Apple's iWatch Conundrum

News from the Japanese trademark office that Apple (NASDAQ: AAPL  ) has applied to trademark "iWatch" is a strong indication that the product will ultimately come to fruition. While the release of a new device in a new product segment has the potential to be a win for Apple, there are concerns that investors should understand. As rumors continue to circulate, and anticipation builds, the stakes for Cupertino are likely on the rise.

In the video below, Fool.com contributor Doug Ehrman discusses the pros and cons of the iWatch, and how it positions Apple relative to Google (NASDAQ: GOOG  ) in the wearable tech space.

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Bank of America Needs to Get Even Skinnier

Like many of its peers, Bank of America (NYSE: BAC  ) attended the Morgan Stanley Financials Conference in New York this week, where Chief Financial Officer Bruce Thompson was put on the hot seat, answering questions from analysts and cluing investors in on where the big bank is headed these days. Two issues of particular importance concerned the mortgage business, and the extensive expense-slashing in which the bank has been engaged over the past two years.

Investors: Don't take cost-cutting off the table
Lately, CEO Brian Moynihan has been trying to move the emphasis at Bank of America more toward revenue generation and away from the massive cuts that have been achieved during his tenure -- an excellent idea, considering the fact that revenue has been less than robust on his watch. However, he has been busy slimming the overweight behemoth, having shed $60 billion of extra fat over the past two years.

Investors, though, haven't had enough slicing and dicing, as it turns out. At the conference, a survey asking, "What would drive you to add to your Bank of America position?" showed that 51% of respondents favored the response, "execution on expense reductions flowing to the bottom line," over other choices such as an improved outlook on housing, more return of capital to investors, or stronger loan growth.

B of A isn't alone in its cost-cutting binge. Michael Corbat, CEO of Citigroup (NYSE: C  ) , noted at another investor's conference last month that Citi plans to cut about $2 billion in expenses in the next couple of years. That's chicken feed, though, compared to the amount conference goers revealed that they think B of A should trim over the next three years -- between $5 billion and $10 billion. 

Mortgages: Back in the game?
In regard to mortgage lending, Thompson noted that the bank increased that metric 57% from the first quarter of 2012 to the most recent quarter. Though exiting correspondent lending hurt, he said, the bank is getting its share of the market back -- thanks to an aggressive cross-selling initiative at branch locations.

While Thompson sees revenues increasing into the future, the sad fact is that the mortgage business has experienced a severe slowdown. This was apparent in the first-quarter earnings results of Wells Fargo (NYSE: WFC  ) , the king of mortgage originations, which reported a sizable decrease year over year in refinance activity, along with the attendant income. In addition, the most recent Refinance Index showed refinance applications at their lowest point since November 2011 -- a scenario that is only apt to worsen as interest rates continue to rise.

The journey is far from over
It looks like the next year or two will continue on in the same vein for Bank of America, as it persists in efforts to pare itself down to the bare minimum -- which is what investors seem to want. Hopefully, Moynihan will continue with his cross-selling program, as well, because he is correct in his belief that the bank needs to ramp up revenues if it is to survive. Thriving, it seems, is still a little way off.

Bank of America's stock doubled in 2012 -- can the big guy do it again? With continued cost slashing and legal turmoil 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.

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More Expert Advice from The Motley Fool

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

Basic Needs Portfolio Selection: Chevron

Five weeks ago, I outlined my plans to create a portfolio of 10 companies that all have one thing in common: They provide a basic need or deliver life's necessities. It's my contention that basic-needs companies can offer investors stability and growth throughout any market environment thanks to consistent demand, incredible pricing power, and delectable dividends. This portfolio, which I have dubbed the Basic Needs Portfolio, will be pitted against the S&P 500 over a period of three years with the expectation of outperformance for all 10 stocks. I'll be rolling out a new selection to this portfolio every week for the next five weeks.

You can review my previous four selections here:

Waste Management Intel NextEra Energy MasterCard

Today, I plan to introduce the fifth of 10 selections to the Basic Needs Portfolio: Chevron (NYSE: CVX  ) .

How it fits with our theme
There are no magic surprises here: We need energy to provide electricity to our homes and businesses and power our cars and trucks. Chevron is a diversified oil and gas company that does everything from drilling for oil, natural gas, and natural gas liquids, to refining petroleum into everyday products such as fuel for our cars.

What we often forget is that on top of being a domestic and international juggernaut that supplies the world with much of its energy needs, petroleum has numerous other uses outside of energy. According to Ranken Energy, a 42-gallon barrel of oil makes 19.4 gallons of gasoline. The remaining petroleum is used to make some 6,000 different items, including household products like plastic containers, dishes, and candles, women's cosmetics, and even the tires on your car, just to name a few. Petroleum is an essential of life, so it only makes sense to include one of the biggest companies involved in drilling for, retrieving, and refining petroleum products in this portfolio of basic needs stocks.

The risk
The three biggest risks that integrated oil and gas companies face are political unrest in overseas markets, imprudent capital expenditures, and a global growth slowdown.

Rebel guard in Libya, March 2011. Source: BRQ Network, Flickr.

Despite operating around the globe, many of Chevron's assets are well-protected from political unrest or violence. The same can't be said for Italian-based Eni (NYSE: E  ) which saw a good chunk of its oil production come under serious pressure in 2011 because of civil unrest and an eventual regime change in Libya. At the time, 14% of Eni's daily production – nearly 250,000 barrels – came from Libya and it maintained quite a few other undeveloped assets in the country. Eni's prospects have since improved, but other oil and gas companies deal with the similar potential for unrest on a daily basis.

No oil and gas driller is perfect, not even Chevron, and all have made an imprudent asset investment before. Luckily for Chevron, the company's diversified global assets provide ample cash flow – an average of $11.4 billion over the past three years – which makes it easy for the company to utilize this cash for drilling activities or improving its refining capacity.

On the other hand, Chesapeake Energy (NYSE: CHK  ) got itself in a lot of trouble when natural gas prices sank to a decade-low last year. Chesapeake leveraged itself to the hilt by purchasing natural-gas-heavy assets last decade but was forced to reduce its output when nat-gas prices hit their lows. Chesapeake would have actually run into a capital expenditure shortfall in 2013 if it didn't sell off some of its assets to boost its available cash.

Finally, there's the threat of a global slowdown which would negatively impact the need for oil, natural gas, and natural gas liquids, and send prices and volume markedly lower. This is a threat that diversity of assets certainly helps abate, but that Chevron is unable to completely escape from.

Why Chevron?
Despite the risks mentioned above, I feel Chevron is the strongest and most attractively priced integrated oil and gas company.

Source: Commons.wikimedia.org.

Chevron's biggest opportunity is in its overseas markets. It's not a big secret that China, India, and much of Southeast Asia represents an area of independent growth that could push higher without the help of U.S. or Western European demand. This is of particular interest to Chevron which is Australia's largest natural gas asset holder, with 21 known finds off the coast of Australia since mid-2009 which have added roughly 10 trillion cubic feet in reserves. With its proximity to these rapidly growing markets, and natural gas prices commanding a premium overseas that they do not domestically, Chevron looks poised to profit from high growth in this region.

But, we can't forget that Chevron is a domestic juggernaut as well. As Chesapeake Energy was putting the "for sale" signs in its front yard, Chevron and Royal Dutch Shell (NYSE: RDS-A  )  were chomping at the bit to gobble up those assets. Chevron and Royal Dutch Shell wound up purchasing Chesapeake's Permian Basin assets for a sum of $3.3 billion in September. This is important because the Permian Basin is known for its liquids-rich assets – translating to higher margins since oil prices are often less volatile than natural gas prices – and it's close enough to Louisiana's terminals that bypassing Cushing, Okla., and shipping by rail to obtain the higher Brent crude price makes sense.

It would also be completely foolish of me not to mention Chevron's onshore natural gas assets which could turn into a big moneymaker if President Obama follows through with policies designed to make America more energy independent.

Perhaps the greatest aspect of Chevron, and the reason why I prefer it over peer ExxonMobil (NYSE: XOM  ) , is the company's emphasis on its shareholders. Chevron repurchased $1.25 billion worth of its shares in just the past quarter and has a 25-year streak of boosting its dividend.

Source: Nasdaq.com; * denotes an assumed payout of $1.00 per quarter for remainder of 2013.

In its most recent quarter it announced an 11% dividend increase, which would pushe its yield up to 3.4%, significantly higher than ExxonMobil's 2.8%. Simply put, there is no smarter play on energy assets than Chevron.

Stay tuned next week, when I'll unveil the sixth selection to the Basic Needs Portfolio.

Energy investors would be hard-pressed to find another company trading at a deeper discount than Chesapeake Energy. Its share price depreciated after negative news surfaced concerning the company's management and spiraling debt picture. While the debt issues still persist, giant steps have been taken to help mitigate the problems. To learn more about Chesapeake and its enormous potential, you're invited to check out The Motley Fool's brand-new premium report on the company. Simply click here now to access your copy.

Walgreen Increases Sales but Misses Estimates on Earnings

Walgreen (NYSE: WAG  ) reported earnings on June 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended May 31 (Q3), Walgreen met expectations on revenues and missed estimates on earnings per share.

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

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

Revenue details
Walgreen reported revenue of $18.34 billion. The 15 analysts polled by S&P Capital IQ looked for revenue of $18.48 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.

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

EPS details
EPS came in at $0.85. The 20 earnings estimates compiled by S&P Capital IQ forecast $0.90 per share. Non-GAAP EPS of $0.85 for Q3 were 35% higher than the prior-year quarter's $0.63 per share. GAAP EPS of $0.65 for Q3 were 4.8% higher than the prior-year quarter's $0.62 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 28.5%, 30 basis points better than the prior-year quarter. Operating margin was 4.7%, 20 basis points worse than the prior-year quarter. Net margin was 3.4%, 40 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $18.00 billion. On the bottom line, the average EPS estimate is $0.76.

Next year's average estimate for revenue is $72.32 billion. The average EPS estimate is $3.10.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,100 members out of 2,247 rating the stock outperform, and 147 members rating it underperform. Among 602 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 578 give Walgreen a green thumbs-up, and 24 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Walgreen is outperform, with an average price target of $49.58.

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Add Walgreen to My Watchlist.

Stocks and the Federal Reserve -- Necessary Pandemonium

Let me be clear from the outset: The Federal Reserve has not only been justified in its aggressive stance toward monetary policy over the past five years, it's also been effective.

Fears of inflation were wrong. Completely. Price appreciation isn't too high; the problem is that it's too low.

And the idea that the benefits of the central bank's policies -- namely, the three successive rounds of quantitative easing -- were outweighed by their detriments, exhibits abject ignorance about the source of our economic malaise. By driving down long-term interest rates, the Fed allowed tens of thousands of homeowners to refinance their mortgages, and thereby free up income for consumer spending. The latter, mind you, accounts for more than 70% of our gross domestic product.

You can see this in action by reading the quarterly reports of any of the nation's largest banks. In the first quarter of this year, for example, Wells Fargo underwrote $109 billion in mortgages, the vast majority of which were refinances. The same was true at Bank of America, though to a slightly smaller degree, given that it originated a total of only $24 billion in home loans over the same three-month period.

But that being said, people who argue that the Fed's policies don't have negative side effects are also deluding themselves. When you inject $2.5 trillion of liquidity into an economy, it's going to inflate asset prices, which is exactly what happened.

Between the beginning of last September, the same month the Fed announced QE3, and the middle of this past May, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) and the S&P 500 (SNPINDEX: ^GSPC  ) climbed by 18% and 19%, respectively. And if you want a more extreme example of this, just cast your eyes across the Pacific to Japan, where the benchmark Nikkei (NIKKEIINDICES: ^NI225  ) soared more than 80% since the government rolled out a similar, albeit more extreme version of the same thing.

Why are higher asset prices a bad thing? In and of themselves, they aren't. One could even make a convincing argument that they've been good. The accompanying wealth effect makes consumers feel more confident and, therefore, willing to, well, consume -- which, again, as I've already noted is the bedrock of our economy.

Where we run into issues, however, is on the downside, triggered by the inevitable pullback in monetary easing. And this is where the necessary pandemonium referenced in the title comes in.

As you can see in the table below, in June, the first full month after Fed Chairman Ben Bernanke intimated that the central bank could soon begin to taper its $85 billion in monthly bond purchases, things went haywire. The average daily movement of the Dow nearly doubled to 136 points, and the blue-chip index either advanced or declined by a triple-digit margin in 80% of the trading sessions.

Month

Percent of Days of Triple-Digit Moves on the Dow

Average Daily Move

January	5%	61
February	37%	77
March	10%	54
April	32%	74
May	36%	73
June	80%	136

Source: Yahoo! Finance

The big question now, of course, is what does this mean going forward?

To be clear, the Fed hasn't said that it will taper its bond purchases, only that it may soon begin to do so. Consequently, once it does finally make that decision, which could happen at any time now depending on how the economy performs, I think it's safe to assume that volatility could even pickup further. And it's for this reason that investors would do themselves a favor over the next few months by temporarily misplacing the password to their brokerage accounts, as buying and selling in this type of environment will almost invariably lead to substandard performance.

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

Don't Bank on Bank Cash Advances

Not even if you're name is Wells Fargo (NYSE: WFC  ) can you escape the wrath of bankers who don't want competition from the payday industry. New regulations by the FDIC and the Office of the Comptroller of the Currency are being targeted at the loans provided not by payday lenders, but rather by the big banks, like Wells and US Bank. 

Many may not realize that, while the payday industry is often characterized by the banking industry as a bunch of loan sharks engaging in predatory lending on the poor and unaware, some of the largest banks themselves commit the heresy of offering short-term loans to borrowers. 

Wells, US Bank, Fifth Third Bancorp, and Regions Finance all offer payday loans that are many times more insidious than those offered by traditional payday lenders. Unlike First Cash Financial or EZCORP (NASDAQ: EZPW  ) , payday loans by the big banks actually have ready access to your checking account (you need to have one of them first to get a payday loan from them) and they freely dip into it to automatically remove your payment and fees. Payday lenders can't do that.

There's a level of risk involved in providing the unbanked and underbanked with an unsecured loan, which the industry's critics ignore. In 2012, EZCORP made $366 million worth of consumer loans, $314 million of which were repaid. That 15% of defaulted loans was up from 13% the year before, as it didn't have the luxury of dipping into the borrower's bank account.

The default repayment option for a Wells Fargo Direct Deposit Advance is automatic repayment from the borrower's checking account. There is an option to make a payment by mail, but you have to call the bank to request that option, and you have to do it before you get an advance. Moreover, as your direct deposits are deposited into your checking account, Wells Fargo will take its payment as soon as the money hits your account. 

The bank's regulators want to crack down on them, requiring that they first assess a borrower's ability to repay, along with identifying what the annual percentage rate of these payday loans are. As critics have contended when it came to traditional payday lenders, a 15% interest rate on a two-week loan equates to an APR of about 300%.

Now, if we can just get the banks to publicize the APRs on the other fees they charge. The FDIC notes that, if you overdraw your account by $20, and the bank charges you $27 for doing so (the average these days), that's equal to an APR of $3,520%! And that $2 fee for withdrawing $20 from the ATM works out to a 260% APR. 

By all means, disclosure is important, and the banks have angled for greater scrutiny of the payday industry. Now the payoff is coming, because they're coming under the magnifying glass themselves.

While personal debt levels remain excessive, there's no comparison to the tab the federal government has run up. The U.S. has piled on more than $10 trillion of new debt since 2000. Annual deficits topped $1 trillion after the financial crisis. Millions of Americans have asked: What the heck is going on? The Motley Fool's new free report, "Everything You Need to Know About the National Debt," walks you through with step-by-step explanations about how the government spends your money, where it gets tax revenue from, the future of spending, and what a $16 trillion debt means for our future. Click here to read the full report!

Hot Growth Stocks To Own For 2014

Accenture (NYSE: ACN  ) is well known as a consulting giant, with an emphasis on financial and risk management services, IT consulting, and outsourcing. But the reach of Accenture's business goes well beyond what many investors are familiar with, and Accenture stock has benefited from the wide range of opportunities that the company has capitalized on. Let's take a closer look at Accenture to find out what's driving its growth story forward and what it'll take for the stock to keep moving higher.

How Accenture does business
Accenture isn't the only major consulting company in the world, but it's one of the largest. The emphasis on human capital over physical assets in generating the company's profits leads to highly attractive returns on invested capital, and the company's corporate culture has produced a strong reputation both within the industry and among potential clients.

Hot Growth Stocks To Own For 2014: Isg Capital Co(SUS.V)

ISG Capital Corporation, a real estate company, engages in the acquisition and greening of investment properties. As of September 30, 2010, the company acquired one property, which is located in Ingersoll, Canada. ISG Capital Corporation is based in Toronto, Canada.

Hot Growth Stocks To Own For 2014: Reis Inc(REIS)

Reis, Inc., through its subsidiary, Reis Services, provides commercial real estate market information and analytical tools in the United States. The company maintains a proprietary database containing information on commercial real properties, including apartment, office, retail, and industrial properties in the metropolitan markets and neighborhoods. Its data is used by real estate investors, lenders, and other professionals to make informed buying, selling, and financing decisions; and debt and equity investors to assess, quantify, and manage the risks of default and loss associated with individual mortgages, properties, portfolios, and real estate backed securities. The company?s products include Reis SE and ReisReports that provide online access to a proprietary database of commercial real estate information and analytical tools designed to facilitate debt and equity transactions, and ongoing evaluations; and trend and forecast analysis at metropolitan and neighborhoo d levels, as well as to building-specific information, such as rents, vacancy rates, lease terms, property sales, new construction listings, and property valuation estimates. It serves banks, other financial institutions, investment funds, equity owners, regulators, brokers, and appraisers, as well as property owners, developers, and builders. The company was founded in 1980 and is based in New York, New York.

5 Best Sliver Stocks For 2014: Reno De Medici(RDM.MI)

Reno de Medici S.p.A. engages in the production and distribution of cartonboard made of recycled fiber in Italy, Spain, Germany, France, and the United Kingdom. Its products are used for packaging and binding applications. The company was formerly known as Cartiera del Reno and changed its name to Reno De Medici S.p.A. in 1986. Reno De Medici S.p.A. was founded in 1967 and is based in Milan, Italy.

The Future of Apple Is Everywhere

The genius of Apple's (NASDAQ: AAPL  ) product innovation is that Apple has found a way to think years, even decades ahead of consumers. It revolutionized what we thought about cell phones, created an app model that didn't previously exist, and is currently taking steps to connect us to everything, all the time.

Don't get fooled by the product announcements most people focus on; it's the software that Apple will use to differentiate itself in the future. Airplay allows your Apple devices to communicate with each other, AirDrop makes other devices accessible, and iCloud stores photos, music, and soon passwords that pull you in and keep you in the ecosystem.

Slowly, these products creep into our daily usage and become a natural extension of us. Turn the lights on remotely, check your security camera, change a file on your smartphone, and beam anything to the nearest Apple-powered screen.

What Apple is doing is making the device itself ubiquitous. Wherever or whenever it's convenient to do what you need to do, from business to recreation, on any of your Apple devices, a solution will be available. Wi-Fi, iCloud, AirDrop, and AirPlay are just the ways Apple uses to connect them and make sure Apple is everywhere.

The next step
Don't think the iWatch or iTV product rumors will just be devices on their own. The point is to connect you even more to the Apple ecosystem. An iWatch could be an extension of an iPhone or iPad, relaying iMessages, emails, and of course music. The iTV could be a screen for AirPlay, a cable replacement, or your home movie theater, all through Apple services and devices.

The connectivity of these devices is probably more important than anything else because that allows Apple to create a user experience no one can match.

Can the competition catch up?
Google is a larger player in smartphones and is on Apple's heels in tablets, but it lags behind in a few key ways. Consumers don't update its operating system, and it doesn't have a viable TV offering yet. In many ways, Google is ahead of Apple from a software and cloud perspective, but it doesn't make all of those services available to all devices right away like Apple does.

Microsoft has smartphones, tablets, and TV access with Xbox One, but its installed base is so small that developers don't leverage the ecosystem the way Apple's do. I think Microsoft is Apple's biggest challenger, but the price of Xbox One is a hurdle and people don't seem to be thrilled about using Windows for mobile just yet.

When it comes to connectivity, Apple has a huge lead in access and usability and Google and Microsoft are playing catch-up. Pay attention to how Apple's new product announcements this year enhance connectivity and function between devices, not just how the device itself works, because that's where Apple is building a real advantage.

We know that whatever Apple comes out with next it has a history of cranking out revolutionary products and before you know it replacing successful products with something new. Find out how Apple does it in our free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.

Top Japanese Stocks To Buy Right Now

Asian stocks headed for their longest losing streak since November as a stronger yen weakened the profit outlook for Japanese exporters and China signaled it will tolerate slower growth.

Nissan Motor Co., Asia�� third-largest carmaker, slid 6.8 percent in Tokyo as the yen gained against the dollar. David Jones Ltd. lost 0.8 percent as sales at Australia�� second-biggest department-store operator missed analyst estimates. 361 Degrees International Ltd. (1361) sank 9.1 percent in Hong Kong after the sportswear manufacturer projected a profit drop.

The MSCI Asia Pacific Index slid 1.3 percent to 136.80 as of 2:23 p.m in Hong Kong, the lowest since April 19, a fifth day of declines. Almost two stocks fell for each that rose and all 10 industry groups on the gauge retreated. The measure lost 2.7 percent last week, the most since July, as speculation grew the Federal Reserve will reduce its bond purchases as the economy improves and China manufacturing data missed estimates.

Top Japanese Stocks To Buy Right Now: Sirius XM Radio Inc.(SIRI)

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

Advisors' Opinion:

• [By Chuck Carlson]

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

Top Japanese Stocks To Buy Right Now: S1 Corporation(SONE)

S1 Corporation provides payments and financial services software solutions in the United States and internationally. The company operates in three segments: Banking: Payments, Banking: Large Financial Institution (FI), and Community Financial Institution (FI). The Payments segment provides ATM and retail point-of-sale driving, card management, and merchant acquiring solutions to financial institutions, retailers, and transaction processors of various sizes globally. The Banking: Large FI segment offers consumer banking, small business and corporate online banking, trade finance, and mobile banking solutions to large banks globally; branch and call center banking solutions to large banks outside of the United States; and software, custom software development, hosting, and other services to State Farm Mutual Automobile Insurance Company. The Banking: Community FI segment provides consumer and small business online banking, mobile banking, voice banking, and branch and call c enter banking solutions to community and regional banks, and credit unions in the United States. The company also provides various professional services, such as project management, implementation, custom software development, integration, educational, and Web design services; and customer support services. In addition, it offers hosting services comprising systems outsourcing, data center hosting, and operational management and control across a range of personal, small business and corporate Internet banking, mobile, voice, and payment processing applications. The company primarily serves banks, credit unions, retailers, and transaction processors. S1 Corporation was founded in 1934 and is headquartered in Norcross, Georgia.

5 Best Consumer Service Stocks To Invest In Right Now: PIMCO Municipal Income Fund III(PMX)

PIMCO Municipal Income Fund III is a closed ended fixed income mutual fund launched and managed by Allianz Global Investors Fund Management LLC. The fund is co-managed by Pacific Investment Management Co LLC. It invests in fixed income markets. The fund invests in a portfolio of municipal bonds, including long and short U.S. Treasury Notes, and U.S. Treasury Bond Futures. PIMCO Municipal Income Fund III was formed in 2002 and is domiciled in United States.

Top Japanese Stocks To Buy Right Now: RPX Corporation(RPXC)

RPX Corporation provides patent risk management solutions in the United States, Europe, and Asia. It offers a subscription-based patent risk management solution that facilitates exchanges of value between owners and users of patents. The company provides a defensive patent aggregation solution in which it acquires patents or licenses to patents and licenses these patents to clients to protect them from patent infringement assertions. It also allows its clients access to the company?s proprietary patent market intelligence and data. The company?s clients include companies that design, make, or sell technology-based products and services, as well as companies that use technology in their businesses. RPX Corporation was founded in 2008 and is based in San Francisco, California.

Here's What This Annual 20% Gainer Has Been Buying

Every quarter, many money managers have to disclose what they've bought and sold, via "13F" filings. Their latest moves can shine a bright light on smart stock picks.

Today, let's look at Caxton Associates, founded in 1983 by Bruce Kovner (who stepped down in 2011). The investment company is known for relatively few years with negative returns, and also for average annual gains of about 20% since its inception several decades ago. That's a powerful record.

Caxton is also known for charging clients dearly for the privilege of going along for the ride. In an industry known for routinely charging 2% of assets annually while also taking 20% of profits, Caxton had long charged 3% and 30%, though that was reduced some last year.

The company's reportable stock portfolio totaled $1.6 billion in value as of March 31, 2013.

Interesting developments
So what does Caxton Associates' latest quarterly 13F filing tell us? Here are a few interesting details:

The biggest new holdings are Assured Guaranty and the SPDR Select Financial Sector ETF. Other new holdings of interest include Micron Technology (NASDAQ: MU  ) and Level 3 Communications (NYSE: LVLT  ) . The struggling PC market has hurt Micron, but bulls are hopeful that growth in tablets and smartphones will boost demand for memory chips. Micron's purchase of Japanese manufacturer Elpida has some investors quite optimistic, as it boosts Micron's capacity and its relationship with Apple. Micron has been losing market share, though, and some worry about the commoditization of memory and Micron's debt levels. Several analysts increased their price targets for the stock recently.

Level 3 Communications, long burdened with substantial debt, is expanding its services around the world, for example boosting its video broadcasting in Latin America. Many investors are steering clear, however, not liking its hefty debt, net losses, and negative free cash flow. (Its recent losses were smaller than analysts had expected, though.)

Among holdings in which Caxton Associates increased its stake was R. R. Donnelley (NASDAQ: RRD  ) . Commercial printer Donnelley provides labels, packaging, and more to the private and public sector. It prints many thousands of forms for the SEC, too, and bought Edgar Online. Bears worry about its steep debt load, though the company is free-cash-flow positive. Some also worry about a possible reduction of its dividend, which recently yielded nearly 8%. To succeed, the company needs to do more digital business. To that end, it recently sealed an eBook deal with Harlequin.

Caxton Associates reduced its stake in lots of companies, including Georgia-based Synovus Financial (NYSE: SNV  ) . Synovus has been posting strong return-on-equity (ROE) numbers. In May, it acquired $54 million in deposits from the failed Sunrise Bank. Bears worry about the bank's significant residential real estate business and the current low interest rate environment. It has also been working to pay off its TARP obligations.

Finally, Caxton Associates' biggest closed positions included Sprint Nextel and JPMorgan Chase. Other closed positions of interest include India-based ICICI Bank (NYSE: IBN  ) . In April, the bank reported double-digit profit increases and rising ROE. Analysts at Zacks downgraded the bank earlier this month, though, citing deterioration of its credit quality and expected steep operating expenses.

We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing. 13-F forms can be great places to find intriguing candidates for our portfolios.

 

With big finance firms still trading at deep discounts to their historic norms, investors everywhere are wondering if this is the new norma. or if finance stocks are a screaming buy today. The answer depends on the company, so to help figure out whether JPMorgan is a buy today, check out The Motley Fool's premium research report on the company. Click here now for instant access.

Boeing Plane Deliveries Reach 15-Year High

Boeing (NYSE: BA  ) has been working hard to increase the production rates of its fast-selling commercial jets, and the company is beginning to see its efforts rewarded. On Wednesday, Boeing released figures for the second quarter of 2013, which show that the company has not only increased deliveries by 13% over the quarter, but also delivered more planes in a quarter than it has since 1998. For 2013 to-date, it has also beaten its chief competitor Airbus on deliveries. While the company has a lot of work yet to do in meeting its massive $322-billion commercial jet backlog, this successful uptick in production and deliveries is a very positive sign.

Boeing delivered 169 planes in the second quarter, making 306 complete deliveries for the year, so far. About 70% of these were Boeing's 737 Next Generation, a narrow-body jet due to be replaced by the 737 MAX in 2017. The 737 is already Boeing's highest-output program, and Boeing is in the process of boosting production 35 to 48 jets per month.

The second quarter also saw Boeing resume delivery of the flagship 787 Dreamliner, the company's most technologically advanced jet. The company delivered just one of the wide-body planes in the first quarter, as battery problems kept the global Dreamliner fleet grounded for nearly four months. Boeing delivered 16 more Dreamliners in the second quarter, each at a list price of over $200 million. The company is aggressively trying to raise production rates on the Dreamliner to 10 planes per month, an effort it will have to execute quickly if Boeing is going to hit its goal of delivering 60 Dreamliners in 2013.

For investors, this is good news. While Boeing has all the demand it can handle, the company doesn't get paid if it can't supply its planes, and the company has struggled in the past to successfully ramp up production. Careful, incremental increases in building rates, without more serious incidents like the 787 grounding, are exactly what Boeing needs to focus on to take advantage of its market opportunity.

Boeing's order backlog will only grow as the global economic recovery strengthens, as increased demand for air travel forces airliners to expand and upgrade their fleets. Air travel is just one of the key business areas that will inevitably improve with a  stronger recovery. A recent Motley Fool report, "3 Strong Buys for a Global Economic Recovery," outlines how Boeing, and two other key industrial companies, could take off when the global economy gains steam. Click here to read the full report!

5 Best Biotech Stocks To Own For 2014

 Today, we review two big uptrends we've urged you to profit from...

 

One is speculative... one is conservative. Together, they make for a good pair.

 

 The first trend is biotechnology. Regular readers know we see biotechnology as one of the great "boom and bust" sectors of the stock market. With its promise of individualized medicine, cancer cures, and miracle drugs, few sectors capture imaginations and speculative money as well as biotechnology.

 

As Steve Sjuggerud has written several times, if you catch a good biotech boom, you can make extraordinary gains.

5 Best Biotech Stocks To Own For 2014: Exelixis Inc.(EXEL)

Exelixis, Inc., a biotechnology company, develops small molecule therapies for the treatment of cancer. It focuses on developing Cabozantinib, an inhibitor of tumor growth, metastasis, and angiogenesis that target MET, VEGFR2, and RET, which are key kinases involved in the development and progression of various cancers. The cabozantinib is in Phase III clinical trial for the treatment for medullary thyroid cancer. The company also engages in various clinical programs for cabozantinib focused on the treatment of metastatic castration-resistant prostate cancer, ovarian cancer, breast cancer, renal cell carcinoma, non-small cell lung cancer, hepatocellular cancer, and melanoma. In addition, Exelixis, Inc. involves in developing a portfolio of other novel compounds to address serious unmet medical needs through collaborations with various pharmaceutical and biotechnology companies, including Bristol-Myers Squibb Company, sanofi-aventis, Genentech, Inc., Boehringer Ingelheim Gm bH, and GlaxoSmithKline and Daiichi Sankyo Company Limited. Its products under development through collaborations include XL475, XL281, XL139, and XL413 inhibitors; ROR antagonists; therapies targeted against LXR, a nuclear hormone receptor implicated in various cardiovascular and metabolic disorders; XL147, XL765, and isoform-selective PI3K inhibitors; XL518, a small-molecule inhibitor of MEK; sphingosine-1-phosphate type 1 receptor; XL880 inhibitor; and therapies targeted against the mineralocorticoid receptor, a nuclear hormone receptor implicated in various cardiovascular and metabolic diseases. The company was formerly known as Exelixis Pharmaceuticals, Inc. and changed its name to Exelixis, Inc. in February 2000. Exelixis, Inc. was founded in 1994 and is headquartered in South San Francisco, California.

Advisors' Opinion:

• [By Stephen]

  This drug-development company will go before the FDA later this year and throughout 2012 and 2013 with a series of new drug applications. Exelixis' drug cabozantinib, code-named XL1-84, has shown a great deal of promise with a range of metastasizing tumors. The drug is being tested in the treatment of several types of cancers, hence the multiple filings with the federal regulator.
  
  But a much closer catalyst exists: at the annual American Society of Clinical Oncology meeting, to be held in early June, Elexilis will present data from the phase II trial of cabozantinib. If history is any guide, then the interim testing results will be well-received by shareholders.
  
  During the second half of 2011, the drug will go deeper into the clinical testing trials. Each time that happens, the company will provide effectiveness data on the performance of the prior round of testing. Results from a phase III study of metastasized thyroid cancers are expected to be concluded in a few months, while phase III studies for the treatment of prostate cancer are expected to begin later this year. Every one of these instances could be a catalyst to take shares higher.
  
  As a final catalyst, Exelixis has allegedly been having discussions with potential buyers, according to Bloomberg, though waiting on such a transaction before making a move also represents risk. Investors bid up shares of Savient Pharma (Nasdaq: SVNT) after the company put itself up for sale. Hopes for a quick profit were dashed when the company couldn't find any suitors and shares lost almost half of their value in just one day.

5 Best Biotech Stocks To Own For 2014: Algeta ASA (ALGETA)

Algeta ASA is a Norway-based biotechnology company engaged in the development of targeted cancer therapies based on its alpha-pharmaceutical platform. The Company�� principal product is Alpharadin for the treatment of bone metastases resulting from castration-resistant prostate cancer. The Company�� pipeline also includes Alpharadin for the treatment of bone metastases resulting from breast cancer, a combination of Alpharadin with Taxotere for the treatment of bone metastases resulting from prostate cancer and Thorium-227 showing various cancer indications. The Company develops Alpharadin in a development and marketing cooperation with Bayer Schering Pharma. Algeta ASA is active through the two wholly owned subsidiaries, Algeta Innovations AS and Algeta UK Limited. On April 12, 2012, the Company announced that it estabilished a subsidiary active in the United States, Algeta US.

Top Low Price Companies For 2014: Organovo Holdings Inc (ONVO)

Organovo Holdings, Inc. (Organovo), formerly Real Estate Restoration & Rental, Inc., incorporated in 2007, is a development-stage company. The Company has developed and is commercializing a platform technology for the generation of three-dimensional (3D) human tissues that can be employed in drug discovery and development, biological research, and as therapeutic implants for the treatment of damaged or degenerating tissues and organs. On December 28, 2011, Real Estate Restoration and Rental, Inc.�� (RERR) entered into an Agreement and Plan of Merger, pursuant to which RERR merged with its, wholly owned subsidiary, Organovo (Merger Sub). On February 8, 2012, the Company merged with and into Organovo Acquisition Corp. (Acquisition Corp.), a wholly owned subsidiary of Organovo, with the Company surviving the merger as a wholly owned subsidiary of Organovo Holdings (the Merger). As a result of the Merger, Organovo acquired the business of Organovo, Inc.

The Company has collaborative research agreements with Pfizer, Inc. (Pfizer) and United Therapeutic Corporation (Unither). As of March 31, 2012, it has five federal grants, including Small Business Innovation Research grants and developed the NovoGen MMX Bioprinter (its first-generation 3D bioprinter). The Company is engaged in the development of specific 3D human tissues to aid Pfizer in discovery of therapies in two areas of interest. In addition, in October 2011, it entered into a research agreement with Unither to establish and conduct a research program to discover treatments for pulmonary hypertension using its NovoGen MMX Bioprinter technology. Additionally, under the research agreement with Unither, the Company granted Unither an option to acquire from the Company a worldwide, royalty-bearing license in certain intellectual property created under the research agreement solely for use in the treatment or prevention of pulmonary hypertension and all other lung diseases.

The Company�� NovoGen MMX Bioprinter is an automate! d device that enables the fabrication of three-dimensional (3D) living tissues comprised of mammalian cells. A custom graphic user interface (GUI) facilitates the 3D design and execution of scripts that direct precision movement of the dispensing heads to deposit cellular building blocks (bio-ink) or supporting hydrogel. The Company is using a third party manufacturer, Invetech Pty., of Melbourne, Australia, to manufacture its NovoGen MMX Bioprinter. Its bioprinting technology and surrounding intellectual property and commercial rights serve as a platform for product generation across multiple markets that employ cell- and tissue-based products and services.

The Company competes with Organogenesis, Advanced BioHealing, Tengion, Genzyme, HumaCyte and Cytograft Tissue Engineering.

5 Best Biotech Stocks To Own For 2014: Gilead Sciences Inc.(GILD)

Gilead Sciences, Inc., a biopharmaceutical company, engages in the discovery, development, and commercialization of therapeutics for the treatment of life threatening diseases worldwide. Its products include Atripla, Truvada, Viread, Emtriva for the treatment of human immunodeficiency virus infection in adults; Hepsera, an oral formulation for the treatment of chronic hepatitis B; AmBisome, a amphotericin B liposome injection to treat invasive fungal infections; Letairis, an endothelin receptor antagonist for the treatment of pulmonary arterial hypertension; Ranexa for the treatment of chronic angina; Vistide, an antiviral medication for the treatment of cytomegalovirus retinitis in patients with AIDS; and Cayston, an inhaled antibiotic used as a treatment to enhance respiratory systems. The company?s products also comprise Tamiflu, an oral antiviral for the treatment and prevention of influenza A and B; Macugen, an intravitreal injection for the treatment of neovascular a ge-related macular degeneration; and Lexiscan/Rapiscan, an injection used as a pharmacologic stress agent in radionuclide myocardial perfusion imaging. Its products under the Phase III clinical trials consist of Cobicistat, a pharmacoenhancer that is under evaluation as a boosting agent for HIV medicines; Elvitegravir, an oral integrase inhibitor being evaluated as part of combination therapy for HIV; Integrase Single-Tablet, a ?Quad? regimen of elvitegravir, cobicistat, tenofovir disoproxil fumarate, and emtricitabine for the treatment of HIV/AIDS in treatment-naive patients; and Aztreonam for inhalation solution for the treatment of cystic fibrosis patients with Pseudomonas aeruginosa. The company?s Phase II clinical trials products comprise Cicletanine, Ranolazine, and Aztreonam, as well as GS 9190, GS 9256, and GS 9451. Its Phase I clinical trial products include GS 7340, GS 5885, GS 6620, GS 9620, and GS 6624. The company was founded in 1987 and is headquartered in Fost er City, California.

Advisors' Opinion:

• [By TheStreet Staff]

   Gilead Sciences (GILD) hits a snag that delays the filing, approval or launch of its all-oral Hepatitis C drug regimen. Investors also wake up to the realization that the commercial market for Hep C drugs is far smaller than expected. Gilead shares close in the red for the year. This is my Black Swan prediction for 2013.

5 Best Biotech Stocks To Own For 2014: Medivation Inc.(MDVN)

Medivation, Inc., a biopharmaceutical company, focuses on the development of small molecule drugs for the treatment of castration-resistant prostate cancer, Alzheimer?s disease, and Huntington disease. The company?s product candidates under clinical development include MDV3100, which is in Phase 3 development for the treatment of castration-resistant prostate cancer; and dimebon, which is in Phase 3 clinical trial for the treatment of Alzheimer?s disease and Huntington disease. It has collaboration agreements with Pfizer Inc. to develop and commercialize dimebon; and Astellas Pharma Inc. to develop and commercialize MDV3100. The company was founded in 2003 and is based in San Francisco, California.

BlackBerry Is No Apple

Things may not be all that rosy for Apple (NASDAQ: AAPL  ) these days, but at least it knows that it can count on its growing loyal audience to show up for new product introductions.

In this video, longtime Fool contributor Rick Munarriz explores the real problem with BlackBerry's (NASDAQ: BBRY  ) 2.7 million Z10 and Q10 devices sold during their debut quarter by comparing the 3% adoption rate to Apple's better-than-10% adoption rate when the iPhone 5 came out. There seemed like a flattering nugget out of BlackBerry from its previous conference call in March, but in the context of last week's carnage, it's not pretty.

The thinking investor's mobile play
The mobile revolution is still in its infancy, but with so many different companies it can be daunting to know how to profit in the space. Fortunately, The Motley Fool has released a free report on mobile named "The Next Trillion-Dollar Revolution" that tells you how. The report describes why this seismic shift will dwarf any other technology revolution seen before it and also names the company at the forefront of the trend. You can access this report today by clicking here -- it's free.

CoreLogic Makes an Acqusition

CoreLogic (NYSE: CLGX  ) is proceeding logically in terms of asset buys. The company announced it has signed an agreement to acquire a set of assets that compliment its core competencies. The seller is the privately held Decision Insight Information Group, and the price is $661 million.

That package includes Marshall & Swift/Boeckh, a company which CoreLogic describes as "a leading provider of residential and commercial property valuation solutions to the property and casualty insurance industry."

No. 2 is property data and analytics specialist DataQuick Information Systems, and the third acquisition is the credit and flood services operations of DataQuick Lender Solutions.

CoreLogic said it expects to realize cash tax benefits from the transaction totaling around $115 million. It anticipates the sale will be accretive to its fiscal 2013 results, and it will close during the company's Q3.

CoreLogic touted the complimentary aspects of its purchase. In the press release heralding the news, it quoted CEO Anand Nallathambi as saying that it "significantly expands our footprint in property and casualty insurance and adds additional scale to our existing property data and analytics business."

5 Important Trends in Consumer Electronics

The big consumer electronics show known as CE Week wrapped up in New York City a few days ago. Produced by the Consumer Electronics Association, this mid-year trade show is a good gauge of what industry insiders consider the most important up-and-coming technologies.

Our roving reporter Rex Moore was in New York for the extravaganza, and in the video below explains the trends investors need to know about.

Meanwhile, smartphones always play a part in consumer technology trends. Want to get in on the phenomenon? Truth be told, one company sits at the crossroads of smartphone technology as we know it. It's not your typical household name, either. In fact, you've probably never even heard of it! But it stands to reap massive profits NO MATTER WHO ultimately wins the smartphone war. To find out what it is, click here to access the "One Stock You Must Buy Before the iPhone-Android War Escalates Any Further..."

NVIDIA Shield Delayed: Does It Matter?

At the Consumer Electronics Show back in January, graphics-chip specialist NVIDIA (NASDAQ: NVDA  ) showed off a new portable gaming device that it called Project Shield. As my colleagues Eric Bleeker and Austin Smith discussed at the time, creating Shield was an odd move for NVIDIA.

After all, NVIDIA's core competency is building graphics chips: particularly for hardcore gamers. More recently, it has moved to become a major player in the mobile processor market. While it's understandable that NVIDIA wants to encourage a "marriage" of gaming and mobile computing, building its own portable gaming system could make investors wonder whether the company is losing focus.

On Wednesday afternoon, investors got another reason to worry. With Shield scheduled to go on sale the following day, NVIDIA announced that shipments will be delayed until July because of a third-party mechanical component that did not meet NVIDIA's standards. Is NVIDIA in trouble, or is this a minor incident that will have no lasting impact on the company?

Safeguarding the brand
As Patrick Moorhead of Forbes recently wrote, NVIDIA's decision to delay Shield was wise if there really was a quality control problem. Had the company released a faulty product in its first foray into the device market, it could have doomed the entire project.

That said, it's disturbing that NVIDIA got so close to the launch date before deciding to postpone it. Since Shield was supposed to go on sale on Thursday, retailers who are carrying the device probably have faulty units already in stock, which now need to get shipped back to NVIDIA and fixed or written off. Furthermore, if it took until the last day to recognize and react to this quality control issue, it's possible that other issues were also missed earlier in the testing process.

Looking forward
Now the company needs to scramble to fix the problem, which could distract management from the core chipmaking business. There have already been some hiccups there recently; the company's Tegra 4 mobile processor was delayed, possibly costing NVIDIA some design wins. Whereas Tegra 3 hit the market (in limited quantities) in December 2011, Tegra 4 is just starting to show up in devices now. That lag in product introductions is much greater than the one-year industry standard.

Another concern is inventory risk. While initial shipments of Shield were probably fairly modest, it could still be expensive to fix or replace all of those units. That's especially troubling when the device isn't expected to earn very high profits; NVIDIA recently dropped the price from $349 to $299 to stimulate consumer demand.

Foolish bottom line
It's possible that this incident will just be a slight bump in the road for NVIDIA. After all, gaming devices aren't NVIDIA's bread and butter -- the company is really relying on its Tegra and Icera mobile chips and its GRID cloud-based graphics cards for future growth. Shield is just a sideshow, at least for now.

The danger for NVIDIA investors is if Shield becomes a costly sideshow. Investors should definitely keep an eye on the company's margins in its next quarterly report, and look out for any disclosures about losses related to this quality issue.

That said, in light of the company's fairly low valuation, good prospects in its core areas of focus, and its significant program to return cash to shareholders, the stock still looks attractive at current levels. If NVIDIA's management can maintain its focus on the company's main growth drivers -- the upcoming Tegra 4i chip and the rollout of GRID servers -- the benefits should overshadow any headwinds from Shield.

The mobile revolution is still in its infancy, but with so many different companies it can be daunting to know how to profit in the space. Fortunately, The Motley Fool has released a free report on mobile named "The Next Trillion-Dollar Revolution" that tells you how. The report describes why this seismic shift will dwarf any other technology revolution seen before it and also names the company at the forefront of the trend. You can access this report today by clicking here -- it's free.

How Tight Are the Fed's New Banking Thumbscrews?

“World War Z” Is a Winner, but Vampires Still Slay Zombies

The Walking Dead may be chomping on The Vampire Diaries when it comes to TV ratings, but, at the movies, rotting corpses are usually no match for the bloodsuckers, or even werewolves. Can Brad Pitt's surprise hit World War Z, based on the popular book by Max Brooks, change all that? So far, the dead are putting up some pretty live numbers.

The zombie thriller raced to a $66.4 million opening weekend in the U.S. and has since added $22 million in domestic receipt,s and $45.8 million in international ticket sales heading into this weekend's showings, according to data supplied by Box Office Mojo.

Zombies on a plane! Sources: Paramount Pictures, YouTube.

No doubt the film's producers are relieved. World War Z's $190 million budget and well-known production snafus had some worrying that the film would be a John Carter-sized disaster for Viacom's (NASDAQ: VIA  ) Paramount Pictures. Instead, the studio is apparently already in talks about a sequel.

Did I mention the rotting part?
But again, The Walking Dead is an exception. The breakout zombie hit for AMC Networks (NASDAQ: AMCX  ) enters its fourth season in October as the top-rated scripted show of the 2012-2013 fall season, and that's in spite of an uncommonly tight budget for a drama dependent on brilliant makeup and visual effects artists.

SOURCE: Frank Ockenfels/AMC.

World War Z isn't exactly in Walking Dead territory. But, as you can see from the data compiled by Box Office Mojo, it's rare for a zombie flick to attract any kind of a wide audience. So rare, in fact, that World War Z is already tops in the genre -- presuming you discount Sony's animated monster mashup, Hotel Transylvania:

Metrics	Vampires	Werewolves	Zombies	The Mummy
Total U.S. box office	$2.91 billion	$1.73 billion	$1.14 billion	$550.9 million
No. of films in franchise	71	26	52	4
Per-film average	$40.97 million	$66.41 million	$22.01 million	$137.74 million
Top film in franchise** (box office)	The Twilight Saga: Eclipse ($300.5 million)	Wolf ($65.0 million)	World War Z ($88.3 million)	The Mummy Returns ($202.0 million)

Source: Box Office Mojo.
** Where the monster in question is somehow attached to the lead character.

Remember: go for the head
Each big box office makes it more likely we'll see more monsters at the theater. In the meantime, Walt Disney's (NYSE: DIS  ) Marvel Studios has taken pains to reclaim the film rights to darker characters such as the vampire-hunting Blade, and the demon-possessed Ghost Rider. Netflix, for its part, has ordered a second season of its original horror hit, Hemlock Grove.

And why not? Judging by the numbers, the dead are alive and well. Invest accordingly.

One stock that's hard to kill
The Motley Fool's chief investment officer has selected his No. 1 stock for this year. Find out more in the special free report: "The Motley Fool's Top Stock for 2013." Just click here to get your copy now and we'll tell you the name of this under-the-radar company.

A 1-Day Bounce Won't Solve the Dow's Problems

After declines over the past week have sent the Dow Jones Industrials (DJINDICES: ^DJI  ) down by more than 650 points, early signs this morning point to a potential rebound for the beleaguered U.S. stock market, with projections suggesting about a 70-point rise at the open. Yet even with some favorable news emerging both abroad and domestically, you need to be cautious before concluding that the worst of the recent correction is over.

Overnight, some favorable news has calmed global investors somewhat and sent U.S. stock futures markets higher as well. With the Chinese central bank making reassuring gestures in order to address fears that a credit crisis could further slow the emerging nation's economic growth, Asian stock markets recovered from their worst levels of the trading day, with Chinese stocks in particular rising from lows not seen since the depths of the financial crisis in 2009. European markets are also up broadly, with the major stock indexes in France, Germany, and the U.K. gaining between 1% and 1.5%. With durable-goods orders in the U.S. up 3.6% last month, investors can also point to the prospects for a strong domestic economy in justifying a market advance.

Stock gains in premarket trade are widespread. Industrial powerhouses Caterpillar and Alcoa have posted gains of about 1% right before the open. These two stocks' fortunes are strongly linked to China, with Alcoa suffering from a glut of Chinese aluminum production and Caterpillar falling as overall commodity demand reduces the ability and need for mining companies to buy its equipment.

Bank of America (NYSE: BAC  ) has also vaulted higher in the premarket hours, gaining 2.3%. A favorable settlement between B of A's Merrill Lynch unit and the government of the Piedmont region of Italy over a derivatives-related dispute is one more example of the bank trying to handle its legal risk, but of greater importance is avoiding any systemic risk of another global financial crisis. If China's efforts to control its credit markets bear fruit, then it represents one less worry for B of A to consider as it tries to spur growth in the face of rapidly rising interest rates.

Keep your eyes on the big picture
Regardless of whether this morning's favorable signs bear out in stock market gains today, any restoration of the bull market in stocks will take a lot longer than a single day to play out. Bond rates are unlikely to drop to their previous levels, barring a major economic slowdown, and the changing environment for stocks, bonds, and other investments will introduce new challenges for investors. By staying focused on longer-term trends, rather than getting caught up in day-to-day noise, you'll be best prepared to handle what the markets throw at you in the weeks and months to come.

The 2 Most Popular Stocks This Week

Stocks have just put in their best first-half performance since 1998, with the S&P 500 (SNPINDEX: ^GSPC  ) and the narrower, price-weighted Dow Jones Industrial Average (DJINDICES: ^DJI  ) adding 12.6% and 13.8% (price return), respectively.

Let's take a quick look at this week's two most popular stocks. When I say "popular," I don't mean the ones that performed best, but those that popped up on investors' radars -- for good or bad reasons. Here, then, is who made a splash.

Noodles & Company (NASDAQ: NDLS  )
Thursday evening, on the eve of the initial public offering of fast-casual dining chain Noodles & Company, I wrote:

Foolish investors know that IPOs are a beauty contest and are, as a result, skeptical of the "value proposition." At the $16 midpoint of the new pricing range, shares of Noodles & Company would be valued at 52 times trailing normalized earnings per share, or 31 times tangible book value per share. In this case, that skepticism looks richly deserved.

That didn't stop underwriters from pricing the shares at $18, or $1 above the top end of a $15 to $17 pricing range that had already been raised once. That, however, was nothing compared with what transpired once the shares hit the secondary market, as the shares opened at $32; by the end of the session, they settled at $36.75 -- better than a double with respect to the IPO price.

That's a wonderful result for investors who were able to obtain an allocation of shares as part of the IPO. For the company itself, however, it ought to be disappointing. Why? Consider what actually occurred: It sold shares at a price that the market immediately judged was equal to just half their intrinsic value -- in other words, the company appears to have left a lot of money on the table.

Mind you, it's legitimate to ask whether the market has made a rational assessment of the shares' intrinsic value, which it now pegs at 118 times trailing normalized normalized earnings per share and 73 times tangible book value per share. This was a small IPO (Noodles raised less than $100 million), and decent investor interest can have a big impact on price under those conditions. This could well be a situation in which liquidity trumped valuation discipline.

BlackBerry (NASDAQ: BBRY  )
Shares of BlackBerry fell by more than a quarter on Friday, as the company disappointed with the results of its fiscal first-quarter ended June 1. The magnitude of the stock's loss hints at the magnitude of the negative surprise, and, indeed, the company lost $0.06 per share (excluding one-time items) where analysts had been expecting a $0.13-per-share profit.

The company is struggling for oxygen in a market increasingly dominated by Apple's iPhone and devices running on Google's Android operating system. Friday's report provided little to no evidence that the company is having (or would have) any success swimming against that tide; BlackBerry didn't provide unit shipment numbers for the Q10 or the Z10, the newly launched products under its new BlackBerry 10 iteration.

Shares of BlackBerry look cheap on a number of metrics (they're trading at less than their tangible book value, for example), but I'd caution investors that this is a speculative situation, not an investment operation; "cheap" stocks of companies battling for survival can easily get a lot cheaper.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged among the five kings of tech. Click here to keep reading.

A Bearish Case For Rio Tinto: Commodities Conundrum

Believe that a China slowdown is imminent? One way of taking advantage of your idea is to short Rio Tinto (RIO).

Operating and Net Margins

A huge portion of Rio Tinto sales revenue come from hard metal like iron ore, aluminum and copper. This makes Rio Tinto particularly susceptible to a China slowdown, as a slowdown may adversely affect such metal prices. Declining metal prices can result in large operating losses.

(click to enlarge)

Sources: Rio Tinto 2012 Annual Report

Downside potential

(click to enlarge)

Sources: Rio Tinto 2012 Annual Report

Assuming no growth in metals production, a linear decline in ore prices can actually have an exponential effect on margins. Of course this assumes that operating cost is largely invariable. As such, Rio Tinto is a great way for one to lever up on the potential price collapse.

(click to enlarge)

Sources: Indexmundi.com

Just 10 years ago, iron ore was trading less than a tenth of its historical high. A material drop in ore prices is very possible.

Now, assuming Rio Tinto steps up its operations and increases volume productions, would that increase profitability? The answer is no. In fact, it would reduce it. Increasing supplies in light of declining demands would drive prices further down. At the same time, doing so would increase operating costs, squeezing operating income even more.

However, this is exactly what Rio Tinto did. It plans to kick up its production. For example, it plans to expand its iron ore production in the Pilbara region in Australia from 290 million tons to 360 million tons annually by 2015. While this is likely to be a positive for Rio Tinto in the long run, in ! the short run where a China crash may be imminent, this is a very dangerous idea.

Sources: Rio Tinto 2012 Annual Report

Financial position

High debt positions

Rio Tinto debt has been increasing while its cash have been dwindling. This puts Rio Tinto in a spot whereby it is especially susceptible to changes in metal prices. Large losses could further worsen the company's financial position.

(click to enlarge)

Sources: Capital IQ

Interest coverage

Due to the recent fed potential tapering, it is likely that interest rate coverage would decline, putting a strain on the company's ability to generate profits. Previously, the company increased its debt positions to take advantage of both booming china and cheap credit. Now with a much inflated debt to cash ratio, things are about to unwind.

Sources: Capital IQ

All in all

As such, I am convinced that shorting Rio Tinto is a great way to lever up on the potential China slowdown or crash. The best way may be to buy long term put options, instead of a outright short, to limit potential losses, while still having the majority of profits.

Source: A Bearish Case For Rio Tinto: Commodities Conundrum

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in RIO over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Declining Spreads Are a Big Concern for Oil and Rail Companies

Since the recession, there has been a noticeable pricing gap between West Texas Intermediate crude, a lighter grade of oil used as the benchmark for pricing in the U.S., and Brent crude, the European crude benchmark of light sweet crude produced from the North Sea.

Historically, these two oil types have traded almost in tandem with one another. However, the recession and subsequent economic and supply troubles of the U.S. and Europe changed all that.

Source: Energy Information Administration.

Because of decreased production in the U.S. and supply issues in Europe, Brent crude was at one time valued at $28 more per barrel than WTI. Some had actually questioned the importance of WTI in terms of overall global pricing given the strength that Brent had been exhibiting. 

This gap, while troublesome for midstream companies that had developed intricate transmission, pipeline, and storage systems that delivered oil assets to Cushing, Okla., the major oil hub of the U.S., turned out to be a boon for many independent oil companies operating in the oil-rich Bakken shale and Permian basin. It also was also a big help at just the right time for the railroads as commodity shipments like coal have dropped off a cliff because of cheaper alternative energy pricing. With oil companies looking to pump up their profits, they turned to railroad companies to ship their oil past Cushing to Louisiana terminals, where they could receive the higher Brent crude price, pay the rail company for shipping, and still walk away with a higher price than WTI in almost every instance.

This has been a lucrative practice for both oil and rail companies, but it may be on the verge of collapsing.

A disappearing spread
According to the Energy Information Administration, last year the U.S. produced an average of 6.5 million barrels of oil per day! That's the quickest rate of production we've witnessed since the mid-1990s, according to a report by The Wall Street Journal. Furthermore, production in May came in at 7.4 million barrels per day, the fastest monthly rate in more than two decades.

As the Obama administration has pushed for greater reliance on domestic oil, U.S. oil and gas companies have responded in record fashion. With the transmission, storage, and pipeline infrastructure in place now that simply wasn't there even five years ago, refiners across the U.S. have been able to use their capacity to refine more domestic WTI and less imported Brent crude. The end result has been an incredible tightening of the spread between Brent and WTI. 

Oil producers are losing their free money
One of the biggest losers of the tightening Brent-WTI spread will be oil and gas drillers that operate in liquid-rich shale assets that historically had delivered production to Cushing, specifically the Bakken and Permian basin.

The Bakken, as my Foolish colleague Matt DiLallo recently pointed out, has seen total oil reserve estimates jump from a range of 3 billion to 4.3 billion barrels five years ago to a current estimate of 7.4 billion. A liquid-rich region like this is highly sought after by oil drillers who want to lessen the impact of still relatively inexpensive natural gas prices. The biggest name in the Bakken, and largest leaseholder, is Continental Resources (NYSE: CLR  ) , which has been shipping close to two-thirds of its Bakken production by rail to Louisiana.

A really intriguing deal was actually forged by refiner Phillips 66 (NYSE: PSX  ) , which struck a five-year deal to ship 50,000 barrels per day of Bakken refined oil to New Jersey. For a refiner that relies on nimbleness and the ability to adapt production based on spreads and demand, this is a risky gamble that WTI will remain cheaper than Brent for quite a long period of time. It could wind up being a gamble that could backfire.

In the Permian Basin, Occidental Petroleum (NYSE: OXY  ) has been a big rail transport beneficiary, since it produced as much oil in 2011 as the No. 2, No. 3, and No. 4 producers combined! Being able to pilfer a few extra dollars per barrel can mean hundreds of millions of dollars extra for companies like Occidental with huge oil exposure.

Derailed
The biggest demand shock, though, could come from railroad companies, which have relied on this spread to drive petroleum transports.

Source: Ron Reiring, commons.wikimedia.org.

Railroad companies have seen declining demand for coal transports across the board, which is disconcerting since it can account for up to 30% of revenue for some companies. Coal, a "dirtier" fuel source, is being replaced with natural gas and other alternative energies by electric utilities looking to cut their long-term production and environmental costs. Furthermore, relatively weak U.S. economic growth coupled by austerity measures in Europe isn't exactly creating a situation where the rails are seeing consumer goods shipping demand pick up.

Notable railroads that could be hit by a slowdown in oil transports because of a declining spread include Canadian National Railway (NYSE: CNI  ) , Union Pacific (NYSE: UNP  ) , and Berkshire Hathaway subsidiary BNSF.

Canadian National may get a bit of a pass since it's developing railway networks, which could be crucial in the transport of oil extracted from Canada's oil sands, but it nonetheless will feel a pinch being one of the Bakken's prime oil-by-rail shippers.

Union Pacific has even more riding on petroleum transports. CEO Jack Koraleski is expecting oil shipments to rise by as much as 40% this year. This may not happen if the Brent-WTI spread tightens further, which could leave Union Pacific in a short-term bind. You see, increased lumber shipments have also been its other recent boon, and with interest rates rising rapidly of late, that too may come to a grinding halt in the form of slower homebuilding efforts.  

Even railway giant BNSF could feel the pinch, although I highly doubt Warren Buffett will bat an eye, with a portfolio of nearly 60 well-diversified investments.

How to play this move
I certainly wouldn't suggest trying to fight this shrinking spread, nor would I suggest abandoning your rail investments, either, since crude transport represents, in most cases, only a small (but growing) portion of their income. I also don't think, without a major surge in WTI, that we'll see a big price difference in the oil drillers themselves. I mean, what they lose from the Brent difference they gain from cheaper shipping costs, since they can sell at the wellhead or in Cushing, which is often a lot closer than Louisiana.

The smart way to play tightening Brent-WTI spreads is by investing in midstream companies that have the pipelines and storage network to handle a boom in oil production. There are frankly too many to list, so consider this a "to be continued" for a few days, when I'll name a few midstream companies that have my undivided attention.

If you're on the lookout for some currently intriguing energy plays, check out The Motley Fool's "3 Stocks for $100 Oil." For free access to this special report, simply click here now.

Chevy's New Silverado Goes to Battle in Texas

Pickup trucks are big business for all of the Detroit automakers, and more pickups are sold in Texas than in any other state. That's why General Motors (NYSE: GM  ) is starting the rollouts of its all-new Chevy Silverado and GMC Sierra in Texas, with a five-month campaign that will include dozens of events.

Pickup sales have been booming lately, and GM's big marketing push for its all-new trucks looks likely to add fuel to an already blazing fire. In this video, Fool.com contributor John Rosevear looks at GM's latest launch plans – and at why Ford (NYSE: F  ) , the leader in pickup sales, is delighted to welcome its archrival to the Texas pickup wars.

China is already the world's largest auto market – and it's set to grow even bigger in coming years. A recent Motley Fool report, "2 Automakers to Buy for a Surging Chinese Market", names two global giants poised to reap big gains that could drive big rewards for investors. You can read this report right now for free – just click here for instant access.