Why Buffett's Gifts Will Only Get Bigger

Warren Buffett

On Monday, Berkshire Hathaway  (NYSE: BRK-B  ) (NYSE: BRK-A  ) CEO Warren Buffett just gave a total of 22,870,529 Class B shares of Berkshire Hathaway stock to five different charitable foundations, worth nearly $2.63 billion dollars based on today's closing price of $114.88 per share.

Of course, this shouldn't come as a surprise, especially considering Buffett promised years ago he would gradually give away the bulk of his fortune to those five charities, beginning in July 2006 with 602,500 total shares of Berkshire Hathaway stock. Most notably, 500,000 of those shares would go to the Bill and Melinda Gates Foundation.

Then, with each passing year, Buffett said he would decrease the number of shares by 5%.

What's changed
That said, if you're wondering why that "decreasing by 5%" math doesn't stack up with the number of shares Buffett just gave away this July, note a few things have changed since then.

First, shortly after Berkshire's acquisition of Burlington Northern Santa Fe was announced in late 2009, Berkshire shareholders approved a 50 for 1 split in their Class B shares, largely to make it easier for smaller BNSF shareholders to opt for the tax-free exchange into Berkshire Hathaway stock if they so chose.

Short of simply splitting up the Class B pie into smaller slices, then, this was a zero-sum game that didn't otherwise affect the value of Buffett's charitable contributions.

Second, as fellow Fool Justin Loiseau noted Monday, Buffett last year decided to double the amount of stock he would give each year to his children's foundations (which collectively account for three of the five aforementioned organizations) after he was pleased with the work they were doing.

Why smaller is bigger
Putting share price semantics aside, though, there's one big reason less is more when it comes to Buffett's giving.

Despite the fact that The Oracle is methodically reducing the number of shares he gives away each year by 5%, take a look what Berkshire Hathaway stock has done since he announced his selfless pledge in late June of 2006:

 

BRK.B Total Return Price data by YCharts.

Wouldn't you know it? Berkshire Hathaway stock -- the performance of which is directly influenced by the greatest investor in the world -- has risen almost 89% since then, outpacing the S&P 500's perfectly respectable total return by more than 35%.

Then again, you can bet Buffett already knew Berkshire's gains would almost certainly have little trouble offsetting the 5% annual decline in the number of shares he was giving, anyway. And for those of you familiar with the high-quality plethora of operating segments that make up the enormous conglomerate that is Berkshire Hathaway, there's little reason to believe Berkshire Hathaway stock won't be able to continue its long-term streak of outperformance.

That, my Foolish friends, is why Buffett's predictable annual gifts will only get bigger as time goes on.

Naturally, few people will argue with the fact 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.

This Pop-Culture Sensation Is a Hotbed for Investment Opportunities

More than 130,000 nerds and geeks will mix and mingle with Hollywood elite at San Diego Comic-Con next week. Longtime comics fan and Fool contributor Tim Beyers will also be there looking for investment opportunities hiding amid the panels and parades.

There are plenty to be found, Tim says in the following video. Walt Disney's (NYSE: DIS  ) Marvel Studios will preview two films in development -- Thor: The Dark World and Captain America: The Winter Soldier -- at a panel on Saturday, July 20. Another, scheduled for the day prior, will supply details of Marvel's forthcoming TV drama, Agents of S.H.I.E.L.D.

Time Warner's (NYSE: TWX  ) DC Comics will be just as busy with panels celebrating the 75th anniversary of Superman, its hit TV show Arrow, and other properties in development, including (presumably) a sequel to Man of Steel and related efforts to build out the DC Cinematic Universe.

But there's also much more than the Big Two to see at Comic-Con. Every major Hollywood studio is looking at new comic book properties as investment opportunities. Sony (NYSE: SNE  ) is attached to the Valiant Comics character Bloodshot, for example.

The entirety of nerd culture will be front and center as publishers try to find the next transcendent property. A worthy successor to HBO's Game of Thrones or AMC's The Walking Dead, if you will. Billions are at stake. Not only for the creators, but also for the public company publishers and their investors, Tim says.

Have you explored the investment opportunities in media stocks? Please watch the video to get Tim's full take, and then let us know whether you plan to attend or follow the news at San Diego Comic-Con.

Not that you need to in order to profit from the stock market. For generations, investors have profited by placing modest bets on solid companies selling at depressed prices. What's the best one to buy now? We offer up an idea in this free report: "The One REMARKABLE Stock to Own Now." Just click here to get started.

Asian Stocks Little Changed as China Risk Counters U.S. Stimulus

Asian stocks ended the week almost unchanged as the International Monetary Fund said risks of a slowdown in Chinese growth are increasing while the Federal Reserve allayed concern the U.S. is planning to curb stimulus.

GCL-Poly Energy Holdings Ltd. (3800) surged 13 percent for the week on speculation tariffs on polysilicon shipped to China will cut supplies from the U.S. and South Korea, boosting earnings at the world's largest maker of materials used in solar panels. Taiwan Semiconductor Manufacturing Co. (2330), the world's largest contract manufacturer of chips, slumped 11 percent in Taipei after forecasting sales that trailed analyst estimates. Nissan Motor Co., a Japanese carmaker that gets about 80 percent of sales abroad, climbed a third week as the yen weakened against the dollar.

The MSCI Asia Pacific Index ended the week at 134.93, up from 134.88 on July 12, to continue its longest streak of gains since the week ending March 15. Chairman Ben S. Bernanke told a House committee there was no preset course for the U.S. central bank's asset purchases, tempering speculation the Fed would begin to trim its $85 billion-a-month bond-buying program as early as September.

"The chances are that we see growth in the U.S. economy strengthening over the next 12 months," David Cassidy, the Sydney-based head of equity strategy for Australia at UBS AG, said by phone. "There's scope for equities to move higher with earnings growth and a gradual economic recovery."

Gains Limited

Gains on the benchmark regional equities gauge were limited to 4.3 percent this year, compared with an 18 percent surge on the Standard & Poor's 500 Index, as concern mounted that a manufacturing slowdown in China and the worst cash shortage in a decade may curb earnings growth. The MSCI Asia Pacific Index is trading at 13.2 times average estimated earnings compared with 15.3 for the S&P 500 and 13.4 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

China's economy, the world's second-largest, expanded 7.5 percent in the three months to June 30, a report showed July 15. That matched the median forecast of 45 economists surveyed by Bloomberg.

The International Monetary Fund said July 17 risks are increasing that China's economic growth will fall short of the institution's 7.75 percent annual forecast as it urged the nation to follow through on reforms to sustain expansion. Premier Li Keqiang said this month restructuring should proceed as long as growth and employment stay above unspecified limits.

'Earnings Interest'

"There appears to be very little to stop the growth slowdown in China," said Matthew Sherwood, head of investment markets research in Sydney at Perpetual Investments, which manages about $25 billion. "The earnings season is taking on renewed interest as companies which have rallied strongly are having to prove their recent surge is justified."

China in March stepped up a three-year campaign to cool housing speculation, and has studied expanding property-tax trials after implementing them in Shanghai and Chongqing. China's June new home prices rose in 69 of 70 cities the government tracked from a year earlier, a report showed July 18.

Developers trading in Hong Kong fell for the week amid concern measures to curb rising property prices will remain intact. China Resources Land Ltd., which gets all of its revenue on the mainland, lost 9.6 percent to HK$19.72. China Overseas Land & Investment Ltd. (688) sank 3.7 percent to HK$20.75, and Agile Property Holdings Ltd slid 2.2 percent to HK$7.91.

'Targeting Developers'

"The Chinese government has been targeting developers for at least three and a half years now, so they're not operating in a friendly environment," said Alex Wong, a Hong Kong-based director at Ample Capital Ltd. "You can not expect any easier environment for them in the near term."

Hong Kong's Hang Seng Index added 0.4 percent and China's Shanghai Composite Index fell 2.3 percent. South Korea's Kospi advanced 0.1 percent. Taiwan's Taiex index dropped 1.9 percent, as Taiwan Semi fell. The chipmaker is the largest company on the measure, comprising 11 percent of the benchmark.

Australia's S&P/ASX 200 Index ended the week little changed as the Reserve Bank of Australia said the currency's decline and interest-rate cuts meant its policy setting was appropriate even as it maintained room for future reductions, according to minutes of its July 2 meeting. New Zealand's NZX 50 Index fell 0.7 percent.

The Topix climbed 0.8 percent this week, a fifth straight weekly gain. That's the biggest such advance since April 2009 and the longest winning streak since February. The measure extended gains this year amid optimism Prime Minister Shinzo Abe will push through economic reforms after tomorrow's upper house elections.

Biggest Gains

Japanese shares have topped gains this year among 24 major developed equity markets tracked by Bloomberg News. The Topix index surged 41 percent and the Nikkei 225 Stock Average soared 40 percent in 2013 as Abe and Bank of Japan Governor Haruhiko Kuroda pushed to stoke the nation's inflation rate to 2 percent.

Japanese exporters climbed as the yen declined to 100.65 per dollar, from 99.22 per dollar at the end of last week. Nissan climbed 2.4 percent to 1,121 yen, a third week of gains. Honda Motor Co. (7267) advanced 1.8 percent to 3,875 yen.

Victory tomorrow would give Abe's Liberal Democratic Party-led coalition the strongest grip on power since 2007, strengthening its ability to carry out the three-pronged plan of monetary easing, fiscal stimulus and structural reform known as Abenomics. The LDP and partner New Komeito are on track to secure a majority, according to a poll published in the Nikkei newspaper on July 17.

GCL, Taiwan Semi

GCL soared 13 percent to HK$1.96. The Chinese ruling is "positive" for domestic polysilicon manufacturers such as GCL-Poly because it may reduce supplies from abroad, boosting prices for the raw material in China, Timothy Lam, a Hong Kong-based analyst at Citigroup Inc. wrote in a report July 18. Importers of raw material to make solar panels into China must pay the duties beginning July 24.

Taiwan Semi tumbled 11 percent to NT$98.20 as the Hsinchu, Taiwan-based firm joined Intel Corp. predicting third-quarter sales below analyst expectations. The company forecast third-quarter sales of as much as NT$164 billion ($5.5 billion) in the three months ending September, compared with the NT$164.5 billion average of 25 analyst estimates compiled by Bloomberg before the announcement.

Tencent Holdings Ltd. (700), operator of China's No. 1 mobile messaging application, jumped 7.8 percent to a record HK$333.80 as the State Council pledged to upgrade telecommunications and Internet infrastructure. Tencent is the best-performing stock on the Hang Seng Index (HSI) this year.

Treasury Wine Estates Ltd., the world's second-biggest listed winemaker by revenue, slumped 18 percent to A$4.77 in Sydney after saying it would write off A$160 million ($145 million), greater than the company's expected net income this year. The decision was made to address excess stock in the U.S., Treasury Wine's largest division by sales, the company said.

Big Moves Within the Dow Today, But the Index Itself Only Moved Slightly

Despite the poor quarterly earnings performance and massive losses to technology stocks today, a few of the Dow Jones Industrial Average's (DJINDICES: ^DJI  ) components did have a very good session this afternoon. But, first, let's take a look at how the major indexes performed. The Dow lost 4 points, or 0.03%, and now rests at 15,543, while the S&P 500 actually pulled out a win today by gaining 0.16%. The big index loser of the session, however, was the technology-heavy Nasdaq, which lost 0.66%, or 23 points.

Unlike most trading days, the key driver today was quarterly earnings. As I mentioned, the Dow's big technology stocks all had a rough day, as Microsoft fell the most, losing 11.4%, then Hewlett-Packard, down 4.52%. IBM lost 2.25%, and Intel shed 0.88% after poor earnings from Microsoft and Advanced Micro Devices put pressure on the PC industry.

On the flip side, General Electric's (NYSE: GE  ) quarterly report help push its shares higher by 4.61%. Although the company missed revenue estimates of $35.6 billion when it posted sales of $35.12 billion, it did beat earnings-per-share expectations of $0.35 with $0.36. And while that's all good and great, missing on revenue and hardly beating on EPS isn't enough to excite investors enough to drive the stock higher by more than 4.5%. So what is? The company announced that backlog orders were up $7 billion in Q2 from the $223 billion the company reported in Q1. Furthermore, CEO Jeff Immelt told analysts that "Emerging markets remain resilient, and in the U.S. we saw strong growth in orders this quarter". He then went on to state "Europe is stabilizing but still challenged." These comments and the backlog growth have finally made investors believe Immelt when he tells them things are improving and will be better in the future.  

Two other big Dow winners came from the health-care industry as Johnson & Johnson (NYSE: JNJ  ) rose 2.28% and Pfizer (NYSE: PFE  ) gained 2.11%. Johnson & Johnson reported earnings earlier in the week and the company beat on both the top and bottom lines, but after earnings were announced, shares closed even on Tuesday, compared to Monday's close, at $90.40. While investors surely liked the fact that estimates had been topped, they didn't seem to be thrilled with some comments by management that pricing pressure was increasing. But a poor earnings report, an FDA warning, and weak guidance moving forward from Intuitive Surgical (NASDAQ: ISRG) yesterday make Johnson & Johnson's medical device unit look stronger than ever. And that's why I believe shares of J&J moved higher today.

As for Pfizer, the likely reason for its shares decline was a Reuters report that the company is no longer interested in buying Onyx Pharmaceuticals, which had been previously reported. Many believe Pfizer decided not to move forward because the cancer drug manufacturer had become too expensive and the valuation no longer made sense. Investors hate seeing hard-earned capital being squandered on expensive, overhyped acquisitions that don't pan out to add meaningful value to the company. If this is the reason Pfizer backed out, it is truly a good one.  

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How to Profit From Pipeline Alternatives

The Energy Information Administration has reported that refinery receipts of crude oil delivered by rail, truck, and barge increased 57% in 2012 year over year, so that the nation's refineries were receiving more than 1 million barrels per day via these transportation methods.

Before we get into what this means for investors, it's important to place this trend in context. Pipelines still delivered more than half of all refinery receipts. Total deliveries to refineries were more than 15 million bpd in 2012, so that 1 million bpd delivered by alternative methods is just a drop in the bucket. It's a rapidly growing drop, so let's take a look.

Behind the trend
Much of the growth is driven by increased production from U.S. oil plays, which seems obvious enough, but some of it is also being driven by market fundamentals and the fact that truck, barge, and train transportation can hit markets that are not served by pipeline. When they do that, producers fetch a higher price.

For example, East Coast refiners like PBF Energy (NYSE: PBF  ) did not see the astronomical margins that mid-continent refiners experienced last year, because they were still importing foreign oil, while midcontinent refiners had access to cheap Bakken crude. PBF has built out its rail infrastructure, and it can now receive cheaper domestic crude from North Dakota and Canada by rail -- provided that domestic crude remains cheaper than foreign crude.

Buckeye Partners (NYSE: BPL  ) is another company hoping to exploit alternative transportation from its rail and barge hub at the Port of Albany, on the Hudson River.

Everybody wins
Buckeye's Albany assets help highlight another point, which is that the simultaneous growth of truck, rail, and barge is no coincidence. Typically when one of these alternative methods takes off, so do the others. For example, a pipeline may bring oil from the field to the refinery, while a train will go from the field to a river, where a barge awaits to haul the crude up or down stream to a refinery.

The role of the barge can't be underestimated. Barge receipts increased more than two percentage points year over year, and this is a great place for investors to look for opportunity. Companies with maritime resources benefit from this trend, as well as growth in exports. Three such companies that are worth a look are:

Kirby Corporation (NYSE: KEX  ) , which operates 30% of the coastal tank barges in the U.S.  Oiltanking Partners (NYSE: OILT  ) , which has storage capacity of 12.1 million barrels and six deepwater docks on the Houston Ship Channel Martin Midstream Partners (NASDAQ: MMLP  ) , which operates a large fleet of inland barges and controls 31 marine terminals 

These companies won't be the only winners, but they are a good place to start your research.

Bottom line
Going forward, domestic oil production will continue to increase in the near future, though the long term outlook is much more uncertain. It's important to note, however, that the WTI/Brent spread is an important factor in transportation dynamics. If the spread shrinks, it will erode some of the benefits that these alternative transportation methods provide.

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How Tomorrow's GE Earnings Can Power Ahead

General Electric (NYSE: GE  ) is scheduled to release its quarterly earnings report tomorrow, and this time around, at least, expectations are fairly modest. That signals investors' beliefs that the company is going through hard times, but it also sets the stage for a big GE earnings beat that could push the stock upward out of its recent flat performance.

GE is the oldest member of the current Dow Jones Industrials (DJINDICES: ^DJI  ) , but it has reinvented itself in recent years to focus on its industrial roots. With its past financial focus having given way to innovation in energy and other industrial applications, the company is poised to capitalize on long-term trends that should boost its business. Let's take an early look at what's been happening with General Electric over the past quarter and what we're likely to see in its quarterly report.

Stats on General Electric

Analyst EPS Estimate	$0.36
Change From Year-Ago EPS	(5.3%)
Revenue Estimate	$35.58 billion
Change From Year-Ago Revenue	(2.5%)
Earnings Beats in Past 4 Quarters	3

Source: Yahoo! Finance.

When will GE earnings push higher?
In recent months, analysts have throttled back their expectations for General Electric's earnings, with a 10% cut in estimates for the June quarter and a penny-per-share pullback for their full-year 2013 consensus. The stock has managed to post modest gains, rising about 4% since mid-April.

GE's stock didn't start the quarter well, even though its earnings report back in April didn't look all that bad on the surface. Operating earnings grew 15%, with particularly strong gains in oil and gas equipment and its aviation segment. Yet investors focused on GE's flat revenue and struggling European business, which suffered 17% declines in sales and weighed on profit margins as well.

Still, those results haven't changed GE's general strategic plan as it strengthens its reach into various industrial sectors. Its vision of what it calls the "industrial Internet" put it on a collision course with IBM (NYSE: IBM  ) , whose Big Data initiative has similar goals of providing interconnections across networks of equipment to provide information that companies can use to cut costs and monitor operations. IBM has used its technology expertise to attract interest from clients and bolster its high-margin earnings growth, but GE has a closer connection to the actual equipment that will provide data to users. General Electric has also continued to become a bigger player in energy, combining its renewable-energy expertise with its recent purchase of Lufkin Industries to add traditional oil and gas services to its portfolio of offerings to customers.

In order to emphasize its successful industrial business, GE has tried to shrink its once-dominant GE Capital unit. Yet the division is so large that it's hard to find viable buyers, and its $50 billion portfolio of credit card loans raises concerns that a buyer would have such a large stranglehold over the industry that it would create systemic risk. GE did manage to sell off some of its net-lease properties to American Realty Capital (NASDAQ: ARCP  ) late in the quarter, as American Realty has been going through a string of acquisitions with the aim of growing its overall business. But with the deal coming out to less than $800 million, GE will have to work harder to divest itself of GE Capital assets if it truly wants to de-emphasize that part of its business.

In tomorrow's GE earnings report, pay special attention to each individual business segment, with particular attention to the health care division. With Obamacare right around the corner, the need for electronic medical records will likely increase, but sophisticated medical equipment might be a tougher sell. As GE seeks to grow on all fronts, though, it'll be interesting to see where it focuses the most attention in the coming months.

Whether you like well-established stocks like GE or up-and-coming start-ups, 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.

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

Can VMware Meet These Numbers?

Why Plexus Shares Jumped

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

What: Shares of Plexus (NASDAQ: PLXS  ) have jumped today by as much as 13% after the company reported earnings results.

So what: Revenue in the fiscal third quarter totaled $571.9 million, well ahead of the Street consensus of $565 million. Earnings per share were $0.68, similarly topping expectations of just $0.58 per share. CEO Dean Foate said the strong results were driven by the networking and communications as well as the health care and life sciences sectors.

Now what: Guidance for the coming quarter was also strong, with sales forecast to $545 million to $575 million. Adjusted earnings per share should be in the range of $0.60 to $0.66. Investors would have been happy with just $0.57 per share in adjusted profit next quarter. The company also repurchased $14.5 milion worth of shares during the quarter.

Interested in more info on Plexus? Add it to your watchlist by clicking here.

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UnitedHealth Reports Healthy Q2 Earnings

Hot Value Companies To Own In Right Now

As highly as we Fools think of Warren Buffett and�Berkshire Hathaway (NYSE: BRK-B  ) , we'd be foolish (with a lower-case "f") to believe any company is truly without risk.

With that in mind, here are six ways Berkshire could potentially fail investors going forward:

1. Losing to the market on Buffett's terms
Over the years, Buffett has largely made his name by identifying stocks whose share prices have lagged the intrinsic value of their underlying businesses. As a result, it should come as no surprise that Buffett believes the best way to measure Berkshire's performance is by calculating its book value.

Sure enough, as I noted�last month, Buffett himself lamented Berkshire's respectable 2012 book value growth of 14.4% as "subpar" after it fell short of the S&P 500's 16% gain.

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

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

Advisors' Opinion:

• [By Kathy Kristof]

  Headquarters: Houston
  
  52-Week High: $79.38
  
  52-Week Low: $56.86 
  
  Annual Sales: $39.5 bill.
  
  Projected Earnings Growth: 18% annually over the next five years 
  
  
  Energy-services giant Schlumberger is the prototypical multinational. The company derives roughly 85% of its revenues from overseas, including developing markets in Africa, Brazil and Asia. 
  
  With particular expertise in deep-water drilling, Schlumberger is well-positioned to compete in a world where oil is harder to find, says Argus Research analyst Philip Weiss. Admittedly, oil exploration is a cyclical business, driven largely by crude prices. And weak prices for natural gas have hit the company’s stock, Weiss says. But the price of natural gas has little to do with Schlumberger’s profits, so Weiss just sees this as an opportunity to get the shares at a more reasonable price.

• [By Michael]

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

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

• [By Brian Stoffel]

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

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

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

• [By Dave Friedman]

  Institutional investors bought 66,328,670 shares and sold 64,611,410 shares, for a net of 1,717,260 shares. This net represents 0.14% of common shares outstanding. The number of shares outstanding is 1,250,000,000. The shares recently traded at $74.84 and the company’s market capitalization is $100,986,600,000.00. About the company: Schlumberger Limited is an oil services company. The Company, through its subsidiaries, provides a wide range of services, including technology, project management and information solutions to the international petroleum industry as well as advanced acquisition and data processing surveys.

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

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

Advisors' Opinion:

• [By Sam Collins]

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

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

5 Best Stocks To Invest In 2014: Caterpillar Inc.(CAT)

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

Advisors' Opinion:

• [By Jim Cramer]

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

• [By Jim Cramer,TheStreet]

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

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

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

• [By Roberto Pedone]

  Caterpillar (CAT) is staging a textbook breakout in May. Shares of heavy equipment maker haven't exactly been kind to investors year-to-date; CAT has barely broken even during a time when the broad market has been in a historic rally. But a textbook breakout should change that.

  CAT started forming an inverse head and shoulders pattern back in early April. The inverse head and shoulders is formed by two swing lows that bottom out around the same level (the shoulders), separated by a lower low called the head; the buy signal comes on the breakout above the pattern's "neckline" level, which was just below $86 for CAT. That puts this stock's upside target right around $92.

  Even though CAT has nearly hit its upside target already (the post-breakout buying has been very quick), the longer-term implication for investors is a break of the downtrend that had been haranguing shares this year. Now, with that downtrend broken, CAT should have more room to move higher. I'd just expect some consolidation first.

• [By Dave Friedman]

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

Hot Value Companies To Own In Right Now: Tupperware Corporation(TUP)

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

Advisors' Opinion:

• [By Sam Collins]

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

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

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

No One Is Talking About This Astonishing Bull Market

 A "stealth" uptrend we've been tracking for more than a year just hit an important new high...

 

As longtime readers know, biotech is one of the greatest "boom and bust" sectors known to man... Every few years, it draws in "hot money," fueling a huge run.

 

Since 1983, the sector has seen four triple-digit runs... and one quadruple-digit run of 1,347% in the early 1990s. The busts were equally spectacular, taking the entire sector down by as much as 70%.

 

Ride the booms and avoid (or even short) the busts, and you can make a fortune.

 

 A little more than a year ago, we showed you that biotech had kicked off a new uptrend. We figured that if the market was going to work higher from there, biotech would lead the way.

 

As you can see from the chart of the big biotech fund IBB below, the sector has soared higher. Shares of IBB are up more than 50% since our note last June.

 

 

 The big picture in biotech still looks great...

 

Big Pharma companies need to buy biotechs so they can restock their pipelines with new drugs. And money managers need to buy biotechs to get in on the bull market.

 

But there isn't much supply. In 1999, the last big year for biotech, 63 new "biotech" companies went public. (Like the dot-com boom, many of these companies were only remotely associated with biotech.) Those IPOs raised $6 billion. So far this year, only 16 biotech companies have gone public. They've raised about $1 billion.

 

According to biotech industry organization BIO, there are 25% fewer biotechs today than there were in 2008.

 

In short, when the "hot money" comes to biotech, it won't have a lot of choices. It'll drive up the price of the small number of publicly traded biotechs. It'll drive up the price of funds like IBB or BIB (a double-leveraged fund).

 

 Even though the Nasdaq Biotech Index is up 213% since its March 2009 crisis lows, this trend has only begun. You're not reading about the biotech bull market on the front page of investment magazines. They're not talking about it on CNBC.

 

Biotech is still relatively unknown to the investing public. That means there's plenty more upside here.

 

– Amber Lee Mason and Brian Hunt

The Surprising Stocks Behind the Dow's Gain Today

As often happens, occasions that Wall Street looks forward to with bated breath turn out to be non-events in terms of market reaction. Some investors believed that today's testimony from Federal Reserve Chairman Ben Bernanke might result in the same levels of volatility that we saw last month, when the Fed had its first serious discussion about easing off on the quantitative-easing accelerator pedal. But for the most part, Bernanke didn't say anything that his audience didn't already know, and the market traded in a relatively narrow range, with the Dow Jones Industrials (DJINDICES: ^DJI  ) finishing up 19 points and narrowly missing a record high.

Still, the market's quiet day didn't stop a few stocks from picking up serious ground. DuPont (NYSE: DD  ) was the hot stock in the Dow, soaring more than 5% to levels not seen in more than a decade on reports from CNBC that Nelson Peltz and his Trian Fund Management investment firm had taken a large stake in the chemical giant. Neither Peltz nor Trian confirmed or denied the report, but the stock's price jump indicates how much shareholders are banking on the activist investor's reputation for squeezing more value from companies he targets.

Bank of America (NYSE: BAC  ) also made sizable gains, rising almost 3% as the bank's combination of solid net income and cost-cutting measures helped the bank beat its earnings estimates. Perhaps more importantly, Bernanke's comments seemed to stabilize the bond market, which has been extremely turbulent in recent months as fears of the Fed's QE exit pushed interest rates higher. With the 10-year Treasury bond trading below 2.5% today, the possibility of one last run at relatively low mortgage rates could create big demand for home loans as buyers rush to get what they might see as a last chance at cheap financing.

Finally, outside the Dow Industrials, airlines had a good day, with United Continental (NYSE: UAL  ) jumping 8% and Delta Air Lines (NYSE: DAL  ) posting a 3% gain. Despite recent trouble in making fare hikes stick, airlines have done a great job of boosting fee income and posting solid bottom-line earnings lately. Moreover, United Continental's announcement today that it will pioneer the commercial use of the Split Scimitar winglet design in a retrofit of its fleet of 737-800 aircraft. The move could help improve efficiency by 2%, which should help United's earnings rise even further.

No matter which industry you think will produce the top returns, 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.

Why Citigroup Is in the Green Today

Two hours into trading, Citigroup (NYSE: C  ) is up 0.8%, riding the market wave of reassuring -- or at the very least not terrifying -- congressional testimony from Federal Reserve Chairman Ben Bernanke. Monday's positive second-quarter earnings report isn't hurting the stock's performance today either.

The Great Oz has spoken
Bernanke is testifying on monetary policy today before the House Committee on Financial Services; tomorrow he'll do the same before the Senate banking committee. Most on the minds of investors is the fate of quantitative easing, which the markets have come to depend on over the last four years, at least psychologically.

So far, Bernanke's comments seem to indicate that the Fed remains on course to begin tapering QE later this year, so long as U.S. economic data remains positive. But at the same time, the central bank believes the economy is clearly not where it should be -- thus indicating the continuation of accommodative monetary policy.

Foolish bottom line
In fact, more than just indicating continuing accommodative monetary policy, Bernanke is explicitly committing the central bank to it: "With unemployment still high and declining only gradually," the Fed chairman said, "and with inflation running below the Committee's longer-run objective, a highly accommodative monetary policy will remain appropriate for the foreseeable future."

Yet Bernanke hasn't backed off on tapering. He's trying to have it both ways: keep the tapering plan in place and reassure the markets the Fed will be there to support the U.S. economy. Normally, that sort of thing doesn't work, but today, it seems to be. Not only are Citi and its Big Four peers trading up, so are the markets in general, with the S&P 500, the Dow Jones Industrial Average, and the Nasdaq all currently in the green.

Naturally, Citi's strong second-quarter results are also keeping the bank's investors happy today. On Monday, Citi reported that net income for Q2 grew by 42% year over year, while total revenue grew by 11%. Earnings per share were $1.34, up from $0.95 a year ago. The bank grew its business in key, fundamental areas as well -- in deposits and loans, for instance.

So, Citi investors have reason to be happy so far today and this week, but also remember that investing Foolishly means investing for the long term: tuning out market noise -- like today's -- and focusing on the fundamentals of the companies you're invested in. Check on your stocks once a month, or even once a quarter, and leave the daily ticker checks to the day traders: Your portfolio will thank you, even if your broker won't. 

Many investors are terrified about investing in big banking stocks after the crash, but the sector has one notable stand-out. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.

Earnings Calls Are Exciting Again

The death of the quarterly conference call was premature.

Yahoo! (NASDAQ: YHOO  ) may have disappointed investors yesterday by posting weak display advertising results and tweaking its full-year revenue guidance marginally lower, but at least it looked good while it happened.

For the first time ever, Yahoo! chose to host its earnings call as a video conference that could be streamed live online.

CEO Marissa Mayer and CFO Ken Goldman sat in a studio set with a slide-spewing monitor between them.

It would've been great if the news had been a little better, but at least you realize that Mayer is trying to establish a connection with investors that failed to materialize with previous CEOs at the company.

It's not just Yahoo! raising the ante here.

When Netflix (NASDAQ: NFLX  ) reports next week, it will also shift to a live video conference call format. However, it won't just be the video service's CEO and CFO breaking down the past three months for viewers. BTIG Research analyst Rich Greenfield and CNBC's Julia Boorstin will be on hand to moderate the discussion, taking in questions that are emailed in ahead of time or posted on Twitter.

Back in April, Zillow (NASDAQ: Z  ) became the first company to solicit investor questions ahead of the conference call via Twitter and Facebook. The fast-growing travel portal has always fancied itself a trendsetter. It became the first company with a single letter ticker symbol to list on Nasdaq.

Remember when conference calls were becoming so unfashionable that even CEOs weren't showing up? A lot of companies were hosting their quarterly updates, letting their CFOs and lesser executives do all of the talking.

Well, the conference call matters again, and CEOs are using social media tools to get noticed.

If Zillow can take questions from Twitter, Netflix can come back three months later and do the same thing -- and stream it live with a full video production crew.

These three companies also have something else in common beyond raising the game of what conference calls can be: All three stocks happen to be on fire.

Yahoo! has nearly doubled off of its 52-week low, and it's the slacker here. Zillow has more than doubled and Netflix is a five-bagger off their 52-week lows.

This doesn't mean that a company that fires up a webcam at its next earnings call or begins sifting through Twitter hashtags for questions will be a market winner. However, in an investment world where successful companies are copied, it's a safe bet that this is just a taste of things to come.

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 like Yahoo! and Netflix. 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 by the five kings of tech. Click here to keep reading.

Privacy Invasion Moves Back to the Real World

Although a report in yesterday's New York Times highlighted the practice, the truth has been out there for months. Nordstrom (NYSE: JWN  ) had a trial program where it used video surveillance and Wi-Fi signals in smartphones to track customers in the store. It wanted to use the data to help it connect with customers, and then to sell them more things. The company posted announcements about the program in stores, and after complaints, it ended the program in May this year.

The issue is just the tip of the iceberg for consumers and the general public, and if the uproar surrounding online privacy is any indicator, the yelling may have only just begun.

The value of a lingering glance
Two major companies, Google and Facebook, have already made a career of making your interactions valuable. Google parses your email to give you better advertising, while Facebook uses the contents of your wall and interactions to do the same. The business is incredibly lucrative, and the potential to move that value into the physical space is undeniable.

Retailers have been doing these sorts of studies for a long time. Usually, a company will hire an external consultant, who will count the number of customers coming into a store, watch their movements throughout the store, and often give the customer a survey after his or her visit to get more detail. The reason we're quick to raise our concerns once the surveillance is automated has to do with its infallibility.

The speed camera parallel
In a similar program, speed cameras across the U.S. have come under fire for being mechanical, among other things. Drivers don't get a chance to talk to their accuser, and there is less opportunity to explain the circumstances of the infraction. In the store, shoppers are faced with a similar dread.

If you spend three minutes looking at tires, you might be branded a tire shopper. Spend three minutes in front of the laxatives, the pregnancy tests, or the liquor, and the fear is that, in some systems, you're just that kind of shopper. The lack of gray area makes us very hesitant in the physical world.

Online, we're actually pretty willing to be stalked. Google searches, cookies and other tracking software, shopping histories, and other technology, all add to the picture that we paint of ourselves. The value of that picture helped Google rake in $43.6 billion in ad revenue last year.

Nordstrom's gamble
Nordstrom had to know that what it was attempting could set people off. The fact that it posted information in stores about the pilot program, along with instructions on how to opt out, shows that it was aware of its consumers from day one. The fact that it stopped the program speaks to its consumer-centric strategy. The backlash from customers came, even though the company was aggregating the data above a personal level -- it would never know that it was you in front of the tires.

The system didn't pay off for Nordstrom, but the company behind the tests, Euclid, has already been used in thousands of other locations with other companies' customers. In the long run, being tracked while you shop is going to become the norm in larger businesses. Of course, leaving your smartphone at home will make it much more difficult for companies, but there may still be some oversight. For now, customers need to be on the lookout to protect the rights that are important to them. Nordstrom's capitulation showed us that consumers can make a difference in retail surveillance.

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

Will Advanced Energy Industries Blow It Next Quarter?

The Key to Growth for SUPERVALU Earnings

SUPERVALU (NYSE: SVU  ) will release its quarterly report on Thursday, and investors are increasingly optimistic that the grocery-store chain has finally turned the corner, and is poised for a rebound. Although the company is much smaller after having divested itself of several of its biggest chains, SUPERVALU nevertheless has the potential to remain profitable.

Hard-hit shareholders have been waiting for good times to come, after having dealt with consistent share-price losses and the suspension of SUPERVALU's dividend. Yet, the grocery industry has some promising prospects for growth. Let's take an early look at what's been happening with SUPERVALU over the past quarter, and what we're likely to see in its quarterly report.

Stats on SUPERVALU

Analyst EPS Estimate	$0.03
Change From Year-Ago EPS	(84%)
Revenue Estimate	$5.17 billion
Change From Year-Ago Revenue	(51%)
Earnings Beats in Past 4 Quarters	0

Source: Yahoo! Finance.

Will SUPERVALU earnings finally measure up?
Analysts have continued to ratchet down their views on SUPERVALU earnings in recent months, having slashed their May-quarter estimates by two-thirds, and cut their calls for the current fiscal year almost in half. But the stock has been oblivious to those concerns, rising 28% since early April.

SUPERVALU has impressed investors lately with its turnaround story. With the company having sold off its Albertsons, Jewel-Osco, Acme, Shaw's, and Star Market chains to Cerberus Capital last quarter, new CEO Sam Duncan gave a strong message that SUPERVALU intends to cut back on its cost structure to reflect its new smaller size. Investors cheered favorable prospects for the company's Save-A-Lot discount chain by bidding shares upward after the company's previous quarterly report in April.

One interesting battle that's playing out in the grocery industry is the collection of purchase data through loyalty cards. SUPERVALU and Kroger (NYSE: KR  ) have both tried to flesh out and expand their loyalty systems in order to hold off competition from non-traditional competitors like big-box retail stores, and Safeway (NYSE: SWY  ) CEO Steve Burd said earlier this year that its shelf-pricing will be "irrelevant because we can be so personalized in what we offer people." Yet, taking the other side of the issue, in light of recent privacy concerns, former SUPERVALU chain Albertsons recently made the decision to drop its loyalty-card program, arguing that all it really needs is to track store-level sales rather than customer-specific purchases.

Still, SUPERVALU faces two major threats. One is the impact that healthy-food-focused Whole Foods has had on the industry, with its huge profit margins putting SUPERVALU and its peers to shame. Kroger has done a good job of using a combination of organic offerings and private-label branding to keep margins up, but in the midst of its strategic shifts, SUPERVALU arguably has too much on its plate to consider shaking up its product lineup, as well.

In SUPERVALU's earnings report, watch for the company to report on the status of its cost-cutting measures, and to explain how it intends to move forward with new initiatives to improve its competitive position. Unless the company can demonstrate its ability to grow, then all the gains in its stock could disappear quickly.

Succeeding in grocery retail is tough, but the most forward-looking and capable companies will thrive, and handsomely reward those investors who understand the industry landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.

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

Show Me the Money, Resolute Forest Products

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Resolute Forest Products (NYSE: RFP  ) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, Resolute Forest Products generated $19.0 million cash while it booked a net loss of $30.0 million. That means it turned 0.4% of its revenue into FCF. That doesn't sound so great.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at Resolute Forest Products look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

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

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

Resolute Forest Products's issue isn't questionable cash flow boosts, but items in that suspect group that reduced cash flow. Within the questionable cash flow figure -- here a negative-- plotted in the TTM period above, other operating activities (which can include deferred income taxes, pension charges, and other one-off items) constituted the biggest reversal. Overall, the biggest drag on FCF also came from other operating activities (which can include deferred income taxes, pension charges, and other one-off items) which represented 96.3% of cash from operations.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

Looking for alternatives to Resolute Forest Products? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

Add Resolute Forest Products to My Watchlist.

Center Bancorp: Hidden Reserves Are Hiding This Bank's True Value

Center Bancorp (CNBC) has been bringing in a lot of money for investors over the past year and even-so, a big majority of it has yet to hit the company's bottom line. As you can see from the graph below, reported net incomes have consistently improved even though the bank has close to have a year's worth of net income tucked away in allowances. And, I'm only talking about the allowance balance after all nonperforming loans are subtracted. It is very necessary to put aside this money but 3.9Xs nonperforming loans puts CNBC at one of the highest coverage ratios I've found (more the result of quickly improving NPLs than management setting aside too much money).

CNBC Net Income Quarterly data by YCharts

Year-over-year, nonperforming loans have declined 68% to a very low $2.619 million, ~0.3% of Center's $879 million gross loan portfolio. Along with this improvement, the bank has in some recent quarters actually recovered more NPLs than it charged-off and allowances now dwarf NPLs to the point that zero dollars were provisioned last quarter, and I wouldn't be surprised if they soon started to add dollars to the bottom line (negative provision expenses release allowances).

(click to enlarge)

In addition to its nonperforming loan improvements, CNBC's loan portfolio and deposit accounts have both grown ~11% YOY. When last reported, L/Ds was 68.6% which is very low and/or indicates a very high capacity for new loans. Even though the loan portfolio above has been growing, the level its at has been held back recently by a large number of prepayments ($33.1 million last quarter) and scheduled payoffs ($41.1 million), which means the bank's new bookings are actually 2Xs what they would appear to be a! fter a cursory top-line inquiry. Close to 60% of CNBC's loans are backed by real estate with 49.1% of the total portfolio tied to commercial real estate loans, where virtually all of the loan portfolio growth has been realized.

(click to enlarge)

Moving forward, the bank continues to focus on growing business in its backyard with plans and recent approval to open a new office in Princeton. On that, President & CEO Anthony C. Weagley says the new addition will help the company's "strategic plan to expand the reach of our branch network." A big positive considering that CNBC's capacity is not likely to be filled by organic growth alone.

Net interest margins of 3.31% are right at the national average but under what the CNBC could be earning with a larger loan portfolio. With this in mind, I was expecting to find low returns but management appears to be on-top of expenses and a very low 48.5% efficiency ratio has helped consistently bring in an above average ROA of ~1.16% and ROE of ~12.7%. Even more impressive considering the reserves that didn't get added in.

(click to enlarge)

Before looking at the current valuation, I will say that most regional banks that have an:

ROA over 1ROE over 12 andDividend yield over 2%

Trade between 1.4-1.6 times TBV. But, not all of them have:

Capacity for more loansSuch a low NPL balanceAny plans for expansion andAn efficiency ratio under 50%

With that said, I consider Centers current P/TBV of 1.645 fair but would argue buyers were getting a lot more quality than most other regionals trading with that price tag.

CNBC Pr! ice / Book Value data by YCharts

Bottom Line

Center Bancorp is a small-cap bank with a management that is looking to expand while keeping costs as low as possible. Given the fact that loans have been hard to come by for all banks, and the fact that Center's loan balance has been growing organically, I'm not too worried about the pace considering that NPLs have improved so much that virtually all of the bank's loans are now performing. Recent announcements to raise the dividend and the already implied safety come with a pretty full price but anyone looking for a safe dividend in a growing business should definitely consider Center Bancorp.

CNBC Dividend data by YCharts

Note: Center Bancorp was upped to a strong buy from Zacks Equity Research after the announcement to increase its dividend by 36.36%.

Source: Center Bancorp: Hidden Reserves Are Hiding This Bank's True Value

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within 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...)

Abbott Buying IDEV Tech for $310 Million

Don't look now, but Abbott Labs (NYSE: ABT  ) is about to buy itself a bit of growth.

On Monday, the Abbott Park, Ill.-based medical products giant announced that it has agreed to buy privately held medical device-maker IDEV Technologies for $310 million, net of cash and debt. In return, it will gain IDEV's portfolio of products that include, importantly, the SUPERA Veritas self-expanding nitinol stent system, used for opening blocked blood vessels. Approved for use in Europe, SUPERA Veritas has only limited approval for use in the U.S. but is in the process of seeking FDA approval for expanded usage.

Chuck Foltz, Abbott senior vice president for vascular products, said in a statement that "the acquisition of IDEV Technologies will expand and complement Abbott's existing peripheral technology portfolio of guidewires, balloon dilatation catheters, and stents, making it one of the most comprehensive and competitive portfolios in the industry."

A private company that is not required to disclose its financials, as of late last year, IDEV was not believed to be profitable. The company is on record, however, as saying it is experiencing "accelerated revenue growth." As for Abbott, IDEV's soon-to-be new parent earned $6.1 billion last year and is expected to grow earnings at close to 12% annually over the next five years.

5 Stocks Under $10 Worth Buying

If you've got ten bucks, I have some stock ideas for you.

I've been singling out attractive opportunities in low-priced stocks since my original "Ten Stocks Under $10" column a dozen years ago, and I've seen plenty of stocks with pocket-change prices generate incredible gains.

There are risks, and they are readily apparent given the recent volatility. There are often good reasons for stocks to be ignored or beaten down. However, a market rally can work wonders for the unloved with positive catalysts in their pockets.

Let's go over my five picks from March 2009 -- when low-priced stocks bottomed out -- to prove my point.

 Company

July 12, 2013

March 13, 2009

Gain

Sirius XM Radio	$3.72	$0.198	1,779%
Bare Escentuals*	$18.20	$3.66	397%
Focus Media*	$27.50	$5.74	379%
Geron	$1.54	$4.36	(65%)
Ford	$17.11	$2.19	681%

*Bare Escentuals was acquired for $18.20 a share in 2010. Focus Media was acquired for $27.50 a share in 2013.

The average gain of 634% in four years is pretty remarkable.

Even with Geron crashing as the lone stinker, the other four multibaggers have easily trounced the market by excelling in satellite radio, cosmetics, cars, and Chinese advertising -- and two have been acquired at healthy premiums.

Let's go over this month's picks.

Nam Tai Electronics  (NYSE: NTE  ) -- $6.78
Shares of Nam Tai took a hit three months ago after posting uninspiring quarterly results.

The contract manufacturer made a big play for the booming liquid crystal display modules for smartphones last year, but cutthroat competition drove prices and margins lower and customer orders are coming in below Nam Tai's original forecasts.

This is the bad news that got Nam Tai down to the single digits, but there's also an opportunity here. Demand for consumer electronics isn't going away, and Nam Tai is still profitable and growing. The stock is fetching a reasonable 12 times next year's projected earnings. Along the way, Nam Tai's quarterly dividend of $0.15 a share leaves the stock currently yielding a tempting 8.8%.

BlackBerry (NASDAQ: BBRY  ) -- $9.24
I hate BlackBerry in the double digits. It's a different story in the single digits.

Yes, this is a mess right now. BlackBerry is coming off a dreadful quarter where it sold just 2.7 million smartphones fueled by the BB10 mobile operating system that was supposed to make the wireless pioneer relevant again. Carriers slashing BlackBerry Z10 prices over the weekend will put even more margin pressure on the struggling company.

I saw the horrible quarter coming, and you probably did too.

Now it's time to assess the situation. As bad as things may be for BlackBerry's relevance, this is still a company with a healthy balance sheet flush with $3.1 billion in cash and equivalents. If things continue to head south, it can always improve its standing by spinning off either its hardware or software and services businesses.

Advanced Micro Devices (NYSE: AMD  ) -- $4.32
AMD isn't in a good place right now. Revenue is falling and losses are mounting as PC sales plunge for the fifth quarter in a row. AMD's push into graphics hasn't been enough.

However, a few analysts upgraded the spunky chip maker last week, betting on an eventual turnaround.

It won't happen right away, but something interesting will happen when the Xbox One and PS4 hit the market this holiday season: AMD will be powering the guts of all three major video game consoles. AMD has also received some early favorable buzz for new products in its FX series of chips.

Wall Street sees AMD resuming its revenue growth and returning to profitability next year, and that's good enough to warrant attention now.

Tremor Video (NYSE: TRMR  ) -- $7.97
Tremor went public at $10 a share late last month, and it's already a busted IPO.

The company seems to be at the right place at the right time. Tremor runs an online video advertising network at a time when everyone is gravitating to video content. Tremor's VideoHub platform analyzes in-stream video content to serve up optimal video ad campaigns. Its clients include all 10 of the largest automakers and all but one of the 10 largest packaged goods companies.

Growth is already there. In-stream video advertising rose 32% last year, and Tremor's top line popped 43% higher during this year's freshman quarter. Tremor is still delivering losses, but gross margins are expanding and net losses are shrinking.

Sure, it's not a good sign when an IPO falls apart in its first few weeks of trading, but the market eventually comes around when it can't ignore growth.

Office Depot (NYSE: ODP  ) -- $4.30
Shares of the office supply superstore chain have more than doubled since being singled out in this column last summer.

Refreshed confidence in corporate America is partly behind the rise, but the real news here is that Office Depot is set to merge with rival Office Max later this year. The second- and third-largest office supply retail chains announced their intentions to join forces in February, and just last week the two masters of file cabinets and copy toner cartridges approved the union.

The move is a no-brainer as both retailers are expected to post slight declines in sales this year. The combination should create cost savings in the form of materialized synergies -- and that's just good business.

Five for the road
These five stocks aren't trading in the single digits by accident. If I'm right about the catalysts, though, they may not be trading in the single digits for too much longer.

Finding promising stocks while they're still cutting their baby teeth is at the heart of the Rule Breakers newsletter that I write for. You can check it out for free this month with a 30-day trial subscription. There are roughly a half-dozen active stock recommendations in the growth stock research service trading for less than $10 at the moment. Check those out, and I'll be back with more on the third Monday of next month.

With the U.S. relying on the rest of the world for such a large percentage of our goods, many investors are ready for the end of the "made in China" era. Well, it may be here. Read all about the biggest industry disrupters since the personal computer in 3 Stocks to Own for the New Industrial Revolution. Just click here to learn more.

Egypt's Turmoil Could Lead to Rocky Oil Markets

There have been several reports that the recent uptick in oil prices is because of the uncertainty about the political situation in Egypt. What is confusing, though, is that the country only produces about 730,000 barrels per day and is a net importer of about 60,000 barrels per day. So how can a country with such paltry production be a critical cog in the global markets? Let's take a look what Egypt means for the oil industry and how it affects you and your energy investments.

See you at the crossroads
The global oil market is, and will potentially always be, a tight market. In 2012, global consumption outpaced supply by only 30,000 barrels per day. This means that whenever there is a threat of a major slowdown in production, someone is going to go without oil, or they will pay more than someone else to get it. This ripple effect reverberates throughout the global oil market and results in higher oil prices across the board.

Source: U.S. Energy Information Administration

We saw a very similar situation to this just over two years ago when Libya was on the brink of civil war. During the run-up to the conflict and into the first couple months of fighting, Brent crude prices surged by a third in a six-month period.  

Much like what we saw with the Libyan conflict, Egypt's oil production may not be too much of a concern in the long run. OPEC member nations have over 5.76 million barrels per day in spare production capacity that is left idle to maintain high oil prices. So if this event poses a big threat to global supplies, it can be covered. 

But Egypt is unique. Not because of its oil, but because of where it is located. The Suez Canal runs right through the Sinai Peninsula and is quite possibly the most important shipping route in the world. This region isn't just important because of the ship traffic that travels through the canal, but also because of the adjacent SUMED pipeline that moves oil from the Red Sea to the Mediterranean. Between shipping and the pipeline, the region can move up to 3.2 million barrels per day. Without this critical shipping route, oil tankers will need to travel all the way around Africa to deliver Middle Eastern and Pacific crudes to Europe and the U.S. This would add up to 15 days to deliveries for some regions, which will have an effect on prices for both Europe and the Americas.

Unrest in your portfolio?
Aside from the fear of higher gas prices, investors might be interested to know what kind of effect this will have on their portfolios. For producers that don't have assets in Egypt, this could potentially provide a little boost because they might get a slightly higher premium for their product. Then again, there are a couple companies that could be hurt by production losses from their Egyptian assets.

Company	Total Production in Egypt (bpd)	% of Company's Production
BP (NYSE: BP  )	41,000	1.75%
Royal Dutch Shell	100,000	2.8%
Apache (NYSE: APA  )	100,000	11.7%
Eni  (NYSE: E  )	91,000	10.0%

Of the four companies listed, Apache has the most to lose. Not only is Egypt the largest producing country for Apache, it also represents 27% of the companies worldwide production revenue, so any sustained period of uncertainty could drastically hurt Apache's bottom line. So far, BP has pulled expatriate staff from the country, but no company has announced a shut down of production or a full withdraw from the country yet.

The sting for each of these companies will depend on if and how much production slips during this turmoil. Based on recent events like this in the Middle East, it could have little to no effect or could shut down operations for several months. In 2011, when former president Hosni Mubarak was removed from power, there was little to no effect on oil production. Since that time, though, production has tapered off as the economy in Egypt has struggled and some companies have been hesitant to invest there because of political uncertainty.

A more extreme outcome could be what happened in Libya. Prior to and during the first parts of the conflict, Eni's production of 280,000 barrels of oil equivalent essentially came to a standstill for six months. Even today, almost two years after the company restarted production, the company's production is only 36% of what it was before the conflict. 

Another element to consider as well is a sustained period where the Suez Canal is shut down. If this were the case, it could be a temporary boost for tanker fleets. LNG carriers like Teekay LNG Partners  (NYSE: TGP  ) , the third-largest liquefied natural gas fleet, would be well positioned to benefit from the increased ship times. Day rates for LNG carriers are about $100,000 per day, and the extra eight to 15 days of shipping time could be a nice pad to revenue.

Oil tankers could also see a benefit as well. With potential of the SUMED pipeline being shut down, it would mean that tankers would need to increase traffic by 2 million barrels per day and increase its shipment times as much as LNG tankers. Norway's Frontline  (NYSE: FRO  ) , the world's largest oil tanker fleet, has day rates of about $25,000 for its oil carriers, so it's not as much of a win as LNG carriers. Also, higher fuel prices for all shipments will eat into that revenue boost. 

What a Fool believes
For producers and shippers alike, it all comes down to the severity and duration of unrest in Egypt. More than likely, these will be temporary situations that could affect revenue for a while. It is hard to see either situation completely changing an investment thesis for any of these companies unless some completely drastic measure happens in Egypt in the next couple months.

More than anything, events like this play on investor's emotional reactions. Fear of higher oil prices leads us to overvalue the threat. Just look back at the Libya example from two years ago. The biggest run-up in oil prices came before any civil unrest. As the civil war was prolonged and oil production in the country dropped by over 1 million barrels per day, global oil prices steadily fell for the rest of the year.

The biggest mistake an investor can make is to let emotions like fear cloud their judgement when making investments. Rather, do your due diligence and invest with confidence. Get started on the right path of investing, we're here to help. 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.

Why Oracle Is Ready to Rebound

Banks Are Corrupt and Greedy (Except for My Bank)

American Banker Magazine recently published a reputation survey that showed respondents are more likely to give their own financial institution higher reputation scores than other banks. 

For the big banks, the gap was greatest and overall scores were generally lower. It seems that battered institutions like Citigroup (NYSE: C  ) and Bank of America  (NYSE: BAC  ) are still trapped in the mud of 2007 and 2008. Regional banks contrast that, though, with banks like Huntington Bancshares  (NASDAQ: HBAN  ) and Suntrust (NYSE: STI  ) scoring higher and with less of a gap between customers and non customers.

In the video below, Motley Fool contributor Jay Jenkins discusses the results and the takeaways.

Many investors are terrified about investing in big banking stocks after the crash, but the sector has one notable stand-out. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.

4 Stocks Making Moves

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

Yum! Brands' (NYSE: YUM  )  second-quarter profits fall 16%. Amazon (NASDAQ: AMZN  ) benefits from a rise in e-commerce. Costco's (NASDAQ: COST  ) same-store sales in June rise 6%. And Wal-Mart (NYSE: WMT  ) scraps plans for three new stores in Washington, DC. In this installment of Investor Beat, Motley Fool analysts Jason Moser and Isaac Pino discuss four stocks making moves today.

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

The relevant video segment can be found between 2:30 and 5:41.

5 Best Bank Stocks For 2014

The labor market is an important factor for the market as a whole as we continue to try to recover from the financial crisis. But there is an added importance for the banking industry that many investors may not consider. As the banks continue to perform in the sluggish economic conditions, it will be important for investors to know when a full turnaround may happen -- leading to increased performance by lenders like Wells Fargo (NYSE: WFC  ) , which held 29% of the mortgage market in 2012.

In the video below, Motley Fool contributing writer Jessica Alling discusses why the labor market's recovery is important for banks, what investors should look for, and how a full recovery will effect the banking sector.

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

5 Best Bank Stocks For 2014: New York Community Bancorp Inc (NYCB)

New York Community Bancorp, Inc. is a bank holding company and a producer of multi-family mortgage loans in New York City, with an emphasis on apartment buildings that feature below-market rents. It has two bank subsidiaries: New York Community Bank (the Community Bank),New York Commercial Bank (the Commercial Bank. The Community Bank has 241 branches and operates through seven divisional banks. The Commercial Bank has 34 branches in Manhattan and operates 17 of its branches under the divisional name Atlantic Bank.

During the year ended December 31, 2011, all of the one-to-four family loans the Company originated was sold to government-sponsored enterprises (GSEs). In New York, the Company serves its Community Bank customers through Roslyn Savings Bank, with 55 branches on Long Island; Queens County Savings Bank, with 34 branches in the New York City borough of Queens; Richmond County Savings Bank, with 22 branches in the borough of Staten Island, and Roosevelt Savings Bank, with eight branches in the borough of Brooklyn. As of December 31, 2011, in the Bronx and neighboring Westchester County, the Company had four branches that operated directly under the name New York Community Bank.

In New Jersey, the Company serves its Community Bank customers through 51 branches that operate under the name Garden State Community Bank. In Florida and Arizona, where it has 25 and 14 branches, respectively, the Company serves its customers through the AmTrust Bank (AmTrust) division of the Community Bank. In Ohio, the Company serves its Community Bank customers through 28 branches of Ohio Savings Bank. Customers of the Community Bank and the Commercial Bank have access to their accounts through 261 of its 285 automatic teller machines (ATMs) locations in five states. The Company also serves its customers through three Websites, which include www.myNYCB.com, www.NewYorkCommercialBank.com and www.NYCBfamily.com.

Lending Activities

The Company�� principal asset is l! oans. Its loan portfolio consists of three components: covered loans, non-covered loans held for sale and non-covered loans held for investment. As of December 31, 2011, the balance of covered loans was $3.8 billion, of which $3.4 billion were one-to-four family loans. Non-covered loans held for sale consists of the one-to-four family loans that are originated for sale, primarily to GSEs. At December 31, 2011, the held-for-sale loan portfolio totaled $1.0 billion

As of December 31, 2011, loans held for investment consisted of loans that it originates for its own portfolio, and totaled $ 25.5 billion.

In addition to multi-family loans, loans held for investment include commercial real estate loans (CRE); acquisition, development and construction (ADC) loans; commercial and industrial loans (C&I), and one-to-four family loans. As of December 31, 2011, its multi-family loans represented $17.4 billion, or 68.3%, of total loans held for investment, and represented $5.8 billion, or 64.1%, of the total loans that it originated for investment. The multi-family loans it originates are typically secured by non-luxury apartment buildings in New York City. It also makes multi-family loans to property owners who are seeking to expand their real estate holdings by purchasing additional properties.

As of December 31, 2011, CRE loans represented $6.9 billion, or 26.9%, of total held for investment; ADC loans represented $445.7 million, or 1.7%, of total loans held for investment. Its ADC loan portfolio consists of loans that were originated for land acquisition, development, and construction of multi-family and residential tract projects in New York City and Long Island.

C&I loans represented $600.0 million, or 2.4%, of total held for investment. It also offers a range of loans to small and mid-size businesses for working capital (including inventory and receivables), business expansion, and the purchase of equipment and machinery. Non-covered one-to-four family loans totaled $127! .4 millio! n at December 31, 2011.

Investment Activities

The Company�� securities portfolio primarily consists of mortgage-related securities, and debt and equity (other) securities. Its investments include GSE certificates, GSE collateralized mortgage obligations (CMOs) and GSE debentures. The Community Bank and the Commercial Bank are members of the Federal Home Loan Bank of New York (FHLB-NY), one of 12 regional Federal Home Loan Banks (FHLBs) consisting of the FHLB system. As of December 31, 2011, the Company�� securities represented $4.5 billion, or 10.8%, of total assets. As of December 31, 2011, 93.7% of its securities portfolio consisted of GSE obligations; held-to-maturity securities represented $3.8 billion, or 84.0%, of total securities, and its investment in bank-owned life insurance (BOLI) was $769.0 million.

Source of Funds

The Company has four primary funding sources. These include the deposits that it added through its acquisitions or gathered through its branch network, and brokered deposits; wholesale borrowings, primarily in the form of FHLB advances and repurchase agreements with the FHLB and various brokerage firms; cash flows produced by the repayment and sale of loans, and cash flows produced by securities repayments and sales. As of December 31, 2011, deposits totaled $ 22.3 billion, which included certificates of deposit (CDs) of $7.4 billion; negotiable order withdrawal (NOW) and money market accounts of $8.8 billion; savings accounts of $ 4.0 billion, and non-interest-bearing accounts of $2.2 billion. As of December 31, 2011, the Company�� borrowed funds totaled $14.0 billion, loan repayments and sales generated cash flows of $15.0 billion, and securities sales and repayments generated cash flows of $4.2 billion.

Subsidiary Activities

As of December 31, 2011, Community Bank had 34 subsidiary corporations. Of these, 22 are direct subsidiaries of the Community Bank and 12 are subsidiaries of Community Bank! -owned en! tities. The 22 direct subsidiaries of the Community Bank include DHB Real Estate, LLC, Mt. Sinai Ventures, LLC, NYCB Community Development Corp., NYCB Mortgage Company, LLC, Eagle Rock Investment Corp., Pacific Urban Renewal, Inc., Somerset Manor Holding Corp., Synergy Capital Investments, Inc., 1400 Corp., BSR 1400 Corp., Bellingham Corp., Blizzard Realty Corp., CFS Investments, Inc., Main Omni Realty Corp., NYB Realty Holding Company, LLC, O.B. Ventures, LLC, RCBK Mortgage Corp., RCSB Corporation, RSB Agency, Inc., Richmond Enterprises, Inc. and Roslyn National Mortgage Corporation.

The 12 subsidiaries of Community Bank-owned entities include Bronx Realty Funding Company, LLC, Columbia Preferred Capital Corporation, Ferry Development Holding Company, Peter B. Cannell & Co., Inc., Roslyn Real Estate Asset Corp., Walnut Realty Funding Company, LLC, Woodhaven Investments Inc, Your New REO, LLC, Ironbound Investment Company, Inc.,The Hamlet at Olde Oyster Bay, LLC, The Hamlet at Willow Creek, LLC and Richmond County Capital Corporation.

The two direct subsidiaries of the Commercial Bank include Beta Investments, Inc., and Gramercy Leasing Services, Inc. The two subsidiaries of Commercial Bank-owned entities include Omega Commercial Mortgage Corp. and Long Island Commercial Capital Corp.

5 Best Bank Stocks For 2014: Wilshire Bancorp Inc.(WIBC)

Wilshire Bancorp, Inc. operates as the holding company for Wilshire State Bank that offers a range of financial products and services. It accepts various deposit products that include certificates of deposit, regular savings accounts, money market accounts, checking and negotiable order of withdrawal accounts, installment savings accounts, and individual retirement accounts. The company?s loan portfolio comprises commercial real estate and home mortgage loans, commercial business lending and trade finance, and small business administration lending, as well as consumer loans, including personal loans, auto loans, and other loans. It also provides trade finance services that include issuance and negotiation of letters of credit, handling of documentary collections, advising and negotiation of commercial letters of credit, transfer and issuance of back-to-back letters of credit, and trade finance lines of credit. In addition, the company offers Internet banking services, auto matic teller machines, and armored carrier services. It has 24 full-service branch offices in Southern California, Texas, New Jersey, and the greater New York City metropolitan area; and 6 loan production offices in Colorado, Georgia, Texas, New Jersey, and Virginia. The company was founded in 1980 and is headquartered in Los Angeles, California.

Advisors' Opinion:

• [By Philip]

  Shares of Wilshire Bancorp (WIBC) of Los Angeles closed at $3.42 Friday, down 55% year-to-date. The shares have 18% upside potential, based on a mean 12-month price target of $4.04, among analysts polled by FactSet.

  The company had $2.7 billion in total assets as of Sept. 30, with 24 branches in Southern California, Texas, New Jersey, and the New York City area, and six loan production offices in n Colorado, Georgia, Texas (two offices), New Jersey, and Virginia.

  Wilshire Bancorp owes $62.2 million in federal bailout funds received through the Troubled Assets Relief Program, or TARP. The company raised $100 million in common equity during the second quarter, following an agreement with the Federal Deposit Insurance Corp. and state regulators to bring main subsidiary Wilshire State Bank's Tier 1 leverage ratio up to at least 10%. The Bank subsidiary's Tier 1 leverage ratio was 13.24% as of Sept. 30.

  The holding company reported third-quarter net income available to common shareholders of $10.2 million, or 14 cents a share, increasing from $2.1 million, or 4 cents a share, during the second quarter, and $5.0 million, or 14 cents a share, during the third quarter of 2010.

  The main factor in the earnings improvement was a reduction in credit costs, with a third-quarter provision for loan losses of $2.5 million, declining from $10.3 million the previous quarter and $18.0 million a year earlier. A $5.7 million decline in loan loss reserves during the third quarter directly boosted earnings.

  With the company continuing its aggressive reduction of its commercial real estate loan portfolio and its nonperforming loans, Wilshire Bancorp's total assets declined 17% from a year earlier. During the third quarter, the company sold $28.7 million in loans, most of which were nonperforming, for a gain of $1.7 million.

  Net interest income declined 14% year-over-year to $25.5 million in the third quarter, reflecting the balance sheet reduction.

  The net interest margin -- t! he difference between a bank's average yield on loans and investments and its average cost for loans and deposits -- was a strong 4.23% in the third quarter, which was down from 4.42% the previous quarter, but up from 3.393% a year earlier.

  Wilshire Bancorp's ratio of nonperforming assets to total assets was 2.46% as of Sept. 30, improving from 3.22% the previous quarter and 2.87% a year earlier. The annualized ratio of net charge-offs -- loan losses less recoveries -- to total loans was 0.46%, and with reserves covering 5.27% of total loans, the company appeared well-positioned for continued significant releases of reserves.

  FIG Partners analyst Timothy Coffey on Oct. 28 reiterated his "Outperform" or "Buy" rating for Wilshire Bancorp, raising his 12-month price target to $4.50 from $3.80, also "estimating tangible book values of $3.43 in 2011, $4.21 in 2012 and $4.84 in 2013." The analyst said that he anticipated that "could start to reverse the DTA-Deferred Tax Asset valuation allowance over the coming quarters," and that "the improvement in the earnings power has resulted in losses below management's projections, which has increased the valuation allowance to $40 million." Coffey estimated that "company could have no tax expense or very limited expense in 2012 before a normalized expense returns in 2013."

  The shares trade for 6.8 times the consensus 2012 earnings estimate of 50 cents, among analysts polled by FactSet, and just above their Sept. 30 tangible book value of $3.27, according to SNL Financial.

  Four out of seven analysts covering Wilshire Bancorp rate the shares a buy, while the remaining analysts all have neutral ratings.

Top 10 Transportation Companies To Own For 2014: Signature Bank (SBNY.O)

Signature Bank (the Bank) is a full-service commercial bank with 25 private client offices located in the New York metropolitan area serving the needs of privately owned business clients and their owners and senior managers. The Bank offers a variety of business and personal banking products and services through the Bank, as well as investment, brokerage, asset management and insurance products and services through its wholly owned subsidiary, Signature Securities Group Corporation (Signature Securities), a licensed broker-dealer and investment adviser. Through Signature Securities, it also purchases, securitizes and sells the guaranteed portions of the United States Small Business Administration (SBA) loans. The Bank offers a variety of deposit, escrow deposit, credit, cash management, investment and insurance products and services to its clients. As of December 31, 2011, the Bank maintained approximately 78,000 deposit accounts, 6,900 investment accounts, 8,600 loan a ccounts and 14,300 client relationships. In April 2012, it formed a new subsidiary, Signature Financial, LLC.

The Bank offers a range of products and services oriented to the needs of its business clients, including deposit products, such as non-interest-bearing checking accounts, money market accounts and time deposits; escrow deposit services; cash management services; commercial loans and lines of credit for working capital and to finance internal growth, acquisitions and leveraged buyouts; permanent real estate loans; letters of credit; investment products to help better manage idle cash balances, including money market mutual funds and short-term money market instruments; business retirement accounts, such as 401(k) plans, and business insurance products, including group health and group life products. It offers a range of products and services oriented to the needs of its high net worth personal clients, including interest-bearing and non-interest-bearing checking accounts, with optional features, such as debit/ a! u! tomated teller machine (ATM) cards and overdraft protection and, for its clients, rebates of certain charges, including ATM fees; money market accounts and money market mutual funds; time deposits; personal loans, both secured and unsecured; mortgages, home equity loans and credit card accounts; investment and asset management services, and personal insurance products, including health, life and disability.

Lending Activities

The Bank�� commercial and industrial (C&I) loan portfolio is consisted of lines of credit for working capital and term loans to finance equipment, company owned real estate and other business assets, along with commercial overdrafts. Its lines of credit for working capital are generally renewed on an annual basis and its term loans generally have terms of 2 to 5 years. The Bank�� lines of credit and term loans typically have floating interest rates, and as of December 31, 2011, approximately 61% of its outstanding C&I loan s were variable rate loans. As of December 31, 2011, funded C&I loans totaled approximately 15% of its total funded loans. The Bank�� real estate loan portfolio includes loans secured by commercial and residential properties. It also provides temporary financing for commercial and residential property. As of December 31, 2011, funded real estate loans totaled approximately $5.74 billion, representing approximately 80% of its total funded loans. It issues standby or performance letters of credit, and can service the international needs of its clients through correspondent banks. As of December 31, 2011, its commitments under letters of credit totaled approximately $235.7 million. Its personal loan portfolio consists of personal lines of credit and loans to acquire personal assets. As of December 31, 2011, its consumer loans totaled $11.8 million, representing less than 1% of its total funded loans.

Investment and Asset Management Products and Services

Investment and asset management products and servi! ces a! re! provid! ed through the Bank�� subsidiary, Signature Securities. Signature Securities is a licensed broker-dealer. Signature Securities is an introducing firm and, as such, clears its trades through National Financial Services, Inc., a wholly owned subsidiary of Fidelity Investments. Signature Securities is also registered as an investment adviser in New York, New Jersey, Pennsylvania and Florida. It offers an array of asset management and investment products, including the ability to purchase and sell all types of individual securities, such as equities, options, fixed income securities, mutual funds and annuities. The Bank offers transactional, cash management type brokerage accounts with check writing and daily sweep capabilities. It also offers retirement products, such as individual retirement accounts (IRAs) and administrative services for retirement vehicles, such as pension, profit sharing, and 401(k) plans to its clients. Signature Securities offers wealth management servi ces to its high net worth personal clients. Together with its client and their other professional advisors, including attorneys and certified public accountants, it develops a financial plan that can include estate planning, business succession planning, asset protection, investment management, family office advisory services, bill payment, art and collectible advisory services and concentrated stock services.

Sources of Funds

The Bank offers a variety of deposit products to its clients. Its business deposit products include commercial checking accounts, money market accounts, escrow deposit accounts, lockbox accounts, cash concentration accounts and other cash management products. Its personal deposit products include checking accounts, money market accounts and certificates of deposit. The Bank also allows its personal and business deposit clients to access their accounts, transfer funds, pay bills and perform other account functions over the Inte rnet and through ATM machines. As of December 31,! 2011, it! m! aintained! approximately 78,000 deposit accounts representing $11.70 billion in client deposits, excluding brokered deposits.

Insurance Services

The Bank offers its business and private clients an array of individual and group insurance products, including health, life, disability and long-term care insurance products through its subsidiary, Signature Securities. The Bank does not underwrite insurance policies. It only acts as an agent in offering insurance products and services underwritten by insurers.

5 Best Bank Stocks For 2014: FirstMerit Corporation(FMER)

FirstMerit Corporation operates as the bank holding company for FirstMerit Bank, N.A. that provides a range of banking, fiduciary, financial, insurance, and investment services to corporate, institutional, and individual customers in northern and central Ohio, and western Pennsylvania. The company?s commercial business offers commercial term loans, revolving credit arrangements, asset-based lending, leasing, commercial mortgages, real estate construction lending, letters of credit, cash management services, and other depository products. Its retail business provides various financial products and services, including consumer direct and indirect installment loans, debit and credit cards, debit gift cards, residential mortgage loans, home equity loans and lines of credit, fixed and variable annuities, and ATM network services, as well as deposit products comprising checking, savings, money market accounts, and certificates of deposit. The company?s wealth business provides a sset management, private banking, financial planning, estate settlement and administration, and credit and deposit products and services. FirstMerit Corporation also offers trust and investment services, including personal trust and planning, and investment management; retirement plan services; retail mutual funds, other securities, variable and fixed annuities, personal disability and life insurance products, and brokerage services; and private banking services, including credit, deposit, and asset management solutions. As of December 31, 2009, it operated a network of 160 full service banking offices and 182 ATMs. The company was founded in 1855 and is headquartered in Akron, Ohio.

5 Best Bank Stocks For 2014: National Bank of Greece SA (NBG)

National Bank of Greece S.A. (the Bank), incorporated on March 30, 1841, is a Greece-based financial institution. It offers a range of integrated financial services, including corporate and investment banking, retail banking (including mortgage lending), leasing, stock brokerage, asset management and venture capital, insurance, real estate and consulting services. In addition, the Company is involved in various other businesses, including hotel and property management, real estate and information technology (IT) consulting. On May 19, 2009, the Bank established Ethniki Factors S.A., a wholly owned subsidiary. On June 8, 2009, Finansbank A.S. established Finans Faktoring Hizmetleri A.S. (Finans Factoring), a wholly owned subsidiary. On June 30, 2009, NBG Luxemburg Holding S.A. and NBG Luxfinance Holding S.A. were merged to NBG Asset Management Luxemburg S.A. On January 18, 2010, the Bank acquired 35% of the share capital of AKTOR FM. On October 16, 2009, United Bulgarian Bank A.D. (UBB) established UBB Factoring E.O.O.D., a wholly owned subsidiary of UBB. On September 15, 2009, the Bank disposed of its investment in Phosphoric Fertilizers Industry S.A.

At December 31, 2009, the Bank operated in Greece through 575 branches, one private banking unit, one unit for financial institutions and 10 specialized banking units that deal exclusively with troubled and non-performing loans. At December 31, 2009, the Bank had over 1500 automated teller machines (ATMs).

Retail Banking

The Bank offers retail customers a number of different types of deposit and investment products, as well as a range of services and products. The Bank offers a range of mortgage products, with floating, fixed, or a combination of fixed and floating interest rates. In February 2009, the Bank introduced a new floating rate product, the ESTIA MIKTO with flexible payment terms. In addition to fire and earthquake property insurance, the Bank offers an optional life insurance plan together with mortgage! s.

The Small Business Lending Unit (SBL Unit) a part of the Bank's retail banking division consists of three credit centers situated in Athens, Thessaloniki and Patrastail. The SBL Unit offers term loans geared towards medium and long-term working capital needs for the financing of asset purchases.

Corporate and Investment Banking

The Bank offers corporate accounts with overdraft facilities, foreign currency loans, variable rate loans, and currency swaps and options for corporate customers. The Bank's commercial loan portfolio in Greece comprises approximately 50,000 corporate clients, including small and medium sized enterprises. It offers the corporate clients a range of products and services, including financial and investment advisory services, deposit accounts, loans denominated in euro and other currencies, foreign exchange services, insurance products, custody arrangements and trade finance services. The Bank lends primarily in the form of credit lines, which are generally at variable rates of interest with payment terms of up to 12 months. In addition, the Bank provides letters of credit and guarantees for its clients.

The Bank�� shipping finance and syndicated loan portfolio consists of first-tier shipping groups involved in diversified shipping activities. The Bank provided project finance advisory services to the Hellenic Republic on two infrastructure projects: the new Attica Motorway and Kasteli International Airport.

Global Markets & Asset Management

The treasury activities provided by the Bank and its subsidiaries include

Greek and other sovereign securities trading, foreign exchange trading, interbank lending and borrowing in euro and other currency placements/ deposits, forward rate agreement trading, repurchase agreements, corporate bonds, and derivative products, such as options and interest rate and currency swaps. The Bank also conducts a portion of its treasury activities through its subsidia! ry CPT. A! s at December 31, 2009; CPT's portfolio comprised Greek government bonds and corporate bonds, with a total value of EUR 1.8 billion.

The Bank offers its private banking services both domestically and internationally from its international private banking units in London. The Bank offers custodian services to its foreign and domestic institutional clients who hold equity securities listed on the ATHEX or listed Greek State debt, as well as remote settlement and custody services on the Cyprus Stock Exchange. The Bank offers trade settlements, safekeeping of securities, corporate action processing, income collection, proxy voting, tax reclamation, brokerage services, customized reporting, regular market flashes and information services. The Bank also acts as global custodian to its domestic institutional clients who invest in securities outside of Greece.

The domestic fund management business is operated by NBG Asset Management, which is wholly owned by the Group. NBG Asset Management manages funds that are made available to customers through the Bank's extensive branch network. As at December 31, 2009, NBG Asset Management's total assets under management were EUR 1.9 billion.

National Securities S.A offers a range of investment services to both individual and institutional customers. In September 2009, National Securities S.A. opened a branch in Nicosia, Cyprus, to provide brokerage services to local private investors.

Turkish Operations

The Bank�� Turkish operations include the Finansbank group of companies and NBG Bank (Malta) Ltd. Finansbank's group of companies includes Finans Invest, Finans Leasing, Finans Portfolio Management, Finans Investment Trust, Finans Factoring, IBTech, Finans Pension, and Finans Consumer Finance. As at December 31, 2009, Finansbank operated through a network of 461 branches in 60 cities.

Finansbank Corporate Banking serves corporations through its eight branches in the four cities in Turkey.! Finansba! nk Commercial Banking serves medium-sized companies located in 23 cities in Turkey through its head office, four regional offices (three in Istanbul and one in Ankara) and a distribution network, which includes 61 branches.

Finansbank Investment Banking consists of project finance, corporate finance and technical consulting. Investment Banking acts as a client relations specialist while providing medium to long-term loans and other products. Finansbank Private Banking has been providing investment products and asset management services to individuals through eight private banking centers and 28 private banking corners located in Finansbank's branches in the cities throughout Turkey.

International

The Bank's international operations include the Bank's branches in Albania, Egypt and Cyprus, as well as banking subsidiaries in six countries: NBG Cyprus; Stopanska Banka A.D. in FYROM; United Bulgarian Bank A.D. in Bulgaria; Banca Romaneasca S.A., in Romania; Vojvodjanska in Serbia; and the South African Bank of Athens, as well as other subsidiaries, primarily in the leasing sector. As at December 31, 2009, the Bank had foreign branches in four countries, including one in the United Kingdom, 30 in Albania, one in Cyprus, 15 in Egypt and one in Guernsey (which closed early in 2010).

Insurance

The Bank provides insurance services to individuals and companies through the wholly owned subsidiary Ethniki Insurance Group (EI) and Finans Pension. EI offers a range of products such as life, accident and health insurance for individuals and groups, fire, catastrophe, credit, motor, marine hull and cargo insurance, and general third party liability. EI operates through a network of 2,850 tied agents and 2,620 independent insurance brokers, in addition to selling bancassurance products through the Bank's network. EI provides bancassurance products through our insurance brokerage subsidiary NBG Bancassurance S.A. (NBGB), which assumes no insurance underwr! iting ris! k, and the Bank's extensive network in Greece.