Best Stocks To Buy 2013, Best Stocks For 2013: January 2014

Friday, January 31, 2014

Mattel's 4Q Revenue Drops as Barbie Sales Slip

Mattel 4Q Revenue Drops as Barbie sales Slip Emmanuel Dunand, AFP/Getty Images EL SEGUNDO, Calif. -- Mattel says it was a tough time in toyland this past holiday season.

Shares of Mattel (MAT) dropped more than 9 percent in premarket trading Thursday after the world's largest toy maker said sales of key toys like Barbie and Fisher-Price preschool items dropped in its fourth quarter. CEO Bryan Stockton called 2013 a "challenging and transformative year at retail." Toy makers count on the November and December holiday season to make 40 percent or more of annual revenue. But traditional toy makers are struggling as kids turn more toward electronic devices and video games. While fourth-quarter net income climbed 21 percent from year-ago results depressed by a litigation charge, its quarterly performance missed both analyst estimates and the company's own expectations. For the three months ended Dec. 31, Mattel earned $369.2 million, or $1.07 a share. That compares with $306.5 million, or 87 cents a share, a year ago. The prior-year period included an $87.1 million litigation charge. Analysts surveyed by FactSet expected earnings of $1.19 a share. Revenue dropped 7 percent to $2.11 billion from $2.26 billion. Analysts expected $2.37 billion. Barbie and Fisher-Price sales both declined 13 percent. Sales for Hot Wheels fell 8 percent. One bright spot was American Girl, which reported a 3 percent sales increase. Mattel said the performance was mostly helped by sales of the 2013 Girl of the Year, Saige. CEO Stockton said weakness was mostly in the U.S. and the El Segundo, Calif.-based toy maker is continuing to invest in emerging markets like China and Russia. Mattel's full-year net income increased to $903.9 million, or $2.58 a share, from $776.5 million, or $2.22 a share, in the previous year. Annual revenue edged up 1 percent to $6.48 billion from $6.42 billion.

3 Biotech Stocks Under $10 Moving Higher

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

>>5 Stocks Under $10 Set to Soar

Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.

>>5 Stocks Insiders Love Right Now

With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside today.

Ariad Pharmaceuticals

Ariad Pharmaceuticals (ARIA) is engaged in the discovery and development of breakthrough medicines to treat cancers by regulating cell signaling with small molecules. This stock closed up 8.5% to $2.79 in Thursday's trading session.

Thursday's Range: $2.58-$2.81

52-Week Range: $2.51-$24.59

Thursday's Volume: 9.66 million

Three-Month Average Volume: 11.93 million

From a technical perspective, ARIA spiked sharply higher here and broke out above some near-term overhead resistance at $2.70 with decent upside volume. This move is quickly pushing shares of ARIA within range of triggering a major breakout trade. That trade will hit if ARIA manages to take out Thursday's high of $2.81 to some more near-term overhead resistance at $2.82 with high volume.

Traders should now look for long-biased trades in ARIA as long as it's trending above Thursday's low of $2.58 or above more support at $2.33 and then once it sustains a move or close above those breakout levels with volume that hits near or above 11.93 million shares. If that breakout hits soon, then ARIA will set up to re-fill some of its previous gap down zone from October that started just above $4.

Achillion Pharmaceuticals

Achillion Pharmaceuticals (ACHN) is a biopharmaceutical company focused on the discovery, development and commercialization of innovative treatments for infectious diseases. This stock closed up 9.7% to $2.92 in Thursday's trading session.

Thursday's Range: $2.71-$2.95

52-Week Range: $2.26-$10.17

Thursday's Volume: 5.40 million

Three-Month Average Volume: 2.86 million

From a technical perspective, ACHN skyrocketed higher here and broke out above some near-term overhead resistance at $2.85 with monster upside volume. This move is quickly pushing shares of ACHN within range of triggering another big breakout trade. That trade will hit if ACHN manages to take out Thursday's high of $2.95 to some more near-term overhead resistance at $2.98 with high volume.

Traders should now look for long-biased trades in ACHN as long as it's trending above Thursday's low of $2.71 or above more key support levels at $2.52 to $2.44 and then once it sustains a move or close above those breakout levels with volume that hits near or above 2.86 million shares. If that breakout triggers soon, then ACHN will set up to re-test or possibly take out its gap down day high from September at $3.62. Any high-volume move above $3.62 will then give ACHN a chance to re-fill some of its previous gap down zone that started at $7.50.

Immunomedics

Immunomedics (IMMU) is a biopharmaceutical company focused on the development of monoclonal antibody-based products for the targeted treatment of cancer, autoimmune and other serious diseases. This stock closed up 9.2% to $3.90 in Thursday's trading session.

Thursday's Range: $3.60-$3.93

52-Week Range: $2.11-$7.35

Thursday's Volume: 1.03 million

Three-Month Average Volume: 1.26 million

From a technical perspective, IMMU spiked sharply higher here right above some near-term support at $3.50 with decent upside volume. This stock has been dowtrending badly for the last month and change, with shares dropping from its high of $7.35 to its recent low of $3.28. During that move, shares of IMMU have been consistently making lower highs and lower lows, which is bearish technical price action. That said, the sharp move higher for IMMU on Thursday could be signaling that the downside volatility for IMMU is over in the short-term.

Traders should now look for long-biased trades in IMMU as long as it's trending above some key near-term support levels at $3.50 or at $3.28 and then once it sustains a move or close above resistance at $3.94 to its 200-day moving average at $4.19 with volume that hits near or above 1.26 million shares. If we get that move soon, then IMMU will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day of $4.93 or at $5.50 to $6.

To see more stocks that are making notable moves higher today, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

How to Tell Your Family You Can't Make It Home for the Holidays

Getty Images Many people are willing to sacrifice almost anything to be with their family during the holidays. After all, there's no place like home for the holidays, right? But the truth is, sometimes it isn't worth the financial sacrifice to make it home. If you just can't justify the costs of traveling home this holiday season, you're not alone (although it might feel like you are). Perhaps you're surrounded by friends and family who pull out all the stops for the holidays and expect you to do the same. Or maybe you've already ensured everyone that you'll be there, and you're worried that your change of plans might land you on everyone's naughty list. Two years ago, Johnny and I were faced with the fact that we wouldn't be making it to our parents' homes for Thanksgiving or Christmas. Johnny had just started a new job, and his company strongly discouraged him from leaving for the holidays. We wanted to make the responsible financial decision and keep Johnny in good standing at his new job. And so we had to tell our families that we wouldn't be home for the holidays. But how? Tell them sooner rather than later: Even though you might be dreading telling your family that you won't be coming home, delaying the inevitable won't help the situation. The closer to the holiday season, the more likely that your family will have made plans around your arrival. They'll appreciate a heads-up. And who knows -- maybe the extra time will give your loved ones a chance to put a holiday box in the mail for you (Please, Mom?). Break the news as personally as possible: Two years ago, Johnny's family was expecting us for Christmas. When debating how to tell them, we realized the most personal approach would be best. So we video-chatted with his family one Sunday to break the news. Because we took the time to video-chat, they were able to see our genuine disappointment, and much to our relief, they immediately understood. If we'd told them by text or email, our explanation might have seemed less sincere. Find ways to let your family know you care: Despite being by ourselves, Johnny and I still wanted a way to connect with his family at Christmas. We had a tight budget, so we headed to a dollar store and bought everyone funny (OK, maybe just weird) gag gifts. We sent other gifts to our Secret Santas, but the gag gifts helped everyone know we were thinking of them. They all opened the box on Christmas morning, and everyone had a good laugh over video-chat.

Van Damme’s Volvo split gone viral

Movie star Jean-Claude Van Damme doing an improbable-looking split -- with each leg set on a truck that is driving backwards.

A cute kid in a Darth Vader outfit using "special powers" to unlock car doors.

A group of adorable babies dancing with adult versions of themselves.

These ads have millions of views on YouTube, tons of buzz on social media and have likely have been conversation topics at dinner tables, lunchrooms and cocktail parties.

But do these popular videos from Volvo, Evian and Volkswagen -- as well as ads gone viral from other brands -- actually help the company?

Absolutely, say marketing experts.

In the case of the new Van Damme ad, which has nearly 7.7 million YouTube views, the publicity will not only aid the overarching Volvo brand, but it could also sell more trucks, says Mediapost.com advertising columnist Barbara Lippert.

"This is completely unique. It's an incredible human way to show the equilibrium of the steering of the truck," she says, adding that "anyone who knows anyone who drives a truck or owns a truck will mention it to them. People love this stuff."

Reaching those current truck drivers and owners was a big part of the marketing strategy, says Volvo spokesman Anders Vilhelmsson.

In using social media rather than a traditional TV ad, Volvo also hoped to boost brand awareness with young people who could be "future truck drivers," he says.

Volvo scored big with this ad, but in reality, most marketers don't come close to garnering this type of digital attention.

"Everybody wants their ads to go viral," says Ted Marzilli, CEO of consumer perception research firm BrandIndex. "But if there was a playbook to do that, you would just follow the recipe and your ad would go viral."

And while garnering views - and positive reviews -- is admirable, it doesn't guarantee brand success. Sometimes, those who make it big have a big problem: folks remember the ad, but not the product it's touting.

"It only help! s the advertiser if people make the connection between the content and the brand," says Toby Southgate, CEO Americas at branding agency Brand Union.

Otherwise, the viewer may recall the actors, the music or the stunts in isolation, he says.

Another issue: consumers giving creative kudos to the wrong brand. For instance, folks often get messages from Visa and MasterCard mixed up, says Marzilli.

But for marketers who get it right -- and successfully link their brand to a much-viewed video -- the payoff can be immense.

"A viral ad can generate 30 million views," says Jonathan Symonds, executive vice president of marketing at advertising analytics firm Ace Metrix. The cost can stretch into the millions of dollars to buy that type of reach on TV, he says.

And many people are not only open to receiving buzzed-about videos from those who pass them on, but they also seek them out themselves.

"Consumers are choosing that content," he says.

As for the Volvo video, ad columnist Lippert sees only one potential downfall, "I can't see any negative at all except if it is proven to be fake," she says.

Volvo's spokesman Vilhelmsson says the action is indeed real.

"There was a safety line" attached to Van Damme that is not visible in the ad, he says, but the actor did do the split between the moving trucks.

"There were rehearsals for several days," he says. "But what you see in the film that is one take without any breaks."

Thursday, January 30, 2014

With $16.7B in new money, a banner year for Dimensional Fund Advisors

dimensional fund advisors, mutual funds, investing

David Booth, co-founder and chief executive, Dimensional Fund Advisors.

Dimensional Fund Advisors is on pace for its best year ever as the growing acceptance of factor investing attracts record gobs of cash.

DFA has had $16.7 billion of net new deposits through the first three quarters, more than the company has received in any previous calendar year, according to Morningstar Inc.

The company's funds, which primarily are sold through financial advisers, trail only indexing giant The Vanguard Group Inc. in terms of sales so far this year. Not too shabby for the eighth-largest mutual fund company.

Since 2010, DFA has leapfrogged OppenheimerFunds Inc. and BlackRock Inc., in terms of total mutual fund assets, and now is just $8 billion from passing J.P. Morgan Funds to become the seventh-largest mutual fund company.

Like Vanguard, DFA has benefited greatly from the shift away from active managers and toward a passive approach. What separates the two companies, though, is DFA's use of factors in creating its passive strategies.

“The old market index fund is a pretty good solution,” said David Booth, founder of DFA. “But if you weight stocks a little differently and you are a long-term investor, you have the expectation of better returns.”

Factors such as a company's size or price-to-book value have been shown to predict which companies are most likely to outperform over long periods of time. DFA uses that research to tilt its portfolios toward smaller companies and undervalued companies.

The company is also in the process of adding a third factor to its portfolio construction kit that focuses on a company's persistence of profitability.

None of these ideas is particularly new, but they are resonating with advisers who are fed up with active managers but are open to ideas on how to beat a plain-vanilla market-capitalization index.

“Factor investing is one of those things the cool kids learned about decades ago,” Morningstar analyst Samuel Lee said.

“Most sophisticated institutions were doing it,” he said. “Now it's percolating with advisers.”

Mr. Booth was one of those cool kids who bought into the futility of beating markets back in the late 1960s while in a class taught by economist Eugene Fama.

Mr. Fama is the so-called father of the efficient-market hypothesis, which states that because markets are efficient they can't be consistently beaten by any particular money manager.

“It kind of shocks people that all this evidence about the inability of professional money managers to beat benchmarks was pretty ! much established by then,” Mr. Booth said.

Mr. Fama was awarded the Nobel Prize in Economics this month for his work, giving DFA two Nobel Prize winners on its board, along with Myron Scholes.

“It's nice to say you have two Nobel laureates behind your investment strategy,” said Hilary Martin, a partner at registered investment adviser The Family Wealth Consulting Group. “We advertise that to our clients.”

Mr. Booth said that it is easy to see why the efficient-market hypothesis can be hard to swallow for some advisers.

“It's so counterintuitive at the grassroots level,” he said.

“In most industries, if you're smarter and work harder you have a better chance of beating other people in your industry. The public securities business is quite different,” Mr. Booth said, referring to Mr. Fama's efficient-market theory.

Ann Gugle, principal at Alpha Financial Advisors, began using DFA's funds about two years ago, after growing frustrated picking active managers and being drawn to the company's philosophy of planning long-term.

“It seemed like we were constantly re-evaluating managers,” she said. “Even if a manager had a good track record, they couldn't keep it going.”

Advisers aren't the only ones coming around to DFA's line of thinking.

In fact, there has been a growing trend of exchange-traded fund companies trying to jump on board the factor investing bandwagon. BlackRock's iShares unit, Charles Schwab Investment Management and FlexShares are just a few of the growing number of companies offering factor-investing products.

But just because factor investing is becoming more popular, that is by no means a guarantee of success over any given time period, which means that patience is key when investing with DFA.

“Dimensional Funds will not win every year. No fund will,” said Andrew Feldman, founder of AJ Feldman Financial.

“Looking at a short-term period isn't fair to anybody. It's no! t one or ! two years that matter, it's a lifetime,' Mr. Feldman said.

“That's how I think about it, and that's how my clients think about it,” he said.

Wednesday, January 29, 2014

For JCP Stock Holders, Proposed Poison Pill Isn’t Worth It

Popular Posts: 5 Tech Stocks With Electric Dividend YieldsMedical Devices: 5 Healthcare Stocks to BuyMore U.S. Companies Realize China Isn’t Worth the Trouble Recent Posts: For JCP Stock Holders, Proposed Poison Pill Isn’t Worth It Medical Devices: 5 Healthcare Stocks to Buy Amazon Earnings Preview: Can New Projects Boost AMZN Stock? View All Posts

The good news coming out of JCPenney (JCP) right now? JCP has taken steps to make it so an outsider can’t buy a huge chunk of the company, gain a controlling interest on the Board of Directors and install an all-new management team.

jcpenney185 For JCP Stock Holders, Proposed Poison Pill Isn't Worth It The bad news — especially for JCP stock holders? Those same defensive steps will make it so an outsider can’t buy a huge chunk of the company, gain a controlling interest on the Board of Directors and install an all-new management team.

Yes, you read that right. The latest proposed update of the JCPenney poison pill could be considered a blessing or a curse, depending on which side of the JCP fence you sit on.

In a lot of ways, though, this sure-to-be debated issue is going to do something beneficial for everyone with a stake in JCPenney stock (long or short): It’s going to force JCP shareholders to commit for the long haul or bail out … and it’s going to force the current management team and current Board of Directors to prove they can do the job or leave their post.

In other words, one way or another, the end of the JCP saga is now in sight.

The JCP Poison Pill Makes Sense…

If you’re not sure what’s going on, here’s the quick and dirty version: JCP is close to insuring it won’t suffer a takeover like the one that allowed activist investor Bill Ackman to name Ron Johnson as CEO. Remember, that move pushed the department store to the brink of collapse and slaughtered the JCPenney stock price.

How is JCPenney trying to prevent a repeat disaster? By threatening a painful amount of dilution for any single person’s or entity’s stake that exceeds 4.9% of the total number of shares of JCP stock — a strategy referred to as a “poison pill.”

The onus for the new, lower cap on the size of the permissible stake (the prior poison pill allowed for up to a 10% stake in JCP stock) is founded on a tax rule described in Section 382 of the Internal Revenue Code. In simplest terms, any major change in the company’s ownership could mean part or all of $2 billion worth of tax-reducing losses the corporation could use to offset any future profits may be forfeited.

So on the surface, the poison pill does seem like a smart fiscal move for JCP. After all, things have been inordinately tough for the retailer, and anything that can ease its burden for the first $2 billion worth of net profits would be a welcome relief as JCPenney continues to walk its recovery path.

There’s just one little detail included with the proposed limitation, however, that should concern current JCP stock holders.

… Except That You Have To Get Married To It

Reducing taxable income is a good thing. And if doing so means nobody can become a huge stakeholder in the company … well, that’ll just have to be something JCPenney stock holders learn to like. The board’s proposal as it stands right now, however, will keep the ownership restriction in place for three more years.

So for JCP stock investors, that’s three more years of nobody from the outside being allowed in. Ergo, realistically, that’s three more years of the current Board of Directors, which in turn means three more years of the same management team, the same dated strategies and possibly the same lack of success … with nary a chance of some much-needed personnel changes at the top of the JCPenney hierarchy.

In other words, should JCP shareholders approve the proposal at May’s shareholder meeting, it’s tacitly a bet on the current management team and the current turnaround plan … with a generous three-year timeframe to produce said turnaround for the struggling retailer.

All of a sudden, that $2 billion worth of tax write-offs for JCPenney doesn’t seem nearly as important. Why? Because the poison pill also means it would be impossible for a legitimate retail turnaround artist to be placed somewhere on the Board of Directors, or better yet, within the ranks of JCPenney management.

Indeed, an approval of the updated poison pill proposal is a bet on things just as they are right now at JCP … for better or worse.

The Bottom Line for JCP Stock Holders

Perhaps it won’t matter. In fact, if JCPenney is on the right track, it shouldn’t matter, as the turnaround will have taken hold by 2017.

Given the precarious position JCP is already in, though, it’s conceivable that the retailer will need to raise money through a secondary offering, and/or need the capital and expertise (or management) that only a private equity firm can offer. If a major buyer or capital provider can’t own a meaningful chunk of JCP stock, however, they’re not apt to pony up any resources.

That could be the end of JCPenney.

As was noted, the poison pill proposal will be up for shareholder vote at the annual meeting in May. Hopefully JCP stock investors will take a step back and see the bigger picture before making a restrictive decision.

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

Tuesday, January 28, 2014

Consumer confidence rises again in January

Consumer confidence rose in January, reinforcing December's rebound.

The Conference Board Consumer Confidence Index rose to 80.7, vs. up from 77.5 in December. The index started at 100 in 1985. The independent business membership and research association's index also showed increasingly optimistic assessments of current and future conditions.

"All in all, confidence appears to be back on track and rising expectations suggest the economy may pick up some momentum in the months ahead," said said Lynn Franco, Director of Economic Indicators at The Conference Board.

STOCKS TUESDAY: How markets are doing

The Conference Board's index is based on a monthly survey by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was January 16.

According to the survey, respondents who said business conditions are "good" increased to 21.5% in January from 20.2% in December. People who said business conditions were bad fell slightly, to 22.8%, from 23.2%. And consumers were slightly more optimistic about the job market, with 12.7% saying jobs were plentiful, vs 11.9 percent in December. Still, 32.6% said jobs are hard downs slightly from 32.9%

Looking into the future, consumers were somewhat more muted. Those expecting better business conditions the next six months remained unchanged at 17.4%, but those who thought things would get worse fell to 12.1% from 13.9%.

Because nearly two-thirds of the economy depends on consumer spending, the Conference Board's monthly survey is an important indicator of future economic activity. One hopeful sign: 15.8% of those surveyed expected their incomes to rise in the months ahead, vs. 13.9% in December.

"Given the increased optimism on the part of consumers about future earnings, the momentum behind the stronger consumer spending observed in the fourth quarter of last year looks like it can be maintained in the new year," Wells Fargo senior economist! Mark Vitner said in a letter to clients. He warned, however, that consumer confidence is extremely sensitive to political unrest in Washington -- and the looming fight over raising the federal debt ceiling could rattle consumers next month.

FPA Capital's Third Quarter Top Five Stocks

First Pacific Advisors Capital Fund and the FPA New Income Fund, reported their third quarter portfolio holdings earlier today. FPA Capital primarily invests in the stocks of smaller companies, and according to his investing philosophy they base their investments on the following criteria: strong balance sheets, free cash flow, an understandable and successful business strategy under capable management and unique business characteristics.

Holding a fairly concentrated portfolio, the fund added one new stock to its holdings. This sets the total portfolio at 27 stocks valued at nearly $800 million. The following five companies represent the fund's top five stocks that hold the highest weighting in the FPA portfolio.

Rosetta Resources (ROSE)

FPA Capital's largest holding is in Rosetta Resources. Here the guru holds on to a total of 1,419,402 shares of the company's stock which makes up for 9.7% of its total portfolio and 2.32% of the company's shares outstanding.

During the third quarter the fund made a slight decrease in his holdings by selling 21,900 shares. This transaction represents a -1.52% decrease in his position in the company. The guru sold these shares in the third quarter price range of $42.45 to $54.47, with an estimated average quarterly price of $47.33. From this average price, the price per share has increased an additional 23.1%.

FPA Capital's holding history of Rosetta as of the third quarter:

[ Enlarge Image ]

Rosetta is an exploration and production company involved in the acquisition and development of onshore energy resources in the U.S. The company owns producing and non-producing oil and gas properties in proven or prospective basins that are primarily located in South Texas.

Rosetta Resources' historical revenue and net income:

[ Enlarge Image ]

The three largest guru sh! areholders of Rosetta:

· RS Investment Management: 7,081,517 shares, representing 11.59% of the company's shares outstanding.
· First Pacific Advisors: 2,960,302 shares, representing 4.84% of the company's shares outstanding.
· Columbia Wanger: 1,506,100 shares, representing 2.46% of the company's shares outstanding.

The analysis on Rosetta reports that the price is nearing a 10-year high, its P/S ratio is nearing a 1-year high and it has issued $769 million of debt over the past three years.

The Peter Lynch Chart suggests that the company is currently overvalued:

[ Enlarge Image ]

Rosetta Resources has a market cap of $3.56 billion. Its shares are currently trading at around $58.25 with a P/E ratio of 16.90, a P/S ratio of 4.50 and a P/B ratio of 2.80.

Rowan Companies PLC (RDC)

FPA Capital's second largest position goes to Rowan Companies where the guru holds on to a total of 2,065,700 shares. Their position in the company represents 9.5% of the fund's total assets managed and 1.66% of the company's shares outstanding.

During the third quarter FPA Capital reduced their position -8.48% by selling 191,300 shares of the company's stock. They sold these shares in the second quarter price range of $33.97 to $38.30, with an estimated average quarterly price of $35.94. Since then the price per share has increased a slight 0.8%.

FPA Capital's historical holding history:

[ Enlarge Image ]

Rowan Companies is a provider of international and domestic contract drilling services. The company also owns and operates a manufacturing division that produces equipment for the drilling, mining and timber industries.

Rowan Companies' historical revenue and net income:

[ Enlarge Image ]

The top three guru sha! reholders! of Rowan Companies:

· First Pacific Advisors: 6,679,200 shares, representing 5.38% of the company's shares outstanding and 2.4% of their total assets managed.
· Columbia Wanger: 2,432,878 shares, representing 1.96% of the company's shares outstanding and 0.36% of their total portfolio.
· Robert Rodriguez: 2,065,700 shares, representing 1.66% of the company's shares outstanding and 9.5% of his total portfolio.

The analysis on Rowan Companies reports that the revenue has been in decline for the past five years, the operating margin has been in a 5-year decline and the P/S ratio is nearing a 2-year low.

The Peter Lynch Chart suggests that the company is currently overvalued:

[ Enlarge Image ]

Rowan Companies has a market cap of $4.51 billion. Its shares are currently trading at around $36.31 with a P/E ratio of 19.40, a P/S ratio of 3.00 and a P/B ratio of 1.00. The company had an annual average earnings growth of 13.00% over the past ten years.

Arrow Electronics Inc (ARW)

FPA Capital's third largest stock holding is in Arrow Electronics. The guru holds on to a total of 1,515,500 shares of Arrow, representing 1.51% of the company's shares outstanding and 9.2% of his total portfolio.

During the third quarter they cut their holdings by -28.53%. The guru sold a total of 605,100 shares in the third quarter price range of $39.89 to $48.66, with an estimated average quarterly price of $45.83. The share price has since then increased approximately 6.4%.

FPA's historical holding history of Arrow Electronics:

[ Enlarge Image ]

Arrow Electronics is a global provider of products, services and solutions to industrial and commercial users of electronic components and computer products. The company offers products and services such as materials planning, new product design, programming, inven! tory mana! gement and a variety of online supply chain tools.

Arrow Electronics' historical revenue and net income:

[ Enlarge Image ]

The top three guru shareholders of Arrow Electronics:

· First Pacific Advisors: 4,242,000 shares, representing 4.23% of the company's shares outstanding and 1.8% of their total assets managed.
· Robert Rodriguez: 1,515,500 shares, representing 1.51% of the company's shares outstanding and 9.2% of his total portfolio.
· Scott Black: 257,635 shares, representing 0.26% of the company's shares outstanding and 1.2% of his total portfolio.

The analysis on Arrow Electronics reports that the company's revenue has slowed down over the past year, the price is nearing a 10-year high and it has issued $695.574 million of debt over the past three years.

The Peter Lynch Chart suggests that the company is currently undervalued:

[ Enlarge Image ]

Arrow Electronics has a market cap of $4.93 billion. Its shares are currently trading at around $49.17 with a P/E ratio of 11.90, a P/S ratio of 0.25 and a P/B ratio of 1.30.

Avnet Inc (AVT)

FPA Capital's fourth largest holding is in the company Avnet. The fund holds on to 1,722,400 shares of the company's stock, representing 1.29% of their shares outstanding and 9.2% of his total portfolio.

During the third quarter FPA cut its position -24% by selling a total of 559,600 shares. They sold shares in the third quarter price range of $33.94 to $41.71, with an estimated average quarterly price of $38.62. Since then the price per share has increased about 8.9%.

FPA's historical holding history of Avnet:

[ Enlarge Image ]

Avnet is an industrial distributor of electronic components, enterprise computer and storage products and embedded subsys! tems. The! company creates a link in the technology supply chain that connects the world's electronic component and computer product manufacturers and software developers with its customer base.

Avnet's historical revenue and net income:

[ Enlarge Image ]

The top three guru shareholders of Avnet:

· First Pacific Advisors: 4,943,742 shares, representing 3.6% of the company's shares outstanding and 1.8% of its total assets managed.
· Richard Pzena: 3,967,050 shares, representing 2.89% of the company's shares outstanding and 0.89% of his total portfolio.
· Columbia Wanger: 3,241,000 shares, representing 2.36% of the company's shares outstanding and 0.48% of their total portfolio.

The analysis on Avnet reports that the company's revenue has slowed down over the past year, its price is nearing a 10-year high and it has issued $513.415 million of debt.

The Peter Lynch Chart suggests that the company is currently undervalued:

[ Enlarge Image ]

Avnet has a market cap of $5.75 billion. Its shares are currently trading at around $41.94 with a P/E ratio of 13.10, a P/S ratio of 0.23 and a P/B ratio of 1.30.

Western Digital Corporation (WDC)

FPA Capital's fifth largest portfolio holding is in Western Digital. The guru holds on to a total of 791,500 shares of Western Digital stock, representing 0.33% of the company's shares outstanding and 6.3% of the fund's total portfolio.

During the third quarter the portfolio managers cut their position -21.62% by selling a total of 218,300 shares. They sold these shares in the third quarter price range of $60.72 to $70.09, with an estimated average quarterly price of $65.31. Since then the price per share has increased an additional 6.1%.

FPA's holding history of WDC as of the third quarter:

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Western Digital is an industry developer and manufacturer of storage solutions that enable people to create, manage, experience and preserve digital content. The company designs and makes storage devices and home entertainment products under the HGST, WD and G-Technology brands.

Western Digital's historical revenue and net income:

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The top three guru shareholders of Western Digital stock:

· Charles Brandes: 3,730,071 shares, representing 1.57% of the company's shares outstanding and 2.9% of his total portfolio.
· First Pacific Advisors: 2,315,100 shares, representing 0.98% of the company's shares outstanding and 1.5% of their total assets managed.
· Robert Rodriguez: 791,500 shares, representing 0.33% of the company's shares outstanding and 6.3% of his total portfolio.

The analysis on Western Digital reports that the company's price is near a 10-year high, it has shown predictable revenue and earnings growth and its P/E and P/S ratios are trading near historical highs.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Western Digital has a market cap of $16.66 billion. Its shares are currently trading at around $70.65 with a P/E ratio of 18.00, a P/S ratio of 1.11 and a P/B ratio of 2.10. The company had an annual average earnings growth of 27.60% over the past ten years.

GuruFocus rated Western Digital the business predictability rank of 3.5-star.

Check out FPA Capital's complete third quarter portfolio here.

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Monday, January 27, 2014

Stocks mostly rise as House leaders meet

NEW YORK (MarketWatch) — U.S. stocks were mostly up on Wednesday, with the Dow industrials and the S&P 500 near session highs, as House leaders met on Capitol Hill and the government shutdown marked a ninth day.

"I think we're getting a glimmer of hope. There seems to be a conversation going in the background that the way to exit this mess is a short-term lifting of the debt ceiling and as a reward an agreement for both sides to sit down and discuss budget issues," said Art Hogan, a market strategist at Lazard Capital Markets LLC.

Click to Play

Yellen is Obama's choice as Fed chief

President Barack Obama plans to announce Wednesday he is nominating Federal Reserve Vice Chairwoman Janet Yellen to become the central bank's new leader. If confirmed, she would be the first female central bank chair. Jon Hilsenrath reports. Photo: AP.

House leaders from both parties met on Wednesday. In addition, President Barack Obama set meetings with Republican and Democratic lawmakers to discuss the budget standoff that has shut down the government and prompted concerns about the nation's debt ceiling.

The stock market offered little reaction to the Federal Reserve's release of minutes from its September meeting, at which the Fed unexpectedly refrained from tapering its $85 billion in monthly asset purchases. The minutes showed most Fed members thinking it would still make sense to scale back bond buying this year. Janet Yellen, vice chairwoman of the Federal Reserve, will be nominated to succeed Ben Bernanke as Fed chief, with an announcement expected this afternoon.

After a 52-point drop, the Dow Jones Industrial Average (DJIA) was lately up 46.75 points, or 0.3%, at 14,822.57.

The S&P 500 index (SPX) rose 2.6 points, or 0.2%, to 1,658.05, with telecommunications the best performing and energy faring the worst among its 10 major industry sectors.

Darden Restaurants Inc. (DRI) shares jumped 7.4%. The Wall Street Journal, citing people familiar with the matter, reported hedge fund Barington Capital LP had taken a 2.8% stake in the owner of the Olive Garden and Red Lobster restaurants, and was pushing for Darden to split in two.

Shares of Hewlett-Packard Co. (HPQ) rallied 7% after Chief Executive Meg Whitman said the company is poised to see "pockets of growth" in 2014.

Alcoa Inc. (AA) rose 4.5%, a day after the aluminum producer reported better-than-anticipated quarterly earnings. Read more on Alcoa results.

Shares of Jos. A. Bank Clothiers Inc. (JOSB) and Men's Wearhouse Inc. (MW) both rallied after Men's Wearhouse spurned the former's buyout offer.

• Government shutdown: Track the latest news out of Washington »
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The Nasdaq Composite (COMP) declined 9 points, or 0.3%, to 3,685.69.

For every seven stocks falling, roughly eight gained on the New York Stock Exchange, where 387 million shares traded as of 2:10 p.m. Eastern.

Composite volume approached 2.3 billion shares.

U.S. stocks fell sharply in the last two sessions, with the S&P 500 ending Tuesday at the lowest level since Sept. 6, hit by worries about the government shutdown and looming debt-ceiling deadline.

"I wish I could be watching earnings and economic data, but the goofiness in Washington is pretty much taking all the air out of the room," said Paul Nolte, managing director at Dearborn Partners.

"The market is starting to slowly price in a chance of default; we don't pay our bills, everybody takes a look at the U.S. a little differently at that point. That's part of why I think we'll get a deal, but it's politics not finance," said Nolte, who believes the stock market could drop as much as 10% should politicians fail to hike the nation's debt ceiling before an Oct. 17 deadline.

Treasury prices fell, with the yield on the 10-year note (10_YEAR) used in figuring mortgages and other consumer loans up 3 basis points at 2.663%.

The dollar (DXY) gained against the currencies of major U.S. trading partners, including the yen (USDJPY) and the euro (EURUSD) , while the price of dollar-denominated commodities declined, with oil futures off $1.86, or 1.8%, at $101.63 a barrel and gold futures down $17.40, or 1.3%, to close the floor session at $1,307.20 an ounce.

Sunday, January 26, 2014

GT Advanced Technologies Inc (GTAT): A Gem That's About To Shine?

GT Advanced Technologies Inc. is really advancing yesterday as the crystal growth equipment and solutions provider's shares are up almost 9% on the day. The sharp performance is compliments of an UBS upgrade.

The research firm moved GTAT into the "Buy" column from a "Neutral" rating with a price-target of $10 – 21.4% potential upside to target – not bad.

GT Advanced provides crystal growth equipment and solutions for the solar, light emitting diode (LED), and electronics industries worldwide. The company operates through three segments: Polysilicon; Photovoltaic (PV); and Sapphire.

UBS Analyst, Stephen Chin says, "Our checks find use of sapphire by the major Tier-1 mobile consumer electronics companies is now viewed as a key part of their differentiation strategy. We believe there is a significant increase in the % of sapphire content in the recently launched mobile products such as Samsung's smartwatch and Apple's iPhone 5S."

Making the case for his change of opinion, Chin reasons, "We expect this trend to accelerate as shown in a recently published patent on new ways to incorporate sapphire on display covers by Apple. GT is the largest sapphire equipment supplier and likely beneficiary of this inflection point in mobile devices. . . Our own industry checks last week in Asia found a first ever Tier-1 customer is now set to ramp its sapphire content significantly in 1H14 with 500 furnaces from GT which we believe is for a phase 1 cover screen build out. We increase our 2014 mobile sapphire sales and EPS by $150M (assume 300 furnaces at $500K each) and $0.30 respectively assuming a gross margin of 40%."

If Chin is right, this is a radical shift in sentiment for GTAT. In the tech company's most recent 10-Q, management wrote, "The price for sapphire material has recently experienced significant decreases. We expect that current low prices will continue for some time. Consequently, we anticipate that demand for our ASF systems will also remain limited. Further, customers ! have requested, and expect that they will continue to request, delivery of ASF systems be delayed until the price of sapphire recovers which has delayed the timing of which amounts attributable to ASF systems roll-off of backlog and into revenue and the timing on which we enter into new contracts to sell ASF systems. Additionally, we may receive requests to cancel deliveries, which would reduce our reported backlog."

However, management did add the qualifier, "The use of sapphire in industrial applications and consumer electronics has been adopted to a limited extent. While the use of sapphire in these applications is still in the very early stages, it represents a potential market and may result in increased demand for sapphire manufacturing equipment."

This is where Chin is headed with his brave call as eight of the 11 analysts following GT rate the stock as a "hold", one as an "underperform", and only two see the company as some degree of "buy."

It's been our experience that a lot of money can be made when pivot points are correctly diagnosed.

The current consensus 2014 estimate for GTAT is $0.38 on sales of $567.44 million. We aren't sure what UBS' estimates are for sales and EPS; so, we'll work off the bottom of the current range to set the low bar.

Next year's low EPS estimate is $0.18, let's add $0.30 and use $0.48 for our calculations. The lowball sales number is $467.75 million. We'll tack on another $150 million to arrive at $617.75 million.

For the past five-years, GTAT traded with average price-to-earnings and price-to-sales ratios of 8.31 and 1.4, respectively. With our lowball 2014 EPS and revenue numbers, we arrive at potential price-targets of $3.98 and $7.18 – remember, these are bottom-of-the-barrel figures.

Since GT has not traded with the P/E necessary to hit Chin's $10 target in the last half-decade, P/S is probably a better valuation metric. To hit $10 requires a the specialty-semiconductor to trade at 1.95 times sales, which is above th! e norm, b! ut below the five-year max of 2.5.

Overall: If Stephen Chin is correct that GT Advanced Technologies Inc. (GTAT) sapphire business is at an inflection point, then $10 could prove to be conservative 12-to-18 months from now.

Hot Recreation Companies To Own For 2015

The services sector expanded slightly for May, according to an Institute for Supply Management report released today. The Institute's Non-Manufacturing Index clocked in at 53.7% for May, up 0.6 percentage points from April and 0.1 points below analyst expectations.

An above-50 rating signals overall expansion, and the services sector has managed to increase its economic activity for 41 consecutive months. The index is comprised of 10 components, with all three of the main components registering gains for May. Business activity led the improvement at 56.5%, while new orders clocked in at 56%. Both business activity and new orders added 1.5 points from April's report. The services employment index barely managed growth, falling 1.9 points to chalk up a 50.1% reading for May.

On an industry-by-industry level, 13 of the 18 industries reflected reported growth. Accommodation and food services made the largest gains, followed by transportation and warehousing and arts, entertainment, and recreation. Mining reported the largest losses, while health care and social assistance and real estate, rental and listing also went red.

Hot Recreation Companies To Own For 2015: In Ovations Holdings Inc (INOH)

In Ovations Holdings Inc, formerly Marine Exploration, Inc., incorporated on June 27, 1996, is engaged in marine treasure hunting expeditions. Its operations are limited to providing funding to, and making approved capital expenditures for its joint venture partner, Hispaniola Ventures, LLC (Hispaniola). Hispaniola is engaged in the actual search for, diving to, and recovery of, the cargo and artifacts. In May 2012, the Company acquired Atmospheric Water Solutions, Inc. (AWS). The acquisition includes water making technology, inventory, and a distribution center. In January 2014, the Company announced the incorporation of of its Energy Services Company (ESCO), Electro Verde, Inc.

The Company is focused on the recovery of two vessels, named as Operation Mystery Galleon and Operation Abrojos which includes, without limitation, an operation to the Serranilla and Bajo Nuevo Banks in the Caribbean Sea. It is undergoing preliminary operations off the coast of the Dominican Republic. On December 11, 2008, Marine Exploration Inc's 128 ft operations vessel, the M/V Hispaniola, was launched for its primary missions, Operation Mystery Galleon and Operation Abrojos.

The Company competes with Odyssey Marine Exploration, Subsea Resources Ltd., Sovereign Exploration Associates International Inc. and Admiralty Holding Company.

Hot Recreation Companies To Own For 2015: Accell Group NV (ACCEL)

Accell Group NV is a Netherlands-based holding company. The Company and its subsidiaries divides its business into two segments: Bicycle & Bicycle Parts, active in the design, development, production, marketing and sales of bicycles, bicycle parts and accessories; and Fitness, providing fitness equipment. It sells bicycles under the Batavus, Bremshey, Ghost, Haibike, Hercules, Koga, Lapierre, Loekie, Redline, Sparta, Staiger, Tunturi, Winora, XLC and Raleigh brands via specialist bicycle retailers as well as bicycle parts under the Juncker Bike Parts and Wiener Bike Parts brands and fitness equipment under the Bremshey Sport brand. The Company�� main markets are the Netherlands, Germany, France, and European countries. The Company has production facilities in the Netherlands, Germany, France, Hungary and Belgium. As of December 31, 2011, it operated through 21 wholly owned subsidiaries. On May 22, 2012, the Company acquired Raleigh Cycle Limited.

Top 5 Penny Companies For 2014: Smith & Wesson Holding Corp (SWHC.O)

Smith & Wesson Holding Corporation (Smith & Wesson), incorporated on June 17, 1991, is a manufacturer of firearms. The Company manufactures a range of handguns, modern sporting rifles, hunting rifles, black powder firearms, handcuffs, and firearm-related products and accessories for sale to a range of customers, including gun enthusiasts, collectors, hunters, sportsmen, competitive shooters, individuals desiring home and personal protection, law enforcement and security agencies and officers, and military agencies in the United States and globally. It sell its products under the Smith & Wesson brand, the M&P brand, the Thompson/Center brand, and the Walther brand. The Company manufactures its firearm products at its facilities in Springfield, Massachusetts and Houlton, Maine. On July 26, 2012, it sold all of the assets of Smith & Wesson Security Solutions, Inc.

Firearms

During the fiscal year ended April 30, 2012 (fiscal 2012), the Company intr oduced multiple new handgun and modern sporting rifle models, and one new bolt action rifle platform. The Company's rifle introductions included the addition of the M&P15 300 Whisper to the Company's line of modern sporting rifles. As of April 30, 2012, the Company participated in three categories of the long-gun market and both core categories of the handgun market.

Handguns

The Company manufactures an variety of handgun models that include revolvers and pistols. A revolver is a handgun with a cylinder that holds the ammunition in a series of rotating chambers that are successively aligned with the barrel of the firearm during each firing cycle. There are two general types of revolvers: single-action and double-action. The Company's small-frame revolvers have been carried by law enforcement personnel and personal defense-minded citizens. The Company's revolvers are available in a variety of models and calibers, with applications in virtually all pr ofessional and personal markets.

The Company� �! s M&P15 Series of modern sporting rifles are designed to satisfy the functionality and reliability needs of global military, law enforcement, and security personnel. These rifles are also popular as sporting target rifles and are sold to consumers through the Company's sporting good distributors, retailers, and dealers. The Company has a range of product portfolio of modern sporting rifles, which includes a lower price-point, sport model, a .22 caliber model, and a fully automatic model designed for the exclusive use of military and law enforcement agencies throughout the world.

Hunting Firearms

The Company manufactures three lines of bolt-action rifles under its Thompson/Center brand consisting of several models in each line. The Company's hunting rifles are offered in 16 different calibers. Bolt-action rifles operate by the cycling of a bolt handle that allows for both the loading and unloading of rounds through a magazine fed system.

< p>During fiscal 2012, the Company introduced the Dimension bolt action rifle platform. Under the Company's Thompson/Center brand, the Company also offers seven models of American-made single shot black powder, or muzzle loader, firearms. The Company offers eight models of interchangeable, single shot firearm systems that deliver numerous gun, barrel, caliber configurations, and finishes. These systems can be configured as a center-fire rifle, rim-fire rifle, shotgun, black powder firearm, or single-shot handgun for use across the entire range of big- and small-game hunting.

Handcuffs

The Company manufactures handcuffs and restraints in the United States. The Company fabricates these products from the carbon or stainless steel.

Smith & Wesson Academy

Through the Smith & Wesson Academy, the Company offers instruction designed to meet the training needs of law enforcement and security customers worldwide. Classes are conduct ed at the Company's facility in Springfield, Massachus! etts o! r! on loca! tion around the world.

Specialty Services

The Company's services include forging, heat treating, finishing, and plating. It provides services to third-party customers.

The Company competes with Ruger,Taurus, Beretta, Glock, Heckler & Koch, Sig Sauer, Springfield Armory, Bushmaster, Rock River, Stag Arms, DPMS, Browning, Marlin, Remington, Ruger, Savage, Weatherby, CVA, Traditions, and Winchester.

Hot Recreation Companies To Own For 2015: Accell Group NV (ACCG.AS)

Hot Recreation Companies To Own For 2015: Smith & Wesson Holding Corp (SWHC)

Firearms

During the fiscal year ended April 30, 2012 (fiscal 2012), the Company introduced multiple new handgun and modern sporting rifle models, and one new bolt action rifle platform. The Company's rifle introductions included the addition of the M&P15 300 Whisper to the Company's line of modern sporting rifles. As of April 30, 2012, the Company participated in three categories of the long-gun market and both core categories of the handgun market.

Handguns

The Company�� M! &P15 Series of modern sporting rifles are designed to satisfy the functionality and reliability needs of global military, law enforcement, and security personnel. These rifles are also popular as sporting target rifles and are sold to consumers through the Company's sporting good distributors, retailers, and dealers. The Company has a range of product portfolio of modern sporting rifles, which includes a lower price-point, sport model, a .22 caliber model, and a fully automatic model designed for the exclusive use of military and law enforcement agencies throughout the world.

Hunting Firearms

During fiscal 2012, the Company introduced the Dimension bolt action rifle platform. Under the Company's Thompson/Center brand, the Company also offers seven models of American-made single shot black powder, or muzzle loader, firearms. The Company offers eight models of interchangeable, single shot firearm systems that deliver numerous gun, barrel, caliber configurations, and finishes. These systems can be configured as a center-fire rifle, rim-fire rifle, shotgun, black powder firearm, or single-shot handgun for use across the entire range of big- and small-game hunting.

Handcuffs

The Company manufactures handcuffs and restraints in the United States. The Company fabricates these products from the carbon or stainless steel.

Smith & Wesson Academy

Through the Smith & Wesson Academy, the Company offers instruction designed to meet the training needs of law enforcement and security customers worldwide. Classes are conducted at the Company's facility in Springfield, Massachusetts or o! n locatio! n around the world.

Specialty Services

The Company's services include forging, heat treating, finishing, and plating. It provides services to third-party customers.

Advisors' Opinion:

[By Hibah Yousuf]
What's moving: Smith & Wesson (SWHC) shares tumbled after the gun maker reported a disappointing outlook for the current quarter.

Facebook (FB) shares rose 3%. The social network's stock hit a new 52-week high of $44.61 and is inching closer to its all-time high of $45. The rise made Facebook the most talked about stock among StockTwits traders. But investors were divided on whether Facebook's gains are warranted.
[By James Brumley]
Shares of Sturm, Ruger & Company (RGR) are up 65% year-to-date, and that’s with the sizable pullback from November’s highs. Smith & Wesson Holding (SWHC) has doled out a 57% reward for shareholders this year, with a big chunk of that coming in just the past few weeks. Those performances are far better than the market’s gain for the year.
[By Rich Smith]
Editor's note: A previous version of this article incorrectly mentioned Smith & Wesson Holding Corp.�(NASDAQ: SWHC) as securing a contract. That is not the case. The Fool regrets the error.

Saturday, January 25, 2014

Hot European Stocks To Invest In 2015

With shares of UBS (NYSE:UBS) trading around $18, is UBS an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let�� analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

UBS, a financial services firm, provides wealth management, asset management, and investment banking products and services worldwide. Its Wealth Management division provides financial services to high net worth individuals worldwide. Its Investment Bank division offers products and services in equities, fixed income, foreign exchange, and commodities to corporate and institutional clients, sovereign and government bodies, financial intermediaries, alternative asset managers, and its wealth management clients. UBS Asset Management division offers investment solutions to various asset classes.

Citing informed persons, the Wall Street Journal reports that UBS has reached an immunity arrangement with European Union authorities that will guard the Swiss bank from additional penalties for alleged manipulation of key interest rates. Under the terms, UBS is being rewarded for cooperating with investigators and relinquishing information regarding other banks, according to the Journal.

Hot European Stocks To Invest In 2015: British American Tobacco Industries p.l.c.(BTI)

British American Tobacco p.l.c., through its subsidiaries, engages in the manufacture, distribution, and sale of tobacco products. The company offers cigars, cigarettes, smokeless snus, roll-your-own, and pipe tobacco products under the Dunhill, Kent, Lucky Strike, Pall Mall, Vogue, Viceroy, Kool, Rothmans, Peter Stuyvesant, Benson & Hedges, and State Express 555 brand names. It has operations in the Asia-Pacific, the Americas, eastern and western Europe, Africa, and the Middle East. The company was founded in 1902 and is headquartered in London, the United Kingdom. British American Tobacco p.l.c. operates independently of Remgro Ltd. as of November 03, 2008.

Advisors' Opinion:

[By Editor , Dividend Growth Investor]
The company�� largest competitors include British American Tobacco (BTI), Imperial Tobacco (ITYBY) and Japan Tobacco.

Earnings per share have doubled over the preceding 7 years to $5.17 in 2012. The company expects earnings to reach $5.37-$5.42 per share in 2013, followed by a 6-8% increase in 2014. Despite the near-term slowdown in earnings per share, the company is committed to growing currency neutral EPS by 10-12% per year after 2015.
[By GuruFocus]
The decade low yield of tobacco stocks can be clearly seen from our new interactive charts, which are embedded below. The chart shows the dividend yield of three tobacco stocks: Reynolds American (RAI), Philip Morris International (PM) and British American Tobacco (BTI).
[By G. A. Chester]
British American Tobacco (LSE: BATS ) (NYSEMKT: BTI ) , Tesco (LSE: TSCO ) (NASDAQOTH: TSCDY ) , and Severn Trent (LSE: SVT ) fit the bill, and the table below gives the low-down on them.

Hot European Stocks To Invest In 2015: BP p.l.c.(BP)

BP p.l.c. provides fuel for transportation, energy for heat and light, retail services, and petrochemicals products. Its Exploration and Production segment engages in the oil and natural gas exploration, field development, and production; midstream transportation, and storage and processing; and marketing and trading of natural gas, including liquefied natural gas (LNG), and power and natural gas liquids (NGL). This segment has exploration and production activities in Angola, Azerbaijan, Canada, Egypt, Norway, Russia, Trinidad and Tobago, the United Kingdom, and the United States, as well as in Asia, Australasia, South America, North Africa, and the Middle East. This segment also owns and manages crude oil and natural gas pipelines; processing facilities and export terminals; and LNG processing and transportation, as well as NGL extraction facilities. BP p.l.c. has interests in the Trans-Alaska pipeline system, the Forties pipeline system, the Central Area transmission sys tem pipeline, the South Caucasus Pipeline, and Baku-Tbilisi-Ceyhan pipeline, as well as in LNG plants located in Trinidad, Indonesia, and Australia. The company?s Refining and Marketing segment involves in the supply and trading, refining, manufacturing, marketing, and transportation of crude oil, petroleum, and petrochemicals products and related services to wholesale and retail customers primarily under the BP, Castrol, ARCO, and Aral brands. Its Other Businesses and Corporate segment produces and markets rolled aluminum products, as well as generates energy through wind, solar, biofuels, hydrogen, and carbon capture and storage sources; and engages in shipping activities. The company was founded in 1889 and is headquartered in London, the United Kingdom.

Advisors' Opinion:

[By Royston Wild]
Today I am looking at�BP� (LSE: BP ) (NYSE: BP ) to see how it measures up.

What are BP's earnings expected to do?
[By Arjun Sreekumar]
For instance, net income margins for ExxonMobil (NYSE: XOM ) , BP (NYSE: BP ) , and Total have all fallen from their highs near the middle of the previous decade. Last year, BP and Total reported margins of 3.1% and 5.9%, respectively, down significantly from 2005 respective margins of 9.2% and 10.5%.�

Top Consumer Stocks For 2015: Telefonica SA(TEF)

Telefonica, S.A. provides fixed and mobile telephony services primarily in Spain, rest of Europe, and Latin America. Its fixed telecommunication services include PSTN lines; ISDN accesses; public telephone; local, domestic, and international long distance and fixed-to-mobile communications; corporate communications; video telephony; supplementary and business-oriented value-added services; network services; leasing and sale of handset equipment; and telephony information services. The company?s Internet and broadband multimedia services comprise Internet service provider service; portal and network services; retail and wholesale broadband access; narrowband switched access to Internet; naked ADSL, a broadband connection; residential-oriented value-added services; companies-oriented value-added services; television services, such as IPTV, cable television, and satellite television; and Fiber to the Home, a service for high speed Internet access and digital video recording. Its data and business-solutions services principally include leased lines; virtual private network services; fiber optics services; the provision of hosting and application; outsourcing and consultancy services; desktop services; and system integration and professional services. The company?s wholesale services for telecommunication operators primarily comprise domestic interconnection services; international wholesale services; leased lines for other operators? network deployment; local loop leasing under the unbundled local loop regulation framework; and bit stream services. It also offers various mobile and related services and products that include mobile voice services, value added services, mobile data and Internet services, wholesale services, corporate services, roaming, fixed wireless, and trunking and paging services. The company has a strategic alliance with China Unicom (Hong Kong) Limited. Telefonica, S.A. was founded in 1924 and is headquartered in Madrid, Spai n.

Advisors' Opinion:

[By The Investment Doctor]
In this article I'll follow up on my earlier article on Telefonica (TEF) 'Why Telefonica might be a good investment right now', and have a look at the company's H1 financial results which were published last week. I'll first discuss the numbers, have a closer look at the debt level (as it's one of Telefonica's priorities to considerably reduce this debt) and give my updated opinion at the end of this article.
[By Eric Volkman]
Ebix (NASDAQ: EBIX ) will be very busy in the near future doing work for a major South American telecom incumbent. The company announced that it has signed a deal with Telefonica's (NYSE: TEF ) Brazilian subsidiary Telefonica/Vivo (NYSE: VIV ) , also known as Telefonica Brasil,�to supply its services for the latter's eHealth Self Care initiative, which aims "to provide health assistance and complimentary services to their millions of clients." Ebix will utilize its A.D.A.M. Health Content Exchange solution to make this happen.
[By Charles Sizemore]
As was the case with KMI, ARCP insiders have been using the recent weakness as a buying opportunity. In the month of November, four company officers bought a combined 72,500 shares of ARCP stock worth over $950,000, and this followed a steady stream of insider buying throughout the summer.
Dividend Stocks to Buy Now:�Telefonica (TEF)
TEF Dividend Yield: 6%

Hot European Stocks To Invest In 2015: STMicroelectronics N.V.(STM)

STMicroelectronics N.V., an independent semiconductor company, engages in the design, development, manufacture, and marketing of a range of semiconductor integrated circuits and discrete devices. Its products include discrete and standard commodity components, application-specific integrated circuits, custom devices and semi-custom devices, and application-specific standard products for analog, digital, and mixed-signal applications. The company also offers subsystems and modules for the telecommunications, automotive, and industrial markets comprising mobile phone accessories, battery chargers, ISDN power supplies, and in-vehicle equipment for electronic toll payment, as well as provides Smartcard products. Its products are used in various microelectronic applications consisting of automotive products, computer peripherals, telecommunications systems, consumer products, industrial automation, and control systems. The company sells its products through distributors and ret ailers. STMicroelectronics N.V. was founded in 1987 and is headquartered in Geneva, Switzerland.

Advisors' Opinion:

[By Lee Jackson]
STMicroelectronics NV (NYSE: STM) supplies most set-top box chips for Scientific�Atlanta, and also sells chips for disk drives that end up in DVRs; but still has less than a 10% exposure. The consensus target for the stock is $11. Investors do receive an outstanding 4.0% dividend from the company.
[By Evan Niu, CFA]
STMicroelectronics (NYSE: STM ) and OmniVision (NASDAQ: OVTI ) are the two camera suppliers, and HTC is reportedly no longer considered a "tier one" manufacturer so it doesn't get priority any more. That implies that one of these image sensor specialists was giving HTC the cold shoulder in favor of bigger names.
[By Esekla]
Like Universal Display, InvenSense (INVN) represents a good long-term opportunity in its own right. The price entry point is not quite as good, though it has pulled back under my more recent price target of $15, when reports of a long-awaited Apple design win were challenged. Though conversations between the two are ongoing, InvenSense management's comments indicate an unwillingness to get roped into wrecking margin for volume, like many other Apple suppliers. Consequently, I don't believe they will gain Apple as a customer until the release of an iWatch or similar device that absolutely requires InvenSense's best-in-class form factors and power usage. It's also possible that continued good news on their legal battles with ST Micro (STM) could move the stock.
[By Seth Jayson]
STMicroelectronics (NYSE: STM ) reported earnings on July 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 29 (Q2), STMicroelectronics met expectations on revenues and missed expectations on earnings per share.

Hot European Stocks To Invest In 2015: Aegon NV(AEG)

AEGON N.V. provides life insurance, pensions, and asset management products and services worldwide. The company?s life insurance products include traditional, term, universal, whole, and other life insurance products sold as part of defined benefit pension plans, endowment policies, post-retirement annuity products, and group risk products; supplemental health insurance products comprise accidental death, other injury, critical illness, hospital indemnity, medicare supplement, and student health; specialty lines consists of travel, membership, and creditor products; and long term care insurance products for policyholders who require care due to a chronic illness or cognitive impairment. It also offers a range of savings and retirement products and services, including mutual funds, and fixed and variable annuities, savings accounts and investment contracts, segregated funds, guaranteed investment accounts, and single premium immediate annuities, as well as investment advice to individuals. In addition, the company offers employer solutions and pensions, such as retirement plans, pension plans, and pension-related products and services; investment products, including onshore and offshore bonds, and trusts; reinsurance products and solutions to life insurance and financial services companies; general insurance products comprising house, car, and fire insurance; and asset management products and services, including general account assets, unit-linked funds, and third party activities. AEGON N.V. markets its products through independent and career agents, financial planners, registered representatives, independent marketing organizations, banks, broker-dealers, benefit consulting firms, wirehouses, affinity groups, institutional partners, independent managing general agencies, and specialized financial advisors, as well as through online, direct, and worksite marketing. The company was founded in 1900 and is headquartered in The Hague, the Netherl ands.

Hot European Stocks To Invest In 2015: Aercap Holdings N.V. (AER)

AerCap Holdings N.V., through its subsidiaries, operates as an integrated aviation company worldwide. It engages in leasing and trading aircraft and engines; and selling parts. The company also provides aircraft management services, as well as aircraft and limited engine MRO services, and aircraft disassembly services through its repair stations. In addition, it offers aircraft services, including remarketing aircraft; collecting rental and maintenance payments, monitoring aircraft maintenance, monitoring and enforcing contract compliance, and accepting delivery and redelivery of aircraft; conducting ongoing lessee financial performance reviews; inspecting the leased aircraft; coordinating technical modifications to aircraft to meet new lessee requirements; conducting restructurings negotiations in connection with lease defaults; repossessing aircraft; arranging and monitoring insurance coverage; registering and de-registering aircraft; arranging for aircraft and aircraft engine valuations; and providing market research. The company?s management services include leasing and remarketing, cash management and treasury, technical advisory, and accounting and administrative services. As of March 31, 2011, it owned 272 aircraft and 95 engines, which it leased under operating leases to 118 lessees in 53 countries. The company was founded in 1995 and is headquartered in Schiphol, the Netherlands.

Advisors' Opinion:

[By John Udovich]
Yesterday around midday,�Netherlands based aviation leasing stock�AerCap Holdings N.V. (NYSE: AER) began surging on rumors and closed up 11.6%, meaning its probably time to take a closer look at those rumors along with aviation leasing peers like small caps or mid caps�Aircastle Limited (NYSE: AYR), Air Lease Corp (NYSE: AL), Fly Leasing Ltd (NYSE: FLY) and AeroCentury Corp (NYSEMKT: ACY).
[By Roberto Pedone]
AerCap (AER) provides aircraft leasing and aviation finance services. This stock closed up 3.3% at $18 in Wednesday's trading session.

Wednesday's Volume: 740,000

Three-Month Average Volume: 318,589

Volume % Change: 85%

From a technical perspective, AER jumped higher here right above its 50-day moving average of $17.27 with above-average volume. This stock has been uptrending strong for the last five months, with shares moving higher from its low of $14.84 to its recent high of $18.16. During that uptrend, shares of AER have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of AER within range of triggering a near-term breakout trade. That trade will hit if AER manages to take out its 52-week high at $18.16 with high volume.

Traders should now look for long-biased trades in AER as long as it's trending above its 50-day at $17.27 or above more near-term support at $17.17 and then once it sustains a move or close above its 52-week high at $18.16 with volume that's near or above 318,589 shares. If that breakout hits soon, then AER will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $20 to $23.
[By Ben Levisohn]
Finally. Finally American International Group (AIG) has disposed of its ILFC unit by selling it to AerCap Holdings (AER).
Bloomberg News
The Wall Street Journal has the details on the deal:

Hot European Stocks To Invest In 2015: Nuveen Select Tax Free Income Portfolio(NXP)

Nuveen Select Tax-Free Income Portfolio is an exchange traded fund launched by Nuveen Investments, Inc. It is managed by Nuveen Asset Management Inc. The fund invests in the fixed income markets of the United States. It primarily invests in long-term municipal obligations with investment-grade ratings (Baa and BBB or better). Nuveen Select Tax-Free Income Portfolio was formed on March 19, 1992 and is domiciled in United States.

Hot European Stocks To Invest In 2015: Fresenius Medical Care Corporation (FMS)

Fresenius Medical Care AG & Co. KGaA, a dialysis company, provides products and services for patients with chronic kidney diseases. As of May 12, 2011, it provided dialysis care services to 216,942 patients through its network of 2,769 dialysis clinics primarily in North America, Europe, Latin America, the Asia-Pacific, and Africa. The company also develops and manufactures various dialysis products, including hemodialysis machines, dialyzers, hemofilters, dialysis fluid filters, tubing systems, fistula needles, dialysis related equipment, acute hemodialysis machines, plasma filters, acute tubing systems and cassettes, catheters, and related disposable products for chronic hemodialysis, acute therapy, home therapy, and therapeutic apheresis, as well as dialysis drugs. In addition, it provides laboratory services. Fresenius Medical sells its products through distributors. The company was founded in 1996 and is headquartered in Bad Homburg, Germany.

Advisors' Opinion:

[By Johanna Bennett]
Dialysis provider DaVita Healthcare Partners (DVA) soared almost 8.9% to close at $61.55 after the market learned that Medicare funding cuts would come in lower than expected. Rival Fresenius Medical Care (FMS) rose 7.2% on the same news.
[By Louie Grint]
Still unaffected
First, Fresenius Medical Care (NYSE: FMS ) is the No. 1 global provider of dialysis equipment. It enjoys leading market share of almost 33% in its home country.

Hot European Stocks To Invest In 2015: TotalFinaElf S.A.(TOT)

TOTAL S.A., together with its subsidiaries, operates as an integrated oil and gas company worldwide. The company operates through three segments: Upstream, Downstream, and Chemicals. The Upstream segment engages in the exploration, development, and production of oil and natural gas. It also involves in the transportation, trade, and marketing of natural gas and liquefied natural gas (LNG), as well as in LNG re-gasification and natural gas storage operations. In addition, this segment engages in the shipping and trade of liquefied petroleum gas (LPG); power generation from gas-fired power plants, nuclear, or renewable energies; production, trade, and marketing of coal, as well as in solar power systems and technology operations. As of December 31, 2010, it had combined proved reserves of 10,695 Mboe of oil and gas. The Downstream segment involves in refining, marketing, trading, and shipping crude oil and petroleum products. It also produces a range of specialty products, s uch as lubricants, LPG, jet fuel, special fluids, bitumen, marine fuels, and petrochemical feedstock. This segment holds interests in 24 refineries located in Europe, the United States, the French West Indies, Africa, and China, as well as operates a network of 17,490 service stations. The Chemicals segment produces base chemicals, including petrochemicals and fertilizers, as well as engages in rubber processing, resins, adhesives, and electroplating activities. TOTAL S.A. was founded in 1924 and is based in Paris, France.

Advisors' Opinion:

[By Arjun Sreekumar]
For instance, Total SA (NYSE: TOT ) recently threw in the towel on its Voyageur�Upgrader project, a 200,000-barrels-a-day facility that was designed to "upgrade" bitumen into crude oil. It sold its 49% stake in Voyageur to its joint venture partner, Suncor Energy (NYSE: SU ) , for $500 million, arguing that the project was "no longer justified from a strategic and economic" standpoint. Not long after, Suncor also decided to abandon the project, for which it took a C$1.5 billion write-down.

Hot European Stocks To Invest In 2015: Flamel Technologies S.A.(FLML)

Flamel Technologies S.A., a biopharmaceutical company, engages in the development and commercialization of controlled-release therapeutic products based on its proprietary polymer based technology in the United Kingdom, Ireland, the United States, France, and Europe. The company develops nanogel Medusa technology, which is intended to provide controlled release following injection of therapeutic proteins, peptides, and other molecules; a microparticle adaptation of the Medusa platform that is intended for use in the delivery of smaller proteins and peptides; and Micropump technology, a microparticle technology for oral administration of small molecule drugs with applications in controlled-release, taste-masking, and bioavailability enhancement; and Trigger-Lock technology, an adaptation based on Micropump technology, which is intended to minimize the misuse and abuse of medications subject to abuse. Its principal product based on Micropump technology is Coreg CR, which is intended for the treatment of moderate to severe heart failure and left ventricular dysfunction following myocardial infarction. The company?s products under development based upon Medusa technology include Interferon-alpha, a naturally occurring protein that the body uses for the treatment of Hepatitis C virus and as a immune response; and FT-105, an injectable insulin formulation for diabetic patients. Its products based on its Micropump technology comprise LiquiTime for the elderly and pediatric patient patients, or others who have difficulty swallowing. The company has strategic alliance with Baxter International, Inc.; GlaxoSmithKline; Merck Serono; and Pfizer Inc, as well as has a joint development agreement with Digna Biotech, S.L. Flamel Technologies S.A. was founded in 1990 and is headquartered in Venissieux, France.

Thursday, January 23, 2014

El-Erianâ€™s PIMCO Exit: A Game Changer?

PIMCO’s announcement on Tuesday that CEO and co-CIO Mohamed El-Erian would soon leave those roles but stay on as a board member of parent company Allianz continued to ripple through the financial world on Wednesday.

Morningstar analyst Eric Jacobson, among others, shared the mixed views of other experts on the news affecting the Newport Beach, Calif.-based bond shop, which had close to $2 trillion in assets under management as of Sept. 30.

“I think it’s of minimal short-term significance, but could potentially have a very long-term impact on the firm,” Jacobson said in an interview with ThinkAdvisor.

Also, the Morningstar expert doesn’t think El-Erian was nudged out.

“I don’t believe that PIMCO’s outflows or the Total Return Fund’s 2013 difficulties likely had much to do with this departure, nor do I expect that he was pushed,” Jacobson said.

Others, like Chip Roame, managing principal of Tiburon Strategic Advisors, agree. “I highly doubt he was pushed out because of one off year,” the consultant said in an interview.

His exit, more likely, is related to other issues. “He has been a very busy guy, making appearances everywhere on behalf of PIMCO. He relocated to Boston a few years ago [to work for Harvard’s endowment] and then went back. He may just need a break, or he may want to do something different,” Roame added.

Investment Woes

Still, PIMCO’s reorganization may be tied at least partially to its poor showing last year, when the PIMCO Total Return Fund (PTTAX, PTTRX) had about $41 billion of outflows. It lost 2.3% in 2013 vs. losses of 1.3% for its category, according to Morningstar. Its asset base is about $237 billion; the fund's ETF shares (BOND) are about $3.5 billion.

Several other PIMCO funds did have inflows in 2013, Jacobson says. “Overall, the firm saw $25.9 billion in net outflows from mutual fund and ETF businesses (combined), which is a relatively modest sum compared with the firm’s overall assets under management,” he noted.

El-Erian has been a lead manager of two funds: PIMCO Global Advantage Strategy Bond (PGSAX) and PIMCO Global Multi-Asset (PGMAX), which have total assets of $3.5 billion and $2.3 billion, respectively. The multi-asset fund declined 8% in 2013 while funds in its Morningstar category improved 9% in the same period.

“If history is a guide, PIMCO will quickly promote his current co-managers to lead roles and more than likely appoint additional managers to back them up. Meanwhile, El-Erian's operational responsibilities appear to be in good hands with the promotion of COO Douglas Hodge to the CEO position,” Jacobson wrote online late Tuesday.

The leadership changes to come at PIMCO return the firm to a management structure that resembles what it had in place before El-Erian became CEO, he adds.

On the other hand, the shift leave a "a bigger question mark," according to Jacobson. "El-Erian has been a crucial, senior voice on PIMCO's investment committee and one of only a handful of people who have likely had the right mix of traits necessary to strongly challenge and help influence [co-CIO Bill] Gross' opinions. His loss is particularly significant given the retirement of Paul McCulley in December 2010," the Morningstar analyst explained in an online article.

While there are "top-notch people" on and about to become part of the investment committee, only time will tell if they "will be able to effectively play the devil's advocate role in that group, a role Gross has always professed to value highly," notes Jacobson.

Future Face of Firm

Apart from changes at PIMCO, El-Erian’s departure is expected to leave a fairly sizeable hole in daily discussions and media coverage of global financial news and PIMCO’s prominent role in these debates.

“In terms of the general investor community, it will be interesting to see how much or whether El-Erian steps back significantly from the public eye,” the fund analyst said. “He plans to remain involved in advising Allianz on economic and policy issues, and has signaled that he may continue writing, something with which he has been very prolific.”

Meanwhile, speculation on El-Erian's next move is running rampant, including conjecture that he might be tapped for the Federal Reserve Board of Governors, a role that would certainly put him back in the public spotlight.

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Wednesday, January 22, 2014

How to connect with the fastest-growing client demographic

Financial advisers seeking to build relationships with the fastest growing demographic in America just need to reach out and connect with it.

The Hispanic community has a significant unmet need for financial advisory services, has been historically underserved by advisers — thanks to a handful of common misconceptions — and would be very receptive to financial advice if only advisers reached out, according to a study by Prudential Financial Inc.

The Hispanic population is expected to grow 167% by 2050. More so than other groups, Hispanics stand to benefit substantially from financial advisory services. For example, Hispanic households with incomes above $75,000 accumulate only half the assets of others in that income bracket, according to Tanya Valle, vice president of global communications for Prudential, who moderated a webcast on the study results Wednesday. Some reasons for this include saving more than investing, spending on family needs and, for some, lacking knowledge of financial options.

Tuesday, January 21, 2014

As War Risk Spreads, Syria’s Economy by the Numbers

The United Kingdom has decided to refrain from an attack on Syria, although the United States may go it alone. The American decision could blunt the use of chemical weapons. Additionally, it could add to the violence and instability in the entire region. Whether or not Syria’s government is affected, its economy is bound to worsen, probably faster than the turmoil so far has caused already.

From the standpoint of these economic consequences, Syria’s gross domestic product (GDP) and imports and exports will have no effect on the economy in the rest of the world. It is too small.

On the basis of nominal GDP, Syria ranks 63rd among all countries, according to the International Monetary Fund (IMF). The nation’s GDP last year was a mere $74 billion, making it smaller on that basis than Ecuador and Morocco. The country’s population is just above 22 million. Syria has walled off access to its data, as far as the IMF is concerned, which means little can be determined about how badly it has been damaged recently. The IMF reported on August 2:

On July 26, 2013 the Executive Board of the International Monetary Fund (IMF) was informed that there could not be a briefing to the Board with an assessment of economic developments and policies in Syria, whose Article IV consultation is delayed by 26 months, due to a lack of adequate information that would allow staff to make such an assessment.

The World Bank has had slightly more success, as it reported in April:

The impact of the crisis on the economy is significant, which may, according to unconfirmed estimates have contracted 3 percent in 2011 and about 20 percent in 2012. Most affected by the conflict, as well as by the subsequent international sanctions, were tourism, retail trade, transportation, communications, mining and manufacturing.

The agency added:

Declining oil revenue following the imposition of sanctions on Syrian oil imports by the European Union as well as a significant economic contraction is also putting government finances under pressure. Latest data released by the International Energy Agency shows that oil output was consistently below 200,000 barrels per day (bpd) in 2012, compared to 400,000 bpd in 2009.

Even if the government can support itself by using money from falling sales of oil, the general population does not have any similar recourse to counter the effects of those things that erode consumer spending.

The CIA Facebook confirms not only the trouble with the Syrian economy, it also cements the nation as a third-world one that will not emerge from that status under current circumstances. The CIA evaluation also confirms how little Syrian GDP matters to the rest of the world.

Despite modest economic growth and reform prior to the outbreak of unrest, Syria’s economy continues to suffer the effects of the ongoing conflict that began in 2011. The economy further contracted in 2012 because of international sanctions and reduced domestic consumption and production, and inflation has risen sharply. The government has struggled to address the effects of economic decline, which include dwindling foreign exchange reserves, rising budget and trade deficits, and the decreasing value of the Syrian pound. Prior to the unrest, Damascus began liberalizing economic policies, including cutting lending interest rates, opening private banks, consolidating multiple exchange rates, raising prices on some subsidized items, and establishing the Damascus Stock Exchange. The economy remains highly regulated by the government. Long-run economic constraints include foreign trade barriers, declining oil production, high unemployment, rising budget deficits, and increasing pressure on water supplies caused by heavy use in agriculture, rapid population growth, industrial expansion, and water pollution.

In sum, it is small, troubled and getting worse.