2012 Top Stocks Market, Best Stocks Investment In 2012, Top Stocks For 2012

Earnings Preview: Commodity Price Rise And Margins Hold Key To Procter & Gamble¡¯s (PG) Q2 Earnings

2012-01-29T10:30:00.001-08:00

Consumer goods manufacturer Procter & Gamble Co. (PG) will report its second quarter earnings results on, January 27, before the market opens. The commodity price rise and gross margin as well as operating margins will hold key to its performance. The results will have the effects of its joint venture with Teva and sale of Pringles.

Though the company has showed improvement in its gross margin as well as operating margin sequentially, the year-over-year fall could upset the growth prospects.

Expectations

In November, Procter & Gamble disclosed that it see earnings of $1.00 - $1.11 a share, including 0 �C 5 cents share for restructuring charges, on sales growth of 3 �C 5 percent.

Wall Street analysts are estimating the Cincinnati, Ohio-based company to earn $1.08 a share on revenues of $22.19 billion for the second quarter. This represents earnings fall of 4.4 percent on revenue growth of 4 percent.

First Quarter Results

Procter & Gamble reported net earnings of $3.02 billion, down from $3.08 billion but earnings rose to $1.03 a share from $1.02 a share in the year earlier quarter. Net sales grew 9 percent to $21.92 billion from $20.12 billion in the previous year quarter.

Street analysts were estimating the company to earn $1.03 a share on revenues of $21.55 billion.

On year-on-year basis, gross margin slipped to 49.5 percent from 51.8 percent, while operating margin drifted to 19.8 percent from 22.4 percent. On a sequential basis, gross margin and operating margin improved from 48.3 percent and 15.7 percent respectively.

Analyst Take

On January 23, Stifel Nicolaus downgraded P&G shares to Hold from Buy. While 8 analysts are recommending Strong Buy in the current month, 11 analysts have Buy rating on the stock with 4 analysts recommending Hold. Significantly, no analysts have recommended Sell.

Earnings History

In the past four quarters! , the co mpany's earnings topped analysts' estimations twice and met with expectations once, while the remaining one quarter failed to meet predictions. P&G earned $1.03 a share, $$0.84 a share, $0.96 a share and $1.13 a share in the first quarter of current fiscal and preceding three quarters of last year.

On the revenue side, the company generated revenues of $21.92 billion, $20.86 billion, $20.23 billion and $21.35 billion for the first quarter of latest fiscal and preceding three quarters of previous year.

Versus Others In The Industry

Procter & Gamble's gross margin for the trailing twelve-month period is 50.04 percent compared to industry average of 47.91 percent and Johnson & Johnson's 68.99 percent. Similarly, operating margin of 18.55 percent is weaker than J&J's 25.42 percent but better than industry average of 10.25 percent.

Interestingly, Colgate-Palmolive (CL) reported adjusted net income of $630 million, up 1 percent from $624 million and earnings grew 4.8 percent to $1.30 a share from $1.24 a share in the year-ago quarter. Revenues increased 4.8 percent to $4.17 billion from $3.98 billion in the previous year quarter. Gross margin slipped to 57.4 percent from 59.1 percent, while operating profit margin slipped to 22.1 percent from 22.8 percent in the year earlier quarter indicating higher commodity prices impacting unfavorably.

iStock Punch

The results of Colgate-Palmolive is giving the impression that commodity prices may hurt P&G results too, but how much remains to be seen. Though it is an industry phenomenon, P&G should have taken steps to limit the damage so as to meet its own earnings target. One can take a call on seeing the results.

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Has Obama's housing policy failed?

2012-01-28T16:42:00.001-08:00

NEW YORK (CNNMoney) -- The president's efforts to revive the housing market have largely failed. But is that entirely Obama's fault?

"I don't think anyone could have done anything to stabilize the housing market," said Ed Jacob, executive director of NHS Chicago, which provides homeownership and foreclosure prevention services. "This housing market was in far worse shape than anyone knew."

Obama took office in 2009, promising swift action to address the mortgage crisis. He quickly unveiled his signature foreclosure prevention program, known as HAMP, and his refinance program, known as HARP.

But the HAMP program, which was designed to lower troubled borrowers' mortgage rates to no more than 31% of their monthly income, ran into problems almost immediately. Many lenders lost documents, and many borrowers didn't qualify. Three years later, it has helped a scant 910,000 homeowners -- a far cry from the promised 4 million.

HARP, which was intended to reach 5 million borrowers, has yielded about the same results. Through October, when it was revamped and expanded, the program had assisted 962,000.

Meanwhile, more than 3.5 million people remain behind in their mortgage payments and more than 1.9 million homes are in foreclosure. And home prices have fallen for six months straight.

GOP cribs: Where the candidates live

One of the main problems with Obama's foreclosure prevention program was that the housing crisis had already spiraled beyond unaffordable mortgage rates. Homeowners were defaulting because they didn't have jobs -- and the administration's effort did little to help them.

In response, Obama rolled out a multitude of initiatives designed to help the underwater and the unemployed. But few of them have had much impact.

"He focused his gun in the wrong place," said Anthony Sanders, a real estate finance professor at George Mason University. "The administration's approach is to kick the can down the road. That d! oesn't l ead to a recovery and just strings the problem along."

But the president deserves points for having the Federal Housing Administration step in to provide mortgages for homeowners and for spurring homebuying with a tax credit, said John Burns, head of John Burns Real Estate Consulting. They staunched the bleeding in home sales and values. The Federal Reserve has also tried to help by keeping mortgage rates at record lows.

At the same time, though, the economy has remained weak. Unemployment is still high, consumer confidence is still low and banks are still hesitant to lend.

And Congress and the president remain at odds over how to spur job creation, which many say is the key to stabilizing the housing market.

"Obama was in many ways hemmed in as to how to effectively and positively affect the housing crisis," said Gabriel Stuart, director of UCLA's Ziman Center for Real Estate. "The economy was moving under their feet."

Missed opportunities

One thing some experts say Obama could have done is required servicers, as well as Fannie Mae and Freddie Mac, to write down the principal balance on loans. This, however, has been a very controversial step because it would have forced large losses on banks and the government-controlled mortgage finance companies.

But at least the administration could have come down harder on the mortgage servicers, forcing them to expand and improve their foreclosure prevention processing procedures more quickly, experts said.

In Phoenix, Obama's foreclosure programs are helping some people, but many more could take advantage of them if the administration had taken a harder line with servicers, said Patricia Garcia Duarte, chief executive of NHS-Phoenix, which counseled 1,800 delinquent homeowners last year.

"The missing ingredient was that it was a voluntary program," she said. "If it hadn't been, we would have had much better results."

Were you f! alling o ut of the middle class even before the Great Recession hit? Do you have a job but still feel you aren't upwardly mobile? Are you better or worse off than your parents? Email realstories@cnnmoney.com with your name and phone number, and you could be featured in an upcoming story on CNNMoney.

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4-Star Stocks Poised to Pop: Blackstone Group

2012-01-28T12:23:00.001-08:00

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, alternative asset manager Blackstone Group (NYSE: BX ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Blackstone's and see what CAPS investors are saying about the stock right now.

Blackstone facts

Headquarters (Founded)	New York (1985)
Market Cap	$7.15 billion
Industry	Asset management
Trailing-12-Month Revenue	$3.36 billion
Management	Co-Founder/Chairman/CEO Stephen Schwarzman President/COO Hamilton James
Return on Equity (Average, Past 3 Years)	(26%)
Long-Term Debt	$9.41 billion
Dividend Yield	2.7%
Competitors	Bain Capital The Carlyle Group KKR & Co

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 85% of the 1,069 members who have rated Blackstone believe the stock will outperform the S&P 500 going forward. ?

Just last week, one of those bulls, All-Star TMFDeej, tapped the stock as a tempting bargain opportunity:

I'm sure that I have shorted Blackstone here in the past, but at today's prices the company is too cheap to ignore. It's assets under management have doubled since it's IPO, yet it's stock price has imploded. Its GAAP financials hide the business's profitability. With a solid franchise, huge dividend, ! and net cash on its balance sheet, [Blackstone] is a good bet to outperform the S&P going forward.

What do you think about Blackstone, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.

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New York DUI Attorney

2012-01-27T09:44:00.001-08:00

New York law causes it to be a criminal offense for any person drive an automobile a car under the influence of alcohol or drugs. This means that anybody who is charged with and convicted of such a offense can face serious criminal penalties along with the decrease of New York driving privileges. Since these penalties have the prospect to earnestly impact your wellbeing in Nyc, it is necessary that you just make use of the chance to consult qualified New York DUI law attorney. Using a skilled Ny DUI lawyer on the team can guide you to defend yourself against these serious DWI charges and might assist you to save your valuable driving privileges so you can proceed with your life.

Ny DUI Arrests

There are numerous circumstances under which you could be charged with DWI. You are if you have dangerous driving patterns that pose a menace to others and you are stopped by a police force official. A different way to be arrested for DUI is when you cause a car accident and also the officer believes alcohol was obviously a element in the accident. It doesn’t matter why you were arrested for DWI, you will be facing serious criminal and administrative penalties. New York is probably the states in which a DWI arrest will trigger two separate cases against you being a defendant. The first is a criminal court case in places you will face criminal charges for driving while intoxicated and a prosecutor will attempt to prove your guilt. The second is an administrative case that deals with the losing of your driving privileges inside the state of recent York. When you’re charged with a DWI offense, you can be prosecuted under a couple of prosecution theories. One of several theories requires the common law definition of driving drunk. With this type of case, the prosecutor attempt to exhibit which you were too impaired they are driving since you consumed alcohol prior to operating your automobile. The prosecutor will endeavour to show that you were impaired by introducing evidence including your ! driving habits, field sobriety test results, and knowledge whether you was intoxicated. DWI charges can also derive from submitting to chemical testing and to become a result of 0.08% or greater. In this sort of case, the charges do not have to do along with your capacity to safely operate the car. Even if you do not appear impaired during the time of your arrest, you can be faced with DWI if the chemical test reveals a failing result.

Getting a qualified Ny DUI attorney may help you both in varieties of cases. The big apple is different because the law allows someone arrested for DWI to see once you get your York DUI attorney before making a determination about whether or not to submit to or refuse chemical testing. Having a skilled Nyc DUI lawyer on your side can assist you to defend yourself against DWI charges as successfully as you possibly can. If aggravating factors appear in your DWI case, you could be arrested for a much more severe offense and face harsher criminal penalties. A DWI case can be aggravated for a lot of reasons including having a BAC of 0.15% or greater, causing a car accident, fleeing the scene of an DWI accident, or refusing to undergo chemical testing.

DWI Criminal Penalties in New York

The penalties you face if found guilty of a DWI will depend on what sort of DWI was charged and whether you’ve got any prior convictions on the record. You will be faced with a misdemeanor or a felony depending on the circumstances. A first offense DWI in The big apple is charged as being a misdemeanor. It’ll cost you using a felony DWI when you have an earlier conviction within a decade of the arrest. Driving while impaired by alcohol is not a criminal offenses in Nyc. It can be considered a traffic infraction, which means you is not going to have a criminal record if arrested for this offense. The penalties for any first offense for driving drunk by alcohol are fines of $300 to $500 and up to 15 days in jail. However, having a couple of prior convictions changes the offen! se to yo ur misdemeanor crime. The penalties really are a fine of $750 to $1,500 or over to 180 days in jail. If there aren’t any prior convictions, you’ll face a 90 day license suspension. When you have had a prior conviction, the suspension period is 6 months. Driving while intoxicated is the charge that is commonly filed when someone is charged with DWI. This can be a misdemeanor offense and can result in giving you a criminal history if convicted. The penalties may include fines of $500 to $1,000, license revocation of Six months, with no several year imprisonment. A felony DUI offense is charged when someone has been found guilty of a misdemeanor DWI. The penalties just for this offense increase low fine of $1,000 plus a maximum of $5,000. You could possibly face jail time of merely one.Three or four many probation of Several years. For the reason that penalties for a misdemeanor DWI along with a felony DWI are extremely severe, they can create a lower quality if life and negative influence on your previously good reputation. Since this can alter the whole life, it is crucial for you to utilize a The big apple DUI attorney and that means you have the best potential for getting a successful outcome within your case.

For more information about New York DUI Lawyer just visit us here.

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MF Global: Corzine goes before Senate

2012-01-27T05:12:00.001-08:00

NEW YORK (CNNMoney) -- It's not just Congress that wants answers about the missing money at bankrupt brokerage MF Global.

So does Dean Tofteland.

Tofteland is a Minnesota farmer and former MF Global customer whose commodities account has been frozen since the firm's bankruptcy in late October. (MF Global: Sorting through the debacle.)

He'll be one of 10 witnesses set to appear on Tuesday before the Senate Agriculture Committee, the second congressional hearing into MF Global's collapse.

Former MF Global CEO Jon Corzine will be back in the hot seat, this time flanked by two former colleagues from the brokerage's parent company, MF Global Holdings: Chief operating officer Bradley Abelow and chief financial officer Henri Steenkamp.

Also set to testify is James Giddens, the trustee overseeing the brokerage's liquidation.

For Tofteland, MF Global's failure has left him unable to access more than $200,000 of his own money. He has been forced to delay seed purchases and leaving next year's harvest uncertain.

The plight is a common one for farmers who rely on the commodities market to protect against volatility in crop prices.

Exchange operator CME Group has accused MF Global of unlawfully "commingling" customer money with its own ahead of its bankruptcy. Customer funds are supposed to be segregated from a firm's own assets.

Six weeks on, more than $1 billion in customer money remains missing, according to Giddens. The shortfall has drawn the attention of federal regulators and the FBI.

Corzine is also due to appear before the House Financial Services Committee on Thursday to discuss the MF Global (MFGLQ) collapse. He offered testimony on the issue before the House Agriculture Committee last week, saying he did not know where the missing money was and denying ordering transfers from customer accounts.

This testimony, Tofteland said, shed little light on the case for anxious customers. He is hoping for more information when Corzine ! appears along with his former lieutenants on Tuesday.

"Between him and those other two guys, they should have a pretty good idea of where the money went," Tofteland said. "Commingling or whatever they call it in their world -- back on Main Street, it's called stealing."

Based on advance copies of the testimony from Abelow and Steenkamp, however, it appears they may not be any more help in finding the missing money than Corzine has been.

Abelow said in his brief prepared remarks that he is "deeply troubled" by the shortfall, but does not know where the money is. Steenkamp, supposedly in charge of the firm's financials, said he was only made aware of the shortfall after the fact.

"As a general matter, I was not involved with the details of segregated funds in the course of my duties as global CFO," Steenkamp said. In the firms final days, he added, "my attention was appropriately focused on crisis management and strategic issues relating to the sale of the company."

A spokeswoman for MF Global did not respond to a request for comment, nor did lawyers for Steenkamp and Abelow.

In his own testimony, Tofteland said he won't try to pose as "an expert recommending a solution," and will instead simply explain how the missing money has affected his business. Afterward, he and his 15-year-old daughter plan to spend an extra day in Washington.

"We're going to see the sights and take in the experience of a Senate committee hearing," he said. "I'm really glad that they're holding the hearings, because it means at least some of the people in Washington know who they work for and are trying to get some answers for us."

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Pay cuts coming for new Fannie, Freddie CEOs

2012-01-27T00:49:00.001-08:00

NEW YORK (CNNMoney) -- The next CEOs at Fannie Mae and Freddie Mac are unlikely to receive the controversial, multi-million dollar pay packages given to their predecessors, the companies' regulator said Tuesday.

"[We] anticipate a substantial decrease in CEO compensation when the new CEO's are hired," said Corinne Russell, a spokeswoman for the Federal Housing Finance Agency, which sets pay at Fannie and Freddie.

The troubled government-backed firms, which have required more than $100 billion in bailouts, came under scrutiny last year over the lucrative bonuses they granted to their executives even as they drew on public funds.

Lawmakers called the bonuses excessive and unjustifiable, though Edward DeMarco, acting director of the Federal Housing Finance Agency, defended them as necessary to retaining top executives.

FHFA changed its tune on Tuesday. However Russell did not offer specific pay package figures or respond to follow-up questions.

Current Fannie and Freddie CEOs Michael Williams and Ed Haldeman have their 2011 pay targets set at about $6 million a piece, a total that will include deferred compensation. Both men have announced plans to step down at some point in the coming months.

Spencer Bachus, chairman of the House Financial Services Committee, called the FHFA's announcement on executive pay "welcome, but long overdue."

"The fact that the top executives of these two failed companies receive multi-million dollar pay packages and bonuses -- all courtesy of the American taxpayer -- is a continuing outrage," Bachus said in a statement Tuesday.

Lawmakers in both the House and Senate have introduced bills to curb executive pay at the troubled mortgage finance companies.

Of the billions in bailout funds received by Fannie and Freddie, at least $95 million has gone to pay packages for top executives, filings showed last year.

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This Election Could Lead To The Next 'Eurocrisis'

2012-01-26T20:28:00.001-08:00

by Jason Jenkins, Investment U Research

As the European crisis has come to unfold, we have seen Eurozone governments receive votes of no-confidence because of their inability to solve financial crisis and new governments installed. It happened to both Greece and Italy. But to be honest, these members aren't that pivotal. They're the "bailoutees."

The bullies on the block �C otherwise known as France and Germany �C possessed all the leverage to make sure some sort of austerity package was passed to keep the currency bloc going for the time being.

However, 2012 brings some new challenges to the Eurozone as its unofficial two-headed driving force may be chopped in half. France, the Eurozone's second-largest economy, will hold presidential elections on April 22 and May 6, followed by general elections in June.

Sarkozy's Rocky Five Years

French President Nicolas Sarkozy, along with German Chancellor Angela Merkel, has been cozy in leading the way to the 17-member currency bloc's response to their sovereign debt crisis. For the most part, the Conservative leaders have been in lock-step preaching austerity over monetary easing and the creation of euro bonds.

This 2012 election conversation would all be a moot point if Sarkozy was safe�� but he's not. The conservative leader is heading towards April's election with rampant unemployment, the debt crisis and the prospect of a sovereign debt downgrade all hanging over his head. Also, many French citizens resent the fact that his campaign pledges of five years ago to bolster employment haven't delivered.

His popularity ratings have inched up as he has shown leadership over the Eurozone crisis, but still stand at a dismal 34% in recent polls, and some two-thirds of French are unhappy with his performance.

Recent surveys show his competition could beat him by as much as 10 percentage points in a deciding second round in May.

The Competition

Sarkozy is fac! ing a ch allenge from Socialist party candidate Francois Hollande, and let's just say they don't see eye to eye on the management of France or the Eurozone.

In terms of governance, there's a gulf between the Conservatives and the otherwise moderate Socialist party �C that's just fundamental ideology. However, Mr. Hollande's thoughts on the direction of the Eurozone could have global implications.

Hollande is "highly unpredictable," Alistair Newton, Senior Political Analyst at Nomura, told CNBC. Newton went on to say Hollande has promised to "renegotiate the (European Union) agreement to put what it lacks today" and said he would push to include European Central Bank intervention and a new euro bond �C both measures opposed by Germany. He has also stated that he would not vote for the balanced budget part of the agreement, which has to be implemented at the national level.

Disagreement between Germany and France on the direction of the Eurozone would be catastrophic.

"This could cause a serious setback for the political process in Europe, and after years with Merkozy's intensifying leadership it could become rather uncomfortable for the financial markets to watch a Hollande publicly showing that he is very much in disagreement with German Chancellor Angela Merkel on several accounts," analysts at Danske Bank wrote in a note.

As always, look down the road when analyzing Europe. The headlines currently offer glimmers of hope but there are still more far-reaching issues to be addressed. A German/French schism may prove to be the next "Eurocrisis" to overcome.

Good investing,

Jason

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Absolute P/E Valuations of the Top 5 Buffett-Munger Stocks

2012-01-26T15:54:00.001-08:00

I recently came across another variant on the old standby price-to-earnings ratio valuation method. The particular variant is called the Absolute P/E and is detailed by Vitaliy Katsenelson in his book Active Value Investing and was brought to my attention by Jae Jun��s excellent Old School Value newsletter.

The basic idea is to adjust the P/E ratio to take into account several forward looking variables and determine what P/E ratio the stock should be trading at.

The variables are earnings growth, dividend yield, business risk, financial risk, and earnings predictability. The model is:

Absolute PE = (Earnings Growth Points + Dividend Points) x [1 + (1 - Business Risk)] x [1 + (1 - Financial Risk)] x [1 + (1 - Earnings Visibility)]

The value for earnings growth is determined by starting with a no growth P/E of 8 and adding .65 points for every 100 basis point increase in the projected growth rate up until 16%. After 16% you add .5 points for every 100 basis points in projected growth.

The value of the dividend yield is simply the yield expressed in P/E points, for example a 3% yield equals 3 P/E points.

The values for business risk, financial risk, and earnings visibility are all expressed as percent with companies that are riskier getting higher values and those that are less risky receiving lower values. For instance a company with low business risk like Coca-Cola might receive a value of .9 or .95 while a cyclical company with a high business risk might receive a value of 1.2.

I thought it would be interesting to apply this new twist on the P/E ratio to a few companies in the Buffett-Munger screener. I choose the top five companies that appear in the screener but I then decided to remove ITT Education (ESI), Telefonica (TEF), and Express scripts (ESRX). I removed ESI because of the intense regulatory risk around the company. The absolute P/E ratio method won��t tell us much about the regulatory risk. Te! lefonica was removed because it reports results in euros and a large portion of its debt is denominated in euros and its valuation is more a reflection of the outcome of the eurozone debt crisis than any other issue. Finally, I chose to exclude ESRX because of the ongoing merger efforts with Medco.

That left us with Humana (HUM), EZCorp (EZPW), Bio-Reference Labs (BRLI), General Dynamics (GD), and Lockheed Martin (LMT) as the top five.

So let��s see how they look using the Absolute P/E valuation method.

For the earnings yield projections I took the lowest of the 5 or 10 year net income, EBITDA, or EPS growth rate.

Humana (HUM)

Humana is a mid size health and benefits company. There are many competitors smaller than Humana and a few twice its size. The company has a solid balance sheet (as is expected for this type of company) and earns high returns on capital. I gave it a 1 for financial risk, and a slight deduction ( .05) for earnings predictability as earnings dipped during the recession. The business risk factor was a harder decision.

For-profit third party health benefits and health insurance companies have been proven in study after study to offer poorer coverage at higher prices than single payer health care systems. The healthcare system in the US is grossly inefficient and companies such as Humana play a big role in that inefficiency. I gave Humana a 1.3 for business risk because ultimately it is unlikely the US can continue on its existing path with regards to providing healthcare services. Disagree? Changing the 1.3 to 1 yields a P/E of around 18 versus the 14.23 shown below.

Currently trading at a P/E of 11.2, Humana looks like it could be a deal but it depends on your view of healthcare in the US.

EZCORP (EZPW)

EZCorp operates a chain of pawn shops in the US and Mexico as well as offering short term consumer loans. With the economy in the toilet ! it��s no surprise EZCorp has shown strong growth with five year EBITDA growing by 23.9% compounded. ROI is excellent at 23.9%. The monkey wrench in the valuation is business risk. Short term consumer loan companies are highly unpopular with state regulators and there are always efforts by regulators as well as consumer groups to rein in what they perceive as predatory lending practices (I happen to side with the consumer groups on this issue).

I gave EZCorp at 1.5 for business predictability and a 1.1 for earnings visibility as the recession has provided a huge tailwind to recent results.

EZCorp currently trades at a P/E of 10.88 which is approximately the value we came up with. Looks like the market agrees that the regulatory risk and tailwind created by the recession mean EZCorp should trade at a discount.

Bio-Reference Labs (BRLI)

BRLI provides laboratory testing services primarily to customers in the New York metro area. The company has grown rapidly (23.3% five year compounded EBITDA growth) and is in an attractive business (ROI of 17.5%).

The company competes with much larger rivals such as Quest Diagnostics and Laboratory Corp. of America so it gets a 1.1 for Business Risk.

BRLI currently trades at a P/E of 12.59 so the absolute P/E model agrees with the Buffett-Munger screener that BRLI looks undervalued.

General Dynamics (GD)

General Dynamics is a large defense contractor and civil aviation (Gulfstream jets) company. Berkshire-Hathaway recently initiated a stake in GD and Buffett has mentioned publicly that he liked the company so we should expect to see it come up as undervalued.

Growth rates are much lower than the other companies we looked at, coming in at 8.73% five year compounded growth in net income. ROI is good at 16.3%.

General Dynamics loses points in earnings predictability because of the recent chatter re! garding cuts to the Department of Defense budget.

Current at a P/E 9.25, GD looks undervalued. The absolute P/E model sees the same thing Buffett himself saw.

We profiled General Dynamics in the October 2011 issue of the Buffett-Munger Newsletter.

Lockheed Martin (LMT)

Lockheed Martin is one of the world��s largest defense contractors and the prime contractor for the always in the news Joint Strike Fighter (JSF) program.

We give LMT a 10% bonus for being the prime contractor of the only fifth generation fighter in production (although not yet in service) in the world. That��s quite a monopoly, even if LMT still has some kinks to work out in the program.

Again we deduct points for earnings visibility because of uncertainty of the Department of defense budget.

LMT currently trades at a P/E of 10.15 and just like GD looks undervalued.

Conclusion

The absolute P/E model is good addition to any investor��s toolbox. Like all valuation methods though the usual caveat that they depend heavily on forward looking assumptions still applies. Of course, what valuation method doesn��t use any forward looking assumptions at all?

The Buffett-Munger screener is designed to find Buffett-type investments with extraordinary profitability, consistency, and future prospects. Our monthly Buffett-Munger Best Bargains Newsletter picks one stock from the screener. Our in-depth analysis shares with you why a younger Buffett and Munger would like this stock. If you are a premium member, you can download it here. If you are not, we invite you for a 7-day Free Trial.

Disclosure: Long LMT

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Payday Loans Pay Off For Advance America, Stock Breaking Out

2012-01-26T11:34:00.000-08:00

Lending to consumers outside the mainstream continues to be profitable for Advance America, Cash Advance Centers, Inc. (AEA – Snapshot Report).

It recently surprised on the Zacks Consensus for the third quarter in a row. Despite trading near multi-year highs, this Zacks #1 Rank (strong buy) is still a value stock with a forward P/E of just 9.4.

Advance America provides non-bank cash advances at 2600 centers and 52 limited licensees in 29 states, the UK and Canada to consumers who otherwise would not be able to get credit at traditional banking institutions.

Advance America Beat by 14.3% in the Third Quarter

On Oct 26, Advance America reported its third quarter results and surprised by 3 cents per share. Earnings per share were 24 cents compared to the consensus of 21 cents. The company made just 2 cents in the year ago period.

Revenue rose to $443.6 million from $440 million a year ago despite regulatory changes in Colorado, Illinois, Virginia, Washington and Wisconsin which cut revenue to $11 million from $17.3 million last year. If those 5 states are excluded, total revenue actually rose 8% year over year.

The company closed or consolidated 51 centers in 9 states, including 30 centers in Washington where its operating results were negatively impacted by a new law that went into affect in January 2010. It also opened 7 centers.

Advance America also completed the acquisition of the assets of CompuCredit’s retail storefront consumer finance business which had been announced previously. It was the most significant acquisition by the company in the last 10 years.

The deal consisted of about 300 centers in Alabama, Colorado, Kentucky, Ohio, Oklahoma, Mississippi, South Carolina, Tennessee and Wisconsin.

Zacks Consensus Estimates Rise

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IHOP, Applebee's owner is chock full o' risk

2012-01-26T06:58:00.001-08:00

What better time to refocus on risk than in the wake of an enormous six-week rally? The market has come a long way since early October, sparking huge moves in countless stocks that were on the ropes not so long ago. Investors might be feeling better as a result, but that doesn��t mean it��s safe to take your eye off the ball.

Europe remains an accident waiting to happen, leaving open the possibility of a meaningful slowdown in growth in the year ahead. If the recession scenario does in fact play out, companies that have little financial wiggle room are likely to see their stocks obliterated. As a result, this is no time to take a chance on stocks of companies with excessive levels of debt.

DineEquity (NYSE:DIN) is a prime example of a stock that could be vulnerable to a sudden downturn in growth. It seems un-American to pan the stock of a company that brought us the Rooty Tooty Fresh N��Fruity, but the owner of the IHOP and Applebee��s chains is in a tenuous position. The company has a massive debt load of $1.5 billion due to its leveraged buyout of Applebee��s in 2007, which dwarfs its annual free cash flow of $177 million. The company has been actively reducing debt by moving to a franchise model, but more than 95% of its restaurants are now franchised — indicating that this strategy is nearing its limit.

Click to EnlargeNotably, DineEquity has the 20th-highest debt-to-equity ratio (14.8) of all publicly traded U.S. stocks, according to ycharts.com, and it is seventh among those with market caps of over $500 million. It also is the highest in the restaurant sector, ahead of Sonic (NASDAQ:SONC) at 10.3 and Morton��s Restaurant Group (NYSE:MRT) at 4.8. DIN shares are down 11% year-to-date, while Sonic is off 28% and Morton��s has fallen 22%.

Sales at Applebee��s and IHOP fell 0.3% and 1.5%, respectively, during the third quarter, and the company lowered its forecasts! for 201 2. Because of its focus on the low-end market, both chains are primed for further weakness if the economic backdrop worsens in the months ahead. With food costs rising and a large debt load to maintain, DineEquity can ill afford slower top-line growth.

During the last recession, the stock fell from a peak near $70 to a low in the mid-single digits — indicating the potential danger of owning this stock when economic growth is weak. DineEquity shares might look tempting now that they��re off over 25% from their high for the year, but with so many stocks to choose from in the casual dining sector, there��s no reason to shoulder the risks that come with owning this name.

Naturally, there also is the distinct possibility that Europe will manage to contain its problems and we will ease into an environment of slow, steady global growth. In that scenario, DineEquity — and other heavily indebted, higher-risk stocks — likely would provide investors with robust returns in 2012. In addition, DIN has a high short interest (14.2% of shares outstanding on Oct. 31), providing some added fuel if there��s better-than-expected news.

But why take the chance? At a time when the ��tail risk�� is substantial, there��s no sense rolling the dice on a stock with above-average downside potential.

As of this writing, Daniel Putnam did not own a position in any of the aforementioned stocks.

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DrStockPick.com Stock Report! Thursday August 27, 2009 (Upgrades/Downgrades)

2012-01-26T03:00:00.001-08:00

DrStockPick.com Stock Report!

Thursday August 27, 2009

Stocks Upgraded Today

Company	Ticker	Brokerage Firm	Ratings Change	Price Target
Isle of Capri	ISLE	Susquehanna Financial	Neutral ? Positive
Wilmington Trust	WL	Sun Trust Rbsn Humphrey	Neutral ? Buy	$16
Barclays PLC	BCS	Keefe Bruyette	Mkt Perform ? Outperform
Olin	OLN	Barclays Capital	Equal Weight ? Overweight
Senior Housing	SNH	Wells Fargo	Market Perform ? Outperform
Heartland Express	HTLD	UBS	Sell ? Neutral
Knight Transportation	KNX	UBS	Sell ? Neutral

Stocks Downgraded Today

SIGM

Company	Ticker	Brokerage Firm	Ratings Change	Price Target
National Fuel Gas	NFG	Argus	Buy ? Hold
Sigma Design! s	Collins Stewart	Buy ? Hold
Astronics	ATRO	Jesup & Lamont	Hold ? Sell	$7
Medical Properties Trust	MPW	Wells Fargo	Market Perform ? Underperform
Jackson Hewitt	JTX	Oppenheimer	Outperform ? Perform
Alkermes	ALKS	Jefferies & Co	Buy ? Hold	$14 ? $11.50

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Antares Pharma Inc recently Stroke its 52 Week High Price - NYSEAMEX:AIS

2012-01-25T13:31:00.001-08:00

Antares Pharma Inc (NYSEAMEX:AIS) achieved its new 52 week high price of $2.70 where it was opened at $2.57 UP 0.12 points or +4.69% by closing at $2.68. AIS transacted shares during the day were over 2.69 million shares however it has an average volume of 659,567 million shares.

AIS has a market capitalization $277.41 million and an enterprise value at $251.30 million. Trailing twelve months price to sales ratio of the stock was 18.51 while price to book ratio in most recent quarter was 8.59. In profitability ratios, net profit margin in past twelve months appeared at -38.65% whereas operating profit margin for the same period at -38.43%.

The company made a return on asset of -12.93% in past twelve months and return on equity of -29.20% for similar period. In the period of trailing 12 months it generated revenue amounted to $14.31 million gaining $0.16 revenue per share. Its year over year, quarterly growth of revenue was 25.50%.

According to preceding quarter balance sheet results, the company had $26.11 million cash in hand making cash per share at 0.25. The total debt was $0.00 billion. Moreover its current ratio according to same quarter results was 4.42 and book value per share was 0.30.

Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 1.37% where the stock current price exhibited up beat from its 50 day moving average price $2.29 and remained above from its 200 Day Moving Average price $2.16.

AIS holds 103.51 million outstanding shares with 81.22 million floating shares where insider possessed 19.44% and institutions kept 33.50%.

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Wal-Mart’s (WMT) Bid To Save The Healthcare System

2012-01-25T08:43:00.001-08:00

The AMA, the federal government, and most insurance companies and HMOs have been arguing that storing and updating medical records digitally is much more efficient than having them on paper. The argument is compelling. Transferring files and billing are done more easily when?data are set up electronically. For most doctors?it makes records easier to store and update.

Wal-Mart has decided that it can help save the medical system from relying on paper and make money as part of the process.

According toThe New York Times, Wal Mart’s Sam’s Club outlets will offer digital medical systems. That paper says that “The Sam's Club offering, to be made available this spring, will be under $25,000 for the first physician in a practice, and about $10,000 for each additional doctor.” Physicians are extraordinarily cheap, so the product may be a tough sale.

If the the new Administration’s goal is to upgrade the health care?system, which would almost certainly involve overhauling it so that digital records are the norm, it will not be able to rely on $25,000 systems from Wal-Mart. The?expense of practicing medicine is rising too fast due to malpractice and labor costs. Adding another?big monthly bill?to that is asking too much of most physicians.

If the government wants to turn the tracking of patient data from 19th Century practices to 21st Century technology, it might as well buy the new systems from Wal-Mart and give them away to the doctors who want them.

Douglas A. McIntyre

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Safeway Shines With These Two Metrics

2012-01-25T04:21:00.001-08:00

Safeway (NYSE: SWY ) carries $431 million of goodwill and other intangibles on its balance sheet. Sometimes goodwill, especially when it's excessive, can foreshadow problems down the road. Could this be this be the case with Safeway?

Before we answer that, let's look at what could go wrong.

AOL blows up
In early 2002, AOL Time Warner was trading for $66.27 per share.

It had $209 billion of assets on its balance sheet, and $128 billion of that was in the form of goodwill and other intangible assets. Goodwill is simply the difference between the price paid for a company during an acquisition and the net assets of the acquired company. The $128 billion of goodwill in this case was created when AOL and Time Warner merged in 2000.

The problem with inflating your net assets with goodwill is that it can -- being intangible after all -- go away if the acquisition or merger doesn't create the amount of value that was expected. That's what happened in AOL Time Warner's case. It had to write off most of the goodwill over the next few months, and one year later that line item had shrunk to $37 billion. Investors punished the stock along the way, sending it down to $27.04 -- or nearly a 60% loss.

In his fine book It's Earnings That Count, Hewitt Heiserman explains the AOL situation and how two simple metrics can help minimize your risk of owning a company that may blow up like this. Let's see how Safeway holds up using his two metrics.

Intangible assets ratio
This ratio shows us the percentage of total assets made up by goodwill and other intangibles. Heiserman says he views anything over 20% as worrisome, "because management might be overpaying for the acquisition or acquisitions that gave rise to the goodwill."

Safeway has an intangible assets ratio of 3%.

This is well below Heiserman's threshold, and a sign that any growth you see with the company is probably! organic . But we're not through; let's also take a look at tangible book value.

Tangible book value
Tangible book value, which is simply what remains after subtracting goodwill and other intangibles from shareholders' equity (also known as book value, see box). If this is not a positive value, Heiserman advises you to run away because such companies may "lack the balance sheet muscle to protect themselves in a recession or from better-financed competitors."

Safeway's tangible book value is $4 billion, so no yellow flags here.

Foolish bottom line
Safeway appears to be in good shape in terms of the intangible assets ratio and tangible book value. You can never base an entire investment thesis on one or two metrics, but there are no yellow flags here. If any companies you're researching do fail one of these checks, make sure you understand the business model and management's objectives. I'll help you keep a close eye on these ratios over the next few quarters by updating them soon after each earnings report.

Keep up with Safeway, including news and analysis as it's published, by adding the company to your free, personalized watchlist.

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Billionaire's Plans for Macau Casino Resort Stung by Global Credit Crunch

2012-01-24T19:38:00.001-08:00

It's been a hard few months for Eastman Kodak (NYSE: EK ) , but this past week was a real doozy. The stock fell on rumors that the company may be talking with Citigroup (NYSE: C ) about arranging bankruptcy financing, a development that could see Kodak selling its patent portfolio to meet obligations.

Source: Yahoo! finance.

If Kodak's share price continues to slide, there's a distinct possibility that the stock itself could be delisted. But whoever snaps up Kodak's patents could find itself sitting on a goldmine of possibilities. The future may be hazy for Kodak, but photo bugs out there can still find a reason to smile.

If you're on the hunt for ideas in the year ahead, check out the new report we've compiled named "The Motley Fool's Top Stock for 2012." It details one company set for a bright future, but it'll be available for only a limited time. Get access to the report and find out the name of this legendary company.

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24/7 Wall St. 2007 Break Up Values: Ebay $28 (Current Price $32)

2012-01-24T14:58:00.001-08:00

By Ryan Barnes. Edited by Douglas A. McIntyre

Ebay, Inc. (EBAY)

Ebay's main property is obviously their flagship marketplace site, which generates revenues from listing fees collected on the user base, which currently stands at over 200 million. The other 2 company-designated segments are Payments (Paypal) and Communications (Skype VoIP).

Ebay really can't be sliced up any way other than spinning off the Paypal unit to realize the profit they've made on the deal, and selling Skype outright. The Skype deal is less than 2 years old, but for the sake of analysis we will include the value of the purchase at cost as the technology is too new to provide much of a dent in current revenues at Ebay.

Net income growth is still in very impressive territory over at Ebay, and the same goes for Paypal, which is clocking 30% plus income growth currently. A stand-alone stock for Paypal could trade for 20x operating income very easily, which would value the unit at just over $10 billion. Valuing Ebay's core business is difficult because nobody knows for sure when the top-line growth will slow down to "normal" rates. Ebay still deserves a premium valuation, so we're giving it a multiple of 25x operating income, which would put the PEG ratio at about 1.2, bringing the total breakup value to $28 per share. A company like Ebay should trade for more than its breakup value, as the brand, intangibles, and high barriers to entry are what give the company much of its value. Still, with the recent troubles in the stock it is clearly close to entering "value investor" territory.

Ryan Barnes

Ryan Barnes has over 10 years' experience in portfolio management and investment research, covering equities, fixed income, and derivative! product s. Ryan spent the past 5 years working as an institutional trader & manager for high-net worth investors, working with Merrill Lynch, Charles Schwab, Morgan Stanley, and many others. Ryan is currently working as a writer and financial modeling consultant on hedging and capital appreciation strategies, and does not own securities in the companies being covered.

Methodology

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Q4 Growth Drives 2010 Equity Returns: Ibbotson

2012-01-24T10:37:00.001-08:00

Target maturity funds enjoyed their "second great year in a row," according to the Ibbotson Target Maturity Report for the fourth quarter of 2010. The average target maturity fund returned 7.1% in the fourth quarter, according to Ibbotson, beating the BarCap U.S. Aggregate Bond Index's decline of 1.3%.

Fourth-quarter equity asset classes drove performance for the year. The S&P 500 returned 10.8% in the fourth quarter; with third-quarter returns of 11.3%, the total return for 2010 was over 15%. The 12-month return for the averge target maturity fund was nearly 13%, less than the return for the Morningstar Lifetime Moderate Index (14.7%) or the S&P 500, but nearly double that of theBarCap U.S. Aggregate Bond Index, which returned 6.5%.

In describing equity asset class performance throughout the year, the authors wrote, "The first quarter saw mild, yet positive returns in global markets, followed by a second quarter in which equity markets plunged and fixed income markets experienced their strongest quarter of the year. The third and fourth quarters, though, took off and didn’t look back […] ."

Non-U.S. equities didn't fare as well. The report notes that they "rebounded well" as did most other asset classes in the third quarter, but "they have to be considered disappointments in 2010." Non-U.S. developed equity returned 8.2% in 2010, compared with an average annual return of 14.5% for the seven years prior, the report authors write. That seven year period includes a 43.1% loss in 2008. Likewise, emerging market equity performed well compared with other asset classes, but was a disappointment based on prior performance. In 2010, emerging market equity returned 19.2%, after averaging 30.7% annual returns for the seven years prior. Emerging markets lost 53.2% in 2008.

The report highlighted three main trends for the fourth quarter:

U.S. assets outperformed non-U.S.
U.S. small cap outperformed U.S. large cap
U.S. growth outperformed U.S. value

The top performer for the fourth quarter was U.S. small growth equity, which returned 17.1%. Large growth equity returned 11.8%. Value equity had slightly smaller returns: Small value returned 15.4, while large value returned 10.5%. Commodities were similarly successful, returning 15.8%. The report noted that while growth outperformed value for the quarter, in the long term investors should expect value to come out on top.

The difference between U.S. equity and non-U.S. equity is stark. Non-U.S. developed equity returned 6.7%, while emerging market equity returned 7.4%. Real estate showed similar returns at 7.4%.

"During the fourth quarter a weakening Euro depressed the performance of non-U.S. developed equity, leading the asset class to underperform both U.S. and emerging market equities," the authors wrote.

Overall, the second quarter is the only one in which equity asset classes experienced negative returns.The U.S. market fell a "horrendous" 37% in 2008 and rebounded 26.5% in 2009, before settling at 15.1% last year. "Though this is greater than we expect over the long-term, it was still much more of a return to normalcy."

Just as it did in the fourth quarter, growth outperformed value equity in 2010, and small cap outperformed large cap. Large growth equity returned 16.7%, and small growth equity returned 29.1%. Small value equity returned 24.5% and large value equity returned 15.5%.

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Cramer: 3 Tech Stocks Rising

2012-01-24T06:13:00.001-08:00

Sure, this market should be going down already. Sure, this year has become too good to be true. You can sell now and take it all to the bank and they won't mind that you made it because you played the first few weeks of January.

Still Greek uncertainty. Google's(GOOG) hammering. Downbeat commentary about Europe across the board. We should be in a tailspin.

But the Dow says "no" to the tailspin and it says it each day with a different group, whether it be telecom or health care or industrials. Today it said "no" to a big selloff with three old-line tech companies that are still so cheap on earnings that we heard last night that you can see why people will still b! uy them.

All three tell different stories. Intel(INTC) actually did have killer gross margins and did make up some ground at the end of the quarter. People are becoming believers in the future and it isn't just because of hype, it is also because of the big boost in capital expenditures for new form factors. A new cycle could be at hand and maybe several. It can go higher, especially with a boost in the already-bountiful dividend and some big cellphone chip orders that might be coming their way.

>>Click here to learn about Real Money, a premium service that relays investment strategies from veteran Wall Street pros.

Microsoft(MSFT) is becoming the stealth opponent of Apple(AAPL) using Xbox to become a preferred hardware player. I am having a hard time getting my arms around this even as the kids love Xbox and love to stream on it. But I like generational ignorance. It means the appropriate demo knows more than I do. You get Skype integrated into actual TV watching, badmouthing American Idol participants to your friends while watching the show and suddenly Microsoft actually has pizzazz. I don't want to get too far ahead of myself here, because Microsoft is a personal-computer-based company and I think we all see the writing on the wall on that one even as it seems like a huge wall with small writing right now. But to me, it's terrific to hear about another business line that has come on strong in a different way than just gaming. Ballmer keeps his job, the stock goes higher.

IBM(IBM)? What can I say? It's a delivery machine. They are so far ahead of targets and it isn't all stock buybacks, although that buyback is now up there with Autozone(AZO) as one that is moving the needle. I continue to be impressed with how aggressive IBM is in consulting and how consistent it is.

Oddly, what I think caused the stock to skyrocket today was only part earnings. The rest might have been the chart that was signaling one of the more classic head-and-shoulders patterns I have come across of late and I know many traders who thought that Europe had to be bringing them down. Nada. The stock goes higher.

Three stocks left for dead, two repeatedly in Microsoft and Intel, and one for many years, IBM. All back to life, and not as Walking Dead but sprinting winners. They all go higher.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long IBM and AAPL.

>To order reprints of this article, click here: Reprints

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PepsiCo Inc. (NYSE: PEP) Is the Perfect Buy-and-Hold Investment

2012-01-24T01:50:00.001-08:00

If they aren't already, long-term investors should be digging up some solid defensive plays, like PepsiCo Inc. (NYSE: PEP).

Everyone is familiar with PepsiCo, one of the leading manufacturers and marketers of food and beverage products. And with a strong business model, steady bottom-line growth, and a healthy dividend, PepsiCo is one of those rare buy-and-hold investments.

Although its name is typically associated with soda, PepsiCo has developed a diversified product line that supports a steady revenue stream from more than just fizzy drinks. PepsiCo, through its Frito-Lay and Quaker Oats subsidiaries, is the name behind consumer-favorite brands like Doritos, Tropicana, Gatorade, SoBe Lifewater, Cracker Jack, Rice-A-Roni, and Grandma's Cookies.

Many investors already know that, though.

What you might not know is that PepsiCo's future earnings are based on much more than delicious snacks for U.S. consumers.

This global powerhouse is investing in two areas that will drive food company profits going forward: emerging markets growth and "good for you" products.

It has struck deals to develop both initiatives this year, and the efforts are paying off.

Increased emerging markets sales boosted PepsiCo's revenue from those countries 33% last quarter. Sales of healthy products are on pace this year to hit almost $15 billion, and the company hopes to double that by 2020.

When you combine its new business focuses with its existing profitable product lines, PepsiCo is strong enough to weather a global economic storm - exactly what our portfolios need to include right now.

So it's time to buy PepsiCo Inc. (**).

PepsiCo Inc. Knows Where to Find Profits

Purchase, NY-based PepsiCo, founded in 1898, has had a strong presence in the U.S. food and beverage market for decad! es. Now it's working on replicating that brand loyalty in developing economies.

Pepsi announced last year that it was going to invest $2.5 billion in China - one if its highest growth markets - to expand its local capacity. It has massive plans for new manufacturing facilities, research and development centers, and brand-building programs.

The increased investment has already helped sales. In the third quarter, PepsiCo reported snacks volume grew in eight of its top 10 international markets, with snacks volume in Asia, the Middle East and Africa up 16% from the year before. China's snacks volume was up 31%, India up 26%, and Turkey 22%.

PepsiCo, recognizing the growing global focus on nutrition, also is starting a healthy-foods initiative.

It's expanding its product range to include more juice, dairy, and grain products, and expects healthier selections to make up about 30% of its portfolio in 10 years. Right now about 22% of PepsiCo products are considered "good for you."

It's already making strides in health with some global dealmaking. PepsiCo in September became the No. 1 juice and dairy company in Russia when it completed its $3.8 billion purchase of Wimm-Bill-Dann. And it has many more healthy products in the pipeline.

PepsiCo is reportedly working with a German company on a new yogurt product for the United States, will introduce iron-fortified snacks in India, is developing a new fruit beverage for Latin American markets, and is trying to identify nutrient-dense staple crops in sub-Saharan Africa to locally produce snacks.

PepsiCo's profits also will get a bump from continued food inflation. Global food prices are expected to increase 4% next year, and could climb even higher on supply squeezes. Costlier food prompted the company to raise product prices, which helped boost last quarter revenue by 13%.

Indra Nooyi, PepsiCo chief executive officer, said the pricing adjustments ,as well as in! creased consumer demand, led to well-balanced top-line and bottom-line growth last quarter.

The company reported revenue of $64.5 billion in the last trailing 12 months and gross profits of $31.2 billion. PepsiCo has been steadily increasing earnings for five straight quarters, with an average 1.7% increase in net income and 26.2% revenue growth. Revenue in the third quarter ended Sept. 30 rose 13.3% to $17.6 billion.

Pepsi has a market capitalization of about $100 billion, and an enterprise value of more than $121 billion once net debt and cash levels are considered. The company's 3.2% dividend yield makes it one of the higher yielding defensive megacaps.

Analysts give it an average price target of $70.17, a 9.9% premium to Friday's $63.85 closing price.

Action to Take: Buy PepsiCo Inc. (NYSE: PEP) (**).

PepsiCo Inc. is a strong defensive play with steady and stable growth and dividend yield. It provides investors with a place to park low-risk capital.

The stock has had a tight trading range in the last year. It is extremely liquid and has a liquid options market.

Let's buy our exposure while the market is weak overall, but use the market to help average into this one. If you want to invest 3% of your low-risk portfolio, let's buy 2% at market now.

For the last third, let's put in a limit order at 5% below your first fill.

Pepsi also makes a great covered-call vehicle. The stock is not going to run away from us if we cap our near-term upside, and if it did, we can always repurchase it on weakness.

(**) Special Note of Disclosure: Jack Barnes has no interest in PepsiCo Inc. (NYSE: PEP).

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Raymond James Adds 5 Advisors From Wells, UBS

2012-01-23T16:53:00.001-08:00

Raymond James (RJF) said Thursday that it hired a team for its employee channel from Wells Fargo in Richmond, Va., with about $1.1 million in yearly sales and $90 million in assets. This news comes about a week after the firm tapped three reps in near Jackson, Miss., to join its independent-advisor operations from Wells Fargo (WFC) and UBS (UBS) with roughly $3 million in combined annual fees and commissions, as well as about $500 million in assets.

Advisors James A. Schmidt and Bernice “Bernie” Murff recently formed the Schmidt Wealth Management Group of Raymond James and opened the first Raymond James & Associates office in Richmond.

“I’m thrilled to welcome such an accomplished team to Raymond James,” said Tash Elwyn, (left) president of RJ&A, in a press release. “Jim and Bernie are extremely talented, offer very individualized services and bring extensive experience to our firm. We could not ask for a stronger team to open the first RJ&A office in Richmond.”

The team focuses on a “relatively small base of client families particularly customized investment services,” said Schmidt, in a statement, “so it was extremely important to us to be able to continue to offer these strategies at Raymond James. Tash and complex manager Tony Barrett and many home office associates worked tirelessly with us to be sure this was possible.”

Schmidt and Murff met with senior leadership and numerous employees, according to Murff. “[I]t was evident that everyone enjoyed working at Raymond James, and that they all understood the importance of helping clients achieve their financial goals,” he said in a release. “The firm’s values and the culture just felt right to us.”

Raymond James says its independent broker-dealer has three offices in the Richmond area and one bank branch that offers an investment program through a partnership with Raymond James Financial.

On Dec. 27, financial advisors Arthur Finkelberg, Butch McKenzie Jr., and Albert Green joined Raymond James’ employee channel in Jackson.

“I am thrilled to be able to open our first ever office for Raymond James & Associates in this part of the country with such an accomplished group of advisors,” said Ira Federer, divisional director for the unit, in a press release.

Raymond James is moving to expand in the Gulf Coast, according to Tom Galvin, complex manager for the region. “[W]e are looking for advisors of this caliber and reputation to join our growing division,” he said in a statement. The firm’s independent-advisor channel has 16 independent offices in the state of Mississippi, as well as seven bank branches with investment programs.

Finkelberg comes to Raymond James from Wells Fargo where he managed $283 million in client assets and had annual production of $1.5 million. He began his career in 1982 with Merrill Lynch, later joining A.G. Edwards and the succeeding firms of Wachovia and Wells Fargo.

“I wanted to join an investment firm where all the employees, from top management on down, are focused on one thing: helping our clients,” said Finkelberg. “After researching almost every firm out there, I found that Raymond James came closest to that ideal."

McKenzie also joined Raymond James from Wells Fargo, where he managed over $110 million in client assets and had annual production of almost $600,000. He started his career with A.G. Edwards in 1984, moving to Paine Webber in 1990 and back to A.G. Edwards in 1995, staying through the Wachovia and Wells Fargo acquisitions.

“After meeting with senior management, department heads and numerous employees,” said McKenzie in a statement, “it was evident that everyone enjoyed working at Raymond James, and that they all understood the focus of the firm is helping clients achieve their financial goals.”

Green joined the firm from UBS, where he managed almost $150 million in client assets and had $949,000 in annual production. Green, an almost 50-year veteran of the industry, began his financial services career with Equitable Securities in 1962. That firm was then acquired by Paine Webber and later UBS Financial Services.

Raymond James has about 5,400 advisors in its various channels in the United States, Canada and the United Kingdom with some $268 billion in assets under administration.

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Warren Resources Traded Over Peak Price - WRES

2012-01-23T12:27:00.001-08:00

Warren Resources, Inc. (NASDAQ:WRES) recently hit 52 week peak price $5.75, opened at $5.31 scored +6.08% closed $5.58. WRES traded on over 1.02 million shares in comparison to average volume of 515,460 shares.

WRES has earnings of $19.84 million and made $85.89 Million sales for the last 12 months. Its quarter to quarter sales remained 40.62%. The company has 71.19 million of outstanding shares and 67.49 million shares were floated in the market.

WRES has an inside ownership at 2.34% and institutional ownership remained 62.13%. Its return on investment (ROI) for the last 12 month was 8.26% as compare to its return on equity (ROE) of 15.97% for the last 12 months. The price moved ahead +11.86% from the mean of 20 days, +20.81% from 50 and went up 51.13% from 200 days average price. Company’s performance for the week was 7.93%, +26.53% for month and yearly performance remained 137.45%.

Its price volatility for a month remained 5.10% whereas volatility for a week noted as 4.85% having beta of 2.70. Company’s price to sales ratio for last 12 months was 4.62 while its price to book ratio for the most recent quarter was 2.63 and its earnings before interest, tax, depreciation and amortization (EBITDA) remained 45.13 Million for the past twelve months.

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How to Buy Bonds in King Harald's Norway - SmartMoney.com

2012-01-23T07:51:00.001-08:00

Everyone knows the U.S. government faces a budget crisis. Everyone, it seems, except the bond market. Investors are still willing to lend to Uncle Sam for 2 to 3 percent interest, even for 30 years. Money continues to pour into bond funds.
I'm sorry to be a skeptic, but I think investors are making a mistake. These bonds may turn out okay, but they involve big risks -- not of default, but of currency debasement and inflation, which destroy a bond's value.

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So, should we all be considering buying foreign government bonds? If so, which ones are the best bets? And how can you go about getting them?
Many foreign "sovereigns" seem to offer a much more compelling trade-off between risk and return. Start with the safe ones. According to the International Monetary Fund, the industrialized-world governments with the strongest finances include Denmark, Norway, Sweden, New Zealand and Australia.
Norway is in a league of its own. The country has invested its North Sea oil windfall sensibly: While we have a national debt, King Harald V is sitting on net assets. His government's assets exceed its liabilities by about $800 billion, or 170 percent of GDP. I'd be happy to lend this man money.
People in finance still call the interest rate on Treasury bonds the risk-free rate, but for my money, that term ought to apply to King Harald's bonds. And yet 10-year Norwegian bonds recently yielded about 2.5 percent, compared with around 2 percent for U.S. Treasurys -- showing that investors have more faith in Uncle Sam than in the Norse.
The other strong nations are also sit! ting far prettier than the U.S. Sweden has net assets equal to one-fifth of its economy. Denmark, Australia and New Zealand have net debts, but each is less than 12 percent of GDP. The figure for the U.S. is 80 percent and rising.
Dan Fuss, the bond guru at Loomis Sayles, is a fan of all these countries. Your main risk is exchange rates: If the dollar rises against other currencies, it will eat into your returns. There are country-specific risks, too. Australia and New Zealand have inflation and are exposed to the commodities boom, for good or ill. So is oil-rich Norway. Fuss notes New Zealand has geological risks as well: It contains two of the world's supervolcanoes.
At the other end of the spectrum is Ireland. The fallen Celtic Tiger is trying to fight its way out of depression and austerity. There is a risk of default and a "haircut" on the bonds. But the 30-year bonds yield 9 percent. You could take a serious buzz cut on those, watching their yields plunge, and still beat someone who owned Treasurys.
Mutual funds aren't a great avenue for owning these bonds; funds tend to spread investors out among bonds from a bunch of other nations, including Japan, whose bonds pay squat. The good news is that some brokers can help you buy these bonds directly; though you'll likely have to get on the phone to make it happen. You don't need to be a high roller, either. E-Trade, for example, can usually trade in lots of 25 bonds for developed countries. That typically works out to be around $25,000. And they can deal in Norwegian bonds for around $5,000 -- not bad for a piece of Harald's kingdom.
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Dear U.S.A.: Your Account is Overdrawn

2012-01-23T03:27:00.001-08:00

Dear United States of America: We regret to inform you that your withdrawals exceeded your deposits last year by $1,600,000,000,000 ($1.6 trillion), including your "supplemental appropriations" spending.
Your account does have an overdraft protection, and so bonds were sold to cover your $1.6 trillion overdraft. While we value your business, we feel obligated to remind you that this is the third year that your overdraft protection exceeded 10% of your gross national product (GDP), and it seems your account is on course to register yet another $1.6 trillion overdraft in fiscal year 2012.
Currently, your overdraft account exceeds your GDP of $15 trillion.
Quite frankly, we are worried that you have become dependent on extensive overdraft protection--a feature designed to tide the account holder over for a short period of time in near-term expectation of higher deposits or lower withdrawals--and that relying on large-scale overdraft borrowing to cover your basic expenses is now your standard operating procedure.

This violates the intent of the overdraft feature, and as a result we must seriously consider modifying the terms of the overdraft protection on your account. Current conditions enable us to provide this overdraft, but the feature was not designed to be permanent nor on this scale.
In order to give you sufficient time to bring your deposits and withdrawals back into alignment, we will maintain the current low-interest overdraft protection on your account through fiscal year 2012. Beyond that, however, please be aware that to maintain the integrity of the system, we will have to raise the rate of interest on your overdraft and scale back the size of the overdraft line of credit.
We regret informing you of these modifications, but the o! verdraft protection was not intended to be permanent nor near-infinite in scale.
Yours truly,
The Global Bond Market
*Post courtesy of Charles Hugh Smith at Of Two Minds.

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Morgan Stanley CEO Steps Down, Will Remain As Chairman

2012-01-22T18:29:00.001-08:00

Acacia Research Corporation (NASDAQ:ACTG) witnessed volume of 1.23 million shares during last trade however it holds an average trading capacity of 321,989.00 shares. ACTG last trade opened at $43.47 reached intraday low of $42.05 and went +7.91% up to close at $44.87.
ACTG has a market capitalization $1.92 billion and an enterprise value at $1.61 billion. Trailing twelve months price to sales ratio of the stock was 11.61 while price to book ratio in most recent quarter was 5.89. In profitability ratios, net profit margin in past twelve months appeared at 18.21% whereas operating profit margin for the same period at 27.55%.
The company made a return on asset of 12.32% in past twelve months and return on equity of 16.57% for similar period. In the period of trailing 12 months it generated revenue amounted to $153.19 million gaining $4.59 revenue per share. Its year over year, quarterly growth of revenue was 53.70% holding -33.30% quarterly earnings growth.
According to preceding quarter balance sheet results, the company had $313.61 million cash in hand making cash per share at 7.33Y. Moreover its current ratio according to same quarter results was 10.25 and book value per share was 7.05.
Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 21.98% where the stock current price exhibited up beat from its 50 day moving average price of $36.03 and remained above from its 200 Day Moving Average price of $33.34.
ACTG holds 42.77 million outstanding shares with 38.85 million floating shares where insider possessed 3.88% and institutions kept 71.30%.
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TETRA Technologies (TTI) Guides 2012 In-Line With Consensus

2012-01-22T14:25:00.001-08:00

TETRA Technologies Inc. (NYSE:TTI), an oil and gas services company,issued its earnings forecast for 2012, in line with Wall Streetprojections.
The Woodlands, Texas-based company expects earnings? of $0.70 to$0.90 per share from continuing operations attributable to TETRAstockholders. Analysts' expect the company to post earnings of 78 centsper share.
The company said the earnings outlook reflects anticipated improvement in each of its service segments in 2012.
"During 2012, we expect to benefit from the continued strength ofshale-related activity onshore in the US, improvements in completionactivity in the deepwater Gulf of Mexico, continued strength in Mexicoand increased activity in other international markets, and improvedconditions in the Gulf of Mexico abandonment and decommissioningmarket," said chief executive Stuart Brightman.
TETRA said its Offshore Services segment is dealing with typicallyslow fourth quarter activity in the Gulf of Mexico and the added impactof unusually poor weather conditions.
"We do expect that the Offshore Services segment will experience avery weak first quarter in 2012 due to typically poor seasonal weatherin the Gulf of Mexico and our need to dry-dock several assets for theirperiodic maintenance and inspections," said Brightman.
The stock closed 6.4 percent higher at $9.94 on Tuesday.
{$end}
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Protected Equity Products – Can You Have Your Cake and Eat It?

2012-01-22T09:40:00.001-08:00

They are promoted as an opportunity to benefit from share market growth, without the risk of losing capital. They involve borrowing up to 100% of the purchase price of a basket of shares for a minimum period (generally 3 – 5 years). You keep the dividends and any gains and are protected against investment loss.
The loan interest is also usually prepaid to bring forward a tax deduction and reduce a current year “tax problem”. What a deal – no downside and tax benefits!
However, even with this basic explanation, the alarm bells should ring for smart investors. PEPs play to at least one psychological bias (i.e. “loss aversion”) that investors should be wary of and contradict at least one of our wealth management decision making principles (i.e. “It’s about ends, not means”).
What’s the catch?
The downside is the borrowing cost. It includes a premium to pay for capital protection. This premium varies according to the term and volatility of the shares purchased.
It can add between 7-15% p.a. on a 3 year product and is not a tax deductible expense. So, if the typical loan rate was 7% p.a., the interest rate on the PEP would be around 14-22% p.a.
When you finance shares with a normal loan (i.e. excluding in built protection costs), you can make money, after-tax, even if the pre-tax return on the shares is the same or a little less than the pre-tax interest cost on the loan. Franked dividends and a favourable tax treatment of capital gains allow for this situation.
While PEPs also benefit from these tax effects, the additional costs of protection mean you need a very high return on your share portfolio to generate an after tax gain. If this was your expectation, you’re far better off holding an unprotected position.
Do PEPs make sense?
PEPs play to investors’ desire to make “risk-free” gains and obtain a tax benefit. But they are not a serious way to inves! t in sha res. Simultaneously eliminating the downside risk and expecting to get share market type returns doesn’t make sense. It’s the finance equivalent of alchemy.
At best, all you can realistically expect is cash type returns. To give yourself a chance of earning the higher expected returns of share markets, you need time, patience and a willingness to accept the accompanying risk.
But if your investment time horizon is short and/or your risk appetite is low, a PEP is an inappropriate investment solution. Borrowing to purchase shares is always a high risk strategy, and especially over the short term.
Offsetting this risk by adding a costly protection mechanism is extremely inefficient. It’s like driving your car with one foot on the accelerator and the other on the brake.
Summary:
1. Avoid focusing on minimising tax. You should aim to maximise your (risk-adjusted) after tax return. Tax can’t magically overcome inherent pre-tax disadvantages;
2. Don’t get seduced by complexity. It’s costly and there are usually simpler, more effective ways to achieve your objectives; and
3. Recognise that there are more efficient ways to reduce (long term) tax. Most of these, however, require some pre-planning to allow you to confidently take a longer term approach. An investment in good planning will help to avoid the costs of reactive decision making.
Wealth Foundations is an independently owned personal financial advisory firm that offers wealth management and strategic financial planning services. For more information, visit Wealth Management.
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Morgan Stanley Posts '09 Results; Revenue Up for 18,135 FAs

2012-01-22T05:50:00.001-08:00

This news article originally appeared on ResearchMag.com on 1/20.

Morgan Stanley says its Global Wealth Management group - which includes the operations of Smith Barney -- delivered net revenues of $9.4 billion in 2009 with client assets of $1.6 trillion and 18,135 global representatives as of December 31, 2009.

The Morgan Stanley Smith Barney merger was completed on May 31, 2009.

"In a year of transition for our firm and the entire financial services industry, the employees of Morgan Stanley delivered substantially improved financial performance while also making significant progress on critical strategic initiatives that will drive our business in the years ahead," says CEO and President James Gorman.

Thus, whereas a year ago, Morgan Stanley had 8,356 financial advisors, it now has more than 18,100. The most recent total of 18,135 - however - is down a bit from the 18,160 that MSSB had as of September 30, 2009 and the 18,444 it had on June 30, 2009.

"During the year, we closed the Smith Barney transaction earlier than expected; continued the expansion of our strategic alliance with Mitsubishi UFJ; and forged a deal to sell Van Kampen and our retail asset management business to Invesco," explains Gorman.

Trailing-12-months' revenue per advisor is now $692,000 vs. $662,000 at the end of the third quarter in 2009 and $603,000 at the end of 2008, before the merger with Smith Barney.

Morgan Stanley says that 70 percent of client assets are held by clients with over $1 million being managed by the broker-dealer. Fee-based assets represent 24 percent of total assets.

Assets per advisor are now roughly $86 million, up from $84 million in September 2009 and $66 million in December 2008.

Net new assets stood at (negative) -$4.7 billion in December 2009 vs. -$8.8 billion in September 2009 and -$7.4 billion in December 2008.

For all of 2009, the Global Wealth Management Group had pre-tax income from continuing operations of $559 million, compared with a pre-tax income from continuing operations of $1,169 million last year. (Comparisons of current year results to prior periods were impacted by the results of MSSB, according to the company, and '08 results included pre-tax income of $688 million related to the sale of Morgan Stanley Wealth Management S.V., S.A.U.).

On the day it announced results, January 20, Morgan Stanley's stock declined as traders reacted to the fact that it missed earnings estimates on lower trading revenue.

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Intuitive Surgical Beats Up on Analysts Yet Again

2012-01-22T00:41:00.001-08:00

Intuitive Surgical (Nasdaq: ISRG  ) reported earnings on Jan. 19. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Intuitive Surgical beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly, and earnings per share increased significantly.
Gross margins improved, operating margins grew, net margins shrank.
Revenue details
Intuitive Surgical logged revenue of $497 million. The 13 analysts polled by S&P Capital IQ looked for sales of $484 million. Sales were 28% higher than the prior-year quarter's $389 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
EPS details
EPS came in at $3.75. The 14 earnings estimates compiled by S&P Capital IQ averaged $3.35 per share. GAAP EPS of $3.75 for Q4 were 24% higher than the prior-year quarter's $3.02 per share.

Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
Margin details
For the quarter, gross margin was 73.0%, 50 basis points better than the prior-year quarter. Operating margin was 40.2%, 70 basis points better than the prior-year quarter. Net margin was 30.4%, 70 basis points worse than the prior-year quarter.
Looking ahead
Next quarter's average estimate for revenue is $461 million. On the bottom line, the average EPS estimate is $3.16.
Next year's average estimate for revenue is $2 billion. The average EPS estimate is ! $14.18.< /p>
Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 3,939 members out of 4,144 rating the stock outperform, and 205 members rating it underperform. Among 1,281 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,238 give Intuitive Surgical a green thumbs-up, and 43 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Intuitive Surgical is hold, with an average price target of $433.09.
The healthcare investing landscape is littered with also-rans and a few major winners. Is Intuitive Surgical the right stock for you? Read "Discover the Next Rule-Breaking Multibagger" to learn about a company David Gardner believes will be a phenomenal success over the next few years. Click here for instant access to this free report.

Add Intuitive Surgical to My Watchlist.
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Third week is climax of the battle between theta and gamma

2012-01-21T20:16:00.001-08:00

Option expiration week ushers in some fascinating dynamics when it comes to option pricing. And when we get into pricing that means you have to address theta and gamma, two of the Greeks that every options trading investor should know. Understanding these Greeks as you head into expiration week can mean the difference between a winning trade and a big hit to your wallet.
And is it a coincidence that in ancient Athens the Theta symbol was used as an abbreviation for death? After all expiration is a kind of death with a lot of strikes leaving this world. For that matter, a lot of options trading investors who hold bad trades die a little every day until expiration.
Let��s look at how these two Greeks impact expiration and option pricing. For my examples, let��s consider we are discussing the behavior of at-the-money strikes.
THETA
Theta
Theta measures the rate of time decay of an option per day. It can be either positive or negative. Option buyers acquire negative theta because their position loses value as time passes. Option sellers acquire positive theta because their position makes money as time passes. The rate of time decay is not linear, but rather exponential. That means it speeds up as expiration approaches.
That��s why traders are drawn to selling short term options which lose value at a quicker rate than long term options. Put simply — Why sell an option losing $5 a day when you can sell one losing $25 a day? This explains the built-in incentive for traders to utilize short-term options when seeking positive theta.
Be careful though. There are other forces at work that should temper your enthusiasm for aggressively selling short-term options! . Many t raders learn the hard way that having a one-variable mind in a multi-variable world is a recipe for disaster.
GAMMA
Gamma has always been a property of options I��ve found easier understood through experience rather than reading an article. By definition it is the rate of change of delta per $1 move in the underlying stock. Gamma can also be positive or negative. Option buyers acquire positive gamma while option sellers acquire negative gamma.
Gamma
Gamma rises as expiration approaches which causes some interesting problems to option sellers going into expiration week. An adverse move in the stock can cause losses to rapidly mount.
A position with positive gamma is one that will see its gains accelerate and losses decelerate. Think of a long call or a long straddle. A negative gamma position is one that will see its gains decelerate and losses accelerate. Think of a covered call or an iron condor.
Positive Gamma = Long Call/Long Straddle
Negative Gamma = Covered Call/Iron Condor
The absolute worst example of negative gamma risk killing a trade that I��ve seen is when a buddy of mine was short September call spreads on the Russell 2000 Index (.RUT) in 2008. With two days until expiration the RUT was sitting at 676, placing my friend��s 740 – 750 call spreads 11% out-of-the-money. Given the elevated volatility of the time there was still about $.75 of premium in the spread. That tempted him to hold the spread the last few days to exploit the rapid time decay. After all, what are the odds the RUT would move 11% in two trading sessions?
Well, never say never because the small cap index proceeded to do just that. In fact ! the sett lement value for September options came in at 771, or 14% higher than where the RUT was two days prior.
That $.75 gain turned into a $10 loss. Due to the huge negative gamma going into expiration a small gain turned into a monumental loss. You want to know the worst part?? The RUT was back down to 676 within one week!
Gamma Catch-22
Gamma brings to traders a Catch-22 of sorts. On the one hand holding short options close to expiration offers quick rewards due to high time decay. On the other hand these short options expose traders to the potential to quickly accumulate losses — often referred to as gamma risk.
Traders that insist on riding their short option positions all the way to expiration in an attempt to capture the last few bucks from a trade often justify their approach by pointing out the elevated rates of time decay eating away at their short. But they forget the elevated gamma risk they face.
For as many times as they enjoy the additional and oft times quick profits they rake in from riding a short into expiration, they will inevitable have to deal with the occasional horror show where the market makes a kamikaze run for their short options.
In the long run, the extra few bucks accumulated from riding to expiration unscathed typically pale in comparison to what��s forked out to pay the piper when those ��cheap�� short options come back to bite you.
Expiration week is a difficult time for most traders, both the hard-boiled veterans and the guy that may do only a few trades a month. It is almost inevitable that the expiring strikes will mean losses during a trader��s life time. But understanding and applying the Greeks like Theta and Gamma can help reduce those losses and build the gains.
Follow Tyler Craig on Twitter@TylersTrading.
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Saudi Prince Alwaleed bin Talal invests $300M in Twitter

2012-01-21T15:55:00.001-08:00

Last week��s IPO of social gaming company Zynga (NASDAQ:ZNGA) certainly was a disappointment — at least for public investors. The stock broke its offering price by 5% and is down another 4% in Monday trading. This is not an isolated case. Other hot social companies, such as Pandora (NYSE:P) and LinkedIn (NYSE:LNKD), also have seen large drops since their IPOs.
But these flops don’t seem to matter to big-time private investors. Just look at Prince Alwaleed bin Talal (part of the Saudi royal family), who just agreed to invest $300 million in Twitter.
This type of investment really is chump change for Alwaleed, who, according to Forbes, is worth almost $20 billion. Prince Alwaleed is known as a long-term investor who focuses on large global brands, like News Corp. (NASDAQ:NWSA) — and even has a long-standing business relationshipwith CEO Rupert Murdoch. He also likes tech plays, as evidenced by investments like Amazon.com (NASDAQ:AMZN), eBay (NASDAQ:EBAY) and Apple (NASDAQ:AAPL).
No doubt, Twitter has a tremendous global brand and has become a force in politics (especially in the Middle East). At the same time, it is a key platform for social media marketing, with more than 100 million active users.
Despite all this, Twitter has been a mediocre revenue generator — the buzz is that revenues are around $140 million to $150 million this year. But Prince Alwaleed still was willing to invest at a whopping $10 billion valuation. That’s $2 billion more than Zynga, which is profitable and is expected to generate more than $1 billion in revenues for 2011.
Interestingly enough, the! valuati on of Twitter was $8 billion in August, when the company raised a hefty $800 million. All in all, Twitter has privately raised more capital than Zynga has from its IPO!
With such a huge slug of cash, Twitter really has no incentive to go public anytime soon. Like Facebook, the company is likely to continue focusing on building its user base and finding revenue opportunities. And in light of 2011′s social IPOs, it��s probably a good idea for Twitter to hold off, anyway.
Tom Taulli runs the InvestorPlace blog ��IPOPlaybook,�� a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of ��All About Short Selling�� and ��All About Commodities.�� Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned stocks.
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Medco Health Solutions Inc. posted a Year Record Price - NYSE:MHS

2012-01-21T11:34:00.001-08:00

Medco Health Solutions Inc. (NYSE:MHS) achieved its new 52 week high price of $66.38 where it was opened at $65.87 UP 8.05 points or +14.43% by closing at $63.83. MHS transacted shares during the day were over 70.98 million shares however it has an average volume of 3.24 million shares.
MHS has a market capitalization $25.52 billion and an enterprise value at $27.16 billion. Trailing twelve months price to sales ratio of the stock was 0.33 while price to book ratio in most recent quarter was 6.20. In profitability ratios, net profit margin in past twelve months appeared at 2.16% whereas operating profit margin for the same period at 3.80%.
The company made a return on asset of 9.66% in past twelve months and return on equity of 31.55% for similar period. In the period of trailing 12 months it generated revenue amounted to $66.68 billion gaining $155.99 revenue per share. Its year over year, quarterly growth of revenue was 4.30% holding 3.90% quarterly earnings growth.
According to preceding quarter balance sheet results, the company had $171.10 million cash in hand making cash per share at 0.43. The total of $5.03 billion debt was there putting a total debt to equity ratio 139.78. Moreover its current ratio according to same quarter results was 0.91 and book value per share was 9.00.
Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 22.87% where the stock price exhibited up beat from its 50 day moving average with $56.08 and remained above from its 200 Day Moving Average with $59.44.
MHS holds 399.80 million outstanding shares with 397.29 million floating shares where insider possessed 0.09% and institutions kept 76.60%.
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Investors Needn¡¯t Fear a Double-Dip Recession

2012-01-21T06:55:00.001-08:00

A new report contains some very good news for investors: Double-dip recessions are very rare.

That means that a drop back into recessionary conditions looks less and less likely even as unemployment creeps higher and has crossed the 10% threshold for the first time in a quarter century.

After reviewing U.S. economic history all the way back to the 1850s, Deutsche Bank AG (NYSE: DB) economists found that double-dip recessions are exceedingly rare: There have only been three episodes in which the economy has fallen back into recession within a year of a previous recession ending. And that��s out of 33 recessions that have taken place since 1854.

Indeed, when these double-dip downturns do occur, they happen under circumstances quite different from today's situation.

Two of the three double-dips happened in the years prior to World War II �C in 1913, and again in 1920. The more relevant example was the double-dip recession of the early 1980s, which was driven by the fight against double-digit inflation rates.

U.S. President Jimmy Carter imposed credit controls in March 1980, which resulted in a sharp but short-lived recession before the economy expanded again for 12 months. Then U.S. Federal Reserve Chairman Paul A. Volker hiked short-term interest rates to 20% in the summer of 1981, as he pushed the economy back into recession but dealt a death blow to inflation.

With deflation just as likely as inflation at the moment, a repeat of the 1980s just isn't in the cards, as the Fed is set to keep rates at very low levels until the end of 2010.
Tom McClellan of the McClellan Market Report has some more potentially good news. As you can see in the chart above, the level of employment tends to follow stocks on a 12-month lag. It's not a perfect match: The red numbers show the actual lags of important turning points over the last forty ! years. B ut the correlation is strong enough to provide one more piece of evidence that the "turn" in employment is perhaps four months or so in the future.

So while the public will continue to be preoccupied by a still rising unemployment rate and political chatter over the perceived failure of the Obama administration's stimulus package – the market will continue to anticipate the improvement just over the horizon.

One final note: The economists at ISI Group note that outside of the United States, employment already started to grow in 11 economies. These include Japan, Canada, Singapore, Brazil, Russia, Sweden, and Taiwan. Stocks have sniffed out the fact that a global employment turn is already happening. The U.S. economy just isn't fully participating yet, but it will.

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Gold Stock Pressure, With Or Without Gold Prices (EGO, RGLD, IAG, GSS, GLD, GDX, ABX)

2012-01-20T22:05:00.001-08:00

We covered last weekend about how the $1,000.00 gold was at an inflection point and looking as though it was either poised to pop to $1,200.00 on the speculation of fear or that it was likely to fall back towards $800.00 as reality prevails as the world didn’t flatten and proceed to roll off the edge into the abyss.? What is interesting is that even as gold was hitting highs, many of the miners, particularly the speculative miners, were well under highs and have seen even worse pressure this week on gold’s pullback.

When Eldorado Gold Corporation (AMEX:EGO) withdrew its planned offering of common stock on Tuesday, its shares and those of competitor miners fell sharply. Eldorado opened the day at $9.34 and closed it at $8.19, off more than 12%. Royal Gold Corporation (NASDAQ:RGLD) fell from $44.85 to $41.22, down about 8%; IAMGold dropped from $8.74 to close at $7.66, down more than 12%; and Gold Star Resources, Ltd. (NYSE:GSS) dropped from $1.40 to $1.16, off about 17%.
Two gold ETFs, SPDR Gold Shares (NYSE:GLD) and Market Vectors Gold Miners (NYSE:GDX) both fell sharply as well, but both have recovered some as of yesterday’s close. Gold Shares invests in bullion and Gold Miners invests in mining stocks. Gold Shares is down about 5% as of yesterday’s close, while Gold Miners is down about 9%.
Miners, especially the smaller ones like Eldorado and Royal Gold, will continue to struggle with liquidity as the economy remains sour. Mining ETFs like Market Vectors Gold Miners will follow along because the large gold miners like Barrick Gold Corporation (NYSE:ABX) included in the fund are also struggling to lower costs and increase production.
Gold bullion investors, like SPDR Gold Shares, will follow the economic news. Bullion fell sharply yesterday to close just above $940/ounce, down from about $945/ounce the previous day. European and Asian markets are lower today, so gold has recovered a bit to about $958/ounce. When inflat! ion fear s rise, bullion rises sharply, as it did last week, when it closed above $1,000/ounce.
Paul Ausick
February 27, 2009
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Top Analyst Upgrades & Downgrades (ARO, AAPL, CIEN, CSCO, EMC, FNSR, JASO, GOOG, MSFT, NTAP, TLAB, YHOO)

2012-01-20T13:30:00.001-08:00

Tech seems to be dominating the analyst calls this Thursday based on new coverage of the sector at Wells Fargo.? There were many other calls that did not make the cut as a result as a “top analyst call.”? These are some of this Thursday’s top analyst upgrades, downgrades, and initiations seen from Wall Street research calls:
Aeropostale, Inc. (NYSE: ARO) Cut to Neutral at Stern Agee.
Apple Inc. (NASDAQ: AAPL) Started as Outperform at Wells Fargo.
Ciena Corp. (NASDAQ: CIEN) Cut to Hold at Auriga.
Cisco Systems, Inc. (NASDAQ: CSCO) Cut to Perform at Oppenheimer.
EMC Corp. (NYSE: EMC) Started as Market Perform at Wells Fargo.
Finisar Corp. (NASDAQ: FNSR) Cut to Hold at Auriga.
JA Solar Holdings Co. (NASDAQ: JASO) Raised to Buy at Auriga.
Google Inc. (NASDAQ: GOOG) Started as Outperform at Wells Fargo.
Microsoft Corporation (NASDAQ: MSFT) Started as Market Perform at Wells Fargo.
NetApp, Inc. (NASDAQ: NTAP) Started as Outperform at Wells Fargo; Cut to Neutral at Merriman Curhan Ford..
Tellabs Inc. (NASDAQ: TLAB) Maintained Buy, but Target Cut to $9 at Auriga.
Yahoo! INc. (NASDAQ: YHOO) Started as Market Perform at Wells Fargo.
You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.
JON C. OGG
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3 Principles of Personal Finance We Can Learn from The Greatest Generation

2012-01-20T04:29:00.001-08:00

Fact: Our grandparents and great-grandparents were better at saving money than we are.
Photo Credits
While there are many reasons for their success, there are three core principles of personal finance that we can learn from them. These principles are tried and true, and something that many of us have lost sight of.
Economic trends may come and go, but saving money never goes out of style. Let��s take a moment to rediscover three principles of personal finance that have withstood the test of time:
Ingenuity
Our grandparents were shrewd and they were frugal. While it��s easy to joke about this generation being full of ��cheapskates,�� ingenuity goes beyond just being resourceful: It is at the crossroads of creativity and dexterity.
How we can apply this to our lives today:
-If something breaks, try to fix it yourself.
-If a newer and ��better�� version of something comes out, wait to buy it until your current model no longer works.
-Put away the checkbook and try to solve problems creatively.
-Teach yourself skills that expand your practical knowledge.
Accountability
The Greatest Generation took control of their finances because they were accountable for every penny they spent. The popularity of credit cards has diminished the need to keep track of every expense, as it has created a ��swipe and reconcile later�� attitude. Our grandparents were attached to their money because spending it was a tangible experience.
How we can apply this to our lives today:
-Use real-time tracking to keep your budget under control.
-Analyze your spending on a daily basis. Looking at credit card statements that are 30 to 45 days old will not help you take control of your finances today.
-Only ask or accept credit when it is truly necessary; learn to live within your means.
Humility
Because The Greatest Generation lived through The Great Depression, they learned to ! be truly grateful for everything that they had. Experiencing disastrous financial times made them painfully aware of the potential for future hardships. Our grandparents combined their grateful attitude with an unwavering work ethic and then used those skills to gain financial security and independence.
How we can apply this to our lives today:
-Drop the self-entitlement attitude: You only deserve what you have worked hard for.
-Be thankful for what you already have.
-Carefully analyze your ��wants�� versus ��needs��.
-Combine a grateful attitude with an unwavering work ethic.
-Pay attention to your emotional attachment to spending money. Ask yourself, ��Will purchasing this item really make me happy?��
While our grandparents and great-grandparents may have been better at saving money than most of us, it��s not too late to follow in their footsteps. With a little foresight and consciousness, we can begin down the path towards financial wisdom.
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Fewer And Fewer Make Timely Mortgage Payments

2012-01-19T14:57:00.001-08:00

It makes sense. Unemployment for February could hit 8%. It could move closer to 9% by the end of April. That does not include people who have been out of work for extended periods and are not looking now.
Along with jobs cuts, fewer people are getting raises and many are taking pay cuts.
The number of people who cannot pay their mortgages is spiking up.
According tothe FT, “The percentage of loans that were in foreclosure or at least one payment past due rose to 11.93 per cent in the fourth quarter, the highest since the MBA began keeping records in 1972 and a jump of almost 2 percentage points since the third quarter.”
Despite the Administration’s new mortgage rescue plan, the figure?is likely to go higher. More people will lose jobs. More homeowners will find that their home loans are much larger than the equity of their houses. As home prices fall, that ratio will get even worse. A home is simply becoming an awful long-term investment.
No matter how much assistance goes into the system to help “worthy” people keep their houses, the number of people who cannot wait to turn in the keys or have lost work will continue to rise.
Douglas A. McIntyre
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Occupy Wall Street Goes to Washington: Occupy Congress Set for Jan. 17

2012-01-19T10:29:00.001-08:00

Protesters affiliated with the Occupy Wall Street movement have filed paperwork with the National Park Service seeking permission to demonstrate on the National Mall in Washington, D.C., on January 17 in an event being billed as “Occupy Congress.”
The application was filed by Tuesday by “Occupy Congress and Occupy DC,” listing McPherson Square as the group’s address and “Peaceful 1st Amendment demonstrations, including holding signs and group speaking” as its purpose.
About 50 Occupy D.C. protesters took to Capitol Hill on December 6 to protest in what they called “Take Back the Capitol.” Occupy D.C. organizers are hoping for at least 2,000 marchers for the “Occupy Congress” event next month.
In its application, the group requests permission to demonstrate from 7 a.m. until 11 p.m. on the day Tuesday following a national holiday — Martin Luther King, Jr. Day. However, whether or not the group’s permit is approved may be irrelevant. Protesters living in the McPherson Square encampment since early October have never had a permit to stay, and have yet to be evicted as has been the case with so many other encampments around the country, including Occupy Wall St. in Manhattan’s Zuccotti Park.
��Submitted. .?.?. approved or not we��re coming. This will just make it easier to provide some basic necessities and structure to this event,�� reads an update posted to the ��Occupy Congress January 17, 2012�� Facebook page.
To contact the reporter on this story: Emily Knapp at staff.writers@wallstcheatsheet.com
To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com
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Frightened? Suddenly, The Bears Gain Some Traction, But Losses Just Over 1%

2012-01-19T06:02:00.001-08:00

Remember those spinning newspapers in ’60s-era television shows that filled viewers in on key pieces of plot detail? That hokey device would be spelling out ”Wall Street Suffers Its Worst Loss In A Month” in 24-point type if it were being employed today.
And even though it’s true – banks stocks came undone and bears took advantage of one of their rare opportunities to play offense – the losses still didn’t amount to a full percentage point. The S&P 500 (GSPC)retreated 12 points on the day,nicking just overone percent out of the blue-chip indicator. So even on Wall Street’s worst day in a month – even with stocks up a ripe 50% off the March lows – there’sonly so much the bears can do.
Financials took a bruising, with MBIA (MBI)helping set the pace on the declines after JPMorgan lowered its rating on thebond insurer, which tumbled 14% in the session. American International Group (AIG), which moved up in four consecutive trading sessions coming into Tuesday’s action, declined, giving up 14%; still the stock hasdoubled over the course of the last month.
Meanwhile, the banking sector suffered broad-based declines after Dick Bove, the influential banking analyst at Rochdale Securities, said that the gains the sector has enjoyed have come thanks to improving psychology, not fundamentals. The prospect of what the Federal Reserve is going to do on Wednesday at the conclusion of its latest policy meeting – a meeting that is not expected to result in a change in monetary policy – also weighed on the stocks.
Bank of America (BAC)lost 4% on the day, Citigroup (C)fell 5%, and Wells Fargo (WFC)dropped 5%, as well.
In all, though, what shaped up as a disappointing session – one that featuredan episode ofWall Street’s rare willingness to surrender on back-to-back trading sessions – pr! oved to be something short of keenly frightening. Certainly, it’s difficult to make the argument that stocks are prepared toenter a period of pronounced consolidation, despite the oversold conditions in the market.
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Media Digest (1/13/2012) Reuters, WSJ, NYT, FT, Bloomberg

2012-01-19T01:39:00.001-08:00

TPG may invest $1 billion in troubled Olympus. (Reuters)
President Obama to ask for a $1.2 trillion increase in the national debt ceiling. (Reuters)
China's foreign currency reserves drop to $3.18 trillion, a sign that exports have slowed enough to change monetary policy. (Reuters)
Novartis?(NYSE: NVS) will cut 2,000 jobs in the U.S. (Reuters)
Apple (NASDAQ: AAPL) stops iPhone sales in China when crowds become unruly. (Reuters)
Several buyers, including?Delta (NYSE: DAL) and US Air (NYSE: LCC), may approach American Airlines parent AMR?about a buyout. (Reuters)
Yields fall at Italy and Spain debt sales. (Reuters)
Research In Motion (NASDAQ: RIMM) may have retained Goldman Sachs (NYSE: GS) to look at strategic alternatives. (Reuters)
The Fed may force Bank of America (NYSE: BAC) to leave a number of businesses and some areas of the country. (WSJ)
Goldman Sachs approaches federal officials about buying the troubled bond portfolio of AIG (NYSE: AIG). (WSJ)
A strategic review of PepsiCo (NYSE: PEP) by its board likely will not prompt the firing of its CEO, Indra Nooyi. (WSJ)
China sets new rules to make it easier for foreign investors to put capital into the country. (WSJ)
A Wynn Resorts (NASDAQ: WYNN) shareholder files suit about a possible donation the company made to a university in Macau. (WSJ)
Low retail sales raise concerns about the pace of the recovery. (WSJ)
An agency of the U.S. government pressures AMR to keep its pension plans intact. (WSJ)
Eurozone factory output drops in November, based on year-over-year numbers. (WSJ)
The government probes potentially illegal financial activities at Diamond Foods (NASDAQ: DMND). (WSJ)
Several lenders to Sears Holdings' (NASDAQ: SHLD)?suppliers?want faster payments?to those suppliers. (WSJ)
BMW and Mercedes increase production in the U.S. (WSJ)
Peugeot?would like to form a broad alliance with another car company. (WSJ)
International bond in! vestors largely believe a deal on Greek debt will be done, but not on the terms Greece expects. (WSJ)
China may invest some of its foreign reserves in stocks to get better returns. (WSJ)
Corn prices fall on new, higher estimates of U.S. production. (WSJ)
Members of the 2006 Fed did not anticipate the housing collapse. (NYT)
CVS Caremark (NYSE: CVS) pays $5 million for charging too much for some drugs. (NYT)
Target (NYSE: TGT) will set up small Apple stores inside its retail locations. (NYT)
The creditworthiness of U.S. companies fell over the past 30 years, according to S&P. (FT)
Google (NASDAQ: GOOG) and LG discuss a new TV project. (Bloomberg)
Eastman Kodak (NYSE: EK) approaches Citigroup (NYSE: C) for capital it might use as part of a bankruptcy. (Bloomberg)
Douglas A. McIntyre
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Survey: Some delaying or holding off on buying an iPad

2012-01-17T14:03:00.001-08:00

Here are your Apple rumors and AAPL stock news items for Wednesday:
Kindle Fire Holds Back Potential iPad Customers: A new survey conducted by RBC Capital Markets and ChangeWave found that Amazon‘s (NASDAQ:AMZN) new Kindle Fire tablet already is starting to impact Apple (NASDAQ:AAPL) iPad sales. According to an Apple Insider report detailing the survey results, 26% of the 2,600 respondents said that the Kindle Fire has caused them to delay purchasing the iPad. Five percent of respondents said they already had pre-ordered Amazon’s tablet or planned to purchase it soon. A similar survey conducted prior to the iPad 2′s release last March found that just 4% of respondents had already pre-ordered the device or planned to buy it in the near future.
Adobe No Longer Making Flash Mobile: In a way, Apple won its war against Adobe (NASDAQ:ADBE) on Wednesday. The media-editing app maker announced via its official blog that it is ceasing development of its Flash media platform for mobile devices like those powered by Google‘s (NASDAQ:GOOG) Android operating system. The company will instead “more aggressively” develop resources for HTML5. Flash vice president Danny Winokur wrote that the universal support of the new web standard, which allows web app designers to build video and interactive content directly into a website, is the reason for the change. Apple famously barred Flash from working on its iOS devices like iPhone and iPad, pushing HTML5 instead.
Apple is World’s N0. 4 Green Electronics Manufacturer: Greenpeace released its 2011 Guide to Greener Electronics and placed Apple as the No. 4 cleanest electronics maker on the planet, according to a Wednesday report at Fortune. This is a huge step up for Apple which, back in 2007, was second only to Panason! ic (NYSE:PC) as the dirtiest electronics manufacturer. Apple received accolades for its recycling programs and for meeting or exceeding Energy Star requirements.
As of this writing, Anthony John Agnello did not own a position in any of the aforementioned stocks. Follow him on Twitter at?@ajohnagnello?and?become a fan of?InvestorPlace on Facebook. For previous Apple rumors and news, click here.
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The Home Depot, Inc made New 52 Week High Price - NYSE:HD

2012-01-17T09:36:00.001-08:00

The Home Depot, Inc. (NYSE:HD) achieved its new 52 week high price of $38.75 where it was opened at $37.65 down -0.23 points or -0.60% by closing at $37.84. HD transacted shares during the day were over 11.80 million shares however it has an average volume of 10.91 million shares.
HD has a market capitalization $59.19 billion and an enterprise value at $67.78 billion. Trailing twelve months price to sales ratio of the stock was 0.87 while price to book ratio in most recent quarter was 3.28. In profitability ratios, net profit margin in past twelve months appeared at 5.23% whereas operating profit margin for the same period at 9.06%.
The company made a return on asset of 9.19% in past twelve months and return on equity of 19.09% for similar period. In the period of trailing 12 months it generated revenue amounted to $68.78 billion gaining $42.79 revenue per share. Its year over year, quarterly growth of revenue was 4.20% holding 14.30% quarterly earnings growth.
According to preceding quarter balance sheet results, the company had $2.55 billion cash in hand making cash per share at 1.63. The total of $10.78 billion debt was there putting a total debt to equity ratio 59.10. Moreover its current ratio according to same quarter results was 1.45 and book value per share was 11.62.
Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 3.36% where the stock current price exhibited up beat from its 50 day moving average price $35.59 and remained above from its 200 Day Moving Average price $34.92.
HD holds 1.56 billion outstanding shares with 1.55 billion floating shares where insider possessed 0.11% and institutions kept 71.30%.
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Ford's Latest Bold Move

2012-01-17T05:13:00.001-08:00

From the perspective of last week, there was absolutely nothing wrong with the 2012 version of Ford's (NYSE: F  ) popular Fusion sedan. The midsized mainstay had seen its sales grow solidly over the past few years -- largely at the expense of the longtime segment mainstays, the Toyota (NYSE: TM  ) Camry and Honda (NYSE: HMC  ) Accord.
In fact, despite being a few years old, the Fusion had its best sales year ever in 2011, ranking third in U.S. car sales behind the Camry and Nissan's Altima.
But that was last week.
On Monday, Ford took the wraps off its new Fusion -- and as was widely rumored, it's visually stunning, a stylistic home run reminiscent of sleek ultra-luxury Aston Martin coupes. But it's not just a pretty face: Ford's new Fusion comes with a big surprise -- one that might turn out to be a game-changer.
A welcome failure to play it safe
Automakers don't typically reinvent their best-selling vehicles from generation to generation. Look at the last few Camrys and you'll see a series of minor styling tweaks and incremental improvements over time -- but the current car isn't that different from the one Toyota was selling a decade ago.
The new Fusion, though, expands on the best features of the current model while breaking with it in several ways. The car's look is striking and dramatic, its lines a departure from recent Ford practice that other models are expected to follow in coming years -- and one that will be seen around the world, as this car, like the Fiesta and Focus, will be a global model. The hybrid version is expected to get 47 mpg -- a solid improvement on the current Fusion Hybrid's 41, and high enough to beat the latest hybrid entries from Toyota, Hyundai, and Kia.
! And in a surprise, there's a full-blown plug-in hybrid version, dubbed the Fusion Energi, set to debut later this year. Ford says that it expects the Fusion Energi's "miles per gallon equivalent," an EPA standard rating used for cars that can run entirely on electricity, to exceed those of General Motors' (NYSE: GM  ) Chevy Volt and the plug-in version of the Toyota Prius.
Ford has so far been coy about details like the Fusion Energi's pricing and range, not surprising for a model that won't hit dealers for almost a year, but an aggressively priced plug-in entry in this class could end up being quite popular.
But while we won't know for sure until on-road reviews (and initial sales numbers) start to roll in, I think the new Fusion is likely to be quite popular no matter what.
A bold step forward in a conservative segment
With the new Fusion (and its overseas twin, called the Mondeo), Ford looks set to gain more sales ground on the Camry and Accord, both of which suddenly look a little stale in comparison. While the Accord is in fact somewhat stale -- Honda, which is scrambling to perk up its product line, has hinted that a new version will arrive late this year -- the latest edition of Toyota's Camry is only a few months old.
But that doesn't mean that gains will be easy for Ford to find. Despite its incremental, evolutionary design, the new Camry is selling quite well so far -- and strong entries in the segment from Hyundai and Kia, a renewed effort from Volkswagen, and GM's refreshed Chevy Malibu will add to the competitive pressures on the Fusion.
But as last year's two new Fords -- the Explorer and Focus -- have shown, the Blue Oval's recent products can compete with just about anyone on quality, value, and fuel efficiency. Add in class-leading "infotainment" features and bold styling, and Ford may have another hit product on its hands.
Ford's dividend will be bac! k in a f ew months, but you don't have to wait to put the power of reinvested dividends to work in your portfolio. In a special new report, Motley Fool analysts identify "11 Rock-Solid Dividend Stocks," all great additions to a long-term investor's portfolio. This new report is completely free for Fool readers -- get instant access.
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Economists Weigh In on Markets and Election

2012-01-17T00:45:00.001-08:00

Pundits? Who needs them? If you’re wondering who will be taking the oath of office for the presidency next January, economists say you can get a pretty good idea, not by following the politics so much as by following the markets. Not to mention that you can also sort of predict market behavior by what is going on in politics. Sound confusing? Read on.

David Kelly (left), chief market strategist for J.P. Morgan Funds, pointed out that the election this November will be about much more than which party ends up occupying the Oval Office. In a statement, he said it "will likely determine the pace of deficit reduction over the next few years with implications for both economic growth, in general, and the Treasury market in particular." He added, "In addition, who gets elected president will likely impact the mix of tax increases and spending cuts employed to achieve this deficit reduction."

But that’s not all. Watching politics in the coming week, he said, could give investors a good idea of what might be in store for markets, as well, since the outcome of the Iowa caucuses and early primaries could indicate which way the wind might blow for Republicans.

Kelly said, "A drawn-out fight on the Republican side might require the candidates to placate the more extreme elements of the party, whereas an early putative nominee could put some pressure on Republican members to compromise in a year where the public has little patience left for intransigence." He continued, "This is particularly important given the 60-day deadline to come up with a year-long extension of the payroll tax cut and extended unemployment benefits."

While Kelly expected the first few indicators of 2012 to be positive–anticipating modest gains, he said, for both the ISM Manufacturing Index and the Non-Manufacturing Index, with light vehicle sales also showing a general up trend, the big numbers to watch are the unemployment figures and the jobs report. The former could fall back after last week’s numbers, which were higher than expected. The latter is expected to show solid gains, based on demand, confidence and labor market indicators.

Still, if unemployment numbers are revised upward after last month’s surprising drop, and should last month’s numbers also be revised upward, that could tell a different story. And, of course, there are China and the eurozone crisis to consider–both weighing in on our economy as well.

So is the dog wagging the tail or the tail wagging the dog? Sam Stovall, chief equity strategist

at S&P Capital IQ, said that if 2012 turns out to be a normal presidential election year, the S&P will record gains in seven out of 12 months, and in all four quarters, but with substandard quarterly and full-year rises. The first 10 months of the year would reflect unsettled markets as investors stress over the election results, and then markets would post gains for the last two months once things have been decided.

But January could be the decider of how things will go for the rest of the year. Said Stovall in a statement, "If there’s one thing presidential election years are good at, however, it’s predictability. The January Barometer was correct eight of eight times in forecasting positive calendar-year performances, while the frequency with which the S&P 500 has risen during the presidential election year has been comforting at 75%. In addition, the market has been successful more than 85% of the time in predicting whether the party in power will remain in power or be replaced." If it goes up, it might mean good news for Obama.

He concluded, "Therefore, whatever the S&P 500 doesn’t provide in absolute return this year, it will likely make up for in predictability."

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Why the Dollar's Rebound Will Be Short-Lived

2012-01-16T20:15:00.001-08:00

Decorating your home for the holidays is a tradition that sets the stage for a festive feel, indoors and out. Left unmanaged, holiday decor can also eat into your holiday budget before you��ve even started to shop for gifts. (A recent LivingSocial deal for a holiday light installation package was recently offered for a whopping $399��marked down from the standard price of $799!) Here are some scrooge-free decorating ideas that will deliver a warm and festive holiday feel, while going on easy on your budget and the environment.
Add outdoor oomph
Even though the effect is beautiful, showcasing holiday lights outside your home can be a pricey endeavor. If you choose to hang lights, make sure to use the LED version. Not only are they durable (the string won��t go out when bulb burns), they are more energy-efficient (using about 0.04 watts per bulb) when compared to traditional incandescent lights, which use as much as ten watts per bulb. Seek out local recycling programs at hardware stores and grocery stores, like Whole Foods, that will recycle your old lights for you. You can even find savings through sites like HolidayLEDs.com, which offers a 25% off coupon to shoppers who mail in old lights for recycling. Home Depot also has a limited-time recycling program early in the holiday season that rewards customers with a store coupon.
Planning your outdoor light display in advance can help maximize the visual impact, while minimizing the impact on your budget. Instead of decorating every tree, shrub and structure, you can conserve money and energy by featuring one focal point with LED icicle lights and then support the glow with a strand or two of LED lights as an accent. Plan non-lighted d��cor in tandem, so that your lights showcase all of your decorations, but aren��t left to do all the heavy lifting. Set an automatic timer so your lights will power off when the neighborhood has gone to bed. The reasoning behind this is to protect the safety of your home, maximi! ze cost- efficiency, and to save energy.
Bob and Cortney Novogratz, from HGTV��s Home by Novogratz, suggest creating your own outdoor display with items you find around the house. Spray metal planters and cans with green paint and fill them with branches that you have sprayed red, silver or gold. Garden gnomes can easily be transformed into elves with silver spray, too. Buy giant ornament balls and hang them on a small outdoor tree for a holiday statement that does not require illumination.
Bring warmth indoors
The Novogratz duo says that creating holiday magic indoors can also be easily executed with just a can of gold and silver spray paint.? Pick a single item, like pinecones, fruits, rocks, or leaves, spray each, and fill different glass containers with them. Display the containers around the house and on mantels. They also suggest shredding sheet music (either original or printed from the web) into paper ribbons and adding to hurricane glasses or clear vases that you have sprayed with shimmery paint for a classic holiday touch.
Becky Mallar, innkeeper and decorator of The 1785 Inn & Restaurant in New Hampshire, says the key to a lush holiday mantle is creating depth. Start with lots of greens (preferably ones that you��ve gathered from outside or from the trimmings of your tree). Build three layers of greens and secure them to the mantle. Place a mirror that you have adorned with an inexpensive accent, like glittery holiday wired ribbon, above the mantel to add fullness. Adorn with energy-efficient flameless LED candles for a warm glow and sprinkle in creative adornments like pine cones, ornament balls, candies and nuts. If you prefer to use ��real�� candles, choose those made of soy, beeswax or a vegetable base.
Interior designer Christine Schwalm recommends using your wrapped holiday gifts to serve as double-duty d��cor by placing them in a basket that will provide a pop of holiday color. Stick to solid color and chic stripes so you can use the leftover ! paper fo r occasions other than the holidays, and try to find paper made of recycled materials. Cut out images from old holiday cards for hand-made gift tags.
Tablescapes
If you��re hosting, you can also create your own tablescape using resources from the outdoors��and your produce section. Gina Samarotto of Samarotto Design Group?suggests using artichokes, apples, pears and pomegranates tucked into a few evergreen branches and displayed on a cake plate. Not only is it a visually appealing, it’s an eco-friendly way to spruce up your table and you can eat later! Schwalm suggests placing a small wreath flat on a cake stand, placing a large pillar candle in the center and dressing it up with ribbons for an instant centerpiece.
If kids are attending your holiday gathering, the Novogratz team recommends tapping into their creative energy with an interactive tablescape. Ask your butcher for a large piece of butcher paper that will cover the kid’s table for an instant giant coloring sheet. Fill containers with holiday colored crayons and sparkly markers so they can design their own holiday scene. For inspiration they can draw from, fill little present bags with pictures of holiday items and holiday words.
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Nordstrom Earnings & Outlook: When Bad Is Good Enough (JWN)

2012-01-16T15:49:00.003-08:00

Nordstrom Inc. (NYSE: JWN) reported terrible earnings.? Interestingly enough, the report from the high-end retailer? is looking “good enough” when you consider the state of many retailers.

Nordstrom earned $0.31 EPS, a drop of nearly two-thirds on a net earnings basis.? It revenue were down 8.5% to $2.30 billion.? First Call consensus estimates were $0.30 EPS and $2.28 billion in revenue.? Same store sales for the quarter were off by 15.8%.? Imagine the day that we say that is good news.
The guidance for 2009 is certainly not great.? But it is within the range of estimates and may actually be looking better than some peers.? Same-store Sales are expected to be down 10% to 15%, and the company is targeting $1.10 to $1.40 EPS? 2009 based upon 219 million shares.? Other metrics seen for the year are a Gross Profit drop of 150 to 250 basis points, a cut in SGA of $100 to $175 million for 40 to 70 basis points, a finance increase of $55 to $60 million with an increase in interest expenses of $20 to $25 million increase; and it sees an effective tax rate of 39.4% to 39.7%.
What is interesting is that the Thomson Reuters (First Call) estimates for fiscal January 2010 are $1.22 EPS).? The $1.10 to $1.40 is right in line there.? Just keep in mind that the same consensus estimate was $1.54 less than 90 days ago.
Nordstrom closed down almost 5% at $11.33 today, but shares are up 12% at $12.70 in the after-hours session.
Jon C. Ogg
February 23, 2009
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How Much Should I Tip? Your Money Questions Answered

2012-01-16T15:49:00.001-08:00

Should you rent or buy a home? How much should I tip the delivery person? Will money make me happy?
Ask ten different people, and chances are you��ll get ten different answers. Those are the type of questions where everyone seems to have their own opinion or philosophy.? That��s exactly what makes them a great fit for Mint.com��s new feature, Mint Answers.
We launched Mint Answers a few weeks ago to give consumers a platform to voice their personal finance and investing questions. Since then, hundreds of you have asked �C and many more have chimed in with responses. (At Mint Answers, your questions are answered by experts, as well as by other community members like you.)
Below are three of the most popular questions for the past week. Find and ask (or answer) more at answers.mint.com.
Rent or buy a home?
Every day I read blogs about this sort of thing and there are pros and cons of both. With the housing market where it is today, which do you advocate?
1. There are aspects of this question that go well beyond the financial, but purely in terms of money, you can’t beat the New York Times’s buy vs rent calculator. In my market, it says rent. Yours may vary.
2. Oh man, I may be the only financial blogger here that wants to go BACK to renting…Financial costs aside, it really messes with your freedom. When you own a place you can’t just pick up and move whenever you feel like it – or if worst case you lose your job.
If you’re totally cool with settling down in one spot for 4+ years, then disregard this comment.? But if you’re a roamer/military kid, then really THINK about this before you sign away…there’s no shame in renting at all ? And you can still build up your net worth in plenty of other ways too.
3. [You're] not the only one ! We are currently selling our house so that we can rent. We consider owing anyone money a burden that we do not wish to partake in anymore.
We are not making this decision without a plan though. Starting in 2011 our 4-5 year plan to save money to buy the house we want to live in will begin. When I say buy I mean the 100% down plan.
Renting for 5 years is not the worse thing one could do, especially when the reward is a paid for house. When your house is paid for there is not a recession anywhere that will render you homeless. (Unless you don’t pay your taxes that is.)
My answer is: Rent until the purchase of a home, whether with debt or not, is a blessing. (If you have an emergency fund with at least 6 months of expenses set aside, have an additional 20% to avoid PMI ,and buy well within your means it will be more of a blessing than a burden. It’s also not a bad idea to save yourself a lot of money by getting a 15 year mortgage instead of a
More answers to this question>>
What do you normally tip for food delivery?
We ordered Indian food the other night and the bill came out to $35…my instinct said to tip $5, but then I wondered if take out is different than, say, sit-down service.? Twitter friends came in with $3-$8 — I ended up tipping $6. Am I crazy?
1. I usually tip 20% no matter what but I used to work in a restaurant. ?I haven’t typically used a flat rate to tip.
2. For delivery, I usually tip 10% to 15%. If it’s a small order, I’ll tip a higher percentage because the delivery person still had to make a trip out. I tip towards 20% if the food is still warm when it gets to my apartment.
3. I tip $3, standard, for anything under $20, and $4 for anything over $20, with an extra $1 for particularly fast service or for?inclement weather.
More answers to this question>>
Will money make me happy?
1. If money ! has the ability to truly make people happy, how come there are so many miserable rich people?
It’s a question that requires more clarification. Money is often attributed as causing happiness, but only because it allows one to afford either necessities or luxuries of life. You would be hard pressed to find someone happy with bricks of gold if they were stuck on an island like Tom Hanks in Castaway.
I met a man once who was a multi-millionaire while I was working for a top US Bank. He was trying to leverage some of his real estate for more real estate. This man was 80 years old, and even though he had more money than he knew what do with, he was still trying to build wealth through deals as he did in his youth. He explained to me that even though he was well-off now, he was only really happy when he was making deals, working hard, and risking for a greater prize. Not exactly the picture of contentment.
In the end, you can’t take it with you. You won’t be lying on your death-bed thinking about stock quotes and the previous year’s rate of return. Money is a great tool. But it is a fleeting tool that more people have made themselves unhappy over than have become rich.
2. If you have no money and are struggling with every day needs, money will make you much happier. If you have some money and get more money, the money will probably make you a little happier, but not nearly by the margin that it did before. If you are a billionaire and you just got another billion, you might be happier because you are now another billion ahead of other billionaires, but I’d venture to say that happiness is fleeting. But what do I know. I have no billions.
More answers to this question>>
Do you have a money question that you feel has no black-or-white answer? Go to Mint Answers and ask away! While you��re there, feel free to answer questions ! from oth er community members. Come back often, as we introduce new enhancements to this feature.

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Don't Get Too Worked Up Over Microchip Technology's Earnings

2012-01-16T11:28:00.001-08:00

It takes money to make money. Most investors know that, but with business media so focused on the ��how much,�� very few investors bother to ask, "How fast?"
When judging a company's prospects, how quickly it turns cash outflows into cash inflows can be just as important as how much profit it��s booking in the accounting fantasy world we call "earnings." This is one of the first metrics I check when I'm hunting for the market's best stocks. Today, we'll see how it applies to Microchip Technology (Nasdaq: MCHP  ) .
Let's break this down
In this series, we measure how swiftly a company turns cash into goods or services and back into cash. We'll use a quick, relatively foolproof tool known as the cash conversion cycle, or CCC for short.
Why does the CCC matter? The less time it takes a firm to convert outgoing cash into incoming cash, the more powerful and flexible its profit engine is. The less money tied up in inventory and accounts receivable, the more available to grow the company, pay investors, or both.
To calculate the cash conversion cycle, add days inventory outstanding to days sales outstanding, then subtract days payable outstanding. Like golf, the lower your score here, the better. The CCC figure for Microchip Technology for the trailing 12 months is 119.5.
For younger, fast-growth companies, the CCC can give you valuable insight into the sustainability of that growth. A company that��s taking longer to make cash may need to tap financing to keep its momentum. For older, mature companies, the CCC can tell you how well the company is managed. Firms that begin to lose control of the CCC may be losing their clout with their suppliers (who might be demanding stricter payment terms) and customers (who might be demanding more generous terms). This can sometimes be an important signal of future distress -- one most investors are likely to miss.
In this series, I'm most interested in compar! ing a co mpany's CCC to its prior performance. Here's where I believe all investors need to become trend-watchers. Sure, there may be legitimate reasons for an increase in the CCC, but all things being equal, I want to see this number stay steady or move downward over time.

Source: S&P Capital IQ. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.
Because of the seasonality in some businesses, the CCC for the TTM period may not be strictly comparable to the fiscal-year periods shown in the chart. Even the steadiest-looking businesses on an annual basis will experience some quarterly fluctuations in the CCC. To get an understanding of the usual ebb and flow at Microchip Technology, consult the quarterly-period chart below.

Source: S&P Capital IQ. Dollar amounts in millions. FQ = fiscal quarter.
On a 12-month basis, the trend at Microchip Technology looks less than great. At 119.5 days, it is 2.2 days worse than the five-year average of 117.4 days. The biggest contributor to that degradation was DIO, which worsened 7.3 days when compared to the five-year average.
Considering the numbers on a quarterly basis, the CCC trend at Microchip Technology looks OK. At 138.7 days, it is 29.9 days worse than the average of the past eight quarters. Investors will want to keep an eye on this for the future to make sure it doesn't stray too far in the wrong direction. With both 12-month and quarterly CCC running worse than average, Microchip Technology gets low marks in this cash-conversion checkup.
Though the CCC can take a little work to calculate, it��s definitely worth watching every quarter. You��ll be better informed about potential problems, and you'll improve your o! dds of f inding the underappreciated home run stocks that provide the market's best returns.

Add Microchip Technology to My Watchlist.
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Puyallup Locksmith

2012-01-16T06:59:00.001-08:00

The locks on your vehicle are made to prevent others from gaining access to your automobile. Unfortunately, if you happen to lock yourself out, these complex devices may prevent you from gaining entrance additionally. A qualified automotive locksmith has the knowledge and tools needed to quickly unlock your doors without causing harm to your locking mechanisms or your car.
If you feel yourself locked out of your automobile, do not try to break in. Using sharp objects to take the locks can cause costly damage to your vehicle. In these kind of cases, many insurance companies might decline claims of damage as resulting trying to gain access to your locked car. Car security systems are even more advanced than they used to be. The old coat hanger trick do not work on most modern vehicles.
Resist the urge allowing helpful strangers to help you out break into your car. Not only can that be dangerous, they can severely damage the mechanisms of your lock or other components of your vehicle.
It is never good to separate your car window to be able to retrieve your keys. Shattering glass might cause bodily injury to people and spectators standing close by. This will result in a costly window replacement additionally.
Many people feel an immediate sense of panic and fear when they realize they may have locked their keys of their vehicle. While these are natural reactions, it is extremely important to remain calm. It is a good idea to keep a locksmith’s phone number in your phone for emergency situations like this. That way, if you do lock yourself out, you can call for help at once. Most locksmiths are available round the clock and offer quick response times for emergencies.
Be sure that the locksmith you telephone is fully licensed and insured. Look at the company’s website to find out more about the training they feature their technicians. Ask your friends and relations for a recommendation. A professional locksmith comes with years of training together with practice in ! opening auto locks for a number of make and models associated with vehicles. He should have the different necessary tools and skills needed to get the job done quickly and without harm to the vehicle.
Most reputable companies will be able to give you an estimate of the amount of the service will cost prior to the technician arrives. There are some disreputable locksmith companies that can try to benefit from stranded motorists by increasing the price. If you receive a great estimate that sounds uncommon, hang up and test calling another reputable corporation. Most legitimate locksmiths will be pleased we could an estimate before the service begins.
The locksmith may require your driver’s license or proof vehicle ownership. Do not be insulted. He must ensure that he is truly party to potential criminal behavior.
If however, you get locked out of your vehicle, it is comforting to know that there are knowledgeable locksmiths available and ready to help. Doing some planning and research before you need a locksmith service is advisable to prevent unfortunate outcomes in the case of an emergency.
In an ideal environment, you would just adore to believe that every local locksmith company and program is reputable for all future emergencies. Driving home from work privately of the road isn’t where for checking out several companies, reading up on customer reviews, and making sure ALOA (Associated Locksmiths of America) membership. However, if you’re locked out and get no choice but to resort on the yellow pages or internet listings, watch out for these 5 indicators that you’re about to fall to get a locksmith scam. Locksmith scams are common from coast to coast.
Danger sign #1: No Company Name
The main dead giveaway is right after they answer your call. There are a wide variety of company names, the person answering your call may well only say, “Locksmith”, without even saying the company name. Locksmiths that are generally fraudulent use many false ! business names, addresses, and mobile that all feed into one remote call center.
Warning sign #2: Unusually Low Quotes
Suspiciously good deal quotes over the phone or in the ad are the next indicator. It’s a vintage bait and switch: a local locksmith company gives you what seems like a great quote so you admit the service good price. When the locksmith actually originates out, though, the initial quote turns out to cover the company call only. The actual labor tacks with another $50-$100 (or maybe more if the locksmith provides you on unnecessary solutions) to you’re definitely climbing bill.
If you sense any evasiveness as soon as you ask about pricing relating to the phone, trust your instincts together with try another locksmith that intend firm quotes. Written quotes are even better. You could end up paying into $300 range just have your car or truck door unlocked.
Warning sign #3: Unmarked Cars
Locksmiths who arrive in unmarked cars will be the next indicator. An unmarked car can be a major red flag because you will be dealing with a locksmith or Bob from down the road. Shady locksmith companies use remote call centers but hire local contractors who are of low quality or confident at precisely what they do, and likely uninsured. A technician that’s inexperienced and naive might cause serious damage to ones locks, doors, and home’s windows.
A local locksmith company in your neighborhood that provides its specialists with tools, uniforms, and marked cars is a much better bet, not only because you’re likely to enjoy better service, and because you can hold them along with the company accountable if everything goes wrong.
Danger sign #4: Talking Up The Amount
Locksmiths who talk up the price before even beginning to work on your lock could be the lowest of the low in the business. Ask about pricing before they begin to work on your fastener. If they’re already tacking on additional fees, you know you’re visiting be biting ! off a lo t more than you can afford to pay. Although you might be tempted to just accompany it, keep in mind that shady, inexperienced locksmiths can damage your locks and end up costing you even more money and time.
Remember: It’s not necessarily too late to dismiss this locksmith and telephone another.
Warning sign #5: Drilling Your Locks
Locksmiths who wish to drill your lock are definitely the final warning sign. While there can be cases in which your lock can not be picked and must end up drilled, they are relatively rare. Legitimate locksmiths view drilling as the last resort in acquiring a lock open. If a locksmith works on the lock for only some minutes before declaring which it needs drilling, he is lying back.
Drilling a lock means you’ll have to pay for installing a brand brand-new lock, on top with the initial charge. Get a second opinion instead could save you hundreds of dollars.
If you like to know about Puyallup Locksmith, Visit for more informaiton about Puyallup Locksmith
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Oh! Oh! Oh! Beware of These 3 Holiday Scams

2012-01-16T02:30:00.001-08:00

The holidays are high season for scam artists. That��s because consumers like you are at your most vulnerable when you’re seeking gifts for your loved ones. (It��s the most wonderful time of the year, isn��t it?)
There are two kinds of scams, as I identify in my new book Scammed: How to Save Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals:
��Lowercase�� scams, which are obvious rip-offs, like giving money to a nonexistent charity.
��Uppercase�� scams, which are perpetuated by real businesses with a product. But, they attempt to defraud you by doing things like mislabeling a product as being ��on sale�� when, in fact, it��s been marked up.
Make no mistake, it��s open season on shoppers, and both kinds of scams are all around you. One recent survey estimated that the average American household spends $1,700 on holiday shopping. Some businesses earn a bulk of their revenue between Black Monday and New Year��s Day, while others spring up around that time?(only to?disappear afterwards).
Everyone �C including the scam artists �C are out in full force. Here are three common lowercase scams to look for. Next week, I��ll take a look at the uppercase scams.
Bogus Bell Ringers (and other Holiday Come-Ons)
While a vast majority of the bell ringers that stand in front of the department store are legit, it��s still worth paying attention to them. Are they with the Salvation Army, which sponsors the Red Kettle Christmas Campaign – i.e.-? the real deal? If not, you might want to take your money elsewhere, or just make your donation online. In one story that made the rounds a few years ago, thieves stole several bell-ringer jackets and officials feared they could pose as bogus bell-ringers. Be aware before making a donation. Just because some guy is dressed in a Santa suit doesn��t make him authentic.
The Gas Can Scam
This is a favorite! confide nce scam during the holidays, because it��s relatively easy to pull off in the parking lot of a busy mall. Here��s how it works: The scammer approaches you with a gas can and a tall tale about having run out of fuel. He��s desperate to get home to his family. Could you ��lend�� him just a few dollars? I��ve personally been approach by one of these scam artists during the holidays, a time when a lot of folks are feeling charitable. You��re better off phoning mall security, which is in a far better position to help a stranded motorist �C and much less likely to fall for a fraud.
Holiday Dot-Cons
Christmas is a time for online shenanigans, according to George Delta and Jeffrey Matsuura��s book, Law of the Internet. The level of fraud encountered by U.S. online retailers is estimated to be hundreds of millions of dollars each season, they note. In one cybercrime enforcement sweep, federal authorities charged approximately 135 people with various forms of Internet fraud, affecting 89,000 victims and inflicting about $176 million in damage. A few years ago in England, more than 1,200 sites were shut down during the holidays offering everything from designer goods to counterfeit jewelry. How to avoid them? Buy from someone you know and trust, and always, always pay with a credit card.
This is by no means an exhaustive list of the perilous ��lowercase�� scams that lurk while you do your holiday shopping. But these are likely to affect consumers like you the most.
Give to a reputable charity, patronize businesses you trust and don��t believe everything a stranger tells you. I guarantee your holidays will be a lot happier if you do.
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Carrier IQ: We don't record keystrokes, but your phone does

2012-01-15T22:03:00.001-08:00

NEW YORK (CNNMoney) -- As the privacy fiasco that erupted around Carrier IQ continues smoldering, the finger pointing has intensified over the controversial software that sends data from individuals' phones back to their carriers.
This week, Carrier IQ concluded an internal investigation and released a report on its findings. The company's analysis confirmed that its software does not, by itself, record users' keystrokes. Instead, the report affirmed the Carrier IQ's prior suspicions that the recording is being triggered on the handset manufacturers' end.
Carrier IQ's investigation was a response to developer Trevor Eckhart's 17-minute YouTube video, which showed how the software secretly runs on his HTC EVO 3D Android phone and logs every key press, every text, and the full URL of every website he visits. It recorded that data even from websites that use security encryption designed to prevent that kind of tracking.
Carrier IQ's report said that what the Eckhart video displays is actually the result of separate tools put in place by the handset manufacturer.
The data recording was being done in what's known as a debug log. The log is intended to help software developers understand what happened if something goes wrong with an application. It stashes information in the phone's memory, which it remains stored until the device is powered down.
"It appears that the handset manufacturer software's debug capabilities remained 'switched on' in devices sold to consumers," Carrier IQ said in its analysis.
That debugger is supposed to be turned off unless a developer turns it on. It's also highly unusual -- and potentially insecure -- for an application to store so much data to the debug logger. A stolen phone that hasn't been turned off could be a gold mine for hackers, who would have access to literally everything a user has done or said on the device since it was last powered down.
Though Carrier IQ is installed on more than 150 million phones worldwide! , the de bug logging problem appears to only exist on HTC and Samsung smartphones. Those two manufacturers add a layer of their own software on top of the stock Google Android operating system, according to Dan Rosenberg, a consultant at Virtual Security Research who has extensively studied Carrier IQ's software.
HTC did not respond to multiple requests for comment. A Samsung spokesman confirmed to CNNMoney that Samsung was storing data in its phones' logs, but declined to say why the manufacturer had turned on that functionality or whether it is working on a fix for the problem.
Still, Carrier IQ isn't completely off the hook.
As part of its internal investigation, the company discovered that it had been accidentally sending users' text messages to carriers.
The problem was the result of a bug, which Carrier IQ says it has told the carriers how to fix. The texts were also encoded, so they weren't "human readable," the company claims.
The potential privacy breach caught the attention of the government regulators, who have launched a probe into the issue, according to The Washington Post. Senator Al Franken, D-Minn., has been asking pointed questions, and Rep Edward Markey, D-Mass., has asked the Federal Trade Commission to investigate the practices of Carrier IQ.
Company spokeswoman Mira Woods said she was "not aware of an official investigation into Carrier IQ at this time."
In an attempt to get ahead of the probes, Carrier IQ this week sought meetings with the FTC and Federal Communications Commission to answer questions and present its side of the argument.
An under-the-radar company until recently, Carrier IQ is a small firm whose software is designed to help carriers run diagnostics on their phones and network. Its tools are intended to monitor boring, basic phone functions, like signal outages, battery life and website load times.
But there's a whole lot lurking under the hood of our smartphones. Carrier IQ's sudden thrus! t into t he national spotlight illustrates that even those who build, sell and service our phones may not know everything that's hiding inside Pandora's box.
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Solar Surges: LDK, STP, JASO, CSIQ Rise Despite Deep Losses

2012-01-15T17:39:00.001-08:00

Investors seem to be calling a bottom, at least for the moment, in the fortunes of solar energy technology providers, with the stocks rising nicely despite a slew of earnings this morning that fell short of expectations.
The combination of terrible results that were, however, somewhat foreshadowed by preannouncements, plus “guidance” that in many cases agrees with the Street’s diminished expectations, and the beaten-down state of the stocks, may be acting as a relief of sorts to some investors, suggesting to them the worst about the industry is on the table and priced in the stocks.?
SunTech Power Holdings (STP), based in Wuxi, China, reported revenue of$809.8 million and a loss of 64 cents a share. The revenue result was better than the expected $776 million,?but the net loss was worse than the 26 cents the Street was looking for. For the year, the company cut its outlook to a range of $3 billion to $3.1 billion in revenue from a prior range of $3.2 billion to $3.4 billion. That is in line with the $3.1 billion analysts have been modeling.?
STP shares are up 39 cents, or almost 18%, at?$2.62.
Zhabei, China-based JA Solar (JASO) also beat revenue estimates for its Q3, reporting $388 million versus ?$379 million expected, but reported a net loss of 36 cents, well below the 1-cent-per-share expected. The company cut its full-year solar cell and module shipment forecast to 1.6 gigawatts from a prior 1.8-gigawatt forecast.
JASO stock is up 3 cents, or 2%, at $1.55.
Canadian Solar (CSIQ), based in?Kitchener, Ontario, reported revenue of $499 million, above the $496 million expected, but delivered a net loss of $1.02 per share versus a consensus estimate for a 39-cent loss. The company reiterated its year shipment view, but also said it would cut its Q4 capital expenditure forecast by about a third.?
Canadian Solar shares are up 21 cents, almost 10%, at $2.41.?
And Xinyu, Chi! na-based LDK Solar (LDK) turned in revenue and earnings below expectations, reporting $472 million and a net loss of 87 cents a share, worse than the $499 million and 46-cent loss analysts were expecting. The company forecast Q4 revenue in a range of $440 million to $520 million, below the average $507 million estimate.?
LDK shares are up 19 cents, almost 7%, at $3.02.
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Capella Education Company YTD Performance Remained Positive - NASDAQ:CPLA

2012-01-15T13:18:00.001-08:00

Capella Education Company (NASDAQ:CPLA) shares were transacted unexpectedly with a volume of 1.87 million shares as compared to its average volume of 0.340 million shares. CPLA opened at $55.97 dropped -17.54% closed $52.23. Its 52 week price range is $51.66 - $98.01.
CPLA has earnings of $58.22 million and made $405.94 million sales for the last 12 months. Its quarter to quarter sales remained 25.66%. The company has 16.54 million of outstanding shares and 15.09 million shares were floated in the market.
CPLA has an insider ownership at 8.64%. Its return on investment (ROI) for the last 12 month was 30.06% as compare to its return on equity (ROE) of 31.69% for the last 12 months.
The price moved down 10.47% from the mean of 20 days, -13.83% from 50 and went down 26.57% from 200 days average price. Company��s performance for the week was -11.67%, -7.21% for month and yearly performance remained -34.79%.
Its price volatility for a month remained 3.48% whereas volatility for a week noted as 4.92% having beta of 0.55. Company��s price to sales ratio for last 12 months was 2.13 while its price to book ratio for the most recent quarter was 4.26 and its earnings before interest, tax, depreciation and amortization (EBITDA) remained 107.09 million for the past twelve months.
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Whitney Wrong on Muni Market, to a Degree

2012-01-15T08:51:00.001-08:00

While Bloomberg continues to delight in Meredith Whitney’s bold “prediction-that-wasn’t,” The Wall Street Journal notes she might not be so far off. They admit she was wrong; the massive wave of defaults the famous analyst warned of in her Dec. 12, 2010 interview on “60 Minutes” never happened, but it’s really only a matter of degree.

“Debt issued by municipalities—a category that includes local governments and other affiliated entities like school districts—has returned 10.2% so far this year,” the Journal writes. “That beat out Treasurys, the second-best performer, with a 9.3% return. Riskier high-yield corporate bonds returned 4.2%.”

However, the paper reminds readers that Moody's Investors Service said in November that downgrades outpaced upgrades by a ratio of about five to one, “the highest ratio since the start of the financial crisis. The ratings firm also said it expected the downgrade trend to continue in the coming quarters, as deficit-cutting measures from states and the federal governments take hold.”

“Ms. Whitney and others who predicted munis' demise just had the wrong D-word," Dan Genter, chief investment and executive officer for RNC Genter Capital Management, told the paper. "People need to be focused on downgrades, not defaults," he said.

New issuers appear to have shaken off Whitney’s threat heading into 2012. The Securities Industry and Financial Markets Association on Wednesday released its 2012 Municipal Bond Issuance Survey.

Respondents expect total municipal issuance, both short- and long-term, to reach $402 billion in 2012, which the organization calls “a significant recovery” from their expectation of $342 billion in 2011. Additionally, excluding short-term notes, long-term issuance is also expected to recover in 2012, with a forecast of $347 billion total in 2012 compared with $288 billion in 2011.

“Despite fiscal difficulties at the state and local levels, the strong issuance forecast underscores the market’s appetite for municipal bonds,” Leslie Norwood, managing director and associate general counsel at SIFMA, said in a statement. “This is still highly dependent upon a number of market-effecting factors including the current fate of the tax-exempt status in current federal fiscal debates.”

Other highlights from the survey include:

Projected long-term, tax-exempt municipal issuance to total $303 billion in 2012, a 20.2% increase from the $252 billion estimated for 2011;

Projected long-term taxable municipal issuance is $35 billion in 2012, a 25% increase from the $28 billion estimate in 2011;

Two-year Treasury note yield is expected to rise gradually from 0.25% in December 2011 to 0.5% in December 2012; and

10-year Treasury note is also expected to rise gradually in the second half of 2012, with yields projected to climb from 2% at the end of December 2011 to 2.5 % at the end of December 2012.

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China¡¯s Stocks Slide to Lowest Since March 2009 as Small Companies Plunge

2012-01-15T04:16:00.001-08:00

China��s stocks (IFB1) fell to the lowestlevel since March 2009 on concern the European debt crisis willcurb exports and a potential cash crunch before the Chinese newyear holidays may boost lending costs for small companies.
China Cosco Holdings Co. (601919), Asia��s largest shipping line,dropped 4.4 percent after Luxembourg��s prime minister said theEuropean Union is facing a recession of unknown scope. UfidaSoftware Co. plunged 8 percent, leading declines for technologystocks, the worst performing industry. Shanghai PudongDevelopment Bank Co. (600000) paced gains for lenders after the centralbank refrained from selling three-month bills and investorsspeculated the central bank will cut lenders�� reserverequirements this month.
��Small-cap shares are falling as they had risenconsiderably before; it��s a rotational change,�� said Wu Kan, afund manager at Dazhong Insurance Co., which oversees $285million. ��Investors are probably keen on steadier shares likebig-cap companies amid the economic downturn.��
The Shanghai Composite Index (SHCOMP), which tracks the bigger ofChina��s stock exchanges, slid 20.94 points, or 1 percent, to2,148.45 at the close. The CSI 300 Index slumped 1 percent to2,276.39.
The Shenzhen Composite lost 3.5 percent, while the ChiNextindex of start-up companies plunged 5.7 percent. Anhui AnkeBiotechonology (Group) Co. tumbled 9.5 percent to 9.99 yuan inShenzhen. Gauges of technology and health-care companies in theCSI 300 dropped more than 3 percent, the most among industrygroups. Ufida Software fell 2.5 percent to 16.48 yuan. BeijingTongrentang Co., a retailer of Chinese medicine, declined 5.1percent to 13.14 yuan.
The Shenzhen Stock Exchange will oversee the initial reviewof refinancing plans of ChiNext companies, Caixin Onlinereported today, cited unidentified officials as saying.
Shippers Decline
Speculation the securities regulators are ��looking todecentralize oversight on financing plans may have had apsychological impact o! n invest ors,�� said Wu. ��If the Shenzhenexchange were to be in charge of refinancing for GEM-listedstocks, there would be less certainty.��
China Cosco lost 4.4 percent to 4.30 yuan. UniCredit SpA,Italy��s largest bank, said yesterday it will sell new shares ina 7.5 billion-euro ($9.8 billion) offer to strengthen itscapital position. The rights offer boosted concern that lendersmay struggle to raise more capital to weather the region��s debtcrisis. The European Central Bank reported overnight depositsfrom financial institutions rose to an all-time high.
The Shanghai Composite fell 1.4 percent on the firsttrading day of the year yesterday, adding to a 22 percent plungelast year, on concern increases in borrowing costs and Europe��sdebt crisis will derail economic growth. The CSI 300 (SHSZ300) slid 25percent in 2011. The value of stocks traded in Shanghai slumpedto the weakest level in three years on Dec. 29.
Money Rates
The People��s Bank of China refrained from selling three-month bills for a second week today, helping stem increases inmoney-market rates as banks hoard cash in the run-up to theChinese New Year holiday.
China��s seven-day repurchase rate, which measures interbankfunding availability, rose 51 basis points to 4.51 percent inShanghai, based on a daily fixing by the National InterbankFunding Center. It reached a five-month high of 5.60 percent onDec. 30 before sliding 1.60 percentage points yesterday afterPremier Wen Jiabao said business conditions may be ��relativelydifficult�� this quarter and monetary policy will be fine-tunedas needed.
Staples Drop
Consumer-staples producers in the CSI 300 slid for a secondday, losing 1.6 percent. The stocks were the best performer lastyear out of the index��s 10 groups as investors bought shares ofcompanies whose earnings can better withstand an economicslowdown. The gauge of consumer staples trades at 16.8 timesestimated earnings, compared with 8.9 times for the CSI 300,according to data compiled by Bloombe! rg.

Kweichow Moutai Co., the biggest maker of baijiu liquor,fell 1.1 percent to 183.15 yuan, adding to yesterday��s 4.2percent plunge.
��Chinese alcohol companies, one of the biggest winnerslast year, have relatively high valuations now,�� said Zhang Lu,a Shanghai-based analyst at Capital Securities Corp. ��Investorsare taking profits.��
A gauge of financial companies (SHSZ300) in the CSI 300 rose 0.6percent today, the only gainer among the industry groups.
Banks Gain
Pudong Development Bank gained 2.9 percent to 8.65 yuan.The lender estimated last year��s net income jumped 42 percent to27.2 billion yuan ($4.3 billion). China Citic Bank Corp. surged2.8 percent to 4.10 yuan. China Construction Bank Corp. (601939), thesecond-largest lender, increased 1.8 percent to 4.58 yuan.
Economists at Barclays Capital and Bank of America Corp.say the central bank will cut lenders�� reserve requirementsbefore the Chinese New Year holiday starts on Jan. 23, thesecond reduction since 2008. The People��s Bank of China raisedreserve requirements six times last year to cool inflation thataccelerated to its fastest pace in three years in July.
��I think investors will gain more confidence in theinterest-sensitive sector�� if borrowing costs and reserveratios are cut, while liquidity improves, Hugh Simon, chiefexecutive officer of Hamon Investment Group, said on BloombergTelevision today from Hong Kong. He said he was buying Chinesebank shares.
Local Debt
Concerns over the quality of Chinese banks�� assets, the��major share-price driver�� of lenders�� stocks last year, willease, according to Macquarie Group Ltd.
��We believe the macro economy will undergo a soft landingand there will be further monetary loosening in 2012,�� VictorWang and Rachel Li, Hong Kong-based analysts at Macquarie, wrotein a report dated yesterday. ��We thus expect asset qualityconcerns to ease going forward.��
China��s audit office said local governments have cleared upalmost half! the 531 billion yuan ($84 billion) of debt on theirbooks that an investigation found to have irregularities. Thegovernments and companies they set up to borrow money haveresolved 259 billion yuan of bad debt with measures includingland sales and the offer of new collateral, according to datareleased yesterday on the National Audit Office��s website.
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Obama tries to fill Fed board - again

2012-01-14T23:56:00.001-08:00

NEW YORK (CNNMoney) -- Contentious politics have left the Federal Reserve's Board of Governors operating without a full roster for more than five years. Now, President Obama will again try to fill the board's two open seats.
The president plans to nominate lawyer Jerome Powell and economist Jeremy Stein to the Federal Reserve Board of Governors, according to a White House statement. Both candidates hold degrees from Princeton, have served briefly at the Treasury Department and have diverse backgrounds in the finance field.
"I am grateful that these individuals have agreed to serve their nation at this important time for our economy," Obama said in the release. "Their distinguished backgrounds and experience, coupled with their impressive knowledge of economic and monetary policy, make them tremendously qualified to serve in these important roles."
Powell currently works as a visiting scholar at the Bipartisan Policy Center in Washington. He served as Undersecretary of the Treasury for Finance under President George H.W. Bush, and has donated money to Republican presidential campaigns including those of John McCain in 2008, and both Mitt Romney and Jon Huntsman this year. He holds a bachelor's degree from Princeton and a law degree from Georgetown.
An economics professor at Harvard, Stein recently served stints at both the Treasury Department and the National Economic Council. In 2008, he donated to Obama's campaign. He holds a bachelor's degree from Princeton and a Ph.D. in economics from the Massachusetts Institute of Technology.
The Federal Reserve Board in Washington is supposed to be headed by seven voting members, but the last time all of those seats were filled was in April 2006.
Members are appointed by the president, but must be confirmed by the Senate. They can serve terms up to 14 years, but often end up resigning early.
Since 2006, both Presidents George W. Bush and Obama have struggled to push their nominees through the! Senate. Obama's previous nominee, Nobel prize-winning economist Peter Diamond, withdrew his nomination in June, citing opposition from Senate Republicans.
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iShares MSCI Germany: Will Likely Outperform European Stocks if Recovery Holds

2012-01-14T19:40:00.001-08:00
Since the European Union��s (EU) founding in the early 1990s, the currency union has been criticized for being just that: a monetary union that attempts to embrace fragmented fiscal interests and concerns. And while this monetary union might have worked initially with its 12 core member states, there are now 23 countries using the euro while pursuing their own fiscal interests.

Because of the EU��s lack of fiscal unity, a monetary and fiscal crisis was largely inevitable. The EU��s founding members hoped that somehow fiscal unity might emerge over time. Over the past 25 years, however, Europeans have been slow to address the issues that have prevented them from achieving a greater degree of fiscal unity.

But after two years, the continent��s sovereign-debt crisis reached a critical stage that finally compelled leaders of member nations to take action.

During a meeting earlier this month, European heads of state struck a deal aimed at restoring order to the region��s economy and financial markets. The tentative fiscal compact would limit budget deficits by member states and create sanctions to enforce budget discipline.

Unfortunately, doubts abound as to the extent to which the deal can truly be implemented. The proposed fiscal rules aren��t going to be incorporated into a customary EU treaty, so each country will have to adopt the rules as they would any other law in their home jurisdictions. As a result, the rules are subject to each member nation��s political process, whether that involves parliamentary debate or ratification via referendum. As such, there is substantial political risk that the new rules may not survive this process in some countries.

The markets haven��t given the proposed deal a vote of confidence; the euro recently hit an 11-month low, equity prices in the region have continued to fall and yields on Italian bonds are rising once again.

This pessimistic reaction is understandable, but such pessimism is largely overblow! n.

The primary concern is that the EU will ultimately splinter as a result of this crisis, but that��s an unlikely outcome.

That��s because the consequences of a breakup �� particularly if it��s not handled in an orderly fashion �� would be dire. From an economic standpoint, the EU��s raison d'��tre is to facilitate trade within the region, which would collapse in the event of a breakup.

And dissolution of the currency union would require the reintroduction of former national currencies. As a result, citizens would be anxious to move their cash into the countries which have the strongest national currencies. That would spark bank runs which, in turn, would require nations to introduce capital controls and recapitalize their now isolated banking systems, as well as restrict the movement of both people and currency across their borders. In order to fund those efforts, private assets would have to be seized and hyperinflation would be a likely consequence. Naturally, social disorder would be rampant in the midst of this activity. That��s not an environment conducive to friendly trade.

There are orderly ways in which a dissolution could be handled which largely sidestep many of the unpleasant consequences of a drastic change. But the temper of the European public is not favorably disposed to these changes.

So European governments have heavy incentive to keep the currency union together and transform what was initially an experiment into a viable long-term societal evolution.

Germany stands to gain the most from a eurozone resolution even though it may be liable for financing the bulk of the deal.

Presently, the EU is tentatively committed to funneling EUR200 billion into the International Monetary Fund, about a quarter of which will likely be funded by Germany.

With Germany��s deep trade ties in the region, that��s a small investment to ensure markets remain open to its goods and services. On the other hand, Germany is bet! ter posi tioned to weather a collapse of the EU.

For one, Germany also has extensive trade relations outside of Europe: 6.7 percent of annual German exports are bound for the U.S. with a further 4.7 percent going to China. So while a disintegration of the EU would be a shock for German exporters, they don��t rely solely on the EU for revenue.

And if the Deutsche mark were to be revived, the former German national currency would be one of the strongest currencies in Europe due to the conservative monetary policy of the Bundesbank, Germany��s central bank.

Because of this relatively positive outlook, shares of iShares MSCI Germany Index (NYSE: EWG) remain undervalued in our opinion.

The exchange-traded fund (ETF) tracks the country��s 50 largest companies. The ETF��s portfolio has significant exposure to companies that derive a sizable percentage of their earnings outside the EU, including industrial companies involved in emerging-market infrastructure projects. We expect the gross domestic product (GDP) of emerging market nations to continue growing at a pace at least double that of the developed world, so that should cushion earnings for German blue chips.
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Whoopie pies - a sweet new gig

2012-01-14T15:10:00.001-08:00

(MONEY Magazine) -- Had Julie Ganong and Alan Mons not both been laid off in 2008, the couple might not be making whoopie right now. Whoopie pies, that is.
Almost immediately after being let go from The Provident Bank, where she was a senior vice president, Ganong began searching for similar positions. But her husband, a business analyst at Sun Life Financial, "was not unhappy" to get the ax.
A restaurant manager and line cook in a former life, Mons had been wanting to shift back to a food-related career. And his wife had given him an idea: to perfect a mini-version of the whoopie pie, a Maine tradition she'd baked beside her grandmother that consists of two dense cookies sandwiching a fluffy filling. "Losing my job gave me the time to make this dream real," he says.
Ganong started helping him out between job interviews. In May 2009, she assembled a focus group for a taste test. The feedback was positive. So, that same month, when a friend informed them that a bakery in Newburyport, Mass., was up for lease, the couple sprang into action.
Spending wisely after recovering from tough times
They tapped a HELOC for $15,000 for equipment -- and opened Chococoa Baking Co. within three weeks. Ganong soon stopped sending out her résumé. "It became clear this business needed both of us," she says.
Their bakery launched just as whoopies began gaining traction across the U.S., elbowing in on the cupcake trend. Excitement surrounding the treat has helped Ganong and Mons establish sales of around 4,000 pies a week. At that pace, and a price of $1.68 apiece, Chococoa should break even this year.
Send The Help Desk your money questions
The couple, who once earned $160,000, took home just 10% of that in 2011. But a distribution deal in the works with a regional grocery could easily double their output -- at which point "we'd be in a position to really pay ourselves," says Ganong. Then they'll be living their! sweet d ream.
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Top picks 2012: HMS Holdings Corp.

2012-01-14T10:34:00.001-08:00

For a play on healthcare reform in this country, HMS Holdings (HMSY) is a small-cap to own. The company provides cost containment services for state's Medicaid programs and other third party payors by ridding the system of fraud and errors. ?

Healthcare Reform should expand the number of Medicaid covered lives significantly, from 57 million to over 80 million by 2019, with estimated spending more than doubling over that same time period.

Another result of healthcare reform is the requirement that states establish Medicaid Recovery Audit Contractor (RAC) programs to identify and recover Medicaid overpayments. ?
With several RAC contract wins under their belt, management expects the company to win at least 50% of these eligible contracts. ?

The majority of their revenues are contingency-based, thus allowing them to charge little or no up-front costs (which is quite a compelling offer in this economy) while being motivated to save their customers as much money as possible. ?

Most of their contracts are multi-year commitments whereby HMS gets paid as a percentage of the money saved.? HMS grew earnings over 30% in their latest reported quarter, and we expect the company grow revenues by 30+% over the next 12 months. ?

They have an impressive track record of entering new and faster growing markets, with two recent acquisitions positioning HMS in the lucrative yet nascent market for dependent eligibility services. ?

Here, the company audits client data on a fee-for-service basis to ensure that dependents enrolling for employer-sponsored health care are indeed eligible to receive such subsidies. ?

With stock markets having retreated and most growth-story stocks in the dumps, this diamond in the rough should be on yo! ur radar .

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HealthSpring, Inc crossed 52 Week High Price - NYSE:HS

2012-01-14T06:02:00.000-08:00

HealthSpring, Inc (NYSE:HS) achieved its new price of $54.69 where it was opened at $54.68 up +0.20 points or +0.37% by closing at $54.56. HS transacted shares during the day were over 5.64 million shares however it has an average volume of 2.68 million shares.
HS has a market capitalization $3.66 billion and an enterprise value at $2.93 billion. Trailing twelve months price to sales ratio of the stock was 0.73 while price to book ratio in most recent quarter was 2.17. In profitability ratios, net profit margin in past twelve months appeared at 5.16% whereas operating profit margin for the same period at 9.02%.
The company made a return on asset of 11.90% in past twelve months and return on equity of 18.74% for similar period. In the period of trailing 12 months it generated revenue amounted to $5.00 billion gaining $80.31 revenue per share. Its year over year, quarterly growth of revenue was 83.60% holding 46.90% quarterly earnings growth.
According to preceding quarter balance sheet results, the company had $1.06 billion cash in hand making cash per share at 15.73. The total of $335.45 million debt was there putting a total debt to equity ratio 19.95. Moreover its current ratio according to same quarter results was 1.21 and book value per share was 25.06.
Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 1.37% where the stock current price exhibited up beat from its 50 day moving average price of $45.56 and remained above from its 200 Day Moving Average price of $42.32.
HS holds 67.11 million outstanding shares with 63.66 million floating shares where insider possessed 9.56% and institutions kept 87.50%.
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Facebook Marketing: Marketing On The Web

2012-01-14T01:37:00.001-08:00

Facebook marketing calls for a single to get it right from the outset bearing in brain that you will find massive numbers of individuals who’re also making use of this advertising channel. Standing out from the crowd and acquiring the phenomenal publicity that should increase good return on investment means that a single definitely requirements a effectively established presence.
The first and most crucial factor should be to be sure that the written content is constantly fresh new and unique whatsoever instances. If no matter what a single intends to say will not likely be of any benefit for the group, it might have been to keep peaceful all together. Just as would be the scenario with other on-line platforms, the type of written content that a single puts is what will determine no matter whether the guests will be interested in what the business is supplying. Getting vague written content will only serve to piss off the likely prospects and they will find yourself losing curiosity on no matter what a single is saying.
Getting a running Facebook web page does not suggest the finish of your story but the upcoming factor that a single must embark on would be the advertising of your pages. Certainly one of the top strategies should be to inform the pals on the network concerning the business.
Yet another way of advertising the web page is holding of contests exactly where one among the requirements to qualify should be to much like the web page. The other factor is interaction with individuals members who have joined the pages exactly where a single shares interesting stuff and this definitely goes an extended way in establishing very long standing relationships with them.
The grave mistake that a lot of individuals make should be to overlook that they are dealing with individuals making use of these networks. It truly is consequently, to constantly get complete cognizance of your undeniable fact that these are human beings and not objects. With this in brain, a single is e! ffective ly able to succeed in out to them in a very extra organic way.
The fact that Facebook is awash with millions of customers does not simply suggest that they are all wanting for brand names. For this reason a single must contemplate the approaches that should make the brand names extra visible within this platform exactly where competitiveness would be the byword.
Certainly one of the productive methods of Facebook marketing is coming up with advertisements for your useful promotion of your pages. They’re commonly affordable and go an extended way in reaching an incredibly significant audience if employed optimally. The other way should be to make good use of your employees by telling them to involve the facebook tackle of your brand whilst sending out e mails to their pals.
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Canadian Solar Slips As Collins Stewart Downgrades To Hold

2012-01-13T16:47:00.001-08:00

Canadian Solar (CSIQ) shares are trading lower this morning after Collins Stewart analyst Dan Ries cut his rating on the stock to Hold from Buy on concerns about the impact on margins of rising solar cell prices.
“Strong demand has led to a firming of module prices,” he say. But Ries adds that module demand is so strong that it is now pulling up prices for solar cells and wafers; he thinks higher cell prices could weigh on CSIQ’s Q2 margins. Ries cuts his 2010 EPS forecast to $1.72, from $1.82.
“It will be difficulty for CSIQ to outperform in a period in which it is likely to have negative earnings revisions and miss Street expectations,” he writes. “While CSIQ’s flexible vertical integration strategy has advantages, it is not optimal when material prices are rising faster than module prices. Vertically integrated vendors are better structured to handle the current market conditions.”
CSIQ is down $1.19, or 5.4%, to $20.90.
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CoveritLive Blogs Crash Amid iPhone Fever

2012-01-13T07:52:00.001-08:00
Some live blogs powered by popular hosting service CoverItLive crashed on Tuesday afternoon, coinciding with Apple's(AAPL) iPhone 4S launch.

TheStreet's own live blog of the Apple event was down for around 30 minutes, as were those from CNET, Macworld, ZDNet and others.
The problem was resolved around 1:30 p.m. according to a post on CoverItLive's Twitter feed which said: "Events are stabilized now. Appreciate your patience as we worked through this issue."
A CoverItLive spokesperson said the site is looking to determine the cause of the crash.
CoverItLive also had technical problems during the iPad launch event in January.
CoverItLive is owned by Demand Media(DMD).
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Google, Skype, And A New Age Of Censorship

2012-01-13T03:22:00.001-08:00

The book bans of fifty years ago which included “Catcher In The Rye” are distant memories. But censorship is not over. The Wall Street Journal has been banned in Singapore within the last five years. The local government said that some of its content was unreasonably anti-government, a decision that only the government can decide.
Censorship has recently become a more prominent part of the digital age. China has effectively banned Google (NASDAQ: GOOG) more than once. The Saudi Arabian government has gotten Research In Motion (NASDAQ: RIMM) BlackBerry security tools. India is now threatening RIM unless it provides similar code so that the government in the world’s second most populous nation can monitor communications that it deems criminal or a threat to the government. The FT recently reported that the Indian government will push Google (NASDAQ: GOOG) and Skype to “share” information that can be gathered from their customers inside the Indian borders.
Digital censorship poses the same kind of problems for the US government and multinational companies as currency manipulation and unequal trade practices do. America can pressure India and Saudi Arabia to accept more open principles of free speech which are alien to these governments. The question becomes what if any price the US is willing to pay to help its technology and internet companies to guard their business practices and revenue.
The attempt to impose rules on other sovereign nations whether they are for trade or censorship usually ends up the same way. There are trade reprisals and roadblocks to companies that need to do business in the nations that have offended American standards . It is a battle that the US government will not win because it is not willing to wage it with vigor and a disregard for its short-term economic interests. Free speech may be easy to defend at home, but to defend it outside US borders can be costly.
Would the US allow the yuan to keep its current valuation proce! ss in ex change for the People’s Republic’s agreement not to censor Google? No. Some prices are not worth paying no matter what
Douglas A. McIntyre
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DrStockPick.com Stock Report! 8/04/09, HIL, MAC, CBST, ICUI, YRCW, RCRC

2012-01-12T22:55:00.001-08:00

DrStockPick.com Stock Report!
Tuesday August 4, 2009
Hill International (NYSE:HIL), the global leader in managing construction risk, announced today that it has received a contract from the U.S. General Services Administration to provide construction management services during the modernization of the Thomas S. Foley U.S. Courthouse in Spokane, Washington. The five-year contract has an estimated value to Hill of approximately $2.0 million.
The Macerich Company (NYSE: MAC) today announced results of operations for the quarter ended June 30, 2009 which included total funds from operations (”FFO”) diluted of $59.9 million or $.67 per diluted share compared to $1.12 per diluted share for the quarter ended June 30, 2008. For the six months ended June 30, 2009, FFO-diluted was $162.8 million compared to $192.1 million for the six months ended June 30, 2008. Net loss available to common stockholders for the quarter ended June 30, 2009 was $21.7 million or $.29 per diluted share compared to net income available to common stockholders of $15.7 million or $.21 per diluted share for the quarter ended June 30, 2008. For the six months ended June 30, 2009, net loss available to common stockholders was $7.7 million or $.11 per diluted share compared to net income available to common stockholders of $108.3 million or $1.47 per diluted share for the six months ended June 30, 2008. Negatively impacting both FFO per diluted share and EPS by $.31 per share during the quarter ended June 30, 2009 was a $27 million impairment charge on non core assets. The Company’s definition of FFO is in accordance with the definition provided by the National Association of Real Estate Investment Trusts (”NAREIT”). A re! concilia tion of net income to FFO and net income per common share-diluted (”EPS”) to FFO per share-diluted is included in the financial tables accompanying this press release.
Cubist Pharmaceuticals, Inc. (NASDAQ: CBST) today announced that Robert Perez, EVP and COO, will present on Wednesday, August 12, 2009 at 11:30 a.m. Eastern Time at the Canaccord Adams 29th Annual Global Growth Conference at the InterContinental Hotel in Boston, Mass. This presentation will include discussion of the company’s business activities, financial outlook, and current news.
ICU Medical, Inc. (Nasdaq:ICUI) and privately-held Medegen, Inc. announced today that the companies have reached an agreement to end litigation in the Central District of California alleging infringement of a patent owned by Medegen. ICU Medical and Medegen are pleased to shift their focus from the litigation to their business relationship.
YRC Worldwide Inc. (Nasdaq: YRCW), announced today that New Penn, one of its regional operating companies, will introduce a new and improved suite of guaranteed service offerings featuring superior reliability and value. All guaranteed service shipments are backed by the New Penn no-hassle guarantee to be complete and on-time or the invoice will automatically be reduced to zero dollars with no need for the customer to file a claim.
RC2 Corporation (NASDAQ:RCRC) announced today that it has completed its previously announced public offering of common stock at a price of $15.00 per share to the public. RC2 Corporation also announced that the underwriters in the offering have exercised their option to purchase additional shares to cover over-allotments in full, resulting in a total sale to the public of 4,025,000 shares of common stock.
Source: E-Gate ! System f rom Alphatrade.com
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A Solution For Troubled Newspapers And Magazines: Internet-Only Products

2012-01-12T18:31:00.001-08:00

No printed Wall Street Journal. No printed New York Times, or Newsweek or The New Yorker. That possibility grows more?by the day.
Hearst, which said it would close it Seattle paper, the Post-Intelligencer, has told some members of its staff that they may be candidates to create an online version of the paper as its print version is shuttered.
According to the AP, “An unspecified number of the P-I’s 181 employees received `provisional offers’ Wednesday and Thursday to work for the online venture.”
Several large city dailies, including The Rocky Mountain News, have already folded. The Boston Globe is supposedly losing $1 million a week. Most analysts looking at figures from The Washington Post Company (WPO) say Newsweek loses money. The New York Times newspaper, owned by NYT (NYT)?may loose money this year. The Wall Street Journal, part of News Corp (NWS)?is losing advertising at an alarming rate.
The good aspect of having publications move to an “online-only” format is that the brands survive. The bad news is that most of the employees from the print property will not keep their jobs. Internet versions of publications often bring in only 5% or 10% of the sales that the physical versions of the properties do. But, the online business are not burdened with the costs of printing and distribution. Internet advertising is also more likely to grow than print is. Some major national weekly magazines and large business magazines like BusinessWeek have lost half of their advertising pages over the last two years. That trend is not likely to be reversed.
In the future, the big daily newspaper and national weekly magazine will not be printed at all. They will exist on the internet, run by much smaller staffs. But, at least they will exist.
Douglas A. McIntyre
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Mercury General Corporation made New 52 Week High Price - NYSE:MCY

2012-01-12T14:10:00.001-08:00

Mercury General Corporation (NYSE:MCY) achieved its new 52 week high price of $46.61 where it was opened at $45.30 UP 1.45 points or +3.22% by closing at $46.44. MCY transacted shares during the day were over 311,906 shares however it has an average volume of 239,707 shares.
MCY has a market capitalization $2.55 billion and an enterprise value at -$647.94 million. Trailing twelve months price to sales ratio of the stock was 0.92 while price to book ratio in most recent quarter was 1.36. In profitability ratios, net profit margin in past twelve months appeared at 3.28% whereas operating profit margin for the same period at 3.38%.
The company made a return on asset of 1.36% in past twelve months and return on equity of 4.81% for similar period. In the period of trailing 12 months it generated revenue amounted to $2.68 billion gaining $48.96 revenue per share. Its year over year, quarterly growth of revenue was -19.70%.
According to preceding quarter balance sheet results, the company had $3.25 billion cash in hand making cash per share at 59.22. The total of $139.35 million debt was there putting a total debt to equity ratio 7.70. Moreover its current ratio according to same quarter results was 3.63 and book value per share was 33.00.
Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 1.19% where the stock current price exhibited up beat from its 50 day moving average price $43.18 and remained above from its 200 Day Moving Average price $39.79.
MCY holds 54.84 million outstanding shares with 26.76 million floating shares where insider possessed 51.19% and institutions kept 39.80%.
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Student Loans and Bankruptcy - The Debate Continues

2012-01-12T10:00:00.001-08:00

?
Alan Collinge recently contributed a piece on the idea of allowing student loans to be discharged in bankruptcy.? It sparked quite a few comments and he has returned to address them systematically
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Returning Bankruptcy Protections to Student Loans, in Practice
I recently wrote a piece in this column showing why bankruptcy protections are essential for the healthy functioning of the nation’s federal and private student loan systems, and the public interest that they serve. Of the 50 or so comments received, very few challenged the validity of the argument or the soundness of its premises. Surprisingly, a significant proportion of the readers not only agreed with the piece, but actually called for more ambitious remedies, such as forgiving all student loan debt, adopting a free higher education model, and so forth. While these solutions merit serious attention, in this and other forums, I remain focused on the question before us, since private loan bankruptcy bills are in the House and Senate as we speak, and similar legislation for federal loans is expected in the near term. In this context, there were legitimate questions raised about the practical effects of returning bankruptcy protections to both private and federal loans, and so these are what compel this continued discussion.
There were essentially two concerns raised on this front. First were concerns that returning bankruptcy protections would?allow widespread abuse of the system. The second concern was that bringing bankruptcy back would cause private lenders to tighten up their lending, and also cause the loans to be more expensive for the students. These two concerns have been used for years to stop this debate, and keep the lending system on its current, unsustainable trajectory. To be blunt, those dogs don’t hunt t! oday, an d really never did for that matter.
Here’s why: Alarmist predictions of widespread bankruptcy filings fly in the face of all available historical data. It is well established by John Pottow (U Mich) and others that when bankruptcy was allowable for all federal student loans, far less than 1% were ultimately discharged this way. One legislator who participated in the legislative process which first began restricting bankruptcy protections for student loans characterized it as a response to “a crisis only in the imagination”.
Like today’s “Pell Runners” (people who enroll in school only to abscond with Pell Grant proceeds), a vanishingly small number of citizens who acted in bad faith were pointed to by the lending industry, and a crisis was manufactured with the aid of the national media. This crisis served as political cover for removing bankruptcy protections from everyone, not just the handful of bad actors who actually deserved such a response. In hindsight, this was essentially a cheap trick (and I suspect the same gimmickry is being employed in the current Pell debate). The point, here, is that people never rushed out to file for expediency or convenience. It just didn’t happen.??????
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Many will claim that the filing statistics I point to were during a different time, when the relative cost of college was far lower, and this is a valid point given current debt loads, a more cynical younger generation, etc.. But what they fail to acknowledge is that the increased pressure that today’s student debt loads might put on borrowers to file is more than balanced by today’s far more stringent bankruptcy laws compared to 40 years ago. Simply put, bankruptcy isn’t nearly the “walk away” option that it used to be. Bankruptcy filers who are gainfully employed (or even employed), usually are compelled to repay a significant portion of their debts by ! the cour t. So the widely perpetuated stereotype of people washing their hands of the debt, scott-free is a myth, and has been for years.
Also, the claim that young people today are less concerned about the negative implications of filing for bankruptcy than in previous generations is dubious at best. No one wants to file for bankruptcy, and in my experience I would say this holds particularly true for young adults fresh out of college, and full of optimism. This is another myth perpetuated by the lending industry- one which that plays upon the paternalism that naturally wells up in adults when discussing college related issues (I suspect, frankly, that this cynical characterization is more a reflection of the ethical shortcomings of those painting the picture than those who are being painted). Whatever the case, suffice it to say that bankruptcy is still as stigmatizing, embarrassing, and unpleasant today as it ever has been- the last, worst possible course of action to be forced into. No one would choose this if other options existed (options not involving public humiliation or usury, ideally).
And indeed, there are payment options for recent graduates that are clearly preferable to bankruptcy. The first option (obviously) is to get a good job/income stream and repay the debt quickly. Absent that course, there are two repayment programs in place which allow the student to repay a fairly low portion of his/her income over 20 years, or what is more attractive, 10 years if the student is employed at a non-profit or works in the public sector.

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Amazon Best Sellers: Nintendo And Activision (ATVI)

2012-01-12T05:11:00.001-08:00

Which companies are likely to big holiday sales? In the video game category Activision (ATVI) and Nintendo are the leaders on the Amazon (AMZN) bestseller list for video games.
Activision (ATVI) has four games in the top 25 sellers lead by "Call To Duty 4"
Buyers may not be able to find Nintendo Wiis for Christmas, but accessories are selling well contollers and charge stands near the top of the list. Microsoft’s (MSFT) "Halo 3" and some XBox packages also make the list.
Douglas A. McIntyre
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AIG Could Repay $85 Billion Government Loan With $115 Billion in Asset Sales, Analyst Says

2012-01-12T00:42:00.001-08:00

After a tumultuous infancy, the health-care reform law celebrates its first birthday March 23. Despite ongoing legal challenges, several provisions of the law have taken effect and are making changes in the way people pay for medical care. Over the past year, Ive received many questions from readers about how the new law affects them. Heres what you need to know to make the most of the new rules.
1. Health coverage for adult children. One of the highest-profile changes was the rule permitting adult children to stay on their parents health-insurance policies until age 26, rather than kicking them off when they turn 21 or graduate from college. You usually need to add your kids to your policy during open enrollment in the fall for coverage to start at the beginning of the next plan year. But parents may add adult children in the middle of the year under certain circumstances, such as if the kids lose their own health-care coverage. Contact your insurer or employer for specific sign-up rules.
If you already have family coverage for younger siblings, then you may not have to pay more to add your grown kids. But if you have to switch from an individual plan to a higher-cost family plan, it pays to compare the extra premiums with the cost of buying the young adult his or her own policy. In many states, a healthy twentysomething can buy an individual health insurance policy for about $100 per month. See Keeping Adult Children Insured for more information about the new rules and alternatives.
2. Coverage for preventive care. Many insurance plans must now provide certain preventive-care screenings without charging deductibles or co-payments. Depending on your age, this rule may apply to blood-pressure, diabetes and cholesterol tests, mammograms and colonoscopies, flu shots, routine vaccines, well-baby and well-child visits and other services.
If your health-insurance plan has not made major changes to its costs and benefits since health-care reform was enacted (technica! lly call ed a grandfathered plan), the preventive-care requirements may not apply. Ask your insurer or your employers benefits office whether your plan qualifies. See the preventive-care page at Healthcare.gov for a detailed list of the eligible services.
Medicare beneficiaries also get some new preventive benefits, including an annual wellness visit and a personalized prevention plan. Also, Medicare no longer charges co-pays or deductibles for mammograms, cervical-cancer and colorectal-cancer screenings, cholesterol tests, flu and pneumonia shots, hepatitis B vaccinations, and certain kinds of prostate-cancer screenings. See the Manage Your Health section of Medicare.gov for a list of who qualifies for these services and how often you can take advantage of them.
3. Restrictions on using flexible spending money for nonprescription drugs. Starting this year, you may no longer use tax-free money in your flexible spending account or health savings account to stock up on over-the-counter drugs, such as pain relievers and allergy medications, with the exception of insulin. But there is a loophole: You can use the money if you get a prescription. Dont schedule a special appointment, but the next time youre at the doctors office, ask for prescriptions for any pain relievers, allergy medications, anti-fungals or cough-and-cold medicines you use regularly. See Make the Most of the New Flex-Account Rules for more about this and other changes to FSAs.
4. Stiffer penalty for nonmedical withdrawals from a health savings account. Although HSAs have always provided attractive tax benefits, the downside was that you paid a 10% penalty if you used the money for nonmedical expenses before age 65. That penalty has now doubled, to 20%, starting in 2011.
But there are still plenty of medical bills you can spend the money on penalty-free at any age, including insurance deductibles and co-payments, prescription drugs, uninsured vision and dental care, and a portion of long-term-care premiums (base! d on age ).
You may open a health savings account if you have a health-insurance policy with at least a $1,200 deductible for individual coverage or $2,400 for family coverage in 2011. See What to Know About Health Savings Accounts and Health Savings Account Answers for more information about how these plans work and which expenses qualify.
5. The shrinking Medicare Part D doughnut hole. The worst thing about the Medicare prescription-drug program has always been the doughnut hole -- the coverage gap after your total drug costs reach $2,840 for the year, in which you have to pay all of your bills yourself until your out-of-pocket drug costs reach $4,550 for the year. But the doughnut hole is starting to close in 2011, and it will disappear entirely by 2020.
This year, after your total drug costs reach $2,850, your pharmacist will automatically apply a 50% discount on brand-name drugs. The pharmacy will continue to apply the discount when you purchase the medications until your out-of-pocket costs reach $4,550; the entire cost of the drug (before the 50% discount is applied) counts toward the amount needed to fill the coverage gap. Also starting this year, youll pay only 93% of the cost of generic drugs in the doughnut hole, with the government picking up the remaining 7%. See Help With High Drug Costs for more information about the new rules and how these discounts are applied.
6. New coverage for people with preexisting conditions. The health-reform law will eventually prohibit insurers from rejecting people because of their health. But that rule doesnt take effect until 2014, so the law also created high-risk insurance pools to help cover people with health problems until then.
The Pre-Existing Condition Insurance Plan sounds good on paper, but it has been less popular than expected because of a big catch: You may only qualify for coverage if you have been uninsured for at least six months. The new pools -- some are run by states, some by the federal government -- ! can be a good solution for people who have been uninsured for an extended period of time. But there are better options for people with health problems who are about to lose coverage: You may have other federal and state protections, including coverage-extension requirements or access to state high-risk pools that existed before health-care reform and may not have a six-month waiting period. See FAQs on the New High-Risk Pool for more information about the new pools and your alternatives.
For many more strategies to help you lower your medical expenses, see 30 Ways to Cut Health Care Costs.
Got a question? E-mail me directly at askkim@kiplinger.com. Want to be heard? Leave a reader comment below.
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2 Energy Themes for 2012 and Beyond

2012-01-11T15:49:00.001-08:00

It's fun looking for big profits in energy among independent explorers and producers of oil and natural gas, which involves seeing which companies are cheap, have great assets, and are able to grow production economically. To truly feel the pulse of the global energy scene, however, one might follow a global company such as major equipment provider National Oilwell Varco (NYSE: NOV  ) . A look into National Oilwell Varco's strong performance of late shows two major themes: shales and deepwater drilling.
Performance recap
In the third quarter of 2011, National Oilwell Varco had new capital equipment orders of $3.94 billion, a new record. This pushed up capital equipment backlog to $10.3 billion, a 33% increase from the second quarter. Oil and gas exploration is roaring back, and increased demand for services such as drilling and well completion means service providers are ordering new equipment to be able to meet current and future demand.
The company's new $10 billion backlog is starting to approach the level of the commodity boom of 2008, when it was just under $12 billion. Even with the onslaught of the financial crisis, the company saw only 3% cancellation from that huge backlog, much better than most people had predicted. This bodes well for the currently strong (and still expanding) backlog.
Increased shale activity
In North America, we are now seeing unconventional plays account for more than half of drilling activity and that means more orders for heavy-duty equipment. The prolific amount of oil and gas unlocked has also led to much merger and acquisition activity, such as Statoil (NYSE: STO  ) acquiring Brigham Exploration to gain access to its liquids-rich Bakken acreage. Another big-time transaction worth noting was Marathon Oil's (NYSE: MRO  ) acquisition of 141,000 ! net acre s in the core of the Eagle Ford shale at $3.5 billion, which comes out to over $24,000 per net acre.
Even though natural gas prices are now depressed in the U.S., rig count has not gone down as the number of rigs in those gas plays goes down. Instead, these rigs are moving over to liquids plays, where the returns are much higher. Also, there are plenty of shale formations to be unlocked across the rest of the world, where gas prices are much higher than in the U.S. National Oilwell Varco has been making moves to be relevant in the rest of the world, as well. All told, higher demand for equipment powerful enough to unlock the shales has shown up by way of increased orders.
Deepwater, too
Earlier this year, National Oilwell Varco received a $1.5 billion order from Estaleiro Atlantico Sul, a Brazilian shipyard. The order was for equipment that will go into seven drillships for Brazilian oil giant Petrobras (NYSE: PBR  ) , which is looking to contract for up to 28 drilling rigs for exploration in deep waters. The first contract for seven drillships won by EAS is just the first of several in Petrobras' plan to spend big in deepwater drilling in the future.
Halliburton (NYSE: HAL  ) , one of the leaders in oil-field services, is also seeing the trend of increased offshore activity. After growing at a fairly subdued pace from 2000 to 2008, deepwater rig count has been growing rapidly in recent years. Halliburton also notes that deep water and hostile deep water are 11 times and 13 times as intensive as land, respectively.
That means that the number of technologically complex equipment needed is rapidly rising, and an equipment provider like National Oilwell Varco is poised to benefit, as are major oil-field service providers like Halliburton, Schlumberger (NYSE: SLB  ) , and Baker Hughes (NYSE: BHI  ) .
Foolish bottom line
A look at the global energy scene shows increased activity from unconventional sources such as the shales and deepwater drilling. Since we're not finding super oil fields like we once did, this trend is likely to continue in 2012 and beyond. One of the many ways to play this ongoing investment theme is to look at equipment maker National Oilwell Varco, since increased activity in new areas means more technologically advanced equipment may be needed.
I think National Oilwell Varco is a great pick for the future, but our analysts have selected a different stock that they believe is poised for tremendous growth in 2012. Find out which company in our new free report: "The Motley Fool's Top Stock for 2012." Thousands have already requested access and it'll only be available for a limited time. Simply click here -- it's free.
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Silver To Rise On Currency-Commodity-Industrial Triple Whammy

2012-01-11T11:25:00.001-08:00

After peaking at an all-time nominal high of almost $50 an ounce back in April, silver tumbled and moved to the background, as investors�� attention shifted more to equities and the crisis in Europe.? But, after gold was pushed back onto center stage by a global central bank liquidity-bailout, silver appears well positioned to benefit, HSBC��s Jim Steel argued.
Silver suffered a 38% correction this year from its peak but remains up more than 5%, outperforming most asset classes. ??��If silver were a currency, it would be up against everything but the [Japanese] yen and gold,�� explained Steel.? Indeed, silver bullion has outperformed U.S. and emerging market equities, even silver and gold miners in 2011.
HSBC��s head of precious metals research, Jim Steel, made his case for silver at all the precious metals at an ETF Securities conference hosted in New York?on Thursday. ?Only this year did silver manage to beat its previous nominal all-time high, hitting $49.51 an ounce on April 28.? Looking back at its previous record high, $48.70 in 1979, which adjusted for inflation would be $150 in today’s prices.? ��[There��s] lots of room for it to go up,�� said Steel.
Much like gold, silver trades as a commodity-currency asset.? Particularly in the emerging world, where asset seizures and violent regime change are more common, investors have looked at silver, and gold, as monetary assets.? The gold/silver ratio has been one of the tools investors use to analyze price action.? ��The lower the ratio the more bullish for silver,�� explained Steel, who said the all-time low was 17:1 when silver peaked in 1979, while the record high was 100:1.? Over the last 25 years, it has averaged 70:1, while over the last decade it slid to 60:1; currently, it stands at 53:1.
��The single biggest driver [for the silver market] is industrial demand,�� explained Steel, noting industrial demand was ��a tad below half of all dema! nd for t he precious metal.��? Silver is used in a variety of contexts and products, but in minute sizes, which?contrasts?with gold, which counts with limited industrial uses and is mainly seen as an investment.? Currently, demand for silver has found support from solar panels, as the metal is used to silver coat mirrors, as a conductor, among other uses. ?The solar industry is under pressure this year, with stocks taking a beating; First Solar, the largest U.S. producer, has seen its stock tumble more than 60% this year, suggesting this particular source of demand might wane, but must be kept in sight, Steel said.
The stage is set for commodities to rally, and it looks particularly ripe for precious metals, according to Steel.? Beyond industrial demand, investors have been pouring into gold and silver in the face of a global financial crisis that ��has had four or five incarnations, from subprime to financial, from a global crisis to a sovereign debt crisis, each time more dangerous.��
Silver is seen as a portfolio diversifier, reacting to what Steel calls the ��monetary merry-go-round.��? Monetary supplies have surged around the globe, used for stimulative purposes in advanced economies, and in reaction to massive increases in reserves in EM economies.? Zero bound interest rates in the ?U.S. and falling rates in Europe sends investors looking for yield.? Commodity intensive growth in EM also helps fuel industrial demand for gold.? ��Broadly speaking, silver does better when public debt is up, resource nationalism kicks in, trade barriers rise, and directed markets do better than free ones,�� explained HSBC��s economist.
Generally negatively correlated with the dollar, silver has recently been trading closer to risk assets and the VIX.? ��There��s not really a relationship between silver and inflation,�� said Steel, ��it��s more an anticipated reaction to the monetary response to inflation.��? Steel recalled the late ��70s, when as Paul Volcker was taking the top spot at the Fed and pledging to! tackle inflation, gold and silver sold off in anticipation.? ��Until we see real rates begin to rise, it will be hard to call an end in the investment rally,�� he said.
Steel sees silver averaging $34 an ounce in 2012, with prices ranging from $30 to $40.? ��All precious metals will be volatile next year given the many false positives we’ll have in Europe,�� explained Steel, adding ��I think $50 an ounce might be a psychological barrier.��

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Coal for Sale (ACI, RTP)

2012-01-11T06:58:00.001-08:00

Arch Coal, Inc. (NYSE:ACI) plans to buy a coal mine in Wyoming’s Powder River Basin from Rio Tinto plc (NYSE:RTP) for $761 million. The Jacobs Ranch mine includes 381 million tons of coal reserves and produced 42.1 million tons in 2008. It lies adjacent to another mine, Black Thunder, already owned by Arch.

Arch predicts that the acquisition will add between $145 million and $165 million to the company’s EBITDA in 2009. Virtually all of the mine’s production for 2009 is committed and priced, and about 75% of 2010 production and 50% of 2011 is also committed and priced.
The combined mines are expected “to create significant operating synergies.” Jacobs Ranch employs 600 people, and Arch declared that these employees “will be a tremendous addition to our company.”
The company apparently expects to reduce costs because of the proximity of the mines to one another. That seems pretty iffy.
Rio Tinto, which recently agreed to sell a 9% stake in the company to China’s Chinalco for $19.5 billion, gets some much needed cash, and lowers its operating expenses without having to fire anybody. Not bad in today’s world.
Paul Ausick
March 9, 2009
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The Perfect Technical Set Up: RF Micro Devices

2012-01-11T02:38:00.000-08:00

Rarely have I seen bullish technical formations as perfect as the one recently formed in RF Micro Devices (Nasdaq: RFMD). It’s a classic textbook bounce set up from both the classic TA view and the candlestick pattern.? Price dropped to the 200-day simple moving average at $6.15 per share, bounced, then fell back creating the “doji” or reversal candlestick on the daily chart.? Of course, nothing is 100% when it comes to technical analysis, but technical traders will be placing bullish bets on this pattern.
With the technical picture reviewed, let’s take a closer look at the company.? Founded in 1991, RF Micro Devices designs and manufactures radio frequency components and compound semiconductors in the United States and internationally. The company provides integrated circuits, including gain blocks, LNAs, PAs, receivers, transmitters, transceivers, modulators, demodulators, attenuators, switches, frequency synthesizers and voltage-controlled oscillators. It also offers multi-chip modules comprising PA modules, switch-filter modules, active antenna products, VCOs, phase-locked loops, coaxial resonator oscillators, active mixers, variable gain amplifiers, hybrid amplifiers, power doublers and optical receivers.
The stock price has been knocked down due to several upsetting remarks from the company’s head of its multi product group, Robert Van Buskirk.? Buskirk warned that the companies revenue may be at the low end of the estimates due to Nokia (NYSE: NOK) transitioning to Microsoft’s (Nasdaq: MSFT) Window’s Phone 7. In addition, Buskirk is nervous about a slowdown in China affecting the company.? He points at Taiwan’s Meditek, who partners with RF Micro Devices, and whose revenue fell 40%, as a possible precursor to things to come.? However, an analyst at D. A. Davidson just reiterated a buy rating with a $10 per share target.? The analyst believes that the market has overly punished the stock and it's ready for a rebound.
Combin! ing the analyst’s view with the technical picture creates a strong bullish case for RF Micro Devices.
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Irregular Volume of StemCells, Inc - NASDAQ:STEM

2012-01-10T17:44:00.001-08:00

StemCells, Inc. (NASDAQ:STEM) witnessed volume of 3.78 million shares during last trade however it holds an average trading capacity of 1.37 million shares. STEM last trade opened at $0.53 reached intraday low of $0.48 and went -7.55% down to close at $0.49.
STEM has a market capitalization $67.54 million and an enterprise value at $46.64 million. Trailing twelve months price to sales ratio of the stock was 51.51 while price to book ratio in most recent quarter was 3.63.
The company made a return on asset of -48.40% in past twelve months and return on equity of -108.66% for similar period. In the period of trailing 12 months it generated revenue amounted to $1.42 million gaining $0.01 revenue per share. Its year over year, quarterly growth of revenue was -3.80%.
According to preceding quarter balance sheet results, the company had $21.62 million cash in hand making cash per share at 0.16. The total of $725.74K debt was there putting a total debt to equity ratio 3.62. Moreover its current ratio according to same quarter results was 5.23 and book value per share was 0.15.
Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 31.01% where the stock current price exhibited up beat from its 50 day moving average price of $0.62 and remained above from its 200 Day Moving Average price of $0.84.
STEM holds 137.83 million outstanding shares with 129.16 million floating shares where insider possessed 2.18% and institutions kept 15.10%.
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Why Finisar's Earnings May Not Be So Hot

2012-01-10T13:18:00.001-08:00

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 Finisar (Nasdaq: FNSR  ) , 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, Finisar generated $18.6 million cash while it booked net income of $51.2 million. That means it turned 1.9% of its revenue into FCF. That doesn't sound so great. FCF is less than net income. Ideally, we'd like to see the opposite.
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 b! e real a nd 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 Finisar 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.
With 31.5% of operating cash flow coming from questionable sources, Finisar investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotted in the TTM period! above, stock-based compensation and related tax benefits provided the biggest boost, at 25.9% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures, which consumed 79.4% 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.
We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

Add Finisar to My Watchlist.
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HealthSpring, Inc Succeeded New Record Year Price - NYSE:HS

2012-01-10T04:25:00.001-08:00

HealthSpring, Inc (NYSE:HS) achieved its new 52 week high price of $54.75 where it was opened at $54.56 UP 0.09 points or +0.16% by closing at $54.65. HS transacted shares during the day were over 966,943 shares however it has an average volume of 2.84 million shares.
HS has a market capitalization $3.67 billion and an enterprise value at $2.94 billion. Trailing twelve months price to sales ratio of the stock was 0.73 while price to book ratio in most recent quarter was 2.18. In profitability ratios, net profit margin in past twelve months appeared at 5.16% whereas operating profit margin for the same period at 9.02%.
The company made a return on asset of 11.90% in past twelve months and return on equity of 18.74% for similar period. In the period of trailing 12 months it generated revenue amounted to $5.00 billion gaining $80.31 revenue per share. Its year over year, quarterly growth of revenue was 83.60% holding 46.90% quarterly earnings growth.
According to preceding quarter balance sheet results, the company had $1.06 billion cash in hand making cash per share at 15.73. The total of $335.45 million debt was there putting a total debt to equity ratio 19.95. Moreover its current ratio according to same quarter results was 1.21 and book value per share was 25.06.
Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 1.49% where the stock current price exhibited up beat from its 50 day moving average price of $47.06 and remained above from its 200 Day Moving Average price of $42.40.
HS holds 67.11 million outstanding shares with 63.66 million floating shares where insider possessed 9.56% and institutions kept 87.50%.
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This high-yielding shipping company is breaking out

2012-01-09T15:03:00.001-08:00

Ship Finance International Limited (NYSE: SFL) — This company is an international operator of vessels and offshore related assets consisting of oil tankers, bulk carriers and a variety of other ships.
The stock has risen from $13 to over $20 since July 2009.?
Following a break and run from $15 in February to $21, SFL has been consolidating within a right triangle.?
But during this time, the stock has been under accumulation, and yesterday broke from the right triangle following a buy signal from our internal indicator, the Collins-Bollinger Reversal (CBR).?
SFL pays an annual dividend of $1.53, a yield of almost 8%, and has a trading target of $23.
If you have questions or comments for Sam Collins, please e-mail him at samailc@cox.net.
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U.S. Dollar Mixed in Wake of ECB Plan

2012-01-08T12:18:00.001-08:00
U.S. dollar is mixed vs. majors Thursday in narrow ranges as eurozone sentiment remains choppy in the wake of the ECB's long-term refinancing operation.

After being unable to extend its rally Wednesday, the euro has traded heavily but is finding some modest support near 1.3050 for now. Choppy conditions likely reflect market uncertainty about the efficacy of the LTRO. While liquidity helps the banking system, underlying solvency and debt issues have not been addressed by the ECB's actions and so further eurozone tensions should reappear soon.
So far today, the dollar bloc and sterling are outperforming vs. USD and are up on the day, while the Scandies are underperforming vs. USD and are down modestly on the day.
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Equity markets are mixed, with Asian stocks largely down and European stocks opening up. Euro Stoxx 600 is up 1.1% (financials up 1.2%) while U.S. equity market futures are pointing to an up open.
Bond markets are mixed. Periphery yields are mostly higher. The US 10-year yield is down 1 basis point, Germany up 1 basis point, France down 1 basis point, and UK down 3 basis points.
The commodity complex is mixed, with oil and copper up, gold down. EM currencies were mostly firmer. ZAR, RUB, and PLN are outperforming in EM vs. USD and are up on the day, while KRW, INR, and MYR are underperforming vs. USD and are down on the day.
German Chancellor Merkel's advisor Peter Bofinger said the future of the euro will be determined in the next six months, and that its survival will require Germany to change its stance. He added that the ECB could help by capping yields on Italian and Spanish bonds.
It appears that Greece's private sector creditors are balking at the IMF's proposal for a 5% coupon on restructured debt, as the haircut is seen as too deep. Lastly, another French downgrade rumor made the round! s, one o f these days the rumor will be correct.
In Mexico, mid-December consumer price index numbers are due out at 9:00 a.m. EST, 0.32% month-over-month is expected vs. 0.97% in mid-November.

In Colombia, third-quarter GDP is due out at 11:00 a.m. EST, 6.0% year over year is expected vs. 5.2% in Q2. The economy remains strong, and helps explain the surprise 25-basis-point rate hike in November. However, minutes suggest that was an insurance hike and the bank is now likely on hold. In 2012, we think it will be easing like the rest of the world.
In Italy, October retail sales was stronger than expected, up 0.1% month over month vs. -0.2% expected and -0.4% in September.
U.S. November Chicago Fed index, Q3 GDP, weekly jobless claims, and November leading index are all out today. U.S. data has been coming in on the strong side recently, and good numbers today should add to the upswing in market sentiment.
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Stock Futures Point Up On Jobs, ECB Rate Cut

2012-01-08T07:57:00.001-08:00

S&P 500, Nasdaq and Dow futures are all up modestly after a stronger than expected U.S. jobs report and an announcement by the European Central Bank that it would cut its benchmark rate.
The number of U.S. workers filing new applications for unemployment benefits fell by 23,000 to a seasonally adjusted 381,000 in the week ended Dec. 3, exceeding economist forecasts of 395,000. This represents the lowest level in nine months.
European markets were mostly higher after the ECB said it would cut its benchmark rate to a historic low of 1% from a previous 1.25%. European leaders are set to meet later today for the beginning of a summit to determine the future of the euro zone.
In stocks, McDonald’s (MCD) is up nearly 1% after a better-than-expected same-store sales report, while Costco (COST) is down 4% as earnings failed to rise in line with sales. Pork-producer Smithfield Foods (SFD) is up 1.3% after earnings beat expectations.
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Best Ideas 2012: Yield Gushers - Just Energy, Seaspan, BDCL

2012-01-08T03:23:00.001-08:00

Many of our readers crave cash income and the following five investment recommendations provide exactly that. Below are the investment experts’ opinions on a mix of dividend stocks, partnerships, preferred stocks and an exchange traded note. Given the recent market turbulence the stabilizing effect of dividend income has become paramount to many investors. For those not using a tax deferred account it is important to remember that the Bush tax cuts, including the favorable 15% treatment of dividend income, are set to expire at the end of 2012. For some, this could mean the tax rate on stock dividends will nearly triple.
For more Best Ideas for 2012 please see the links at the end of this post pointing to other expert recommendations.
Richard Lehmann
Forbes/Lehmann Income Securities Investor
Jack Adamo
Jack Adamo’s Insider Plus
Seaspan Corp. Series-C 9.50% Cumulative Preferred (NYSE: SSW-C)
I expect 2012 to be a bad year for stocks, so I��m emphasizing safety. Over the last 10 years Insiders Plus had a Sharpe Ratio (risk-adjusted return) five times the market��s.
Seaspan leases container ships on long-term charters of up to 12 years. 70% of its revenues come from shipping companies owned by The People��s Republic of China. Another 20% are from Japan��s biggest shippers.

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How the Wealthy Slash Their Income Tax Bills

2012-01-07T22:58:00.000-08:00

Stories about millionaires and billionaires who pay little or no income tax make great headlines, especially when these people have committedtax fraud. However, the methods that most wealthy taxpayers use to reduce what they owe are perfectly legal tax-lowering strategies that anyone can use.
Charitable Donations
Taxpayers may donate up to 50% of their?adjusted gross incomes (AGI),?according to?IRS publication 526, Charitable Contributions. Deductions for donations exceeding 50% of a taxpayer’s adjusted gross income can be carried over for the next five years until they are used up. When carryovers are included, contributions are still limited to 50% of AGI per year. Most people cannot afford to donate anywhere near 50% of their AGI, but the super-rich have this option.
While making a large charitable donation helps wealthy taxpayers significantly lower their tax bills, it’s not as if these taxpayers are keeping the money for themselves and not paying taxes on it. The government may not get as much revenue, but it has granted taxpayers permission to give it less revenue in this circumstance.
Both the government and private charities run many programs intended to help people with limited means. Well-managed charities have lower administrative costs than government bureaucracies, and that means they can do more good with the same amount of money. Charities also have an incentive to use donated funds as efficiently as possible because they must compete with each other for contributions, whereas government welfare agencies have a monopoly. Thus, we shouldn’t be upset when the wealthy pay lower taxes because of their large donations to charity. This tax deduction helps to provide more assistance to people who truly need it.
Maxed-out Retirement Plan Contributions
The average taxpayer might have difficulty making the maximum $16,500 annual pre-tax contribution to an employer-sponsored?401(k), or even maxing out a?traditional IRA, with its low ! $5,000 a year pre-tax contribution limit. High-income taxpayers, on the other hand, often have no trouble maxing out their retirement accounts because their essential expenses, like food and housing, make up a lower percentage of their incomes.
People?who earn income as independent contractors, or who have their own businesses, have even better opportunities to make large retirement contributions. These options are not exclusively available to the rich; they are also available to taxpayers of lesser means. It’s just that the latter group may not be able to afford to take full advantage of tax-advantaged retirement contributions for the self-employed, since they don’t have as much?disposable income.
“Wealthy consultants, solo practitioners and business owners, especially those who are close to retirement, might consider establishing a defined-benefit pension plan,” says Jonathan Bergman, a Certified Financial Planner and vice president of Palisades Hudson Financial Group, a wealth management firm in?Scarsdale,?N.Y.;?Atlanta,?Ga.;?and?Ft.?Lauderdale, Fla. “Self-employed consultants and physicians’ practices are ideal for this type of plan.”
Such plans permit very large retirement plan contributions for owners who can afford to stash the money away until they’re older.
“Retirement-plan contributions reduce current year taxable income, and once the money is in the plan, it is not taxed until it is withdrawn. This income tax deferral can reduce, or even avoid, state income tax permanently if the contributor relocates to a tax-friendly state during retirement,” says?Bergman.
Investment Income
Some wealthy people are able to pay taxes on a lower percentage of their incomes than the non-wealthy because the wealthy generate significant earnings from investments that are taxed at a lower rate than employment income. The non-wealthy get most of their income from employment.
The money you earn from a job is subject to fed! eral and state income taxes. The more you earn, the higher the tax rate you pay on the last dollar you earn.
Regardless of how much you make, employment income is also subject to payroll taxes (FICA), which are currently 6.2% for?Social Security and 1.45% for?Medicare.?Self-employed workers pay almost double those amounts since they have to pick up the employer’s share of the tax. Employees lose out on the higher wages and salaries their employers could have paid them if not for the additional tax.
Investment income is subject to different tax rates depending on the type of investment and how long it was owned and the investor’s marginal tax rate, but the rates are often substantially less than the rates on employment income. Here are some examples of the federal tax rates on different types of investment income:
-Qualified dividends: 0% for taxpayers in the 10% and 15% brackets; 15% for everyone else
-Long-term capital gains: 0% for taxpayers in the 10% and 15% brackets; 15% for everyone else
-Tax-exempt municipal bond interest: 0%
Also, while interest income from U.S. Treasuries is subject to?federal income tax, it is exempt from state and local income taxes. This feature can help taxpayers in high-tax states and localities reduce their tax bills.
As you can see, investments are generally taxed at a lower rate than employment income. If you start building an investment portfolio, over time, your investment returns might generate a significant portion of your income, too. When they do, you’ll be glad that this income is taxed at a more favorable rate.
The Bottom Line
Many of the strategies that millionaires and billionaires use to reduce their taxes are perfectly legal and available to everyone, but taxpayers with modest incomes may not have the resources to take advantage of these techniques. Not everyone can afford to make large donations and retirement contributions or to hire sophisticated financial planners and tax accountants, but tha! t doesn& #8217;t mean that the wealthy are tax criminals.
Additionally, the wealthy may be less afraid to take advantage of every possible deduction because they have the resources to defend themselves against an IRS audit, but again, that doesn’t make them tax-evaders. Furthermore,?tax evasion is not a crime of the super-rich. People at all income levels refuse to pay the taxes they owe, whether they do it by not filing a return, filing a fraudulent return or attempting to circumvent the tax code. These people usually get caught and have to pay up sooner or later. The rest of us could learn something about legal tax minimization strategies from those who employ them.

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NBSK Pulp ¨C A Market Overview

2012-01-07T09:35:00.000-08:00
Paper pulp stocks have tanked in the last few months. With the pricing of their commodity products falling, some of the stocks are off more than 50%. Although they are probably not out of the woods yet (pardon the pun), it might be worthwhile to take a look at the industry. I hope to provide a brief market overview in this post and then take a look at two pure-play pulp stocks, Mercer International (MERC) and Canfor Pulp Products (TSE: CFX)(PINK:CFPUF), that make NBSK (northern bleached softwood kraft pulp).

Here is a nice overview of the paper supply chain:

Market pulp makes up a relatively small portion of the material used in paper production, with most pulp coming from recycled products or in-house in the case of vertically integrated paper producers. The two major types of market pulps are BHKP (bleached hardwood kraft pulp) and BSKP (bleached softwood kraft pulp). NBSK is the premium grade of BSKP and is produced mainly in Canada and Scandinavia.

Demand

In analyzing demand there are two issues to look at. One is the growth in the production of paper end products (printing and writing paper, tissue products, etc.) and the other is the mix of pulp types used. The overall picture is one of moderate demand growth. In developed countries, the production of writing and printing papers is slowing while tissue and specialty paper production is growing steadily. And in the emerging markets, especially China, paper production of all types is growing quickly with the r! ise in s tandard of living. As China has limited domestic forest resources (per capita forest stock volume is one sixth of the world average), it relies on imported pulp for a majority of its paper production. In 2011 China will account for 23% of world market pulp usage, up from 15% in 2005. Tissue and specialty paper production in China is expected to grow at a more than 10% rate for the foreseeable future.

BSKP is a stronger material than BHKP and generally commands a higher price. Paper producers prefer to use hardwood where they can to save on production costs, but there is a limit to how much they can substitute for softwood before degrading product quality and losing production efficiency. As paper machine technology and production speeds advance, fiber strength becomes more crucial to prevent tears and maintain machine uptime. Additionally, the strength of BSKP is needed as paper industry growth is skewed to lower basis weight products. Over the past 15 years producers have found ways to use an increasingly larger percentage of hardwood, but the substitution cycle is slowing. One possible indicator of this is the widening price spread between hardwood and softwood pulp (based on RISI data, chart from recent MERC presentation):

This forecast has market pulp demand for BKSP going from 22 million metric tons in 2010 to 26 million mt by 2014:

Supply!

Supply is expected to be essentially flat for the next few years, as only one BSKP new build has been announced. This is in contrast to BHKP, where several million tons of new capacity is being added in the next few years (chart based on Terrachoice data, from MERC investor presentation):

There are several reasons for the divergence of BHKP and BSKP supply. One is that demand for BHKP is expected to grow faster than BSKP given the lower pricing on BHKP. The other is that the global stock of hardwood is double that of softwood, with softwood being concentrated in North America and Scandinavia. There is plenty of hardwood stock in Latin America and Southeast Asia where very low cost hardwood pulp plants are being built.

From 2006 to 2009, 5.3 million mt of high cost NBSK capacity was shut. Even with 1.9 million tons of capacity being restarted in the back half of 2009 and 2010, that leaves over 3 million tons that appears to be permanently shuttered. And by definition the restarted capacity is that of marginal players who will not be competitive as NBSK prices drop.

Pricing

While the supply/demand fundamentals for NBSK appear decent, the short term picture is not as strong. The pulp markets are very sensitive to short term swings in the macro economy. Interestingly, pulp is the second most volatile commodity after oil as measured by standard deviation of market pricing. Oliver Landsdell, one of the leading industry consultants, has said macroeconomic i! ssues ca use two thirds of the swings in pulp market pricing, with specific industry supply/demand issues only causing one third of the pricing changes.

As you can see from the chart, NBSK pricing has been a roller coaster the past few years. Pricing collapsed in the second half of 2008. Producer inventories plummeted due to capacity shutdowns and production slowdowns. This led to extreme supply tightness when the economy started picking up in the second half of 2009. And the February 2010 earthquake in Chile further exacerbated the supply issues. Pricing hit a record this summer at over $1,000/mt for the benchmark European NBSK index, in part due to the dissolving pulp craze which diverted some NBSK supply, as well as a significant ramp up in new Asian paper capacity.

In the last three months the party has ended, with Europe NBSK dropping to $870/mt. The culprits appear to be the general jitters on the part of buyers due to the European debt scare and the Chinese government credit contraction in their attempt to control inflation. Producer supply is up to 34 days, well above the 30 day balanced level. Chinese buyers appear to have built inventory and are waiting for lower prices. Pulp producers will need to reduce inventories in the fourth quarter and they are selling into a weak demand environment. China pricing has fallen to $700/mt, or a 17% decline in just two months.

So, where does pricing go from here? Of course nobody knows, as even the industry experts are not very good at predicting pricing in such a volatile market. If the global economy crashes then so will NBSK, although there appears to be a floor around the $600/mt ton area as higher cost producers will just shut their plants down. And we know that the historical peak is around $1,000/mt. That doesn��t help much, but gives us a range to think about. The pulp markets are so volatile that there isn��t really a ��normal! ized�� p rice, but those bullish on the fundamental supply/demand dynamics will argue it is closer to $1,000 than $600. It will be interesting to see how long and how deep the current NBSK downturn will be. Barring a macro meltdown things might tick up as early as the spring as producers reduce their inventories. I think there might be an interesting opportunity to go long pulp in the near future and to that end will take a look at Mercer International (MERC) and Canfor Pulp Products (CFX) in the coming days.

Disclosure: No position in stocks mentioned.

Elie Rosenberg runs a value investing research website at valueslant.com. Sign up here to get his free value investing ideas and analysis by email and get his free ebook, "16 Ways to Find Undervalued Stocks."
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Retailers Report Disappointing Increase in Their In-Store Black Friday Sales, Despite Solid Jump in Online Results

2012-01-07T05:12:00.001-08:00

Steep discounts in November and a surge in online purchases meant that retail sales moved only slightly higher on the opening day of the 2010 holiday shopping season - despite a nice increase in the number of shoppers who crowded retail stores.

Retail spending hit $10.69 billion on Black Friday, the traditional start of the holiday shopping season, a 0.3% increase from the $10.66 billion in sales recorded on the day after Thanksgiving last year, reports ShopperTrak, a Chicago-based retail firm that tallies sales in more than 70,000 retail locations around the country.

However, ShopperTrak said the sales total was still a Black Friday record. The researcher is standing behind its prediction that holiday-season spending will rise 3.2%.

"It's hard to say Black Friday wasn't a success, it's just not the success we saw in the mid-2000s, when the day really became a phenomenon," said ShopperTrak founder Bill Martin.

Store traffic actually advanced a solid 2.2%. Martin says the disconnect between the traffic increase and the much-smaller sales increase suggests that consumers were searching for bargains - and didn't buy if they didn't find them.

"This means the American shopper has adapted to the economic climate over the last couple of years and is possibly spending more wisely as the holiday season begins," ShopperTrak's Martin said.

Two key factors may have crimped in-store Black Friday sales: Heavy discounts earlier in November and online shopping, which saw a big increase.

Shoppers who skipped the crowds on Black Friday gave online merchants a 16% percent spike in revenue, according to data from Web researcher Coremetrics.com that was released Saturday. The average order rose to $190.80 - a jump of 12% over the average order of $170.19 for Black Friday last year.

The solid increase adds to a 33% jump i! n online spending that took place on Thanksgiving Day. Online shopping still only accounts for 8% to 10% of all holiday spending.

Smartphone shopping continues to grow: About 5.6% of shoppers who log onto a retailer's Website do so using a mobile device - up from about 1% on Black Friday? in 2009.

"The [online shopping] season's off to a great start," said John Squire, vice president of strategy for Coremetrics. "It really shows really strong consumer sentiment for buying and for going online."

Some of the so-called "big box" retailers have already reported that HDTVs, laptop and netbook computers, and Zhu Zhu pets have been among the biggest sellers.

The hope is that today (Monday) - so-called "Cyber Monday" - will provide retailers with a nice tailwind as they head toward the holidays. Cyber Monday - the Monday after Black Friday - has become a huge online shopping day.

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Although growing, YUM, CMG and DPZ aren¡¯t worth their P/E's

2012-01-07T00:46:00.001-08:00

Fast-food companies are doing well thanks to global growth and popular store concepts. But we’ll know just how well they’re doing when Yum! Brands (NYSE:YUM) reports its results Tuesday after the market closes. But YUM is far from the only restaurant stock out there — for example, there’s Chipotle (NYSE:CMG) and?Domino’s (NYSE:DPZ). Will any of these companies fatten your net worth?
Yum! Brands is a tale of two?regions — a slumping U.S., and a booming China and rest of the world. YUM operates 38,000 restaurants globally, many of those under the Taco Bell, Pizza Hut and KFC brands. But thanks to growth overseas, Yum! Brands is expected to report higher revenue and profit in its third-quarter report. Almost three-quarters of?Yum! Brands’ operating profit comes from China and other foreign countries — even though they account for a relatively meager 50% of its total restaurant count.
But one of the downsides of the growth in China is the risk that inflation — in the form of higher labor and commodity costs?– will take a bite out of YUM’s profits. Meanwhile, Yum Brands’ U.S. operations are flagging. In the second quarter, its operating profit there fell 28% in all three of its core brands.?Its biggest problem has been with Taco Bell, which accounts for 60% of its U.S. profit.
FactSet-polled analysts expect Yum! Brands to report 82 cents a share of adjusted earnings on $3.08 billion in revenue — that would be an EPS increase of 12.3% and a revenue rise of 73 cents per share on revenue of 7.1% compared to the third quarter of 2010.
Chipotle’s growth could accelerate if its new newly opened ShopHouse Southeast Asian Kitchen can do for Asian noodles what Chipotle already has done for Mexican food. Based on the popularity of its Washington, D.C., store, opened recently, ShopHouse��s prospects look g! ood.

And while Domino’s was dogged for years for its low-quality pizza, it made wholesale changes to its base pie in 2010, and the company recently introduced a new ��artisan�� line that features feta cheese and so-called Tuscan salami that may help boost public perception of its quality.
But is any of this enough to justify an investment in Yum! Brands, Chipotle or Domino’s? I would skip them all for now, as they are too expensive when compared to their earnings growth. Here’s my reasoning:
Yum: Growing, profitable company; overpriced stock.?Yum revenues were up 4.7% to $11.7 billion in the past year, and its net income?grew 8.1% to $1.2 billion, yielding a solid 10.3% profit margin. But its price/earnings-to-growth ratio is an overvalued 1.61 (where 1.0 is considered fairly valued) on a P/E of?19.5 on earnings forecast to grow 12.1% to $3.19 in 2012.
Chipotle: Rapidly growing, highly profitable company; overpriced stock. Chipotle’s revenues are up 21% in the past year to $2 billion, and its net income?climbed 41% to $192 million, yielding a solid 9.6% net profit margin. And its PEG is?a high?1.77 on a P/E of?48.4 on earnings forecast to grow 27.3% to $8.67 in 2012.
Domino’s: Growing,?decently profitable company; pricey stock. Domino’s revenues are up 11.9% in the last year to $1.6 billion, and its net income exploded 10.2% to $93 million, yielding a slim 5.8% net profit margin. And its PEG is?a high?2.05?with a P/E of 26.5 on earnings forecast to grow 12.9% to $1.83 in 2012.
The market is overestimating the growth prospects for these fast-food purveyors. Avoid them for now, as they could unsettle your portfolio.
Peter Cohan has no financial interest in the securities mentioned.
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Hard Drive Makers Fall on Wedbush Downgrade

2012-01-06T11:22:00.001-08:00

Shares of both Seagate Technology (STX) and Western Digital (WDC) are trading lower today, in the wake of somewhat bearish sentiment from Wedbush Securities. Analyst Kaushik Roy downgraded both of the hard-disk drive makers to Neutral from Outperform.
“We want to take some profits and reduce exposure to HDDs as weenter the seasonally soft June quarter,” Roy writes. “Inventories are not bloated at this time, but are starting to creep up and the directional change may make investors more cautious at this time.”
Over the last year, shares of Seagate are up 191%, with Western Digital stock up 89%. The Nasdaq, by comparison has risen 48%.
Roy’s new price targets are $23 for Seagate (from $25) and $48 for Western Digital (from $55).
In today’s trading:
Seagate is down 3.3%, or 63 cents to $18.45.
Western Digital is down 1.8%, or 73 cents, to $40.36.
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