Is Apple Really Losing Its Tablet Dominance?

From the fourth quarter of 2011 to the fourth quarter of 2012, investors saw Apple's (NASDAQ: AAPL  ) tablet market share drop from more than 50% down to 43%. But is this really a cut-and-dry case of Apple's market share dominance fading away, or are there other factors at stake here? In this video, Motley Fool senior technology analyst Eric Bleeker takes a look at the new market share divide, and why these losses might not mean as much as they seem to.

There's no doubt that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, after its recent pullback, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

OpenTable Fluctuates on Earnings Release

Beating Wall Street expectations only slightly,�OpenTable (NASDAQ: OPEN  ) �hasn't moved much in after-market trading. Fourth quarter earnings came in at $0.46�per diluted share ($10.7 million total), which topped estimates by $0.03.

Across 2012, the company increased revenues 16%, to $161.6 million. OpenTable mirrored that increase in Q4, bringing in 16% more revenues year over year to a total of $43.0 million -- beating estimates of $42.5 million. This quarter, North America business continued to drive the top line, bringing in 16% more than its International segment, at 13% on a year-over-year basis; that translates to $36.7 million and $6.3 million, respectively.

The company also saw growth in its restaurant customers and in seated diners.

Currently, OpenTable grew its restaurant base by 9.5%, to�27,517; 19,801 comes from North American merchants, and 7,716 are international.�After adjusting for a relaunch of its toptable site in Q2 2012, OpenTable says that its international installation base actually saw a 62% increase over 2011.

Seated diners increased by 22.3%, to 32.8 million, compared to Q4 2011. North America accounted for 29.9 million diners, growing 21%, while International diners grew 35%, and totaled 3.0�million.

Matt Roberts, President and CEO of OpenTable, said:

Our business continued to demonstrate strong momentum in 2012. The shift to mobile coupled with richer customer experiences represent long-term opportunities for the business, and we're pleased with the recent progress in our international segment.

Going forward, OpenTable expects revenues to be around $44.7-$46.1 million next quarter, and $186.1-$193.1 million next year. Non-GAAP EPS should be in the range of�$1.79 to $1.96 for the year, while next quarter EPS should range from�$0.39 to $0.44;�

Top Stocks For 2/9/2013-4

Crown Equity Holdings Inc. (OTCBB:CRWE) is a consulting organization which provides and assists small business owners with the knowledge required in taking their company public, and has re-focused its primary vision with its aligned group of independent website divisions to providing media advertising services, as a worldwide online media advertising publisher, dedicated to the distribution of quality branding information, as well as search engine optimization for its clients.

With the growth of information on the internet has growth the amount of time people spend on it, which has in turn generated a new market for internet advertising. Some of the wealthiest companies in the world have made sure that they get a piece of the internet marketing pie, and for a good reason.

One Internet advertising benefit is always that, since internet spans the entire planet, pockets of one’s target audience is scattered worldwide, can be targetted at once, instead of trying to find different publications, radio stations and tv stations that focus on a particular geographical area.

Content published on the World Wide Web is immediately available to a global audience of users. This makes the World Wide Web a very cost-effective medium to publish information, reaching more than 190 countries.

McGrath Rentcorp (Nasdaq:MGRC) a diversified business to business rental company declared a quarterly cash dividend of $0.225 per common share for the quarter ended December 31, 2010. The dividend will be payable on January 31, 2011 to all shareholders of record on January 17, 2011. Founded in 1979, McGrath Rent Corp is a diversified business-to-business rental company. Under the trade name Mobile Modular Management Corporation (Mobile Modular), it rents and sells modular buildings to fulfill customers� temporary and permanent classroom and office space needs in California.

McGrath RentCorp operates as a business-to-business rental company in the United States. It operates in four segments: Mobile Modular Management Corporation (Mobile Modular); TRS-RenTelco; Adler Tank Rentals, LLC (Adler Tank); and Enviroplex, Inc. (Enviroplex).

Simmons First National Corporation (Nasdaq:SFNC) Board of Directors declared a regular $0.19 per share quarterly cash dividend payable January 3, 2011, to shareholders of record December 15, 2010. Simmons First National Corporation is an eight bank financial holding company with community banks in Pine Bluff, Lake Village, Jonesboro, Rogers, Searcy, Russellville, El Dorado and Hot Springs, Arkansas. The Company�s eight banks conduct financial operations from 89 offices, of which 85 are financial centers, in 46 communities in Arkansas, Missouri and Kansas.

Simmons First National Corporation, through its subsidiaries, provides a range of banking products and services to individual and corporate customers primarily in Arkansas.

Nasdaq OMX Group Inc. (Nasdaq:NDAQ) announced the results of the annual re-ranking of the NASDAQ-100 Index(R), which will become effective prior to market open on Monday, December 20, 2010. �The NASDAQ-100 Index is increasingly accepted as one of the world�s most globally recognized benchmarks, the basis of more than 2200 structured products and 22 exchange-traded funds worldwide,� said NASDAQ OMX Executive Vice President John L. Jacobs. �This re-ranking ensures the NASDAQ-100 Index�s relevance as a global benchmark comprised of the world�s most innovative large-cap growth companies that are recognized leaders across a broad range of industries.�

The NASDAQ OMX Group, Inc. provides trading, exchange technology, securities listing, and public company services worldwide. It offers trading across various asset classes, including equities, derivatives, debt, commodities, structured products, and exchange traded funds.

These 2 Stocks Are Overvalued

The following video is from Thursday's MarketFoolery podcast in which host Chris Hill, and analysts Jeff Fischer and Nick Crow, discuss the top business and investing stories.

In this segment, the guys take a look at two stocks they see as being overvalued and overpriced. Jeff takes a look at Bristow Group (NYSE: BRS  ) , while Nick discusses Netflix (NASDAQ: NFLX  ) .

The precipitous drop in Netflix shares since the summer of 2011 caused many shareholders to lose hope. While the company's first-mover status is often viewed as a competitive advantage, the opportunities in streaming media have brought some new, deep-pocketed rivals looking for their piece of a growing pie. Can Netflix fend off this burgeoning competition, and will its international growth aspirations really pay off? These are must-know issues for investors, which is why we've released a brand-new premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. We're also offering a full year of updates as key news hits, so make sure to click here and claim a copy today.

The relevant video segment can be found between 7:27 and 16:34.

For the full video of today's MarketFoolery, click here.

Weak Economic Data Pushes Stocks Lower

Stocks meandered lower today after the government released uninspiring economic data. Last week's jobless claims fell slightly to 366,000 but were short of forecasts of 360,000, and the previous week's reading was revised higher. The Department of Labor also said productivity fell 2% in the fourth quarter. The drop follows a 3.2% gain in the third quarter, but this isn't a good sign for overall economic growth. As of 3:20 p.m. EST the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is down 0.32%, while the S&P 500 (SNPINDEX: ^GSPC  ) has fallen 0.3%.

Caterpillar (NYSE: CAT  ) is taking the news the hardest today, dropping 1.9% during trading. The company relies on economic growth to build its demand, and there are now worries that the company has hit a wall after years of explosive growth. Still, shares only trade at 11 times trailing earnings, and Caterpillar pays a 2.1% dividend yield, so with the global economic recovery still in an early stage, I think there's an opportunity for patient investors.

Coca-Cola (NYSE: KO  ) is one of the few Dow components in the black today, climbing 1.4% after its distributor Coca-Cola Enterprises released earnings. The downstream company reported a 25% increase in earnings to $0.45 per share and a 1% bump in sales. This could be a peek into how Coca-Cola's earnings will look when results are released early next week. Coca-Cola owns some of its own bottling network, so it should see benefits similar to those CCE enjoyed.

Boeing (NYSE: BA  ) is also up 1.4% today as investors speculate that a fix for the 787 Dreamliner's problems isn't far off. The National Transportation Safety Board said it has identified the source of one of the battery fires and is narrowing in on the major fault that has grounded the brand-new aircraft. That's great news for Boeing investors, and it means there may soon be a solution to the troubles that have plagued Boeing over the past month.

Help in a choppy market
Are you at ease...or nervous? It's been a great five-year run for investors, with the Dow and S&P at or near all-time highs. Yet fears abound. When will the next downturn hit? Will political gridlock lead to portfolio-killing inflation? To learn how to protect your portfolio, click here for free guidance from the Motley Fool Pro Academy!�

MakeMyTrip Increases Sales but Misses Estimates on Earnings

MakeMyTrip (Nasdaq: MMYT  ) reported earnings on Feb. 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q3), MakeMyTrip beat expectations on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted and GAAP earnings per share.

Gross margins expanded, operating margins contracted, net margins shrank.

Revenue details
MakeMyTrip reported revenue of $22.4 million. The five analysts polled by S&P Capital IQ expected to see revenue of $21.9 million on the same basis. GAAP reported sales were 19% higher than the prior-year quarter's $53.8 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at -$0.07. The five earnings estimates compiled by S&P Capital IQ forecast $0.03 per share. GAAP EPS were -$0.14 for Q3 compared to $0.00 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 35.0%, 590 basis points better than the prior-year quarter. Operating margin was -9.6%, 1,200 basis points worse than the prior-year quarter. Net margin was -8.2%, 830 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $22.0 million. On the bottom line, the average EPS estimate is $0.03.

Next year's average estimate for revenue is $88.4 million. The average EPS estimate is $0.16.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 45 members out of 66 rating the stock outperform, and 21 members rating it underperform. Among 21 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 14 give MakeMyTrip a green thumbs-up, and seven give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on MakeMyTrip is outperform, with an average price target of $15.67.

Is MakeMyTrip the right retailer for your portfolio? Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks," including one above-average retailing powerhouse. Click here for instant access to this free report.

  • Add MakeMyTrip to My Watchlist.

Top Stocks To Buy For 2/8/2013-2

China Unicom (Hong Kong) Limited (ADR) NYSE:CHU surged 3.36%, closed at $14.45 and its overall trading volume was 2.87 million shares during the last session. The price to earning ratio reached $65.39 while 5 years net income growth rate remained 15.18.


CarMax, Inc NYSE:KMX gained 0.29%, closed at $34.62 and its overall trading volume was 2.66 million shares during the last session. The price to earning ratio reached $21.87 while 5 years net income growth rate remained 22.48.

Republic Services, Inc. NYSE:RSG advanced 1.60%, closed at $30.41 and its overall trading volume was 2.63 million shares during the last session. The price to earning ratio reached $29.66 while 5 years net income growth rate remained 15.78.

Senior Housing Properties Trust NYSE:SNH increased 0.42%, closed at $21.27 and its overall trading volume was 2.49 million shares during the last session. The price to earning ratio reached $23.62 while 5 years net income growth rate remained 14.10.

America Movil SAB de CV (ADR) NYSE:AMX surged 0.34%, closed at $56.89 and its overall trading volume was 2.15 million shares during the last session. The price to earning ratio reached $16.40 while 5 years net income growth rate remained 33.99.

Golf Clap for Columbia Sportswear

Columbia Sportswear (Nasdaq: COLM  ) reported earnings on Feb. 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Columbia Sportswear met expectations on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped and GAAP earnings per share grew.

Gross margins dropped, operating margins shrank, net margins grew.

Revenue details
Columbia Sportswear tallied revenue of $501.1 million. The 13 analysts polled by S&P Capital IQ expected revenue of $500.9 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.15. The 13 earnings estimates compiled by S&P Capital IQ predicted $1.14 per share. GAAP EPS of $1.15 for Q4 were 6.5% higher than the prior-year quarter's $1.08 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 41.3%, 120 basis points worse than the prior-year quarter. Operating margin was 10.2%, 60 basis points worse than the prior-year quarter. Net margin was 7.9%, 90 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $342.6 million. On the bottom line, the average EPS estimate is $0.21.

Next year's average estimate for revenue is $1.73 billion. The average EPS estimate is $3.19.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 480 members out of 524 rating the stock outperform, and 44 members rating it underperform. Among 205 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 196 give Columbia Sportswear a green thumbs-up, and nine give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Columbia Sportswear is hold, with an average price target of $57.54.

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  • Add Columbia Sportswear to My Watchlist.

Lannett Beats on Both Top and Bottom Lines

Lannett (AMEX: LCI) reported earnings on Feb. 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Lannett beat slightly on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share increased significantly.

Margins expanded across the board.

Revenue details
Lannett reported revenue of $36.6 million. The two analysts polled by S&P Capital IQ expected to see a top line of $36.1 million on the same basis. GAAP reported sales were 32% higher than the prior-year quarter's $27.7 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.10. The two earnings estimates compiled by S&P Capital IQ predicted $0.09 per share. GAAP EPS of $0.10 for Q2 were 400% higher than the prior-year quarter's $0.02 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 38.0%, 950 basis points better than the prior-year quarter. Operating margin was 12.8%, 1,100 basis points better than the prior-year quarter. Net margin was 7.9%, 570 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $33.3 million. On the bottom line, the average EPS estimate is $0.02.

Next year's average estimate for revenue is $140.9 million. The average EPS estimate is $0.23.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 77 members out of 86 rating the stock outperform, and nine members rating it underperform. Among 18 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 17 give Lannett a green thumbs-up, and one give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Lannett is buy, with an average price target of $6.33.

  • Add Lannett to My Watchlist.

Exelon Whiffs on Revenues

Exelon (NYSE: EXC  ) reported earnings on Feb. 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Exelon whiffed on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share shrank significantly.

Margins shrank across the board.

Revenue details
Exelon reported revenue of $6.44 billion. The four analysts polled by S&P Capital IQ expected revenue of $8.26 billion on the same basis. GAAP reported sales were 57% higher than the prior-year quarter's $3.99 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.64. The 17 earnings estimates compiled by S&P Capital IQ anticipated $0.64 per share. GAAP EPS of $0.44 for Q4 were 52% lower than the prior-year quarter's $0.91 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 24.1%, 1,680 basis points worse than the prior-year quarter. Operating margin was 11.6%, 1,600 basis points worse than the prior-year quarter. Net margin was 6.0%, 920 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $7.34 billion. On the bottom line, the average EPS estimate is $0.75.

Next year's average estimate for revenue is $26.33 billion. The average EPS estimate is $2.53.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,898 members out of 1,956 rating the stock outperform, and 58 members rating it underperform. Among 471 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 456 give Exelon a green thumbs-up, and 15 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Exelon is hold, with an average price target of $35.13.

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Six stocks poised for breakout

Here are six stocks poised to break out of their bullish consolidation patterns.

Level 3 Communications LVLT �is in a rising-triangle formation, consolidating its steep move from just above 18 in late November to near 25. The stock is at a triple top just below 25 going back to September, a break of which could lead to next targets near its March 2012 high around 27.50.

Geo Group GEO �has been hovering sideways at around 33 in recent weeks. The stock is up from 27.50 since late December, and a break would continue the advance into all-time high territory, as it has taken out its previous high of 31.63 from October 2007.

Citigroup C �is consolidating its December move from 34.50 to above 42, and the consolidation is narrowing with higher lows that are pressuring the resistance line just under 43.40. This is also long-term resistance going back to July 2011. A break of that level could move the stock to the 45-46 area not seen since April 2011.

Anadigics ANAD , which is consolidating its more than 100% up-move from mid-November to the start of this year, is also experiencing higher lows pressuring resistance at 2.75. Next level is just above 3 going back to February of last year.

Parker Drilling PKD �is flagging off its most recent 10% up move from the 5 level in mid-January. The stock has seen a series of up-moves and flags since it began stair-stepping higher off its November low of 3.66. A move above 5.70 could lead the stock to levels above 6 last seen in April 2012.

VirnetX VHC �is hovering in the 35 area which has contained prices since November. The stock has retraced most of its losses since plummeting from over 40 to 22.50 last July, and a move above 36.40 would break it out of its current tight wedge formation and continue the uptrend.

See charts illustrating the technical pattern on these stocks.

Disclosure: Mr. Persich is long GEO.

3 Shares With Fast-Improving Prospects

LONDON -- I've been searching the FTSE 100 to find companies where profit estimates have been increasing. If sentiment on a company is turning for the better, these shares could deliver big returns as the stock is rerated.

Using data from Stockopedia, I have found the FTSE 100 companies whose earnings forecasts have been increased the most often in the last month. Here are three of them.

BP (LSE: BP  ) (NYSE: BP  )
BP is striving to put the Gulf of Mexico disaster behind it. Over two years since the accident, BP's final liability is still unclear.

In the last month, five analysts have moved to increase their earnings-per-share forecast for BP in 2014. Now, the consensus is that BP will make $1.01 per share in 2014 and pay $0.40 in dividends. That's a 2014 P/E of 7.3 and an expected yield of 5.4%.

BP may still have more to pay out to settle disaster claims, but 2013 looks like the year that BP shareholders can get financial closure on the Gulf disaster.

Unilever (LSE: ULVR  )
Progress in the eurozone has inspired confidence in the profits of companies making sales there. One such organization is Anglo-Dutch giant Unilever. Sentiment toward the stock has been boosted in the last month by seven upgrades to 2014 forecasts.

Expectations are that the company will earn 1.75 euros per share in 2014, paying a 1.07 euro dividend.

Unilever is a top company. As is usually the case, this has given its shares a top price. The shares trade on a 2014 P/E of 17.1 times earnings. Although the dividend looks safe, with EPS growth of just 9% being forecast, the valuation looks pretty full to me.

Vodafone (LSE: VOD  ) (NASDAQ: VOD  )
In 2012, Vodafone paid out more cash in dividends than any other FTSE 100 company. This was thanks in part to a 4 pence special dividend that Vodafone paid. This payment came from Verizon Wireless, the U.S. mobile operator of which Vodafone owns 45%.

In the last month, Vodafone's 2014 earnings have been upgraded six times. Expectations now are for the company to deliver EPS of 16.2 pence for 2014, paying a 10.5 pence dividend.

I expect the current share buyback program to support the Vodafone share price and future dividend payments. I am happy to hold shares in the company.

If you are looking for a high-caliber dividend investment but don't quite fancy Vodafone, The Motley Fool has prepared a free report on what our analysts consider to be the very best large-cap income opportunity in the market today. This share comes with a 5.7% yield and the potential to rise by more than 20%. Our report is completely free, and no further commitment from the reader is necessary. Just click here and get this investment income intelligence delivered to your inbox today.

Fixing online comments — how do you automate trust? - 12:55 PM

(gigaom.com) -- The social web has been around for more than a decade now, but even after all that time, no one has quite figured out how to fix online comments. Some bloggers have given up trying and don’t allow comments at all, while others have turned their communities over to Facebook, only to find that doing so makes things worse instead of better. Jeff Atwood, one of the founders of the online geek community Stack Overflow, has launched a new commenting system he hopes will help solve one of the crucial problems — namely, trust. But is it even possible to automate that process?

Atwood, who left Stack Exchange — the company that manages Stack Overflow and a number of other similar sites — about a year ago, launched his new venture on Tuesday with a blog post in which he lamented the fact that commenting and user forums have not changed much in the past decade. The vast majority of these platforms, he says, still fail to capture real conversation and are too difficult or expensive to implement.

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The Stack Overflow founder says his new platform, which is known as Discourse, differs from other commenting systems in a number of ways — including the fact that it is fully open source. Atwood used the blog-publishing platform WordPress as a model (see disclosure below), and says the company will rely on selling hosting, support and other services for revenue.

Discourse has raised funding from a group of venture backers including Greylock and SV Angel, although Atwood wouldn’t say how much (another hosted commenting solution, Livefyre, also just closed a round of financing).

In addition to some other innovations, such as links that automatically expand within a comment (in the same way Twitter’s “expanded tweets” do), Atwood says he is trying to build a reputation system that will grant users new abilities based on the level of trust the platform has in them. Although he doesn’t provide a lot of detail, in a comment on a Hacker News discussion thread he suggests that it will be based on behavior such as flagging abusive posts.

Measuring trust and rewarding good behavior is something online communities have been trying to do for years, with mixed success. Some believe that sites like Slashdot — which has a moderation platform that awards “karma points” for certain behavior and appoints moderators automatically — have a good solution to the usual problems of trolling and flame wars, while others argue that these systems are almost always fatally flawed. Metafilter (which charges users $5 to become members) has many fans, but it is also a relatively small community. Branch is another attempt to reinvent user forums and discussion as invitation-only hosted conversations.

Atwood says he wants to use a badge system for rewards (something Huffington Post also uses), but Gawker founder Nick Denton said in an interview last year that a similar reward system his sites used was a “terrible mistake,” because it was easily gamed and encouraged the wrong kinds of behavior. Denton has since completely revamped Gawker’s commenting system in an attempt to make reader comments the centerpiece, as well as a potential business model.

As my colleague Jeff Roberts noted in a recent post, the Huffington Post has also launched what it hopes will be a new feature called Conversations, which allows popular comments to become full-fledged blog posts of their own. The Verge — a tech blog run by Vox Media — is doing something similar with its site, in order to try and encourage more discussion and community. But both take a lot of manual effort.

Veteran blogger Anil Dash pointed out in an insightful post in 2011 that one of the only ways to maintain and encourage a healthy conversation — regardless of what platform you use — is to be involved in those discussions yourself as much as possible (a point Bora Zivkovic of Scientific American also made recently). Unfortunately for publishers looking for a quick or inexpensive fix, that kind of engagement is almost impossible to automate.

Disclosure: Automattic, the maker of WordPress.com, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

Post and thumbnail images courtesy of Shutterstock / Sam72 and Yan Arief Purwanto

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How 3M Rescued the Dow Today

It's often an encouraging sign of a bull market when stocks are able to recover from early losses to finish higher. That's what happened today, as investors dismissed early concerns about Europe to focus instead on the growing prospects for economic growth domestically. By the end of the day, the Dow Jones Industrials (DJINDICES: ^DJI  ) had managed to eke out a 7-point advance, and while the average continues to flirt with the 14,000 level, many analysts increasingly believe that the market is setting up to make a run at record highs in the near future.

Good news from 3M (NYSE: MMM  ) definitely helped set a more positive tone for stocks, as the company set an all-time high after announcing an 8% increase in its dividend and a new $7.5 billion share-buyback program. Given that the company's market capitalization is just over $70 billion, the repurchase program could lead to more than a 10% drop in outstanding shares, setting the stage for even further share-price appreciation.

Beyond the Dow, Shutterfly (NASDAQ: SFLY  ) soared more than 20% on news that the online-photo company saw profits jump 50%. Orders rose by a third during the holiday quarter, but what investors really focused on was the company's full-year guidance for 2013, as it's looking for 16% growth in sales and earnings between $0.38 and $0.51 per share. Shutterfly has come a long way since picking up the online photo business of bankrupt Eastman Kodak, and now, it looks like it's reaping the rewards.

Finally, mortgage insurer Assured Guaranty (NYSE: AGO  ) jumped 10% after a court found that Flagstar Bancorp will have to reimburse $90 million that Assured Guaranty paid to mortgage-backed securities holders. Investors are looking closely at the case because of the potential impact it could have in much larger lawsuit between MBIA (NYSE: MBI  ) and Bank of America. Flagstar was found to have failed to meet the loan standards that it agreed to with Assured Guaranty, and if B of A is found to have done the same thing, then it could end up losing its dispute with MBIA.

Will 3M keep going higher?
3M's new all-time high is arguably the end result of decades of invention and innovation, but some wonder whether the creative culture at 3M has started to fade. Find out more about what's in store for 3M's future by reading our comprehensive new research report on the company. As a bonus, you'll receive a full year of key updates and guidance as news develops, so don't miss out. Click here now to claim your copy today.

Can American Science & Engineering Beat These Numbers?

American Science & Engineering (Nasdaq: ASEI  ) is expected to report Q3 earnings on Feb. 11. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict American Science & Engineering's revenues will shrink -15.1% and EPS will drop -36.9%.

The average estimate for revenue is $49.1 million. On the bottom line, the average EPS estimate is $0.53.

Revenue details
Last quarter, American Science & Engineering booked revenue of $46.3 million. GAAP reported sales were 16% lower than the prior-year quarter's $54.8 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Last quarter, EPS came in at $0.76. GAAP EPS of $0.76 for Q2 were 2.7% higher than the prior-year quarter's $0.74 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
For the preceding quarter, gross margin was 45.4%, 50 basis points worse than the prior-year quarter. Operating margin was 20.7%, 210 basis points better than the prior-year quarter. Net margin was 13.8%, 130 basis points better than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $198.4 million. The average EPS estimate is $2.24.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 971 members out of 1,000 rating the stock outperform, and 29 members rating it underperform. Among 312 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 307 give American Science & Engineering a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on American Science & Engineering is hold, with an average price target of $62.80.

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Allstate Beats on EPS But GAAP Results Lag

Allstate (NYSE: ALL  ) reported earnings on Feb. 6. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Allstate met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded slightly and GAAP earnings per share dropped significantly. The non-GAAP profit was a surprise, as analysts had predicted a loss.

Margins dropped across the board.

Revenue details
Allstate logged revenue of $6.74 billion. The 14 analysts polled by S&P Capital IQ expected to see net sales of $6.74 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.59. The 24 earnings estimates compiled by S&P Capital IQ predicted -$0.04 per share. GAAP EPS of $0.81 for Q4 were 43% lower than the prior-year quarter's $1.43 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 20.3%, 590 basis points worse than the prior-year quarter. Operating margin was 7.5%, 650 basis points worse than the prior-year quarter. Net margin was 4.6%, 420 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $6.77 billion. On the bottom line, the average EPS estimate is $1.22.

Next year's average estimate for revenue is $27.26 billion. The average EPS estimate is $4.56.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Allstate is outperform, with an average price target of $44.44.

  • Add Allstate to My Watchlist.

CAPS Players Show Their Smarts on Diamond Offshore

Deepwater drilling contractor Diamond Offshore Drilling (NYSE: DO  ) is hardly a favorite in the community of analysts who follow its industry, but its results for the fourth quarter of 2012 indicate that its five-star CAPS rating may well be warranted.

For the quarter, the company's net income was $155.7 million, or $1.12 per share, compared with $188.5 million, or $1.36 per share, for the comparable quarter a year earlier. But eliminating the $0.29-per-share charge for the reclassification of four rigs yields adjusted per-share earnings of $1.41, a drubbing of the $1.11 per share that had constituted the consensus expectation. Revenues for the quarter reached $750.5 million, versus $734.3 million a year earlier.

It's also worth noting that in the most recent quarter, the company, which operates as a subsidiary of Loews (NYSE: L  ) , carried an effective tax rate of 15.9%. That's more than double the 7.4% rate for the final quarter of 2011. The prior rate resulted from a reduction in liabilities for uncertain tax positions. For 2012, the company's rate was 21.5%.

Another nice surprise
As has now been the case for a number of quarters, Diamond Offshore's board of directors declared a special quarterly cash dividend of $0.75 per share in addition to a regular quarterly per-share cash dividend of $0.125. As in the past, the board emphasized that the payment of special dividends will be determined quarterly.

The four rigs that were reclassified as "held for resale" involved three semisubmersibles and one jack-up. As CEO Lawrence Dickerson noted on the company's post-release call, "[O]ur goal is to recognize that some of these rigs are at the end of their lives, and they're not rigs that we would like to continue to invest in." At the same time, those units will be replaced by six rigs currently under construction. The company incurred capital expenditures of nearly $500 million on the new-builds in 2012, with additional expenditures, excluding capitalized interest, expected to reach $1.3 billion this year and $1.4 billion in 2014.

Dickerson said on the call, "We have an aggressive new-build program, as do many of our competitors, but there's really nothing being done right now to refresh the market in water depths ranging from 3,000 to 6,000 feet." As a result, management scoured its fleet for one or more rigs that could be reconstituted and thereby made ready to operate in more lucrative locations.

A patriot to the rescue
The Ocean Patriot was settled upon as a rig that could be upgraded and mobilized from the Pacific theater to the North Sea. Once it is able to comply with U.K. specifications, it will begin working for Royal Dutch Shell (NYSE: RDS-B  ) at a day rate of more than $400,000, substantially higher than the mid-$200,000 range it had been commanding previously.

Playing drilling-rig chess
At the same time, another of the company's rigs, the Ocean Onyx, which has been serving the deepwater market, has been contracted to Apache (NYSE: APA  ) for work in the Gulf of Mexico for "a very, very attractive day rate." Indeed, according to Dickerson, "The returns and cash flow that we'll have on that rig, we believe will exceed or meet the cash flow coming off the new-build drillships and with quite a bit lower capital cost as well."

It's intriguing, then, to note how fleet management -- i.e., upgrading and redeploying rigs around the planet -- can significantly expand the payouts generated by those units. It appears that Diamond Offshore has performed admirably in that aspect of drilling company management.

As in previous quarters, Dickerson focused on the company's emphasis on cost management. Indeed, he singled out the "severe cost pressure coming out of Brazil." By my reckoning, nine Diamond Offshore rigs are currently working for Petrobras (NYSE: PBR  ) . In response to a query during the question-and-answer session of the call, Dickerson pointed to several items that result in high costs in the country. Included was a scarcity of skilled labor that makes it difficult to fulfill a Brazilian requirement that a given percentage of crews be made up of Brazilians.

Foolish takeaway
Industry analysts are currently higher on, for instance, Noble (NYSE: NE  ) , a Switzerland-based competitor of Diamond, than they are on the Houston company. At this juncture, about 82% of the Wall Streeters rate Noble a buy or better, compared with 30% for Diamond Offshore. Nevertheless, I remain convinced that Diamond Offshore's CAPS rating is meaningful, and I suggest that Fools with a penchant for oil-field services watch the he offshore drillers -- including Diamond Offshore -- carefully.

If you're into drilling companies, keep in mind that National Oilwell Varco makes a host of the key equipment used on today's rigs. This company is poised to profit in a big way; its customers are both increasing the number of new drilling rigs as well as updating an aging fleet of offshore rigs. To help determine if NOV is a nice fit for your portfolio, check out our premium research report with in-depth analysis on whether NOV is a buy today. For instant access to this valuable investor's resource, simply click here now and claim your copy today.

Small Broker-Dealers Under Fire but Confident: FSI OneVoice 2012

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  • Regulatory Oversight of Investment Advisors Although the regulatory environment is in a state of flux, it is imperative that RIAs adhere to their compliance obligations. To ensure compliance, RIAs and IARs must fully understand what those obligations are.
  • Do�s and Don�ts of Advisory Contracts In preparation for a compliance exam, securities regulators typically will ask to see copies of an RIAs advisory agreements. An RIA must be able to produce requested contracts and the contracts must comply with applicable SEC or state rules.
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Fee compression, new regulation and industry consolidation are threatening the independent broker-dealer business, especially smaller firms, experts say, leading some to openly question  whether these firms will survive.

But boutique broker-dealers are taking the argument head-on, countering that rumors of their death have been greatly exaggerated.

“We are the place for that advisor that does $300,000 of production,” Marshall Leeds, Summit Financial Services Group chairman and chief executive officer, told AdvisorOne on Monday at FSI’s OneVoice Conference in Orlando. “About 40% of that is with insurance products," said Leeds (left), 30% is in fee-based business and the last 30% is mutual funds, stocks and bonds. It’s a good mix.”

Leeds says Summit gets inquiries from insurance companies and private equity firms interested in a potential acquisition of the broker-dealer “on a monthly basis”.

“We always take a look, and we always will take a look, but nothing has caught our interest,” he says. “And we look at acquiring smaller shops ourselves, but at the end of the day, we find that we can recruit and service reps faster than we ever could through acquisition.”

Wall Street Financial Group’s Joe Richard, who oversees approximately 180 reps at the Fairport, NY-based firm, says the skepticism larger firms have about the viability of smaller firms “is a marketing message for them, and a big story for them to be able to tell.”

“I was speaking with [an outside recruiter] about the challenges smaller firms have when it comes to capitalization,” he says. “But at the end of the day, it’s an emotional attachment that members of senior management have at smaller firms. Our founder started the company when he was 27 years old. It’s his baby. He values what he’s built and the relationships that go with it.”

Both men agree on two important keys for survival in the space; the need for outsourcing and a clean compliance record when it comes to the products they approve. The latter, in particular, along with its associated liability, has caused a number of smaller firms to recently close their doors.

“With technology, as an example, it doesn’t make sense for a broker-dealer of our size to develop it in-house,” Leeds says. “It’s much more cost effective and state-of-the-art to outsource to technology providers, often through our clearing firms, Pershing and Wells Fargo. And once I invest in the technology, the updates are automatic, so I don’t have to worry about it being cutting-edged. We offer a technology buffet, and we let the advisors choose the providers they want to go with.”

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“We offer Albridge, LaserFiche; the major platforms and components,” Richard adds. “We pushed ahead with technology implementations in 2007 and 2008 when the market was down, and now we have a newer back-end web initiative that is extremely interactive to the point that it’s truly a fully-functioning portal for our reps.”

This outsourcing, combined with low turnover of solidly-performing reps, will mean a secure future for firms like Wall Street Financial, he concludes, provided they stay vigilant with compliance oversight.

“Although we have turnover each year from underperforming reps, in the history of the firm we’ve only lost four reps that we didn’t want to leave. The relationships are key, and as a result, small broker-dealers can and will survive.”

Read more AdvisorOne articles on FSI OneVoice 2012 at our OneVoice home page.

Follow editor Jamie Green's tweets from the FSI OneVoice 2012 conference.

The cell phone recycling kiosk is slowly invading malls near you - 11:37 AM

(gigaom.com) -- Just got the iPhone 5, and don’t know what to do with your perfectly fine iPhone 4? (Jerk). Well, there’s a growing amount of cell phone recycling kiosks coming to malls near you that will pay you cash for your discarded gadgets. ecoATM, a startup that is building out these networks, has just raised $41 million in debt and options, according to a filing, which could help it start pushing out a much higher volume of these kiosks.

Five-year-old ecoATM’s kiosks use technology to identify the recycled item (like your basically new iPhone), quantify its condition and worth, and offer you compensation in cash or coupons. The company has about 300 kiosks across 20 states as of now, spokeswoman Anita Giani tells me, which is up from the 50 kiosks they had installed about a year ago.

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That’s steady growth, though a bit slower ramp up than they had expected a few years ago. But Giani says that ecoATM is looking to install hundreds of kiosks more this year, and has also expanded the types of devices it can accept to recently to include tablets.

ecoATM’s kiosks also have wireless connections, and the boxes use software from startup Axeda to run diagnostics and do remote management. The company can do remote software refreshes on its kiosks, and it can also fix any problems with the kiosks without having to send a technician in person out to each kiosk.

This debt round is separate from the company’s previous equity rounds. Before that Series B, ecoATM had also raised $14.4 million Series A round in early 2011. The company has a set of strategic backers that could be a strong asset to get its kiosks into more stores, including change kiosk giant Coinstar, Oakland venture firm Claremont Creek Ventures, Tao Ventures, and Singapore billionaire Koh Boon Hwee.

I’ve been watching the company’s site for a few years, and it’s now added a lot more information about the technology and methods they are using to combat theft. The problem with the kiosks is that if someone steals a new iPhone, and takes it to the kiosk, it could provide an easy way to get cash for the stolen device. After a friend’s phone was stolen recently in San Francisco, the police actually told her to go down to check an area that had recycling options, as it wasn’t uncommon for phones to end up there.

ecoATM says to fight theft, they have established methods like: requiring a drivers license to recycle goods, the recycler has to be 18 or over, the recycler gives a thumbprint, the devices are kept for 14 days as a precaution, the kiosks use remote cameras to take photos of and monitor the recycler, and serial numbers are kept of the devices to check against reported stolen goods.

This story was updated at 9:308AM to confirm that ecoATM’s debt round was separate from its former equity rounds.

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  • Why Google Android’s Electric Vehicle Deal With GM Matters

What You Must Watch When American Capital Agency Reports Earnings

Will�American Capital Agency� (NASDAQ: AGNC  ) back up its massive dividend with a massive fourth quarter?�

Over the next few days, investors can expect to see the results from quite a few companies in the mortgage-REIT industry. American Capital Agency is slated to release its results after the market close on Thursday. It'll be joined by�Two Harbors� (NYSE: TWO  ) ,�CYS Investments� (NYSE: CYS  ) , and�Invesco Mortgage Capital� (NYSE: IVR  ) , all of which are expected to report before the week closes. And while�Annaly Capital� (NYSE: NLY  ) -- which we could probably call the standard bearer for the space -- hasn't set a firm date for its release, I wouldn't be surprised if we saw that later this week as well.

But as investors gear up for this rush, and American Capital Agency's report in particular, what should they be looking out for in the earnings reports and conference calls that follow?

What we know: Spreads ain't pretty
While the rapidly falling interest rate environment of 2007, 2008, and the years that followed was great for mortgage REITs, the more recent experience hasn't been as favorable.

The short-term rates at which mREITs borrow fell quickly, but over time, the rate compression has caught up on the asset side and the rates that the mREITs can earn have fallen, reducing the spread they collect in the middle. That the Federal Reserve has stepped in to buy billions in mortgage-backed securities -- thereby pushing up prices and reducing yield -- hasn't helped, either.

The fact that this is happening shouldn't be news to American Capital Agency�investors. When fourth-quarter numbers come out, there's little reason to believe that there will be any major improvement on this front, though it's possible that further pressure has been muted.

So... how's your book?
Here's the upside to the above: When rates are going down, that's happening as prices are rising. That means that as it's become harder for American Capital Agency and its fellow mREITs to lock down paper with a sizable yield, the securities already in their respective portfolios are faring well.�

In past quarters, the company's management has pointed to increases in book value as part of its total return -- that is, book value growth plus the dividends it's paid. While this does make sense to an extent, unless American Capital Agency�decides to start selling off its portfolio to pay dividends, investors can't "eat" book value -- the proceeds from selling now-higher-priced securities would have to be reinvested in today's low rate environment. I expect we'll see a strong showing from the pricing on the MBSes that the company owns, but I'm less enthusiastic about that than its management.

Prepayment rising
While interest rate risk is obviously front and center for anyone investing in fixed-income instruments, when buying up agency-backed MBS paper -- as American Capital Agency�does -- the risk that borrowers pay back their loans sooner than expected is another key risk. In particular, when rates fall, borrowers tend to do things like refinance in order to take advantage of cheaper borrowing.

American Capital Agency's management team has been fixated on minimizing the portfolio's exposure to rising prepayment rates. Investors will want to look for signs in the fourth-quarter results that this positioning is paying off.

One quarter, meet the long term
Who's set to come out on top of the mortgage REIT sector? The 15.8% dividend yield from American Capital Agency is noticeably larger than Annaly Capital's 12.1% yield. But could the longevity and experience of Annaly's management help it outperform over the longer term? To dig in deeper on the outlook for Annaly, I invite you to download our�premium research report on the company.

Our analyst runs through absolute must-know topics, as well as the future opportunities and pitfalls of Annaly's strategy. Click here now to claim your copy.

2 Lessons Annaly Can Learn From the NBA Scandal

There are few business practices more reprehensible than nepotism, the hiring of relatives irrespective of merit. Though, another that measures up is unjustly enriching oneself at the expense of your employer and/or shareholders. Recently, two organizations that couldn't be more different from each other have shared common experiences in this regard.

Nepotism and the NBA
In the middle of last month, a report commissioned by the NBA Players Association questioned its executive director Billy Hunter's leadership and "exhaustively" documented questionable business practices including nepotism.

The most damning conclusions reported by Bloomberg News were that Hunter's $15 million employment contract was never properly approved by the association's executive committee and player representatives, and that the association had paid almost $4.8 million to Hunter's family members and their professional firms since 2001.

According to ESPN, his daughter-in-law made $173,219 in 2011 and has earned a total of nearly $1.2 million over the course of her tenure there. His daughter earned $82,954 last year as the union's benefits director. His son works at investment advisory firm that's been paid almost $3 million since 2005. And a second daughter has secured hundreds of thousands of dollars in fees from the organization for two law firms she's worked at since 2007.

While I have no basis to question the quality of work that Hunter's relatives have provided to the union, suffice it to say that the decision to hire so many of them certainly creates an appearance of impropriety. As we came to find out at the end of last week, moreover, it also fueled the association's decision to suspend Hunter from his duties.

So what about Annaly?
At this point, you're probably wondering what Annaly Capital Management (NYSE: NLY  ) has to do with any of this. The answer is that Annaly has employed, and continues to employ, many of these same unacceptable business practices.

In the first case, like Hunter, Annaly's executives have a history of enriching themselves at the expense of stakeholders. In 2011, both its then-CEO Michael Farrell and then-COO Wellington Denahan-Norris were paid $35 million each. By means of comparison, Jamie Dimon -- the CEO of the nation's largest bank by assets, JPMorgan Chase�-- earned $23 million that year. You do the math -- Farrell and Denahan-Norris oversaw $109 billion in assets while Dimon presided over $1.1 trillion.

Now, suffice it to say, making a lot of money isn't a crime. In fact, it doesn't even amount to an appearance of impropriety so long as shareholders -- or in Billy Hunter's case, the executive committee of the players association -- approve.

The problem for Farrell and Denahan-Norris was that there's reason to believe Annaly's shareholders weren't comfortable with the extravagant payouts. At the company's annual shareholder meeting on May 26, 2011, its shareholders voted overwhelmingly�in favor of yearly say-on-pay votes -- 268 million in favor of annual votes versus 102 million in favor of tri-annual votes -- under which they have the opportunity to express their approval or disapproval for the company's compensation system.

What do you think Annaly's executives and board members did? If you guessed that they ignored the shareholder vote, then you'd be right. Later that same day, the board voted against annual say-on-pay votes, choosing instead to hold them every three years. Here's how Annaly justified it in a regulatory filing with the SEC:

The Board has considered the appropriate frequency of future non-binding advisory votes regarding compensation awarded to its named executive officers. Among other factors, the Board considered the voting results at the Company's 2011 Annual Meeting with respect to the non-binding advisory vote regarding the frequency of non-binding advisory votes regarding compensation awarded to its named executive officers. The Board has determined that future non-binding advisory votes regarding compensation awarded to its named executive officers will be submitted to shareholders of the Company every three years.

In other words, when Annaly's board says that it "considered" the results of the vote, it should probably have included a disclaimer explaining that it also decided to reject them.

Beyond this and perhaps more alarming, Annaly's practice of nepotism puts Billy Hunter's to shame. While we're limited with respect to how much information we have in this regard -- as publicly traded companies are only obligated to reveal information about their most senior leaders -- we know that relatives of Annaly's board members currently occupy the CEO and CFO positions in Chimera Investment Corporation (NYSE: CIM  ) , a separately traded mREIT controlled by Annaly's wholly owned subsidiary FIDAC. We also know that each executive was paid in excess of $1.2 million in 2008, the last year Chimera reported these figures, according to S&P's Capital IQ.

One could argue, of course, that Chimera CEO Matthew Lambiase and CFO Alexandra Denahan simply used connections to get positions they were otherwise qualified for -- to say nothing of their seven-figure compensation packages. However, at least in the case of its Denahan's resume, there's little tangible support for this.

In the company's first proxy statement, filed in 2008, her bibliography provided only that Denahan -- the sister of Annaly's current CEO and then-COO -- got her MBA and bachelor's degree in accounting from Florida Atlantic University and was a "business consultant in Fort Lauderdale" before joining Annaly in 2002 at the approximate age of 30. Thus, as far as we know, she became the CFO of a multibillion-dollar company with simply an MBA and four years of pertinent experience. That's not exactly something that happens every day.

And this is not just a theoretical problem. Since the end of 2011, Chimera has been embroiled in an accounting mess, which obviously falls under the CFO's purview. The company is now in the process of restating effectively every meaningful financial statement that it's published since going public. One of the few things we know in this regard, as Chimera has been otherwise tight-lipped about the whole matter, is that its net income between 2008 and 2011 is estimated to fall by 66%. In addition, Chimera has now failed to file its quarterly financial statements with the SEC for over a year now.

While these problems and Denahan's inexperience could certainly be a coincidence, it's hard for me to accept this possibility at face value. Instead, this appears to serve as a cogent example of the dangers of nepotism. Of course, like Hunter above, it won't be Denahan who genuinely suffers here, since she's already been paid an inordinate amount of money and can put "CFO" on her resume irrespective of the eventual outcome. The people who have lost out are the shareholders. And that's inexcusable.

What Annaly should learn from the NBA
The lessons that Annaly should take away from this are twofold. First, as the media and public's reaction to the NBA Players Association scandal have demonstrated, nepotism and enriching oneself at the expense of your employer are unacceptable business practices. And second, when these things are unearthed, there should be consequences for the offending parties.

To learn more about Annaly, check out our�brand new premium research report on the company, which takes readers through a number of absolute must know topics, as well as the future opportunities and pitfalls of Annaly's strategy. Click here now to claim your copy now.

ZNGA Up 7%: Q4 Beats, Q1 View Light; Filed Casino Papers in Nevada

Online video game maker Zynga (ZNGA) this afternoon reported Q4 revenue that topped analysts’ estimates, and a surprise profit where the Street had been expecting a net loss per share.

Revenue in the three months ended in three months ended in December rose to $311 million, yielding EPS of a penny per share.

Analysts had been modeling $250 million and a 3-cent loss per share, according to FactSet.

CEO Mark Pincus said the “biggest highlight” of the quarter was the release of “FarmVille2,” its online social strategy game.

The company’s “daily active users” rose by 3%, year over year, to 56 million. Monthly active users were up 24%, year over year, at 298 million.

For the current quarter, the company sees revenue of $255 million to $265 million. FactSet lists the Street consensus as $268 million. The company sees a net loss of 5 cents to 4 cents, worse than the Street’s 1-cent loss estimate.

Zynga stock is up 18 cents, or almost 7%, at $2.92.

Zynga management will host a conference call with analysts at 5 pm, Eastern time, and you can catch the webcast of it here.

Update: During the call this evening, CFO David Wehner addressed the company’s planned push into online gambling, saying Zynga has applied to the State of Nevada to determine its “suitability” to have a casino license:

Another revenue stream we are focused on building is real money gaming. An area we have made significant progress in over the past few months. In Q4 we signed a partnership with B1 party to offer real money gaming in the UK. We believe this is a great opportunity to offer our players a high-quality, real money gaming experience. We remain on track to deliver our first real money gaming products in the UK in the first half of 2013. Together with B1 party we’ll offer poker and casino games under the Zynga plus casino and Zynga plus bland and rolling out these programs across a range of platforms in the UK, the web, download, Facebook and mobile. In addition we filed an application for a preliminary finding of suitability with the Nevada gaming control board in December. A small first step towards participating in the US online real money gaming market. These are all steps moving us towards our long-term vision in real money games.

The shares are up 20 cents, over 7%, at $2.94.

Top Stocks To Buy For 2/6/2013-5

Petrohawk Energy Corporation (NYSE:HK) achieved its new 52 week high price of $38.44 where it was opened at $38.16 down -0.03 points or -0.08% by closing at $38.33. HK transacted shares during the day were over 13.17 million shares however it has an average volume of 25.17 million shares.

HK has a market capitalization $11.65 billion and an enterprise value at $15.44 billion. Trailing twelve months price to sales ratio of the stock was 6.15 while price to book ratio in most recent quarter was 3.18. In profitability ratios, net profit margin in past twelve months appeared at 6.43% whereas operating profit margin for the same period at 18.81%.

The company made a return on asset of 2.71% in past twelve months and return on equity of 4.75% for similar period. In the period of trailing 12 months it generated revenue amounted to $1.90 billion gaining $6.30 revenue per share. Its year over year, quarterly growth of revenue was 69.50% holding 671.60% quarterly earnings growth.

According to preceding quarter balance sheet results, the company had $1.65 million cash in hand making cash per share at 0.01. The total of $3.78 billion debt was there putting a total debt to equity ratio 103.09. Moreover its current ratio according to same quarter results was 0.62 and book value per share was 12.07.

Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 8.21% where the stock current price exhibited up beat from its 50 day moving average price of $31.64 and remained above from its 200 Day Moving Average price of $25.29.

HK holds 303.89 million outstanding shares with 275.64 million floating shares where insider possessed 2.71% and institutions kept 84.90%.

Does eBay need a dance partner?

I remember using eBay a few times to buy and sell stuff about seven or eight years ago. Since then, I have barely even glanced at it, not the site, not the stock. That was probably a mistake, especially last year.

What I knew about eBay EBAY �was that Amazon (AMZN) was competing with them, as were thousands of other sites with low-pricing models that disrupted eBay's auction-based system. I also knew about Paypal as a user, but it never seemed like enough to really spend much time analyzing the parent company.

My interest in the company was stoked a few weeks ago, though, when I was asked by a client how to sell some �teen numbered license plates from California, Nevada and Wisconsin that he had kept active in his garage for decades. My first thought was an auction house, but almost simultaneously I also thought of eBay.

"We just throw some decisions into the 'too hard' file and go onto others."

�Charlie Munger

The process of looking into how to use eBay effectively quickly turned into an analysis of eBay the company and eBay the stock. In short, what I found was an evolved, interesting company, but not necessarily a stock to buy.

eBay does have the extremely successful Paypal attached to it, a generally successful sales model, a dynamite balance sheet and even an intriguing potential catalyst as the baby boomers retire, which I haven't heard anybody talk about. Ultimately, though, the company appears fairly valued, and as I'll go into a little later, seems like it might be best off getting involved in a major strategic transaction.

Clearly, the company is still powerful and now has major inroads into foreign markets. However, their commissions on products sold is stagnant to slowly drifting down, and gaining market share is an upstream swim against serious competition. Their auction business has slowed, and there is also the matter of Wiley v. Kirtsaeng.

eBay's auction business does have some very interesting revival potential in my opinion. Given that three quarters of baby boomers are nowhere near being ready to retire financially, it seems to me that they will be selling stuff to survive. Whether it is reselling antiques that they inherit or trading goods as a side business, eBay seems like the place for that. I have already seen an eBay store pop up on the second busiest intersection in Wisconsin. That can't be a coincidence.

Right now, Paypal is the most important profit driver for the company. It accounts for about 44% of eBay's revenue. Impressively, Paypal is used in about a quarter of all online transactions. That is huge, but other payment methods are evolving to compete, and it seems to me that market share is near its peak.

Paypal's arrangement with Discover is a good one, but not special. eBay's expansion into international markets should give Paypal the ability to hold its market share and grow nominally. Overall, Paypal, which I do use for business and personal purposes, is a strong and interesting piece, even if there are threats to its dominance.

As for valuation, eBay stock is not particularly attractive to me at 20 times earnings, but neither is it particularly unattractive with a growth rate in the teens. With its huge cash balance of over $10 billion the company could engage in share buybacks, special dividends or a major transaction.

Here is where I think eBay gets really interesting. What could this company be if they just got in front of more eyeballs by better getting into search and crashing the social media party?

As I looked deeper into eBay's model, the thought that the company would be better off engaging in a big deal became very apparent in my opinion. eBay is facing serious emerging competition. So, while they have a great position currently, the moat they have had around their business could be breached. eBay needs a partner, or maybe two.

That, of course, turns my eyes to who would be a good partner. There are three tech companies and a few major retailers that come to mind. Let's take a quick look at the tech companies.

The two most obvious companies that might like to dance with eBay in a more intimate way are Facebook (FB) and Google (GOOG).

Facebook's social reach and desire to engage more with our pocketbooks would make them a logical merger candidate. Not only would there be instant ability to market to a billion people more directly, the potential development of the platform would be immense. Also, bringing some of eBay's management to the merged company would probably be a benefit to Facebook.

Google has the ability to buy eBay outright. If Google truly wants to create its own powerful store presence rather than being an aggregator of deals around the web, buying eBay could accomplish that. I don't see it though. In the long run, a Google acquisition seems to have limited upside for the price.

The tech deal that intrigues me though is a possible purchase of Yahoo (YHOO) by eBay. Yahoo's new search is powerful, and frankly cool, but without a nudge, might never live up to its potential. Yahoo's homepage is still very popular � it's my homepage so it must be (haha) � and could be a fantastic way to integrate the businesses. Adding a more integrated eBay module and better developing Yahoo's social reach using the email system as the starting point, could provide incredible development opportunity for a company with broader scope.

Among retail opportunities, would Sears Holdings (SHLD) consider selling off the failing KMart stores to eBay? I can't see why not. Without major remodeling, it appears to me that KMart is doomed to shutter. It could make more sense to Eddie Lambert to sell the asset sooner rather than later. An outright strategic acquisition of KMart would give eBay an instant bricks-and-mortar presence nationally which could be powerful. eBay could develop the stores as a high-tech combination auction house, consignment space and mall model by renting out mini-eBay stores.

Back to the stock. Despite its great 2012, I am not a buyer of eBay shares at this point. I missed that move, and that's all right. There might be another opportunity later. And if there isn't with eBay, I'll move on to some other opportunity.

Too many investors worry about "missing it" and make bad decisions in an effort to try to catch up. We might be on the front end of that happening in the broader stock market as stock inflows have picked up at the retail level.

If eBay stock falls back into the $40s again on some correlated market event, possibly due to some of the things identified in my year-opening article, I would probably look for an entry, but for now, I'm staying away. It's just too hard to know what the future holds for eBay at the moment.

Kirk Spano is the owner of Bluemound Asset Management, LLC and publisher of the American Resource Boom Letter. Neither Kirk nor clients hold any positions in companies mentioned. Opinions subject to change at any time without notice. If any of the deals noted above come to pass, I would like an invitation to the champagne party.

Why The Wall Street Journal Was Wrong About Mobile Home Parks

A December 11, 2012 article in the Wall Street Journal titled “Tide Changes for Manufactured Housing” suggests that “the falling fortunes of manufactured housing appear closely tied to the rising fortunes of traditionally built homes.” Of the approximately 50,000 mobile home parks in the U.S., this description might be valid on 5,000 of them. But for the other 45,000, this contention could not be further from the truth. Indeed, those parks that focus on “affordable housing” have never had stronger operating numbers. Here’s how the Journal got it wrong, and what the true story is.

The industry is fragmented

Mobile home parks have fragmented into two main areas of concentration: 1) lifestyle choice (in which the customer can afford other options, but chooses mobile home park living as better meeting their goals) and 2) affordable housing (in which the customer has essentially no other alternatives that they can afford other than mobile home parks). These two sectors focus on different types of customers, and have entirely different performances in terms of cap rates, occupancy and risk.

The Wall Street Journal was right about the challenges facing “lifestyle choice”

The “lifestyle choice” business model is based on factors that are not necessarily going in favor of the mobile home park. Back when single-family and condo prices were stratospheric, it made a whole lot more sense to buy a mobile home versus the alternatives. But with the collapse in pricing of the other housing options, it’s hard to imagine the average consumer choosing a mobile home over a brick house or condo with a nice view. The “lifestyle choice” model is based on combined lot rent and home mortgage costs of over $1,000 per month. There are many options today at that price point. And when faced with competition from the more socially acceptable forms of shelter, mobile homes tend to lose every time.

But they left out the “affordable housing” segment

What was not addressed in the article was the “affordable housing” niche. In this business model, the combined lot rent and home mortgage are around $500 per month, and the only competition is class-B and class-C apartments. In this battle, mobile homes tend to win every time. In addition, the customer base for “affordable housing” is the fastest growing demographic segment of the U.S. population – those families earning $20,000 per year or less. This has grown into roughly 30% of the U.S. population, and that does not even count the 10,000 baby boomers per day that are retiring into social security checks that average only $1,200 per month.

It doesn’t help that all of the public companies in the mobile home park niche are “lifestyle choice”

The three public mobile home park REITs are ELS, SUI and UMH – which are all “lifestyle choice” business models. This tends to influence analysts and the media to assume that this is the standard business model of all mobile home parks. While there are additionally a good many private REITs with this same business model, it is definitely in the minority and not majority. There are estimated to be 50,000 mobile home parks in the U.S., but only maybe 5,000 are “lifestyle choice” business models. That means that 90% of the mobile home parks in the U.S. are focused on the “affordable housing” segment.

What the “affordable housing” segment looks like today, and going forward

As long as roughly a third of the U.S. population has an annual household income under $20,000, and the baby boomers continue to retire at the rate of 10,000 per day into $14,400 average annual incomes, there is no shortage of customers for “affordable housing.” Additionally, with apartment rents averaging over $1,000 per month in the U.S., only the bottom tier of apartments can meet the affordable housing household budget of $500 per month. And there are very few tenants who would choose the appalling  conditions of poorly under-capitalized and poorly managed multi-family. The average person prefers no neighbors banging on their walls and ceilings, a yard for their kids, a pet, and the community feel of a mobile home park. The only way this business model can go bad is if the average U.S. family starts becoming significantly more prosperous. And that’s a bet that every park owner in the U.S. will take (as will every sane economist).

Conclusion

The Wall Street Journal is an excellent publication. They write a lot of great articles. However, they missed the mark concerning mobile home parks. The real mobile home park industry is strong and getting stronger. Every negative trend in the American economy, without exception, is a plus for the affordable housing sector of mobile home parks.

Baidu-Owned Qunar Revamps Luxury Hotel Search

Baidu-owned (NASDAQ: BIDU  ) online travel search engine Qunar unveiled a luxury hotel portion of its website today. The new subdomain sports familiar hotel search features, but with a new design focused on attracting high-end customers.

Similar to hotel search on Qunar's main site, the new section,� lh.qunar.com, lets customer research specific hotels and hotel brands. At the same time, customers can now search by a hotel's�build date or renovation date, and by hotel amenities like gyms, swimming pools, and spas. The main difference comes with a new design with sleeker,�larger pictures to showcase more than 2,000 high-end hotel partners�to luxury and business travelers.�

In the summer of 2011, Baidu became the majority stakeholder in Qunar after its $306 million investment.

link

Baidu Can Do Better

The sky isn't falling at Baidu (NASDAQ: BIDU  ) , but it's also not as blue as it used to be.

China's leading search engine posted ho-hum quarterly results on Monday after the market close. Revenue soared 42% to $1.02 billion, and that's just ahead of the $1.01 billion that Wall Street was targeting.

Bulls will argue that this is the most important takeaway from the report. In its first full quarter butting heads with Qihoo 360 (NYSE: QIHU  ) since the browser and security software specialist launched its own platform, Baidu didn't miss a beat. Users stuck around. Advertisers did, too. Baidu closed out 2012 with 406,000 marketing customers. Not only is that 31% ahead of where it was a year earlier, but the average sponsor is spending 8% more.

The good news begins to deteriorate after that.

Expenses across most of the vital categories -- bandwidth, content, SG&A, R&D -- all grew faster than revenue. The end result is that operating profit climbed just 24% during the quarter. Net income did manage to surge 36% to $1.28 a share. That may be in line with analyst expectations, but that figure was padded by a one-time gain related to its step acquisition of video-streaming website iQiyi.

Don't expect that to be the last Baidu acquisition. The company has $5.2 billion in cash and marketable securities at a time when it helps to diversify.�

Its guidance for the current quarter is disappointing, though it could've been worse. The dot-com giant is forecasting $945.4 million to $975.9 million in revenue. Yes, that's a 4% to 7% decline sequentially, but earlier in the day Sohu.com (NASDAQ: SOHU  ) announced that its Sogou search platform would be posting a 12% to 17% sequential decline on the top line.

Analysts were braced for the seasonal dip, but the midpoint of Baidu's range is below the $967.1 million that Wall Street was modeling.

Baidu survived -- and that's certainly commendable in this kind of climate -- but the stock needs the company to thrive if it wants to resume its winning ways.

Betting on Baidu

Regardless of your short-term view on the Chinese economy, there may be opportunity in Baidu (a.k.a. the "Chinese Google"). Our brand-new premium report breaks down the dominant Chinese search provider's strengths and weaknesses. Just click here to access it now.

CSCO to Dominate Software-Defined Networks, Says Pac Crest

Pacific Crest‘s Brent Bracelin today reiterates an Outperform rating on shares of Cisco Systems (CSCO), which has been a relative bright spot amidst the broad market decline, currently up 2 cents at $20.85.

Bracelin thinks the stock can hit $25 in a year’s time, and further out could rise as high as $35, driven in part by greater focus on�software.

In particular, an evolution of Cisco with respect to software is already “well under way,” Bracelin thinks, and it marks in some ways a return to Cisco’s software roots in routing protocols, he thinks.

Bracelin focuses on the trend toward “software-defined networking,” or SDN, which some on the Street think could be a problem for Cisco. That theory holds that sophisticated software will allow enterprises and telecom firms to buy cheap switches instead of Cisco’s gear.

Not so, says Bracelin. SDN is a way for Cisco to increase the software content of its networking products:

Cisco has a long heritage in software and silicon as the leading architect of feature-rich routers and switches that have been instrumental in enabling Internet connectivity to 35% of the world�s population. The fact that Cisco has captured more than 50% of the switching and routing market, while generating a 15-year average gross margin of 65%, validates a long-term sustainable differentiation, largely because of its innovations in software and silicon. The recent advent of programmable software-defined networks (SDN) will not mark the demise of Cisco, in our view, but rather, drive the next leg of innovation at Cisco, enabling it to move further up the stack into software applications. The race is on for who will control the nascent, but fast-growing SDN application ecosystem. We think it will be Cisco, especially given the $7 billion investment it has already made on software and cloud M&A in the past 11 months. If successful, CSCO could evolve from a call on the improving macro and share gain into a call on a multiyear transition from a laggard to an innovator. Over the past decade, significant wealth has been created by technology stocks once viewed as laggards but became innovators. Only a few have made this transition�Apple, EMC, IBM, Oracle and SAP�and each created meaningful wealth over a multiyear period [...] Since the $1.2 billion Nicira acquisition by VMware, there has been rampant speculation that new software-defined networking (SDN) models could cannibalize Cisco�s core networking franchise [...] Based on the anticipated gradual pace of disruption as the industry shifts to programmable SDN architectures, Cisco has ample time to adjust its internal product roadmap while pursuing an offensive strategy to acquire and build the broadest portfolio of SDN applications before this market reaches critical mass. The value in a programmable post-SDN world will increasingly shift toward the SDN application layer, a new segment that we expect Cisco to dominate. Overtime, much like the hypervisor has commoditized within server virtualization, we view SDN controllers as the interface most at risk to commoditizing, with an increasing portion of the value extracted by SDN applications [...] We expect Cisco to pursue an aggressive build-andbuy strategy over the next two years, which eventually should expand Cisco�s reach. Within a pre-SDN world, Cisco bundled key software applications with internally developed equipment. This partially changes in a post-SDN world, where it will have the ability to sell Cisco-branded SDN applications on any vendor�s equipment.

Nanometrics Beats Up on Analysts Yet Again

Nanometrics (Nasdaq: NANO  ) reported earnings on Feb. 4. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 29 (Q4), Nanometrics met expectations on revenues and exceeded expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank significantly and GAAP loss per share grew.

Margins dropped across the board.

Revenue details
Nanometrics chalked up revenue of $30.3 million. The six analysts polled by S&P Capital IQ hoped for a top line of $30.2 million on the same basis. GAAP reported sales were 33% lower than the prior-year quarter's $45.3 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at -$0.13. The five earnings estimates compiled by S&P Capital IQ predicted -$0.15 per share. GAAP EPS were -$0.16 for Q4 versus -$0.02 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 41.6%, 500 basis points worse than the prior-year quarter. Operating margin was -21.6%, 2,600 basis points worse than the prior-year quarter. Net margin was -12.0%, 1,080 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $35.3 million. On the bottom line, the average EPS estimate is -$0.07.

Next year's average estimate for revenue is $191.6 million. The average EPS estimate is $0.49.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Nanometrics is outperform, with an average price target of $16.20.

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Who Cares Who Runs Berkshire After Buffett?

Although many investors in Berkshire Hathaway (NYSE: BRK-B  ) are nervous about what the company will look like after it loses its visionary investing leader Warren Buffett, in this video Motley Fool financial analyst Matt Koppenheffer offers a different take. He tells us that what Buffett built in Berkshire is now a self-perpetuating organization with strong revenue streams in the companies it owns, and shows how the stock lacks any kind of "Buffett premium" at the moment.

Warren Buffett's long track record of success has made him one of the best investors of all time. With the Buffett at the helm, Berkshire Hathaway has�grown book value per share at a compounded annual rate of 19.8% for nearly 50 years! Despite an incredible historical track record, investors have to understand the key issues to watch moving forward. To help investors, The Fool's resident Berkshire Hathaway expert, Joe Magyer, has created this�premium research report�on the company. Inside you'll receive ongoing updates as key news hits, as well as reasons to both buy and sell the stock. Claim a copy by�clicking here now.

EU Considers Stronger Bailout Fund; ECB Doesn’t Raise Rates

European Union (EU) leaders on Friday will discuss strengthening the European Financial Stability Facility (EFSF). France and Germany are also expected to present attendees with joint proposals to impose financial commitments within euro zone nations in exchange for Germany’s support on the matter.

The meeting follows a Thursday announcement by Jean-Claude Trichet, president of the European Central Bank (ECB), that euro zone interest rates would not increase; the news had sent the euro tumbling.

According to Reuters, investors had expected, after the ECB’s previously tough talk on inflation worries, that it would act sooner rather than later to lift rates. However, Trichet said that inflation expectations were “firmly anchored” and rates would not rise any time in the near future.

The summit meeting of EU leaders will see which measures have been incorporated into the “comprehensive package” long insisted upon by Angela Merkel, Germany’s chancellor. Germany has previously voiced its opposition to increasing the amount of the 440-billion-euro ($599.4 billion) bailout fund, insisting that other euro zone nations need to adopt stricter measures for debt control, among other things.

Merkel told reporters at her arrival for the meeting, “We will talk about how to prepare decisions that are still necessary, in particular with regard to the permanent crisis mechanism which is to be agreed by March.”

A source in French President Nicolas Sarkozy’s office was cited as saying that both Paris and Berlin intended that the 17 nations within the euro zone should make commitments on increasing the competitiveness of their economies; these measures would be reviewed at annual summits.

The unnamed source said, “We are at a key moment; markets are turning, doubts about the solidity of the euro and the euro zone are dissipating. This is the moment to take a great step forward.”

The official added that the package to be presented would include both Germany’s call for stricter financial discipline, with sanctions against nations that fail to comply, and France’s desire for euro zone summits on a regular basis for the building of a "European economic government" and coordination of policies to stimulate growth.

This "competitiveness pact" proposal would also include nations’ commitments to incorporate deficit curbs within their constitutions, increase the flexibility of both wages and labor markets, and tie pension systems to individual nations’ demographies.