Unlikely Budget Deal Paves Way for CR; Shutdown Risk 'Very Small': Analyst

Hopes for a budget deal are waning given that the Senate is not in session this week and both chambers are intent on adjourning for the year on Dec. 13 — the same date on which the budget conference committee is tasked with striking a deal to keep the government running beyond the expiration of the current Continuing Resolution on Jan. 15.

As Joe Lieber of Washington Analysis wrote in his Washington This Week commentary, released Monday, given the constrained Dec. 13 timeline, “we doubt the ongoing budget negotiations will be able to reach a consensus.”

What’s more likely, Lieber says, is that another CR at FY13 levels ($988 billion), with sequestration reducing that figure to $967 billion, is the end result sometime in early January.

“House Republicans remain concerned that the absence of a deal prior to the winter recess will stoke both fears and, more importantly, blame, regarding another government shutdown,” Lieber said. “As such, the lower chamber may seek to pass its own CR prior to adjourning, leaving the Senate to either accept it or resume discussions” when lawmakers return on Jan. 7.

But the odds of a government shutdown are “very small,” Lieber says. “In fact, we continue to see a very benign macro ‘fiscal’ policy outlook for the markets, with little chance of another government shutdown between now and mid-December of 2014, and an even smaller probability of breaching the debt limit as the mid-March deadline approaches.”

Even if Washington Analysis’ prediction is incorrect, Lieber says, “and the government does shut down again, there would likely be an even a smaller market reaction than what occurred in October, which was itself minimal.”

The remainder of this year’s legislative session will be consumed by “more macro-level budget and policy priorities,” Lieber opines, “in addition to ongoing noise about the Affordable Care Act.”

Rep. Dave Camp, R-Mich., chairman of the House Ways and Means Committee, will also miss his self-imposed deadline of moving a tax reform bill through his committee this year, according to Wes Sheumaker on a recent blog posting on the law firm Sutherland Asbill & Brennan’s TaxReformLaw.com.

Sheumaker says that some Republicans have gone so far as to question whether a tax reform bill is even possible in 2014, “given the budget and debt ceiling fights that are expected in the coming months and the fundamental differences between the Republicans and Democrats over possible tax increases.”

Says Sheumaker: “While Rep. Camp has refused to make any prediction on timing," he has said that he “would continue to move ahead on the bill and continue to refine it.”

Indeed, Camp expressed approval of Senate Finance Committee Chairman Max Baucus’ recently released tax reform discussion drafts, and praised Baucus for “his continued commitment to advancing tax reform forward.” /* .premium-promo { border: 1px solid #ddd; padding: 10px; margin: 0 10px 10px 0; width: 200px; float: left; } .premium-promo li, .premium-promo ul { list-style-type: none; margin: 0; padding: 0; } .premium-promo li { margin: 0 0 10px; padding: 0 0 10px; border-bottom: 1px dotted #ddd; } .premium-promo h3 { text-transform: uppercase; font-size: 11px; } .premium-promo h4 { font-size: 16px; } .premium-promo a { text-decoration: none !important; } .premium-promo .btn { background: #0069a1; border-radius: 4px; display: inline-block; padding: 5px 10px; clear: both; color: #fff; font-weight: bold; } .premium-promo .btn:hover { background: #034c92; } */ Baucus’ proposal on international tax reform sets up a discussion of “how to design the equivalent of a leash to rein in the abuse of the U.S. tax system by multinational corporations,” wrote Christopher Bergin, president and publisher of Tax Analysts, in a recent blog posting. “It’s a great understatement to say that what Baucus is doing is not what the multinationals had in mind.”

Says Bergin: “When tax reform does come, and whatever it means when it gets here, U.S. multinationals will pay a price.”

It’s unclear how much Baucus, D-Mont., will impact tax reform’s progress, as he announced that he would not seek re-election in 2014. The more pressing question in Bergin’s mind is: Who will replace Baucus?  

---

Check out Senate Finance's Baucus Floats International Business Tax Reform Plan on ThinkAdvisor.

European Stocks Post Biggest Weekly Decline Since June

European stocks posted their biggest weekly decline since June as better-than-estimated U.S. economic reports spurred speculation that the Federal Reserve will begin cutting stimulus measures sooner than forecast.

ThyssenKrupp AG (TKA) slumped 9.3 percent after Germany's largest steelmaker raised 882.3 million euros ($1.21 billion) through a share sale. Standard Chartered Plc lost 8.1 percent. Sage Group (SGE) Plc, the U.K.'s biggest software maker, rose 6.8 percent after reporting revenue growth that exceeded analysts' estimates. AZ Electronic Materials SA surged 43 percent after Merck KGaA (MRK) agreed to buy it for about 1.6 billion pounds ($2.6 billion).

The Stoxx Europe 600 Index fell 2.7 percent to 316.5 this week. The regional benchmark gauge has still surged 13 percent in 2013 as central banks pledged to continue their support for economic growth. The Euro Stoxx 50 Index (SX5E), a measure for the euro area, lost 3.5 percent this week.

"Strong employment data means tapering comes sooner, but you also don't want weak numbers," Andreas Nigg, head of equity and commodity strategy at Vontobel Asset Management in Zurich, said in a phone interview. "This week has shown the latest economic reports to surprise on the positive side. While normally this could be a good omen for company earnings, we're at a point in time where tapering fears trump that."

National benchmark indexes retreated in all of the 18 western European markets this week, except in Iceland. Germany's DAX (DAX) lost 2.5 percent, while France's CAC 40 slid 3.9 percent. The U.K.'s FTSE 100 (UKX) slipped 1.5 percent for its fifth consecutive weekly retreat.

U.S. Economy

European markets pared weekly losses after data from the U.S. Labor Department on Dec. 6 showed payrolls increased by 203,000 in November, following a revised 200,000 advance in October. The median forecast of 89 economists surveyed by Bloomberg called for a 185,000 advance last month. The jobless rate dropped to a five-year low of 7 percent.

The Federal Open Market Committee meets on Dec. 17-18 to consider changes to its $85 billion of monthly bond buying. Officials said at their Oct. 29-30 meeting that they may slow their asset purchases if the economy improves as forecast.

Gains in manufacturing, technology and housing fueled "modest to moderate" economic growth from early October through mid-November, the Fed said in its Beige Book survey released on Dec. 4.

Manufacturing Gains

U.S. manufacturing rose in November, with the Institute for Supply Management's factory index climbing to 57.3 in November from 56.4 a month earlier. That beat the median projection in a Bloomberg survey of 77 economists calling for a drop to 55.1. Separate data from the Commerce Department on Dec. 4 showed U.S. new-home sales jumped in October by the most in three decades.

European Central Bank President Mario Draghi said on Dec. 5 that increased commodity prices, weaker domestic demand and slow export growth all posed downside risks to the outlook for the euro area's economy.

ECB officials kept the main refinancing rate unchanged at 0.25 percent as predicted by every economist in a Bloomberg News survey. In the U.K., the Bank of England left its key interest rate at a record low of 0.5 percent, in line with its own guidance on rates.

ThyssenKrupp lost 9.3 percent, after increasing capital by 10 percent of its market value on Dec. 3. That followed an agreement last week to sell a U.S. steel plant for $155 billion as it pulls back from its Americas division.

Standard Chartered

Standard Chartered, the U.K. lender that makes about three-quarters of its earnings in Asia, fell 8.1 percent after saying full-year operating profit at its consumer-banking unit will drop at least 10 percent, hurt by its Korean business.

Operating profit at the division "is now expected to be down by a double-digit rate," while revenue is seen increasing "at a low single digit rate" in 2013, the London-based bank said in a statement on Dec. 4, without giving details. Consumer banking in Korea is expected to drop by about 15 percent.

Vienna Insurance Group AG declined 9.7 percent as an unidentified investor sold 2.29 million shares in Austria's biggest insurer, according to terms obtained by Bloomberg. They were sold at 34.10 euros apiece, according to two people with knowledge of the deal.

Sage Group, which provides accounting and payroll software to more than 6 million mostly small and medium-sized businesses, advanced 6.8 percent. Sales, excluding items such as acquisitions and currency fluctuations, rose 5 percent in the fiscal second half, beating the 3 percent analysts predicted on average, Numis Securities said in a note on Dec. 4. Full-year underlying revenue rose 4 percent to 1.26 billion pounds.

AZ Electronic (AZEM) surged 43 percent, the most since its at least November 2010, after Merck on Dec. 5 said it had agreed to buy the company for about 1.6 billion pounds. Merck added 0.4 percent. Shareholders will get 403.5 pence for each share, Merck said. The price is 53 percent above the Dec. 4 closing level in London trading.

Anatomy of a Deal’s Collapse

In a blow for one of Australian Edge’s original “Eight Income Wonders from Down Under,” late last week the Australian government decided to reject Archer Daniels Midland Co’s (NYSE: ADM) AUD3.2 billion bid to acquire GrainCorp Ltd (ASX: GNC, OTC: GRCLF). The deal had included an offer of AUD12.20 per share plus AUD1 per share in a one-time special dividend.

This outcome wasn’t entirely a surprise at this point, as it had been telegraphed a couple weeks prior in a report by The West Australian that we detailed last issue. The Coalition government has been on the receiving end of substantial lobbying from its Nationals contingent to quash the deal, so much so that Treasurer Joe Hockey had previously said he would not be “bullied” into making a decision by this cohort.

But politics clearly prevailed anyway, even if they didn’t figure into the government’s explanation of its rationale for spurning ADM. Mr. Hockey asserted that the acquisition would have been “contrary to the national interest” because it would give a foreign company control over a significant portion of eastern Australia’s bulk grains market. The treasurer noted that GrainCorp’s network handles approximately 85 percent of this trade via its ownership of 280 up-country storage sites and seven grain port terminals.

The government said that the industry is still in a transitional phase since its 2008 deregulation, and industry participants were concerned that the acquisition could impede their access to markets since GrainCorp’s network currently has few competitors.

Beyond that, Mr. Hockey was mindful that the concerns about the deal in some corners could undermine support for future foreign investment more generally should the bid have been approved. Though the government had the power to impose additional conditions on ADM to allay its concerns, it chose not to do so, as it worried it might set a bad precedent for the industry.

Interestingly, Mr. Hockey said that he would be inclined to approve any moves by ADM to increase its current stake in GrainCorp from 19.85 percent of shares outstanding to as much as 24.9 percent. The wording of this portion of the government’s statement seemed to suggest that it might not be opposed to a similar bid down the road, once the industry develops further, and ADM makes inroads among the constituencies that opposed this deal:

“This would also provide a platform for ADM to build stakeholder support for potentially greater participation in the Australian industry as it develops.”

To that end, ADM has indicated that it intends to be involved in the Australian market for the long term and is considering enlarging its stake, though it has no definitive plans to do so yet. Australia’s rules would permit ADM to purchase an additional 3 percent stake every six months up to the aforementioned threshold. ADM also said that there still might be ways for it to partner with GrainCorp in the future.

Such a partnership could prove particularly helpful, since the acquisition would have provided the financial infusion necessary for GrainCorp to upgrade key infrastructure, such as rails. Management has acknowledged that without ADM’s superior financial backing, its growth will occur at a slower pace as it deploys its own capital toward upgrades while rationalizing its storage and logistics division.

Even so, ADM’s substantial stake and influence on the board means that GrainCorp’s former suitor should still be incentivized to do what it takes to ensure its investment proves to be a profitable one. But it remains to be seen what form its support or any partnership will take.

In the meantime, GrainCorp’s executive suite was rocked by additional drama this week, as CEO Alison Watkins resigned in the wake of the deal’s collapse. She had been at the helm for the past three years and will leave the firm at the end of January to run Coca-Cola Amatil Ltd (ASX: CCL, OTC: CCLAF). Chairman Don Taylor will fulfill the executive role while the firm seeks internal and external candidates to become the next CEO.

GrainCorp’s shares are down about 34.5 percent since their trailing-year high in late April. But they’re still up 87.7 percent, including the reinvestment of dividends, since we initially recommended the stock in September 2011. The shares currently trade near AUD8.40 for a net yield of 5.4 percent.

While we would have certainly been pleased to book the gains from the acquisition’s consummation, and we’re not enjoying the sharp selloff since it unraveled, it does gives us the opportunity to continue compounding our wealth over the long term from a steady dividend payer that’s leveraged to growth in emerging Asia.

Stocks Going Ex-Dividend on Monday, December 9 (KSS, ROST, APC, More)

Ex-dividend dates are very important to dividend investors, since you must purchase a stock prior to its ex-dividend date in order to receive its upcoming dividend payout. For more information, check out Everything Investors Need to Know About Ex-Dividend Dates.

Below are seven stocks going ex-dividend on Monday, December 9.

Kohl’s Corporation
Kohl’s Corporation (KSS) offers a dividend yield of 2.54% based on Thursday’s closing price of $55.04 and the company's quarterly dividend payout of 35 cents. The stock is up 28% year-to-date. Dividend.com currently rates KSS as “Neutral” with a DARS™ rating of 3.4 stars out of 5 stars.

Ross Stores
Ross Stores, Inc. (ROST) offers a dividend yield of 0.94% based on Thursday's closing price of $72.25 and the company's qua

Top 10 Clean Energy Stocks To Buy For 2014

With traditional energy production rising from fracking and horizontal drilling, the renewable energy sector hasn�� been a great investment since the financial crisis. Broad-based clean energy funds- like the iShares S&P Global Clean Energy Index (NASDAQ:ICLN) ��till sit far below their all-time highs. Those lousy returns have been even worse for the solar sector. As prices for panels have crashed due to a glut on the market, many solar stocks have suffered.

Yet, solar bulls may finally be getting some good news.

For the first time, new solar power installations overtook wind energy capacity across the globe. That�� a huge win for the energy form and could finally signal solar�� return as a valid portfolio choice.

Policy Shifts In Key Markets

According to Bloomberg New Energy Finance, photovoltaic capacity installed around the world this year will beat wind for the first time ever. The news agency predicts that a total of 35.5 gigawatts (GW) worth of wind energy- both onshore and off- will be installed this year. That compares to its median forecast of 36.7 GW of new photovoltaic capacity.

Top 10 Clean Energy Stocks To Buy For 2014: TriMas Corporation(TRS)

TriMas Corporation designs, manufactures, and distributes various products for commercial, industrial, and consumer markets worldwide. Its Packaging segment offers steel and plastic closure caps, drum enclosures, rings and levers, and specialty plastic closures, as well as dispensing systems, such as pumps and specialty sprayers to store, transport, process, and dispense various products for industrial, agricultural, food, beverage, personal care, pharmaceutical, nutraceutical, and medical markets. The company?s Energy segment provides metallic and non metallic gaskets; and various types of stud bolts, industrial fasteners, and specialty products for petroleum refining, petrochemical, oil field, and industrial markets. Its Aerospace and Defense segment offers aerospace fasteners and military munitions components to serve aircraft and weapons platforms in the aerospace and defense industries. The company?s Engineered Components segment provides natural gas engines and par ts, compressors, gas production equipment, and chemical pumps engineered for well sites for the oil and gas industry; and high-pressure and low-pressure cylinders for the transportation, storage, and dispensing of compressed gases. Its Cequent Asia Pacific and Cequent North America segments offer custom-engineered towing, trailering, and electrical products, including trailer couplers, winches, jacks, trailer brakes and brake control solutions, lighting accessories, and roof racks for recreational vehicle, agricultural/utility, marine, automotive, and commercial trailer markets; and functional vehicle accessories and cargo management solutions comprising vehicle hitches and receivers, sway controls, weight distribution and fifth-wheel hitches, hitch-mounted accessories, and other accessory components. The company sells its products through direct sales force, third‑party agents, distributors, licensees, and independent sales representatives. TriMas Corporation is based in Bloomfield Hills, Michigan.

Top 10 Clean Energy Stocks To Buy For 2014: Fortune Real Estate Inv Trust (F25U.SI)

Fortune Real Estate Investment Trust, through its subsidiaries, engages in the ownership and investment of retail shopping malls in Hong Kong. As of December 31, 2008, it holds a portfolio of 11 retail malls and properties located in Hong Kong. The company was founded in 2003 and is based in Singapore, Singapore.

Top High Tech Companies To Own In Right Now: Multi-chem Limited (M06.SI)

Multi-Chem Limited, an investment holding company, provides printed circuit board (PCB) manufacturing services primarily in precision drilling to PCB fabricators in Singapore, the People�s Republic of China, and internationally. It offers mechanical and laser drilling, and routing services. The company also distributes a range of specialty chemicals for surface treatment, electroless copper plating, tin/tin lead stripping, and micro-etching; and PCB-related materials and equipment, such as plating systems, pulse rectifiers for copper plating, copper anodes and tin anodes for electroplating, entry and back-up materials for drilling, non-woven brushes to ensure clean copper surface with suitable roughness, dry film and liquid photoresist, CCL and prepreg, tacky rollers, tack cloth/wipes, and cleaning machine to remove foreign particles on PCBs. In addition, it distributes hardware and software relating to Internet and network products, including Internet security, WAN optim ization, network management, and video conferencing products, as well as provides installation, maintenance, and related technical services for such products. Further, the company offers software consultancy and implementation services. Multi-Chem Limited was founded in 1985 and is headquartered in Singapore.

Top 10 Clean Energy Stocks To Buy For 2014: Kingspan Group(KGP.L)

Kingspan Group plc, together with its subsidiaries, provides energy building solutions for the construction industry. The company designs and manufactures insulated panels, rigid insulation boards, architectural facades, raised access floors, engineered timber systems, solar thermal hot water systems, and fuel and water storage solutions. Its products and solutions include insulated roof, architectural wall, and facade systems for designers and architects; insulation products comprising insulation boards for roofs, walls, and floors, as well as insulation products for HVAC ductwork for use in the construction and related industries; and structural systems, such as cladding support purlins and rails, and composite floor decking for buildings. The company also offers solar and renewable technologies, including solar thermal hot water package solutions, solar cooling solutions, solar photovoltaic systems, and air source heat pumps for new or existing building integration; and various insulated and air tight building fabric systems for the private and public sector. In addition, it provides waste and surface water management, and conservation solutions for sustainable drainage, rainwater harvesting, and off-mains effluent treatment systems, including pollution prevention, pumping, and drainage solutions; environmental containers; and telemetry and management systems. Kingspan Group plc serves the distribution, logistics and manufacturing; temperature controlled; retail; commercial office; education; healthcare; hotel, motel, and leisure; government and public buildings; communications; private and affordable housing and apartments; student accommodation; self-build housing; and refurbishment sectors. It has operations in the Republic of Ireland, the United Kingdom, and rest of Europe; the Americas; and internationally. The company is headquartered in Kingscourt, Ireland.

Top 10 Clean Energy Stocks To Buy For 2014: Meghmani Organics Limited (M30.SI)

Meghmani Organics Limited engages in manufacturing, selling, distributing, and trading pigments and agrochemicals. The company offers pigment products, including Phthalocynine Green 7, copper phthalocynine blue, alpha blue, and beta blue pigments used in various applications, such as printing inks, plastics, rubber, paints, textiles, leather, and paper. It also provides agrochemical products in the categories of pesticide intermediates, technical grade pesticides, and pesticide formulations, which are used in crop protection, public health, termite and insect control, and veterinary applications. The company sells its products directly, as well as through a network of stockists, agents, distributors, and dealers. Meghmani Organics Limited offers its products to customers in India, North America, Europe, Central and Latin America, the Asia-Pacific, South Africa, and Brazil. The company was formerly known as Gujarat Industries. Meghmani Organics Limited was founded in 1986 a nd is based in Ahmedabad, India.

Top 10 Clean Energy Stocks To Buy For 2014: Statoil ASA (STO)

Statoil ASA (Statoil), incorporated on September 18, 1972, is an integrated energy company primarily engaged in oil and gas exploration and production activities. As of December 31, 2011, the Company had business operations in 41 countries and territories. Effective from January 1, 2011, the Company�� segments were Development and Production Norway; Development and Production International; Marketing, Processing and Renewable Energy; Fuel & Retail, Other. As of 31 December 2011, the Company had proved reserves of 2,276 million barrels (mmbbl) and 3,150 billion cubic meters (bcm) (equivalent to 17,681 trillion cubic feet (tcf)) of natural gas, corresponding to aggregate proved reserves of 5,426 mmboe. In December 2011, the Company acquired Brigham Exploration Company. On April 14, 2011, Statoil's formation of a joint venture and sale of 40% of the Peregrino field off the coast of Brazil to the Sinochem Group was closed. With effect from January 2011, Statoil formed a joint venture with PTTEP of Thailand in its oil sands business and, as part of that transaction, sold PTTEP a 40% interest in the leases in Alberta, Canada. Statoil retains 60% ownership and operatorship of the oil sands project. In June 2012, the Company divested its 54% interest in Statoil Fuel & Retail ASA to Alimentation Couche-Tard.

Development and Production Norway

Development and Production Norway (DPN) consists of the Company�� field development and operational activities on the Norwegian continental shelf (NCS). Development and Production Norway is the operator of 44 developed fields on the NCS. Statoil's equity and entitlement production on the NCS was 1.316 mmboe per day in 2011, which was about 71% of Statoil's total production. Acting as operator, DPN is responsible for approximately 72% of all oil and gas production on the NCS. In 2011, its average daily production of oil and natural gas liquids (NGL) on the NCS was 693 mboe, while its average daily gas production on the NCS was 99.1 mmcm (3.5 b! illion cubic feet (bcf)). The Company has an ownership interests in exploration acreage throughout the licensed parts of the NCS, both within and outside its production areas. It participates in 227 licenses on the NCS and is the operator for 171 of them. As of 31 December 2011, Statoil had a total of 1,369 mmbbl of proved oil reserves and 444 bcm (15.7 tcf) of proved natural gas reserves on the NCS. Total entitlement liquids and gas production in 2011 amounted to 1,316 mmboe per day.

Statoil's NCS portfolio consists of licenses in the North Sea, the Norwegian Sea and the Barents Sea. It has organized its production operations into four business clusters: Operations South, Operations North Sea West, Operations North Sea East and Operations North. The Operations South and Operations North Sea West and East clusters cover its licenses in the North Sea. Operations North covers the Company�� licenses in the Norwegian Sea and in the Barents Sea, while partner-operated fields cover the entire NCS and are included internally in the Operations South business cluster. During 2011, it two Statoil-operated oil discoveries: the Aldous discovery (PL265) in the North Sea and the Skrugard discovery (PL532) in the Barents Sea. The Aldous Major South discovery in PL265 on the Utsira Height in the Sleipner area is situated 140 kilometers west of Stavanger and 35 kilometers south of the Grane field. The Skrugard discovery is located about 250 kilometers off the coast from the Melkoya LNG plant in Hammerfest.

As of December 31, 2011, the Company�� fields under development included the Gudrun, Valemon, Visund South, Hyme, Stjerne, Vigdis North-East, Skuld, Vilje South, Skarv, and Marulk. In 2011, the Company�� total entitlement oil and NGL production in Norway was 252 mmbbl, and gas production was 36.2 bcm (1,287 bcf). The main producing fields in the Operations South area are Statfjord, Snorre, Tordis, Vigdis, Sleipner and partner-operated fields. Operations North Sea East is a gas area tha! t also co! ntains quantities of oil. The area includes the Troll, Fram, Vega, Oseberg and Tune fields. The Company�� producing fields in the Operations North area are Asgard, Mikkel, Yttergryta, Heidrun, Kristin, Tyrihans, Norne, Urd, Alve, Njord, Snohvit and Morvin.

Development and Production International

Development and Production International (DPI) is responsible for the development and production of oil and gas outside the Norwegian continental shelf (NCS). In 2011, the segment was engaged in production in 12 countries: Canada, the United States, Brazil, Venezuela, Angola, Nigeria, Iran, Algeria, Libya, Azerbaijan, Russia and the United Kingdom. In 2011, DPI produced 28.9% of Statoil's total equity production of oil and gas. Statoil has exploration licenses in North America (Gulf of Mexico, Canada and Alaska), South America and sub-Saharan Africa (Brazil, Cuba, Suriname, Venezuela, Angola, Mozambique and Tanzania), Middle East and North Africa (Libya and Iran) and Europe and Asia (the Faeroes, Greenland, the United Kingdom, Azerbaijan and Indonesia). The main sanctioned development projects in which DPI is involved are in the United States, Angola and Canada. The Brigham Exploration Company acquisition added production of approximately 21 mboe per day (as of December) to Statoil's production and gave access to 1,500 square kilometers (375,000 acres) in the Bakken and Three Forks formations in the Williston Basin.

The Company has exploration licenses in North America (Gulf of Mexico, Canada and Alaska), South America and sub-Saharan Africa (Brazil, Cuba, Suriname, Venezuela, Angola, Mozambique and Tanzania), Middle East and North Africa (Libya and Iran), and Europe and Asia (the Faroes, Greenland, the United Kingdom, Azerbaijan and Indonesia). It completed 16 wells in 2011. Five were announced as discoveries: the Mukuvo and Lira discoveries in Angola, the Gavea and Peregrino South discovery in Brazil and the Logan discovery in Gulf of Mexico (GoM). Statoil acquired in! terests i! n six new licenses in Indonesia in 2011. Statoil has activities in the United States, with approximately 300 exploration leases in the GoM and 66 in Alaska. It is also an operator and partner in exploration licenses off the coast of Newfoundland in Canada. Statoil is operator and partner in exploration licenses off the coast of Newfoundland (11,138 square kilometers). It has exploration licenses in Brazil, Cuba, Suriname, Venezuela, Angola, Mozambique and Tanzania. The Company has licenses in Libya, Iran, Faroes, Greenland, the United Kingdom, Azerbaijan and Indonesia. In 2011, Statoil's petroleum production outside Norway amounted to an average of 334 mboe per day of entitlement production and 534 mboe per day of equity production.

The Company has activities in the United States Gulf of Mexico, the Appalachian region, south-west Texas, the Williston Basin, off the East Coast of Canada and in the oil sands of Alberta, Canada. It also has a representative office in Mexico City. Offshore, the Company has production interests in Hibernia and Terra Nova, and interests in two development projects. Its development and production activities in South America and sub-Saharan Africa comprise the Peregrino operatorship in Brazil, the Petrocedeno project in Venezuela, the Agbami offshore field in Nigeria and four Angolan offshore blocks. Statoil's development and production in the Middle East and North Africa in 2011, primarily encompassed Algeria, Libya, Egypt, Iran and Iraq. The Company�� Development and Production in Europe and Asia primarily comprises Azerbaijan, Russia, United Kingdom and Ireland.

Marketing, Processing and Renewable Energy

Marketing, Processing and Renewable Energy (MPR) is responsible for the transportation, processing, manufacturing, marketing and trading of crude oil, natural gas, liquids and refined products, and for developing business opportunities in renewables. It runs two refineries, two gas processing plants, one methanol plant and three crude! oil term! inals. MPR is also responsible for marketing gas supplies originating from the Norwegian state's direct financial interest (SDFI). In total, it is responsible for marketing approximately 80% of all Norwegian gas exports. In 2011, Statoil sold 36.1 bcm (1.3 tcf) of natural gas from the Norwegian continental shelf (NCS) on its own behalf, in addition to approximately 33.5 bcm (1.2 tcf) of NCS gas on behalf of the Norwegian state. Statoil's total European gas sales, including third-party gas, amounted to 79.8 bcm (2.9 tcf) in 2011, of which 39.5 bcm (1.4 tcf) was gas sold on behalf of the Norwegian state. The Natural Gas business cluster is responsible for Statoil's marketing and trading of natural gas worldwide, for power and emissions trading and for overall gas supply planning. In 2011, the Company sold 36.1 bcm (1.3 tcf) of natural gas from the NCS on its own behalf, in addition to approximately 33.5 bcm (1.2 tcf) of NCS gas on behalf of the Norwegian state. Statoil's total European gas sales, including third-party gas, amounted to 79.8 bcm (2.9 tcf) in 2011, of which 39.5 bcm (1.4 tcf) was gas sold on behalf of the Norwegian state. In addition, it sold 5.5 bcm (0.2 tcf) of gas originating from its international positions, mainly in Azerbaijan and the United States, of which 2.7 bcm (0.1 tcf) was entitlement gas. As technical service provider (TSP), Statoil is responsible for the operation, maintenance and further development of the Karsto gas processing plant on behalf of the operator Gassco.

Statoil is the seller of crude oil, operating from sales offices in Stavanger, Oslo, London, Singapore, Stamford and Calgary and selling and trading crude oil, condensate, NGL and refined products. Statoil holds the lease for the South Riding Point crude oil terminal in the Bahamas, which includes, oil storage as well as loading and unloading facilities. It also operates the Mongstad terminal and has shared ownership with Petoro. The Company is a majority owner (79%) and operator of the Mongstad ref! inery in ! Norway, which has a crude oil and condensate distillation capacity of 220,000 barrels per day. It is the sole owner and operator of the Kalundborg refinery in Denmark, which has a crude oil and condensate distillation capacity of 118,000 barrels per day. In addition, it has rights to 10% of production capacity at the Shell-operated refinery in Pernis in the Netherlands, which has a crude oil distillation capacity of 400,000 barrels per day. The Company�� methanol operations consist of an 81.7% interest in the gas-based methanol plant at Tjeldbergodden, Norway, which has a design capacity of 0.95 million tons per year. It also operates the Oseberg Transportation System (36.2% interest), including the Sture crude oil terminal.

Technology, Projects and Drilling

Technology, Projects and Drilling (TPD) is responsible, as a global service provider to Statoil, for delivering projects and wells and for providing support through global expertise, standards and procurement. TPD is also responsible developing and implementing new technological solutions. Statoil's research and development portfolio is organized in seven programs covering the upstream building blocks. The research and development organization operates and develops laboratories and test facilities and has an academia program that addresses cooperation with universities and research institutes.

Global Strategy and Business Development

Global Strategy and Business Development (GSB) was established in 2011, with its main office in London. GSB sets the direction for Statoil and identifies, develops and delivers opportunities for global growth.

Advisors' Opinion:

• [By Tyler Crowe]

  Several of these countries already have significant control over prices in certain regions of the world. For example, both Gazprom and Norway's Statoil (NYSE: STO  ) are responsible for 40% of Europe's natural gas market, all of which is sold on those lucrative oil-indexed contracts.

• [By Arjun Sreekumar]

  The field, located about 250 miles southwest of New Orleans, is one of the biggest oil discoveries in the ultra-deepwater frontier of the Gulf of Mexico and is estimated to contain nearly 6 billion barrels of oil resource in place. Exxon and Statoil (NYSE: STO  ) , the Norwegian oil and gas giant, each hold a 50% interest in the field.

Top 10 Clean Energy Stocks To Buy For 2014: Tinka Resources Limited (TK.V)

Tinka Resources Limited, a junior mineral exploration company, engages in the acquisition and exploration of precious metals or mineral properties in Peru. The company primarily explores for silver, lead, zinc, and copper deposits. It focuses on the Colquipucro silver-lead-zinc project that consists of 46 contiguous mineral tenements covering an area of 10,234.85 hectares and is located in the Department of Cerro de Pasco. The company is headquartered in Vancouver, Canada.

Top 10 Clean Energy Stocks To Buy For 2014: Credo Petroleum Corporation(CRED)

CREDO Petroleum Corporation, together with its subsidiaries, engages in the acquisition, exploration, development, and marketing of crude oil and natural gas properties in the Mid-Continent and Rocky Mountain regions of the United States. It operates projects in Texas, Kansas, Wyoming, Colorado, Nebraska, Oklahoma, and North Dakota. The company also owns the patents covering its Calliope Gas Recovery System, to recover stranded reserves from depleted gas reservoirs. It operates approximately 108 wells, as well as owns working interests in 337 producing wells and overriding royalty interests in approximately 1,200 wells. The company was founded in 1978 and is headquartered in Denver, Colorado.

Top 10 Clean Energy Stocks To Buy For 2014: African Queen Mines Ltd (AQ.V)

African Queen Mines Ltd., together with its subsidiaries, engages in the acquisition, exploration, and development of mineral properties in Africa. It primarily explores for gold, diamond, and other metals in Botswana, Namibia, Mozambique, Kenya, and Ghana. The company was incorporated in 2008 and is headquartered in Vancouver, Canada.

Top 10 Clean Energy Stocks To Buy For 2014: Sussex Bancorp(SBBX)

Sussex Bancorp operates as the holding company for Sussex Bank that provides commercial banking and related financial services to individual, business, and government customers primarily in the United States. The company?s deposit products include personal and business checking accounts, time deposits, money market accounts, and regular savings accounts. Its loan products portfolio comprises commercial, consumer, mortgage, home equity, and personal loans. The company also operates a general insurance agency, which offers commercial and personal lines of insurance. As of April 27, 2011, Sussex Bancorp operates through 10 offices, including 8 offices located in Sussex County, New Jersey; and 2 in Orange County, New York, as well as serves Pike County, Pennsylvania. The company was founded in 1975 and is based in Franklin, New Jersey.

Neustar Inc. (NSR) Stock Analysis

Neustar (NSR) is a provider of a wide array of communications information services. Examining all of the different services Neustar provides is an article in itself, but let's try to order them in importance to the company from a standpoint of revenue.

Neustar's Lines of Business1) Numbering Services: 53% of total revenue, grew 7% in most recent quarter (mrq). These consist of databases that allow number portability - allowing customers to keep the same phone number even when changing cellular carriers or moving to a new address in the same area. Neustar is currently the sole provider of these services to the number portability administration center, or NPAC. We'll come back to this important fact later.

2) Internet Infrastructure Services (IIS): 11% of total revenue, 9% growth mrq. These are DNS directorieswhich resolve textual Internet addresses to the IP numbers that the 'net is built upon.

3) Identification Services: 10% of total revenue, -4% decline mrq. Caller ID and geolocation services to carriers and some businesses.

4) Registry Services: 9% of total revenue, -4% decline mrq. Neustar is the sole registrar of the .biz, .us, .co, .tel, and .travel Internet domains, and provides registry gateways for the Chinese .cn and Taiwanese .tw domains. In addition, the company operates the Common Short Codes for text messaging (think reality show voting), and operates the UltraViolet digital management system you may have seen on recently purchased Blu-ray discs.

5) Verification & Analytics Services: 6% of total revenue, 8% growth mrq. A relatively new field for Neustar, these are services that allow customers to assess the conversion potential of telephone or web-acquired leads.

6) Local Search & Licensed Data Services: 3% of total, 17% growth mrq. A system that allows local search platforms to verify the identities of their listings.

7) IP Services: 1% of total, -2% decline mrq. Routing services for MMS "text" messages.

An Excellent BusinessNeusta! r has a great model. It possesses many of our 5 Characteristics of a Great Business.

One is robust recurring sales. Over 90% of revenue is derived from long-term contracts! What's more, the current NPAC contract stipulates annual revenue growth rates, meaning Neustar knows a near-certain baseline of revenue a year or more ahead of time. It is hard to understate what a tremendous advantage this is to most companies.

The firm generates a high return on tangible invested capital and robust cash flows. The majority of Neustar's assets are in informational databases, which require little hard capital to maintain. Free cash flow margin has been steady at about 30% of sales for the past 5 years.

Finally, the company has two key competitive advantages. First, the NPAC contract is exclusive, locking out competition and protecting the firm's largest source of revenue. Second, many of its other services are key to their client's processes, making them difficult to switch out of without much effort (i.e., "sticky"). To illustrate the stability of this business, in 2009, a year which most companies suffered big sales declines, Neustar's revenue fell a minuscule 1.7%.

NPAC Renewal and Growth Strategy Are RisksThe key risk is the renewal of the NPAC contract. Most analysts expect Neustar to win renewal, as it has managed the portability database for 17 years, but expect it could come at reduced terms. Unfavorable terms, and certainly a loss of the contract, are the key risks. We should know the status of the renewal by the end of January, and the current contract ends in 2015.

Also, Neustar has diversified into several alternate fields through the acquisitions of Targus and most recently, analytics firm Aggregate Knowledge. While I feel Targus has certainly provided value, growing by acquisition is always quite risky... I'd like to see Neustar grow a little more rapidly by organic means.

Not Quite Cheap EnoughAll told, Neustar is a relatively low business risk investment. So the que! stion com! es down to valuation.

Following about 10% cash flow growth this year, I expect another 9% next year before tapering off to 7% on less favorable NPAC terms, offset some by growth in analytics and local services. The discount rate of 10.5% reflects a lower-risk profile. My earnings yield expectation of about 8.5% is a bit conservative but not unreasonable. All told, this gives me a target price of about $55. Unfortunately, with the stock currently at just over $49, this is not much margin of safety to invest at. For now, we'll put Neustar into the "watch list". I'm interested around $43 but until then there are other, better opportunities in the Magic Formula� screens at present.

About the author:GuruFocus - Stock Picks and Market Insight of Gurus

Currently 1.00/512345 Rating: 1.0/5 (1 vote)

Subscribe via Email Subscribe RSS Comments Please leave your comment:
More GuruFocus Links

Latest Guru Picks	Value Strategies
Warren Buffett Portfolio	Ben Graham Net-Net
Real Time Picks	Buffett-Munger Screener
Aggregated Portfolio	Undervalued Predictable
ETFs, Options	Low P/S Companies
Insider Trends	10-Year Financials
52-Week Lows	Interactive Charts
Model Portfolios	DCF Calculator
RSS Feed	Monthly Newsletters
The All-In-One Screener	Portfolio Tracking Tool

182,434 Users
Have Received Their FREE 12-Page Warren Buffett Portfolio Report Get Yours FREE Here MORE GURUFOCUS LINKS

Latest Guru Picks	Value Strategies
Warren Buffett Portfolio	Ben Graham Net-Net
Real Time Picks	Buffett-Munger Screener
Aggregated Portfolio	Undervalued Predictable
ETFs, Options	Low P/S Companies
Insider Trends	10-Year Financials
52-Week Lows	Interactive Charts
Model Portfolios	DCF Calculator
RSS Feed	Monthly Newsletters
The All-In-One Screener	Portfolio Tracking Tool

NSR STOCK PRICE CHART 49.27 (1y: +22%) $(function() { var seriesOptions = [], yAxisOptions = [], name = 'NSR', display = ''; Highcharts.setOptions({ global: { useUTC: true } }); var d = new Date(); $current_day = d.getDay(); if ($current_day == 5 || $current_day == 0 || $current_day == 6){ day = 4; } else{ day = 7; } seriesOptions[0] = { id : name, animation:false, color: '#4572A7', lineWidth: 1, name : name.toUpperCase() + ' stock price', threshold : null, data : [[1354600800000,40.49],[1354687200000,40.98],[1354773600000,40.98],[1354860000000,40.87],[1355119200000,41.16],[1355205600000,41.97],[1355292000000,42.34],[1355378400000,42.12],[1355464800000,41.7],[1355724000000,42.54],[1355810400000,43.2],[1355896800000,43.1],[1355983200000,42.74],[1356069600000,42.32],[1356328800000,42.62],[1356501600000,42.13],[1356588000000,41.63],[1356674400000,41.54],[1356933600000,41.93],[1357106400000,43.68],[1357192800000,43.18],[1357279200000,43.08],[1357538400000,42.95],[1357624800000,42.66],[1357711200000,42.89],[1357797600000,43.17],[1357884000000,44.35],[1358143200000,44.27],[1358229600000,44.54],[1358316000000,44.35],[1358402400000,43.39],[1358488800000,43.96],[1358834400000,43.79],[1358920800000,43.88],[1359007200000,43.99],[1359093600000,44.26],[1359352800000,44.68],[1359439200000,45.04],[1359525600000,45],[1359612000000,45.14],[1359698400000,45.84],[1359957600000,44.96],[1360044000000,45],[1360130400000,47.07],[1360216800000,46.53],[1360303200000,46.46],[1360562400000,46.37],[1360648800000,46.55],[1360735200000,46.58],[1360821600000,46.25],[1360908000000,46.42],[1361253600000,46.67],[1361340000000,45.86],[1361426400000,44.06],[1361512800000,44.97],[1361772000000,43.54],[1361858400000,44.01],[1361944800000,44.06],[1362031200000,43.85],[1362117600000,43.87],[1362376800000,43.85],[1362463200000,44.26],[1362549600000,44.47],[1362636000000,44.83],[1362722400000,45.14],[1362978000000,45.2],[1363064400000,44.88],[1363150800000,45.26],[1363237200000,46.58],[1363323600000,45.09],[1363582800000,45],[1363669200000,44.75],[1363755600000,45.4],[1363842000000,45.08],[1363928400000,44.95],[1364187600000,44.98],[1364274000000,46.05],[1364360400000,46.3],[1364446800000,46.53],[1364792400000,45.03],[1364878800000,44.45],[1364965200000,43.47],[1365051600000,43.21],[1365138000000,43.01],[1365397200000,43.7],[1365483600000,43.64],[1365570000000,44.07],[1365656400000,43.75],[1365742800000,43.72],[1366002000000,42.38],[1366088400000,43.47],[1366174800000,42.8],[1366261200000,42.99],[1366! 347600000,42.57],[1366606800000,43.03],[1366693200000,43.74],[1366779600000,43.78],[1366866000000,43.92],[1366952400000,43.62],[1367211600000,43.63],[1367298000000,43.87],[1367384400000,43.49],[1367470800000,43.71],[1367557200000,45.47],[1367816400000,45.07],[1367902800000,45.61],[1367989200000,46.53],[1368075600000,46.05],[1368162000000,46.96],[1368421200000,47.06],[1368507600000,47.91],[1368594000000,47.68],[1368680400000,47.39],[1368766800000,47.98],[1369026000000,47.1],[1369112400000,47.18],[1369198800000,46.31],[1369285200000,47.28],[1369371600000,47.55],[1369717200000,48.5],[1369803600000,47.72],[1369890000000,48.38],[1369976400000,48.46],[1370235600000,48.5],[1370322000000,48.5],[1370408400000,47.91],[1370494800000,48.27],[1370581200000,48.25],[1370840400000,48.31],[1370926800000,48.15],[1371013200000,48.06],[1371099600000,48.94],[1371186000000,48.85],[1371445200000,49.73],[1371531600000,50.03],[1371618000000,49.01],[1371704400000,47.49],[1371790800000,47.15],[1372050000000,47.25],[1372136400000,47.83],[1372222800000,48.03],[1372309200000,48.48],[1372395600000,48.68],[1372654800000,49.93],[1372741200000,50.06],[1372827600000,50.19],[1373000400000,51.36],[1373259600000,51.29],[1373346000000,51.3],[1373432400000,51.31],[1373518800000,51.7],[1373605200000,51.97],[1373864400000,51.79],[1373950800000,51.38],[1374037200000,52.11],[1374123600000,52.67],[1374210000000,52.63],[1374469200000,52.93],[1374555600000,52.55],[1374642000000,51],[1374728400000,52.03],[1374814800000,52.09],[1375074000000,51.87],[1375160400000,51.96],[1375246800000,56.08],[1375333200000,56.51],[137

Navigating the Universe of MLPs

Whether you are a novice MLP researcher looking to make your first purchase or a seasoned investor preparing to add to your portfolio, the universe of MLP offerings can be daunting. With the growing diversity of industries forming MLPs, it can be hard to figure out where to start screening the candidates for your portfolio.

One of the sites MLP investors should have bookmarked for market intelligence is Alerian. Alerian was formed in 2004 to provide intelligence on MLPs and the energy infrastructure markets. The company has several benchmarks that are used not only to assess relative performance of the sector, but to generate investment ideas.

The Alerian MLP Index (AMZ) is a composite of the 50 most prominent energy MLPs. The index currently includes MLPs from the following sectors: Gathering & Processing, Natural Gas Transportation, Petroleum Transportation, Exploration & Production, Coal, Compression Services, Propane, Shipping, and Refining.


Source: Alerian

The index includes everything from behemoths like Enterprise Product Partners (NYSE: EPD) and Kinder Morgan Energy Partners (NYSE: KMP) down to a pair with market capitalizations under $1 billion in Martin Midstream Partners (NASDAQ: MMLP) and Navios Maritime Partners (NYSE: NMM). The total market cap of the index is $328 billion, and its one-, three- and five-year total returns are 20 percent, 48 percent and 194 percent. The index yield is 6 percent.

The Alerian MLP Infrastructure Index (AMZI) is comprised of 25 energy infrastructure MLPs that earn most of their cash flow from the transportation, storage, and processing of energy commodities. The AMZI is a subset of the AMZ, as each of its 25 components is also included in the AMZ.

The total market cap of the index is $272 billion, but the one-, three- and five-year total returns are better than those for the AMZ at 24 percent, 56 percent and 216 percent. The index yield is 5.7 percent.

The Alerian Natural Gas MLP Index (ANGI) is an equal-weighted composite of 20 natural gas infrastructure MLPs that earn most of their cash flow from the transportation, storage, and processing of natural gas and natural gas liquids (NGLs).

Some of the criteria for inclusion into this index are that units must have a market capitalization of at least $500 million and trade on the New York Stock Exchange or the Nasdaq. Component partnerships will have also maintained or grown distributions quarter-over-quarter for at least one of the trailing two quarters, and they must have a policy intended to consistently maintain or increase distributions over time (i.e., no variable-distribution MLPs).

Because this is an equal-weighted, periodically rebalanced index, top holdings show the MLPs that have outperformed the overall index, while the biggest losers will be found at the bottom of the portfolio. Presently, Crosstex Energy (Nasdaq: XTEX) comprises 6.4 percent of the overall index, reflecting its nearly 30 percent gain in October. Regency Energy Partners (NYSE: RGP) has been the laggard of the group (albeit just barely), falling to 4.84 percent of the overall index makeup.

The total market cap of the ANGI is $190 billion, and the one-, three- and five-year total returns are 29 percent, 52 percent and 249 percent. The index yield is 6 percent.

The Alerian Large Cap MLP Index (ALCI)  is another subset of the AMZ. It’s an equal-weighted basket of the 15 largest energy MLPs by market capitalization, all of which are also in the AMZ. The top performer since the most recent quarterly rebalancing has been Magellan Midstream Partners (NYSE: MMP), which comprises 7.4 percent of the index at present. At the bottom since the latest rebalancing is Enbridge Energy Partners (NYSE: EEP), at 6.47 of the overall index.

The total market cap of the ALCI is $232 billion, and the one-, three- and five-year total returns are 20 percent, 39 percent, and 167 percent. The index yield is 5.1 percent.

Finally, the Alerian Energy Infrastructure Index (AMEI) is a composite of 30 core North American energy infrastructure companies engaged in the transportation, storage, and processing of energy commodities. Index constituents belong to one of five categories: US MLP affiliates (30 percent); MLPs (25 percent); Canadian infrastructure companies (20 percent); US infrastructure companies (15 percent); and Canadian MLP affiliates (10 percent). Index constituents are equally weighted within each category.

The total market cap of the AMEI is $416 billion, and the index yield is 3.9 percent. The one-, three- and five-year total returns are 30 percent, 80 percent, and 257 percent.

(Follow Robert Rapier on Twitter, LinkedIn, or Facebook.)

The Fast Track to Retirement: Shop Less Now

Getty Images

It's almost Thanksgiving and retailers are going all out on advertising this year. Plus, 2013 has a shortened shopping season because Thanksgiving is later than usual. As a result, retailers are opening even earlier on Thursday. For example, Kmart will open at 6 a.m. on Thanksgiving and will stay open for 41 hours for Black Friday. That's partly our fault because every year more Americans go shopping on Thanksgiving Day. The consumerist lifestyle may help the economy, but it won't help your retirement. It's hard for young people to think about retirement because it's such a long way off. Getting a new 50-inch LCD TV takes just a few minutes with a swipe of the credit card. Black Friday makes it even more fun because everyone is out trying to score a good deal. It's easy to get caught up in the consumerist lifestyle and ignore the chore of saving for retirement. It's much harder to take the long view and see why spending less money is better in the long run. Here's why it's better to save that $500 instead of getting a new TV: Less consumerism means you will need less money for retirement. Financial experts recommend replacing 70 to 80 percent of your income before you retire, which means the average household needs this proportion of their current income for retirement. This income can be from investments, pensions, Social Security or even a part-time job. As you can imagine, it's very difficult for most people to generate 70 to 80 percent of their current income without a job. That's why many people have to wait for Social Security benefits or a pension to kick in before they can retire. Most people will need to spend 70 to 80 percent of their current income to get by in retirement. You don't have to be average, though. If you spend less and save more, then you will be used to it and probably won't need to spend a lot of money after retirement. What if you only spend 50 percent of your current income? Then you would only really need to replace half of your current income in retirement. It is much easier to achieve 50 percent replacement income than 80 percent. Less consumerism means you can save and invest more. Another rule of thumb is to save 10 percent of your income for retirement. Saving 10 percent every year will most likely enable you to retire at 65 and generate the previously mentioned 70 to 80 percent replacement income. Many families spend all their income and even saving 10 percent is difficult. However, if you can manage to spend only 50 percent of your take home income, then you will be able to save a lot more than most people. Saving and investing 50 percent of your take home income will put you on the fast track to financial independence. In 20 years, your investment income will likely be more than your earned income, and that's what being wealthy is all about. Picture $500 compounded over 20 years. What if you saved and invested $500 instead of spending it on a new TV? After 20 years, you'll have $2,330 (assuming 8 percent annual gains). That's not bad, but not a life-changing amount either. However, once you start saving, it can become a habit. If you save and invest $500 every year, then you'll have $24,711 after 20 years. Now that's a more significant sum. Saving 50 percent of income isn't possible for everyone. Saving and investing $500 per year will compound to almost $25,000 in 20 years. Imagine how much you'll have if you save 50 percent of your income. It will most likely be enough for you to achieve financial independence and do whatever you want. Of course, saving 50 percent isn't possible for everyone, but I think most of us can save much more than we are currently doing now. Let's examine our consumerist lifestyle and see if it's possible to cut back a bit and take the long view instead.

Intuit Inc. (INTU) Q1 Earnings Preview: What To Watch?

Intuit Inc. (NASDAQ: INTU) is slated to report its first quarter financial results on Nov.21. The company will host a conference call on the same day at 1.30 Pacific Time to discuss the operating performance.

Intuit makes tax preparation and payroll processing softwares. The company's key products include include QuickBooks, Quicken and TurboTax. Founded in 1983, Intuit had revenue of $4.2 billion in its fiscal year 2013. The company has approximately 8,000 employees with offices in the United States, Canada, the United Kingdom, India and other locations.

Wall Street expects Intuit to report a loss of 10 cents a share, according to analysts polled by Thomson Reuters. In the same period last year, it reported a loss of 3 cents a share. Intuit projects GAAP and non-GAAP net loss per share of 10 to 11 cents for the August to October period.

[Related -Scanning For Stocks With The Highest Consecutive Up Closes In An Uptrend]

The company's results have managed to beat Street view thrice in the past four quarters. However, the consensus loss estimate has widened from 2 cents in the past 90 days, indicating analysts have a bearish stance on the company's earnings prospects for the quarter.

Quarterly sales are expected to fall 6.8 percent to $603 million from $647 million in the same quarter last year. Intuit sees first-quarter revenue of $595 million to $605 million, growth of 6 to 8 percent.

Intuit has built an impressive franchise for financial management software focused on small business and individuals, with high recurring revenues, strong financial management and shareholder friendly cash use (buybacks and dividends).

[Related -Stocks End Lower After Bernanke Testimony; Zale (ZLC) Surges]

Weakness in tax is being offset by ongoing strength in small business where Intuit aims to be the "small business OS," and the acquisition of Demandforce would help the company in gaining more SMB business.

Intuit covers 5 million out of 29 million small business! es in U.S. and about 1 percent of 600 million small businesses worldwide. It processes less than 1 percent of the $2 trillion in commerce managed through QuickBooks (QB). This underscores the huge market available in front of Intuit.

The Street would be focusing on competition around QuickBooks and the uptake of the next generation of QuickBooks Online. QBO was re-written from scratch starting 2 years ago, using JavaScript and HTML5, and features an entirely modern Cloud stack that is more open to partners, including Square that was announced recently.

Investors will look at how tax trends are faring and how the company is coping with the current situation and what it is expecting for the future periods. Tax season can be volatile especially due to Congress delays around funding/budgets.

International business should be another focus point as the company is in early stages of exploring countries beyond U.S. and Canada.

"While int'l revs have been stuck at <5% of revs, we may see it break out during the next 5 years," UBS analyst Brent Thill wrote in a note to clients.

The previous quarter's results were marred by higher costs that weighed on margins and the profits. So, the Street would welcome any improvement in cost reductions.

The market may want some color on the competition in payment processing space, and how Intuit is faring against leading payroll solution provider Paychex Inc. (NASDAQ:PAYX) in the SMB arena.

Investors will want an update on management's full year outlook. It forecasts revenue of $4.440 billion to $4.525 billion, growth of 6 to 8 percent, GAAP EPS of $3.11 to $3.19 (growth of 10 to 13 percent) and non-GAAP EPS of $3.52 to $3.60 (growth of 10 to 13 percent).

For the fourth quarter, Intuit reported a net loss of $16 million or 5 cents a share, compared with a net profit of $4 million or 1 cent a share last year. Excluding items, the company reported adjusted profit of $1 million or breakeven earnings per share for the quarter. Mou! ntain Vie! w, California-based company's revenue for the quarter grew 12 percent to $634 million.

INTU stock is up 16 percent since its last quarterly report and 19 percent this year. Shares of the company, which trade at 18 times its forward earnings, have traded between $55.54 and $73.94 during the past 52-weeks.

United Continental: Execution Time

United Continental (UAL) was supposed to be the loser among the soon-to-be big-three airlines. Not today, however.

Bloomberg

United’s shares have gained 4.9% to $38.17 today at 1:53 p.m., while Delta Air Lines (DAL) has dropped 0.1% to $27.97, AMR Corp. (AAMRQ) has advanced 0.4% to $12.25 and US Airways (LCC) is down 0.7% at $24.23.

United’s rise is being attributed to its investor day presentation where it outlined its plan to cut costs. Bloomberg has the details:

United Continental Holdings Inc. climbed to the highest price since 2008 after the world's biggest airline said it would cut $2 billion in annual spending.

Half the savings will come from a 7 percent reduction in fuel expense as it flies newer, more efficient planes such as Boeing Co.'s (BA) 787 Dreamliner and existing aircraft are equipped with winglets to boost conservation. At a presentation in New York today, the Chicago-based carrier also said it expects to boost fee revenue by $700 million a year…

United's plan, which includes an unspecified return of cash to shareholders in 2015, was outlined after a series of operational issues snarled flights and drove away some customers and four public computer disruptions since the airline switched to a new reservation system in March 2012.

S&P Capital IQ’s Jim Corridore calls it a great plan with one tiny problem-execution. He writes:

UAL today is outlining plans to cut costs, increase profitability and enable the return of cash to shareholders by 2015. UAL will redeploy aircraft out of some Asia markets to more profitable routes, plans to cut fuel consumption, and improve productivity. UAL aims to improve profitability from current levels by 2X-4X over the next four years. We are very positive on these stated goals, but where UAL has run into problems over the past two years is in execution of its stated plans. We would like to see some traction on these plans.

But who cares about execution when there are trading profits to be made?