Why MLPs Belong in Your Income Portfolio

One investment vehicle that any investor interested in income should be familiar with is the master limited partnership, or MLP, as they are some of the best income investments available today. Most master limited partnerships are in the business of owning and operating oil and gas pipelines such as Kinder Morgan Energy Partners (NYSE: KMP  ) or Enbridge Energy Partners (NYSE: EEP  ) . However, there are some MLPs that actually operate oil and gas wells such as Breitburn Energy Partners (NASDAQ: BBEP  ) and Mid-Con Energy Partners (NASDAQ: MCEP  ) . In this article, we will discuss how these investments work and why they deserve a place in your income portfolio.

What is an MLP?
A master limited partnership is not a corporation, but is instead a partnership that trades publicly on a stock exchange such as the NYSE or NASDAQ. Similarly to private partnerships, an MLP is a passthrough entity; this means that no taxes are levied on the business itself. Instead, all of the partnership's income is considered to be the personal income of the partners. Unlike a private partnership, however, an MLP has to pay out at least 90% of its net income to its partners in order to avoid being taxed on the business level. In order to represent each partner's stake in the business, the partnership's interests are divided up into units, and these trade publicly on exchanges just like stocks.

All of this sounds rather complicated, but it's really not so bad. Basically, you buy the partnership's units through your broker just like you would any other stock. You then collect the distributions when the company pays out its earnings to everyone that owns its partnership units.

High yields
Master limited partnerships are much like real estate investments trusts in that they have to pay out at least 90% of their earnings in order to avoid being taxed on the business level. Because of this, MLPs tend to have relatively high yields. For example, Breitburn Energy Partners currently yields 9.78% and Kinder Morgan currently yields 7.21%.

Tax benefits
Another advantage of master limited partnerships is that some of the distributions that they pay are completely tax free. This is because of their status as pass-through entities. MLPs not only pass through their income but they also pass through their depreciation or depletion write-offs.

Basically, by investing in an MLP, you receive your proportionate share of the partnership's income and you also receive your proportionate share of its depreciation expenses. Because of this, you are able to reduce the distributions that you receive by the amount of this depreciation expense that is assessed to you. Of course, you don't really have to pay this depreciation expense to anyone. Therefore, it's just a way to receive some of the money that the company sends you tax-free.

Frequent dilution
Unfortunately, the fact that MLPs have to pay out nearly all of their earnings also has a downside. It makes it very difficult to expand. To overcome this problem, many master limited partnerships create and sell new partnership units frequently to raise the money that they need to expand. Doing this results in a growing unit count and the frequent dilution of existing unitholders. As an example, this chart shows the number of partnership units outstanding that Breitburn Energy Partners had at the end of each quarter over the past year:

Quarter Ending	December 31, 2013	September 30, 2013	June 30, 2013	March 31, 2013	December 31, 2012
Common Units Outstanding	119,170,000	99,680,000	99,680,000	99,680,000	84,668,000

Source: Breitburn Energy Quarterly SEC Filings

As the chart shows, Breitburn has had to steadily increase its unit count over the past year in order to raise the money that it needed to expand its operations.

However, this constant unitholder dilution may not be a bad thing if the money that is raised is used for things that will grow the partnership's cash flow enough that the partnership can consistently grow its per-unit distributions. This was the case with Breitburn, which has steadily increased its distribution over the past year.

Quarter	Q4 2013	Q3 2013	Q2 2013	Q2 2013	Q1 2013
Distribution per Unit	$0.4926	$0.4875	$0.4800	$0.4750	$0.4700

Source: Breitburn Energy

Please note that Breitburn began paying monthly distributions this year. Therefore, the first quarter distribution listed in the chart above is the sum of Breitburn's first three monthly distributions of 2014.

In conclusion, master limited partnerships are a somewhat unusual investment, but they can and should be very appealing for income focused investors.

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Are Earnings No Longer Relevant? - Ahead of Wall Street

Wednesday, July 24, 2013

The flood of earnings reports this morning presents a mixed picture, with positive momentum from the likes of Boeing (BA) and Ford (F) undercut by the pronounced weakness from Caterpillar (CAT). The results from these three corporate leaders aren't surprising and fit neatly into a broader narrative of a slowing global economy with pockets of strength in commercial aviation worldwide and domestic auto and housing.

China's weak July manufacturing numbers overnight further confirm that while the outlook for the U.S. economy may be improving, the decelerating trend in the Chinese economy has not fully played out yet. Caterpillar didn't cite China specifically for its earnings miss and lowered guidance, but the global mining slowdown that some are referring to as the end of the commodity super cycle is a direct offshoot of developments in China.

The downshift in China's growth outlook is likely more secular and enduring than equipment suppliers like Caterpillar and commodity exporting nations like Australia and Brazil are willing to acknowledge at this stage. Caterpillar blamed temporary inventory issues and mining weakness as the reason for the quarterly miss and lowered guidance. But they probably need to realign their business for a long period of sub-par demand growth from the emerging world.

Facebook (FB) will be reporting after the close today, but including this morning's reports from Boeing, Ford, Caterpillar, Pepsi (PEP) and others, we now have Q2 results from 170 S&P 500 companies or 34% of the index's total membership that combined account for 46.6% of its total market capitalization.

Total earnings for these 170 companies are up +3.8%, with 64.1% beating earnings expectations. On the revenue side, we have a growth rate of +3.6%, with 44.1% coming ahead of top-line expectations. The earnings and revenue growth rates and the revenue beat ratio seen thus far are broadly in-line with what we saw from the same group of ! 170 companies in Q1, while the earnings beat ratio is tracking a bit lower.

As we have been pointing out from the get-go in this space that while the aggregate numbers for the S&P 500 as a whole look not so bad, a lot of that respectability is coming from the strong Finance sector results.

Once we take Finance out of the earnings reports that have come out thus far, what is left behind isn't satisfactory by any measure. Total earnings growth outside of Finance is tracking a decline of -4.2% (vs. +3.8% for the S&P 500 as a whole). Even the beat ratios are tracking below what we have been seeing in recent quarters once Finance is stripped out of the aggregate numbers.

Lack of growth notwithstanding, total Q2 earnings are on track to reach a new all-time quarterly record. But it is extremely hard to square this sub-par earnings growth picture with a stock market that is making new all-time highs almost daily. Makes one wonder whether earnings growth has become a non-issue for stock market investors in the current environment of a very supportive Fed. Perhaps investors will start paying attention to the earnings picture once the Fed shifts its stance. For now at least, investors are behaving as if there is no tomorrow.

Sheraz Mian
Director of Research



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The Sun Is Setting for Chinese Solar Stocks

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For many solar stocks, the sun was certainly shining in 2013.

The industry was one of the best-performing sectors of the market, with broad measures like the Guggenheim Solar ETF (TAN) surging more than 120% throughout the year. A combination of dwindling costs and rising subsidies in key markets like China and Japan helped the fortunes of top solar stocks finally catch up to the their long-term promise.

However, the sector has recently met with some cloudy weather. And several solar stocks — particularly of the Chinese persuasion — may be in for darker times.

For investors, it may finally be time to cash in their Chinese solar stock bets and move on to sunnier pastures.

A Litany of Problems For Chinese Solar Stocks

The last few weeks haven't been great for Chinese manufacturers of photovalic (PV) panels. Share prices for key solar panel producers like Trina Solar (TSL) and Yingli Green Energy (YGE) have basically imploded since reaching March highs. YGE alone is down about 40% since then.

And while you can make the argument that the Chinese solar producers were just caught up in the general momentum stock selloff we've been experiencing, something more sinister is afoot. I’m talking about a reversal of all the good fortune that has recently shined on the sector.

One of the key driving forces behind the solar boom has been the abundance of cheap Chinese-manufactured panels. Well, rising input costs — the cost of energy needed to run solar panel factories — along with supply constraints are lifting prices for Chinese-produced PV. According to Boston-based green think-tank GTM Research, the price of Chinese-made solar panels will rise about 20% this year.

And already, the price rise is beginning to take shape. According to its latest report, GTM shows that Chinese solar producers like JinkoSolar (JKS) have priced their modules at 80 to 85 cents per watt for new deliveries. That compares to just to 70 cents per watt at the end of 2013.

Historically, Chinese produced solar panels have been significantly cheaper than those produced in other Areas like the United States and Europe. That fact lead to several high profile-bankruptcies of developed market solar producers like Germany's Q-Cells. All in all, GTM Research estimates that more than half of modules sold in the U.S. last year were Chinese-made.

The rub is that these higher-priced solar panels must now compete with all that ultra-cheap natural gas being produced in spades across the U.S.

And prices for Chinese-produced solar panels could rise even further in the years ahead. Here’s why…

In order to get prices so cheap in the first place, the Chinese government basically uber-subsidized the solar industry with cheap loans, preferential taxes and other state-backed incentives.

Both the U.S. & European Union have claimed that these policies wreak of dumping and have begun a series of investigations and tariffs on imported solar panels. The U.S. is in the process of closing loopholes to make those tariffs stricter, while the E.U. has yet to formalize an agreement with China on anti-dumping measures.

When that deal is finalized, Chinese solar stocks will now face much higher selling prices in one of their traditional hotbeds of activity. And the other hotbeds of new activity aren't exactly running at full tilt, either.

After its Fukushima nuclear disaster, Japan has turned to solar as a means to power its nation. Japan spent heavily on new feed-in-tariffs (FiT) and subsidies to spur adoption of solar energy. That fact was a huge boost to solar stocks share prices. Unfortunately, Japan has decided to cut the FiT by 11% to 31 cents per kilowatt-hour because “Other types of clean energy have not increased.” To that end, Japan actually increased subsidy rates for wind and hydro-power.

Add in Europe's continued austerity measures and the lack of any real energy policy in the U.S. and you have a recipe for more losses for Chinese solar stocks.

Time To Bail On Chinese Solar Stocks

With so many headwinds facing Chinese solar stocks, the time to cut and run may be nigh. Especially when you consider just how high many of these things have run up in the last year so. Pressures are going to crimp sales and cash flows at the solar producers — none of which is good for share prices or investors.

And we've already begun to see the damage.

TSL has reported that it shipped 20% fewer panels than it expected due to the anti-dumping tariffs and higher prices during the first quarter. That warning sent the stock down about 4% last Friday. Any more stumbles could erase all TSL's gains from last year. The other Chinese solar manufacturers are all at risk for the same, or worse — several more bankruptcies in the sector.

Both Suntech and Chaori Solar have already filed, while LDK (LDK) is in the process of doing so and delisting from the NYSE.

All of this negative activity doesn't inspire a whole lot of confidence in Chinese solar stocks. For investors, the best course of action could be to bail on the sector completely or at least move out of individual names and into a broad play like the TAN or Market Vectors Solar Energy ETF (KWT).

For now, the sun appears to be setting on the solar sector once again.

As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.

Is Novartis a Buy after Earnings?

With shares of Novartis (NYSE:NVS) trading around $73, is NVS an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Novartis engages in the research, development, manufacture, and marketing of a range of healthcare products worldwide. Its portfolio includes medicines, eye care, cost-saving generic pharmaceuticals, preventive vaccines and diagnostic tools, over-the-counter drugs, and animal health products. The company operates in five business segments: Pharmaceuticals, Alcon, Sandoz, Vaccines and Diagnostics, and Consumer Health. Its core products and services include prescription medicines; surgical, ophthalmic pharmaceutical, and vision care products; generic pharmaceuticals,  human vaccines, and blood-testing diagnostics; as well as over-the-counter medicines and animal health. In a growing healthcare field, Novartis provides key products and services.

Recently, Novartis has raised its full-year outlook, after finding out a generic version of its best-selling blood pressure medication Diovan would be delayed. Second-quarter income and revenue for the company beat analyst estimates, but earnings per share fell short. However, Novartis is also being cautious about 2014, as the generic version of Diovan may be available by then.

T = Technicals on the Stock Chart are Strong

Novartis stock has been on a bullish run over the last several months. The stock is now consolidating near all-time high prices, and it may need a little time before its next move. Analyzing the price trend and its strength can be done using key simple moving averages.

What are the key moving averages? They are the 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Novartis is trading slightly above its rising key averages, which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Novartis options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Novartis Options	16.76%	0%	0%

What does this mean? This means that investors or traders are buying a very small amount of call and put options contracts, compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
August Options	Flat	Average
September Options	Flat	Average

As of today, there is average demand from call buyers or sellers, and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very small amount of call and put option contracts, and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates, and what that means for Novartis’s stock.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. The last four quarterly earnings announcement reactions can also help gauge investor sentiment on Novartis’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Novartis look like, and more importantly, how did the markets like these numbers?

	2013 Q2	2013 Q1	2012 Q4	2012 Q3
Earnings Growth (Y-O-Y)	5.80%	5.43%	73.16%	-0.99%
Revenue Growth (Y-O-Y)	-0.36%	2.11%	0.48%	-6.62%
Earnings Reaction	-0.52%*	-1.02%	3.38%	-0.42%

Novartis has seen improving earnings and mixed revenue figures over the last four quarters. From these numbers, the markets have expected a little more from Novartis’s recent earnings announcements.

* As of this writing

P = Average Relative Performance Versus Peers and Sector

How has Novartis stock done relative to its peers, Pfizer (NYSE:PFE), Merck  (NYSE:MRK), GlaxoSmithKline (NYSE:GSK), and the overall sector?

	Novartis	Pfizer	Merck	GlaxoSmithKline	Sector
Year-to-Date Return	15.45%	14.48%	18.20%	19.58%	16.78%

Novartis has been an average relative performer, year-to-date.

Conclusion

Novartis is a healthcare company that provides a number of healthcare products and services to consumers and companies worldwide. Just recently, the company issued a positive earnings report, and offered good news for the rest of the year. The stock has been on a strong run, and is now consolidating near all-time high prices. Over the last four quarters, earnings have been improving, while revenue figures have been mixed, which has resulted in confused investors. Relative to its peers and sector, Novartis has been an average year-to-date performer. Look for Novartis to OUTPERFORM.

Top Healthcare Technology Companies To Invest In Right Now

On Wednesday, Movado (NYSE: MOV  ) will release its latest quarterly results. The stock has hit some bumps in the road lately, raising questions about whether it can successfully compete with its luxury-retail peers.

Overall, the luxury space has done relatively well lately, with the upper end of the income scale holding up better than broader-based retailers relying on a mainstream customer base for the bulk of their revenue. Movado has made some interesting strategic moves, but investors haven't been certain about its long-term success lately. Let's take an early look at what's been happening with Movado over the past quarter and what we're likely to see in its quarterly report.

Stats on Movado

Analyst EPS Estimate

$0.22

Change From Year-Ago EPS

(15.4%)

Top Healthcare Technology Companies To Invest In Right Now: Ecopetrol S.A.(EC)

Ecopetrol S.A. operates as an integrated oil company in Colombia, Peru, Brazil, and the U.S. Gulf Coast. The company engages in the exploration, development, and production of crude oil and natural gas. As of December 31, 2010, its proved reserves of crude oil and natural gas consisted of 1,714.0 million barrels of oil equivalent. The company also transports crude oil, motor fuels, fuel oil, and other refined products, as well as mixture of diesel and palm oil. It owns transportation network consisting of 3,003 kilometers of crude oil pipeline directly, as well as an additional 2,178 kilometers of crude oil pipeline with its business partners; and 3,017 kilometers of multi-purpose pipelines for transportation of refined products from refinery to wholesale distribution points. As of the above date, Ecopetrol S.A. owned 58 stations with a nominal storage capacity of 19 million barrels of crude oil and 6 million barrels of refined products. In addition, the company owns and o perates refineries that produce a range of refined products, including gasoline, diesel, kerosene, jet fuel, aviation fuel, liquefied petroleum gas, sulfur, heavy fuel oils, motor fuels, and petrochemicals, including paraffin waxes, lube base oils, low-density polyethylene, aromatics, asphalts, alkylates, cyclohexane and aliphatic solvents, and refinery grade propylene, as well as provides industrial services to third parties. Further, it markets various refined and feed stock products, including regular and high octane gasoline, diesel fuel, jet fuel, natural gas, and petrochemical products. The company was formerly known as Empresa Colombiana de Petroleos and changed its name to Ecopetrol S.A. in June 2003. Ecopetrol S.A. was founded in 1948 and is based in Bogota, Colombia.

Advisors' Opinion:

• [By Dividend]

  Ecopetrol (EC) has a market capitalization of $94.96 billion. The company employs 8,087 people, generates revenue of $35.317 billion and has a net income of $7.863 billion. Ecopetrol�� earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $15.070 billion. The EBITDA margin is 42.67 percent (the operating margin is 35.23 percent and the net profit margin 22.26 percent).

• [By Matt Smith]

  What are some of the best bargains?
  Growing resource nationalism, continuing government interference in the energy sector, falling crude prices and the pessimistic economic outlook has seen investors shy away from investing in Latin American energy companies. This has seen many of the region's major energy companies including Colombian government controlled Ecopetrol (NYSE: EC  ) , Brazilian government controlled Petrobras and Argentine government controlled YPF fall to new 52 week lows.

• [By Rich Duprey]

  Looking to modernize its Cartagena refinery in Colombia, Ecopetrol's (NYSE: EC  ) board of directors has approved spending more than half a billion additional dollars this year on an upgrade. The full project is estimated to cost nearly $6.5 billion.

Top Healthcare Technology Companies To Invest In Right Now: Usinas Siderurgicas de Minas Gerais SA Usiminas (USIM3)

Usinas Siderurgicas de Minas Gerais SA Usiminas, formerly COSIPA - Companhia Siderurgica Paulista, is a Brazil-based company engaged in the steel industry. The Company is principally involved in the production and sale of flat rolled steel. The Company and its subsidiaries operate throughout the steel production process. The Company divides its business into four segments: Mining; Solutions Usiminas and Automotive Usiminas, both units are related to steel processing and unit of capital goods and services through Usiminas Mechanics. The Company provides its products to various industrial sectors, such as automotive, marine, oil and gas, construction, machinery and equipment, among others. The Company offers its services both in Brazil and abroad. On December 20, 2013, the Company concluded transfer of the total stake in the share capital of Automotiva Usiminas SA to Aethra Sistemas Automotivos SA. Advisors' Opinion:

• [By Ney Hayashi]

  The Ibovespa rebounded from its biggest two-day drop since July 2012 as Usinas Siderurgicas de Minas Gerais SA (USIM3) led steelmakers higher, following a rally in commodity prices.

Top Quality Stocks To Watch Right Now: Nomura Holdings Inc (NRSCF)

Nomura Holdings, Inc. is engaged in the investment and financial services business with a focus on securities business. The Company's business operations include financing, asset management, securities trading and brokerage, underwriting and sale of securities, private placement of securities, own funds Investment activities, and other securities and finance-related activities. As of March 31, 2013, the Company owned 738 consolidated subsidiaries. Advisors' Opinion:

• [By Daniel Inman]

  Securities firms were in focus in Tokyo after Nomura Holdings (JP:8604) � (NRSCF) �and Daiwa Securities Group (JP:8601) � (DSECF) �reported second-quarter earnings. Daiwa rose 3.4% after reporting its net profit slid 38% on the previous quarter on decreased equity trading, which was above consensus expectations. Analysts say it already is factored into the price.

Top Healthcare Technology Companies To Invest In Right Now: Southern Copper Corporation(SCCO)

Southern Copper Corporation engages in mining, exploring, producing, smelting, and refining copper and other minerals in Peru, Mexico, and Chile. It is involved in the mining, milling, and flotation of copper ore to produce copper and molybdenum concentrates; smelting of copper concentrates to produce anode copper; and refining of anode copper to produce copper cathodes, as well as refined silver. The company operates Toquepala and Cuajone mines in the Andes Mountains located southeast of the city of Lima, Peru, as well as a smelter and refinery in the coastal city of Ilo, Peru. It also operates La Caridad and Buenavista copper mines, and smelting and refining plants in Mexico. In addition, the company operates five underground mines that produce zinc, copper, lead, silver, and gold; a coal mine which produces coal and coke; and a zinc refinery. Further, it has 145,064 hectares of mineral rights in Peru; 176,250 hectares of exploration concessions in Mexico; 1,068 hectares of exploration concessions in Argentina; 35,958 hectares exploration concessions in Chile; and 2,544 hectares of exploration concessions in Ecuador. The company was founded in 1952 and is based in Phoenix, Arizona. Southern Copper Corporation is a subsidiary of Americas Mining Corporation.

Advisors' Opinion:

• [By Alex Planes]

  Investors love stocks that consistently beat the Street without getting ahead of their fundamentals and risking a meltdown. The best stocks offer sustainable market-beating gains, with robust and improving financial metrics that support strong price growth. Does Southern Copper (NYSE: SCCO  ) fit the bill? Let's take a look at what its recent results tell us about its potential for future gains.

• [By Stoyan Bojinov]

  The Phoenix, Arizona-based copper producer, Southern Copper (SCCO), was upgraded from “Hold” to “Buy” by analysts at BB&T Capital on Monday.Garrett Nelson, an analyst with the firm, noted that the company is expected to improve its output growth significantly starting in 2015. When considering the state of the industrial metals market as a whole, Nelson notes that the current global copper supply is much tighter than it was just a few months ago. Furthermore, Nelson also cites the company’s lackluster performance in 2013 as another reason for why it may be able to deliver more impressive returns in the future; Southern Copper is down 25% year-to-date, compared to its closest competitor Freeport McMoran (FCX), which is up 10% on the year. As such, BB&T upgraded the company from “Hold” to “Buy” with a price target of $24 a share.

  Southern Copper shares posted a gain of 1.90% today to kick off the week. The stock is lagging behind the broad market YTD with a loss of nearly 25%.

• [By Lee Jackson]

  Southern Copper Corp. (NYSE: SCCO) may be the top way to play the copper trade. The current drop in copper prices is due largely�to the global slowdown triggered by reduced growth in China, which accounts for nearly 40% of global copper consumption. However, according to the International Copper Study Group, worldwide copper demand for 2013 is still expected to grow by 4.3% and increase to 5.1% for 2014. Merrill Lynch has a $36 price objective. The consensus number stands lower at $32. Investors are paid a 1.7% dividend.

• [By Russ Kaplan]

  Further, just as Freeport McMoran and Barrick Gold are having their own problems, so are Southern Copper (SCCO) and Rio Tinto (RIO), offering a chance to average down or get in at new positions.

Top Healthcare Technology Companies To Invest In Right Now: Alliance Fiber Optic Products Inc.(AFOP)

Alliance Fiber Optic Products, Inc. engages in the design, manufacture, and marketing of a range of fiber optic components and integrated modules incorporating these components to communications equipment manufacturers and service providers in North America, Europe, and Asia. The company offers interconnect devices that are used to connect optical fibers and components; couplers and splitters that are used to divide and combine optical power; and dense wavelength division multiplexing (DWDM) devices that separate and combine multiple specific wavelengths. Its connectivity products include connectivity modules; optical connectors, adapters, and cable assemblies; fused and planar fiber optical splitters and couplers; optical tap couplers and ultra low polarization dependent loss tap couplers; amplifier wave division multiplexing (WDM) couplers; optical fixed attenuators; and fused fiber WDM couplers. The company?s optical passive products comprise filter WDMs, amplifier fil ter WDMs, DWDMs, coarse WDMs, compact coarse WDMs, add/drop DWDM filters, optical isolators, optical bypass switches, and automatic variable optical attenuators. Its products are deployed in long-haul networks that connect cities; metropolitan networks that connect areas within cities; last mile access networks that connect to individual businesses and homes; and enterprise networks within businesses. The company sells its products to communications equipment manufacturers who incorporate its products into their systems and sell them to network service providers, as well as to other component manufacturers for resale or inclusion in their products. Alliance Fiber Optic Products, Inc. was founded in 1995 and is headquartered in Sunnyvale, California.

Advisors' Opinion:

• [By Alex Planes]

  What: Shares of Alliance Fiber Optic Products (NASDAQ: AFOP  ) have surged nearly 13% today after the company bested the Street's earnings consensus and offered strong guidance for the upcoming quarter.

Top Healthcare Technology Companies To Invest In Right Now: Zweig Fund Inc (ZF)

The Zweig Fund, Inc. (the Fund), incorporated on June 30, 1986, is a closed-end, diversified management investment company. The Fund�� objective is to increase capital primarily with investment in equity securities, consistent with capital preservation and reduction of risk. The Fund�� principal stock market sectors as on June 30, 2007, included information technology, financials, industrials, energy and healthcare.

The Fund�� investment adviser is Phoenix/Zweig Advisers LLC. As of June 30, 2007, its principal industrial positions included Cisco Systems, Corning Inc., EMC Corp., Ford, Goldman Sachs, Morgan Stanley, PowerShares QQQ, Nike, Nokia Corp. and Valero Energy.

Advisors' Opinion:

• [By Nathan Slaughter]

  Consider the Zweig Fund (NYSE: ZF). It's a closed-end fund that has $340 million in net assets, which are invested in a diverse basket of blue-chip stocks such as PepsiCo, Apple, JPMorgan, Comcast, U.S. Bancorp and Qualcomm.

Top Healthcare Technology Companies To Invest In Right Now: Dorman Products Inc.(DORM)

Dorman Products, Inc. supplies automotive replacement parts, fasteners, and service line products primarily for the automotive aftermarket. The company offers approximately 128,000 products comprising original equipment dealer parts, which include intake manifolds, exhaust manifolds, oil cooler lines, window regulators, radiator fan assemblies, power steering pulleys, and harmonic balancers; and replacement parts, such as window handles and switches, door hardware, interior trim parts, headlamp aiming screws and retainer rings, radiator parts, battery hold-down bolts and repair kits, valve train parts, and power steering filler caps. It also provides application specific and general automotive hardware, such as body hardware, general automotive fasteners, oil drain plugs, and wheel hardware; a selection of electrical connectors, wires, tools, testers, and accessories; and a line of home hardware and home organization products designed for retail merchandisers. In addition, the company offers a brake and clutch program; remanufactured automotive replacement parts, such as transfer case modules and instrument clusters; and heavy duty aftermarket parts for class 4-8 heavy vehicles, including coolant tubes, door handles and other body parts, fluid reservoirs, headlights and lighting, hood components, window regulators, and wiper transmissions. It sells its products under the OE Solutions, HELP!, AutoGrade, FirstStop, Conduct-Tite!, Pik-A-Nut, and HD Solutions brand names through automotive aftermarket retailers; national, regional, and local warehouse distributors; specialty markets; and salvage yards in the United States, Mexico, Europe, the Middle East, Asia, and Canada. The company, formerly known as R&B, Inc., was founded in 1978 and is headquartered in Colmar, Pennsylvania.

Advisors' Opinion:

• [By Seth Jayson]

  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 Dorman Products (Nasdaq: DORM  ) , whose recent revenue and earnings are plotted below.

Top Healthcare Technology Companies To Invest In Right Now: Bemis Company Inc (BMS)

Bemis Company, Inc., incorporated on May 18, 1885, is a manufacturer of packaging products and pressure sensitive materials. The Company's business activities are organized around its three reportable business segments, U.S. Packaging , Global Packaging and Pressure Sensitive Materials. The majority of the Company�� products are sold to customers in the food industry. Other customers include companies businesses, such as chemical, agribusiness, medical, pharmaceutical, personal care, electronics, automotive, construction, graphic industries and other consumer goods. In July 2013, Bemis Company Inc acquired all of the common stock of Foshan New Changsheng Plastics Films Co., LTD.

The Company�� flexible packaging businesses has a technical base in polymer chemistry, film extrusion, coating, laminating, printing, and converting. The Company�� pressure sensitive materials business specializes in adhesive technologies. On August 22, 2012, the Company acquired two flexible packaging businesses in Australia and New Zealand.

U.S. Packaging segment

The U.S. Packaging segment represents all food, consumer, and industrial products packaging-related manufacturing operations located in the United States. This segment manufactures multilayer polymer, blown and cast film structures to produce packaging sold for food and personal care product applications as well as non-food applications. Additional products include custom thermoformed packaging, and multiwall paper bags. Markets for these products include processed and fresh meat, liquids, frozen foods, cereals, snacks, cheese, coffee, condiments, candy, pet food, bakery, seed, lawn and garden, tissue, fresh produce, personal care and hygiene, disposable diapers, agribusiness, and minerals. This segment has 35 manufacturing plants located in 16 states, of which 32 are owned directly by the Company or its subsidiaries and three are leased from outside parties.

Global Packaging segment

The ! Global Packaging segment includes all packaging-related manufacturing operations located outside of the United States as well as global medical device and pharmaceutical packaging manufacturing operations. This segment manufactures multilayer polymer, blown and cast film structures to produce packaging sold for a variety of food, medical, pharmaceutical, personal care, and industrial applications. Additional products include injection molded plastic and folding carton packaging. Markets for these products include processed and fresh meat, liquids, snacks, cheese, coffee, condiments, candy, bakery, tissue, fresh produce, personal care and hygiene, disposable diapers, agribusiness, pharmaceutical, and medical devices. This segment has 32 manufacturing plants located in three United States, the Commonwealth of Puerto Rico, and ten non-United States countries, of which 26 are owned directly by the Company or its subsidiaries and six are leased from outside parties.

Pressure Sensitive Materials segment

The Pressure Sensitive Materials segment is a global manufacturer of pressure sensitive adhesive coated paper and film substrates sold into label, graphic, and technical product markets. Products for label markets include narrow-Web rolls of pressure sensitive paper, film, and metalized film printing stocks used in high-speed printing and die-cutting. Products for graphic markets include pressure sensitive films used for decorative signage through computer-aided plotters, digital and screen printers, and photographic overlaminate and mounting materials including optically clear films with built-in ultraviolet (UV) inhibitors. Products for technical markets include micro-thin film adhesives used in delicate electronic parts assembly and pressure sensitive applications utilizing foam and tape based stocks to perform fastening and mounting functions. This segment has seven manufacturing plants located in three states and two non-United States countries, all of which are owned directly b! y the Com! pany or its subsidiaries.

The Company competes with Amcor Limited, Berry Plastics Corporation, Bryce Corporation, Exopack Company, Hood Packaging Corporation, Printpack, Inc., Sealed Air Corporation, Sonoco Products Company, Wihuri OY, Winpak ltd, 3M, Acucote, Inc., Avery Dennison Corporation, FLEXcon Corporation, Green Bay Packaging Inc., Ricoh Company, Ltd., Ritrama Inc., Spinnaker Industries, Inc., Technicote Inc., UPM-Kymmene Corporation, and Wausau Coated Products Inc.

Advisors' Opinion:

• [By Rich Duprey]

  Looking to increase its presence and market share in Asia, specialty packaging maker Bemis (NYSE: BMS  ) announced today it was acquiring a Chinese manufacturer of specialty films, Foshan New Changsheng Plastics Films.�

• [By Jessica Alling]

  Leaders and laggards
  Merck (NYSE: MRK  ) is at the top of the class this morning with a 5.19% gain following some extremely encouraging news about its latest experimental drug,�lambrolizumab. Aimed at unleashing the powers of a patient's own immune system, the drug disables the immune system cells' prevention method that curbs its attack on cancer cells -- a protein called the programmed death 1 receptor, or PD-1. Merck's drug has shown a 38% rate in tumor reduction in patients with advanced melanoma, and up to 52% in patients who received the highest dosage of the drug. Though the patients have not undergone the trial for a long enough period yet, the results are attracting attention for matching the current treatments from two Bristol-Meyers Squibb (NYSE: BMS  ) drugs, Yervoy and nivolumab, with potentially milder side effects. The news is great for Merck investors, as the company has only played a small part in oncology treatments to date.

• [By The Part-time Investor]

  The following stocks met the criteria in January of 2008 and were put into the initial portfolio:

  Abbot Labs (ABT)Advanced data processing (ADP)Associated Banc-Corp (ASBC)Bank of America (BAC)BB&T Corp. (BBT)Bemis Company (BMS)Anheuser Busch (BUD)The Chubb Corporation (CB)Clorox (CLX)Comerica Inc. (CMA)Diebold Inc. (DBD)Emerson Electronics (EMR)First Dollar Corp. (FDO)First Third BanCorp. (FITB)Gannett Co, Inc. (GCI)General Electric (GE)Hershey (HSY)Illinois Tools Works (ITW)Johnson and Johnson (JNJ)Leggett and Platt (LEG)Eli Lilly (LLY)La-Z-Boy (LZB)McDonald's (MCD)Marsh and Ilsley (MI)M&T Bancorp (MTB)PepsiCo (PEP)Pfizer (PFE)Procter & Gamble (PG)Pentair Ltd. (PNR)Regions Financial Corp. (RF)Rohm and Haas (ROH)RPM International (RPM)Sherwin Williams (SHW)Sysco Corp. (SYY)UDR Inc. (UDR)

  Historical quotes were taken from Yahoo Finance. $10,000 was put into each position, to the nearest whole share, so a total of $349,262.89 was invested. From 1/15/08 through 5/16/13 all dividends were reinvested back into the stock that paid them. If a dividend cut was announced, that stock was sold on the ex-div date of the new, lower dividend.

Top Healthcare Technology Companies To Invest In Right Now: Holcim Ltd (HOLN)

Holcim Ltd (Holcim) is a Switzerland-based holding company that specializes in the manufacture, distribution and marketing of building materials. The Company operates four business segments, including Cement, Aggregates, Other construction materials and services, and Corporate. The Cement segment is engaged in the development of cement and comprises clinker and other cementitious materials, among others. The Aggregates business segment includes crushed stone, gravel and sand. The Other construction materials and services business segment comprises ready-mix concrete, concrete products, asphalt, construction and paving, and trading, among others. Additionally, other construction materials and services segment provides environmental services, including waste management, among others. The Corporate segment is engaged in holding activities and general management. It operates through subsidiaries in Asia Pacific, Latin America, Europe, North America, Africa and Middle East regions. Advisors' Opinion:

• [By Sofia Horta e Costa]

  Holcim Ltd. (HOLN) lost 0.9 percent to 68.15 francs in Zurich. Bank of America Corp.�� Merrill Lynch unit cut its rating on the world�� largest cement maker to underperform, similar to a sell recommendation, from neutral. Merrill Lynch cited the company�� exposure to emerging markets.

How to Get in the Game and Profit

A few weeks ago, I told you a story about a woman who took my advice and used it to overcome her fear of investing.

As it turns out, it was an incredibly popular column.

Reader Robert from Vancouver wrote:

Thanks Shah for trying to provide some financial education.

There is a real and urgent need to teach people at least the basics of investing, the economy, and business.

And I wholeheartedly agree.

That's why I wanted to come back and build on the advice I originally gave you.

You see, once you make a decision to start investing, the next step is to make a commitment to become successful.

And today I'm going to show you how to make that next step...

To Be Successful, You Have to Put on Trades

In a nutshell, the advice I gave in my March 27 column was:

Start by taking positions in companies you know something about. It doesn't matter if you like or hate it. Just that you know enough about the company's products, services, whatever they do, so the stock's ups and downs make sense to you.

Once you pick a stock, you always start the same way. You put on the trade.

Never think that your trade, or your position, is an investment. It isn't. It is a trade.

You can get out of it at any time.

If it turns into a brilliant pick, your trade will turn into an "investment" because it's worth holding onto.

But to become a successful investor you have to start by putting on trades.

You can't make money watching from the sidelines. But you also can't be a deer in the headlights either. You can't go into a trade and think it's an investment and you're stuck with it when it goes against you. It's a trade!

And the reality is that some of your trades will be losers...

That means you will get out of positions with small losses. It's part of the game. You will have some losses but they will be monumentally overwhelmed by the trades that will make great money. And the ones that keep going up and maybe pay you dividends will become the "core" of your investment portfolio.

And that's your ultimate goal. You want to create an investment plan that leads to financial freedom.

Psychology and Perception Are More Important Than Data and Facts

One of the reasons I say that you don't need to be an expert on any company, or on any stock, is that no matter how much homework you do, no matter how much analysis you do, what makes perfect sense on paper may have nothing to do with how your stock trades.

When you watch your stock going up and down, you begin to understand the "psychology" of other investors - what they're looking at, how they interpret news and data.

You're one person with one position. There are millions of people like you watching that same stock. Collectively, their perception of news and data and the psychology of their fear and greed ultimately motivate them to take action, which moves the stock.

I can't tell you how many times I've done copious amounts of research and been absolutely confident that I was putting on a winning trade, only to have my head handed to me because other traders' perception of something that came along (it could be out of nowhere) was interpreted as a reason to sell the stock.

My saying - and I live by this - is:

Money moves markets, but psychology moves money.

What I'm saying is: Go ahead and do your homework. But your knowledge of your stock, or your position, has to include your understanding about how other investors perceive the stock and its likelihood to go up or down.

Market psychology is everything. I can trade anything, any stock, any bond, any commodity, any derivative, anything, because I trade on OPP - Other People's Psychology.

It's not easy reading the market's psychology, or the perception the market has about a stock's prospects. But it's not hard either.

First of all, understand that there are two ways to trade psychology.

You go with the flow.

You go against the flow.

I do both, and quite successfully.

Going with the flow is all about the "trend."

The Trend Is Your Friend

Live by that and you will make a lot of money.

In terms of market psychology I always look for the big picture first. What is the big trend? Is the market (we're talking about stocks) in an uptrend or downtrend?

If it's an uptrend I want to be buying stocks. If it's a downtrend I want to be shorting.

Always go with the flow by trading within the big trends.

After all, if the market is going higher, why would you fight it? You don't, you ride it.

Of course, there are nuances in following the big trend. The general market may be going higher but maybe the stock you want to buy falls in an industry that's not going along with the big trend. You have to be careful about that.

That's where going against the flow might come into play.

I make a lot of money following the trends and riding them. But, sometimes I go against the trend.

The reasons to go against the big trend start with the big trend. Maybe you see it stalling out. Maybe you think it's about to turn around and go the other way. It's at these junctures that going against the trend, in measured fashion, can be very profitable.

If I think the psychology has changed and the general market is turning bearish, but the market has still been holding onto its gains, such that I see selective selling, or profit-taking, I will put on a counter-trend position.

If you put on counter-trend positions at inflection points, meaning where the market seems like it could change, you aren't taking a stupid risk. Instead, you are taking a shot that you can get ahead of the bigger shift in psychology.

What's critical is that whenever you take a counter-trend position, you don't "get married" to the position.

You're going against the trend, which you don't generally want to do. But because picking tops and bottoms can be extremely lucrative (and trying to do that exponentially ups your learning curve), it's worth the risk. Again, you only do that when you think you sense a change in the trend.

If I take a counter-trend position and the trade starts out against me, I get out just as the big trend reconvenes its footing and continues. I will lose a little and move on.

Here's another way to play a counter-trend within a bigger trend: Buy that stock you wanted to buy but didn't because its industry group wasn't following the big trend higher.

At some point, when I think that stock and its industry may be out of favor enough, I'd consider buying in. Why? Because if the big trend is still up and I think it's strengthening, then buying an out-of-favor stock that has already gone down (but is a fundamentally good company, not some crazy stock) isn't as risky as it seems.

And if you've done your homework and like the stock but have been surprised that it has gone down in a rising market, then you'll know instinctively if it has gone down enough to make it a good "value" in the rising market. That's not a risky position.

I can't impress upon you enough that you know more than you think. You have to trust yourself. Use your own knowledge of how people react to gauge mass psychology, which sometimes is mass delusion. But that's another lesson.

So, I'll say it again. Tune yourself into the psychology of the market. The psychology of other traders and investors, of what they are reacting to, of their fear and greed.

Perception is reality when it comes to how money reacts.

3M vs. Bank of America: Which Dow Stock's Dividend Dominates?

Dividend stocks outperform non-dividend-paying stocks over the long run. It happens in good markets and bad, and the benefit of dividends can be quite striking: Dividend payments have made up about 40% of the market's average annual return from 1936 to the present day. But few of us can invest in every single dividend-paying stock on the market, and even if we could, we might find better gains by being selective. That's why we'll be pitting two of the Dow Jones Industrial Average's (DJINDICES: ^DJI  ) dividend payers against each other today to find out which Dow stock is the true dividend champion. Let's take a closer look at our two contenders now.

Tale of the tape
3M (NYSE: MMM  ) is a Jack-of-all-manufacturing-trades for the Dow. The Minnesota-based company (the first "M" stands for its state of origin) will soon reach its 37th Dow-niversary, and it will celebrate as it typically does: by working hard to develop innovative new industrial products. Since its founding in 1902, 3M has become a leading producer of a wide range of products, including bandages, cleaning products, paint, filtration, and sticky notes. 3M's consistency will make it a formidable opponent to its challenger...

Bank of America (NYSE: BAC  ) joined the Dow in early 2008, which turned out to be a real disaster for the index's returns. However, the second-largest bank by assets in America is undoubtedly a worthwhile representative of the U.S. financial sector. Not only is Bank of America a dominant player in commercial banking, but its crisis-era purchase of Merrill Lynch also established it as the world's largest wealth-management company. Unfortunately, the financial crisis has weakened Bank of America, and its persistent mortgage-related problems have prevented it from paying a similar dividend to its megabank peers. Can Bank of America prevail, or will industry triumph over finance today in our dividend battle?

Statistic

3M 

Bank of America

Market cap	$80.3 billion	$160.3 billion
P/E ratio	18.3	32.2
Trailing-12-month profit margin	14.8%	4.2%
TTM free-cash-flow margin*	13%	N/A
Five-year total return	89.8%	(50.8%)

Source: Morningstar and YCharts. *Free-cash-flow margin is free cash flow divided by revenue for the trailing 12 months.

Round one: endurance
3M's dividend history stretches all the way back to 1916, so it will soon celebrate its dividend centennial. Bank of America is a far more recent entrant to the dividend game, as Dividata only records payments as far back as 1986, when it was still largely based in California.

Winner: 3M, 1-0

Round two: stability
Paying dividends is well and good, but how long have our two companies been increasing their dividends? The same dividend payout year after year can quickly fall behind a rising market, and there's no better sign of a company's financial stability than a rising payout in a weak market (so long as it's sustainable, of course). 3M is a dividend aristocrat, and its streak of payout growth dates back to 1959. Bank of America, which has yet to raise its payout from the nominal penny-per-share level to which it was reduced during the financial crisis, simply can't compete.

Winner: 3M, 2-0

Round three: power
It's not that hard to commit to paying back shareholders, but are these payments enticing or merely token? Let's take a look at how both companies have maintained their dividend yields over time as their businesses and share prices have grown:

MMM Dividend Yield data by YCharts.

Bank of America might be able to push its payout above 3M's in the future, but it certainly hasn't maintained a strong yield for some time.

Winner: 3M, 3-0

Round four: strength
A stock's yield can stay high without much effort if its share price doesn't budge, so let's take a look at the growth in payouts over the past five years. If you bought in several years ago and the company has grown its payout substantially, your real yield is likely much better than what's shown above.

MMM Dividend data by YCharts.

Winner: 3M, 4-0.

3M blows Bank of America out of the water and moves on to the next round of the Dow dividend tournament. However, Bank of America's persistent weakness shouldn't be permanent, and it might soon become a much stronger dividend stock once its long-standing subprime problems have been worked through its system. Would you invest in Bank of America today in the hopes of getting some hefty dividends in the future, or is the financial giant better considered a momentum play in a recovering economy, to be avoided the next time things take a turn for the worse?

While dividend stocks don't garner the notoriety of highflying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. Our analysts recently sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of the only nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.

Show Me the Money, KEYW Holding

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 KEYW Holding (Nasdaq: KEYW  ) , 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, KEYW Holding generated $9.6 million cash while it booked a net loss of $1.4 million. That means it turned 3.6% of its revenue into FCF. That sounds OK.

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

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

So how does the cash flow at KEYW Holding 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 questionable cash flows amounting to only 4.2% of operating cash flow, KEYW Holding's cash flows look clean. Within the questionable cash flow figure plotted in the TTM period above, stock-based compensation and related tax benefits provided the biggest boost, at 16.7% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures, which consumed 54.2% 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.

If you're interested in companies like KEYW Holding, you might want to check out the jaw-dropping technology that's about to put 100 million Chinese factory workers out on the street – and the 3 companies that control it. We'll tell you all about them in "The Future is Made in America." Click here for instant access to this free report.

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

Add KEYW Holding to My Watchlist.

Apple Q2 Earnings Live Blog Recap

 

This story has been updated from 4:08 p.m. EST.

NEW YORK (TheStreet) -- Apple's  (AAPL) fiscal second-quarter earnings blew past Wall Street's estimates sending shares roughly 8% higher in after-hours trading.

Apple reported second-quarter earnings of $11.62 a share, generating $45.6 billion in revenue. The company shipped 43.7 million iPhones, 16.4 million iPads, and shipped 4.1 million Macs during the quarter. Gross margin, a highly watched level for Apple, came in at 39.3%.

Shares were up 7.7% to $565.15 in post markets. "We're very proud of our quarterly results, especially our strong iPhone sales and record revenue from services," said Tim Cook, Apple's CEO. "We're eagerly looking forward to introducing more new products and services that only Apple could bring to market." "We generated $13.5 billion in cash flow from operations and returned almost $21 billion in cash to shareholders through dividends and share repurchases during the March quarter," said Peter Oppenheimer, Apple's CFO. "That brings cumulative payments under our capital return program to $66 billion." Analysts surveyed by Thomson Reuters were expecting the Cupertino, Calif.-based Apple to report earnings of $10.18 a share on $43.53 billion in revenue, which would be a slight decline in revenue year over year, as Apple continues to promise new products and new categories. Apple also announced that it was upping its capital allocation program to over $130 billion by the end of calendar year 2015. As part of the program, the Board increased its share repurchase authorization to $90 billion from $60 billion, and boosted its quarterly dividend by 8%, to $3.29 a share. "The Company also plans to increase its dividend on an annual basis. With annual payments of $11 billion, Apple is among the largest dividend payers in the world," the company said in the release. From August 2012 through March 2014, Apple has spent $66 billion in cash on its capital return program. Apple will access the public debt markets this year to help paying for the program, and raise an "amount of term debt similar to what the Company raised during 2013." "We are announcing a significant increase to our capital return program," Cook said, when discussing the allocation program. "We're confident in Apple's future and see tremendous value in Apple's stock, so we're continuing to allocate the majority of our program to share repurchases. We're also happy to be increasing our dividend for the second time in less than two years." The Board of Directors also announced a seven-for-one stock split, effective June 2, 2014. Shares will will begin trading on a split-adjusted basis on June 9, 2014.

For the fiscal third quarter, Apple expects revenue between $36 billion and $38 billion. Gross margin is expected to be between 37% and 38%, while operating expenses are expected between $4.4 billion and $4.5 billion.

Apple said on the call that $46 billion of the current $60 billion buyback has already been used and that $66 billion of the total $100 billion in buybacks and dividends has been used already. Cook added that Apple wants to make its stock more accessible to a larger number of investors and a reason for the split.

Apple executives did not mention any details in regards to the next iPhone on the call, but Cook said the key thing for Apple is to "stay focused on things we can do best, and do things at a really high level of quality that our customers have come to expect." Cook added that the company cares about "every detail." "Apple delivered a strong sales and EPS print in 2Q:FY14, while the company's 3Q:FY14 sales outlook is inline with our projections but below the Street; however, this is good enough to satisfy investors, in our view," writes Cantor Fitzgerald analyst Brian White in a research note. Shares of Apple closed the regular session lower, falling 1.3% to close at $524.75. --Written by Chris Ciaccia and Laurie Kulikowski in New York >Contact by Email. Follow @Chris_Ciaccia

Stock quotes in this article: AAPL 

HBO shows coming to Amazon ... not Netflix

If you haven't seen "The Sopranos" we won't spoil it for you. But you'll soon be able to stream it and other HBO shows on Amazon Prime.

NEW YORK (CNNMoney) Non-HBO subscribers will soon be able to watch some of the network's old TV shows, like "The Sopranos" and "The Wire," on Amazon Prime's streaming video service.

Amazon (AMZN, Fortune 500) described the deal as a first for HBO, which has a reputation for being tightfisted with its library of hit shows -- even ones that stopped airing years ago.

The assortment of HBO shows will be a significant addition to Amazon Prime as it attempts to sign up more monthly subscribers and challenge Netflix. HBO will continue to provide complete access to all its shows through HBO GO, the streaming service for its existing subscribers.

The Amazon deal draws a bright line between old and new. For example, the seasons of "Girls," "The Newsroom" and "Veep" that are premiering this year won't be available through Amazon Prime for approximately three years. That means if viewers want to stay current, they have to subscribe to cable television and HBO (or borrow a friend's HBO GO password).

But a more casual type of viewer, who maybe wants to binge on every season of "Six Feet Under" or "Deadwood," will now be able to do so through Amazon.

The deal also includes early seasons of some series that are still on the air, such as "True Blood" and "Boardwalk Empire." (But not the most recent seasons.)

  Amazon's plan to rule your TV

The companies did not disclose any plans for when HBO's current biggest hit -- "Game of Thrones" -- would be available on Prime, if ever. There was also no discussion of "True Detective," the new series with Matthew McConaughey and Woody Harrelson that debuted earlier this year to rave reviews and quickly became a pop culture phenomenon.

HBO is owned by Time Warner (TWX, Fortune 500), which is also the parent company of CNNMoney.

Previously, the only ways for people without HBO to watch the network's shows would be by purchasing DVDs, buying individual episodes through Amazon or Apple's (AAPL, Fortune 500) iTunes store, or by watching reruns of certain shows on other cable channels. ("Sex and the City" now runs on the E! channel, and isn't included in the Amazon deal.)

! In the television industry, revenue from DVDs and reruns has been declining as viewers gravitate toward on-demand ways to watch. With Amazon, HBO is generating a new way to make money from its reruns. In Hollywood, this is known as a new "window" for programming. (The first "window" remains the hotly-anticipated premieres of episodes on the main HBO television channel.)

Amazon and HBO said the first shows would start to appear on Prime on May 21, just in time for Memorial Day weekend.

Some analysts immediately called the licensing deal a loss for Netflix (NFLX), though Netflix has made a point of saying it doesn't see Amazon as its chief rival.

"Since much of the content on Netflix and Amazon Prime (as well as Hulu in the U.S.) is mutually exclusive, many consumers see value in subscribing to all three networks," Netflix said in its quarterly letter to shareholders earlier this week. Hulu is an online streaming video service owned by a conglomerate of several big media firms.

Netflix currently costs $7.99 a month in the United States, although the company said earlier this week that it was going to increase the price for new subscribers. Amazon's streaming video service is bundled as part of its $99 annual Prime membership. Amazon recently raised the price of a Prime subscription from $79 a year.

CAPScall of the Week: AG Mortgage Investment Trust

For years, satirical late night TV host Stephen Colbert has been running a series on his show called "Better Know a District," which highlights one of the 435 U.S. congressional districts and its representative. While I am no Stephen Colbert, I am brutally inquisitive when it comes to the 5,000-plus listed companies on the U.S. stock exchanges.

That's why I've made it a weekly tradition to examine one seldom-followed company within the Motley Fool CAPS database and make a CAPScall of outperform or underperform on that company.

For this week's round of "Better Know a Stock," I'm going to take a closer look at AG Mortgage Investment Trust (NYSE: MITT  ) .

What AG Mortgage Investment Trust does
AG Mortgage Investment Trust is a mortgage real estate investment trust that invests in agency (government-backed) and non-agency (non-government backed) mortgage-backed securities and other real estate-related securities and assets. As of the first quarter, 73.5% of its investment portfolio was tied up in agency residential-MBSes, with the remaining 26.5% made up on non-agency RMBSes, commercial loans, commercial MBSes, and other asset-backed securities.

In the first-quarter, AG Mortgage Investment Trust reported net income of $0.49 per share and declared a quarterly dividend of $0.80. Book value declined slightly to $23.16 by the end of the quarter. Furthermore, net interest margin stood at 2.25% with a leverage ratio of 5.38.

Whom it competes against
If you feel a bit overwhelmed by the earnings reports of mortgage REITs, then I'll make it much simpler. There are only three truly important factors: What's the Fed doing? How high is the leverage ratio? And is this an agency-only, or agency & non-agency mREIT?

The actions of the Federal Reserve have bearing on the entirety of the mREIT sector whether they're agency or non-agency backed. The reason is that Operation Twist -- a program that saw the U.S. central bank sell short-term U.S. Treasuries in favor of buying a corresponding amount of long-term U.S. Treasuries -- and its monthly MBS bond-buying program have worked to artificially keep lending rates low. These rates work in mREITs' favor by allowing them to borrow at historically low levels, then lever up on relatively tight margins to reap big gains from the rate at which they lend. However, recent strong data from the U.S. economy, including a five-year low in the unemployment rate, may indicate the Fed wants to pare back its bond-buying programs in the near future, which could cause rates to rise, and mREITs to lose their bountiful spreads.

These spreads are what have allowed mREITs to pay out double-digit yields for years now. However, with spreads tightening as mortgage rates hit their highest levels in two years, dividend cuts are beginning to cycle through the sector. American Capital Agency (NASDAQ: AGNC  ) , Annaly Capital Management  (NYSE: NLY  ) , and American Capital Mortgage Investment (NASDAQ: MTGE  ) all recently cut their dividends in lieu of smaller investment profits.

Other important factors relate to whether or not an mREIT invests in riskier non-agency assets and what their leverage ratio is. Agency-only mREITs like American Capital Agency and Annaly Capital often carry much lower net interest margins than their non-agency counterparts, but they can really pack on the leverage since their MBSes are protected in case of default by the government.

In contrast, non-agency mREITs often have to be more careful with their leverage since loan defaults actively impact their bottom-line profit, and rapidly rising interest rates, such as what we saw over the past few weeks, can trigger MBS and other security sales at a loss. In return for more risk, non-agency securities pay out higher yields. Take, for example, Invesco Mortgage Capital (NYSE: IVR  ) , a buyer of agency and non-agency RMBSes, which delivered what might seem like an uninspiring 1.64% net interest margin in the first quarter with a leverage ratio of 6.4. Now compare that to agency-only mREIT Annaly Capital, whose net interest margin fell 80 basis points from the year-ago period in the first quarter to just 0.91%, but with a higher leverage ratio of 6.6.

The call
Factoring all of those variables in, I have decided to make a CAPScall of outperform on AG Mortgage Investment Trust.

I am perfectly aware of the negatives surrounding the mREIT sector, which includes the imminent paring back of the Fed's bond-buying program, but I also can't ignore that these businesses are money-making machines that have survived, and even thrived, in much higher interest rate environments. The Fed has been quite forthcoming with its intentions to keep the Fed Funds target lending rate near historic lows through 2015, which gives these mREITs another two-and-a-half years of very good monetary policy visibility.

Valuation is another key factor that attracts me to AG Mortgage Investment. Historically, purchasing mREITs well below their net book value has proven to be a profitable venture. It's certainly hard to argue with history, and AG Mortgage Investment sits at just 76% of its book value.

And of course, where would we be if we didn't discuss AG Mortgage Investment's delectable dividend? Although I'm not sold it'll be able to maintain its current payout of $0.80 per quarter, as of now, it's one of the few mREITs that hasn't yet had to lower its dividend. It's currently yielding an annualized 18.2% -- enough to make any income investor drool. Also, AG Mortgage's leverage ratio is a lot lower than many of its peers, putting it in better shape should it need to shed some of its assets.

Your search for solid dividend paying stocks doesn't have to end here. If you're on the lookout for high-yielding stocks, The Motley Fool has compiled a special free report outlining our nine top dependable dividend-paying stocks. It's called "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your copy today at no cost! Just click here.

Don't Get Too Worked Up Over Isramco's Earnings

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 Isramco (Nasdaq: ISRL  ) , 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, Isramco burned $3.3 million cash while it booked net income of $0.2 million. That means it burned through all its revenue and more. 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 be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

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

So how does the cash flow at Isramco 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 questionable cash flows amounting to only 1.6% of operating cash flow, Isramco's cash flows look clean. Within the questionable cash flow figure plotted 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 1.7% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures. Isramco investors may also want to keep an eye on accounts receivable, because the TTM change is 2.1 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.

Looking for an alternative to Isramco? By investing in this multibillion-dollar energy company, you can get in before its stock rebounds, when natural gas prices eventually do turn upward. And until natural gas prices do rebound (which a top Motley Fool analyst expects will happen by 2014), you can cash in on its stable 5.7% dividend. Click here for instant access to this free report.

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

Add Isramco to My Watchlist.

'N.Y .Times' debuts The Upshot blog

The New York Times launched its political and economic analysis blog The Upshot Tuesday, jumping into the crowded pool of media outlets offering data-driven news sites.

Edited by former Washington, D.C. bureau chief David Leonhardt, The Upshot is the latest Times' online editorial offering and is partly aimed at replacing Nate Silver's popular FiveThirtyEight blog.

"You have no shortage of excellent news sources," wrote Leonhardt on the blog Tuesday. "We believe many people don't understand the news as well as they would like."

"We believe we can help readers get to that level of understanding by writing in a direct, plain-spoken way, the same voice we might use when writing an email to a friend. We'll be conversational without being dumbed down," he said.

The launch follows other similar efforts by competitors that are interested in providing sharper analysis and data-embedded stories. Data-centric journalism has become trendy in American newsrooms in recent months as news organizations seek product differentiation through technology and social media. The software applications used to process data and illustrate results in charts, quizzes and maps are cheaper, if not free online. And branded blogs are seen as an efficient means to post stories quickly to dedicated audiences to generate greater web traffic.

Silver, who gained notoriety by employing his statistical analysis to accurately predict President Obama's victory in the 2008 and 2012 elections, ended his contract-based association with the Times last year and sold his blog brand -- FiveThirtyEight.com -- to ESPN. With the sports cable network's financial backing, FiveThirtyEight.com was launched last month after months of preparation and recruiting.

Ezra Klein, a former Washington Post policy blogger, joined Vox Media and launched the company's first general news site, Vox.com, earlier this month. It was designed as an explanatory site that aims to make news more digestible by incorporating data and graphics.

The Washington Post plans to replace Klein's work with several initiatives, including a new economics blog by reporter Jim Tankersley.

Leonhardt said The Upshot will focus particularly on "unearthing" new data and working with the Times' graphics department to present them in ways that are easier to read. He said he will also solicit story ideas directly from readers.

Buy Bonds With Moving Parts

For the last few years there has been an inner voice telling bondholders "rates have nowhere to go but up." That's why skittish fixed-income investors stampeded into adjustable-rate-bond funds last spring when interest rates bumped up. But there is a smarter strategy than selling in panic or merely sitting on the sidelines.

You want bonds with moving parts. What are they? They're bonds that have some feature that adjusts with rates or resets at some future point in time. Examples are bonds whose yield changes with the slope of the yield curve, Libor-based bonds and bonds whose coupons adjust to a specific Treasury yield. Allocate 10% to 15% of your portfolio to them–and no more. They're all from financial institutions, and too much exposure to any sector is never a good thing.

Citigroup Citigroup has an attractive yield-curve steepener (implying that long-term Treasury yields remain higher than short-term yields). Buy the Citigroup 10.50% Coupon Bond Maturing Feb. 19, 2034 (CUSIP: 1730T0G78), callable Feb. 19, 2015 at par. The impressive 10.50% coupon is a "teaser" rate that changes in February 2016. This gives you nearly two years to bank that double-digit coupon. When the 10.50% coupon resets in 2016, the formula for computing the new coupon is: 6 x (30-year Treasury Swap rate)–(5-year Treasury Swap rate)–25 basis points.

Institutional investors can access these rates on data providers (like the Bloomberg terminals), but an easier way to get a bead on the new rate would be to substitute the 30-year Treasury (now 3.65%) and the 5-year rate (now 1.7%) instead of the swap rates in the formula. This bond, priced at 99.12, has a floor of 0%, and payments and resets are quarterly.

The Bank of Nova Scotia Bank of Nova Scotia, rated A+, AA–, also offers curve steepeners with high teaser yields. The Bank of Nova Scotia 10.50% Coupon Bond (CUSIP: 064159DF0) is callable Jan. 30, 2015 at par and is priced at 97. The terms differ from the Citigroup bond. This issue resets January 2015 and will yield 4 x (the 30-year Treasury swap)–(the 2-year Treasury swap)–25 basis points.

Beware: Some of these bonds with moving parts are small issues with little liquidity, and that may restrict a quick and easy exit. Before buying, search InvestinginBonds.com by CUSIP to verify that your bonds trade daily or at least weekly.

For nervous investors I recommend Libor floaters as a security blanket to calm your interest rate angst. Lloyds Bank Plc. rated A2, A has bonds with a minimum coupon rate of 2%. If three-month Libor plus 1.25% exceeds the 2% floor, then that's the new coupon. Lloyds bonds are shorties, maturing July 20, 2017 (CUSIP: 5394E8BC2) and priced at 100.

Special Offer: Where should you invest now? Download the new free report 12 Stocks To Buy For 2014 for ideas from top Forbes advisors.

5 Best Consumer Service Stocks To Own For 2015

Steelmaker Nucor (NUE) presents a good investment opportunity for investors to initiate a position as its shares have displayed some weakness of late. Nucor was able to report profitability in a sluggish steel market that is gradually working in its favor and the company expects a turnaround in the current fiscal year.

Good Performance

In spite of a challenging market and plant downtimes, Nucor has done well as its revenue grew 10% to $4.89 billion in the fourth quarter. Net income also jumped to $170.5 million from $136.9 million last year. Cost-cutting strategies and operational efficiencies drove Nucor�� performance.

The resurgence of the auto industry in the U.S. has helped Nucor as car sales in the U.S. grew to 15.6 million units in 2013, up 7.6% from a year ago. Car sales are projected to grow to 16 million units in fiscal 2014, and this will help Nucor�� top and bottom line performance as demand for steel will rise subsequently.

Nucor plans to make its operations more profitable. It has recently opened a facility in Louisiana that will produce direct reduced iron, supplementing the existing facility the company has at Trinidad. Nucor has lately witnessed better performance at its Louisiana plant compared to that of the facility at Trinidad, with better DRI quality.

5 Best Consumer Service Stocks To Own For 2015: Landec Corporation(LNDC)

Landec Corporation, together with its subsidiaries, designs, develops, manufactures, and sells polymer products for food and agricultural products, medical devices products, and licensed partner applications incorporating its patented polymer technologies. It has two polymer technology platforms that include Intelimer polymers, a proprietary class of crystalline, hydrophobic polymers, which respond to temperature changes in a controllable, predictable way; and Hyaluronan Biopolymer, a non-crystalline, hydrophilic polymer that exists naturally within the human body. The company?s Food Products Technology segment markets and packs produced and specialty packaged whole and fresh-cut vegetables utilizing the proprietary BreatheWay specialty packaging technology for the retail grocery, club store, and food services industry. This segment also sells BreatheWay packaging to partners for non-vegetable products. Its Food Export segment purchases and sells primarily whole commodity fruit and vegetable products to Asian markets. The company?s Hyaluronan-based Biomaterials segment sells products utilizing hyaluronan, a naturally occurring polysaccharide that is primarily distributed in the extracellar matrix of connective tissues in both animals and humans for medical use primarily in the ophthalmic, orthopedic, and veterinary markets. It also supplies hyaluronan to customers pursuing other medical applications, such as aesthetic surgery, medical device coatings, tissue engineering, and pharmaceuticals. Its Technology Licensing segment licenses Intellicoat, a proprietary seed coating technology to the farming industry; and Intelimer polymers for personal care products and other industrial products. The company sells its products in the United States, Canada, Taiwan, Belgium, Indonesia, China, and Japan. Landec Corporation was founded in 1986 and is based in Menlo Park, California.

Advisors' Opinion:

• [By Laura Brodbeck]

  Thursday

  Earnings Expected From: Landec Corporation (NASDAQ: LNDC), Resources Connection, Inc. (NASDAQ: RECN) Economic Releases Expected: Indian manufacturing PMI, Spanish manufacturing PMI, Hong Kong retail sales, Italian manufacturing PMI, French manufacturing PMI, German manufacturing PMI, eurozone manufacturing PMI, US manufacturing PMI, Canadian manufacturing PMI, US manufacturing PMI

  Friday

• [By Lauren Pollock]

  Landec Corp.'s(LNDC) fiscal first-quarter profit grew 8.8% as the food-packaging maker reported higher revenue due to strong demand for vegetables. Margins, however, fell due to an increase in lower-margin food service sales and higher-than-expected raw produce costs.

• [By John Kell var popups = dojo.query(".socialByline .popC"); popups.forEach(func]

  Landec Corp.(LNDC) said its fiscal third-quarter earnings rose 34% as its food business reported higher revenue.

  Lindsay Corp.(LNN) said fiscal second-quarter revenue and earnings fell as the company’s irrigation business remains mired in a sales slump. The company’s results underperformed Wall Street expectations.

5 Best Consumer Service Stocks To Own For 2015: Fairway Group Holdings Corp (FWM)

Fairway Group Holdings Corp., incorporated on September 29, 2006, operates in the retail food industry, selling fresh, natural and organic products, prepared foods, and specialty and gourmet offerings along with a assortment of conventional groceries. The Company focuses on perishable product categories, which include produce, natural and organic, deli, specialty, cheese, butcher, seafood, bakery, coffee and kosher foods. Its non-perishable product categories consist of conventional groceries, as well as specialty foods. It operates two stores on the West Side of Manhattan, New York. As of September 24, 2012, it operated 11 locations in the Greater New York City metropolitan area, three of which include Fairway Wines & Spirits stores.

The Company�� natural and organic product categories include fruits and vegetables, natural and fresh juices, organic OBE beef and organic chicken, fresh organic peanut butter and natural almond butter, fresh roasted coffees and loose teas, dried fruits and nuts, full assortment of natural and organic groceries, cold cuts and cheeses, breads, supplements (homeopathy, vitamins, herbs), nutritional bars and protein powders, health and beauty aids, dairy, including Fairway-branded organic milk, eggs, including Fairway-branded organic eggs, vegetarian dairy alternatives, frozen foods, e gluten-free selections, baby food and baby care items and cleaning products. It offers a classic New York deli counter. It carries smoked salmon prepared using its own recipe and hand-craft its own fresh mozzarella daily.

The Company�� Specialty Imports and Specialty Grocery departments provide shoppers with specialty and gourmet items, such as Lapalisse pure and virgin nut oils; authentic Sicilian foodstuffs; Burgundy's organic La Trinquelinette fruit preserves made in small batches using only unrefined raw cane sugar; ready-to-eat vacuum-packed beets from the Loire Valley; L'Herbier de Milly La Foret verbena, hibiscus, peppermint and linden blossom infusions; L! a Quiberonnaise Vintage Sardines from Brittany, France; Pruneaux d'Agen (stuffed prunes), and Royal Medjool dates, Quercy's soft dried figs and apricots. It carries approximately 115 varieties of specialty olive oil, including numerous imported unfiltered olive oils, and offer all-day, every day tasting of olive oils in each of its stores.

The Company has meat delivered every day and it is cut and packaged at each of its stores within 24 hours of receipt. It also receives daily deliveries of fresh ice-packed chicken. It offers 50 to 80 different selections of fresh fish and seafood in each store every day. It utilizes a combination of on-site and centralized bakeries to produce our baked goods. Its full-service bakery prepares its signature cookies, tarts, cupcakes, baguettes and bagels. It offers over 100 types of artisanal coffee beans sold by the pound, as well as over a dozen varieties of Fair Trade certified and organic coffee.

The Company offers an array of kosher options, including Fairway's branded products, its conventional and specialty groceries, its coffee, as well as its baked goods, dairy, organic, gluten-free, imported and frozen items. It offers a variety of cuts of kosher poultry, red meat and seafood. It carries a range of conventional grocery items. Its grocery aisles are stacked high with the national brand names Tide, Bounty, Kleenex, Charmin, Lysol, Poland Spring, Oreo, Cheerios, Lipton, Hershey's, Coke, Green Giant, and many more. In addition, it offers an array of ethnic groceries that cater to each store's local demographic.

Advisors' Opinion:

• [By Matt Jarzemsky]

  The group�� worst performer this year is New York City-area grocer Fairway Group Holdings Corp.(FWM), off 58% in 2013. Fairway is also among the farthest from its 52-week high, closing Thursday at $7.57 after trading as high as $28.87 in July.

• [By Jason Moser]

  You can be forgiven if you've never heard of Fairway Group Holdings (NASDAQ: FWM  ) . The company is responsible for Fairway Market, a small chain of high-end grocery stores currently in and around the greater New York City metropolitan area.

• [By Leslie Patton]

  Whole Foods is facing increased competition from expanding organic and natural-food sellers including Fairway Group Holdings Corp. (FWM) and Sprouts Farmers Market Inc. (SFM) The chain has been adding more of its 365 private-label brand items to attract price-conscious shoppers. Sales at stores open at least a year rose 5.9 percent in the fourth quarter, which ended Sept. 29, the slowest growth in 15 quarters.

Top Defensive Companies To Buy Right Now: Ten Peaks Coffee Company Inc (TPK)

Ten Peaks Coffee Company Inc. (Ten Peaks) is a Canada-based company. It operates its business through its subsidiary, Swiss Water Decaffeinated Coffee Company Inc. (SWDCC), which is a green coffee decaffeinator located in Burnaby, British Columbia. It also owns and operates Seaforth Supply Chain Solutions Inc. (Seaforth), a green coffee handling and warehousing business located in Metro Vancouver. SWDCC is engaged in the coffee decaffeination business utilizing the branded Swiss Water Process of 100% chemical free green coffee decaffeination. SWDCC has two subsidiaries, which include Swiss Water Decaffeinated Coffee Co. USA, Inc, and Swiss Water Process Marketing Services Inc. On November 18, 2011, a subsidiary of Ten Peaks, Seaforth Supply Chain Solutions Inc., was incorporated. On January 1, 2011, in response to changes to the legislation governing the taxation of income trusts which made the income trust form of structure less advantageous, the Fund converted to a corporation. Advisors' Opinion:

• [By Inyoung Hwang]

  Travis Perkins Plc (TPK) lost 1.6 percent to 1,749 pence. The builders��merchant said its consumer division failed to grow on a comparable basis in the third quarter, slipping from an 8.6 percent increase in the two months ended June.

5 Best Consumer Service Stocks To Own For 2015: PMC - Sierra Inc.(PMCS)

PMC-Sierra, Inc. engages in the design, development, marketing, and support of semiconductor solutions for the enterprise infrastructure and communications infrastructure markets. Its products include controllers based on Fibre Channel, Serial Attached SCSI, and Serial ATA that enable the development of external and server-attached storage systems; framers and mappers, which convert the data into a format for transmission in the network before the data is sent to the next destination; line interface units that transmit and receive signals over a physical medium, such as wire, cable, or fiber; and microprocessor-based system-on-chips, which perform the high-speed computations that help in identifying and controlling the flow of signals and data in various network equipment used in the communications, storage, and enterprise markets. The company also offers packet and cell processors that examine the contents of cells or packets, and perform various management and reporting functions; radio frequency transceivers, which transmit and receive broadband signals over the air; and serializers/deserializers that convert and multiplex traffic between slower speed parallel streams and higher speed serial streams. PMC-Sierra sells its products to end customers directly, as well as through distributors and independent manufacturers? representatives primarily in China, Asia, Japan, Taiwan, Europe, the United States, and the Middle East. The company was founded in 1983 and is based in Santa Clara, California.

Advisors' Opinion:

• [By CRWE]

  PMC (Nasdaq:PMCS), the semiconductor innovator transforming networks that connect, move and store big data, reported that the Company will present at the Citi 2012 Technology Conference on September 5, 2012, in New York, NY.

5 Best Consumer Service Stocks To Own For 2015: NewMarket Corp (NEU)

NewMarket Corporation (NewMarket), incorporated in 2004, is a holding company, which is the parent company of Afton Chemical Corporation (Afton), Ethyl Corporation (Ethyl), NewMarket Services Corporation (NewMarket Services), and NewMarket Development Corporation (NewMarket Development). Each of the Company�� subsidiaries manages its own assets and liabilities. Afton encompasses the petroleum additives business, while Ethyl represents the sale and distribution of tetraethyl lead (TEL) in North America and certain petroleum additives manufacturing operations. NewMarket Development manages the property, which it owns in Richmond, Virginia. NewMarket Services provides administrative services to NewMarket, Afton, Ethyl, and NewMarket Development. NewMarket Services departmental expenses and other expenses are billed to NewMarket and each subsidiary pursuant to services agreements between the companies.

As a specialty chemicals company, Afton develops, manufactures, and blends formulated fuel and lubricant additive packages, and markets and sells these products globally. Afton is a lubricant and fuel additives companies globally. Lubricant and fuel additives are products for maintenance and reliable operation of all vehicles and machinery. Ethyl provides contract manufacturing services to Afton and to third parties and is one of the marketers of TEL in North America. NewMarket Development manages the property, which it owns on a site in Richmond, Virginia consisting of approximately 64 acres.

Petroleum Additives

Petroleum additives are used in lubricating oils and fuels to enhance their performance in machinery, vehicles, and other equipment. It manufactures chemical components, which are selected to perform specific functions and combine those chemicals with other components to form additive packages for use in specified end-user applications. The petroleum additives market is an international marketplace, with customers ranging from oil companies and refineries t! o original equipment manufacturers (OEMs) and other specialty chemical companies. Lubricant additives are ingredients for lubricating oils. Lubricant additives are used in a range of vehicle and industrial applications, including engine oils, transmission fluids, gear oils, hydraulic oils, turbine oils, and in other application where metal-to-metal moving parts are utilized. Lubricant additives are organic and synthetic chemical components, which enhance wear protection, prevent deposits, and protect against the hostile operating environment of an engine, transmission, axle, hydraulic pump, or industrial machine.

Lubricants are used in every piece of operating machinery from heavy industrial equipment to vehicles. Lubricants provide a layer of protection between moving mechanical parts. Lubricants serve the functions, such as friction reduction, heat removal and containment of contaminants.

The Company offers a range of lubricant additive products, each of which is composed of component chemicals specially selected to perform desired functions. It manufactures the chemical components and blends these components to create formulated additives packages. Purchasers of lubricant additives tend to be oil companies, distributors, refineries, and compounders/blenders. The engine oils market�� primary customers include consumers, service dealers, and OEMs. Afton offers products, which enhances the performance of mineral, part-synthetic, and fully-synthetic engine oils.

The driveline additives submarket is consisted of additives designed for products, such as transmission fluids, gear oils, and off-road fluids. Transmission fluids serve as the power transmission and heat transfer medium in the area of the transmission. Gear oil additives lubricate gears, bearings, clutches, and bands in the gear-box and are used in vehicles, off-highway, hydraulic, and marine equipment. Other products in this area include hydraulic transmission fluids, universal tractor fluids, power ste! ering flu! ids, shock absorber fluids, gear oils and lubricants for machinery. These additives are sold to oil companies and often sold to vehicle OEMs for new vehicles. End-products are also sold to service dealers for aftermarket servicing (service-fill), as well as retailers and distributors.

The industrial additives submarket is consisted of additives designed for products for industrial applications, such as hydraulic fluids, grease, industrial gear fluids, industrial specialty applications, and metalworking additives. This submarket also shares in the 30% of the market not covered by engine oils. These products must conform to industry specifications, OEM requirements and/or application and operating environment demands. Industrial additives are sold to oil companies, service dealers for after-market servicing, and distributors.

The types of fuel additives the Company offers include gasoline performance additives, which clean and maintain fuel delivery systems, including fuel injectors and intake valves, in gasoline engine; diesel fuel performance additives, which perform similar cleaning functions in diesel engines; cetane improvers, which increase the cetane number in diesel fuel by reducing the delay between injection and ignition; stabilizers, which reduce or eliminate oxidation in fuel; corrosion inhibitors, which minimize the corrosive effects of combustion by-products and prevent rust; lubricity additives, which restore lubricating properties lost in the refining process; cold flow improvers, which improve the pumping and flow of diesel in cold temperatures, and octane enhancers. It offers a range of fuel additives globally and sells its products to fuel marketers and refiners, as well as independent terminals and other fuel blenders.

Real Estate Development

The real estate development segment represents the operations of Foundry Park I, LLC (Foundry Park I). The Company is exploring various development opportunities for other portions of the proper! ty it own! s, as the demand warrants.

All Other

The All other category includes the continuing operations of the TEL business (primarily sales of TEL in North America), as well as contract manufacturing performed by Ethyl. Ethyl manufacturing facilities include its Houston, Texas and Sarnia, Ontario, Canada plants. The Houston plant is engaged in petroleum additives manufacturing and produces both lubricant additives and fuel additives. The Sarnia plant is engaged in petroleum additives manufacturing and produces fuel additives. The All other category financial results include a service fee charged by Ethyl for its production services to Afton. Its remaining manufacturing facilities are part of Afton and produce both lubricant additives and fuel additives.

The Company competes with Berkshire Hathaway Inc., ExxonMobil Chemical, Royal Dutch Shell plc, Chevron Oronite Company LLC, BASF AG, Chevron Oronite Company LLC, The Lubrizol Corporation, Innospec, Inc., Eurenco and EPC - U.K.

Advisors' Opinion:

• [By John Udovich]

  The biotech sector has been pretty exciting this year�with small cap biotech stocks Prana Biotechnology Limited (NASDAQ: PRAN) and TNI BioTech (OTCMKTS: TNIB) having recently produced noteworthy news for investors�while Acceleron Pharma, Inc (NASDAQ: XLRN), Ophthotech (NASDAQ: OPHT) and BIND Therapeutics (NASDAQ: BIND) have just�set term sheets for their upcoming IPOs. Just consider all of the following recent news:

  Surge in Biotech IPOs. Unquote.com has noted�a surge in biotech IPOs this year as there have been�almost 30 biotech IPOs since January - marking a 13-year high and sparking some concerns about a bubble. More specifically and according to the National Venture Capital Association (NVCA), there was just one venture capital-backed biotech IPO in the US in the first quarter of this year, but this was followed by a massive increase of 20 in�the second quarter and a�further six since July. There has also been a small uptick in�venture capital-backed European biotech companies going public (four) with�a listing on the Nasdaq appearing to be the most popular or rather the safest option. � New IPO Term Sheets. This month, a couple of small cap biotech companies announced their terms for upcoming IPOs, including 1)�Acceleron Pharma, Inc, a clinical stage biotech developing protein therapeutics for cancer and rare diseases, plans to raise $65 million by offering 4.7 million shares at a price range of $13 to $15; 2) Ophthotech, a clinical-stage biotech developing therapeutics for eye diseases, plans to raise $100 million by offering 5.7 million shares at a price range of $16 to $19; and 3) BIND Therapeutics, a clinical-stage biotech developing a platform of targeted and programmable therapeutics, plans to raise $71 million by offering 4.7 million shares at a price range of $14 to $16. Biotechs Invest More on R&D. The 2013 BDO Biotech Briefing examined the most recent 10-K SEC filings of publicly traded companies listed on the Nasdaq Biotechnolog