Stocks to Watch: Forest Labs, Coca-Cola, Waste Management

Among the companies with shares expected to actively trade in Tuesday’s session are Forest Laboratories Inc.(FRX), Coca-Cola Co.(KO) and Waste Management Inc.(WM)

Actavis(ACT) PLC confirmed plans to acquire rival drug maker Forest Labs in a cash-and-stock deal that values Forest at about $25 billion. Shares of Forest Labs rose 30% to $93.06 premarket. Actavis shares rose 8.2% to $207.70.

Coca-Cola said it is looking for ways to “restore momentum” as it posted lower fourth-quarter results that concluded a challenging year for the soft-drink giant. Coke’s revenue for the quarter missed Wall Street expectations, while profit declined. Shares dropped 1.6% to $38.32 premarket.

Waste Management swung to a fourth-quarter loss as the waste-disposal company posted high asset impairment charges and reported higher accruals from incentive compensation. Adjusted bottom-line results missed estimates, and the company offered a disappointing earnings outlook for 2014. Shares dropped 3.4% to $42.20 premarket.

Navidea Biopharmaceuticals Inc.(NAVB) said the U.S. Food and Drug Administration has granted a priority review for an expanded use of its Lymphoseek drug for some patients with head and neck cancer. Shares dropped 5.4% to $1.97 premarket.

Prana Biotechnology Ltd.(PBT.AU) said its experimental treatment for Huntington disease met its primary goals of safety as well as significant improvement in cognitive function in a Phase II study. Shares rose 17% to $8.45 in recent premarket trading.

Ameren Corp.(AEE) named Warner L. Baxter as its new chief executive, replacing Thomas R. Voss, who is retiring from the utility operator. Mr. Baxter will take on the new position on April 24, at which time Mr. Voss will become executive chairman.

Duke Energy Corp.(DUK) said its fourth-quarter earnings rose a bigger-than-expected 58%, helped by strength in its regulated utilities and international businesses.

Fresh Del Monte Produce Inc.(FDP) said sales rose in the fourth quarter, driven by a surge in its banana business. The company, however, posted a wider net loss due to higher impairment charges and costs.

Medtronic Inc.(MDT) said its fiscal third-quarter earnings fell 23% on a big write-down related to the medical-device maker’s renal denervation program that masked revenue growth. The company narrowed its earnings forecast for the year.

Rothesay Life Ltd. agreed to buy MetLife Inc.'s(MET) U.K.-based annuity pension unit as it continues to build out its annuity portfolio. Financial terms of the deal, which is expected to close in the second quarter, weren’t disclosed.

NiSource Inc.(NI) said its fourth-quarter profit rose 13% as all three of the utility company’s segments posted revenue growth. But the top line missed estimates.

Stryker Corp.(SYK) agreed to acquire privately held surgical-equipment company Berchtold Holding AG for an enterprise value of $172 million. Berchtold, which has operations in Germany and the U.S., generated sales of roughly $125 million last year. The company’s products include surgical tables, equipment booms and surgical lighting systems.

Millennials turn up heat against low wages

Janah Bailey, 21, has participated in several strikes for higher pay at her fast food job over the last year.

NEW YORK (CNNMoney) Millennials are starting to get restless for change.

Stuck in low-wage or part-time jobs with mountains of student loans to pay off, the generation that came of age in the new millennium finds itself in a hopeless situation. Despite being better educated than previous generations, many young people are shut out of the middle class with no road map of how to get there.

So many of them are joining protests, showing up at rallies, or forming unions to improve their situation.

In the past year, millennials turned up the heat against low wages at Victoria's Secret, Wal-Mart (WMT, Fortune 500), McDonald's (MCD, Fortune 500), Wendy's (WEN), KFC (YUM, Fortune 500) and others like Kaplan (GHC), which runs tutoring centers.

Some achieved a measure of success. Debbra Alexis, a 27-year-old Victoria's Secret employee with a bachelor's degree in health sciences, gathered more than 800 signatures in support of her campaign for higher pay at her New York City store. The store, part of L Brands (LB), ended up giving across-the-board raises of about $1 to $2 per hour to all workers in the Herald Square store.

A group of Kaplan tutors in New York City also formed a union to bargain for higher pay.

Some fast food workers wrangled wage increases or better hours. But union-organized rallies are calling for broad-based change and minimum wages of $15. Wal-Mart workers nationwide have also protested, calling for higher pay and more hours.

Janah Bailey has participated in several strikes in Chicago, where union-backed groups Fast Food Forward and Fight for 15 have been calling for $15 an hour pay.

Bailey, 21, is studying to be a cosmetologist and works two jobs -- 40 hours at Wendy's (WEN) and 12 to 16 hours a week at McDonald's (MCD, Fortune 500). Her weekly paycheck is usually about $400, or about $20,000 a year.

Bailey is the primary caregiver of her family of two younger siblings and mom. She pays $750 a month for rent, $50 for heat and $300 for groceries. Her checking account has $5 and her savings account is empty.

  Plight of the fast food worker

Bailey worries about her future and! whether her education will land her a better job.

"We see a lot of people who get degrees and they're still struggling to find better paying jobs," she said. "I'm speaking out because my plan may not land me where I want to go."

Bailey's concerns are not unfounded. The number of minimum wage workers with associates degrees, or in occupational programs like she is, more than doubled to 223,000 from 2007, according to the U.S. Labor Department.

The number of college graduates in minimum wage jobs also doubled during the recession to 284,000 in 2012 from 2007.

"They're coming out of college with huge debts and having to take low-wage jobs. [So they're] trying to fight back," said Bill O'Meara, president of the Newspaper Guild of New York, which represents a group of Kaplan tutors in New York City who unionized hoping to bargain higher pay.

Middle class jobs have lost ground just as millennials have entered the workforce. Some 58% of the jobs created during the recent economic recovery have been low-wage positions like retail and food prep workers, according to a 2012 report by the National Employment Law Project. These low-wage jobs had a median hourly wage of $13.83 or less.

Median household income has also dropped by more than $4,000 since 2000, according to the Census Bureau.

Heidi Shierholz, an economist at the Economic Policy Institute, said more young people are joining protests now because the unions' demands resonate with them. Raising the minimum wage and securing better hours, or speaking up for better working conditions, are a big part of the public discourse of the times.

President Obama has lately talked about rising inequality and called for a higher minimum wage.

In a speech earlier this month, Obama said, "We know that there are airport workers and fast food workers and and nurse assistants and retail sales workers who work their tails off and are still living at or barely above poverty. And that's why it's we! ll past t! he time to raise a minimum wage."

  Obama on social mobility in America

Bailey, the Chicago fast food worker, said such political backing gives her hope that things can change.

"Every time I think of the campaign, I think ... it would be a victory," she said. "It would mean financial freedom."

Will Amazon's Sunday Shipping Save the Postal Service?

AP On Monday, investors learned that Amazon.com (AMZN) is beefing up its shipment schedules in key markets by offering Sunday deliveries to its Amazon Prime customers. The Postal Service was a surprising choice given that FedEx (FDX) and UPS (UPS) were also in the running for Amazon's extended parcel delivery service business. While the new plan nice for customers, the biggest beneficiary may be the United States Postal Service. So now let's get into what this could mean for the struggling Postal Service. Dead Letters It wasn't that long ago that the U.S. Postal Service system was doing so badly that it was entertaining massive layoffs and ending Saturday deliveries. Things are starting to get better for it as the economic recovery shows signs of strengthening, but the Post Office is still losing a lot of money. The Postal Service generated $16.2 billion in revenue in its quarter ending in June, but that was more than offset by $16.9 billion in expenses. The $740 million loss is actually a dramatic improvement, and it would have been an actual profit if it wasn't for Congress-mandated health fund payments. (And who knows what its P&L statement might look like if Congress allowed the Post Office to charge enough for postage to cover its costs?) It may surprise some to see that revenue actually increased by nearly 4 percent during the period, but the growth isn't coming from traditional first-class mail. That business continues to slide as folks use e-mail, smartphones, and faxes to communicate without having to deal with postage stamped communiques. However, if the lines at the Post Office don't seem to be getting any shorter, it's because e-commerce is keeping postal workers busy. Less Mail in Our Boxes, More Mailed Boxes Revenue from package deliveries climbed nearly 9 percent during the June quarter, and at $2.9 billion now accounts for 18 percent of the Postal Service's total revenue. Amazon's move to start to sending Sunday deliveries through the Postal Service will generate it some serious revenue. It will also likely improve the agency's employment picture, as the Postal Service had only limited Sunday operations in the past. Amazon's a leader, and it wouldn't be a surprise if smaller Web-based retailers have little choice but to also team up with the Postal Service to keep up. Sunday is the New Monday Amazon and the Postal Service aren't disclosing the costs or the length of the contract. They also are not disclosing volume projections. Los Angeles and New York City will begin offering deliveries as soon as this Sunday. Other cities expected to be added soon include Dallas, New Orleans, Houston and Phoenix, according to The Wall Street Journal. Amazon will simply have to make sure that its packages are delivered to the Postal Service locations by Sunday morning, and the USPS will handle the rest of the fulfillment process. Amazon will not charge extra for the service if it's available. In fact, Amazon surely wants the Sunday business to take off because it could be a strong catalyst for Friday orders. Putting Friday Shopping In Play There are an estimated 10 million customers paying $79 a year for Amazon Prime, which offers free two-day deliveries of Amazon-warehoused goods. Placing an order on Friday used to mean waiting until Monday, and that may have been enough to dissuade some shoppers from just buying what they needed locally over the weekend. Sunday deliveries would alter that dynamic. Another important factor here is that it will set Amazon apart from the competition this holiday shopping season -- the most important time of the year for retailers. Analysts already foresaw Amazon ringing up more than $26 billion in sales during the quarter, and that number could inch higher with Sunday deliveries making Amazon even more popular than it already is with Web-savvy consumers. However, the U.S. Postal Service will be the big winner here. As long as it doesn't let Amazon down, it will enhance its reputation as a speedy parcel-delivery option for folks who often lean on FedEx or UPS first for package shipments. There's money to be made. There's an image to be spruced up. Something as simple as this could turn a money-losing service into a profitable winner. And that is first-class potential.

To manage steep gains, advisers need to open the tax toolbox

This year's big stock market gains are forcing advisers to think about how to help their clients contend with a potentially stiff capital gains tax bite from mutual fund distributions.

Investors holding mutual funds in taxable accounts are liable to be taxed on the distributions that mutual funds often make after selling securities. Those distributions are taxed as either short-term gains from securities held for a year or less, or long-term gains for securities held more than a year.

”If you have an actively managed mutual fund with a high turnover ratio, you may be getting a large taxable distribution,” said Richard Gotterer, a managing director and senior financial adviser with Wescott Financial Advisory Group. “So this is something that merits a look.”

Mutual funds' fiscal years typically end Oct. 31 and they begin releasing preliminary estimates for distributions in November.

While the sharp stock market gains — the S&P 500 index is up around 25% for the year — means strong returns for investors, it also means higher mutual fund distributions. In addition, investors are facing higher capital gains rates. Short-term capital gains are taxed at the same rate as ordinary income, so the highest bracket is 39.6%, compared with 35% in 2012. For the highest bracket, long-term capital gains rates are at 20%, up from 15% last year.

Advisers do have tools to help clients minimize the IRS' impact, however.

For instance, clients can assess the size of their mutual fund distribution, consider how long they've been a shareholder in the fund — namely, whether their gains would be considered long-term or short-term — and then sell their holdings to miss the distribution, Mr. Gotterer said.

If the client has incurred a loss, he or she can then buy back into the fund after 30 days so the transaction is not considered a wash sale, which carries other tax consequences.

“The value of the fund's shares will fall by the amount of the distribution, so you buy it back after that occurs so you don't collect the taxable distribution,” he said.

This tactic isn't right for everyone. For one thing, it doesn't make sense if the fund isn't in a taxable account, and the distribution from the fund has to be sizable to be worth the legwork.

“You need to see whether the funds will have an extraordinary capital gains distribution,” Mr. Gotterer said. “And you need to see if there is an arbitrage between taking the capital gain versus taking the distribution from a tax perspective: Which one is more beneficial?”

Another way to minimize the bite from capital gains taxes is to look for loss carry forwards from the past. Capital losses can be reported up to seven years after they occurred. Some investors may al! so be able to harvest losses, noted Robert S. Keebler, a partner with Keebler and Associates. “You want long-term losses to offset short-term gains; that's your best arbitrage,” he said.

Those losses, used wisely, can also help knock an investor into a lower tax bracket, Mr. Keebler said.

In fact, back in 2008, the silver lining in the market's dismal performance for many investors was the fact that they could take stock market losses and use them to soften the capital gains tax blow they would be facing when the market climbed in subsequent years, Mr. Gotterer said.

By now, however, those losses have been used up.

Morningstar's Papagiannis: Alts allocation should be at least 5%

Any move into alternative investments should start with an allocation of at least 5%, but in order to have any kind of real impact, that allocation should grow to at least 20%, according to Nadia Papagiannis, director of alternative fund research at Morningstar Inc.

“Five percent is really not going to make a difference, but 20% will start to make a difference,” Ms. Papagiannis said as part of her presentation Monday at the InvestmentNews Alternative Investments Conference in Chicago.

As part of a pre-conference presentation designed to provide a lay of the land with regard to alternative investments, she told the audience of financial professionals to be diligent and to diversify into alternative strategies.

“If I were doing it, I would pick an equity long-short strategy, a managed-futures strategy and a market-neutral strategy as a kind of bond substitute, and I would equal-weight them into the portfolio,” Ms. Papagiannis said. “Prior to 2008, a lot of investors were too heavy into equities, and now a lot of advisers are telling me their clients are too heavy into bonds.”

As she detailed the growth and fast-growing popularity of alternative strategies, Ms. Papagiannis reminded the audience that the definition of “alternative” is evolving constantly.

“What we think of as alternatives today might not be what we think of as alternatives 10 years from now, and the legal structure doesn't help to define it,” she said, citing real estate and emerging markets as examples of asset classes that used to be considered alternative investments.

Ms. Papagiannis advised against bear market strategies that bet on down market cycles because historically the market is up more than it is down.

She also was critical of funds identified as “absolute return,” describing that term as a “misnomer.”

“If it looks too good to be true, it probably is,” Ms. Papagiannis said. “Nothing makes money all the time.”

Ultimately, it comes down to liquidity for most investors, and that is where the mutual funds and exchange-traded funds have stepped up to provide a vast list of options, Ms. Papagiannis said.

“Everybody needs liquidity in a portfolio, and you can't be like a foundation and put 40% of assets in illiquid strategies,” she said.

The Fastest Road to Wealth in America (Right Under Your Nose)

From the Editor: Michael A. Robinson's research always gives our readers a chance to make a lot of money. Santarus, Inc. is up 125% in less than a year. LIN TV Corp. climbed 102% in just three months. And the company he's recommending later today is expected to grow even faster (and much bigger). So before the details hit your inbox, here's Michael's secret... and why he does all of this in the first place.

One disturbing statistic says it all...

It appeared on Page 1 of The Wall Street Journal back on March 19, less than 24 hours away from the first day of spring, the season of hope...

Fifty-seven percent (57%) of U.S. workers have less than $25,000 in savings.

It's a troubling fact.

And to me, it's just nuts...

After all, America isn't just the land of opportunity and democratic freedoms. It's the single-greatest wealth machine in the history of the human race.

So why are so many Americans struggling right now?

Well, there's no doubt the Great Recession of 2008 cut a swath through a lot of people's savings. Millions lost their jobs and had to rob from their savings just to make ends meet. I sincerely hope that didn't happen to you.

But here's the truth...

Anyone can learn how to build wealth. Anyone can turn $25,000 into $250,000. I'm going to show you how today.

Hope has nothing to do with it...

The Road to Wealth is Paved By Tech

Look at all the technological breakthroughs that have taken place during the past century. Those advances have changed our lives.

And the investors who had the foresight to put some money down... well, many of them became wealthy... if not downright rich.

I'm talking about the light bulb, the radio, the TV, and the airplane -- just to name a few.

Underpinning those innovations are such technological breakthroughs as transistors, semiconductors, computers, software, the Web and smartphones.

And innovation never ends.

Every year in the U.S., more billionaires are made in technology than any sector on earth.

To be sure, if you step back and look at the history of U.S. stocks, you see one giant long-range bull market (with some really dramatic short-term dips along the way).

What really drove this market expansion was fresh capital. That comes from innovation and from having lots of new stocks to sell to investors.

Of course, it's always the hot initial public stock offerings (IPOs) that grab the headlines. But the reality is that you don't have to be an insider who grabs one of those sexy deals to make big bucks.

You just have to know how to find the right company at the right time...

It Took Just Seven Months...

Had you bought shares of anti-obesity drug-maker Arena Pharmaceuticals Inc. (Nasdaq: ARNA) in January of last year, you would have made 640% in just seven months.

Since those are the kind of returns than can supercharge just about any investors' portfolio, let's do the math.

Take the average American's net savings of $25,000 (from The WSJ report) and boost it by 640%.

Not counting taxes (don't get me started on that), you wind up with a new net worth of $185,000. Do that a few times, and you're on Easy Street.

And I just pulled that example off the top of my head. There are more. A lot more...

I had the opportunity to get my readers into high-tech metals, for example, long before they became known as "rare earths." Those who followed along had a chance to make 199%, 67%, 38% and 353% in a very short time.

And here's the great thing about investing in high tech the way I do...

All you have to do is follow the "Five Rules" - a rigorous, no-exceptions evaluation strategy I've had 30 years to perfect. Each and every company I invest in must satisfy all five requirements.

And today we'll look at Rule No. 4, which can lead you to the "Holy Grail" of investing...

The Core Driver of Triple-Digit Profit Potential

This is the one thing that elevates the tech sector far above any other profit opportunity you can think of. It's also the one thing that will let you take $25,000 and turn it into $250,000... or $500,000.

I'm talking, of course, about growth.

If you're looking to create life-changing wealth - to get rich - then you have to find investments that can deliver superior growth on a consistent basis... like clockwork.

Most people, for example, haven't heard of Buenos Aires-based Mercadolibre Inc. (NasdaqGS: MELI), a company I detailed last week.

But they'd be better off if they had...

The "eBay of Latin America" boasts a customer base that accounts for nearly two-thirds of all online users throughout the fast-growing region. And it just added another 4.5 million customers last quarter - another double-digit year-over-year increase.

That's growth.

It's happening over at InvenSense Inc. (NYSE: INVN), too. The company's up 40% since I introduced it to readers on May 17. But I'd be surprised if it doesn't hit at least $30 a share by the end of 2015.

And that's why it satisfies Rule No. 5: "Target Companies That Can Double Your Money," which we'll cover next.

Stay tuned...

Michael

Check Your Inbox: You'll receive an email later today that details Michael's new recommendation. In the meantime, take an advanced look right here. As you'll see, passing the growth "test" of Rule No. 4 has never been easier...