Is This Retailer's Turnaround Already Here?

There are few worse feelings in the social world than being the last person to the party. The chips are gone, all the soda left is diet, and everyone except Stan the IRS auditor has someone to talk to. Over the past few days, investors have been worried that they might be showing up late to the Aeropostale (NYSE: ARO  ) party.

On Wednesday, BMO Capital upgraded Aeropostale from "market perform" to "outperform." The stock rose 4% over the day, and was up again by midday Thursday. Year to date, Aeropostale is now up 27%, making it one of the stronger performers in its sector. The upgrade was based on BMO's belief that the turnaround at Aeropostale is getting under way sooner rather than later -- let's see if that's true.

Why Aeropostale needs a turnaround
Before we get to the solution, let's look at the problem. While the company is up in 2013, over the last 12 months, it's down 12%. Last year, the company's net sales increased slightly, up 2%, but comparable sales dropped 2%. Hinting at a recovery, that 2% decline was a step in the right direction from the 8% drop that the company managed in 2011.

One of Aeropostale's problems has been its time to market. The company is chasing trends, but by the time its version hits the sales floor, the trend is old. In the last earnings call, EVP Emilia Fabricant said that Aeropostale was working to "create greater flexibility and scale in our sourcing model." 

The solution to the problem
In a focus group run by BMO, it seemed that teen customers had already seen a difference in the company's offerings. One was quoted as saying, "There's a lot of fashion, instead of just logo tees." If that's a universal belief, then it would indicate that Aeropostale had already started to make the move from market follower to market leader. That move is meant to shift the company's product mix from all basics to a mix of basics and fashion pieces.

It's very similar to the move that Gap (NYSE: GPS  ) made starting in 2011. Gap had been discounting heavily, and had been unable to sustain any of the sales momentum that it would occasionally gain. One of the big problems was that the company was seen as a basics provider -- not a place to get fashionable clothing. Flash-forward to this year, and Gap's comparable sales were up 5% over 2012, with customers flocking back to stores.

Another teen retailer, American Eagle (NYSE: AEO  ) , seems to be in the early stages of a rebound. The company reported a 9% increase in comparable sales over 2012, with earnings per share up 43%. While American Eagle still hasn't been able to sustain a rebound in the stock price, it seems to have made the fundamental changes that could sustain growth in the future.

I think that the Aeropostale turnaround is still too early to call. The company has an earnings call at the end of the month, and before I get overly excited, I'll be looking for some growth in the company's comparable sales. Right now, the stock is trading at a P/E of 38, which seems incredibly expensive for a company that hasn't proven itself yet. While good things may be around the corner, the corner is still a long way off.

The rulers of retail
The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward those investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.

5 Reasons to Worry About Next Week

The economy is showing signs of fumbling the recovery.

Even though a Federal Reserve official is suggesting that the central bank may be feeling comfortable enough to ease the bond-buying stimulus that the Fed has been providing as early as this summer, we're not exactly out of the woods just yet.

The financial data issued this week hasn't been very encouraging. CPI data came in weak, and after a hearty March, housing starts fell a sharp 16.5% in April.

The news isn't just iffy on the macro level. There are also more than a few companies that aren't pulling their own weight in this supposed economic recovery.

There are still plenty of names posting lower earnings than they did a year ago. Let's go over a few of the companies that are expected to go the wrong way on the bottom line next week.

Company

Latest Quarter EPS (estimated)

Year-Ago Quarter EPS

JA Solar (NASDAQ: JASO  )	($1.20)	($1.00)
Best Buy (NYSE: BBY  )	$0.25	$0.72
Hewlett-Packard (NYSE: HPQ  )	$0.81	$0.98
Marvell Technology (NASDAQ: MRVL  )	$0.14	$0.23
Qihoo 360 (NYSE: QIHU  )	$0.14	$0.21

Source: Thomson Reuters.

Clearing the table
Let's start at the top with JA Solar. There have been a few pleasant surprises out of the solar energy realm this earnings season, but JA Solar isn't likely to be one of them. Wall Street sees double-digit declines on both ends of the income statement for the Chinese provider of solar cells and modules.

Don't be surprised if JA Solar's deficit is steeper than the $1.20 a share currently targeted. History hasn't been kind to the prognosticators here, with JA Solar falling woefully short of expectations every quarter over the past year.

Best Buy may be one of this year's hottest stocks -- more than doubling so far in 2013 -- but don't mistake the chart for a turnaround. The registers are still ringing slowly at the consumer electronics chain, and analysts see Best Buy earning roughly a third of what it did during last year's fiscal first quarter.

Hewlett-Packard investors should be braced for a step back. The PC giant's biggest rival posted a brutal 79% drop in reported profitability for its latest quarter last night. HP is in better shape. It has diversified into business services to offset the slide in desktop and laptop sales, but why didn't HP make a bigger dent in smartphones and tablets when it could've made a difference?

HP is the world's largest PC maker. It should've been able to see the trend toward mobile gadgetry coming soon enough to make the right decisions.

Marvell Technology is a maker of mobile communications equipment, but it's failing the make the growth connection these days. Analysts see revenue and earnings per share sliding 9% and 39%, respectively, when it reports on Thursday. Marvell may seem to be in the right place in serving the digital connected lifestyle, but where's the growth? Earnings per share have declined in eight consecutive quarters. The pros see that streak stretching to nine.

Finally, we have Qihoo 360. Isn't this the Chinese dot-com darling that's turning heads in the search engine market in the world's most populous nation? Isn't Qihoo 360 the top player in Web browsers and security software at a time when usage is exploding? The answer is yes on both fronts, but Qihoo 360 is growing. Wall Street's forecasting a 53% surge in revenue when the company reports on Monday morning. The bottom-line snag is that Qihoo 360 is investing in its products and the monetization of its fast-growing search platform. The profitability payoff won't happen right away, but it may surprise some investors when they see earnings likely heading the wrong way next week.

Why the long face, short-seller?
These companies have seen better days. The market has rewarded many of these stocks with reasonable gains over the past year, but they still haven't earned those upticks. Lower earnings translates into higher earnings multiples, and nobody wants to see that happen.

The good news here is that Wall Street already expects these companies to deliver shrinking bottom lines. In other words, the bad news is already baked into the shares.

The more I think about it, the less worried I become.

Should you worry about Best Buy?
The brick-and-mortar versus e-commerce battle wages on, with Best Buy caught in the middle. After what might have been its most tumultuous year in history, there are now even more unanswered questions about the future for the big-box electronics retailer. How will new leadership perform? Will a smaller store format work out for both the company and its brave investors? Should you be one such brave investor? To help answer all these questions, The Motley Fool has released a premium research report detailing the opportunities -- and the risks -- in store for Best Buy. Simply click here now to claim your comprehensive report today.

Will ASCO Unlock Big Value in This Cancer Drug Class?

There's little denying that Roche's (NASDAQOTH: RHHBY  ) cancer wonder drug Avastin has been a godsend to cancer patients and investors alike.

Avastin -- which the Food and Drug Administration has approved to treat metastatic colorectal cancer (as a first-line and second-line treatment), metastatic HER2-negative breast cancer, and metastatic renal cell carcinoma, and as a second-line treatment of glioblastoma -- brought in $5.8 billion in sales worldwide in 2012, up 6% from the previous year. Avastin is part of a class of drugs known as angiogenic inhibitors. Simply put, these drugs bind to receptors often linked to blood vessel growth. By inhibiting blood vessel growth, drugs like Avastin help starve solid tumors of the nutrients they need to grow. Avastin, for instance, works by binding to VEGF-receptors to inhibit blood vessel growth to solid tumors.

The marvel of angiogenic inhibitors
The interesting aspect of angiogenic inhibitors -- other than that they've been shown to increase progression-free survival in many cancer trials -- is that they usually have wide-ranging appeal across a number of cancer types instead of working for just one type of cancer. Take Onyx Pharmaceuticals (NASDAQ: ONXX  ) and Bayer's Nexavar, which also works as a VEGR inhibitor and is approved to treat advanced renal cell carcinoma and unresectable hepatocellular carcinoma. Nexavar has also shown progress in late-stage trials for metastatic thyroid cancer.

Also, because angiogenic inhibitors don't directly kill tumors or surrounding tissue, and instead simply inhibit blood vessel formation, they can be used for long periods of time compared with standard chemotherapy, which often leads to intolerable toxicity.

This is why, with the American Society of Clinical Oncology's annual meeting just two weeks away, it's time to put angiogenic inhibitors on your radar. ASCO's annual meeting is the holy grail of scientific conferences for oncology-based biotech and pharmaceutical companies, and it should give us a good indication of what's working and what isn't within certain drug classes. As for me, I'll certainly have my eye on some early stage anti-angiogenesis drugs.

What to watch at ASCO
Regeneron Pharmaceuticals (NASDAQ: REGN  ) , perhaps best known for its highly successful wet age-related macular degeneration drug Eylea, released two promising abstracts for ASCO on monoclonal antibodies with potential anti-angiogenic effects.

A phase 1 study of REGN421, a monoclonal antibody to delta-like-ligand 4 (DLL4), in combination with SAR153193 from Sanofi (NYSE: SNY  ) , which Regeneron has partnered with, concluded the combination to be safe despite a relative high level of grade 3/4 adverse events, and noted that responses and prolonged stable disease were witnessed in ovarian cancer patients.

The other abstract involves Regeneron's REGN910 and Sanofi's SAR307746. This is a fully human and selective angiopoietin-2 monoclonal antibody that blocks signaling in the Tie2 receptors and has the potential to help patients with advanced solid tumors. Of particular interest, no grade 3 or above adverse events were noted among 37 patients, and one thyroid cancer patient was observed as having stable disease for 46 weeks. It certainly appears to be a good candidate to move to phase 2 trials, and one that could benefit as a combination therapy with existing chemotherapy agents.

Pfizer (NYSE: PFE  ) is also getting in the action with its phase 1b trial of CVX-060 in combination Inlyta, with its FDA-approved drug. Inlyta is a VEGF-inhibitor approved as a second-line treatment for metastatic renal cell carcinoma, while CVX-060 is a humanized monoclonal antibody fused to angiopoietin-2 binding peptides. The thinking is that the resistance to VEGF therapies that tumors develop can be overcome by these angiopoietin-2 binding peptides. Of the 18 patients in trial, two had a partial response and one an unconfirmed partial response. However, higher-than-expected treatment-related thromboembolic events were a cause for concern that may require further dosing studies before even considering a move on to phase 2 studies.

There's a lot more where that came from
This is just the tip of the iceberg with regard to the wealth of knowledge this annual conference brings. If you're someone who's been touched directly or indirectly by cancer, or are an investor looking for the latest and greatest innovations in the biotechnology and pharmaceutical sector, then stay tuned, because there's a lot more data on the way!

While you can certainly make huge gains in biotech and pharmaceuticals, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

How to Build a Thriving American City

In the following interview, we speak with Jeff Speck, author of Walkable City: How Downtown Can Save America, One Step at a Time. Speck is an architect and city planner in Washington, D.C., oversaw the Mayors' Institute on City Design, and served on the Sustainability Task Force of the Department of Homeland Security.

Speck argues that the concerns of young parents leaving urban centers in search of better schools for their children is, in a sense, a "good problem" for a city to have. Many cities are still working to attract those populations in the first place; school issues will come later.

The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

Audience Member: A lot of Fools have young children, and you mentioned that you have young children. I don't, but one day perhaps I would like to. There's sort of a running joke, "When do you move out of the city?" It's when your oldest child turns 5.

Jeff Speck: It's actually not that. It's 3, because we now have universal preschool in D.C., and people are moving out because they don't like the quality of the 3-year-old programs.

Audience Member: Right. So in a city like D.C., where the public schools are not known for being excellent -- which is putting it mildly, unfortunately -- how can millennials who right now are childless stay in the city?

Because right now you talk about this big demographic shift, that millennials and their baby boomer parents, who are empty nesters, are moving into the cities. What happens when the younger part of that cohort starts having their own children?

Speck: My wife and I have a 2-year-old and a 4-year-old. We had our house on the market, briefly -- the house that I built myself and didn't want to leave -- because we were facing this exact problem. We hit the lottery. We got lucky, like a lot of people do, but probably the minority, and our oldest child got into a charter school that we like, which means our younger child is also in that charter school.

My wife is quite active. Her name is Alice Speck, and she tweets a lot on education issues in the District. By the way, I am JeffSpeckAICP, like American Institute of Certified Planners, if you want to follow me on Twitter. I tweet a lot too.

My wife is very active in the education discussion, and every conversation I have like this in the city, or with her, the concept of education is brought up. Everyone has to deal with it their own way, but the simple fact is that it will remain the challenge for a long time. I think D.C. is getting better and better. Other cities are doing yet better than D.C. is doing. Of course, not every Fool is in D.C.

I hate to push back, but I think that, for most of my clients' cities, it's the wrong question to be asking, immediately, because they wish they had the millennial population that is worried about schools, that is ready to be worried about schools in the future, but in fact they have so few residents downtown and so little walkability downtown because of that absence of residents, that they're not yet at that step.

As planners, as philosophers, as people who think, we all believe and say and understand that the best cities, the ideal cities, are those which house everyone well, and how can you have a great city that doesn't have all kinds of people in it?

David Burns says, "Design a city that serves our kids, and I'll show you a city that serves everyone," etc., etc.

It's all well and good, but I remind myself that I lived for a decade, perfectly happily, in South Beach, in Miami, where I would go for months without a single stroller sighting. This was a city that didn't seem to contain anyone between 35 and 55, and certainly no kids, and it was a thriving, healthy city that had come back from being -- if any of you have seen Scarface -- come back from being a complete pit.

Without Al Pacino, many American cities are still in a condition similar to that. They need to provide those things that will attract the millennials and attract the empty nesters, and get to that point where a school problem becomes that good problem to have.

I'm less focused, these days, on the school issue than I am on not how cities can serve everyone, but how they can thrive. What you do see is the schools tend to come around 10 to 15 years later, but that's a long time to wait. We punish the pioneers.

Nothing Can Stop This Wall Street Monster

Many analysts and investors believe Wall Street firms will never flourish again like they did prior to the financial crisis. In the wake of new regulations and restrictions on activities, traditional investment banks now face significant headwinds.

Despite the concerns over industrywide profitability, Goldman Sachs (NYSE: GS  ) remains well-positioned to continue gaining market share and foster new advisory relationships.

In this video, Motley Fool banking analysts David Hanson and Matt Koppenheffer give investors three reasons the Wall Street giant is still a good buy today.

Despite being a powerhouse global financial firm, its stock trades at a valuation of less than half what it fetched prior to the crisis. Does this make Goldman one of the best opportunities in the market today? To answer that question, I invite you to check out The Motley Fool's special report on the bank. In it, Fool banking expert Matt Koppenheffer uncovers the key issues facing Goldman, including three specific areas Goldman investors must watch. To get access to this report, just click here.

#pitch{ display: none; }

More Expert Advice from The Motley Fool

The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

The Men and Women Who Run CRH

LONDON -- Management can make all the difference to a company's success and thus its share price.

The best companies are those run by talented and experienced leaders with strong vested interests in the success of the business, held in check by a board with sound financial and business acumen. Some of the worst investments to hold are those run by executives collecting fat rewards as the underlying business goes to pot.

In this series, I'm assessing the boardrooms of companies within the FTSE 100. I hope to separate the management teams that are worth following from those that are not. Today I am looking at CRH  (LSE: CRH  ) (NYSE: CRH  ) , the Irish building materials group with an international footprint.

Here are the key directors:

Director

Position

Nicky Hartery	(non-exec) Chairman
Myles Lee	Chief Executive
Maeve Carton	Finance Director
Albert Manifold	Chief Operating Officer
Mark Towe	CEO, Oldcastle (Americas)

With a market cap of £10 billion CRH is Ireland's largest company, and seven of its 12 directors are Irish.

Nicky Hartery became chairman last year after eight years on the board, following the footsteps of a predecessor who had similarly been recruited from the ranks of non-execs. He was formerly vice president for manufacturing and business operations for PC-maker Dell's EMEA region, and earlier worked in the U.S. as president and CEO of Verbatim.

From FD to CEO
Qualified as both a civil engineer and a chartered accountant, Myles Lee joined CRH in 1982 and undertook finance roles, rising to be finance director in 2003. He has thus been involved in much of CRH's overseas expansion through a multitude of small and medium sized acquisitions.

Lee continued this strategy after stepping up to be CEO in January 2009. He has run the group during a difficult time for the construction market in Europe and the U.S., overseeing Ireland's largest ever rights issue in 2010. He plans to retire at the end of this year.

More accountants
Maeve Carton is one of just six female finance directors on the FTSE 100. A qualified accountant, she joined the firm in 1988 and rose through the finance ranks to become finance director in 2010.

Also an accountant in a company known for strong financial discipline, Albert Manifold joined CRH in 1998 after a spell working in private equity. He has undertaken divisional finance director and divisional management roles, and assumed the role of chief operating officer when the role was created in 2009 to reflect CRH's increasing complexity. Manifold is seen as the most likely candidate to take over from Lee.

A U.S. citizen, Mark Towe joined the group in 1997 and rose to assume responsibility for Oldcastle, the group's holding company for the Americas, in 2008.

CRH's non-execs have a broad spread of international commercial backgrounds.

I analyze management teams from five different angles to help work out a verdict. Here's my assessment:

1. Reputation. Management CVs and track record. Strong.	Score 4/5
2. Performance. Success at the company. Good during difficult time.	Score 3/5
3. Board Composition. Skills, experience, balance Long-serving executives, recruitment from within.	Score 4/5
4. Remuneration. Fairness of pay, link to performance. Uncontroversial.	Score 3/5
5. Directors' Holdings, compared to their pay. Execs holdings range from £6 million to £0.5 million.	Score 3/5

Overall, CRH scores 17 out of 25, good result. With all the executives having at least 16 years' service with the company and a tradition of recruiting CEOs from within (and chairman from the board), there's unlikely to be any great changes when Lee retires. The preponderance of accountants underlines the group's conservative management.

I've collated all my FTSE 100 boardroom verdicts on this summary page.

Buffett's favorite FTSE share
Legendary investor Warren Buffett has always looked for impressive management teams when picking stocks. His latest acquisition, Heinz, has long had a reputation for strong management. Indeed Buffett praised its "excellent management" alongside its high quality products and continuous innovation.

So I think it's important to tell you about the FTSE 100 company in which the billionaire stock-picker has a substantial stake. A special free report from The Motley Fool -- "The One U.K. Share Warren Buffett Loves" -- explains Buffett's purchase and investing logic in full.

And Buffett, don't forget, rarely invests outside his native United States, which to my mind makes this British blue chip -- and its management -- all the more attractive. So why not download the report today? It's totally free and comes with no further obligation.

link

My 4,600 Pound Investment in BP Is Now 25,000 Pounds in Barclays

5 Reasons to Worry About Next Week

The economy is showing signs of fumbling the recovery.

Even though a Federal Reserve official is suggesting that the central bank may be feeling comfortable enough to ease the bond-buying stimulus that the Fed has been providing as early as this summer, we're not exactly out of the woods just yet.

The financial data issued this week hasn't been very encouraging. CPI data came in weak, and after a hearty March, housing starts fell a sharp 16.5% in April.

The news isn't just iffy on the macro level. There are also more than a few companies that aren't pulling their own weight in this supposed economic recovery.

There are still plenty of names posting lower earnings than they did a year ago. Let's go over a few of the companies that are expected to go the wrong way on the bottom line next week.

Company

Latest Quarter EPS (estimated)

Year-Ago Quarter EPS

JA Solar (NASDAQ: JASO  )	($1.20)	($1.00)
Best Buy (NYSE: BBY  )	$0.25	$0.72
Hewlett-Packard (NYSE: HPQ  )	$0.81	$0.98
Marvell Technology (NASDAQ: MRVL  )	$0.14	$0.23
Qihoo 360 (NYSE: QIHU  )	$0.14	$0.21

Source: Thomson Reuters.

Clearing the table
Let's start at the top with JA Solar. There have been a few pleasant surprises out of the solar energy realm this earnings season, but JA Solar isn't likely to be one of them. Wall Street sees double-digit declines on both ends of the income statement for the Chinese provider of solar cells and modules.

Don't be surprised if JA Solar's deficit is steeper than the $1.20 a share currently targeted. History hasn't been kind to the prognosticators here, with JA Solar falling woefully short of expectations every quarter over the past year.

Best Buy may be one of this year's hottest stocks -- more than doubling so far in 2013 -- but don't mistake the chart for a turnaround. The registers are still ringing slowly at the consumer electronics chain, and analysts see Best Buy earning roughly a third of what it did during last year's fiscal first quarter.

Hewlett-Packard investors should be braced for a step back. The PC giant's biggest rival posted a brutal 79% drop in reported profitability for its latest quarter last night. HP is in better shape. It has diversified into business services to offset the slide in desktop and laptop sales, but why didn't HP make a bigger dent in smartphones and tablets when it could've made a difference?

HP is the world's largest PC maker. It should've been able to see the trend toward mobile gadgetry coming soon enough to make the right decisions.

Marvell Technology is a maker of mobile communications equipment, but it's failing the make the growth connection these days. Analysts see revenue and earnings per share sliding 9% and 39%, respectively, when it reports on Thursday. Marvell may seem to be in the right place in serving the digital connected lifestyle, but where's the growth? Earnings per share have declined in eight consecutive quarters. The pros see that streak stretching to nine.

Finally, we have Qihoo 360. Isn't this the Chinese dot-com darling that's turning heads in the search engine market in the world's most populous nation? Isn't Qihoo 360 the top player in Web browsers and security software at a time when usage is exploding? The answer is yes on both fronts, but Qihoo 360 is growing. Wall Street's forecasting a 53% surge in revenue when the company reports on Monday morning. The bottom-line snag is that Qihoo 360 is investing in its products and the monetization of its fast-growing search platform. The profitability payoff won't happen right away, but it may surprise some investors when they see earnings likely heading the wrong way next week.

Why the long face, short-seller?
These companies have seen better days. The market has rewarded many of these stocks with reasonable gains over the past year, but they still haven't earned those upticks. Lower earnings translates into higher earnings multiples, and nobody wants to see that happen.

The good news here is that Wall Street already expects these companies to deliver shrinking bottom lines. In other words, the bad news is already baked into the shares.

The more I think about it, the less worried I become.

Should you worry about Best Buy?
The brick-and-mortar versus e-commerce battle wages on, with Best Buy caught in the middle. After what might have been its most tumultuous year in history, there are now even more unanswered questions about the future for the big-box electronics retailer. How will new leadership perform? Will a smaller store format work out for both the company and its brave investors? Should you be one such brave investor? To help answer all these questions, The Motley Fool has released a premium research report detailing the opportunities -- and the risks -- in store for Best Buy. Simply click here now to claim your comprehensive report today.

Facebook's Big Move

The following video is from Thursday's Investor Beat, in which host Chris Hill, and analysts Jason Moser and Matt Koppenheffer dissect the hardest-hitting investing stories of the day.

Shares of Facebook (NASDAQ: FB  ) rose on Thursday. The social networking company reported that mobile revenue grew to 30% of the company's total advertising revenue. But Facebook wasn't the only big mover on Wall Street on Thursday. Shares of Yelp (NYSE: YELP  ) rose more than 25% after the reviews site posted a surge in first-quarter revenue. Could Yelp be a better play? That story, plus four of the biggest movers on Thursday's market, and two stocks we'll be watching very closely this week.

After the world's most-hyped IPO turned out to be a dud, many investors don't even want to think about shares of Facebook. But there are things every investor needs to know about this revolutionary company. The Motley Fool's newest premium research report shows that there's a lot more to Facebook than meets the eye. Read up on whether there is anything to "like" about it today to determine if Facebook deserves a place in your portfolio. Access your report by clicking here.

Tessera Tech to Pay $0.30 Special Dividend

As part of a reconfigured capital allocation strategy devised last month, Tessera Technologies (NASDAQ: TSRA  ) is going to pay a special distribution to its stockholders of $0.30 per share of its common stock. It will be paid May 31 to shareholders of record as of May 23.

The company said the new distribution is in line with the adjusted strategy, and that it is derived from "episodic revenue" brought in over the past four quarters, net of certain costs. The company defines episodic revenue as "revenue other than revenue payable over at least one year pursuant to a contract, and may include revenue such as non-recurring engineering fees, initial license fees, back payments resulting from audits, damages awards from courts or tribunals, and lump sum settlement payments."

The new capital allocation plan allows for special dividends to be handed out once per year. These are to be equal to 20%-30% of its "episodic gain," which according to Tessera Tech is "episodic revenue minus pro-rata litigation costs and actual audit costs, taxed at the last fiscal year's book tax rate." Tessera's most recent declared quarterly dividend was $0.10.

link

Top 5 Penny Companies To Invest In 2014

I cringed at the headline: "Why decimalization is a bad idea." It's the second article I had seen in as many days apparently supporting a proposed new Congressional bill that I find incredibly stupid.

Of course, I'd also misread the headline. What it actually said was "Why�dedecimalization is a bad idea" [emphasis mine]. And it wasn't just the headline that Felix Salmon nailed, as he concluded in the post that "there's no way that small investors can possibly benefit from this."

Amen.

But let's backtrack for a moment. The "problem" this bill attempts to rectify is that there are many small public companies out there that don't have much Wall Street research coverage. The reason is that trading is so sparse and spreads -- that is, the difference between the bid and ask prices -- are so thin that there's little money for Wall Street firms to make trading the stocks and, thus, little reason to follow them closely. This situation was a result of "decimalization" -- the changeover from quoting stocks in fractions to decimals, which allowed bid/ask spreads to fall in many cases to just a penny.

Top 5 Penny Companies To Invest In 2014: Sirius XM Radio Inc.(SIRI)

Sirius XM Radio Inc. provides satellite radio services in the United States and Canada. It broadcasts a programming lineup of approximately 135 channels of commercial-free music, sports, news and information, talk and entertainment, traffic, and weather on subscription fee basis through two satellite radio systems in the United States; and holds an interest in the satellite radio services offered in Canada. The company also simulcasts music and selected non-music channels over the Internet; and offers applications to allow consumers to access its Internet services on mobile devices. As of December 31, 2010, it had 20,190,964 subscribers. In addition, the company designs, establishes specifications, sources or specifies parts and components, and manages various aspects of the logistics and production of satellite radios; licenses its technology to various electronics manufacturers to develop, manufacture, and distribute radios under various brands; and imports radios distri buted through its Websites. The company?s satellite radios are primarily distributed through automakers, retailers, and its Websites. Further, it provides music services for commercial establishments; a satellite television service to offer music channels as part of certain programming packages on the DISH Network satellite television service; music and comedy channels to mobile phone users through mobile phone carriers; Backseat TV, a service offering television content designed primarily for children in the backseat of vehicles; Travel Link, a suite of data services that include graphical weather, fuel prices, sports schedules and scores, and movie listings; and real-time traffic and weather services. The company was formerly known as Sirius Satellite Radio Inc. and changed its name to Sirius XM Radio Inc. in August 2008. Sirius XM Radio Inc. was founded in 1990 and is headquartered in New York, New York.

Advisors' Opinion:

• [By Chuck Carlson]

  SIRI has seen steady gains since September 2010, and the company continues to put out new and exciting channels for its satellite radio such as the latest one, Studio 54.Regardless, some investors hav e expressed caution regarding the company. This article, also from Seeking Alpha, brings up some great points that are certainly worth mentioning. In many ways, Sirius XM has not taken full advantage of traditional Internet or the mobile market.Even some users of the company’s technology readily admit that its Internet and mobile services aren’t great. Sirius’s use of advertising and reaching out to certain demographics has also been lacking. Despite all these important points though, the fact remains that competition in the radio industry is quite weak. Net income for Sirius’s most serious (no pun intended) competitor Pandora (P) has been negative for 2 straight quarters now. SIRI also beats P in some other statistics. Gross margin and operating margin for SIRI are both about 20 percentage points higher. Additionally, price to sale ratio for P is a whopping 11.69, while SIRI’s is a much more reasonable 2.39. While more traditional radio broadcasters like Cumuls Media (CMLS) and Westwood One (WWON) have the best price to sale ratios (0.43 and 0.37 respectively), it is quite clear that these companies are a dying breed.

• [By Michael Brush]

  Howard Stern lemmings piled into Sirius stock years ago when the shock jock moved his circus to satellite radio. Many lost almost all their money, as the company's stock fell under $1 from above $8.

  But with a 2008 buyout of XM Radio and a bankruptcy scare under its belt, Sirius XM Radio (SIRI) is now a dominant force on the comeback trail.

  Skeptics believe iPods and free Web radio services like Pandora will jam the signal at Sirius, which charges $12.95 a month. But satellite radio offers content that listeners can't find elsewhere on the radio -- not only Stern, but also Martha Stewart, Oprah Winfrey, Jamie Foxx, Barbara Walters and a Playboy channel, to name a few.

  And recent trends confirm that drivers are willing to pay for that content. Sirius XM Radio's subscriber base grew last year by 8%, to 20.2 million. That helped drive revenue up 14%, to $2.82 billion. "It's kind of like the original cable TV, when everyone thought people wouldn't pay for TV because it's free," says Robert Routh, a media analyst at Phoenix Partners. "Sirius XM Radio has lot of stuff you can't get elsewhere." The reason: While terrestrial radio companies lack the funds to buy the big talent, Sirius XM Radio can buy wh atever it wants to fill its 135 channels, says John Tinker, an analyst with Maxim Group.

  Two other keys to growth: Sirius XM Radio is available for free for a few months in 60% of all new cars. As car sales rise in an improving economy, subscriber growth should increase. A Sirius 2.0 upgrade and a possible rate increase later this year will also drive gains. All-important cash flow could hit $1 billion a year by 2015, predicts Morgan Stanley analyst David Gober. He says Sirius XM Radio will be announcing dividends and share buybacks -- music to investors' ears

• [By Tom Bishop]

  Sirius XM Radio Inc. (SIRI) Sirius has a market cap of $6.86 billion with a price-to- earnings ratio of 44.63. The stock has traded in a 52-week range of $1.10 to $2.44. The stock is currently trading around $1.80. On August 2nd, the company reported revenue of $744 million compared with revenue of $700 million in the second quarter of 2010. Second quarter net income was $173 million compared with net income of $15.3 million in the second quarter of 2010.

  One of Sirius XM’s competitors is Westwood One Inc. (WWON). Westwood One is currently trading around $4 with a market cap of $89.73 million and a negative price-to -earnings ratio.

  Sirius XM has been in an upward trend. In the second quarter, the company increased net income by 1,013% from the second quarter of 2010. In 2010, the company announced that it had increased its annual net income by $572.2 million, when it reported its first ever profit of $43.1 million. The company has completed building its infrastructure and should be able to reduce costs. The company recently reaffirmed its guidance of 10% revenue growth and free cash growth of 75%. Sirius XM has a lot of debt but should be able to pay down debt with the additional cash. Investors like what they see in Sirius and have bid up the stock price by 62% over the last 52 weeks. Additionally, we don't see Pandora (P) as a serious threat. I rate Sirius XM Radio Inc. a buy.

• [By Michael Brush]

  Howard Stern lemmings piled into Sirius stock years ago when the shock jock moved his circus to satellite radio. Many lost almost all their money, as the company's stock fell under $1 from above $8.

  But with a 2008 buyout of XM Radio and a bankruptcy scare under its belt, Sirius XM Radio (SIRI) is now a dominant force on the comeback trail.

  Skeptics believe iPods and free Web radio services like Pandora will jam the signal at Sirius, which charges $12.95 a month. But satellite radio offers content that listeners can't find elsewhere on the radio -- not only Stern, but also Martha Stewart, Oprah Winfrey, Jamie Foxx, Barbara Walters and a Playboy channel, to name a few.

  And recent trends confirm that drivers are willing to pay for that content. Sirius XM Radio's subscriber base grew last year by 8%, to 20.2 million. That helped drive revenue up 14%, to $2.82 billion. "It's kind of like the original cable TV, when everyone thought people wouldn't pay for TV because it's free," says Robert Routh, a media analyst at Phoenix Partners. "Sirius XM Radio has lot of stuff you can't get elsewhere." The reason: While terrestrial radio companies lack the funds to buy the big talent, Sirius XM Radio can buy whatever it wants to fill its 135 channels, says John Tinker, an analyst with Maxim Group.

  Two other keys to growth: Sirius XM Radio is available for free for a few months in 60% of all new cars. As car sales rise in an improving economy, subscriber growth should increase. A Sirius 2.0 upgrade and a possible rate increase later this year will also drive gains. All-important cash flow could hit $1 billion a year by 2015, predicts Morgan Stanley analyst David Gober. He says Sirius XM Radio will be announcing dividends and share buybacks -- music to investors' ears.

Top 5 Penny Companies To Invest In 2014: Nicholas Financial Inc.(NICK)

Nicholas Financial, Inc., through its subsidiaries, operates as a specialized consumer finance company. The company engages in acquiring and servicing contracts for purchases of new and used automobiles and light trucks. It also makes direct loans and sells consumer-finance related products. In addition, the company engages in developing, marketing, supporting, and updating industry-specific computer application software for small businesses located primarily in the Southeast United States. As of April 5, 2011, it operated 56 branch locations in 14 Southeastern and Midwestern states. The company was founded in 1986 and is headquartered in Clearwater, Florida.

Top 5 Up And Coming Companies To Own For 2014: Torch Energy Royalty Trust(TRU)

Torch Energy Royalty Trust, a grantor trust, holds net profits interests, to receive payments from the working interest owners. Its working interest owners include Torch Royalty Company, Torch E&P Company, Samson Lone Star Limited Partnership, and Constellation Energy Partners LLC. The trust is entitled to receive 95% of the net proceeds attributable to oil and natural gas produced and sold from wells on the underlying properties, including Chalkley Field in Louisiana; the Robinson?s Bend Field in the Black Warrior Basin in Alabama; Cotton Valley Fields in Texas; and Austin Chalk Fields in central Texas. Torch Energy Royalty Trust was founded in 1993 and is based in Wilmington, Delaware.

Top 5 Penny Companies To Invest In 2014: Security National Financial Corporation(SNFCA)

Security National Financial Corporation, together wit its subsidiaries, provides various insurance and annuity products in the United States. It operates in three segments: Life Insurance, Cemetery and Mortuary, and Mortgage Loans. The Life Insurance segment engages in selling and servicing certain lines of life insurance, annuity products, and accident and health insurance products. This segment also involves in funeral plans and interest-sensitive life insurance, as well as other traditional life and accident, and health insurance products. It sells its products through direct agents, brokers, and independent licensed agents. The Cemetery and Mortuary segment offers various products that include grave spaces, interment vaults, mausoleum crypts and niches, markers, caskets, flowers, and other related products. This segment also provides services, such as professional services of funeral directors, opening and closing of graves, use of chapels and viewing rooms, and use of automobiles and clothing. It sells its products and services through sales representatives. As of December 31, 2009, the segment owned 6 cemeteries and 10 mortuaries. The Mortgage Loans segment originates and underwrites residential and commercial loans for new construction, existing homes, and real estate projects primarily in Arizona, California, Florida, Hawaii, Indiana, Kansas, Oklahoma, Oregon, Texas, Utah, and Washington. The company was founded in 1965 and is headquartered in Salt Lake City, Utah.

Top 5 Penny Companies To Invest In 2014: Horizon Lines Inc.(HRZ)

Horizon Lines, Inc., through its subsidiaries, provides container shipping and integrated logistics services. It ships a range of consumer and industrial items, such as refrigerated and non-refrigerated foodstuffs, household goods, auto parts, building materials, and other materials used in manufacturing. The company offers container shipping services to ports within the continental United States, Puerto Rico, Alaska, Hawaii, Guam, the U.S. Virgin Islands, and Micronesia. Its integrated logistics services comprise rail, truck brokerage, warehousing, distribution, expedited logistics, and non-vessel operating common carrier operations. Horizon Lines, Inc. also offers terminal services. The company operates terminals in Alaska, Hawaii, and Puerto Rico; contracts for terminal services in seven ports in the continental United States; and the ports in Guam, Yantian, and Xiamen, China, as well as Kaohsiung, Taiwan. In addition, it offers inland transportation services. As of Dec ember 20, 2009, the company owned or leased approximately 20 vessels and 18,500 cargo containers. Horizon Lines, Inc. serves consumer and industrial products companies, as well as various agencies of the U.S. government, including the Department of Defense and the U.S. Postal Service. The company was founded in 1956 and is based in Charlotte, North Carolina.

Advisors' Opinion:

• [By Hutchinson]

  Horizon Lines (NYSE: HRZ) is the largest oceangoing shipping company in the United States with a dominant market position along protected shipping lanes. One look at the steady resurgence in shipping demand, coupled with the company’s improving financials, and it seems the worst is behind them — making now the perfect time to scoop up this stock at a discount.

  HRZ is up almost 30% since September, and I expect it to continue moving higher. Recent data show more goods are being manufactured, and they need to be shipped. Horizon will be one of the biggest beneficiaries.

  Buy HRZ on pullbacks under $5.

Thursday's Top Upgrades (and Downgrades)

This series, brought to you by Yahoo! Finance, looks at which upgrades and downgrades make sense, and which ones investors should act on. Today, our headlines include upgrades for both Con-way (NYSE: CNW  ) and Beazer Homes (NYSE: BZH  ) . But the news isn't all good, so before we get to those two, let's take a quick look at why...

Interactive Intelligence isn't looking so smart today
After seeing their shares double in stock price over the past year, early investors in Interactive Intelligence  (NASDAQ: ININ  ) were looking pretty smart -- but according to one analyst, they shouldn't let success go to their heads. Calling a top on InIn's run to $50, analysts at Northland Securities announced they're downgrading the stock to "market perform" and rolling back their price target on the stock to $46.

That seems prudent. After all, InIn shares now sell for a lofty 475 times earnings. To put that another way, if profits were to remain at today's levels, and not grow at all, you could buy a share today and not make back your investment for... 475 years. Even with recent medical advances in human lifespan, that seems an imprudent investment plan.

Granted, most analysts do think Interactive Intelligence's profits will grow -- but only at about 15% per year over the next five years. That growth rate moves InIn's share price from the realm of the imprudent, to that of the fantastical.

Honestly, the only question I have for Northland today is why they're stopping at a downgrade to "market perform." At these prices, I'm about as certain as I can be that this stock will in fact underperform the market from here on out.

Can Con-way hit the highway?
I'm more intrigued by our second rating of the day, BB&T Capital's upgrade of trucker Con-way.

BB&T is only upping the stock to hold, from a previous rating of underweight. But with the stock costing 23 times earnings, expected to grow earnings at nearly 19% annually, and paying a 1.1% dividend, Con-way actually looks to me like one of the less egregiously overpriced stocks on the market today. It's also generating positive free cash flow -- a fact not every trucker in the country can claim these days.

That being said, the levels of free cash that Con-way is churning out still remain a bit low for my taste -- about $25 million over the past year, versus reported GAAP net income of $93 million. When you get right down to it, Con-way may be one of the better trucking companies out there, but that still doesn't make it a good stock to buy.

Bummed about Beazer
Sadly, our third stock today is yet another story of disappointment, too-high expectations, and too little opportunity for profit: Beazer Homes.

This morning, analysts at CRT Capital upgraded shares of Beazer to buy, and set a $29 price target on the stock. Try as I might, though, I just don't see how Beazer shares can get there.

The company's not profitable. Beazer lost $146 million over the past 12 months. It's not generating cash. Instead, Beazer burned through nearly $26 million over the same period. Beazer also has a weak balance sheet, burdened with more than $1 billion in net debt. And to top it all off, Beazer isn't even growing all that fast. Analysts have the company pegged for a 4% average growth rate over the next five years.

Sequoias grow faster than that.

Long story short, Beazer is a stock I'd rather be short, than long.

Motley Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Interactive Intelligence.

link

Is It Time to Refinance Again?

Many homeowners have already taken advantage of low interest rates to refinance their mortgages at some point in the past few years. But with rates still edging downward, it may make sense for some homeowners to consider refinancing again.

In the following video, Motley Fool investment planning editor Lauren Kuczala talks with longtime Fool contributor and financial planner Dan Caplinger about making a smart refinancing decision. As Dan points out, low rates have come about due in part to Federal Reserve intervention, but with the economy finally starting to pick up steam, this may be your last chance to lock in rock-bottom rates. He also notes that while banks have gotten stricter about lending standards, they're also scrambling to keep their profits up, giving them an incentive to find a way to help you refinance. Dan closes by explaining how to decide whether the benefits of refinancing outweigh the costs involved.

Bank of America may have tightened its mortgage standards, but it has still relied on its mortgage business to boost its profits. Can the bank's stock keep soaring? To find out whether B of A is still a smart stock buy, check out The Motley Fool's premium research report on the bank. Inside, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, Financials bureau chief, lift the veil on the bank's operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.

The $200 Million Drag on Disney's Stock

Disney's (NYSE: DIS  ) video game division has lost better than $200 million in each of the last three years. But could 2013 be the year that breaks that awful streak?

In the video below, Fool contributor Demitrios Kalogeropoulos discusses Disney's best shot at turning its struggling interactive division around -- by directly challenging one of Activision Blizzard's (NASDAQ: ATVI  ) most profitable franchises.

It's easy to forget that Walt Disney is more than just the House of Mouse. True, Disney amusement parks around the world hosted more than 121 million guests in 2011. But from its vast catalog of characters to its monster collection of media networks, much of Disney's allure for investors lies in its diversity, and The Motley Fool's premium research report lays out the case for investing in Disney today. This report includes the key items investors must watch as well as the opportunities and threats the company faces going forward. So don't miss out -- simply click here now to claim your copy today.

This Congressional Bill Is No Win for Investors

I cringed at the headline: "Why decimalization is a bad idea." It's the second article I had seen in as many days apparently supporting a proposed new Congressional bill that I find incredibly stupid.

Of course, I'd also misread the headline. What it actually said was "Why dedecimalization is a bad idea" [emphasis mine]. And it wasn't just the headline that Felix Salmon nailed, as he concluded in the post that "there's no way that small investors can possibly benefit from this."

Amen.

But let's backtrack for a moment. The "problem" this bill attempts to rectify is that there are many small public companies out there that don't have much Wall Street research coverage. The reason is that trading is so sparse and spreads -- that is, the difference between the bid and ask prices -- are so thin that there's little money for Wall Street firms to make trading the stocks and, thus, little reason to follow them closely. This situation was a result of "decimalization" -- the changeover from quoting stocks in fractions to decimals, which allowed bid/ask spreads to fall in many cases to just a penny.

This leads to what Fortune columnist Dan Primack deemed "a cycle of arrested development." And, as he expanded, that cycle is far less amusing than the TV show of the same name:

They are small, so they are ignored by analysts and market-makers. And because they are ignored by analysts and market-makers, they remain small.

To Primack and supporters of the bill, this sad situation would be mitigated by walking back decimalization and making spreads wider -- between five and 10 cents.

Boiling down Salmon's rebut to Primack: hogwash! Wall Street analyst coverage is not the public-market version of Miracle-Gro. Small companies grow because they have -- among other things -- a good business model and products and services that customers value. Wall Street can choose to not cheerlead a good, small public company to its own detriment. There's only so long that the market can ignore growing profits from a good company, and by the time those big-money Wall Streeters decide to tune in and recommend the shares, their clients may have missed out on a good deal of the growth.

But even if Wall Street glad-handing isn't necessary for a company to grow, perhaps it's nonetheless helpful. And there's a case to be made for that. A public company can access growth capital by selling new shares into the market. The higher the company's stock price, the more money a company can raise at a lower implied cost (for the finance nerds, it creates a lower cost of capital). If these small companies have Wall Street analysts -- known for their bullish bias -- cheering them on, we could expect that financing costs would be lower, more growth capital would be tapped, more jobs would be created, and everybody would be a big, big winner. Yay! Right?

Not so fast. All things held equal, lower financing costs can be cheered as a positive. But in this case, the cost of creating this dynamic is pushed through to investors -- both institutional and retail -- as the total cost of purchasing or selling a stock equals the fees you pay plus the trading spreads. Since this bill would widen those spreads, costs to the investor go up.

And what do investors get in exchange for those higher trading costs? Wall Street rah-rahs small, potentially ill-capitalized companies that are hoping to dilute shareholders through new share sales. And as for the "research" coverage, how many full Wall Street research reports are average retail investors getting access to? Yet they'll be helping to subsidize that research through these wider spreads.

In other words, this isn't a boon for investors small or large, nor is it necessarily helpful to profitable, growing companies or those with attractive business models.

It is, on the other hand, an attractive proposition for Wall Street. Brokers benefit because they profit from the trading spread. It's been a hellish decade-plus for the industry because decimalization has whacked the amount of money they typically make on a trade. This bill would take a step in the opposite direction -- more money in the brokers' pockets via less kept in those of investors.

Wall Street investment bankers should love this as well. Though the big investment banks prefer to do deals for giant companies such as Facebook (cringe), in a tougher deal environment they're likely to take what they can get. This month, Citigroup  (NYSE: C  ) has taken Emerge Energy public, Goldman Sachs  (NYSE: GS  ) has brought Cyan to the public markets, and Wells Fargo  (NYSE: WFC  ) has led Insys Therapeutics' IPO. All of these companies are at or near the market cap threshold for what this bill would cover.

To the extent that Wall Street firms can suddenly make more money dealing in the stocks of smaller companies, it would make doing more deals like these that much more attractive. It's also an additional selling point when the bankers are trying to rustle up business.

In other words, we have a potential bill that would put more money in the pockets of Wall Street at the expense of investors, while amping up the cheer section for small, questionable companies that want to sell more stock to public-market investors.

Come on. Is this for real?

A bank that can continue to win
Wells Fargo's dedication to solid, conservative banking helped it vastly outperform its peers during the financial meltdown. Today, Wells is the same great bank as ever, but with its stock trading at a premium to the rest of the industry, is there still room to buy, or is it time to cash in your gains? To help figure out whether Wells Fargo is a buy today, I invite you to download our premium research report from one of The Motley Fool's top banking analysts. Click here now for instant access to this in-depth take on Wells Fargo.

#pitch{ display: none; }

More Expert Advice from The Motley Fool

The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

3 Inconspicuous Stocks Dividend Investors Love

The power of dividends is nothing new to decade-long income investors. Yet, more recently, droves of investors are jumping on the dividend bandwagon, thanks to all-time low savings rates. But not all dividend-paying stocks are created equal.

Looking beyond the Aristocrat status
These two great examples show us that concentrating on one sole metric, like dividend yield, means that we're likely overlooking potential red flags. Instead, a more sustainable strategy is buying dividend stocks that harness both reliable dividend growth and low payout ratios.

Take a look at these three under-the-radar companies. While each of them belongs to the elite S&P 500 Dividend Aristocrats, an exclusive club of blue chips that have boosted their dividends for at least 25 consecutive years, these three are great dividend stocks for other reasons too.

1. VF (NYSE: VFC  )
Through economic (and consumer waistline) recessions and expansions, the company behind North Face apparel and 7 For All Mankind jeans has increased its dividend for an impressive 40 years! VF pays a modest 1.9% dividend yield, but don't let that dupe you. The company has increased its dividend by 248% over the past decade, outpacing the Consumer Price Index nearly tenfold.

And VF's dividend payout ratio, which indicates how much of the company's net income is paid to shareholders through dividends, is 31%. That means the company has plenty of room to grow its dividend even more in the future.

In the ultra-premium-priced jeans market, VF has gained some of competitor True Religion's (NASDAQ: TRLG  ) female customers on pricing. True Religion's stock has vastly underperformed, and its profitability has shrunk. Meanwhile, VF's has skyrocketed. For the first quarter, VF's earnings were up an impressive 25%. 

2. Sigma-Aldrich (NASDAQ: SIAL  )
Maker of test tubes and beakers, Sigma-Aldrich has increased its dividend every year since 1976. Even though the company pays a relatively scrawny 1.1% dividend yield, its 21% payout ratio signals the company has ample opportunity to up its dividend for many years to come.

Sigma-Aldrich recently hiked its dividend by 7.5%. And during the past decade, the specialty chemical maker has upped its dividend at a rate that outpaced the CPI more than sixfold. Last quarter, Sigma-Aldrich was value investing giant Donald Yachtman's biggest new holding. 

3. Illinois Tool Works (NYSE: ITW  )
This maker of industrial products and equipment like fasteners, coatings, and plastic stretch films has increased its dividend for 49 consecutive years. Even though the stock suffered badly in 2008 when the construction and transportation industries it depends on were hit hard, Illinois Tool Works is greatly benefiting from the current economic recovery.

Its stock currently boasts a 2.2% dividend yield, and the company recently grew its dividend by 5%. In fact, the Illinois-based manufacturer increased its dividend by 230% over the past decade, outpacing the CPI by eight-and-a-half times. Its payout ratio is a very healthy 26%. 

Foolish takeaway
By ignoring companies that pay lower yields, you're likely missing out on the next best dividend growth stocks. Don't stop your search at high dividend yields alone. Be sure the company has the financial resources to boost its dividend, effectively giving you a pay raise, for years to come.

If you want more great dividend stock ideas, you'll want to read The Motley Fool's new free report, "5 Dividend Myths... Busted!" In it, you'll learn which stocks provide premium growth and whether bigger dividends are better. Click here to keep reading.

Will the Dow's Pause Refresh Bullish Investors?

Today's news from the financial markets was mixed regarding the U.S. economic outlook, with rising confidence levels from homebuilders inching closer to outright optimism. Moreover, prices at the wholesale level posted another sharp drop in April following a similar decline in March that brought year-over-year price gains to just 0.6%. Yet those developments were offset by a bigger-than-expected drop in industrial production and an unexpected decline in New York regional manufacturing activity, which helped restrain the stock market. As of 10:55 a.m. EDT, the Dow Jones Industrials (DJINDICES: ^DJI  ) are down a mere five points. The broader market is also flat, signaling a pause in the latest record-breaking run for the S&P 500 and Dow in recent weeks.

Leading the decliners in the Dow is Hewlett-Packard (NYSE: HPQ  ) , which has fallen 2.1%. IDC released projections forecasting a slower rate of growth in worldwide IT spending. This could pose a threat to HP's turnaround strategy, which hinges on its ability to widen its customer base and pull in revenue from a broader range of business segments. IDC blamed weak PC shipments for the slowdown, confirming a separate report showing a decline of more than 20% in Western European PC shipments during the first quarter of 2013 compared with the year-ago quarter. HP will need to accelerate its efforts to go beyond PCs if it wants to grow faster in the future.

Caterpillar (NYSE: CAT  ) has dropped 1.1% after heavy-equipment peer Deere (NYSE: DE  ) reported earnings this morning. Deere has fallen more than 5% despite beating estimates for its first-quarter results, as investors instead focused on a weakening sales forecast. Although Deere's agricultural-equipment focus leaves it somewhat more exposed to unpredictable events like weather and crop prices, Caterpillar shares the same general vulnerability to overall economic conditions that have led some customers to defer making large capital expenditures. Without a broader-based recovery, Caterpillar may continue to lag.

Finally, outside the Dow, Zynga (NASDAQ: ZNGA  ) has soared almost 7% after hedge fund Jana Partners reported taking a 25 million-share stake in the social-gaming company. With today marking the date on which money managers are required to disclose their holdings, you can expect to see a lot of attention on the moves influential Wall Street pros are making. For Zynga, a vote of confidence is much-needed support for a stock that has languished ever since its post-IPO optimism gave way to poor results.

Despite today's bounce, Zynga investors are beginning to wonder whether it's "game over" for the social-gaming company. You can learn everything you need to know about Zynga and whether it's a buy or a sell in our new premium research report. Don't even think about picking up shares before you read what our top analysts have to say about Zynga. Click here to access your copy.

Is Chipotle Mexican Grill a Cash King?

As an investor, you know that it pays to follow the cash. If you figure out how a company moves its money, you might eventually find some of that cash flowing into your pockets.

In this series, we'll highlight four companies in an industry and compare their "cash king margins" over time, trying to determine which has the greatest likelihood of putting cash back in your pocket. After all, a company can pay dividends and buy back stock only after it's actually received cash -- not just when it books those accounting figments known as "profits."

Today, let's look at Chipotle Mexican Grill (NYSE: CMG  ) and three of its peers.

The cash king margin
Looking at a company's cash flow statement can help you determine whether its free cash flow backs up its reported profit. Companies that can create 10% or more free cash flow from their revenue can be powerful compounding machines for your portfolio. A sustained high cash king margin can be a good predictor of long-term stock returns.

To find the cash king margin, divide the free cash flow from the cash flow statement by sales:

Cash king margin = Free cash flow / sales

Let's take McDonald's (NYSE: MCD  ) as an example. In the four quarters ending in December, the restaurateur generated $6.97 billion in operating cash flow. It invested about $3.05 billion in property, plant, and equipment. To calculate free cash flow, subtract McDonald's investment from its operating cash flow. That leaves us with $3.92 billion in free cash flow, which the company can save for future expenditures or distribute to shareholders.

Taking McDonald's sales of $25.5 billion over the same period, we can figure that the company has a cash king margin of about 14% -- a nice high number. In other words, for every dollar of sales, McDonald's produces $0.14 in free cash.

Ideally, we'd like to see the cash king margin top 10%. The best blue chips can notch numbers greater than 20%, making them true cash dynamos. But some businesses, including many types of retailing, just can't sustain such margins.

We're also looking for companies that can consistently increase their margins over time, which indicates that their competitive position is improving. Erratic swings in margins could signal a deteriorating business, or perhaps some financial skullduggery; you'll have to dig deeper to discover the reason.

Four companies
Here are the cash king margins for four industry peers over a few periods.

Company

Cash King Margin (TTM)

1 Year Ago

3 Years Ago

5 Years Ago

Chipotle Mexican Grill	11.5%	8.6%	9.4%	2.1%
McDonald's (NYSE: MCD  )	14.2%	16.4%	17.6%	15.1%
Yum! Brands (NYSE: YUM  )	7.9%	9.2%	6.2%	7.7%
Wendy's (NASDAQ: WEN  )	(0.3%)	4.1%	7.9%	(4.2%)

Source: Capital IQ, a division of Standard & Poor's.

Of the companies listed, only Chipotle and McDonald's meet our 10% threshold for attractiveness. Chipotle has also offered substantial growth in its cash king margins from five years ago. Yum! Brands has the third highest margins at nearly 8%, but it hasn't offered much growth over the five-year period. Wendy's has negative cash king margins, with current margins the lowest they've been in the past five years. However, while McDonald's offers an attractive 3.1% dividend yield, and Wendy's offers 3%, and Yum! Brands offers 2.1%, Chipotle doesn't offer a dividend at all.

Chipotle's most recent quarterly report showed a 22% increase in earnings, with much of its growth driven by new stores. However, it had low expectations for future same-store sales growth, which is also important. Also, like McDonald's, Yum! Brands, and Wendy's, Chipotle faces the dual pressure of high ingredient prices and consumers who are looking to cut back costs, which creates pressure to narrow margins. Chipotle has faced additional competitive pressures, too, as these companies compete for health-conscious customers.

The cash king margin can help you find highly profitable businesses, but it should be only the start of your search. The ratio does have its limits, especially for fast-growing small businesses. Many such companies reinvest all of their cash flow into growing the business, leaving them little or no free cash -- but that doesn't necessarily make them poor investments. Conversely, the formula works better for slower-growing blue chips. You'll need to look closer to determine exactly how a company is using its cash.

Still, if you can cut through the earnings headlines to follow the cash instead, you might be on the path toward seriously great investments.

Chipotle's stock has been on an absolute tear since the company went public in 2006. Unfortunately, 2012 hasn't been kind to Chipotle's stock, as investors question whether its growth has come to an end. Fool analyst Jason Moser's premium research report analyzes the burrito maker's situation and answers the question investors are asking: Can Chipotle still grow? If you own or are considering owning shares in Chipotle, you'll want to click here now and get started! 

The 3 Areas Investors Must Watch at Caterpillar

In this video, Motley Fool industrials analyst Blake Bos outlines three areas investors need to watch at Caterpillar (NYSE: CAT  ) . First, the integration of acquisitions: Caterpillar has made some historically large acquisitions. How these acquisitions are integrated into the company and how synergies are achieved will be important. Second, commodity prices: One of Caterpillar's acquisitions was Bucyrus, a mining equipment company. While this expanded Caterpillar's presence in the mining industry, that same business is highly sensitive to commodity prices. If commodities fall, so will revenues from this segment. Lastly, Caterpillar is looking to roll out a new manufacturing system to help reduce costs. This could be important for its future growth in China where Caterpillar competes with Komatsu. Right now, Komatsu has the largest market share in China -- Caterpillar will need all the help it can get to successfully compete.

Caterpillar is the market share leader in an industry in which size matters, and its quality products, extensive service network, and unparalleled brand strength combine to give it solid competitive advantages. Read all about Caterpillar's strengths and weaknesses in The Motley Fool's brand-new report. Just click here to access it now.

Google+ Rolls Out Mobile, Content Recommendations for Websites

When Is the Party Over for Big Bank Stocks?

Bank of America (NYSE: BAC  ) and Goldman Sachs (NYSE: GS  ) have been great stocks to own over the past year, and both companies were trading higher in early trading today. However, investors who purchased shares at the beginning of 2011 have undoubtedly been disappointed as both stocks have significantly lagged the market.

In this video, Motley Fool banking analysts David Hanson and Matt Koppenheffer discuss these two companies and why shares might not be overheated today.

Is the legal-monkey off B of A's back or is there more yet to come? With significant challenges still ahead, it's critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool's premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, Financials bureau chief, lift the veil on the bank's operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.

#pitch{ display: none; }

More Expert Advice from The Motley Fool

The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

Shares of Video Game Makers Soar Amid Sluggish Sales

Sales of video games and consoles have been sluggish, but shares of the game makers are soaring.

The research group NPD reports that domestic sales of video games by retailers fell nearly 10 percent in the first-quarter.

But investors are overlooking some middling performance and focusing on what they hope will be an exciting future.

So far this year, shares of Activision Blizzard (ATVI) and Take-Two Interactive (TTWO) have both soared by more than 40 percent. Industry leader Electronic Arts (EA) is up 24 percent.

And retailer Gamestop (GME) has beat them all, up 49 percent since the beginning of the year.

Electronic Arts and Activision will report first quarter results this week, and analysts aren't expecting anything special.

Invision for Xbox/AP Images So what's driving the stocks higher despite so-so performance? It's the expectation for a new round in the console war, with new Xbox and PlayStation models rolling out in time for the holidays. Microsoft (MSFT) is expected to unveil the new Xbox on May 21st.

And we already know Sony's (SNE) PlayStation 4 will have touch-sensing controllers and a 'share' button to allow gamers to live-cast their play to friends. Sony is likely to release more details at next month's E3 videogame conference.

In the meantime, though, console sales have slumped as gamers await the new models, or anticipate that current models will be deeply discounted.

As for the game makers, they've had some high profile releases this year. EA has "Crysis 3" and "Dead Space 3". Analysts will be watching sales of those games when the company reports.

EA has also been dealing with the surprise resignation in mid-March of its CEO. The company has not yet named a replacement. And the company warned that its earnings for the first-quarter were likely to fall short of Wall Street expectations.

A fourth video game maker, THQ, filed for bankruptcy in December, and it's in the process of selling of its business in parts.

The tepid offering of new games has weighed on Game Stop. The retailer is also dealing with a customer base that has been migrating to cheaper mobile and social games. EA forecasts that digitally delivered video games may account for half of its sales by 2015.

Will Vodafone Group Bid For Liberty Global?

LONDON -- In the latest edition of this long-running story, it has been suggested that Vodafone  (LSE: VOD  ) (NASDAQ: VOD  ) could use a substantial amount of the money it would receive from selling its stake in Verizon Wireless to fund a takeover of Liberty Global  (NASDAQ: LBTYA  ) .

Analysts at Citigroup have declared that an acquisition would be both within Vodafone's reach, and also align with CEO Vittorio Colao's long-term strategy of the company becoming a one-stop shop by offering Internet and television services to customers on its existing mobile network.

Citigroup commented:

For Vodafone, Liberty Global could have strategic advantages giving it a strong portfolio of northern European cable assets, rebalancing the group away from Southern Europe and providing it with a high speed broadband offering, cost synergy, an upgrade path for its own broadband customers and network backhaul options.

Liberty is currently negotiating a purchase of Virgin Media, which would instantly offer Vodafone a television service in the U.K. should it acquire the U.S. cable and telecoms company. 

With increasingly louder noises emanating from Verizon Communications about an interest in bringing its joint-venture with Vodafone under its sole wing, a bandied-about figure of between 65 billion pounds and 85 billion pounds would more than cover a takeover of Liberty, which is valued at around 50 billion pounds -- and, importantly for investors, still return a large proportion of that excess takeover cash to shareholders.

Another player has been (perhaps unwittingly) drawn into this arena, then. There was little movement in Vodafone's shares upon the announcement, as they still hover near 197 pence and close to breaking the 200 pence mark, not seen since November 2011. Investors remain waiting for some concrete news, though, hoping for a sizable return on top of the consensus yield of around 5% that Vodafone currently offers.

If you are looking for opportunities in the FTSE 100 outside of Vodafone, though, this exclusive wealth report reviews five particularly attractive alternatives.

All five of these blue-chip companies offer a mix of robust prospects, illustrious histories and dependable dividends. The report is completely free, but will only remain available for a limited time -- simply click here to get it sent to your inbox immediately.

SoftBank Strong-Arms Potential DISH Lenders

SoftBank recently laid out point-by-point why it thought its bid for Sprint Nextel (NYSE: S  ) was superior to the bid from DISH Network (NASDAQ: DISH  ) . For value, timing, leverage, structure, financing, and mobile expertise, according to SoftBank, it held the advantage.

Now, SoftBank is trying to ensure that DISH definitely has problems getting financial help from investment banks. According to the Financial Times, which cited two people in the know, SoftBank is threatening the chances of any DISH lender to get a piece of the Alibaba IPO anticipated by the beginning of 2014.

SoftBank holds one-third of Alibaba, the Chinese Internet commerce company, and its public offering is valued at $60 billion to $80 billion, according to FT. Reuters has reported that one Wall Street bank has already pulled out from a lending deal for DISH because it didn't want to upset any chance of a role in the Alibaba IPO.

DISH has been trying to get into the wireless communications business and has been accumulating spectrum licenses from bankrupt satellite companies. Late last year, it made a counteroffer to Sprint's bid to buy Clearwire (NASDAQ: CLWR  ) .

It seems that the DISH offer was intended to gain enough control of Clearwire to thwart Sprint's buyout attempt, and then to remove the reason for SoftBank's interest in Clearwire -- its large spectrum cache.

Late last week, DISH held a conference call for industry analysts and journalists to answer questions about its proposed transaction. Chairman and co-founder Charlie Ergen said one big advantage Sprint would get from selling to DISH would be its spectrum.

"SoftBank, on the other hand, only has cash, right. And if they bring cash to the United States, they don't really enhance anybody, because ultimately, spectrum is what you need," he said. "So AT&T with more cash doesn't mean anything. AT&T with more spectrum is formidable."

But cash is still important, and Charlie and company will still need to borrow $9 billion from somewhere to buy Sprint.

The Motley Fool's chief investment officer has selected his No. 1 stock for the year. Find out which stock it is in the brand-new free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

Grab the Best Money Market Rates You Can

If you're looking to park some money in a money market fund, it makes a lot of sense to seek out the best money market rates. But before you actually commit any money, take some time to review the big picture.

The first thing to keep in mind as you look for the best money market rates is that money market accounts are best for short-term savings, not long-term investments. That's especially true today, in our low-interest-rate environment.

As an example, I looked up the prevailing interest rate for a basic money market account at my own bank, and found that for accounts with less than $10,000, the rate was just 0.15%. For those with $100,000 or more, it's still just 0.80%. Imagine that. If you had a whole million dollars in such an account, it would kick out just $8,000 per year! If you had a more typical $5,000 in the account and were earning 0.15%, you'd collect... $7.50 per year. Enough for a sandwich, perhaps.

Small differences add up
That's why it does pay off to find the best money market rates that you can. At sites such as Bankrate.com, for example, you can find the best rates near you, or the best rates nationally -- and there are plenty of financial institutions, such as Internet-based ones, that don't require you to live nearby.

A recent search turned up a 1.01% rate for accounts with at least $1,500 at EverBank, and a 0.85% rate from American Express. With a $5,000 account, you'd receive $50.50 from EverBank, and $42.50 from American Express. It beats the sandwich, at least.

Aim higher and longer
But here's a big problem: Historically, inflation has averaged about 3% annually. So even if you're earning 1% annually in interest, you're losing purchasing power over time. These days, even the best money market rates aren't likely to maintain the value of your investment, much less increase it.

Thus, consider alternatives. Dividend-paying stocks might draw your attention, since plenty of them have been consistently paying shareholders for many years, and frequently with yields above 3%. But be careful. The best of them will keep paying you no matter what the economy or stock market are doing, but at least over short periods, the value of even terrific stocks can sink temporarily. You don't want that to happen right before you need to sell and collect your proceeds. Money that you'll need within the next few years (and even 10 years, if you want to be very conservative and risk-averse) should not be in stocks.

A better compromise might be CDs. One-year CDs recently offered about 1% in yields, while two-year ones ranged up to 1.16% and five-year ones up to 1.6%. Those will likely beat the best money market rates you'll find, but they probably won't keep up with inflation, either. Other options include a variety of bonds, though there are cautions to heed there, as well.

If you're going to invest in a money market account, do seek out the best rates you can find, but if the difference between the best rate and your bank's more convenient rate is just a sandwich or two, perhaps stay put. Just don't park any long-term money in these accounts if you're looking for any kind of growth.

If you're an investor who prefers returns to rhetoric, you'll want to read The Motley Fool's new free report, "5 Dividend Myths... Busted!" In it, you'll learn which stocks provide premium growth and whether bigger dividends are better. Click here to keep reading.

[1] [4] [5] [8] [12] [13] [15] [17] [21] Hot Value Stocks To Own Right Now

tags:NYSE, NKE  ,NASDAQOTH, ADDYY  ,,Value,USA,Retail,Undervalued,DLTR,Energy,Oil & Gas Services,Oil&Gas Services,SLB,TUP,Industrial Goods,Capital,Machinery-Constr & Mining,Machinery-Constr&Mining,CAT,

The old maxim that any publicity is good publicity doesn't seem to hold up as well today as it once supposedly did, but companies always seem shocked -- shocked! -- when one of their celebrity spokespeople becomes embroiled in a controversy.

I mean, what exactly did Reebok think it was getting when it signed on rapper Rick Ross to promote its sneakers? Didn't the company listen to the lyrics of his music before handing over millions of dollars to him? And now that one of his songs blew up in its face -- promoting date rape doesn't exactly sit well with many people -- the sneaker maker is suddenly distressed by all the negative publicity being showered on it. The company ended up severing its ties with the rapper, saying, "Reebok holds our partners to a high standard, and we expect them to live up to the values of our brand."

Hot Value Stocks To Own Right Now: Dollar Tree Inc.(DLTR)

Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.

Advisors' Opinion:

• [By Sam Collins]

  Dollar Tree (NASDAQ:DLTR) is a leading operator of discount variety stores. The stock has hugged its 50-day moving average since mid-February. But a recent minor revision of earnings for this year by several analysts and the recent market sell-off have resulted in a fall from its high of the year at over $70 to under $66. However, Goldman Sachs (NYSE:GS) increased its price target to $73 from $69.

  Technically DLTR is oversold, according to MACD. A break below its 50-day moving average could result in a pullback to $64, but positions could be taken at the current market price. The trading target for DLTR is $72.

Hot Value Stocks To Own Right Now: Schlumberger N.V.(SLB)

Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas.

Advisors' Opinion:

• [By Brian Stoffel]

  This company has been a pick of both Jordan DiPietro and Bryan White. And both analysts have pointed to the company's opportunity for oil exploration abroad -- which is where much of the demand will soon be coming from as well.

  Bryan points out that three-fourths of the company's revenue comes from abroad, with "Brazil, the Middle East, and Africa [as] key regions where activity is expected to be robust and growing."

  Jordan adds, "[Schlumberger] has an important presence in high-growth regions of the world such as Iraq, Mexico, and Russia, and has the competitive advantage to be able to offer full services, from managing entire oil fields to drilling wells."

• [By Dug]

  Schlumberger(SLB) continues to lead the sector, particularly outside the U.S. in the growing markets for vertical drilling. Schlumberger remains my favorite. Another smaller company to look at with growing work in complex procedures is Helmerich & Payne(HP).

• [By Michael]

  Schlumberger Limited (NYSE: SLB): Cramer also had more than $100,000 invested in SLB. As of Feb. 15, his charitable trust owns 1,300 shares for a total of about $100,724. SLB is also quite popular among hedge funds. At the end of last September, there were 42 hedge funds with SLB positions in their 13F portfolios. Ken Fisher was the most bullish hedge fund manager about SLB -- Fisher Asset Management had nearly $500 million invested in SLB at the end of the third quarter. Jim Simons’ Renaissance Technologies also invested nearly $200 million in this stock.

  Schlumberger has reasonable debt levels, growing net income and revenue, and healthy cash flow from operations. It is relatively expensive compared with its competitors though. SLB has a forward P/E ratio of 13.6. Its expected annual EPS growth rate is 21.82% on the average for the next five years, which means that its P/E ratio for 2014 will be around 9.2. This is quite low compared with the market, but not so versus its peers.

Top 5 Safest Stocks To Invest In 2014: Tupperware Corporation(TUP)

Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.

Advisors' Opinion:

• [By Sam Collins]

  Household name Tupperware Brands Corp. (NYSE:TUP) is a global direct seller of products with multiple brands through an independent sales force of 2.4 million people. Its product line focuses on kitchen storage and serving solutions, as well as personal-care products. Over 60% of sales in 2011 are expected to come from Europe and Asia, and the stock has appeal as an emerging markets story.

  S&P estimates that 2011 earnings will increase to $4.54 versus $3.53 in 2010, and it increased its rating to a “five-star strong buy” with a recently revised 12-month target of $81, up from $73. The 2005 purchase of Sara Lee’s (NYSE:SLE) direct-sales business, which has a high growth rate, should be a long-term benefit. TUP’s annual dividend yield is 1.92%.

  Technically TUP had a pullback following a new high at over $70 and is currently oversold. Buy TUP at the current market price with a trading target of $70, but longer term a much higher target will likely be attained.

Hot Value Stocks To Own Right Now: Caterpillar Inc.(CAT)

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.

Advisors' Opinion:

• [By Sam Collins]

  Caterpillar (NYSE:CAT) is the world’s largest producer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. The stock has been in a bull market since the market bottomed in March 2009. CAT was one of our Top Stocks to Buy for December because of its position as a major supplier to the third world and China. The company should also be a beneficiary of orders from Japan due to the damage from earthquakes and the tsunami.

  Revenues in 2011 are expected to increase by 36%, according to S&P, and margins are expected to increase, as well. Earnings for 2012 are forecast at $9.10, up from $7.50 this year, and S&P has a target of $142 over the next 12 months.

  Technically CAT has strong support at $95 and currently appears to be oversold, according to Moving Average Convergence/Divergence (MACD). If it is able to hold at the support line, look for a rally to $110 within 30 days. Longer term the stock could trade north of $125.

• [By Jim Cramer,TheStreet]

  Caterpillar (CAT) could be a monster in 2011, especially with the integration of Bucyrus International (BUCY), which I think will turn out to be a fantastic acquisition.

  Current earnings-per-share estimates of about $6 are, I think, way too low. I see this stock going to $120 in the next year. Too gutsy? Ask yourself what happens if the United States comes back as a growth nation? Right now almost all of the growth is overseas.

  Still a fantastic mineral play and a terrific call on world growth.

• [By Jim Cramer]

  this stock could be a monster in 2011, especially with the integration of Bucyrus (BUCY), which I think will turn out to be a fantastic acquisition. Estimates, currently showing EPS at about $6, I think are way, way too low. I see this stock going to $120 in the next year. Too gutsy? Ask yourself what happens if the United States comes back as a growth nation. Right now almost all of the growth is overseas. Still a fantastic mineral play and a terrific call on world growth.

• [By Dave Friedman]

  The shares closed at $91.37, up $1.56, or 1.74%, on the day. They have traded in a 52-week range of $63.34 to $116.55. Volume today was 10,450,473 shares, against a 3-month average volume of 9,960,260 shares. Its market capitalization is $59.03billion, its trailing P/E is 15.11, its trailing earnings are $6.05 per share, and it pays a dividend of $1.84 per share, for a dividend yield of 2.00%. About the company: Caterpillar Inc. designs, manufactures, and markets construction, mining, agricultural, and forestry machinery. The Company also manufactures engines and other related parts for its equipment, and offers financing and insurance. Caterpillar distributes its products through a worldwide organization of dealers.