Intel vs. Cisco: Which Dow Stock's Dividend Dominates?

Dividend stocks outperform non-dividend-paying stocks over the long run. It happens in good markets and bad, and the benefit of dividends can be quite striking: Dividend payments have made up about 40% of the market's average annual return from 1936 to the present day. But few of us can invest in every single dividend-paying stock on the market, and even if we could, we might find better gains by being selective. That's why we'll be pitting two of the Dow Jones Industrial Average's (DJINDICES: ^DJI  ) dividend payers against each other today to find out which Dow stock is the true dividend champion. Let's take a closer look at our two contenders now.

Tale of the tape
Intel (NASDAQ: INTC  ) is nearing the 14th anniversary of its initiation to the Dow. It joined at the peak of the dot-com bubble and has yet to provide a net benefit to the Dow's valuation, but unless you bought Intel stock at the tail end of 1999, this isn't much of a concern to you. Intel has long been the world's leading chip-maker, with a dominant position in both PCs and servers -- but declines in PC sales have left investors somewhat worried that Intel's growth days are behind it. Despite these concerns, Intel continues to support one of the strongest dividends in the tech industry. Its tablet market share is growing rapidly, for what it's worth, as Intel has a spot in 90% of Windows-based tablets, which now make up about 7.5% of the market.

Cisco (NASDAQ: CSCO  ) is one of the Dow's newest components. It only joined the index four years ago as a last-ditch replacement for a bankrupt automaker. That's not to say that Cisco doesn't deserve a place on the Dow. It is, essentially, the Intel of the Internet: More than half of all Ethernet switches, routers, wireless LAN products, and telepresence apps in the world come from Cisco, and the company also holds more than 30% of the market in voice-over-IP. There's no such thing as an impregnable moat in the tech industry, but Cisco has done an excellent job thus far of holding the line against numerous competitors and competing technologies. Cisco only recently established its dividend, which could hurt its chances in this contest, but let's try not to hold inexperience against it just yet.

Statistic

Intel

Cisco

Market cap	$124 billion	$129.7 billion
P/E ratio	12.5	13.6
TTM profit margin	19.5%	20.1%
TTM free-cash-flow margin*	18.7%	22.7%
Five-year total return	24.6%	(5.8%)

Source: Morningstar; YCharts. TTM = trailing-12-month. *Free-cash-flow margin is free cash flow divided by revenue for the trailing 12 months.

Cisco actually has slightly better margins than Intel, but it has had a difficult time growing its share price over the past few years. Both stocks are undeniably cheap today, but which will be the computer hardware dividend champion? Let's find out.

Round one: endurance
According to Dividata, Intel has been paying dividends since late 1992, for a full two-decade-long streak. Cisco only started paying dividends in 2011. This one's an easy win for Intel.

Winner: Intel, 1-0

Round two: stability
Paying dividends is well and good, but how long have our two companies been increasing their dividends? The same dividend payout year after year can quickly fall behind a rising market, and there's no better sign of a company's financial stability than a rising payout in a weak market (so long as it's sustainable, of course). Intel did not raise its dividend from 2009 to 2010, but that's still a three-year streak of increases, which is a year longer than Cisco has been paying dividends, period.

Winner: Intel, 2-0

Round three: power
It's not that hard to commit to paying back shareholders, but are these payments enticing or merely token? Let's take a look at how both companies have maintained their dividend yields over time as their businesses and share prices grow. We'll be fair to Cisco here and start comparing both stocks from the time the routing kingpin initiated its payouts:

INTC Dividend Yield data by YCharts.

Cisco might beat Intel's hefty yield someday, but it's not there yet.

Winner: Intel, 3-0

Round four: strength
A stock's yield can stay high without much effort if its share price doesn't budge, so let's take a look at the growth in payouts over the past five years. If you bought in several years ago and the company has grown its payout substantially, your real yield will likely look much better than what's shown above. As before, we'll begin tracking the changes from Cisco's first payout:

INTC Dividend data by YCharts.

Cisco is off to a roaring start on growing its payout, leaving Intel in the dust since 2011.

Winner: Cisco, 1-3

Round five: flexibility
A company needs to manage its cash wisely to ensure that there's enough available for tough times. Paying out too much of free cash flow in dividends could be a warning sign that the dividend is at risk, particularly if business weakens. This next metric analyzes just how much of their free cash flows our two companies have paid out in dividends over the past four quarters:

INTC Cash Div. Payout Ratio TTM data by YCharts.

Intel's payouts are quite high for a tech company. Cisco has a lot more room to grow from here.

Winner: Cisco, 2-3

Unfortunately for Cisco, a strong start and more wiggle room to boost payouts in the future can't overcome Intel's history or its superior yield. However, based on Cisco's recent history, it might get even with (or pull ahead of) Intel before long.

When it comes to dominating markets, it doesn't get much better than Intel's position in the PC microprocessor arena. However, that market is maturing, and Intel must find new avenues for growth. In this premium research report on Intel, a Motley Fool analyst runs through all of the key topics investors should understand about the chip giant. Click here now to learn more.

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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.

Are Falling Lumber Prices Really a Bad Sign?

Motley Fool analyst Blake Bos points out additional elements to consider when looking at companies that are dependent on the housing rebound.

In this video, Blake looks at lumber prices compared to housing starts to help give investors a frame of reference.  What will this mean for homebuilders like Lennar (NYSE: LEN  )  and PulteGroup (NYSE: PHM  ) ?

Additionally, Blake shares some key factors to be managed that will impact earnings for lumber suppliers such as Weyerhaeuser (NYSE: WY  ) moving forward.

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.

Microsoft Stock Drags on Dow Despite New Store Concept

Stock markets got back in black today after a three-day losing streak. A 0.6% rise in retail sales last month and a relatively low 334,000 new initial jobless claims had investors back in a good mood. At 3:25 p.m. EDT the Dow Jones Industrial Average (DJINDICES: ^DJI  ) was up 1%, while the S&P 500 (SNPINDEX: ^GSPC  ) had gained 1.2%.

Intel (NASDAQ: INTC  ) continues to be one of the Dow's leaders, gaining 1.9% today. The company's chips have been designed into the new Samsung Galaxy Tab 3, and Intel is expanding in the convertibles market as well. The big rumor this week surrounded Intel's efforts to disrupt the television market by distributing TV over the Internet. Intel is one of many companies working on streaming TV, but it appears willing to pay a premium for content, and it may be willing to dig in against the entrenched cable industry. If the company can break the hold, this is a huge opportunity for Intel and investors.  

Caterpillar (NYSE: CAT  ) is up 2.3% a day after announcing a 15% boost to its quarterly dividend. Investors will now be paid a dividend of $0.60 per quarter, with the first installment going to shareholders of record on July 22. Dividends are one of the best ways for companies to provide a return for investors, and an increase like this is an indication that management is confident about the future of the company.

On the down side, Microsoft (NASDAQ: MSFT  ) stock is down 0.8% today despite announcing new stores within stores at Best Buy. The deal will include 500 specialty stores that will sell Windows-based products, including tablets and computers. This isn't dissimilar to what Samsung announced earlier this year and what Apple already has in place at Best Buy stores. Microsoft seeks to have the same in-store product expertise at one of the biggest electronics retailers in the world. Only time will tell if the partnership will pay dividends for Microsoft shareholders.

It's been a frustrating path for Microsoft investors, who have watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, the company is looking to make a splash in this booming market. In a new premium report on Microsoft, a Motley Fool analyst explains that while the opportunity is huge, so are the challenges. The report includes regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.

Banks Tell Customers: Pay Up or Get Out!

With the broader market barely budging, shares of PNC Financial Services (NYSE: PNC  )  closed roughly 2.5% higher on news that the bank will no longer offer full-service checking accounts for free.

The decision should come as no surprise, and the bank acknowledges that the changes will likely only impact roughly 10% of its customers. Last month, PNC's CFO Rick Johnson had this to say about how the bank is viewing the new environment:

"The current retail banking model is built on giving away services -- free checking, free online banking and free deposits. All banks are in the process of rethinking the fair value exchange we have with our customers. And PNC is no exception."

While truly "free" accounts will no longer exist, most customers will avoid the fee by simply maintaining a certain balance or by linking a direct deposit to one's account.

As my colleague Matt Koppenheffer and I recently discussed, banks were able to justify the free checking account services because of the revenue they generated from interchange fees and overdraft fees. However, with new regulation limiting these fees, banks have had to adjust retail cost structures.

Bad for customers, great for investors
There's no two ways about it -- as consumer, being charged a fee is never fun, but from an investor's perspective, charging fees on certain customers to increase profitability is the right decision.

In order to avoid an extremely adverse consumer reaction like what Bank of America (NYSE: BAC  ) experienced when it proposed implementing a $5 monthly fee for debit card use for certain customers, communication will be essential, and PNC appears to be managing the changes in a prudent way -- most of the changes will not be effective until December or June 2014.

Source: www.pncsites.com

If done correctly, establishing or increasing a fee can avoid public outrage and be a great thing for shareholders. In late 2011, the beloved retailer Costco (NASDAQ: COST  ) clearly communicated to its member its intention to increase its annual membership fee by 10%, and in 2012, the company saw its highest annual membership renewal rate -- nearly 90% in the United States.

Will this fee become a huge money-maker for PNC? No, but it will allow the bank to focus on profitable customers and how it can best serve those customer that drive the most value for cross-sales opportunities.

A sweeping change
PNC is not the only bank with this strategy. Though without the same dramatics as its proposed debit card fee, Bank of America is aiming to migrate less-profitable customers into its eBanking Checking Account, a product that incurs no fee as long as the customer only transacts with the bank's electronic platforms such as ATMs and online bill pay.

In addition to squeezing more out of less-profitable customers, B of A is putting increasingly more resources around nurturing its most profitable customers through its Platinum Privileges program -- the bucket consisting only of customers with assets with the bank of greater than $50,000.

The retail banking model is no longer a one-size-fits-all business. Banks will become increasingly specialized and will continue to do what is most profitable for their shareholders.

Unlikely winner?
After being dogged by issues after the financial crisis, is Bank of America poised to continue its turnaround and impressive stock run? 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.

Dow Still Hooked on Monetary Stimulus

Japan was back at the center of financial news today, not because the Nikkei is still getting rocked back and forth, but because the island-nation's central bank refused to adjust monetary policy today in the midst of a huge market correction. In April, the Bank of Japan had announced a $1.4 trillion stimulus program with room for additional funding if needed, but today passed on that opportunity, though Bank of Japan governor Haruhiko Kuroda did say that the bank could unleash further stimulus if borrowing costs rise.

World markets were down on the news, with the Dow Jones Industrial Average (DJINDICES: ^DJI  ) finishing down 117 points, or 0.8%, in a volatile session, as the blue chips opened down 1% before climbing to breakeven at midday, and finally tanking in afternoon trading. As stocks pulled back, treasuries hit a 14-month high, with the 10-year yield climbing to 2.29% at one point.

Among the Dow's biggest losers today was Microsoft (NASDAQ: MSFT  ) , which fell 1.8% as rival Sony introduced its PlayStation 4 last night and said would be priced at $399, $100 less than Microsoft's Xbox One. The two are major competitors in the gaming arena, and Sony's moves could put pressure on Microsoft. In addition to beating the Xbox on price, the PS4 also allows users to sell or reuse second-hand games and does not require a fixed Internet connection. Both consoles are due out this fall in time for the holiday season.

Disney (NYSE: DIS  ) shares bucked the overall trend, ending the day essentially unchanged as the media giant got an upgrade from Macquarie from "neutral" to "outperform." Analysts Tim Nollen and James Kopelman said that improved consumer spending should help bolster its theme parks, and new technology should also help improve visits. Recent acquisitions of Marvel and LucasFilm further enhance Disney's value and capabilities, they said.

Finally, Facebook (NASDAQ: FB  ) CEO Mark Zuckerberg was back on the hot seat again, nearly a year after his company's IPO debacle. At the social network's first shareholder's meeting, Zuckerberg defended the company's first year despite a nearly 40% drop in the stock price in the meantime. Zuckerberg empathized with shareholders, saying, "We're disappointed with the performance of the stock over the past year," but he also stood by his strategy, adding, "Nothing in that has made me think the fundamental strategy is wrong." Still, investors were not pleased with his explanation and demanded to know when shares would return to their IPO price. Facebook ended the day down 1.2%.

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.

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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.

B of A Hit Hard This Week By Legal Battle and Market Worries

It's been an up-and-down week for Bank of America (NYSE: BAC  ) , but mostly down: Share prices for the superbank are net 2.79% in the red over the last five days, with less than two hours to go on the last day of trading. Thank general market negativity for that, but also uncertainty over what could be the bank's most crucial legal battle yet.

Waiting for Bernanke
Firstly, the world waits to see when Federal Reserve chairman Ben Bernanke and his central-bank compatriots from Europe and Japan are going to turn off the money spigots that have spurred America's nascent economic recovery, kept Europe's recessions from turning into depressions, and offered a glimmer of hope that Japan will finally emerge from its decades-long doldrums.

Secondly, B of A investors are waiting to see what will come out of a trial ending today in a New York courtroom. At issue is a challenge to a 2011 settlement between B of A, AIG (NYSE: BAC  ) , and other big investors over mortgage-backed securities issued by the superbank's problem child, Countrywide Financial.

The original settlement was for $8.5 billion, but if AIG and its co-plaintiffs win this rematch B of A could be on the hook for tens of billions more.

Foolish bottom line
Meanwhile, interest rates in the U.S. are on the rise from record lows. The yield on benchmark 10-year Treasuries has jumped more than 60 basis points in recent months, and now sits at 2.14%: still low by historic standards, but enough of a sudden jump to make everyone nervous. Mortgage-interest rates are on the rise as well, which could effect the revenue and profit of large mortgage lenders like Wells Fargo (NYSE: WFC  ) and JPMorgan Chase (NYSE: JPM  ) , as well as slowdown the country's blossoming housing recovery overall.

Of course, B of A wasn't alone in its poor showing this week: all of the Big Four banks were down to one degree or another, as were the three major market indices. When will the general market nervousness clear up? Maybe when Ben Bernanke finally begins winding down QE3. Maybe this is all just over-anticipation, and once the wind-down gets under way, everyone will relax. Or, maybe once the wind-down begins, that's when things are really going to get hairy -- as the true effects of a slowing money spigot hit the economy not just in theory, but in actuality.

As for Countrywide rematch, there's no word yet on when Judge Barbara J. Kapnick will make her decision. Unfortunately, until then, investors will remain in the decidedly uncomfortable position of not knowing if their favorite bank is facing yet another massive, crisis-related payout. As a result, the stock will likely not perform as well as it could, regardless of what the rest of the market is doing.

But always remember, Fools, to focus on the long term when it comes to investing. Obsessive ticker checking can lead to overtrading, which costs money and can hurt the performance of your portfolio. So tune out the market noise and tune into the fundamentals of the companies you're invested in: Your portfolio will thank you, even if your broker won't. 

Looking for in-depth analysis on Bank of America?
Look no further than this Motley Fool premium report -- written by top Motley Fool banking analysts Anand Chokkavelu and Matt Koppenheffer. They'll help you lift the veil on the bank's operations, and give you three reasons to buy and three reasons to sell along the way. And with included quarterly updates, this could literally be the last bit of investment research on B of A you'll ever need. For immediate access, simply click here now. 

Is Xbox One Enough to Save Microsoft?

It's certainly no secret that Microsoft's (NASDAQ: MSFT  ) recently unveiled Xbox One made waves in technology circles, both good and bad. There's also no question that Microsoft desperately needs to find ways into where the future of computing is going, especially as its recently launched Windows 8 platform has yet to drive the kind of sales volume Redmond had hoped for. What we see today in the software giant is a company very much in transition, and its latest console is clearly intended to play an integral part in that future. So putting it all together, how big a game-changer can the new device be for Microsoft? Watch the following video to find out, as Brendan Byrnes talks with Fool contributor Andrew Tonner.

It's been a frustrating path for Microsoft investors, who've watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely anticipated Windows 8 operating system, the company is looking to make a splash in this booming market. In a new premium report on Microsoft, a Motley Fool analyst explains that while the opportunity is huge, so are the challenges. The report includes regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.

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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.

Mortgage profits from PennyMac

Although the stock market has been more volatile, the sell-off is also creating interesting new buying opportunities.

And I see one in a stock we've traded profitably before: PennyMac Mortgage Investment Trust (PMT), a specialty finance company organized as a real estate investment trust (REIT).

As a REIT, PennyMac avoids the corporate income tax and must pay out at least 90% of its net cash flow to shareholders. In this case, the yield is a whopping 10.5%.

PennyMac's mission is to keep borrowers in their homes and provide investors with attractive returns. The firm has an experienced team that brings a high level of analytic discipline to the process of investing in home loans.

In particular, PennyMac does not invest in a mortgage until it confirms the borrower's willingness and ability to pay his or her mortgage.

PennyMac is good at what it does. In the most recent quarter, earnings soared 180% on a 157% increase in revenue. Operating margins top 63%. And management is earning a solid 19% return on equity.

Yet, the recent uptick in interest rates has sent a lot of high-dividend stocks reeling, and PennyMac is no exception. From a 52-week high of nearly $29, the stock is off roughly 30%.

I think that pullback spells opportunity. For one thing, newly rising home prices protect mortgage holders like PennyMac. For another, PMT has smashed expectations in each of the last four quarters, beating consensus estimates by 127%, 232%, 192% and 176%.

PennyMac is likely to keep outperforming. And I'm not the only one who thinks so. Chairman and CEO Stanford Kurland has been piling into the stock lately. For the last couple of weeks, he has purchased $1 million-worth of the stock -- and now owns 428,000 shares.

Kurland clearly likes the outlook for PennyMac's business -- and recognizes value when he sees it. PennyMac sells at book value and for only six times trailing earnings. So pick up PennyMac Mortgage Trust at market. And place a protective stop at $17.

Is Southern Copper Stock Destined for Greatness?

Investors love stocks that consistently beat the Street without getting ahead of their fundamentals and risking a meltdown. The best stocks offer sustainable market-beating gains, with robust and improving financial metrics that support strong price growth. Does Southern Copper (NYSE: SCCO  ) fit the bill? Let's take a look at what its recent results tell us about its potential for future gains.

What we're looking for
The graphs you're about to see tell SoCo's story, and we'll be grading the quality of that story in several ways:

Growth: Are profits, margins, and free cash flow all increasing? Valuation: Is share price growing in line with earnings per share? Opportunities: Is return on equity increasing while debt to equity declines? Dividends: Are dividends consistently growing in a sustainable way?

What the numbers tell you
Now, let's take a look at SoCo's key statistics:

SCCO Total Return Price data by YCharts

Passing Criteria

3-Year* Change 

Grade

Revenue growth > 30%	49.7%	Pass
Improving profit margin	(2.9%)	Fail
Free cash flow growth > Net income growth	(33.8%) vs. 46.6%	Fail
Improving EPS	49.1%	Pass
Stock growth (+ 15%) < EPS growth	17.7% vs. 49.1%	Pass

Source: YCharts. * Period begins at end of Q1 2010.

SCCO Return on Equity data by YCharts

Passing Criteria

3-Year* Change

Grade

Improving return on equity	4.6%	Pass
Declining debt to equity	153.4%	Fail
Dividend growth > 25%	(55.1%)	Fail
Free cash flow payout ratio < 50%	464%	Fail

Source: YCharts. * Period begins at end of Q1 2010.

How we got here and where we're going
SoCo doesn't quite come through with flying colors, as it's only mustered four out of nine possible passing grades. A big source of that weakness is the company's falling free cash flow, which has diverged markedly from its net income over the past three years, and which may not be able to support its current dividend payouts if the trend continues. Will SoCo be able to turn this weakness around and rebound, or is the copper miner going to be tarnished for some time to come? Let's dig a little deeper.

A major part of SoCo's weakness -- copper prices -- is simply out of its hands, and the trend has not been favorable over the past few years. Since peaking in early 2011, copper prices have fallen back to roughly the same level they reached at the start of our three-year tracking period. SoCo's stock has actually outperformed the slide for a year, but Freeport McMoRan (NYSE: FCX  ) has almost exactly mirrored the movements of copper:

Copper LME Settlement Price data by YCharts

This, at least, seems to indicate a superior position for SoCo over its more diversified rival. SoCo has also been investing heavily in new infrastructure to exploit its assets. In nominal terms, the company's capital expenditures are less than half Freeport's, but run six times as high as smaller competitor Taseko Mines (NYSEMKT: TGB  ) :

SCCO Capital Expenditures Quarterly data by YCharts

Taseko's capex has actually grown at a faster rate during this time, and is now over 540% higher than it was in 2010. SoCo is no slouch, though, and its three-year capex spending growth of 320% puts it on pace to spend roughly $900 million a quarter by 2016. That might be a concern for long-term investors, as none of SoCo's core financial metrics (revenue, profit, or cash flow) have grown at anywhere close to that rate. A rebound in copper prices will certainly help smooth over this imbalance, but there are many near-term concerns that China -- the world's largest copper consumer -- is slowing down. SoCo investors should keep a close eye on Chinese economic reports for a clue to the future of their favorite copper stock.

Putting the pieces together
Today, Southern Copper has some of the qualities that make up a great stock, but no stock is truly perfect. Digging deeper can help you uncover the answers you need to make a great buy -- or to stay away from a stock that's going nowhere.

After putting together a blockbuster deal to expand into the oil and natural gas industry, Freeport-McMoRan will have plenty on its plate as it tries to adapt to the new industry, as expanding into oil and gas carries plenty of inherent volatility. FCX had a profitable copper business and, on top of this foray into a new industry, it still has to contend with mining industry bellwether BHP Billiton. To help investors determine if Freeport-McMoRan is a buy or a sell, The Motley Fool has compiled a premium research report on the company. Simply click here now to access your copy today.

Keep track of Southern Copper by adding it to your free stock Watchlist.

5 Best Oil Stocks To Invest In 2014

While its biggest competitor is embroiled in an M&A battle with giant Japanese banks and telecom juggernauts, DIRECTV (NASDAQ: DTV  ) continues to dominate at its core business. In the just-ended quarter, the company added another 583,000 subscribers in Latin America -- that small, extremely populous region of the world that other cable providers glossed over when glancing at their corporate-strategy edition Rand McNally. In the meantime, North American revenues are rising healthily as well, proving that the company not only gets customers in the door but upsells them as well. The market has rewarded it with new 52-week highs and a healthy valuation, but is there still room left to run? Let's take a look.

Earnings recap
DIRECTV revenues grew 8% in the first quarter to $7.6 billion, driven by the aforementioned Latin American growth and North American average revenue per user, or ARPU, improvements. Operating profit surged 11%, mainly due to the fact that the increased ARPUs in North America boost margins, softening the effects of the slimmer margins in Latin America. On the bottom line, DIRECTV brought in $1.43 per share -- a 34% increase over the year-ago quarter and far beyond analyst expectations. The EPS gain was a result of higher net income and the ongoing stock buyback.

5 Best Oil Stocks To Invest In 2014: Gastar Exploration Ltd (GST)

Gastar Exploration Ltd (Gastar) is an independent energy company engaged in the exploration, development and production of natural gas and oil in the United States. The Company�� principal business activities include the identification, acquisition, and subsequent exploration and development of natural gas and oil properties with an emphasis on unconventional reserves, such as shale resource plays. As of December 31, 2011, it is pursuing the development of liquids-rich natural gas in the Marcellus Shale in the Appalachia area of West Virginia and, to a lesser extent, central and southwestern Pennsylvania. The Company also holds prospective acreage in the deep Bossier play in the Hilltop area of East Texas and conduct limited coal bed methane (CBM) development activities within the Powder River Basin of Wyoming and Montana. The Company is a holding company. Advisors' Opinion:

• [By Roberto Pedone]

   Gastar Exploration (GST) is an independent energy company, engaged in the exploration, development and production of natural gas and oil in the U.S. This stock is trading up 2.8% to $1.26 in recent trading.

  Today’s Range: $1.24-$1.30

  52-Week Range: $0.70-$3.36

  Volume: 186,000

  Three-Month Average Volume: 516,159

  From a technical perspective, GST is bouncing modestly higher here right above some near-term support $1.15 with light volume. This stock has been uptrending strongly for the last month and change, with shares soaring from a low of 70 cents to its recent high of $1.38. During that move, shares of GST have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed GST within range of triggering a major breakout trade. That trade will hit if GST clears some near-term overhead resistance levels at $1.38 to $1.39 with high volume.

  Traders should now look for long-biased trades in GST as long as it’s trending above $1.15, and then once it sustains a move or close above those breakout levels with volume that hits near or above 516,159 million shares. If that breakout triggers soon, then GST will set up to re-test or possibly take out its next major overhead resistance level at its 200-day moving average of $1.77 or possible even $1.89 to $1.96.

5 Best Oil Stocks To Invest In 2014: Fleetcor Technologies Inc (FLT)

FleetCor Technologies, Inc. (FleetCor) is an independent global provider of specialized payment products and services to businesses, commercial fleets, oil companies, petroleum marketers and government entities in countries throughout North America, Latin America and Europe. During the year ended December 31, 2011, the Company processed more than 215 million transactions on its networks and third-party networks. The Company operates in two segments: North American and International segments. The Company provides its payment products and services in a variety of combinations to create payment solutions for its customers and partners. In August 2011, the Company acquired Mexican prepaid fuel card and food voucher business based in Mexico City, Mexico. On December 13, 2011, the Company acquired Allstar Business Solutions Limited, a fleet card company based in the United Kingdom. In July 2012, the Company acquired a Russian fuel card company. In July 2012, the Company acquired CTF Technologies, Inc.

The Company uses third-party networks to deliver its payment programs and services. In order to deliver its payment programs and services and process transactions, it owns and operates closed-loop networks through which it electronically connects to merchants and captures, analyzes and reports information. The Company also provides a range of services, such as issuing and processing. The Company markets its payment products directly to a range of commercial fleet customers, including vehicle fleets of all sizes and government fleets. Among these customers, it provides its products and services to small and medium commercial fleets. The Company also manages commercial fleet card programs for oil companies, such as British Petroleum (BP) (including its subsidiary Arco), Chevron and Citgo, and over 800 petroleum marketers.

The Company sells a range of fleet and lodging payment programs directly and indirectly through partners, such as oil companies and petroleum marketers. It provides it! s customers with various card products that function like a charge card to purchase fuel, lodging and related products and services at participating locations. The Company supports these cards with issuing, processing and information services that enable it to manage card accounts, facilitate the routing, authorization, clearing and settlement of transactions. The Company provides these services in a variety of outsourced solutions ranging from an end-to-end solution (consisting issuing, processing and network services) to limited back office processing services.

In addition, the Company offers a telematics solution in Europe that combines global positioning, satellite tracking and other wireless technology to allow fleet operators to monitor the capacity utilization and movement of their vehicles and drivers. The Company offers prepaid fuel and food vouchers and cards in Mexico that may be used as a form of payment in restaurants, grocery stores and gas stations. Approximately 10.4% of its revenue during the year ended December 31, 2011 came from its lodging and telematics products.

During 2011, the Company owns and operates eight closed-loop networks in North America and internationally. Fuelman network is the Company�� primary fleet card network in the United States. Corporate Lodging Consultants network (CLC) is the Company�� lodging network in the United States and Canada. The CLC Lodging network covers more than 17,700 hotels across the United States and Canada. Commercial Fueling Network (CFN) is the Company�� members only unattended fueling location network in the United States and Canada. Keyfuels network is the Company�� primary fleet card network in the United Kingdom.

CCS network is the Company�� primary fleet card network in the Czech Republic and Slovakia. Petrol Plus Region (PPR) network is the Company�� primary fleet card network in Russia, Poland, Ukraine, Belarus, Lithuania, Estonia and Latvia. Mexican network is the Company�� fuel! and food! card and voucher network in Mexico. Allstar network is the Company�� fleet card network in the United Kingdom. In the United States, the Company issues corporate cards that utilize the MasterCard payment network, which includes 176,000 fuel sites and 398,000 maintenance locations across the country. The networks of locations owned by the Company�� oil and petroleum marketer partners in both North America and internationally are utilized to support the card programs of these partners.

UNION TANK Eckstein GmbH & Co. KG (UTA) operates a network of over 46,000 fleet card-accepting locations across 38 countries throughout Europe, including more than 31,000 fueling sites. DKV operates a network of over 45,000 fleet card-accepting locations across 36 countries throughout Europe, including more than 30,500 fueling sites. In Mexico, the Company issues fuel cards and food cards that utilize the Carnet payment network, which includes approximately 8,700 fueling sites and 78,890 food locations across the country.

The Company competes with Wright Express Corporation, Comdata Corporation, U.S. Bank Voyager Fleet Systems Inc., Edenred and Sodexo, Inc.

Advisors' Opinion:

• [By Ed Carson]

  FleetCor isn't a one-stop financial behemoth. It's more of a truck-stop financial, providing fuel cards and budget management tools for trucking firms and other commercial and government fleets. In its most recent quarter, earnings per share rose 48%, the best gain in seven quarters. Revenue growth accelerated to 39%, the best in 10 quarters.

  Shares have been rising strongly for the past six months. The stock is up nearly 3% so far in 2013, hitting a fresh high intraday on Friday.

Top China Companies To Buy For 2014: Encana Corporation(ECA)

Encana Corporation and its subsidiaries engage in the exploration for, development, production, and marketing of natural gas, oil, and natural gas liquids. The company owns interests in resource plays that primarily include the Greater Sierra, Cutbank Ridge, Bighorn, and Coalbed Methane resource plays located in British Columbia and Alberta, as well as the Deep Panuke natural gas project offshore Nova Scotia in Canada. It also holds interests in resource plays comprising the Jonah in southwest Wyoming, Piceance in northwest Colorado, Haynesville in Louisiana, and Texas resource play, including east Texas and north Texas. The company serves primarily local distribution companies, industrials, energy marketing companies, and other producers. Encana Corporation was founded in 1971 and is headquartered in Calgary, Canada.

Advisors' Opinion:

• [By Conrad]

  EnCana (ECA) is one of North America’s largest independent natural gas producers, boasting nearly 13 trillion cubic feet of reserves. Canada is ECA’s main stomping ground, since the company is headquartered in Calgary, Alberta, but EnCana also has exploration efforts in Brazil, the Middle East, Greenland and even France.

  In late 2009, EnCana spun off its tar-sands oil business into a separate company, Cenovus (CVE). This was a very wise move, because it allowed the company to focus on its natural gas business and really leverage its massive reserves. Though natural gas prices are down from their historic levels, futures have doubled in the past five months. This is a very bullish sign for gas producers like EnCana.

5 Best Oil Stocks To Invest In 2014: North American Energy Partners Inc. (NOA)

North American Energy Partners Inc. provides heavy construction and mining, piling, and pipeline installation services to customers in the Canadian oil sands, industrial construction, commercial and public construction, and pipeline construction markets. The company operates in three segments: Heavy Construction and Mining, Piling, and Pipeline. The Heavy Construction and Mining segment focuses on providing surface mining support services for oil sands and other natural resources. Its activities include land clearing, stripping, muskeg removal, and overburden removal to expose the mining area; the supply of labor and equipment to supplement customers� mining fleets supporting ore mining; and provision of general support services, such as road building, repair and maintenance for mine and treatment plant operations, and hauling of sand and gravel. This segment also engages in the construction related to the expansion of existing projects-site development and infrastructure ; and the provision of environmental and tailings management services. In addition, it provides industrial site construction for mega-projects; and underground utility installation services for plant, refinery, and commercial building construction. The Piling segment installs driven, drilled, and screw piles, as well as caissons and earth retention, and stabilization systems. It also designs, manufactures, and sells screw piles and pipeline anchoring systems worldwide, as well as provides tank maintenance services to the petro-chemical industry in Canada and the United States. The Pipeline segment provides small and large diameter pipeline construction and installation services, as well as equipment rental to energy and industrial clients. The company�s fleet includes approximately 900 pieces of diversified heavy construction equipment supported by approximately 750 pieces of ancillary equipment. North American Energy Partners Inc. was founded in 1953 and is headquartered i n Calgary, Canada.

5 Best Oil Stocks To Invest In 2014: Atlas Resource Partners LP (ARP)

Atlas Resource Partners, L.P. (Atlas Resource Partners), incorporated on October 13, 2011, is an independent developer and producer of natural gas, crude oil and natural gas liquids (NGL), with operations in basins across the United States. The Company is a sponsor and manager of investment partnerships, in which it co-invests, to finance a portion of its natural gas and oil production activities. During the year ended December 31, 2012, its average daily net production was approximately 77.2 million cubic feet equivalent. On December 20, 2012, it completed the acquisition of DTE Gas Resources, LLC from DTE Energy Company. On September 24, 2012, the Company acquired Equal Energy, Ltd.�� (Equal) remaining 50% interest in approximately 8,500 net undeveloped acres included in the joint venture. On July 26, 2012, it completed the acquisition of Titan Operating, L.L.C. On April 30, 2012, it acquired certain oil and natural gas assets from Carrizo Oil & Gas, Inc. In April 2012, it acquired a 50% interest in approximately 14,500 net undeveloped acres in the oil and NGL area of the Mississippi Lime play in northwestern Oklahoma.

Through December 31, 2012, the Company owned production positions in the areas of the Barnett Shale and Marble Falls play in the Fort Worth Basin in northern Texas; the Appalachia basin, including the Marcellus Shale and the Utica Shale; the Mississippi Lime and Hunton plays in northwestern Oklahoma, and the Chattanooga Shale in northeastern Tennessee, the Niobrara Shale in northeastern Colorado, the New Albany Shale in southwestern Indiana and the Antrim Shale in Michigan. During 2012, the Company had ownership interests in over 525 wells in the Barnett Shale and Marble Falls play and 569.3 billion cubic feet equivalent of total proved reserves with average daily production of 31.9 million cubic feet equivalent. During 2012, the Company had ownership interests in over 10,200 wells in the Appalachian basin, including approximately 270 wells in the Marcellus Shale and 1! 12.6 billion cubic feet equivalent of total proved reserves with average daily production of 35.6 million cubic feet equivalent. During 2012, it owned 21 billion cubic feet equivalent of total proved reserves with average daily production of 1.9 million cubic feet equivalent in the Mississippi Lime and Hunton plays in northwestern Oklahoma. During 2012, the Company had average daily production of 7.8 million cubic feet equivalent in the Chattanooga Shale in northeastern Tennessee, the Niobrara Shale in northeastern Colorado, the New Albany Shale in southwestern Indiana, and the Antrim Shale in Michigan.

Top 5 International Companies To Buy Right Now

LONDON -- John Wood Group� (LSE: WG  ) announced today that it is confident it will achieve full-year performance in line with expectations.

The international energy services company -- which operates three core business units -- said that performance in its Wood Group Engineering and Wood Group PSN divisions is on pace; however, Wood Group GTS is behind plan and has extra ground to cover. A trading update for the first half of the year is scheduled for June 26, 2013.

Wood Group, which employs nearly 43,000 people in 50 countries worldwide, currently posts about US$7 billion in annual sales. It provides a range of engineering, production support, maintenance management and industrial gas turbine overhaul and repair services to the oil and gas, and power generation industries worldwide.

Top 5 International Companies To Buy Right Now: Sarepta Therapeutics Inc (SRPT)

Sarepta Therapeutics Inc., formerly AVI BioPharma, Inc., incorporated on July 22, 1980, biopharmaceutical company focused on the discovery and development of ribonucleic acid (RNA)-based therapeutics for the treatment of rare and infectious diseases. The Company�� product candidates include Eteplirsen, AVI-6002, AVI-6003, and AVI-7100. As of December 31, 2011, the Company primarily focused on advancing the development of its Duchenne muscular dystrophy drug candidates, including its lead product candidate, eteplirsen, which is in a Phase IIb trial. The Company is also focused on developing therapeutics for the treatment of infectious diseases, including its lead infectious disease programs aimed at the development of drug candidates for the Ebola and Marburg hemorrhagic fever viruses. The Company's program focuses on the development of disease-modifying therapeutic candidates for Duchenne muscular dystrophy (DMD). The Company initiated a Phase IIb trial for eteplirsen in August 2011 with an objective of initiating a pivotal trial subsequent to 2011.

The Company is also leveraging the capabilities of its RNA-based technology platforms to develop therapeutics for the treatment of infectious diseases. The Company's RNA-based drug programs are clinically evaluated for the treatment of DMD and have also demonstrated anti-viral activity in infectious diseases such as Ebola, Marburg and H1N1 influenza in certain animal models. The Company's lead product candidates are at various stages of development.

Duchenne Muscular Dystrophy Program

The Company's lead program is designed to address specific gene mutations that result in DMD by forcing the genetic machinery to skip over an adjacent contiguous piece of RNA and, thus, restore the ability of the cell to express a new, truncated but functional, dystrophin protein.

Eteplirsen is an antisense PMO-based therapeutic in clinical development for the treatment of individuals with DMD who have an error in the gene codi! ng for dystrophin that can be treated by skipping exon 51. Eteplirsen targets the frequent series of mutations that cause DMD. Eteplirsen has been granted orphan drug designation in the United States and European Union. In addition to the Company's lead product candidate, eteplirsen, the Company is actively pursues development of a product candidate that skips exon 45 through an IND-enabling collaboration.

Anti-Viral Programs

The Company is implementing its RNA-based technology platforms in its anti-viral programs for the development of therapeutics to treat viruses, such as Ebola, Marburg and influenza. The Company's arrangement with DoD supporting the development of the Company's Ebola and Marburg virus drug candidates provides funding for all clinical and licensure activities necessary to obtain approval of a New Drug Application (NDA), by the United States Food and Drug Administration (FDA), if DoD exercises all of its options under the arrangement. During the year ended December 31, 2011, the Company paused its clinical development efforts on AVI-7100 and is exploring funding opportunities or partnerships with DHHS and industry collaborators to advance its development.

The Company's anti-viral therapeutic programs use the Company's translation suppression technology and applies its PMOplus chemistry backbone, an advanced generation of its base PMO chemistry backbone that selectively introduces positive backbone charges to improve selective interaction between the drug and its target. The Company's translation suppressing technology is based on Translation Suppressing Oligomers (TSOs), which are PMO-based compounds that stop or suppress the translation of a specific protein by binding to their specific target sequence in mRNA.

The Company is pursuing development and regulatory approval of its Ebola and Marburg hemorrhagic fever virus product candidates under the FDA's Animal Rule. The Company's lead product candidate against the Ebola virus infec! tion is A! VI-6002. For Marburg virus infection, the Company's lead product candidate has been AVI-6003. In February 2012, the Company announced that the Company received approval from the FDA to remove one of the two oligomers composing AVI-6003 and proceed with a single oligomer approach, AVI-7288, given that efficacy in non-human primates has been demonstrated to be attributable to this single oligomer. The Company is exploring the feasibility of alternate routes of administration of its Ebola and Marburg drug candidates, and at DoD's invitation, the Company is developing a proposal to be submitted for a study to demonstrates feasibility of the intramuscular route.

AVI-6002, which is a combination of AVI-7537 and AVI-7539, is designed for post-exposure prophylaxis after documented or suspected exposure to the Ebola virus. The Company is evaluating the feasibility of developing AVI-7537 as a single agent for the post-exposure prophylaxis after documented or suspected exposure to Ebola virus. AVI-6003, which is a combination of AVI-7287 and AVI-7288, is designed for post-exposure prophylaxis after documented or suspected exposure to Marburg virus. In February 2012, the Company announced that the Company received approval from the FDA to proceed with AVI-7288 as a single agent against Marburg virus infection. The Company intends to proceed with dosing AVI-7288 in the Phase I multiple ascending dose studies and in non-human primate studies.

Influenza Program

The Company's anti-viral therapeutic programs are also focused on the development of the Company's product candidates designed to treat pandemic influenza viruses. AVI-7100 is the Company's lead product candidate for the treatment of influenza and employs its PMOplus technology. In June 2011, the Company initiated dosing of AVI-7100 through intravenous infusion in single-ascending doses in up to 48 healthy adult volunteers. As of December 31, 2011, the Company paused its clinical development efforts on AVI-7100 and are exp! loring fu! nding opportunities or partnerships to advance its development.

The Company has developed three new phosphorodiamidate-linked morpholino oligomers (PMO)-based chemistry platforms in addition to its original PMO-based technology. The Company's PMO-based molecules are designed to sterically block the access of cellular machinery to pre-mRNA and mRNA without degrading the RNA. Through this selective targeting, two distinct biologic mechanisms of action can be initiated: modulation of pre-mRNA splicing and inhibition of mRNA translation.

The Company competes with GlaxoSmithKline plc, Toyama Chemical, Alnylam Pharmaceuticals, Inc., Tekmira Pharmaceuticals Corp., Isis Pharmaceuticals, Inc., Prosensa, and Santaris Pharma A/S.

Advisors' Opinion:

• [By TheStreet Staff]

   Sarepta Therapeutics (SRPT) will have another big year, with an accelerated approval filing mid-year for the Duchenne muscular dystrophy drug eteplirsen in the U.S. and a significant and lucrative ex-U.S. partnership for the company's exon-skipping drug technology platform.

Top 5 International Companies To Buy Right Now: Glacier Bancorp Inc. (GBCI)

Glacier Bancorp, Inc., a multi-bank holding company, provides commercial banking services in Montana, Idaho, Wyoming, Colorado, Utah, and Washington. It offers transaction and savings deposits; real estate, commercial, agriculture, and consumer loans; mortgage origination services; and retail brokerage services to individuals, small to medium-sized businesses, community organizations, and public entities. The company�s deposit products include non-interest bearing demand accounts, interest bearing checking accounts, regular statement savings accounts, money market deposit accounts, fixed rate certificates of deposit, negotiated-rate jumbo certificates, individual retirement accounts, and reciprocal deposits. Its loan products comprise construction and permanent loans on residential real estate; consumer land and lot acquisition loans; unimproved land and land development loans; residential builder guidance lines comprising pre-sold and spec-home construction, and lot acqu isition loans; commercial real estate loans to purchase, construct, and finance commercial real estate properties; commercial and industrial loans; consumer loans secured by real estate, automobiles, and other assets; second mortgage and home equity loans; and agriculture loans. The company operates 106 locations, including 97 branches. Glacier Bancorp, Inc. was founded in 1955 and is headquartered in Kalispell, Montana.

5 Best Warren Buffett Stocks To Own For 2014: Phoenix Oilfield Hauling Inc (PHN.V)

Aveda Transportation and Energy Services Inc. engages in the transportation of products, materials, and equipment for the drilling, exploration, development, and production of petroleum resources in western Canada and the United States. The company�s services include rig moving, general oilfield hauling, and specialized hauling. It is also involved in the rental of tanks, mats, pickers, light towers manifolds, storage tanks, and other equipments for oilfield operations. The company was formerly known as Phoenix Oilfield Hauling Inc. and changed its name to Aveda Transportation & Energy Services Inc. in June 2012. Aveda Transportation & Energy Services Inc. was founded in 1994 and is headquartered in Calgary, Canada.

Top 5 International Companies To Buy Right Now: Konami Corporation (KNM)

Konami Corporation develops, publishes, markets, and distributes video game software products for stationary and portable consoles, and personal computers worldwide. It operates in four segments: Digital Entertainment, Health and Fitness, Gaming and Systems, and Pachinko and Pachinko Slot Machines. The Digital Entertainment segment plans, produces, manufactures, and sells social content for social networks, content for mobile phones, online games, music and video package products, video game software, video games for amusement facilities, content for token-operated games, and card games, as well as electronic toys, figures, and character goods. This segment also builds computer systems related to online games; maintains and operates online servers; and purchases and distributes video game software for home use. The Health and Fitness segment operates health and fitness clubs. As of March 31, 2012, this segment owned and operated 205 fitness clubs; and provided outsourced s ervices at 161 clubs. The Gaming and Systems segment develops and sells content, hardware, and casino management systems for gaming machines for casinos. The Pachinko and Pachinko Slot Machines segment is involved in the production, manufacture, and sale of pachinko slot machines and liquid crystal displays for pachinko machines. In addition, Konami Corporation provides real estate management services; and operates portal sites. The company was formerly known as Konami Co., Ltd. and changed its name to Konami Corporation in 2000. Konami Corporation was founded in 1969 and is headquartered in Tokyo, Japan.

Top 5 International Companies To Buy Right Now: Total S.a. Ord Eur 10(TTA.L)

TOTAL S.A., together with its subsidiaries, operates as an integrated oil and gas company worldwide. The company operates in three segments: Upstream, Downstream, and Chemicals. The Upstream segment engages in the exploration, development, and production of oil and gas, liquefied natural gas, and electricity; and shipping and trading liquefied petroleum gas (LPG), as well as power generation from renewable energies, and coal production, trading, and marketing. As of December 31, 2011, it had combined proved reserves of 11,423 million barrels of oil equivalent of oil and gas. The Downstream segment is involved in refining, marketing, trading, and shipping crude oil and petroleum products. This segment also produces and markets a range of specialty products, such as lubricants, LPG, jet fuel, special fluids, heavy fuel, bitumen, marine fuels, and petrochemical feedstock. This segment holds interests in 20 refineries located in Europe, the United States, the French West Indie s, Africa, and China, as well as operates a network of 14,819 service stations. The Chemicals segment produces base chemicals, including petrochemicals and fertilizers; and specialty chemicals, such as elastomer processing, adhesives, and electroplating chemistry. This segment serves the automotive, construction, electronics, aerospace, and convenience goods markets. TOTAL S.A. was founded in 1924 and is headquartered in Paris, France.

Is It Still Safe to Buy Diageo?

LONDON -- I'm always searching for shares that can help ordinary investors like you make money from the stock market. However, many people are currently worried the market could be overheating.

So right now I'm analyzing some of the most popular companies in the FTSE 100, hoping to establish if they can continue to outperform in today's uncertain economy.

Today, I'm looking at drinks giant Diageo  (LSE: DGE  ) (NYSE: DEO  ) to determine whether the shares are still safe to buy at 1,905 pence.

So, how's business going?
Diageo has been going from strength to strength recently as a combination of organic growth and bolt-on acquisitions have enabled the company to improve earnings by nearly 40% in just three years.

However, there could be some speed bumps ahead for Diageo as the company faces new, strict government regulation in one of its key growth markets: Turkey.

In particular, the Turkish government recently voted into law a bill that prohibits the sale of alcoholic beverages at night and bans the advertisement of alcohol, which could put the brakes on Diageo's growing sales in the country.

Unfortunately, this legislation follows Diageo's acquisition of Mey Icky last year, Turkey's largest beverage company and Diageo's most expensive acquisition to date.

Furthermore, it appears that the company's problems are not just limited to Turkey as Diageo recently reported that during the first quarter of this year, the firm's total volume of alcoholic beverages sold across the group fell 1%.

Having said that, while volumes fell, Diageo's revenues still expanded 4% for the period, thanks to strategic acquisitions and price increases.

Expected growth
As I have mentioned, Diageo's earnings have grown rapidly during the last three years and many City analysts expect this trend to continue. City forecasts currently predict earnings of 1.03 pounds per share for this year (10% growth) and 1.14 pounds for 2014.

Shareholder returns
Diageo has a solid history of returning cash to shareholders. During the last 10 years alone, the company has increased its per-share dividend payout by a compounded 83%. Furthermore, City analysts believe this trend is set to continue with the payout predicted to grow 7% this year, to 47 pence per share.

In addition, Diageo's dividend yield is currently 2.4% -- larger than that of its peers in the beverages sector, which currently offer an average dividend yield of 2.2%.

Valuation
Despite Diageo's defensive nature and its seemingly unstoppable growth, the company still trades at a discount to its competitors. Diageo currently trades at a historic P/E of 19, while its peers trade on an average historic P/E of around 25.

Based on Diageo's growing revenues, low valuation in relation to its peers and the company's defensive nature, overall I believe that Diageo still looks safe to buy at 1,905 pence.

More FTSE opportunities
In addition to Diageo, I am also positive on the five FTSE shares highlighted within this exclusive wealth report. Indeed, all five opportunities offer a mix of robust prospects, illustrious histories, and dependable dividends, and have just been declared by the Fool as "5 Shares You Can Retire On."

Just click here for the report -- it's free.

In the meantime, please stay tuned for my next FTSE 100 verdict.

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Ulta Beats on Both Top and Bottom Lines

Ulta (Nasdaq: ULTA  ) reported earnings on June 11. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended May 4 (Q1), Ulta beat slightly on revenues and beat expectations on earnings per share.

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

Margins shrank across the board.

Revenue details
Ulta reported revenue of $582.7 million. The 12 analysts polled by S&P Capital IQ hoped for a top line of $576.3 million on the same basis. GAAP reported sales were 23% higher than the prior-year quarter's $474.1 million.

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

EPS details
EPS came in at $0.65. The 12 earnings estimates compiled by S&P Capital IQ predicted $0.62 per share. GAAP EPS of $0.65 for Q1 were 20% higher than the prior-year quarter's $0.54 per share.

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

Margin details
For the quarter, gross margin was 35.0%, 100 basis points worse than the prior-year quarter. Operating margin was 11.6%, 50 basis points worse than the prior-year quarter. Net margin was 7.2%, 20 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $588.4 million. On the bottom line, the average EPS estimate is $0.67.

Next year's average estimate for revenue is $2.69 billion. The average EPS estimate is $3.33.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 348 members out of 393 rating the stock outperform, and 45 members rating it underperform. Among 123 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 113 give Ulta a green thumbs-up, and 10 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Ulta is outperform, with an average price target of $99.33.

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

Add Ulta to My Watchlist.

Europe’s Carmakers Fall on Chinese Manufacturing Decline

Volkswagen AG (VOW) (VOW), PSA Peugeot Citroen (UG) and Renault SA (RNO) (RNO), Europe's three largest carmakers, all dropped 5 percent or more after preliminary data showed Chinese manufacturing is unexpectedly contracting.

Peugeot declined as much as 7.5 percent, VW fell as much as 5.3 percent and Renault lost as much as 5.1 percent after the figures indicated manufacturing in the country is shrinking in May for the first time in seven months.

The preliminary reading of 49.6 for a Purchasing Managers' Index released today by HSBC Holdings Plc and Markit Economics compares with a final 50.4 for April. The number was also below the 50.4 median estimate in a Bloomberg News survey of 13 analysts. A reading above 50 indicates expansion.

Europe's automakers are banking on continued gains in China, the world's biggest car market, to help offset plunging demand in their home region, where deliveries are at a 20-year low. The manufacturing drop adds to signs that economic growth in China is losing steam for a second straight quarter.

"China economic data was weaker and raises concern about a possible slowdown in car demand," said Juergen Pieper, a Frankfurt-based automotive analyst with Bankhaus Metzler. "Automakers have a lot to lose in China, not only from a sales volume perspective, but also because they earn above-average profit margins there."

Peugeot dropped as much as 55 cents to 6.83 euros and traded 5.9 percent lower as of 11:20 a.m. in Paris. Renault was down 4.3 percent and VW was 3.5 percent lower. Bayerische Motoren Werke AG (BMW) was down 3.5 percent and Daimler AG (DAI) was 4.7 percent lower.

China Growth

Passenger-vehicle demand in China has surged by an average of 25 percent annually since 2006, according to Kevin Tynan, an auto analyst for Bloomberg Industries. In Europe, deliveries are set to decline for a sixth straight year in 2013.

VW increased sales in the China 25 percent last year to 2.84 million vehicles, accou! nting for 31 percent of its global total. The country became VW's single biggest market in 2009.

China's growth unexpectedly slowed to 7.7 percent in the first quarter while remaining above the government's full-year target of 7.5 percent. Data earlier this month on fixed-asset investment and factory production missed forecasts and gauges of manufacturing and service industries declined. The economy expanded 7.8 percent in 2012, the slowest pace in 13 years.

The S&P 500's 5 Most Hated Stocks

Even though the past few days have been a bit rough on optimists, the broad-based S&P 500 (SNPINDEX: ^GSPC  ) ended May with its seventh straight month of gains. While not all U.S. economic data would concur that the economy is on the mend, a downtrend in the unemployment rate, coupled with a strengthening housing sector and rising consumer sentiment, appears to signal sustainability in this rally.

However, not everyone agrees that the market has a shot at heading higher. In fact, plenty of obstacles stand in the way, including the 800-pound gorilla known as the Federal Reserve, which has the potential to cripple housing and loan growth when it eventually pares back its monthly $85 billion bond-buying program consisting of U.S. long-term Treasuries and mortgage-backed securities.

In response to these concerns, certain companies within the S&P 500 have seen quite a bit of interest from pessimists in the form of short-selling. Today, I propose we once again examine the five most shorted S&P 500 companies, establish why investors are betting against them, and see whether this pessimism is warranted.

Company

Short Interest as a % of Shares Outstanding

Pitney Bowes (NYSE: PBI  )	28.8%
GameStop (NYSE: GME  )	28.61%
U.S. Steel	28.57%
Cliffs Natural Resources (NYSE: CLF  )	26.88%
Frontier Communications (NASDAQ: FTR  )	23.72%

Source: S&P Capital IQ.

Pitney Bowes
Why are investors shorting Pitney Bowes?

Mail hardware and software solutions company Pitney Bowes assumes the top spot among the S&P 500's most hated stocks this month despite a marginal drop in short interest from the previous month. The story here is still the same: Physical mail volumes are falling as email and other forms of digital communication slowly make some of Pitney Bowes' products obsolete. This has translated into a precipitous decline in revenue since 2008 and a 50% reduction of the dividend just a few weeks ago.

Is this short interest warranted?

If you can show me a reason to get excited about owning Pitney Bowes, then I can show you a flying unicorn! The company did recently hire Roger Pilc as its new chief innovation officer from CA Technologies in the hope that he can reinvigorate the company's software solutions and cloud segment. However, with the dividend halved and revenue falling, the long-term trend certainly isn't in Pitney Bowes' favor. I'd still pass on the stock at these levels.

GameStop
Why are investors shorting GameStop?

GameStop saw quite the drop in short interest last month -- well more than 8 percentage points -- following a huge run-up in anticipation of two new gaming consoles due to hit the market in the second-half of the year: the Xbox One and the PlayStation 4. However, short-sellers are vigilant in their pessimism, because these new consoles have safeguards built in to ensure that games cannot be resold as used. GameStop currently makes a pretty penny from buying back and reselling used games, so this threatens to take a bite into GameStop's cash flow. 

Is this short interest warranted?

Although I've taken a pretty hardline stance favoring GameStop over the long run, even I see good reason to take some profit off the table after this incredible run. GameStop is making good headway in transitioning users to its digital platform, and it has been proactive in cutting expenses and closing stores prior to the unveiling of these new consoles. It will, however, face the potential for lower margins as its used-game sales slow in the coming quarters. That being said, I'd much rather wait for a sizable pullback before pulling the trigger on GameStop again.

U.S. Steel
Why are investors shorting U.S. Steel?

Just like we witnessed with the previous two companies, U.S. Steel saw its short interest fall in May, but that still hasn't alleviated the pessimism surrounding steel prices, rampant oversupply, and the belief that weak steel demand in Europe and other developed countries will continue to weigh on its prospects. It also doesn't help that Goldman Sachs recently lowered its steel-price estimates due to falling iron-ore prices.

Is this short interest warranted?

I do fully expect China and other emerging markets to step up at some point in the not-so-distant future and add the demand sorely missing from developed countries at the moment. That still won't make U.S. Steel a particularly intriguing option: It has a mountain of debt and hasn't turned an annual profit since 2008. U.S. Steel just might be your worst possible choice in the steel sector, and I'd suggest looking elsewhere.

Cliffs Natural Resources
Why are investors shorting Cliffs Natural Resources?

Iron-ore and metallurgical-coal miner Cliffs Natural has attracted the interest of short-sellers as iron ore prices have retreated to levels not seen since last summer. Iron ore, a key component to steel, has fallen for many of the same reasons U.S. Steel is weak: Demand isn't there, and oversupply remains an issue. These issues caused Cliffs to slash its dividend by a whopping 76% earlier this year in order to cut expenses and conserve its cash flow.

Is this short interest warranted?

Unlike U.S. Steel, Cliffs Natural is capable of turning a profit in a slow-growth environment and has done a good job of rewarding shareholders with a big dividend in recent years. To me, it seems only a matter of time before iron ore prices rebound and emerging markets fill the void in demand left by much of Europe. I've had Cliffs on my personal Watchlist for some time now and have considered entering a position if it sees extended downside pressures.

Frontier Communications
Why are investors shorting Frontier Communications?

Frontier Communications has struggled under the weight of its asset acquisitions from Verizon. Thinking it would be getting a veritable cash cow of rural landline assets from its purchase, Frontier is discovering that infrastructure upgrades and wireless-device proliferation are making it nearly impossible to grow its bottom line as consumers cancel their landlines at a steady rate. To put things in perspective, you know the landline attrition rate is bad when the highlights of the company's quarterly report include that attrition rates slowed to just 1%! 

Is this short interest warranted?

Everything is going to come down to Frontier's delectable dividend, which is yielding nearly 10%. If Frontier can keep its costs under control and its payout ratio steady, then shareholders could double their money in a tad more than seven years if the yield stays around 10% and they reinvest those dividends. Of course, there are plenty of other variables at play, such as the continued proliferation of mobile devices and whether or not Frontier's ancillary businesses like broadband pick up the slack. Overall, I'm modestly optimistic on Frontier at these levels but would suggest that investors considering this stock understand that it comes with plenty of risks.

Do you feel that any of these S&P 500 companies have been given a bad rap? Share your thoughts in the comments section below.

To be, ore not to be? That is the question...
Cliffs Natural Resources has grown from a domestic iron-ore producer into an international player in both the iron-ore and metallurgical-coal markets. It has also underwhelmed investors lately, especially after its dramatic 76% dividend cut in February. However, it could now be looked at as a possible value play due to several factors that are likely to remain advantageous for Cliffs' management. For details on these advantages and more, click here now to check out The Motley Fool's premium research report on the company.

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3 Things You May Have Missed in Apple's Announcements

As usual, Apple (NASDAQ: AAPL  ) kicked off yesterday's WWDC opening keynote with a deluge of data and business updates. How can investors interpret all the stats that CEO Tim Cook shared?

900,000 and counting
The iOS App Store is now up to more than 900,000 apps in total, including 375,000 titles that are optimized for the iPad's larger display. While there are plenty of low-quality apps that inevitably make their way in, Apple claims that about 93% of all apps are downloaded each month.

The App Store is approaching its fifth birthday, and Cook rightly pointed out that the repository has revolutionized how people consumer mobile content. Just last month, Apple hit its 50 billionth app download. That's a pretty impressive milestone for a service that didn't exist five years ago.

$10 billion and counting
Google (NASDAQ: GOOG  ) has been making a lot of gains in recent months with Google Play, in terms app count, app downloads, and revenue growth. However, from a developer's perspective, Google still lags significantly in one very important area: monetization. Google Play revenue is growing off of a small base; high growth rates alone don't paint the whole picture.

Apple has now paid out a cumulative total of $10 billion to developers, of which half has been paid in the last year alone. Cook also said that iOS is now nearly three-quarters of all app download revenue, with Android comprising just 20%.

Source: Apple.

There's third-party data to corroborate this claim. According to app analytics specialist App Annie, Big G is closing the gap in sheer app downloads.

Source: App Annie.

However, total app revenue in dollar terms still isn't even close, with iOS generating 2.6 times as much revenue as Android.

Source: App Annie.

Developer monetization is a critical aspect of ecosystem viability, and Apple wants them to get paid.

575,000,000 and counting
Further stoking speculation that Apple will inevitably get into mobile payments, Cook said that there are now over 575 million active iTunes accounts with credit card information on file. That's a massive number of users, and "more accounts with credit cards than any store on the Internet" that Apple is aware of.

That's significantly more than the 209 million active customer accounts that Amazon.com (NASDAQ: AMZN  ) was boasting at the end of last quarter. Apple has nearly three times as many active accounts than the largest e-commerce company on the planet.

Amazon's mobile payments service is more about allowing third-party sellers to integrate its checkout service into their own mobile websites. It's not about using a Kindle Fire to pay for things at a local merchant. Amazon doesn't have a smartphone (yet), and people aren't likely to use tablets for mobile payments.

If and when Amazon launches a Kindle Phone, it could very well get into real mobile payments with those 209 million accounts. Amazon's entry could be as early as this fall, so Apple should jump in first to beat Amazon to the punch.

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Top 5 Small Cap Stocks To Invest In 2014

LONDON -- The FTSE 100 (FTSEINDICES: ^FTSE  ) looks to be continuing yesterday's fall today, down 0.35% to 6,398 points as of 8:20 a.m. EDT. Today looks more like a day for the small caps that are beating top-tier shares. We have central-bank meetings to look forward to, and with first-quarter economic figures not expected until April 25, we could be in for a relatively calm period.

But there are plenty of companies beating the indexes. Here are three achieving that today.

AMEC
AMEC shares are up 3.6% to 1,118 pence after a first-quarter update from the oil and gas services firm confirmed that things are going well. Chief executive Samir Brikho told us that "AMEC has performed in line with expectations in the first three months of the year," highlighting the company's recent 68 million pound contract with BP for commissioning two new oil platforms. AMEC's order book stands at 3.7 billion pounds (up from 3.6 billion pounds at the end of December).

Top 5 Small Cap Stocks To Invest In 2014: Hot Topic Inc.(HOTT)

Hot Topic, Inc., together with its subsidiaries, operates as a mall- and Web-based specialty retailer in the United States. The company operates Hot Topic and Torrid store concepts, as well as an e-space music discovery concept, ShockHound. Its Hot Topic stores sell music/pop culture-licensed merchandise, including tee shirts, hats, posters, stickers, patches, postcards, books, novelty accessories, CDs, and DVDs; and music/pop culture-influenced merchandise comprising women?s and men?s apparel and accessories, such as woven and knit tops, skirts, pants, shorts, jackets, shoes, costume jewelry, body jewelry, sunglasses, cosmetics, leather accessories, and gift items for young men and women primarily between the ages of 12 and 22. The company?s Torrid stores sells casual and dressy jeans and pants, fashion and novelty tops, sweaters, skirts, jackets, dresses, hosiery, shoes, intimate apparel, and fashion accessories for various lifestyles for plus-size females primarily betw een the ages of 15 and 29. As of July 30, 2011, it operated 636 Hot Topic stores in 50 states, Puerto Rico, and Canada; 145 Torrid stores; and Internet stores, hottopic.com and torrid.com. The company was founded in 1988 and is headquartered in City of Industry, California.

Advisors' Opinion:

• [By Wyatt Research]

  The teen retailer reported its same-store sales rose 0.4 percent, with same-store sales at its Torrid chain for overweight teens rising 7 percent. Analysts were expecting a decline.

Top 5 Small Cap Stocks To Invest In 2014: ATA Inc.(ATAI)

ATA Inc., through its subsidiaries, provides computer-based testing services in the People?s Republic of China. It offers services for the creation and delivery of computer-based tests utilizing its test delivery platform, proprietary testing technologies, and testing services; and provides logistical support services relating to test administration. The company?s computer-based testing services are used for professional licensure and certification tests in various industries, including information technology (IT) services, banking, securities, teaching, and insurance. Its e-testing platform integrates various aspects of the test delivery process for computer-based tests ranging from test form compilation to test scoring, and results analysis. ATA also provides career-oriented educational services, such as single course programs, degree major course programs, and pre-occupational training programs focusing on preparing students to pass IT and other vocational certification tests; test preparation and training programs and services to test candidates preparing to take professional certification tests in securities, futures, banking, insurance and teaching industries; online test preparation and training platform for the securities and banking industries; and test preparation software for the teaching industry. In addition, the company offers HR select employee assessment solution, an online system that utilizes its proprietary software and an inventory of test titles to help employers improve the efficiency and accuracy of their employee recruitment process. As of March 31, 2010, it had contractual relationships with 1,988 ATA authorized test centers. The company serves Chinese governmental agencies, professional associations, IT vendors, and Chinese educational institutions, as well as individual test preparation services. ATA Inc. was founded in 1999 and is based in Beijing, the People?s Republic of China.

Advisors' Opinion:

• [By Wyatt Research Staff]

  The Chinese-based educator spiked higher recently after it exceeded analysts' expectations. Revenue and adjusted earnings soared 78% and 269%, respectively. Its long-term annual growth rate is 15%.

  Analysts at Zacks Investment Research upgraded shares from "neutral" to "outperform". 

Top Gold Stocks For 2014: Achillion Pharmaceuticals Inc.(ACHN)

Achillion Pharmaceuticals, Inc., a biopharmaceutical company, engages in the discovery, development, and commercialization of treatments for infectious diseases. The company focuses on the development of antivirals for the treatment of chronic hepatitis C; and the development of antibacterials for the treatment of resistant bacterial infections. Its drug candidates for the treatment of chronic HCV include ACH-1625, a protease inhibitor, which is in phase IIa clinical trial for the treatment of chronic HCV; ACH-2684, a pangenotypic protease inhibitor, which is in phase I clinical trial for the treatment of chronic HCV infection; and NS5A inhibitors for the treatment of chronic HCV infection, including ACH-2928, which is to enter a phase I clinical trial, as well as various additional NS5A inhibitors in preclinical development. Its pipeline of product candidates also includes ACH-702 and ACH-2881 for drug resistant bacterial infections; elvucitabine for HIV infection; and AC H-1095 for HCV infection. The company was founded in 1998 and is based in New Haven, Connecticut.

Advisors' Opinion:

• [By Brian Nichols]

  Achillion is an odd play because it has both the most upside and the most downside of any stock on this list. The company's developing and testing its hepatitis C treating drug, ACH-1625, which is currently in phase II. The results of initial testing have consisted of ups and downs, but after many years and a long process, ACH-1625, appears to be on the right track for an FDA approval.

  The upside in shares of ACHN comes from two places: encouraging data from trials and its likelihood of being acquired. In my opinion, ACHN has a very high chance of being acquired in the next 6 months. Both Pharmasset (VRUS) and Inhibitex (INHX) were acquired over the last 5 months with insanely large premiums. VRUS was purchased at a 81% premium and INHX for a 182% premium. ACHN is perhaps the most speculative, but it could also be purchased the cheapest.

  The stock's recently pulled back after a downgrade and is trading much lower over the last couple weeks. The stock's trend reminds me so much of INHX; the month following the VRUS acquisition when INHX traded higher by nearly 300%. But then after the one-month gain, INHX lost its momentum and traded lower by 40% before being acquired with a 182% premium. INHX traded higher after the VRUS purchase because investors thought it would also be acquired, because of its hepatitis C candidate. ACHN is following the same trend, from November 12 till January 13 the stock more than doubled, but has since retraced.

  At $10 I think ACHN is a buy, it does have a good HCV candidate, and I believe that big pharma will bid to acquire ACHN in the near future. However, the risk in ACHN is if the company's not acquired, then it could have significant loss over the next year. But in a competitive biotechnology industry I believe the reward is worth the risk, and that a large pharma company will take the chance and purchase ACHN in an attempt to stay competitive and capitalize on the trend of investors being bullish on HCV treating drugs.

• [By Wyatt Research]

  The developer of treatments for infectious diseases has seen its shares rise 280 percent in the past year, and last month had a successful sale of 1.44 million more shares that raised $60.9 million.

Top 5 Small Cap Stocks To Invest In 2014: bebe stores inc.(BEBE)

bebe stores, inc. engages in the design, development, and production of women?s apparel and accessories. Its products include a range of separates, tops, dresses, active wear, and accessories in career, evening, casual, and active lifestyle categories. The company markets its products under the bebe, BEBE SPORT, bbsp, and 2b bebe brand names targeting 21 to 34-year-old woman. As of July 2, 2011, it operated 252 retail stores, and an online store at bebe.com in the United States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Japan, and Canada, as well as 60 international licensee operated stores in south east Asia, the United Arab Emirates, Israel, Russia, Mexico, and Turkey. The company was founded in 1976 and is headquartered in Brisbane, California.

Advisors' Opinion:

• [By Wyatt Research]

  The women's apparel retailer reported fiscal fourth-quarter sales and same-store sales both rose 7 percent. The stock is up 30 percent year-to-date.

Top 5 Small Cap Stocks To Invest In 2014: Sky-mobi Limited(MOBI)

Sky-mobi Limited engages in the operation of a mobile application store in the People?s Republic of China. It works with handset companies to pre-install its Maopao mobile application store on handsets and with content developers to provide users with applications and content titles. The users of its Maopao store could browse, download, and purchase a range of applications and content, such as single-player games, mobile music, and books. The company?s Maopao store enables mobile applications and content to be downloaded and run on various mobile handsets with hardware and operating system configurations. It also operates a mobile social network community, the Maopao Community, where it offers localized mobile social games, as well as applications and content with social network functions to its registered members. The company owns proprietary mobile application technology in the cloud computing, the MRP format, and SDK development environment. As of March 31, 2011, it had entered into cooperation agreements with approximately 523 handset companies to pre-install Maopao. The company was formerly known as Profit Star Limited and changed its name to Sky-Mobi Limited in October 2010. Sky-mobi Limited was incorporated in 2007 and is headquartered in Hangzhou, China.

Advisors' Opinion:

• [By Wyatt Research Staff]

  MOBI hit another 52-week high of $12.15 late last week. The stock continues to surge on increasing volume. The latest advance in share price came after Oppenheimer upgraded the stock to "Outperform".

  Last week, the China-based internet portal and gaming provider giant Sohu.com (Nasdaq: SOHU), announced an advertising agreement with MOBI.

A Hidden Reason Accuride's Future Looks Bright

Here at The Motley Fool, I've long cautioned investors to keep a close eye on inventory levels. It's a part of my standard diligence when searching for the market's best stocks. I think a quarterly checkup can help you spot potential problems. For many companies, products that sit on the shelves too long can become big trouble. Stale inventory may be sold for lower prices, hurting profitability. In extreme cases, it may be written off completely and sent to the shredder.

Basic guidelines
In this series, I examine inventory using a simple rule of thumb: Inventory increases ought to roughly parallel revenue increases. If inventory bloats more quickly than sales grow, this might be a sign that expected sales haven't materialized. Is the current inventory situation at Accuride (NYSE: ACW  ) out of line? To figure that out, start by comparing the company's inventory growth to sales growth. How is Accuride doing by this quick checkup? At first glance, pretty well. Trailing-12-month revenue decreased 14.3%, and inventory decreased 30.5%. Comparing the latest quarter to the prior-year quarter, the story looks decent. Revenue dropped 28.6%, and inventory dropped 30.5%. Over the sequential quarterly period, the trend looks healthy. Revenue grew 9.2%, and inventory dropped 6.1%.

Advanced inventory
I don't stop my checkup there, because the type of inventory can matter even more than the overall quantity. There's even one type of inventory bulge we sometimes like to see. You can check for it by examining the quarterly filings to evaluate the different kinds of inventory: raw materials, work-in-progress inventory, and finished goods. (Some companies report the first two types as a single category.)

A company ramping up for increased demand may increase raw materials and work-in-progress inventory at a faster rate when it expects robust future growth. As such, we might consider oversized growth in those categories to offer a clue to a brighter future, and a clue that most other investors will miss. We call it "positive inventory divergence."

On the other hand, if we see a big increase in finished goods, that often means product isn't moving as well as expected, and it's time to hunker down with the filings and conference calls to find out why.

What's going on with the inventory at Accuride? I chart the details below for both quarterly and 12-month periods.

Source: S&P Capital IQ. Data is current as of latest fully reported quarter. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Source: S&P Capital IQ. Data is current as of latest fully reported quarter. Dollar amounts in millions. FQ = fiscal quarter.

Let's dig into the inventory specifics. On a trailing-12-month basis, work-in-progress inventory was the fastest-growing segment, up 5.5%. On a sequential-quarter basis, work-in-progress inventory was also the fastest-growing segment, up 5.5%. Accuride seems to be handling inventory well enough, but the individual segments don't provide a clear signal. Accuride may display positive inventory divergence, suggesting that management sees increased demand on the horizon.

Foolish bottom line
When you're doing your research, remember that aggregate numbers such as inventory balances often mask situations that are more complex than they appear. Even the detailed numbers don't give us the final word. When in doubt, listen to the conference call, or contact investor relations. What at first looks like a problem may actually signal a stock that will provide great returns. And what might look hunky-dory at first glance could actually be warning you to cut your losses before the rest of the Street wises up.

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Add Accuride  to My Watchlist.