Has BHP Billiton Become the Perfect Stock?

Every investor would love to stumble upon the perfect stock. But will you ever really find a stock that provides everything you could possibly want?

One thing's for sure: You'll never discover truly great investments unless you actively look for them. Let's discuss the ideal qualities of a perfect stock, then decide if BHP Billiton (NYSE: BHP  ) fits the bill.

The quest for perfection
Stocks that look great based on one factor may prove horrible elsewhere, making due diligence a crucial part of your investing research. The best stocks excel in many different areas, including these important factors:

  • Growth. Expanding businesses show healthy revenue growth. While past growth is no guarantee that revenue will keep rising, it's certainly a better sign than a stagnant top line.
  • Margins. Higher sales mean nothing if a company can't produce profits from them. Strong margins ensure that company can turn revenue into profit.
  • Balance sheet. At debt-laden companies, banks and bondholders compete with shareholders for management's attention. Companies with strong balance sheets don't have to worry about the distraction of debt.
  • Money-making opportunities. Return on equity helps measure how well a company is finding opportunities to turn its resources into profitable business endeavors.
  • Valuation. You can't afford to pay too much for even the best companies. By using normalized figures, you can see how a stock's simple earnings multiple fits into a longer-term context.
  • Dividends. For tangible proof of profits, a check to shareholders every three months can't be beat. Companies with solid dividends and strong commitments to increasing payouts treat shareholders well.

With those factors in mind, let's take a closer look at BHP Billiton.

Factor

What We Want to See

Actual

Pass or Fail?

Growth 5-Year Annual Revenue Growth > 15% 13.7% Fail � 1-Year Revenue Growth > 12% 20.5% Pass Margins Gross Margin > 35% 78.5% Pass � Net Margin > 15% 30.6% Pass Balance Sheet Debt to Equity < 50% 38.8% Pass � Current Ratio > 1.3 0.85 Fail Opportunities Return on Equity > 15% 38.3% Pass Valuation Normalized P/E < 20 9.85 Pass Dividends Current Yield > 2% 3.0% Pass � 5-Year Dividend Growth > 10% 23.4% Pass � � � � � Total Score � 8 out of 10

Source: S&P Capital IQ. Total score = number of passes.

Since we looked at BHP Billiton last year, the stock has lost a point. But the mining company has continued to see fast growth, and a recent dividend boost combined with a significant share price drop has made the stock a lot more attractive.

BHP Billiton has long been known for its iron ore reserves, which made it a prime supplier for countries like China that needed the raw material to m! ake stee l. Along with peers Rio Tinto (NYSE: RIO  ) and Vale (NYSE: VALE  ) , BHP still has a stranglehold on the world's iron ore supply, but China's slowdown has reduced steel demand. That partially explains why Rio Tinto's growth has slowed in the past year, although Vale and BHP are both still seeing solid revenue gains.

Unlike Rio and Vale, though, BHP Billiton has become a huge player in energy as well. With a timely purchase of a stake in the Fayetteville Shale from Chesapeake Energy (NYSE: CHK  ) , BHP is gaining shale-gas expertise that it can potentially use around the world, especially in areas where gas prices present a more lucrative opportunity. Meanwhile, Chesapeake got much-needed cash from the sale to help it weather the drop in natural gas prices.

One issue BHP faces is its debt. Although a 39% debt-to-equity ratio isn't too bad, BHP's net debt amounts to more than $20 billion. That puts BHP at a competitive disadvantage to fellow copper producer Freeport-McMoRan Copper & Gold (NYSE: FCX  ) , which actually has a net cash position. On the other hand, Freeport is more concentrated on copper production and doesn't give you as much diversification as BHP's broader portfolio of assets.

Still, BHP Billiton is close to perfection because overall demand for natural resources remains strong. If the economic recovery begins to accelerate, then it could help get BHP over the hump to claim those last two points on our 10-point scale.

Keep searching
No stock is a sure thing, but some stocks are a lot closer to perfect than others. By looking for the perfect stock, you'll go a long way toward improving your investing prowess and learning how to separate out the best investments from the rest.

BHP Billiton may be close to perfection, ! but we'v e got some ideas you may like better. Let me invite you to learn about three smart long-term stock plays in the Fool's latest special report. It's yours for the taking and is absolutely free, but don't miss out -- click here and read it today.

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

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Top Stocks To Watch In December 2013

The top 10 performers in the benchmark S&P 500 so far this year aren't easy to characterize. They range from Freeport-McMoRan Copper & Gold to Bank of America.

 

The S&P 500 gained 4.4% in January, the biggest increase for that month in 15 years, helped by signs the European sovereign debt crisis that has hung like a cloud over the markets might be coming to a resolution soon. And, perhaps secondarily, the Federal Reserve said it would remain active in boosting the economy and keep inflation in check.

 

The top 10 companies in the S&P 500 in January had share gains that were clustered in the 27% to 39% range, with DVD and digital entertainment deliverer Netflix the outlier with a whopping 77% jump.

 

Still, if you look back to the end of 2013, many of these stocks are still in the hole, so a month or so of increases doesn't wipe that out.

 

In inverse order of return, here are the S&P 500's 10 best-performing stocks of March 2013:

Top Stocks To Watch In December 2013:Eastern Insurance Holdings Inc. (EIHI)

 Eastern Insurance Holdings, Inc., through its subsidiaries, provides workers compensation insurance and reinsurance products in the United States. The company?s Workers Compensation Insurance segment provides traditional workers compensation insurance coverage products, including guaranteed cost policies, policyholder dividend policies, retrospectively-rated policies, deductible policies, and alternative market products to employers. This segment distributes its workers? compensation products and services through its independent insurance agents primarily in Pennsylvania, Delaware, North Carolina, Maryland, Indiana, and Virginia. Its Segregated Portfolio Cell Reinsurance segment offers alternative market workers compensation solutions comprising program design, fronting, claims administration, risk management, segregated portfolio cell rental, asset management, and segregated portfolio management services to individual companies, groups, and associations. Eastern Insurance Holdings, Inc. is headquartered in Lancaster, Pennsylvania.

Top Stocks To Watch In December 2013:Nuveen Quality Preferred Income Fund (JTP)

 Nuveen Quality Preferred Income Fund is a closed ended fixed-income mutual fund launched by Nuveen Investments Inc. It is managed by Spectrum Asset Management Inc. The fund invests in the fixed income markets of the United States. It primarily invests in the taxable preferred securities rated investment grade Baa/BBB or better. Nuveen Quality Preferred Income Fund was formed on June 15, 2002 and is domiciled in the United States.

Top Stocks To Watch In December 2013:Overhill Farms Inc. (OFI)

 Overhill Farms, Inc. manufactures prepared frozen food products for branded retail, private label, foodservice, and airline customers. Its product line includes entrees, plated meals, bulk-packed meal components, pastas, soups, sauces, poultry, meat and fish specialties, and organic and vegetarian offerings. The company markets its products through its internal sales force, as well as through outside food brokers. Overhill Farms, Inc. was founded in 1968 and is headquartered in Vernon, California.

Top Stocks To Watch In December 2013:Taylor Devices Inc. (TAYD)

 Taylor Devices, Inc. engages in the design, development, manufacture, and marketing of shock absorption, rate control, and energy storage devices for use in various types of machinery, equipment, and structures. The company provides seismic dampers that ameliorate the effects of earthquake tremors on structures; Fluidicshoks, which are small and compact shock absorbers for primary use in the defense, aerospace, and commercial industry; and crane and industrial buffers for industrial application on cranes, ships, container ships, railroad cars, truck docks, ladle and ingot cars, ore trolleys, and car stops. It also offers self-adjusting shock absorbers that automatically adjust to different impact conditions for high cycle applications primarily in heavy industries; liquid die springs, which are used as component parts of machinery and equipment used to manufacture tools and dies; and vibration dampers that are primarily used by the aerospace and defense industries to control the response of electronics and optical systems subjected to air, ship, or spacecraft vibration. Taylor Devices, Inc. primarily sells its products through sales representatives and distributors in the United States, Asia, North America, Europe, South America, and Australia. The company was founded in 1955 and is based in North Tonawanda, New York.

Top Stocks To Watch In December 2013:Campbell Soup Company (CPB)

 Campbell Soup Company, together with its subsidiaries, engages in the manufacture and marketing of branded convenience food products worldwide. The company?s U.S. Soup, Sauces, and Beverages segment offers condensed and ready-to-serve soups; broth, stocks, and canned poultry; pasta sauces; Mexican sauces; canned pastas, gravies, and beans; juices and beverages; and tomato juices. Its Baking and Snacking segment provides cookies, crackers, and bakery and frozen products in the United States; and biscuits in Australia and the Asia Pacific. The company?s International Soup, Sauces, and Beverages segment offers soups, sauces, and beverages in Europe, Latin America, and the Asia Pacific region, as well as in the Russian Federation, China, and Canada. Its North America Foodservice segment distributes various products, such as soup, specialty entrees, beverage products, other prepared foods, and farm products through various food service channels in the United States and Canada. The company markets its products directly, as well as through broker and distributor arrangements. Its customers include retail food chains, mass discounters, mass merchandisers, club stores, convenience stores, drug stores and other retail, and commercial and non-commercial establishments. Campbell Soup Company was founded in 1869 and is headquartered in Camden, New Jersey.

Top Stocks To Watch In December 2013:Corrections Corporation of America (CXW)

 Corrections Corporation of America, together with its subsidiaries, owns and operates privatized correctional and detention facilities in the United States. The company owns, operates, and manages prisons and other correctional facilities; and provides inmate residential and prisoner transportation services for governmental agencies. Its facilities also offer various rehabilitation and educational programs, including basic education, religious services, life skills and employment training, and substance abuse treatment. In addition, Corrections Corporation provides healthcare services, such as medical, dental, and psychiatric services; food services; and work and recreational programs. As of June 30, 2011, the company operated 66 facilities, including 45 facilities that it owned with a total design capacity of approximately 90,000 beds in 20 states and the District of Columbia. It is also constructing an additional 1,124-bed correctional facility in Millen, Georgia. Corrections Corporation serves federal, state, and local correctional and detention authorities. The company was founded in 1983 and is based in Nashville, Tennessee.

Top Stocks To Watch In December 2013:Dycom Industries Inc. (DY)

 Dycom Industries, Inc. provides specialty contracting services in the United States and Canada. The company?s services include engineering services, which comprise the design of service area concept boxes, terminals, buried and aerial drops, transmission and central office equipment, administration of feeder and distribution cable pairs, and fiber cable routing and design for telephone companies; and make-ready studies, strand mapping, field walk-out, computer-aided radio frequency design and drafting, and fiber cable routing and design for cable television multiple system operators. The company also provides construction, maintenance, and installation of splice fiber, copper, and coaxial cables to telephone companies; installation and maintenance of customer premise equipment, including set top boxes and cable modems to cable television multiple system operators; and premise wiring services, which include installation, repair, and maintenance of telecommunications infrastructure within improved structures to various corporations, and state and local governments. In addition, Dycom offers underground utility locating services, such as locating telephone, cable television, power, water, sewer, and gas lines to various utility companies. Further, it provides construction and maintenance services for electric utilities and others, which include installing and maintaining overhead and underground power distribution lines, as well as maintenance and installation of underground natural gas transmission and distribution systems. The company was founded in 1969 and is based in Palm Beach Gardens, Florida.

Advisors' Opinion:

  • By Paul At 2011-9-11

    Dycom Industries, Inc. is a provider of specialty contracting services. Its EPS forecast for the current year is 0.43 and next year is 0.73. According to consensus estimates, its topline is expected to grow 3.41% current year and 7.47% next year. It is trading at a forwa! rd P/E o f 23.62. Out of five analysts covering the company, three are positive and have buy recommendations, one has a sell rating and one has a hold rating.

Top Stocks To Watch In December 2013:Guangshen Railway Company Limited (GSH)

 Guangshen Railway Company Limited, together with its subsidiaries, primarily provides passenger and freight transportation services on the Shenzhen-Guangzhou-Pingshi railway in the People's Republic of China. The company?s freight services include the transportation of full load and single load cargo, containers, bulky and overweight cargo, dangerous cargo, fresh and live cargo, and oversized cargo. It also offers long distance passenger transportation services. In addition, the company engages in the sale of food, beverages, and merchandise on board the trains and in railway stations. Further, it engages in the operation of a travel agency, as well as provision of services relating to warehousing, hotel management, cargo loading and unloading, catering management and services, advertising, and freight transportation and package agency services. Additionally, the company provides property management services, as well as involves in the supervision of construction projects. As of December 31, 2009, it operated 218 pairs of passenger trains, including 100 pairs of inter-city high-speed passenger trains between Guangzhou and Shenzhen; 13 pairs of Hong Kong Through Trains; and 105 pairs of long-distance passenger trains. The company was founded in 1996 and is based in Shenzhen, the People's Republic of China.

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Verizon Looking to Fill Empty LTE Network, Says DJ

Dow Jones Newswires’s Greg Bensinger this afternoon offers the findings from an interview with Verizon Communications‘s (VZ) chief technical officer for its wireless unit, David Small, in which it becomes clear that the company’s fastest cellular network, built on so-called long term evolution, or LTE technology, is vastly underutilized.

Although Verizon can reach about 200 million Americans with LTE, just 5% of its customers are currently using it, writes Bensinger. Verizon’s LTE coverage is ahead of the 75 million to 80 million Americans that AT&T (T) has covered with LTE.

Small tells Bensinger the company will reach 260 million Americans by sometime in 2013, up from the carrier’s prior estimate of 250 million.

“Trying to get more LTE devices on the network makes sense since its LTE network is fairly empty,� Drake Johnstone with Davenport & Co. tells me in a phone conversation this afternoon.

“They are getting no competitive edge to the extent they compete with AT&T just on their 3G service.”

AT&T’s GSM-based 3G service is generally regarded as faster than Verizon’s non-LTE service.

Johnstone, like many others, expects Apple�s (AAPL) next iPhone, which may be out this fall, will have LTE connections. That could help with Verizon�s effort, he thinks.

Johnstone has a Neutral rating on shares of Verizon based on valuation. He prefers shares of Vodafone Group PLC (VOD), which owns almost half of Verizon Wireless, as a better way to play the wireless unit’s success, given that Vodafone shareholders receive dividends from Verizon.

Analysts I’ve spoken with expect Verizon will spend $2 billion on LTE build-out this year.

I wrote in ! this wee k’s Barron’s magazine, in the Tech Trader column, that Verizon and AT&T and others rolling out the technology want to increase usage but also don’t want to risk disappointment by customers.

One telecom analyst, Jennifer Fritzsche with Wells Fargo, described Verizon’s LTE network to me by saying “It’s a big, shiny, empty network at this point.

Previously:4G Phones 35% of Smartphone Sales in Q4, Says NPD, March 13th, 2012.

Fin

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Investors better off with Balanced Index or Wellington

With little fanfare, Vanguard bid adieu to Asset Allocation (MUTF:VAAPX) on Friday, Feb. 10, the fund�s last trading day. Assets have now been moved into Balanced Index (MUTF:VBINX) and fund No. 78 (the Admiral shares were No. 578) is now history. And it was some history. Shifting between S&P 500 stocks, long-term Treasuries and cash, the managers at Mellon Capital kept Asset Allocation on a pretty level playing field with Vanguard balanced-fund stalwart Wellington (MUTF:VWELX) for years.

But something must have gotten into the computers because not only did Asset Allocation stumble in bear markets, but since the 2008 market decline, the fund just never got back on its feet.

Click to Enlarge From inception through Friday, Asset Allocation earned a 12.3% annualized return through some of the most bullish, and most bearish markets most of today�s investors have ever seen. But, by contrast, Wellington earned a 13.8% return, 1.5% better per annum over the entire period — a result that simply adds up over time. To put it into dollar terms, for every $100 that Asset Allocation turned into $691, Wellington was able to turn into $864 — a 25% difference. Vanguard simply went with the better horse.

Wellington, by the way, also has outperformed Balanced Index since that fund�s inception in 1992; up an annualized 13.3% to 11.2% for the index fund. Over that same period Asset Allocation earned just 10.9%. Shareholders are better off in Balanced Index, but they�d be even happier in Wellington.

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Why Bridgepoint Education's Earnings Are Outstanding

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 Bridgepoint Education (NYSE: BPI  ) , whose recent revenue and earnings are plotted below.

anImage

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, Bridgepoint Education generated $186.3 million cash while it booked net income of $172.8 million. That means it turned 20.0% of its revenue into FCF. That sounds pretty impressive.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in! the upc oming 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 Bridgepoint Education look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

anImage

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 27.4% of operating cash flow coming from questionable sources, Bridgepoint Education investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotte! d in the TTM period above, other operating activities (which can include deferred income taxes, pension charges, and other one-off items) provided the biggest boost, at 3.0% of cash flow from operations. Overall, the biggest drag on FCF came from changes in accounts receivable, which represented 27.5% of cash from operations. Bridgepoint Education investors may also want to keep an eye on accounts receivable, because the TTM change is 2.2 times greater than the average swing over the past 5 fiscal years.

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 Bridgepoint Education to My Watchlist.

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Fed Chair Comments Boost Greenback

Dominique Strauss-Kahn resigned as leader of the International Monetary Fund (IMF) late Wednesday night, triggering a global battle between developed economies and emerging markets to find a new IMF managing director.

Strauss-Kahn, who was arrested May 14 on sexual assault charges, said in a statement released yesterday (Thursday) morning that he felt "compelled" to resign.

"I want to protect this institution which I have served with honor and devotion, and especially - especially - I want to devote all my strength, all my time, and all my energy to proving my innocence," Strauss-Kahn wrote.

Strauss-Kahn took over the managing director role in 2007 and has played a key part in navigating economies through the aftermath of the global financial crisis. The IMF has used emergency loans to bail out more than a dozen countries, including debt-laden Greece.

The IMF said John Lipsky, the IMF's first deputy managing director, will assume the vacated role until it's filled. Lipsky has been the acting managing director since Strauss-Kahn's arrest over the weekend.

Now the search is on for a new IMF managing director, and so far candidates have emerged from all over the globe. And the IMF must not delay in naming a replacement.

"Time is of the essence," Julie Chon, a senior fellow at the Washington-based Atlantic Council and former adviser to the U.S. Senate Banking Committee, told Bloomberg News. "The longer the IMF allows the specter of uncertainty to hang over its leadership, the more exposed it becomes to the jittery actions of sovereign debt and foreign-exchange traders who have been speculating on what the leadership vacuum means for their portfolios."

Any IMF member can submit a nomination. The IMF's 24-member executive board, representing 187 member countries, is in charge of picking the new leader. It tries to choose by consensus, but if ! an agree ment can't be reached it goes to a vote.

Votes are weighted to represent each country or region's share of the global economy, although some weights haven't kept up with emerging markets' rapid growth. European nations have a total of about 35.6% of the vote, giving their top candidate a good shot.

So far, French Finance Minister Christine Lagarde is the front-runner for the position of managing director. She stands out because of her headline role in helping manage the Eurozone's debt crisis. The Financial Times named Lagarde the best finance minister in Europe in 2009. She would be the first female to assume the managing director position.

"Madame Lagarde is one of the obvious candidates," said Swedish Finance Minister Anders Borg. "I would argue that [she] has outstanding credentials."

Many European Union leaders, including German Chancellor Angela Merkel, think the region's sovereign debt crisis requires an EU candidate. They say the urgent need to fix their countries' spiraling debt will be the IMF's main concern.

"Naturally the developing countries have a claim on the highest position at the IMF or World Bank, but the current situation, given the considerable problems of the euro, speaks for a European candidate," said Merkel.

However, Lagarde may not be that candidate, as she faces legal problems that could remove her from consideration. She is being investigated for wrongdoing in the awarding of damages to controversial French businessman Bernard Tapie, and the court has yet to deliver a decision.


Emerging economies argue that the European IMF dominance should change and countries in Asia and Africa need more representation. Emerging markets are a bigger part of the global economy than they were a few years ago and are more affected now by IMF decisions.

"Institutions such as the IMF must reform so that they can become credi! ble, and to be credible they must represent the interests and fully reflect the voices of all countries, not just a few industrialized nations," South African Finance Minister Pravin Gordhan said in a statement.

Gordhan voiced support for Trevor Manuel, head of South Africa's National Planning Commission. Manuel served as the South African finance minister before Gordhan, who calls him "highly respected in the world."

Asian leaders echoed the sentiment. They said Asian finance leaders were well qualified to handle economic crises and the vacancy presented a key opportunity for the region.

"A new brand of leadership will send a positive signal that the IMF is indeed responsive to the changing world," Philippine Finance Secretary Cesar Purisima told Bloomberg. "Wherein Asia increasingly plays a major role as a growth driver of the global economy, there is no time more fitting than now for an Asian leader to take the helm."

Asian candidates include Singapore's Finance Minister Tharman Shanmugaratnam. He's the current chairman of the IMF's International Monetary and Financial Committee, and was described by Thai Finance Minister Korn Chatikavanij as "one of the most capable, technically sound, well rounded and experienced finance ministers in the world."

The interest of developing economies to nominate replacements signals the increasing importance these countries hold in the global economy. Still, their success at seeing a non-European leader at the IMF relies on their ability to unite against a strong European vote. Many analysts doubted emerging markets' ability to combine their votes for just one candidate.

A big question is how the United States will cast its 16.8% of the vote. With a European official leading the IMF, the United States has traditionally filled the No. 2 spot - and would like to continue that arrangement. But voting against emerging economies could strain relations between wit! h those countries.

U.S. Treasury Secretary Timothy Geithner yesterday called for an open selection process to quickly replace the vacant spot. Many Group of 20 (G20) leaders like Geithner have supported more open and transparent processes for choosing international financial institution leaders.

"The most important thing is to move decisively to appoint the best qualified person for the job," said Australian Treasurer Wayne Swan, through a spokesman. "Uncertainty around a new managing director of the IMF is not in the interests of the global economy or the institution itself."

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Charting Builders FirstSource's Latest Earnings Release

Builders FirstSource (Nasdaq: BLDR  ) reported earnings on Feb. 16. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Builders FirstSource beat expectations on revenues and exceeded expectations on earnings per share.

Compared to the prior-year quarter, revenue increased significantly and GAAP loss per share dropped.

Margins expanded across the board.

Revenue details
Builders FirstSource booked revenue of $192.7 million. The three analysts polled by S&P Capital IQ predicted revenue of $177.1 million on the same basis. GAAP reported sales were 31% higher than the prior-year quarter's $147.1 million.

anImage

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

EPS details
Non-GAAP EPS came in at -$0.10. The one earnings estimate compiled by S&P Capital IQ predicted -$0.11 per share on the same basis. GAAP EPS were -$0.18 for Q4 versus -$0.26 per share for the prior-year quarter.

anImage

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

Margin details
For the quarter, gross margin was 20.4%, 130 basis points better than the prior-year quarter. Operating margin was -4.1%, 900 basis points better than the prior-year quarter. Net margin was -8.7%, 800 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $186.5 million. On the bottom line, the average EPS estimate! is -$0. 09.

Next year's average estimate for revenue is $889.5 million. The average EPS estimate is -$0.21.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 214 members out of 260 rating the stock outperform, and 46 members rating it underperform. Among 67 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 58 give Builders FirstSource a green thumbs-up, and nine give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Builders FirstSource is hold, with an average price target of $3.25.

Over the decades, small-cap stocks like Builders FirstSource have provided market-beating returns, provided they're value priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.

  • Add Builders FirstSource to My Watchlist.

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By Relaxing "Mark-to-Market" Rules, Has the U.S. Switched Off its Financial Crisis Early Warning System?

On Monday, gold�(NYSE:GLD) futures for December delivery declined $22 to settle at $1,725.20 per ounce, while silver (NYSE:SLV)�futures slipped 93 cents to settle at $34.35.

Market Insight: How Will the Yen Intervention Affect Precious Metals?

Early Monday, the Japanese government sold the yen for the second time since August after hitting another post-World War-II record high against the US dollar (NYSE:UUP).� A currency intervention is often considered a way to boost exports.� �We started currency intervention this morning in order to take every measure against speculative and disorderly moves and to prevent risks to the Japanese economy from materializing,� Prime Minister Yoshihiko Noda told parliament.� The intervention came after the dollar reached a low of 75.31 yen, and the intervention sent the dollar surging to 79.53 yen.� The Bank of Japan confirmed the intervention, but did not comment on the size of the action.� �It�s been massive, really, that�s the only word to describe it,� said Michael Turner, strategist at RBC Capital Markets.� �From what we gather, it�s larger than their most recent intervention.�

On Monday morning, the large Japanese yen intervention move sent the dollar surging higher and dollar denominated assets lower.� Gold reached as low as $1,705, while silver fell to $34.09 in morning trading.� �Gold and other precious metals are being knocked this morning by profit-taking and the strong US dollar,� said analysts at Commerzbank.� In afternoon trading, gold miners (AMEX:GDX) such as Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) fell 2% and 3.25%, respectively.� Silver miner (NYSE:SIL) First Majestic (NYSE:AG) fell more than 4%, while Fortuna Silver (FSM) edge nearly 1% lower.

If you would like to re! ceive mo re professional analysis on equity miners and other precious metal investments,�we invite you to try our premium service free for 14 days.

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Elan Corporation, plc (ADR) Accomplished Record New Price of 52 Weeks NYSE:ELN

Elan Corporation, plc (ADR) (NYSE:ELN) achieved its new 52 week high price of $10.06 where it was opened at $9.44 UP 0.56 points or +5.98% by closing at $9.93. ELN transacted shares during the day were over 7.12 million shares however it has an average volume of 3.43 million shares.

ELN has a market capitalization $5.82 billion and an enterprise value at $6.59 billion. Trailing twelve months price to sales ratio of the stock was 4.97 while price to book ratio in most recent quarter was 21.26. In profitability ratios, net profit margin in past twelve months appeared at -21.30% whereas operating profit margin for the same period at 6.46%.

The company made a return on asset of 2.25% in past twelve months and return on equity of -64.52% for similar period. In the period of trailing 12 months it generated revenue amounted to $1.17 billion gaining $2.00 revenue per share. Its year over year, quarterly growth of revenue was 0.80%.

According to preceding quarter balance sheet results, the company had $499.00 million cash in hand making cash per share at 0.85. The total of $1.27 billion debt was there putting a total debt to equity ratio 464.00. Moreover its current ratio according to same quarter results was 2.42 and book value per share was 0.47.

Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 20.99% where the stock price exhibited up beat from its 50 day moving average with $8.53 and remained above from its 200 Day Moving Average with $6.95.

ELN holds 586.30 million outstanding shares with 477.90 million floating shares.

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Apple, Micron, Dell lead mixed day for tech stocks

SAN FRANCISCO (MarketWatch) � Tech stocks ended up putting in a mixed performance Wednesday, with Apple Inc., Micron Technology Inc. and Dell Inc. among the sector�s few advancers.

Apple AAPL �shares flexed their muscles, rising $21.48, or almost 4%, to $589.58. Before the market opened, Morgan Stanley analyst Katy Huberty boosted her price target on Apple�s stock to $720 a share from $515, and Canaccord Genuity analyst Michael Walkley raised his to $710 from $665.

/quotes/zigman/68270/quotes/nls/aapl AAPL 581.52, -4.04, -0.69%

The impetus for the moves is anticipated high demand for the next version of the iPad, which Apple reiterated would go on sale online and at its retail stores on March 16. Earlier this week, Apple said it had sold out of new iPads it had set aside for pre-orders.

Micron MU �shares pulled back from their high point, but still closed with a gain of 9 cents at $8.58. Bernstein Research analyst Mark Newman raised his rating on the memory-chip maker to outperform from market perform. Newman based his rating on factors such as Micron�s ability to potentially bene! fit from consolidation in the DRAM chip market. Micron is scheduled to report its quarterly results on March 22. Read more about Micron in the Ratings Game.

Dell Inc. DELL �shares rose by 19 cents to $17.42 a day after the company said it would acquire privately held network-security technology company SonicWall Inc., in a deal reportedly worth $1.2 billion.

The Nasdaq Composite Index COMP managed to crawl back from some late losses to close with a gain of less than 1 point at 3,041. The Philadelphia Semiconductor Index SOX �and the Morgan Stanley High Tech 35 Index MSH �both closed in the red.

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Intel Corp. INTC �gave up gains and closed with a loss of 3 cents a share at $27.35. Alex Gauna of JMP Securities raised his target on the stock to $33 from $30, saying there are signs of strengthening demand for chips, especially in the notebook and server markets.

Losses also came from Oracle Corp. ORCL , Hewlett-! Packard Co. HPQ , Netflix Inc. NFLX , Yahoo Inc. YHOO �and EMC Corp. EMC

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Google expected to post strong earnings

SAN FRANCISCO (MarketWatch) � Google Inc. is expected to post a 20% gain in earnings on even stronger revenue growth when the Internet search giant reports fourth-quarter results Thursday.


Reuters
Google is expected to post strong fourth-quarter earnings and sales � with a growing expense line.

Analysts believe Google�s GOOG �core search business has continued to perform well during the period, despite a weak global economy, particularly in Europe. Improvements in its display-ad and mobile businesses are also expected to boost the top line, though several analysts are also predicting a growing expense line as the company continues to hire and expand.

Google is slated to report its results on after Thursday�s closing bell. Wall Street�s consensus calls for earnings of $10.50 per share on net revenue of $8.37 billion, according to consensus estimates from FactSet Research.

In last year�s fourth quarter, Google reported earnings of $8.75 per share on net revenue of $6.37 billion.

The results will come at a volatile time for the company�s stock. Google�s shares topped the $670 mark early this year, their highest level in four years, through the stock has slipped by about 6% since then.

/quotes/zigman/93888/quotes/nls/goog GOOG 621.13, +5.14, +0.83%
Three years of Google

�New management is more focused on product innovation and is improving speed within the company,� Doug Anmuth of J.P. Morgan wrote in a note to clients on Friday. �We think investor sentiment is overly focused on Motorola Mobility, and the core business continues to operate very well.�

Anmuth was referring to Google�s pending $12.5 billion acquisition of wireless-device maker Motorola Mobility MMI , which is awaiting regulatory approval.

On Jan. 6, Motorola preannounced lower-than-expected smartphone sales for the fourth quarter. At the Consumer Electronics Show in Las Vegas last week, Motorola CEO Sanjay Jha said part of the shortfall stemmed from the high price of the company�s most recent launch, the Razr 3. Read CES blog posting on Motorola meeting.

Motorola�s results will not be included in Google�s numbers for the period, and the company does not issue quarterly forecasts. Anmuth is bullish on the company�s search business, predicting that paid clicks will grow by 26% compared with the year-ago quarter. He added that the cost-per-click, or CPC, metric �may be negatively impacted due ! to [fore ign exchange] headwinds, particularly around weakness in the euro.�

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Ben Schachter of Macquarie wrote Tuesday that he expects the company�s revenue line to �benefit from solid search trends, strength from mobile (incremental search volume and Android share gains), better-than-expected emerging-markets growth and demand for display products.�

Another area that will be closely watched is the company�s expense line � particularly as it relates to marketing and hiring.

Colin Sebastian of Robert W. Baird expects the company to close out the year with pro forma operating expenses totaling about 39% of revenue, compared with 35% in 2010, he said. The company has been pushing new initiatives such as its Google+ social network and its Chrome Internet browser and operating system.

Jeff Bezos
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AMAZON.COM'S JEFF BEZOS
King of cloud, maker of Fire
In the most uncertain of economic times, he cemented his place at the pinnacle of the new economy by focusing on the customer � ! no matte r how jittery Wall Street would get.

THE FINALISTS

� How Michael Dell is reinventing Dell Inc.
� Cubist's Bonney safeguards firm's future
� Electronic Arts� Riccitiello runs up the score
� Whole Foods bags customers and profits
� CEO of the Year discussion on The Hub
� Read the full report here
/conga/story/2012/01/ceo.html187491

�While Google does not face the same downward margin pressure that impact pure-play online retailers such as Amazon AMZN , we note that marketing expenses are a wild card given heavy advertising for Chrome and Google+,� Sebastian wrote in a report.

Google�s been on a heavy pace of hiring of late. The company�s head count jumped by 28% to 31,353 employees in the first nine months of 2011.

This de-leveraging and operating-expenses spending �by themselves are bad things, but what will be key is the return that Google is able to generate over time from these expenses [or] investments,� Mark Mahaney of Citigroup wrote in a note Friday.

The quarterly report will also mark a year since Google announced that co-founder Larry Page was taking over the CEO role from Eric Schmidt, who assumed the post of executive chairman.

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Banks lead financials higher on job data

SAN FRANCISCO (MarketWatch) � U.S. financial stocks rose to lead the broader market higher Friday as positive jobs data indicated a sustained recovery in the U.S. employment picture.

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Jobs report lifts stocks

Stocks open modestly higher, with investors buoyed by upbeat news on jobs and the Greek debt restructuring, though gains were tempered by disappointing trade deficit data, Laura Mandaro reports on Markets Hub. (Photo by Andrew Burton/Getty Images)

Earlier gains, however, pared after the International Swaps and Derivatives Association declared a �credit event� that will trigger default insurance taken out on Greek sovereign debt. Read more on ISDA, Greek restructuring.

Bank stocks slightly outperformed other sector firms. Shares of First Horizon National Corp. FHN �led the way, closing up 4.5%. Shares of Citigroup Inc. C �rose 0.6% and Dow component J.P. Morgan Chase & Co. JPM �advanced 1.5%.

The Financial Select Sector SPDR ETF XLF , which tracks the financial stocks in the S&P 500 SPX , rose 0.8%, for a weekly gain of 0.2%. The KBW Bank Index BKX , which follows the 24 leading U.S. banks, rose 1%,! for a w eekly gain of 0.3%.

Of the 10 sectors in the S&P 500, financial stocks turned in the best overall performance Friday.

On the data front, 227,000 U.S. jobs were created in February and more people found work in the prior two months than previously reported, suggesting the economy�s recent momentum is likely to continue, according to the latest government data.

The increase in nonfarm jobs topped 200,000 for the third straight month and reinforces the view of an economy gathering strength as 2012 unfolds. The past three months of full-time job growth is the fastest since the end of the 2007-2009 recession and marks the best performance since early 2006.

The unemployment rate, meanwhile, was unchanged at 8.3%, largely because nearly half-a-million workers reentered the labor force in search of jobs. That�s usually a good sign because it means people believe more work is available. Read more about the jobs report on MarketWatch

Among other the financial stocks in the Dow Jones Industrial Average DJIA , Bank of America Corp BAC �shares closed down 0.1%, shares of American Express Co. AXP �advanced 0.5%, and Travelers Cos. TRV �shares tacked on 0.9%.

Other notable gainers included Federated Investors Inc. FII , Lincoln National Corp. LNC , Principal Financial Group Inc. PFG , along with the regional bank sector with Zions Bancorp ZION , Fifth Third Bancorp FITB , U.S. Bancorp USB , and Comerica Inc. CMA �all trading up 1% or more.

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Top 10 Value Stocks November 2012

In mid-September, stocks broke through the top of a trading range that had stubbornly resisted both buyers and sellers for five months. But instead of the breakout being accompanied by high volume with emphasis on blue-chip stocks, the rally has lacked volume and is currently being led by lower-quality stocks. This conundrum has perplexed even the most experienced technicians and fund managers.

September turned the best performance in 71 years, with the major indices rising over 8%, but stocks now appear to be grossly overbought. Investors should consider locking in their gains by selling or using options strategies to stabilize their holdings. This is no time to be a hero by buying at the top. However, despite the short-term overbought nature of the market, there are always bargains to be found if you look hard enough. The six stocks to buy listed here represent extraordinary value even in the current market condition.

Top 10 Value Stocks November 2012:Cinemark Holdings Inc (CNK)

 Cinemark Holdings, Inc. and its subsidiaries engage in the motion picture exhibition business. As of June 30, 2011, it operated 436 theatres with 4,983 screens in 39 states of the United States, as well as in Brazil, Mexico, and 11 other Latin American countries. The company is headquartered in Plano, Texas.

Advisors' Opinion:

  • By Jeff Reeves At 2011-10-21

    Cinemark Holdings Inc. (NYSE: CNK) owns movies theaters across the United States and Latin America, with a total of about 5,000 screens in America alone.

    Current Yield: 4% (84 cents a share annually)

    Dividend History: In June 2010, Cinemark paid a quarterly dividend of 18 cents a share. This July, it will pay 21 cents, for a nearly 17% increase.

    Dividend Outlook: According to Bloomberg, the three-year expected dividend growth rate of CNK is 2.5%.

    Recent Performance: Cinemark has surged over 20% so far in 2011, more than doubling the market. It is approaching a new 52-week high as of this publication.

    Strong Outlook for Shares: Cinemark has seen improving revenue each year since 2007, connecting with movie-goers despite the recession. That’s in part because of growth and acquisitions — most recently it plans to buy a 12-screen cinema in South Carolina. The movie industry may not be booming right now, but CNK could cash in big time when box office receipts improve thanks to its growth over the last few years.

Top 10 Value Stocks November 2012:Jacksonville Bancorp Inc. (JXSB)

 Jacksonville Bancorp, Inc. operates as the holding company for Jacksonville Savings Bank that provides various banking products and services in Illinois. Its deposit products include interest-bearing and non interest-bearing checking accounts, savings accounts, money market accounts, term certificate accounts, individual retirement accounts, and certificates of deposit. The company?s loan portfolio comprises one-to four-family mortgage loans; commercial and agricultural real estate, and multi-family residential real estate loans; commercial and agricultural business loans; and consumer loans, such as home equity loans and lines of credit, and automobile loans. It operates through its main office, as well as through six branches located in Jacksonville, Virden, Litchfield, Chapin, and Concord, Illinois. The company was founded in 1916 and is based in Jacksonville, Illinois. Jacksonville Bancorp, Inc. is a subsidiary of Jacksonville Bancorp, MHC.

Top 10 Value Stocks November 2012:Presidential Life Corporation (PLFE)

 Presidential Life Corporation, through its subsidiary, Presidential Life Insurance Company engages in the marketing and sale of various fixed annuity, life insurance, and accident and health insurance products in the United States. The company offers various annuity products, which include single and flexible premium deferred annuities, single premium immediate annuities, and special annuities. It also provides life insurance products, such as graded benefit whole life, simplified issue whole life, and group life policies, as well as other life insurance products, such as universal life, whole life, and term life. In addition, the company offers accident and health insurance policies, including New York statutory disability benefits, which are short-term disability contracts issued to employers of one or more employees in New York State. Further, it provides products, which include medical stop loss, group dental insurance, individual impaired risk disability, hospital indemnity products, and accident products. The company distributes its annuity and life insurance products through 1,273 independent general agents. Presidential Life Corporation was founded in 1965 and is headquartered in Nyack, New York.

Top 10 Value Stocks November 2012:Acme United Corporation. (ACU)

 Acme United Corporation, together with its subsidiaries, develops and markets cutting, measuring, and safety products to the school, home, office, hardware, and industrial markets in the United States, Canada, Europe, and Asia. Its cutting device products include scissors, shears, guillotine paper trimmers, rotary paper trimmers, rotary cutters, knives, hobby knives and blades, utility knives, pruners, loppers, saws, manicure products, medical cutting instruments, and pencil sharpeners. The company?s measuring instruments products comprise rulers, math tools, tape measures, erasers, compasses and protractors, and rulers and math kits; and safety products that consist of first aid kits, personal protection products, over-the-counter medication refills, emergency care responder kits, and flu care kits. It sells its products through its independent manufacturer representatives and directly under the Westcott, Clauss, Camillus, and PhysiciansCare brand names. The company serves wholesale, contract, and retail stationery distributors; office supply super stores; school supply distributors; drug store retailers; industrial distributors; wholesale florists; mass market retailers; and hardware chains. Acme United Corporation was founded in 1867 and is headquartered in Fairfield, Connecticut.

Top 10 Value Stocks November 2012:Avon Products Inc. (AVP)

 Avon Products Inc. manufactures and markets beauty and related products worldwide. Its product categories include color cosmetics, fragrances, skin care, and personal care; fashion jewelry, watches, apparel, footwear, and accessories; and gift and decorative products, housewares, entertainment and leisure, and children?s and nutritional products. Avon Products Inc. markets its products through direct selling and independent representatives, as well as through distributorships. The company was founded in 1886 and is based in New York, New York.

Top 10 Value Stocks November 2012:Bemis Company Inc. (BMS)

 Bemis Company, Inc. manufactures and sells flexible packaging products and pressure sensitive materials in the United States, Canada, Mexico, South America, Europe, and Australasia. The company operates in two segments, Flexible Packaging and Pressure Sensitive Materials. The Flexible Packaging segment manufactures multilayer flexible polymer film structures and laminates for food, medical, and personal care products, and non-food applications utilizing vacuum or modified atmosphere packaging. It also offers blown and cast stretch film products; carton sealing tapes and application equipment; custom thermoformed plastic packaging; multiwall paper bags; printed paper roll stock; and bag closing materials. The Pressure Sensitive Materials segment manufactures pressure sensitive adhesive coated paper and film substrates comprising label market products, such as narrow-Web rolls of pressure sensitive paper, film, and metalized film printing stocks used in printing and die-cutting. This segment also provides graphic market products consisting of pressure sensitive films used for decorative signage through computer-aided plotters, digital and screen printers, and photographic over laminate and mounting materials, including optical films with built-in UV inhibitors; and technical market products, such as micro-thin film adhesives used in delicate electronic parts assembly and pressure sensitive applications. Bemis Company, Inc. distributes its products primarily through its direct sales force to food and beverage, chemical, agribusiness, medical, pharmaceutical, personal care, electronics, automotive, construction, graphic industries, and other consumer goods markets. The company was formerly known as Bemis Bro. Bag Company and changed its name to Bemis Company, Inc. in 1965. Bemis Company, Inc. was founded in 1858 and is based in Neenah, Wisconsin.

Top 10 Value Stocks November 2012:Crown Cork & Seal Company Inc. (CCK)

 Crown Holdings, Inc. engages in the design, manufacture, and sale of packaging products for consumer goods. The company?s products include beverage cans and ends, and other packaging products for various beverage and beer companies; a range of food cans and ends, including two-and three-piece cans in various shapes and sizes for food marketers; and aerosol cans and ends for manufacturers of personal care, food, household, and industrial products. In addition, it produces a range of steel containers for cookies and cakes, tea and coffee, confectionery, giftware, personal care, tobacco, wines, and spirits, as well as for non-processed food products; and offers metal vacuum closures for food market and various specialty containers, as well as steel containers for paints, inks, chemical, automotive, and household products. Further, the company manufactures and sells can-making equipment. It has operations in the Americas, Europe, the Asia-Pacific, the Middle East, and Africa. Crown Holdings was founded in 1927 and is headquartered in Philadelphia, Pennsylvania.

Top 10 Value Stocks November 2012:Chemed Corp. (CHE)

 Chemed Corporation, through its subsidiaries, provides hospice care, and repair and cleaning services in the United States. The company operates in two segments, Vitas and Roto-Rooter. The Vitas segment offers hospice services to terminally ill patients. This segment provides hospice services in the areas of routine home care, general inpatient care, continuous care, and Medicare cap. It also offers spiritual and emotional counseling to patients and their families through its team of doctors, nurses, home health aides, social workers, clergy, and volunteers. The Roto-Rooter segment provides repair and cleaning services, including sewer, drain, and pipe cleaning, as well as plumbing repair to residential and commercial customers through its network of company-owned branches, independent contractors, and franchisees. The company was founded in 1970 and is headquartered in Cincinnati, Ohio.

Top 10 Value Stocks November 2012:Carriage Services Inc. (CSV)

 Carriage Services, Inc. provides death care services and merchandise in the United States. It operates through two segments, Funeral Home Operations and Cemetery Operations. The Funeral Home Operations segment offers various services to meet a family?s death care needs, including consultation, the removal and preparation of remains, the sale of caskets and related funeral merchandise, the use of funeral home facilities for visitation and services, and transportation services. As of December 31, 2010, it operated 147 funeral homes in 25 states. The Cemetery Operations segment provides interment services; the rights to interment in cemetery sites, including grave sites, mausoleum crypts, and niches; and related cemetery merchandise, such as memorials and vaults. This segment operated 33 cemeteries in 12 states. Carriage Services, Inc. also markets funeral and cemetery services and products on a preneed basis. Its preneed funeral or cemetery contracts enable families to establish, in advance, the type of service to be performed, the products to be used, and the cost of such products and services. The company was founded in 1991 and is headquartered in Houston, Texas.

Top 10 Value Stocks November 2012:Eastern Insurance Holdings Inc. (EIHI)

 Eastern Insurance Holdings, Inc., through its subsidiaries, provides workers compensation insurance and reinsurance products in the United States. The company?s Workers Compensation Insurance segment provides traditional workers compensation insurance coverage products, including guaranteed cost policies, policyholder dividend policies, retrospectively-rated policies, deductible policies, and alternative market products to employers. This segment distributes its workers? compensation products and services through its independent insurance agents primarily in Pennsylvania, Delaware, North Carolina, Maryland, Indiana, and Virginia. Its Segregated Portfolio Cell Reinsurance segment offers alternative market workers compensation solutions comprising program design, fronting, claims administration, risk management, segregated portfolio cell rental, asset management, and segregated portfolio management services to individual companies, groups, and associations. Eastern Insurance Holdings, Inc. is headquartered in Lancaster, Pennsylvania.

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Futures Up on Positive Retail Numbers, Greek Bailout Approval

Market futures are maintaining gains on a number of positives: U.S. February retail sales were up, Greece will get its second bailout and German investor sentiment is on the rise.

Futures lost some of their strength after 9 a.m., but remained up: futures on the Dow Jones Industrials rose 46 points to 12,943, and on the Standard & Poor’s 500, up 5.2 points to 1,372.

Retail sales rose 1.1% in February, matching forecasts; the growth was 0.6% without autos and gasoline, higher than expected.

In stock news, at least 50 advisers who managed nearly $12 billion in client assets at Merrill Lynch have departed the Bank of America (BAC) unit since January 1, based on moves tracked by Reuters. Another 20 advisers who managed more than $4 billion in assets have left the firm since September; in total, these departures represent roughly 1 percent of the brokerage’s roughly $1.5 trillion client asset base, according to the Reuters story. Merrill denied there is a “great exodus.”

Deutsche Bank downgraded Cablevision Systems (CVC) to Hold from Buy.

The Wall Street Journal reports that auto repair retailer Midas (MDS) agreed to be acquired by TBC, a unit of Japan’s Sumitomo, for $173 million. Shares of Midas rose 28% in premarket trading.

After reporting lackluster fourth quarter results late Monday, shares of Urban Outfitters (URBN) were off 5%.

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Chips: ThinkEquity’s Disaster Scenario Charts Potential Sell-Off

ThinkEquity‘s semiconductor analyst Krishna Shankar today offers a “theoretical framework” for downside in chip stocks, in which he sees some stocks having greater potential downside than others, based on the way their shares traded during the recession.

Shankar sees Broadcom (BRCM), Cavium (CAVM), Hittite Microwave (HITT), and SanDisk (SNDK) having 25% to 50% downside, with Spansion (CODE), Micron Technology (MU), and Texas Instruments (TXN) having “less than 15% downside.” He also writes that Entropic (ENTR), Pericom Semiconductor (PSEM), Ultra Clean Holdings (UCTT), and The LGL Group (LGL) are oversold at this point.

Shankar’s framework models a semi industry revenue decline of 10% in 2012, a 20% drop in Ebitda, and a 25% decline in earnings per share. He used a 10 times P/E multiple as the hypothetical “trough” valuation for the stocks, though some high-growth names might not go that low, he writes.

Although some bulls might say names such as Broadcom wouldn’t be easily parted with by investors, he thinks that in such a scenario, even the baby may be thrown out with the bathwater:

We note that bullish proponents of what we perceive as high-quality growth names such as BRCM, CAVM, HITT, SNDK may argue that their revenues and margins would decline to a much smaller extent than our assumed industry decline of 10% and their margins and earnings may hold up better. But, as we observed during 2008/2009, we may experience multiple compression across the board should investors also sell the liquid, high-quality names to raise cash during a bear market. In such as scenario, in our opinion, the “high-flying” stocks with rich multiples may have more downside risk.

!

Despi te the risk, however, Shankar actually has bullish ratings on several of these names. He rates Broadcom a Buy, with a $40 price target, and SanDisk is a Buy as well, with a $58 price target. Micron is a Buy in his book, with a $10 price target, while TI shares are rated Hold.

Update: On a related note, JMP Securities’s Alex Gauna today cut his estimate for Intel (INTC) for Q3 and for Q4, though he reiterated a Market Outperform rating on the stock, and $27.50 price target, writing that the shares should be bought “owing to its [Intel's] attractive valuation levels and advantageous positioning for technology trends.”

Gauna’s revision to his estimates is “relatively immaterial in the grand scheme of things,” and is meant mainly to reflect broad-based macroeconomic weakness. He cut his Q3 estimate to 62 cents a share in profit from a prior 64 cents, and cut his Q4 view to 66 cents from 64 cents. His estimate for 2012 goes to $2.50 per share from $2.55. That’s still above Street consensus of $2.44, however, he notes.

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Polypore International Shares Plunged: What You Need to Know

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

What: Shares of membrane maker Polypore International (NYSE: PPO  ) fell 11% today after General Motors (NYSE: GM  ) said it would shut down Chevy Volt production temporarily.

So what: The Volt isn't selling as well as GM had hoped and the company will shut down production for five weeks, starting in March. That could put a dent in Polypore's sales because the company is believed to supply materials for the Volt.

Now what: Since Volts weren't exactly charging off the shelf I don't think this derails Polypore's long-term financial future. It may be a small blip in coming quarters, but if you have your eye on this stock, I see today as a buying opportunity. Shares are trading at less than 14 times 2012 earnings estimates right now, a nice value for a company expected to grow earnings.

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

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Best Wall St. Stocks Today: HPQ,DELL,AAPL,INTC,MSFT

The personal computer business is changing.� In some ways the changes are better, but in many ways the changes are not good for the sector.� Gartner Group’s Q3 preliminary data showed growth of about 7.6% on a worldwide basis in Q3-2010.� Gartner’s earlier outlook had been for 12.7% growth.� Hewlett-Packard Co. (NYSE: HPQ) and Dell Inc. (NASDAQ: DELL) have some interesting changes; Lenovo, Acer, Asus, and Toshiba all had interesting trends; and Apple Inc. (NASDAQ: AAPL) continues as the disruptive force.� The weakness in demand was soft PC sales in the U.S. and Western Europe, some we already knew if you go back to the guidance of many companies in July and August.

Hewlett-Packard Co. (NYSE: HPQ) maintained the lead with more than 15.4 million units likely shipped.� The problem is that its growth was actually in the red by about 0.5% globally despite having about 2% unit growth in the U.S.� Dell Inc. (NASDAQ: DELL) managed 9.2% global shipment growth with more than 10.8 million units expected to be shipped by Gartner, but its U.S. figures were down by -5.8% at almost 4.2� million units.� Gartner noted, “HP was impacted by consumer PC demand. Dell also had a challenging quarter.”

Gartner noted that Apple Inc. (NASDAQ: AAPL) is a part of the issue here.� The report noted that media tablet hype around devices such as the iPad has impacted consumer notebook growth by delaying some PC purchases.� While these do not replace primary PCs,� they do affect PC purchases and consumers and suppliers are taking longer as the devices are coming out.� Further noted was, “Apple had another strong quarter. Increasing traffic to Apple, associated with the iPad release (iPads are not included in Gartner’s PC shipment statistics), as well as iMac and Mac Pro refreshes, contributed to the growth.” The U.S growth for Apple was put at roughly 13.7% unit growth to more than 1.83 million units.

While Intel Corporation (NASDAQ: INTC) seems to have been kept afloat by c! orporate demand, Gartner’s Q3 data (not its Q4 outlook) indicated that the expected upturn in the professional market was slower than expected.� As far as Microsoft Corporation (NASDAQ: MSFT) and its Windows 7, Gartner believes that deployment is now expected to move into 2011. That data on Microsoft led to a trim in Microsoft’s target to $28 from $30 at Barclays this morning.

Lenovo had the strongest growth rate among the top five vendors in EMEA in the third quarter of 2010, and saw its shipments grow 61.3 percent year-on-year.� For the other makers as a whole, back-to-school PC sales in Latin America were sluggish with fewer home mobile PC shipments.� PC shipments in Japan rose more than 14% and were more than 3.6 million units in the quarter.

Much of this data is preliminary and much of the data was known.� This is also looking backwards rather than forward.� The iPad appears to be the new big disrupting technology and that trend has replaced the disruption of the netbook market from 2008 and 2009.� The big issue not tallied is ASPs: average selling prices.� As these devices get more and more centered around the lower end of the market and in a world of “good enough computing,” the average unit prices (and likely the margins) are likely to be compressing.

JON C. OGG

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5 Currency exchange Tips To Help You Make Money in Currency Trading

If you'd like to invest into something that would truly be worth your time and effort, maybe you’d think about getting into foreign exchange trading. This is a great way to make cash, even without doing a lot to gain it. But diving head-first into the arena of currency exchange FOREX trading without knowing anything about it might be dangerous, and this could cost everything that you'll invest in this endeavor. In order to be successful in this field, you have to know some of the finest tips that won't only help you make cash, but will lead you to long run success in foreign exchange trading and discover thebest job to work from home with currencies.

There are essentially a large amount of currency exchange tips that could help you make money in foreign exchange trading, but only a few of them are useful. You also have to filter the tips that would apply to your present position, and would actually steer you to success. This newsletter will run you through 5 of the best forex trading tips to help you make money, and at last make your enterprise into the world of forex a hit.

Tip 1: Don’t Gamble

Forextrading and betting are two different things, and the latter shouldn't be used with the former. All of your moves and actions in Currency trading techniques should be worked out so as to avoid losses. Of course, there are times that even when you figure out your moves, you’d still sustain losses, but at the least you failed to lose big due to your uncalled for hunch. Making an attempt to trade without analysis and market study is like playing a game of luck. Naturally playing a game is kind of fun and interesting, if it remains as a game and not a real-world event. If it involves cash, as you would be expecting with foreign exchange trading, this already turns serious, so losing your cash won't really be fun any longer. Do not risk even a cent without thinking your moves through first. You may get lucky at some instances, but as you keep going wi! th your uncalculated moves, you will run straight out of money a lot sooner than you believe.

Tip 2: The present trend is your best guide

If you would like to achieve success in the field of currency trading, always go with the trend, particularly if you're just starting to know about things related to forex. The trend is indeed your chum, because this will help you maximise all your chances for success. Of course, there are instances that you would like to trade against the trend, based on your calculations or your projections. However , going against the trend will need more attention from you, wherein you will have to have nerves of steel and pointed talents to reach your objectives. You can attempt to go against the trend once in a while if you have just amassed a good quantity of experience (and hopefully, a good amount of cash) while you were trading with the trend.

Tip 3: Trade with a calm, controlled face

When you are trading with your emotions, you are prone to risking all you have because you're unsatisfied with how things are going. You’d also be more hesitant to take chances, even if you're going with the trend, because you're emotions tell you that you're just gambling with your investments. Being cautious isn't really a problem, but doing so most of the time will not actually bring you anywhere. Keep a peaceful poker face and make reasonable moves to avoid digging a deeper hole for your currency exchange account. Never try to do vengeance trade, or making an attempt to avenge a lost trade in a single go. When you are winning, do not be greedy and put all of your eggs in only 1 basket. Don't ever forget to think obviously in order to avoid overreaction, as it could obviously cost you a lot of money in the end.

Tip 4: Do your trades on the right time frame

One common blunder that may lead to great loses apropos foreign exchange trading is not selecting your most comfortable time. Forex ! trading is just like other duties or activities that you have in your life. If you happen to feel that you are not in your component, probabilities are high that you'd be doing bad moves and be making bad decisions. Select the appropriate time frame so you are snug enough to investigate the market. This way, you’d be well placed to place and close orders at your own speed.

Tip 5: Practice with a Foreign exchange trial account

Before you invest your cash, you need to first have an idea how the currency exchange system works. In foreign exchange trading, you'll be able to learn more about these by practicing on a Foreign exchange Trial account. Never invest all your money into a genuine Forex account without testing the practise account. If you do, then you are predestined to fail because you actually don't know what you are doing. By employing a currency exchange trial account, you'll be able to gain knowledge and build discipline as you practice trading.

James Roshwood Has been trading forex for many years, discover some of his tricks of the foreign exchange trade and forex dealer jobsat greatforexworld.com.

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