less politicized topic: While Republicans tend to be gun owners at a higher rate than Democrats, Democratic gun ownership has spiked in the last decade. Today, 40% of Democrat or left-leaning households own at least one firearm, the highest level in a decade.

That�s not to say that politics aren�t still central to the gun business. With an election year well under way, the National Rifle Association is already actively railing against the Obama administration. While it seems unlikely that a candidate on either side would tighten gun restrictions given the current pro-gun climate, the political message is still likely to do quite a bit to fuel the gun-buying fires this year.

Forest Labs Off 12%: Lazard, Piper Cut Ratings, Targets

Shares of Forest Labs (FRX) are off $3.91, or 12%, at $28.55 followingreports late yesterday that a Food & Drug Advisory panel had recommended against approval of the company’s “Daxas” drug for a some forms of lung ailment.

Digging into the vote this morning, Lazard Capital Markets analyst William Tanner downgrades the stock to “Hold” from “Buy” and cut his price target to $32 from $34.

The 15-member panel apparently split down the middle, with 6 members voting against the efficacy of the drug and another six voting against its safety, writes Tanner.

With no clear path forward for Daxas, negative sentiment is likely to hang on the stock given Forest is now exposed more than before to the coming expiration of patent protection for its chief revenue generator, the anti-anxiety drug Lexapro.

The next ray of hope investors may turn to is something called “Linaclotide,” which is for treating irritable bowl syndrome, writes Tanner. That drug already has convincing data from Phase III trials, he notes.

As for Daxas, he doesn’t expect the FDA to go against the recommendation of its advisory board:

Serevent may be example of FDA disagreeing with PADAC but we aren�t holding our breath. We note that the FDA did not abide by a 2008 PADAC recommendation regarding use of the LABA Serevent for treating asthma. We believe it possible that the Agency may be faced with a similar decision as it relates to the medical necessity and risk/benefit balance of Daxas.

I should note that Piper Jaffray analyst David Amsellem also cut the stock today from “Neutral” to “Underweight” and reduced his target to $26 from $27.

Oppenheimer & Co. analyst John Newman cut his price target to $39 from $40 while writing that like Tanner, he is still holding out hope regarding other things in the pipeline, such as Linaclotide.

U.S. Eagle Gold Coins Strongest Since 1999

November sales of U.S. American Eagle gold coins are on track to be the best in 14 years as uncertainty surrounding the U.S. fiscal cliff and the election of President Obama led to safe haven buying.

Buyers timing the market also increased coin sales by buying during sharp price movements that occurred in the beginning and end of November, coin dealers noted.

Bullion dealers in the U.S. report an influx of high net worth individuals that are buying gold coins in volume and taking physical possession of their bullion. 

Month to date 131,000 ounces of American Eagles sold, that tripled last year's November sales and is the strongest November since 1998, data from the U.S. Mint's website shows.

In October, the U.S. Mint sold 59,000 vs 50,000 ounces the previous year, while November marked its 2nd successive monthly rise. 

Coin banks have come in to buy the stock as the mint usually ends 2012 coin production in early December so it can begin minting the 2013 coins.

American Eagle silver coin sales more than doubled in November going from 1.384 million to 3.135 million ounces. Silver coin sales were just shy of October's figure of 3.153 million ounces.

Coin sales have not only been boosted by dealers and collectors but by the uncertainty of the U.S. presidential election and the US fiscal cliff as investors have turned to them as a safe haven to protect their wealth.

American Eagle gold coin sales are very seasonal with a bulk of investment seen at the start of the year for the newly minted coins. Sales usually fall off in the summer and then increase in September in sync with the Indian wedding season and also following the lunar New Year, between January and February.

*Post courtesy of Mark O'Byrne at GoldCore. His daily ‘Market Updates’ are quoted and reported on in the international financial press on a daily basis. Read more at Gold Core.

 

Companies Ditching Billions to Dodge Fiscal Cliff Taxes

*Warning*: 43.4 percent dividend tax rates ahead!

We've got less than a month before the Bush era tax cuts expire and companies are trying to avoid the potential for “a tripling of dividend tax rates next year.” The results have shareholders ecstatic to receive some sizable payouts just in time for the holidays.

According to Reuters, Oracle Corp. has confirmed that they will be giving over $800 million back to shareholders in the next few weeks due to looming tax fears as the new year approaches.

All the recent anti-climatic fiscal cliff talks have sent stocks on a roller coaster ride as companies take advantage of super-low interest rates; issuing debt at a record rates during the month of November.

Without clarity regarding the transition for tax laws and how new legislation will affect the end of the Bush era tax cuts, Treasurers and CFOs are taking matters into their own hands now while they can still find creative ways to hedge the coming tax increases.

Special dividends seems to be the most popular option for over 100 of our nation's largest companies.

CNBC quoted Joe Levington, managing director of corporate credit at Brookfield Investment Management, regarding this matter:

Companies are using debt to fund payouts for different reasons. "I think what you're seeing is there's largely a mismatch with significant cash balances that are overseas. Companies won't repatriate that money given the tax implications. While there is cash there it's not really useable for a dividend or share repurchase," he said.

At the same time, credit quality is peaking, says Levington. "What I mean is you're going to see companies use leverage in 2013, whether it's in the form of cash to fund dividends, or more likely for acquisitions and share repurchases. That will be a trend that you'll see throughout the year," he said.

Currently the dividend tax rate is 15 percent, but that is set to expire on Dec. 31 so investors have been dumping dividend paying stocks, fearing what the fiscal cliff will do to those dynamic tax rates. Investors fear that the dividend tax rate could climb all the way back up to a staggering 39.6 percent for the highest bracket if Obama gets his way and extinguishes the tax cuts for the wealthy.

Obamacare also adds another 3.8 percent tax on dividends and other investment income that will affect wealthier taxpayers too. That means the dividend tax rate could hike up to 43.4 percent! Meanwhile, capital gain taxes could spike all the way back to the previous 20 percent rate; a full five percent higher than their current 15 percent rate.

This is why companies like Oracle and DISH Network Corporation are paying cash via dividends to shareholders before all of this ensues. Yesterday, DISH declared a non-recurring dividend of $1 per share, payable on December 28 to all shareholders as of December 14.

Costco plans to offer $3.5 billion of senior unsecured notes in order to fund their dividend. Las Vegas Sands, Dillard's, Ethan Allan, Brown-Forman, and ADT have all made formal announcements regarding special dividends before the new year to dodge the 'tax-man.' Walmart also said they would move up its regular first quarter dividend to December 27.

In total, 103 companies say they are offering these “special” dividends for the fourth quarter and 66 announced this decision after the presidential election. Experts predict that at least 20 additional companies will come forward and offer special dividends for shareholders before the new year as well.

Companies are very nervous about what the new year has in store for them, but the looming 'fiscal cliff' is certainly doing a good job keeping them from hiring and spending money. On the other hand, it is driving one of the largest spikes in dividend payouts that we've ever witnessed.

 

Buckeye Could Score You a Double

Buckeye Technologies (NYSE:BKI) — This company is the world�s largest manufacturer of cellulose-based specialty products made from wood and cotton utilizing wetlaid and airlaid technologies.

Several analysts have focused on BKI because of the company�s recent unexpected gains and strong financial report. Q3 earnings came in at 74 cents versus a consensus of 34 cents, and sales rose 19%. In FY 2012, earnings are expected to jump to $2.85 versus $2.23 in 2011, and FY 2013 could increase to $3.20.

The company recently announced the building of new facilities to handle the demand for its products. And S&P raised its price target to $33 from $29. But the break from $30 on high volume yields a technical target of $38.

Buckeye�s products are in high demand, so long-term buyers could achieve a possible double within two years.

ETF Insider: Will Euro Woes Rain On The Bull’s Parade?

Equity markets soared to multi-month highs last week as investors digested encouraging economic data on the home front coupled with positive corporate performance surprises. Wall Street ended the week on a high note after the unemployment rate fell to 8.3%, paving the way for the bulls before Superbowl weekend. Looking forward, with earnings seasons dwindling down to its final releases, investors will need to once again consider the situation in Europe. Greek debt woes have resurfaced early this week as lawmakers overseas continue to struggle to reach a bailout agreement. With no major economic data releases at home this week, investors will likely have to shift their attention back to the debt burdened currency bloc, whether they like it or not.

Weekly Outlook

The coming week will be filled with central bank meetings and key inflation data releases. Below, we highlight ETFs that may see an increase in trading activity as relevant market data is released and evaluated by investors:

• CurrencyShares Australian Dollar Trust (FXA): This ETF could gap on Tuesday morning if the Aussie dollar stages a violent reaction to the latest Reserve Bank of Australia rate decision due later today. Analysts are expecting for the current 4.25% rate to be tightened down to 4%.
• iShares FTSE China 25 Index Fund (FXI): Chinese equity markets may come under pressure on Thursday if the latest consumer price index release shows a worrisome slowdown in economic growth. Analysts are expecting for inflation to come in at 4%, versus the previous reading of 4.1%.�
• CurrencyShares British Pound Sterling Trust (FXB): The Bank of England is expected to release its decision regarding interest rates early Thursday morning, which could lead to volatile trading in both currency and equity markets. FXB may experience an increase in trading volumes depending on how investors interpret the bank’s most recent economic commentary. Analysts are expecting for the interest rate to remain unchanged at 0.5%.�
• iShares MSCI EMU Index Fund (EZU): Soon after the Bank of England decision will follow the European Central Bank meeting. Investors will pay close attention to the economic outlook issued after the rate decision itself. Analysts are expecting for policymakers to hold the rate steady at 1%.
• Van Eck Market Vectors Germany Small-Cap ETF (GERJ): The spotlight will remain fixed over Europe on Friday as well given the German consumer price index release. Equity markets in the European powerhouse will likely take cues from the latest inflation data; analysts are expecting for German CPI to come in unchanged at 2.3%.
• SPDR S&P Retail ETF (XRT): The main economic release from the U.S. this week will be consumer sentiment, which is expected to come in at 75.5, versus the previous reading of 75. Stocks in the retail sector could experience an increase in trading volumes as investors digest what the latest sentiment data could mean for spending.

The bulls have staged quite a run on Wall Street over the past month, although many technical indicators are signaling that markets are floating higher and higher into overbought territory, perhaps suggesting that a healthy pullback may occur in the foreseeable future. With earnings euphoria simmering down at home, investors may need to once again reassess the developments overseas, and judging by the lack of significant progress in debt negotiations, the reaction may translate into profit-taking. Below, we have highlighted three technical trading ideas for the upcoming week. Note that most of these recommendations require active management as they are only relevant for a very short period of time. As always, investors of all experience levels are advised to use stop-loss orders and practice disciplined profit taking techniques.

Actionable ETF Idea #1: Long FCG
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Hewlett-Packard (HPQ) Climbs in After-Hours

Shares of Hewlett-Packard Company (NYSE: HPQ) experienced heavy activity in after-hours trading, up 2.42% to $47.91 after-hours, moving on the company�s second-quarter results.

Hewlett-Packard reported second-quarter profit of $3.5 billion, or $1.09 per share, which is an increase of 27% from the same period last year. Revenue climbed 13% to $30.8 billion. The results were ahead of consensus estimates. The company has also raised its full-year forecast. It now expects revenue to increase by 8%-9% for the full year. It has raised EPS estimate from $4.37-$4.44 to $4.45-$4.50. The company has accounted the expenses related with Palm (NASDAQ: PALM) in its full year estimates. However, it has not accounted for any potential revenue from Palm in the forecast. For the third quarter, the company is now expecting EPS of $1.05-$1.07 on revenue of $29.7-$30 billion.

Mark Hurd, HP�s CEO, said that the company�s transformation process has been successful as it has been able to capitalize on changing consumer and business habits. Obviously, the company is expecting to benefit a lot from the acquisition of Palm. The company plans to use Palm�s WebOS in its tablet PCs, which it plans to launch later this year.

HP is currently has a P/E ratio of 14.13. This is lower than Dell�s (NASDAQ: DELL) 20.54 and Apple�s (NASDAQ: AAPL) 21.42. The stock is trading on a multiple of 10x its projected earnings for the full year. The stock certainly has some upside potential. A lot depends on how HP integrates Palm into its operations and uses its WebOS system.

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Street Jubilant After European Bailout Deal; Dow Futures Soar 230 Points

Traders were preparing for a party on Thursday as European leaders cut a deal to bail out Greece (again), recapitalize banks and create a massive fund to serve as a safety net for the region’s governments.

Dow futures jumped 229 points in pre-market trading around 8 a.m. to 12,031, following European markets higher. The� Stoxx Europe 600 was up 3.4% and France’s CAC-40 rose 5.5%. The Euro rose above $1.40 for the first time since September.

Banks rose sharply higher, with Citigroup (C) jumping 6.6% and Bank of America (BAC) rising 8%.

Under the deal, bondholders will have to take a 50% write-down on Greek debt, and the European governments increased the bailout fund to 1 trillion Euros, or $1.4 trillion.

Pandora’s mobile-advertising market bane

SAN FRANCISCO (MarketWatch) � In this year of ongoing presidential politicking that will culminate in the election on Nov. 6, it probably helps to remember the phrase made famous by the late House Speaker Tip O�Neill: �All politics is local.�

O�Neill�s words could be modified to read �All mobile advertising is local,� following what Internet-based radio company Pandora Media Inc. P �recently had to say about its business outlook. The forecast and reaction speak not only to where Pandora�s future lies, but also to some of the realities facing businesses as consumers increasingly rely on smartphones and tablets for their favorite music, videos and other media and information.

/quotes/zigman/5419837/quotes/nls/p P 9.97, +0.12, +1.22%

�Nobody seems to get that radio advertising is a local market,� said Wedbush Securities analyst Michael Pachter. �[Pandora] is doing a poor job of selling local ads.�

When the average person turns on the radio in the car, Pachter added as an example, he or she is most likely to be interested in services by local businesses that can be reached relatively close to home.

�The trick with mobile advertising is that nobody really believes people view or click through the ads,� the analyst commented. �There�s no question Pandora will monetize this market, but the question is when.�

Investors have shown their displease and concerns with Pandora almost since the minute the company went public on June 15, 2011 at $20 a share. Since then, Pandora�s stock price has been trimmed by 44% at $11.23 on Friday, and that includes a one-day drop of 24% in the wake of its disappointing report and outlook on March 6. Read more about Pandora's most-recent earnings report.

Now, on the surface, Pandora�s ad sales appear to be pretty good. When the company delivered its 2012 fiscal fourth-quarter results last week, it reported advertising revenue of $72.1 million out of total sales of $81.3 million. Those ad sales were up by 74% from the year-ago period.

But for an outfit such as Pandora, content is everything, and it certainly doesn�t come free. The company even said as much as its content-acquisition costs more than doubled, to $48.2 million from $23.9 million in 2011�s fiscal fourth quarter.

Yet zero is the price most Pandora listeners pay to hear music. Yes, Pandora does offer a paid option for $36 a year, which removes all advertising from the listening experience, but most of its 47 million registered users paid nothing for the 2.7 billion hours of listening that took place during the company�s 2012 fiscal fourth quarter, which ended in January.

Hence, there�s a need for advertising to acquire new content so that when you listen to, say, your customized Smithereens channel, Pandora can provide you with more variety and not the same three Lemonheads songs every hour you log on, most likely through the Pandora app on your iPhone. (Yes, I am making a point here about the same three Lemonheads songs coming up over and over again.)

�Pandora always carried very little margin for error, and now there�s error,� said Mark Mahaney, who covers Pandora for Citigroup. The analyst cut his rating on Pandora�s stock to neutral from buy, and also took down his price target on the shares to $17 from $25. The �error� Mahaney spoke of is �that with content costs constantly rising, monetization of mobile usage has to keep rising.�

Click to Play SXSW tries out new democracy

At the annual tech and entertainment festival in Austin, Texas, much of the agenda is dedicated to new forms of political campaigning, (Photo: AP)

Pandora Chief Executive Joe Kennedy, for his part, said mobile revenue was more than $100 million in the company�s 2012 fiscal year, up from about $25 million in 2011, and its key measure of revenue per thousand-listener hours, or RPM, rose to $20 from $13 a year ago.

�We believe Pandora achieved more mobile-ad revenue last year than any entity other than Google GOOG ,� Kennedy said on a conference call discussing earnings results.

Big shoulders to stand on, for sure. Which might also explain why Kennedy then couched his comments by saying: �Our current growth rate in mobile-listener hours may make it difficult to continue to improve mobile RPM in the near term, [but] over the long term, we are well positioned to take a significant share of this market.�

Adding more local sales staff is seen as a step in the right direction, and the company said it has finished up the initial staffing of local radio-ad sales teams in �most of the top 10 U.S.markets.�

But as Pandora realizes that all radio advertising is effectively local, there�s a sense that patience will be required for anyone betting on Pandora as an investment to hold onto down the road.