Starbucks vs. Dunkin' Donuts: Which Is The Better Bet?

Starbucks is everywhere!

While that cry become a rampant cliché in American pop culture, and fodder for many a late-night talk show monologue, Starbucks (NASDAQ: SBUX) often seems to be on virtually every corner of every street in metropolitan America. While exaggerated, that claim can certainly feels true sometimes -- especially when driving through most major cities.

In more realistic terms, the franchise has more than made its presence known in the United States.

There are very few incorporated cities and towns in this country that don’t have at least one Starbucks outlet. That being the case, it would seem that Starbucks has a veritable monopoly on the gourmet coffee market.

But there this other outfit called Dunkin Brands (NASDAQ: DNKN), parent company of the 50-year-old Dunkin’ Donuts coffee chain, that is giving Starbucks a run for its competitive money.

So which stock would you rather invest in, Starbucks or Dunkin’ Brands?

Starbucks made a niche in the gourmet coffee market by charging upwards of $6.00 for a cup, and making it fashionable to pay such an outrageous amount. You would think such a high mark-up would be economic suicide for a company -- but it has actually behooved the company to do so.

Related: Dollar Tree vs. Family Dollar: Which is the Better Bet?

Over the course of the last three years the per-share value of Starbucks has seen a three-fold increase to about $75. Their model has influenced the establishment of countless local and regional coffee stores, and has even indirectly played a part in making its now-biggest competitor Dunkin’ Brands the player that it has become.

 

As a relatively new, publicly-traded company, Dunkin’ Brands and its flagship entity Dunkin’ Donuts has upped the ante in the market.

Dunkin’s strategy has been manifold -- but one of the key elements has been to basically copycat Starbucks in their choice of locations. Almost anywhere that you find a Starbucks you will find a Dunkin’ Donuts within a few blocks. And while Starbucks is far and away the leader in terms of the overall numbers of outlets, Dunkin’ is making some serious headway in that department.

Starbucks enjoys a market cap of $53 billion versus the comparatively tiny cap of $5 billion for Dunkin’, but Dunkin’ has demonstrated a level of innovation and consumer attraction that Starbucks simply does not have. Dunkin’ stores are becoming every bit as contemporary and inviting as Starbucks, and customer feedback indicates the donuts offered by Dunkin’ are far superior to Starbucks' pastry offerings, which could mean the difference over the next three to five years.

Dunkin’s earnings-per-share skyrocketed nearly 25 percent in the second quarter of 2013 from a year prior, which dwarfed that of Starbucks -- and revenue was up fully six percent for Dunkin’.

With Starbucks as the clear market leader for the time being, it may seem like a classic case of David versus Goliath. But David is growing exponentially with each passing quarter.

So, which is the better stock investment? The short-term seems to favor Starbucks, but the long-term may be giving the nod to Dunkin’. In the end, it is for the savvy investor to make the call.

Loading...

Posted-In: cafes coffee food and beverage retailCommodities Restaurants Markets General Best of Benzinga

(c) 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  Most Popular Five Star Stock Watch: Facebook, Round Two A Look at Some 'Legit' OTC Stocks 5 Technology Stocks With The Highest EPS Estimates The Herd Continues to Flock Out of Icahn Enterprises Berkshire Hathaway To Trade Stock for Phillips 66 Specialty Products Business Which Is The Better Bet - FedEx vs. UPS? Related Articles (SBUX + DNKN) Starbucks vs. Dunkin' Donuts: Which Is The Better Bet? Some Big Companies Take Advantage Of Christmas Day Shopping Market Wrap For December 17: Markets Relatively Calm Before The Potential Storm Market Wrap For December 16: Dow Posts Triple Point Gain Ahead of Fed Meeting Benzinga's Top Downgrades Four Profitable Ways to Play the Retail Sector Around the Web, We're Loving... Lightspeed Trading Presents: Thunder and Tubleweeds: Trading Techniques for the New Market Enviroment Pope Francis Rips 'Trickle-Down' Economics Come See How the Pro's Trade in this Exclusive Webinar Wynn, MGM, Other Casino Giants Vying For U.S. Turf What Should You Know About AMZN? View the discussion thread. adsonar_placementId=1587471;adsonar_pid=313476

Analysis: Stop freaking out over $13B JPMorgan …

The size of the reported $13 billion settlement between the Justice Department and JPMorgan Chase commands awe and attention. It's also garnering a lot of criticism.

The New York Post portrays it as a kind of bank robbery. The Wall Street Journal describes it as the government "confiscating" half of JPMorgan's annual earnings to "appease . . . left-wing populist allies" of the Obama administration.

We still do not know all the details of the tentative settlement or the evidence the government has against the bank. But the initial outburst of horror at the $13 billion figure is very likely unwarranted and appears to be based on a fundamental misunderstanding of how damages should be assessed in cases of financial wrongdoing.

In the first place, any view about the unprecedented size of the fines needs to be balanced by the unprecedented size of JPMorgan.

The bank now has $2.4 trillion in assets. This means there are more opportunities for legal liabilities to arise and a need for larger fines to punish wrong-doing. A fine of a few million dollars — even several hundred million dollars — barely merits a footnote in a JPMorgan earnings report.

REALTY CHECK: How JPMorgan deal could curtail credit

VIDEO: Breaking down JPMorgan's settlement

CARNEY AND COX: NetNet's news roundup

In thinking about the size of the potential JPMorgan settlement, it's helpful to begin with the very basics.

Fines levied by the government should aim to deter undesirable behavior without over-deterring beneficial behavior. We want to avoid outright fraud and negligence without making it impossible for banks to offer mortgage securities to investors.

Many people worry that very large settlements could permanently disrupt the mortgage market.

Extreme fines could make playing the role of issuer just too risky for banks. Or, alternatively, the cost of investigating mortgage quality and compliance with representations and warranties required by investors (and, after th! e fact, by regulators) may simply be more than the market can bear.

But this is only one side of equation.

On the other side, there are the potential investors who need to know that banks are properly incentivized to live up to the promises they make when issuing mortgage-backed securities. That there is no room for "efficient fraud" or "efficient negligence" whereby the bank makes more by fraudulent or negligent issuance than loses through fines years later.

Large fines should convince investors that the market in mortgage-backed securities is safe enough to re-enter.

In other words, if we focus on the demand side, strict enforcement of promised credit standards in mortgage-backed securities could lead to looser credit and more mortgage finance availability. Investors will know that the system can be trusted.

Ideally, the fines for the negligence claims would be high enough to incentivize future issuers to properly investigate the underlying mortgages but not so high as to make issuance prohibitive because of possible legal liabilities. Which is to say, we'd want the fines to exceed to cost of undertaking an investigation into the loans multiplied by the odds of getting away with not investigating—and we'd want that number not to be so high that they make issuance completely uneconomical.

We do not, however, live in the ideal world. In the real world, there may be no actual middle ground on which regulators, investors and issuers can meet.

Fines large enough to convince investors that issuers will be well-behaved may be too large for issuers to bear. There may not be a market for the securitization of any but the safest mortgages.

That would mean that we either have to accept that the market for riskier-mortgages will be tighter for the foreseeable future or allow for continued subsidization of this market through government guarantees.

Instead, however, everyone seems to want to pretend that we live in the ideal world where mortgages are safe, ch! eap and r! eadily available so long as everyone follows the rules.

But assuming that the admittedly shocking size of the JPMorgan settlement is a sign that regulators are over-reaching is a mistake. In a world of multi-trillion dollar banks taking in scores of billions in revenue, effective deterrence comes with a high price tag.

Follow Carner on Twitter: @Carney

© CNBC is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.

The Deal: MSCI Puts ISS on the Block

NEW YORK (The Deal) -- Proxy advisory firm Institutional Shareholders Services finds itself on the block, as index provider MSCI (MSCI) initiates a strategic review of the business it acquired only three years ago through its purchase of RiskMetrics Group.

MSCI said Wednesday, Oct. 30, that it is working with Morgan Stanley to look into options including a possible or spin-off of ISS. MSCI did not provide a specific time frame for the review, but said ISS' senior management was supportive of the decision.

"The decision to do it is not surprising," UBS analyst Alex Kramm said in a phone interview Thursday, as "MSCI is really hopping to bring greater shareholder returns through focusing on its core index business."

MSCI's index business accounted for 35% of its total revenues of $258.2 million for the third quarter of 2013, while the governance division contributed only about 11% of that number, according to company filings. ISS, which is located in Rockville, Md., guides shareholders voting on key corporate transactions, including board elections and activist investor scenarios. Other notable proxy advisory firms include Glass, Lewis & Co. and Egan-Jones Ratings Co. ISS, which forms a part of MSCI's governance division, is the only remaining business in the division. In May, MSCI sold its forensic account research business, CFRA, also a part of that division, to an unnamed buyer. Terms of the deal weren't disclosed. On that transaction, Chudd William at David Polk & Wardwell LLP served as legal counsel to MSCI. Now, MSCI CEO and president Henry Fernance said in the statement about ISS, "the time is right to explore our strategic alternatives." "Over the past three years, MSCI has worked hard to return that business to a growth track. We have launched new products, most notably executive compensation data and analytics and Quickscore, grown our salesforce, reached out to new clients and invested in the technology platform," Fernandez said showcasing ISS as an attractive asset, ripe for acquisition/ "We also strengthened the senior management team ... the Governance business reported organic revenue growth of 7% and Adjusted EBITDA growth of 12%," for the third quarter ended Sept. 30, he added.

In the same quarter, however, ISS showed a 1.4% drop in revenues to $29.6 million. On the other hand, MSCI reported a 14.6% increase in net income to $55.3 million as well as a 4.4% increase in Ebitda to $112.8 million.

MSCI bought RiskMetrics in 2010 in a cash-and-stock deal valuing the company at $21.75 per share or $1.55 billion. ISS, known as Institutional Shareholder Services, had been bought by RiskMetrics from Warburg Pincus and Hermes Investment Management in 2006 for $553 million.

After MSCI bought RiskMetrics it moved the governance business into its own division.

New York.-based MSCI trades on the New York Stock Exchange under the ticker symbol MSCI. Shares closed down 1.07% at $40.77 Thursday, giving the company a market capitalization of about $4.9 billion. MSCI spokesman Edings Thibault said the company wasn't commenting further. -- Written by Tatjana Kulkarni in New York

What debt deadline? Stocks soaring

NEW YORK — With the government shutdown now in its 16th day and Congress still at odds over how to end the debt impasse, U.S. stocks opened sharply higher, a sign that Wall Street still remains convinced Washington will avert a debt default.

With a debt limit deadline less than 14 hours away, the Dow Jones industrial average was up more than 180 points, or 1.2%, in early trading. The S&P 500 was up 1.1% and the Nasdaq composite was 1% higher and trading at a fresh 13-year high.

Investors are betting a deal gets done.

WARNING: Fitch issues warning on U.S. credit rating

The reason: the fallout of a U.S. default would be so unpredictable and potentially damaging to the financial system that few people on Wall Street think Congress would let such a self-inflicted wound occur.

"We have to assume that it is in no one's interest for the government to default," says Rob McIver, co-portfolio manager at Jensen Quality Growth Fund.

The short-end of the U.S. bond market, however, continues, to shows signs of distress. The yield on the Treasury bill that comes due on Oct. 31, dubbed "The Halloween Bill," has seen its yield jump to 0.60% in trading today, despite trading in a normal range of 0.05% to 0.10% for most of the year before moving higher and higher this month, according to a Bloomberg chart supplied by UBS.

ADVANCE AUTO PARTS: Gets General Parts for $2B

MATTEL: Monster High, Barbie boost results

This type of short-term bond is typically referred to as a risk-free asset, but investors are selling these bills because they are the most likely government security to be hit by a U.S. default, according to Boris Rjavinski, an interest rate strategist at UBS.

Global markets are in waiting and watching mode.

In overseas trading, the Nikkei 225 Stock Index closed up 0.18% to 14,467.14, however Hong Kong's Hang Seng fell 0.46% to 23,228.33.

Similarly, key European stock indexes were trending lower, with Britain's FTSE 100 index down slight! ly 0.40% to 6,522.37. Germany's DAX 30 index was down 0.10% to 8749.72, while France's CAC 40 index was down 0.70% to 4,224.39.

Still, in the U.S., investors are nervous. And financial markets are in limbo as they wait to see if Congressional Democrats and Republicans can strike a budget deal in time to avoid a debt crisis that could cause the U.S. to default on its debts for the first time.

The clock is ticking closer to the key Oct. 17 deadline -- that's tomorrow -- that will either return sanity to Wall Street or cause potential chaos. When the deadline comes the U.S. won't be able to borrow any more unless lawmakers act to extend the debt ceiling. Barring an agreement, the U.S. won't be able to pay all its bills.

The biggest risk is if sometime after Oct. 17, the U.S. misses interest or principal payments on government debt it has already issued. Such a default could undermine the world's confidence in a financial asset that's long been viewed as the safest investment on Earth.

Due to political brinkmanship, after last night's market close Fitch Ratings cited the potential hit to confidence due to a potential default as a reason it placed the USA's AAA rating on "rating watch negative."

Standard & Poor's, of course, downgraded U.S.debt to AA+ in the summer of 2011 after the last debt-ceiling fight. And John Chambers, chairman of S&P's sovereign debt committee told "CBS This Morning" today that if the U.S. does not pay its bondholders on time and defaults, the reaction in financial markets would "probably be an event that would be much worse than (the bankruptcy) of Lehman Brothers" back in the fall of 2008.

Still a Q&A research note put out yesterday by credit rating agency Moody's Investors Services that downplayed the odds of a credit rating downgrade for the U.S. has provided a sense of balance to the ratings downgrade debate.

Memories of the bad market reaction to the last debt-ceiling fight in Congress back in 2011 has some investors worrie! d. As the! talks dragged on in July of 2011 before ending in a last-minute deal to avoid default, the Dow suffered an eight-day losing streak in late July and early August. The blue-chip gauge then plunged 635 points, or 5.6%, on Aug. 8, 2011, the first day of trading after the S&P credit downgrade.

"The problem with the U.S. not paying investors on time is that it can destroy the very special status of Treasuries as a super-safe, liquid investment," says Rjavinski. "Treasuries are like an invisible glue that binds all of the world's financial markets. We can have a pretty bad chain reaction if there's a default."

The stock market has navigated Washington gridlock nicely so far. Despite a 133-point drop for the Dow Jones industrials on Tuesday after Congress failed to sign a deal, the Dow was still up 0.25% during the 15-day government shutdown. If the deadline passes without a deal, however, stocks would likely suffer a "strong negative reaction," says McIver. If a deal gets done, the market will refocus its attention on corporate earnings and economic growth, he adds.

But there have been more concrete signs of worry in the U.S. government bond market, especially one-month Treasury bills that will come due between Oct. 17 and early November, when the nation is expected to run short of cash.

Many banks and big investors have been selling these short-term instruments that could be hit by a potential default, says Bill Hornbarger, chief investment strategist at Moneta Group.

"Everyone is selling stuff that matures in October," he says.

A Treasury bill that matures on Oct. 24, seven days after the nation's ability to borrow ends, has seen its yield jump from roughly 0% in mid-September to more than 0.40% in recent days, according to a Bloomberg chart supplied by Rjavinski.

Similarly, a government auction of 3-month bills Tuesday also saw yields rise as high as 0.13%, vs. a high of 0.035% at last week's auction.

The issue isn't that investors don't think they wi! ll get pa! id back eventually, says Rjavinski; it is that they won't get paid on time.

"It's telling us investors are getting nervous," says Rjavinski.

Intel was down 0.99% to 23.18 in premarket trading despite topping Wall Street's estimates Tuesday by reporting a 49% increase in quarterly profit of $3 billion, or 58 cents a share.

Mike Snider contributed.

Hewlett-Packard (HPQ) Finally Finding a Groove

There's no denying that the Hewlett-Packard Company (NYSE:HPQ) - largely under the initially-shaky guidance of CEO Meg Whitman, though former CEO's Leo Apotheker and Mark Hurd didn't exactly help - has been a train wreck of a company of late. What was once the world's second-most popular name in the personal computer industry completely whiffed when it tried to throw its hat into the smartphone and tablet ring, then decided to get out of the PC business and focus on more lucrative cloud industries, and then just a few months later decided to stay in the personal computer business after all. As it turns out, HP did neither very well in the meantime. Hewlett-Packard investors have watched revenue fall from 2011's peak of $126.8 billion to what will likely be a top line of $108.9 billion next year, and worse, shareholders have watched HPQ shares tumble from a price of $54 in early 2010 to a low of $11.35 late last year. There's no way of sugar-coating it: That's an investment disaster. Yet...

Not that Hewlett-Packard Company is completely out of the woods yet, but as is all too often the case, the sellers assumed a worst-case scenario that never materialized, beating down a stock that didn't deserve a beating (at least not the one it got).

To give credit where it's due, the market knew Hewlett-Packard was going to hit earnings turbulence by 2012 as early as 2010; that's when HPQ shares started a major slide. Eventually the earnings implosion pulled the company into the red, during the last two quarters of 2012, booking a per-share loss of $4.49 in Q3 and a loss of $3.49 for Q4.

How'd it happen? The losses in Q3 and Q4 partially stemmed from one-time writedowns, but sales declines didn't help. Though operating income was still positive, it was also still weaker on a year-over-year basis. Between a waning PC market, Hewlett-Packard's clear lack of commitment to doing it well (they're getting out of the biz, but two months later decide to stay in?), not putting a viable tablet computer into that race (we'll give HPQ a break on not coming up with a hot smartphone - that's a different ball of wax), and the fact that the cloud solutions opportunity hasn't been anywhere near as fruitful as it was supposed to be, earnings never stood a chance.

As they say, though, that was then and this is now.

The challenges still await, but now with almost two years of company experience under her belt, the oft-criticized CEO Meg Whitman seems to be finding a groove. The company's products also seem to be finding grooves in their respective lanes. In other words, the Whitman turnaround plans for HPQ are working... they're just taking time.

As (partial) evidence of that idea, look at last quarter's earnings from other PC makers. Dell fell short of estimates, and even the hyper-reliable IBM missed analysts' forecasts. Hewlett-Packard, however, beat its estimates. They weren't low-ball outlooks either. Though analysts expected less on a year-over-year basis, the outlooks only gave Hewlett-Packard room to let per-share profits fall from $0.98 a year earlier to $0.80 this time around. The company posted a per-share profit of $0.87, on the heels of measurable - albeit relative - success in the enterprise-level market.

One of the Whitman initiatives, called Moonshot, won't start to achieve material results until later this year after launching last quarter, and really won't hit its full stride until 2014. Moonshot is a project that should finally give the Hewlett-Packard Company a major weapon in the cloud services industry. At the same time, the Slate 7 (Android-powered) tablet for consumers as well as the business-oriented Elitepad tablet in the queue for the second half of 2013, getting HP deeper into that game than it's been able to get thus far. The tablets may well get traction too, as the tablet arena is actually getting more and more fragmented rather than less and less... opening the door to names other than Apple, Samsung, and Barnes & Noble's Nook. More traditional enterprise products and services are also getting traction. That sliver of the market can be slow to move, so the work Whitman was doing two years ago there is only just now starting to bear fruit.

These initiatives have given the Hewlett-Packard Company the kind of powerful weapons it hasn't had in years, making HPQ a turnaround stock worth a closer look. That forward-looking P/E of 7.04 isn't a pipedream; HP's got the tools and momentum it needs to book that projected profit of $3.68 in fiscal 2014. Based on the stock's bounce back to $26.00, some investors see the rebound that's coming. Most investors don't see it yet, though... which is where the opportunity presents itself.

If you'd like to get more trading ideas and insights like this one, sign up for the free daily SmallCap Network newsletter. You'll get picks, market calls, and more. Subscribe today!

4 Financial Planning Steps for New American Citizens

Apropos of the July 4th festivities, much will be new this holiday for recently naturalized U.S. citizens.

That might include financial planning. To help, Certified Financial Planner Board of Standards consumer advocate Eleanor Blayney announced an initiative to encourage new Americans to plan for their financial futures. 

"Taking full advantage of the rights and privileges Americans enjoy — including our unique and often complicated financial systems — requires becoming financially naturalized as well,"  Blayney (left) said in a statement on Tuesday announcing the program. "It's important for all Americans — including new Americans — to obtain credit in their name, establish a credit history and build their savings."

In the latest installment of CFP Board's "Let's Talk Planning" blog and the third feature in its "Financial Planning is for Everyone" series, Blayney offers tips for new citizens:

 Get established with a bank or credit union. Having a local, regulated institution hold your money has numerous advantages. You'll have records and a history of the flow of your money, which in turn leads to better financial management. You'll be able to safely save and build up a reserve. You'll have access to ready liquidity through a bankcard or checks.

Get educated about the costs of education. Many new Americans come with the dream of their children getting a degree from a U.S. college or university.  The benefits can be great, but so are the costs, and without careful planning and savings, an American education can become either unaffordable or lost in a mountain of debt.  It's important that new Americans begin to save regularly for higher education using tax-advantaged accounts such as 529 plans or custodial accounts, and that they become familiar with the steps to qualify for federal aid.

Take advantage of workplace benefits. One distinguishing factor of the U.S. economy is the extent to which the employer, rather than the government, provides key benefits to workers such as health care coverage, access to tax-advantaged retirement plans, and disability income coverage.  This means that your choice of employer — and understanding of the benefits provided — can make a big difference in your financial stability and long-term security.

Invest in yourself. America has always been the land of opportunity for those who work hard and are willing to invest in the future.  This includes investing in yourself — in training, education and experience.  Get involved in your neighborhood and community to become aware of the resources and support they can provide to help you achieve your personal vision.

Blayney notes that consulting with a financial planning professional can help new Americans develop strategies for building financial plans and getting a grasp on expenses to achieve their financial "American Dream."

"If there's one thing that new Americans have in abundance, it's a vision for a better future,” Blayney concluded.  “They have personal goals—many of them financial—that have been powerful motivators in their quest for citizenship. This is a necessary first step in the financial planning process."

---

Check out these related stories on AdvisorOne:

Toyota Opens Mechanic Training Facility to Bolster Quality Control

Mechanics work on a Prius at a newly completed Toyota service center in Tajimi, central Japan, on Monday. -- AP Photo/Yuri Kageyama

TAJIMI, Japan (AP) -- Toyota (NYSE: TM  ) is opening a training facility for mechanics complete with a test course that simulates 13 driving conditions including cobblestones and bumpy roads as part of the automaker's efforts to avoid a repeat of its recall fiasco.

A ceremony with Toyota Motor Corp. President Akio Toyoda and government officials was held at the 9 billion yen ($90 million) Tajimi Service Center Monday in Gifu Prefecture, central Japan, near Toyotacity, where the car maker is headquartered.

Toyoda said quality must remain a priority even as the company becomes ever more global, with buyers driving on a range of road conditions. The center will initially train about 2,600 mechanics year, and eventually 4,800 mechanics a year, the company said.

Toyota has about 120,000 mechanics around the world and those numbers are expected to grow with sales expanding in emerging markets.

Toyota's reputation for quality was tarnished by massive global recalls that started five years ago. The automaker announced recall after recall, spanning almost every model in its lineup, totaling more than 10 million vehicles being recalled.

At the facility, Shinto priests in robes waved branches and hurled specks of paper before an altar with offerings of cabbage and oranges in a purification ceremony. Executives, dealers and officials lined up to bow and clap in what Toyota said was a prayer that its cars would stay safe.

The renewed focus on checking up on defects even after a vehicle has been delivered highlightsToyota's determination to stop recalls from spiraling out of control -- not just in development and design stages but also after production and years of use.

"No vehicle is used in the same way, and all sorts of things happen that cannot be anticipated at the development stage," Toyoda said. "It is impossible to build a vehicle that will never break down."

Toyoda pointed to one problem with Prius hybrid braking, which the company had initially deemed safe, but upon testing had been found to work 0.06 seconds slower than the previous model, and customers were not feeling comfortable.

The new facility might not end recall problems once and for all, but will help the automaker respond more quickly, Toyoda told reporters.

"When something happens next time, we will be faster with our response and then people can trust our vehicles more as safe," he said.

Other automakers have similar training and test-course facilities, and Toyota also has other training centers. But the Tajimi center is among the biggest for any automaker, with a 1.3-kilometer (0.8-mile) track with 13 different kinds of road conditions, including cracked, bumpy and wet surfaces.

It is dotted with big "Safety First" signs. A four-story building has classrooms and areas where car-maintenance checkups can be practiced. Tajimi has one of the hottest temperatures in Japan, but gets snow in the winter, allowing mechanics to study what severe weather does to cars.

Toyota, which makes Lexus luxury models and the Camry sedan, has sprung back from the recall disaster and re-emerged as the world's top automaker, growing in new markets such as China and Indonesia, while regaining sales share in the U.S

"Toyota has been taking longer in model development to be more careful and strengthen quality controls," said Nomura Securities Co. auto analyst Masataka Kunugimoto.

Despite the recall problems, Toyota boasts among the highest quality standards in the industry, he said.

Still, the arrival of new kinds of vehicles such as hybrids means maintenance crews must be trained to spot abnormal vehicle responses, diagnose problems and research new kinds of service technology, according to Toyota.

Training is also mental and involves instilling the right "customer-first" spirit in the mechanics in 135 nations so they won't let a quality failure get by, it said.

In 1935, when Toyota's G1 truck was riddled with problems, company founder Kiichiro Toyoda, Akio Toyoda's grandfather, rushed around to personally fix breakdowns and apologize to customers, Toyoda said to drive home the message of quality.

American Adam J. Crawford, from Arizona, among the instructors at the center, acknowledged he wasn't sure he could really avoid massive recalls by training people who fix cars, but he said he was hopeful.

"If I can instill in him a desire and a true want to have good quality in everything he does, from an oil change to an engine overhaul, then I think we can keep our customers happy and we can keep the quality of our vehicles very high," he said.

link

Everything You Think You Know About Electric Cars Is Wrong

Last month, the electric-car industry passed a small but important milestone. There are now more than 100,000 electric cars on America's roads, including those that operate as plug-in hybrids. That's happened in just two and a half years, as electric-vehicle sales have only been tallied independently since the last month of 2010, when a mere 345 were first parked in customer garages.

Despite this milestone, there's plenty of pessimism to go around regarding the adoption rate of the plug-in EV, which have thus far made up only half of 1% of all cars sold in the U.S. this year. My fellow Fool -- and resident Foolish auto expert -- John Rosevear offered a succinct overview of that pessimism a couple of months ago, which I'll sum up as this: There's no charging infrastructure, and the batteries make EVs cost more than is justifiable.

Does that mean EVs are a failure?

From the perspective of the broader auto market, and when compared to the ambitious one-million-EV goal set by President Obama for 2015, EV hype seems destined for the junkyard. However, from a historical perspective, EVs aren't doing so badly at all. In fact, most of the common complaints about EVs are simply short-sighted or downright wrong when viewed through either a historical lens or one with a longer time horizon for the future. Let's take a look now.

Historical perspective on the auto industry
The American auto industry effectively began in 1896 with a 13-vehicle production run at the Duryea Motor Wagon plant (or garage, as the case might well be). Three years later, just before the start of the 20th century, there were roughly 8,000 cars on what passed for American roads -- virtually nothing was paved for vehicle travel. There were 8,000 EVs on the road after eight months of tracking. That's not really fair, though, because there are more than three times as many people in the U.S. as there were at the turn of the 20th century. Adjusted for population growth, there should have been 33,000 EVs on the roads after three years. That happened after 19 months, and we're now approaching three times that number midway through the third year of tracking. In fact, EVs are outperforming hybrids at the same point after adoption as well. Here's what that looks like:

Automobile Adoption Rates | Create infographics

I included battery-only EVs on the chart to prove I wasn't fudging the numbers on EV adoption by using plug-in hybrids -- battery-only EVs surpassed the population-adjusted sales pace of the earliest cars with eight months to go in their third year of tracking. It's also worth pointing out that battery-only EVs have outsold plug-in hybrids by more than 1,000 vehicles for each of the past three months and are on track to reach a cumulative total of roughly 68,000 sales at the end of the year.

Why compare EVs with the earliest cars? The "motor wagons" of the late 1800s faced similar challenges to those often attributed to EVs: minimal supporting infrastructure and a high price tag relative to the dominant (horse-drawn) transportation of the day.

The first gas stations wouldn't even be built until almost a decade after the Duryeas built the first 13 cars in America, and they had no drive-up pumps -- that innovation didn't arrive until 1913. There are already more than 6,000 publicly accessible EV charging stations in the country. This doesn't count interesting infrastructure developments such as Tesla's (NASDAQ: TSLA  ) battery-swap stations or its growing network of "superchargers" scattered across the United States. It's also worth noting that EVs, unlike early internal-combustion vehicles, can get recharged in most owners' garages.

A comparison between the price of cars at the start of the 20th century and the price of EVs today shows another advantage in electricity's favor: the average car in 1900 cost nearly twice the typical household income, while the average base price of the top three EVs on the market today -- Nissan's (NASDAQOTH: NSANY  ) Leaf, Tesla's Model S, and General Motors' (NYSE: GM  ) Chevrolet Volt -- is about 90% of the median national income.

However, EVs have a hurdle that the motor wagons didn't -- the competition is already mechanical, and it has a century-plus head start. The earliest autos simply had to be better than a horse, which is limited by biology to a certain speed and a certain work capacity. A horse doesn't have an R&D budget or an assembly line, and you have to clean up after it, which is pretty gross. Its obsolescence was inevitable. EVs have to beat a competitor that's benefited from tens of billions of dollars in global research and development spending each year for decades , and which is a significant part of a worldwide oil-and-manufacturing infrastructure that creates trillions of dollars in annual revenue.

EVs have to overcome an entrenched culture, just as early motor wagons did -- but today's car culture is far more deeply embedded in the national psyche than horses ever were. There's one automobile on American roads for every 2.3 Americans today, compared with one horse for every 3.5 Americans in 1900. The average person traveled about 340 miles per year in 1900, compared with 16,000 miles per year in cars and airplanes today. Despite facing one of the most entrenched opponents in the history of capitalism, EVs are already outperforming the puttering internal-combustion pioneers in terms of market penetration, price, and infrastructure deployment at a similar point after introduction.

Let's sum some of that up visually:

Autos vs. EVs: a Comparison | Infographics

Hard to hold a charge
Of course, with all of that said, we come back to perhaps the biggest roadblock between EVs and mass adoption: Battery technology just isn't as good as gas. "A full tank of gasoline," according to American Physical Society Fellow Alfred Schlachter, "contains as much energy as 1,000 sticks of dynamite." It's accessible, portable, and (despite protestations over $5 gallons of gas) quite affordable. The New York Times' Green blog quoted IBM battery researcher Winfried Wilcke on the charging-efficiency problem three years ago:

[Wilcke] illustrated the challenge of building a battery with the energy density of gasoline by recounting that it took 47 seconds to put 13.6 gallons of gas in his car when he stopped to fill up on the way to San Francisco. That's delivering power at the rate of 36,000 kilowatts, he said. An electric car would need to pump 6,000 kilowatts to charge its battery in that period.

"The dream that we have today to have exactly the same car charge up in minutes and drive off hundreds of miles cannot happen," Mr. Wilcke said. "Or at least not for 50 years."

Schlachter points out that battery technology is not subject to Moore's Law-like efficiency gains, because "significant improvement in battery capacity can only be made by changing to a different chemistry." Computing hardware has improved on the same substrate by investing in miniaturization technology since the 1960s, but the energy density of a given chemical compound is essentially fixed -- it's only improvements in the surrounding machinery using that compound (whether engines or batteries) that makes more use of the same material.

However, it may not be necessary for EVs to charge in 20 seconds to make them a compelling alternative. Most people simply never drive far enough in a given day to need a quick charge -- 95% of all people tracked in 2009 by the National Household Travel Survey had a commute of less than 40 miles, and the average commute was less than 14 miles. The average total daily driving of urban dwellers was 37 miles, and that of rural drivers was 49 miles. The Nissan Leaf, which is the cheapest of the three best-selling EVs on the market, can drive at least 73 miles on a single charge. Battery quick-swap stations go a long way toward solving the problem of charging delays on the other 5% of those commutes, and the high cost of batteries -- widely seen as the biggest drawback to EV adoption and a roadblock to quick-swap ubiquity -- is not something that will persist forever.

The lithium-ion batteries used in modern EVs have more than doubled in energy density and have declined in price per kilowatt-hour of capacity by a factor of 10 since the early 1990s, when the modern EV movement began to gestate. A McKinsey research paper published last year projects that lithium-ion batteries will continue to decline in price from roughly $600 per kWh today to about $200 per kWh in 2020. Gas prices aren't likely to decline any time soon, so a two-thirds reduction in battery costs would make EVs a better value on balance than internal-combustion vehicles, according to the McKinsey analysis. None of this would account for another battery breakthrough that would make lithium-ion obsolete, and as the commercial impetus to sell EVs continues to gain steam, it only becomes more likely that intensified research will find something better.

Will EVs continue to outperform the original auto pioneers in the face of stiffer competition? I can't say. However, early results are indeed more promising than many pessimistic commentators would you like to believe. Just as autos replaced horses en masse once their technological superiority was undeniable, EVs will have to be objectively better than internal-combustion vehicles to justify widespread adoption. There are bound to be some bumps and bankruptcies along the way. After all, more than 1,000 automakers of all sizes were founded between 1896 and the mid-1920s. How many of them are still around?

Tesla's plan to disrupt the global auto business has yielded spectacular results. But giant competitors are already moving to disrupt Tesla. Will the company be able to fend them off? The Motley Fool answers this question and more in our most in-depth Tesla research available. Get instant access by clicking here now.

Loose Lips Sinks Stocks

We don't know exactly what was said, but it was salty enough that three directors of Scotts Miracle-Gro (NYSE: SMG  ) resigned as a result, and as The Wall Street Journal reports, the company put out a mea culpa via an SEC filing that included an apology from CEO Jim Hagedorn. Shares of the lawn care specialist are down 5% over the past week.

Coming as it does on the heels of the brouhaha created by comments made by Abercrombie & Fitch's (NYSE: ANF  ) CEO seven years ago, essentially saying chubby kids and dweebs need not shop at his stores -- and causing his company's stock to drop 8% since -- shows that having a personal filter is something boards of directors may want to explore when they perform executive searches in the future.

Yet there is a difference between using colorful language, which seems to be Hagedorn's sin, and being completely tone-deaf like A&F's Mike Jeffries. The first is simply how one talks; the other how one thinks.

Foot-in-mouth disease
While Jeffries' comments were resurrected because of social media and thus given new life, some executive commentary takes on a life of its own. During the Macondo rig oil spill in the Gulf of Mexico, BP's (NYSE: BP  ) Tony Hayward became the poster child of tin-ear responsiveness, first by going off yachting during the height of the crisis, and then proclaiming he'd like to "get his life back" from having to deal with it, all while the livelihoods of Gulf fishermen were being ruined because of his company's malfeasance.

Perhaps it's because my own language is peppered with f-bombs that I'm more forgiving of those who are just rough around the edges. While it's true that we ought to keep some check on our tongues, it's equally the case that we've become hypersensitive to anything that gives the mere appearance of an affront. We really need thicker skin and to avoid manufacturing controversies, as it's given rise to a cottage industry in corporate apologies.

The art of the apology
With customers mostly being a forgiving people, a show of remorse is often all that's necessary for a company to move on from the incident. When JetBlue left passengers stranded on the tarmac for seven hours during a snowstorm, its COO went on YouTube and acknowledged that they dropped the ball and let down their customers. Toyota's recall of 3.8 million cars in 2009 led CEO Akio Toyoda to publicly apologize for his company's failures. These were seen as sincere and believable apologies, and the companies recovered.

Then there are those apologies that grate like fingernails on a chalkboard. Did anyone really believe Goldman Sachs' (NYSE: GS  ) Lloyd Blankfein's plea for forgiveness for helping bring about the financial crisis -- only weeks after chortling about the investment bankers' pay and bonuses, and doing "God's work?" There's a reason the company is still reviled by many.

A penny for your thoughts
While corporate apologies are de rigueur these days, we shouldn't have to apologize for everything we say, even if what's said is too blunt or done in a ham-fisted manner. I had the pleasure of hearing the CEO of burger joint Five Guys, Jerry Murrell ,speak last year and found his down-to-earth manner bracingly refreshing for a corporate executive.

Similarly, you certainly won't find Titan International's (NYSE: TWI  )  Maurice "The Grizz" Taylor begging forgiveness for telling the French to go pound salt when asked to take over Goodyear's business there. "How stupid do you think we are?" he asked. "The French workforce gets paid high wages but works only three hours. They get one hour for breaks and lunch, talk for three and work for three." He concluded, "You can keep the so-called workers." 

We've become way too accustomed to the nuanced, say-nothing manner of political speech. Give me a blunt-talking CEO any day. 

So assuming Scotts Miracle-Gro's chief executive did no more than pepper his talk with some salt, I'd say good riddance to the thin-skinned directors who left and welcome the good fortune of having someone lead a company who speaks like us common folk instead of some polished politician.

During the financial crisis, Goldman Sachs did so well avoiding the worst of the fallout that it had to downplay its success to duck public ire and conspiracy theories. Today, Goldman is still arguably the powerhouse global financial name, and yet its stock trades at a valuation of less than half what it fetched prior to the crisis. Does this make Goldman one of the best opportunities in the market today? To answer that question, I invite you to check out The Motley Fool's special report on the bank. In it, Fool banking expert Matt Koppenheffer uncovers the key issues facing Goldman, including three specific areas Goldman investors must watch. To get access to this report, just click here.

 

Why Apple Is Still One of the Best Buys in Tech Today

While the broad market's been on a steady tear over the last several months, Apple (NASDAQ: AAPL  ) investors have been on a much less pleasant roller-coaster ride with a few more downs than ups. However, it seems like this stock might have finally leveled out on the back of a updated share repurchase plan that puts dividend stalwarts like IBM to shame. In the video below, Fool contributor Andrew Tonner explains that Apple's true upside extends far beyond mere dividends.

There's a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

#pitch{ margin-bottom: 15px; }

More Expert Advice from The Motley Fool

The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

Top Performing Industries For October 23, 2014

Related BBW Morning Market Movers Earnings Scheduled For October 23, 2014 Related CLGX Top 4 Stocks In The Processing Systems & Products Industry With The Highest Revenue CoreLogic Reports 946K Residential Properties Regained $1T In Total Equity in Q2 2014

At 10:30 am, the Dow gained 1.41% to 16,692.53, the broader Standard & Poor's 500 index moved up 1.25% to 1,951.11 and the NASDAQ composite index rose 1.45% to 4,446.45.

The industries that are driving the market today are:

Toy & Hobby Stores: The industry gained 19.58% by 10:30 am. The top performer in this industry was Build-A-Bear Workshop (NYSE: BBW), which gained 19%. Build-A-Bear reported upbeat quarterly results.

Processing Systems & Products: This industry moved up 5.91% by 10:30 am. The top performer in this industry was CoreLogic (NYSE: CLGX), which gained 8.7%. CoreLogic reported better-than-expected quarterly results.

Drug Delivery: This industry jumped 5.34% by 10:30 am. The top performer in this industry was IntelliPharmaCeutics International (NASDAQ: IPCI), which rose 2.9%. Intellipharmaceutics reported positive results from a series of Phase I clinical trials of Regabatin.

Auto Parts Stores: This industry rose 4.51% by 10:30 am ET. The top performer in this industry was O'Reilly Automotive (NASDAQ: ORLY), which gained 7.1%. O'Reilly reported stronger-than-expected Q3 earnings.

Posted-In: Top Performing IndustriesNews Intraday Update Markets Movers

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  Related Articles (BBW + CLGX) Top Performing Industries For October 23, 2014 Morning Market Movers Earnings Scheduled For October 23, 2014 Top 4 Stocks In The Processing Systems & Products Industry With The Highest Revenue Worst Performing Industries For October 9, 2014 CoreLogic Reports 946K Residential Properties Regained $1T In Total Equity in Q2 2014

Dow Jones Industrials: Two Days, Two 100 Point Drops

As the Wonder Pets might say: “This is sewious.”

Getty Images

The Dow Jones Industrial Average fell 116.81 points, or 0.7%, to 17,055.87 today, its second consecutive drop of 100 or more points. The last time the Dow dropped 100 points or more for two consecutive days was in June.

The S&P 500, meanwhile, declined 0.6% to 1,982.77, while the Nasdaq Composite dipped 0.4% to 4,508.69. The small-company Russell 2000 once again suffered the most, having dropped 0.9% to 1,118.72.

Don’t blame the U.S. for today’s decline. An index of home prices rose 0.1% in July and us now just 6.4% below their April 2007 high, while the Markit flash purchasing managers index stayed at 57.9, a 52-month high. If only the same could be said Europe, where the PMI fell to 52.3 in August. The folks at Bespoke Investment Group consider the data:

PMIs were mixed, with beats in French Manufacturing and German Services, but bad misses vice-versa. On a Eurozone basis, both Manufacturing and Services PMIs missed, although narrowly. In short, this report muddied the waters and was neither good news for the economy in Europe nor terrible news that might prompt further policy support from fiscal authorities. European equities are reacting accordingly, a buyer's strike under way from almost the first trades.

ISI Group’s Dennis DeBusschere thinks the risks are rising:

All of this comes back to an argument we have been making for some time. With the S&P fully valued, the Fed clearly signaling its intention to raise rates in 2015, though likely earlier than many would like, ECB QE still just an expectation, equity returns should follow the path of earnings growth. With the slowing in leading indicators, the risk of a market decline is rising. Again, our base case is a mildly stronger market into the end of the year, but the risk / reward spread is clearly worsening.

And just before Rosh Hoshanah too.

How to Save Money While Building a Richer Relationship

Money is one of the leading causes of marital discord, and even divorce. But according to Robyn Crane, a certified financial planner and author of the upcoming book, How to Overcome Your Money Issues to Have a Richer Relationship, money alone isn't always the underlying issue. Instead, relationship rifts often widen because many couples haven't created effective strategies to talk to each other about money.

According to Crane, money conversations often fail because couples come to the table with preconceived judgements about how money is being handled within the household. Most couples don't start out on the same money page, and an attitude of blame or guilt can exacerbate an already tenuous situation.

"A lot of people just won't talk about money because there is an underlying fear," says Crane. "Money creates such heavy emotions."

The good news? Couples who want to build a richer emotional and financial base can learn to talk about their money goals without undue emotional turmoil. How? Follow these four steps:

1. Embrace transparency
Couples often avoid money talk because such conversations, if conducted improperly, can aggravate uncomfortable emotions, and heighten tension or anxiety. It's easy to see why money disagreements are so common. "Everyone is brought up differently," says Crane. "No two people see money the same way."

Within her practice, Crane identifies six dominant "money types," which are shaped, primarily, by a person's experiences with money. Understanding the background behind why one partner hoards money and the other spends impulsively, for example, can be a stepping stone to building a long-lasting, trusting relationship. "If you understand your partner's money patterns," says Crane, "judgement falls away. That brings you closer together."

Further, getting clear about your patterns can have a positive affect on your savings account. "When you recognize your money type and what holds you back," says Crane, "then you're more conscious about where your money goes. Many couples start to make new choices, like to save instead of spend. Clarity about your money type lets you really think about what you value."

2. Develop an aligned vision for money
When a couple's money vision is out of alignment, it's easy to overspend. Crane says she sees clients say things like, "Well, my husband spends money on those things, so I'm going to spend money on these things." According to Crane, this rationale is just excuse-making. "If you don't have transparency and you're not communicating, you give yourself an excuse to spend money," she says. "You need to be on the same page with an aligned vision."

Following a set of money-talk rules can help couples nudge their savings and relationship goals into alignment. Crane's suggested rules include: no judging, no blaming and no excuses.

"There might still be fear about how to pay the mortgage," says Crane, "but if you can let go of judgement and excuses, you're coming to the table with positive intentions. You start to take emotion out of the equation and your end result will be better."

3. Create a long-term plan
The most effective way for a couple to pad their savings is to create their savings intention. Crane suggests couples ask themselves this: If there were no limitations, what would you do in the next five years? The next 10?

"The answers to these questions are the driving force behind why you should save," she says. "You won't save in the face of instant gratification unless you start to associate that with what you want in the future."

A flush bank account can feel emotionally empty unless a couple can envision the rental property, college tuition, or dream vacation those hard-earned savings can provide.

4. Pledge commitment to your money goals -- and to each other
"People often have one foot out the door in a relationship. They're not totally in it," says Crane. "That's why 50 percent of couples are getting divorced." Instead, Crane suggests couples commit to each other -- and their goals -- at the 100 percent level.

Commitment problems, whether emotionally or financially based, are often derived from fear. That's why Crane suggests couples take a money vow.

With this, couples agree to look at their money together at regular intervals to discuss their goals and progress, and to always tell the truth, even when they're afraid. "A daily, 15-minute chat to talk about money can help partners set intentions, celebrate successes, and experience gratitude for what they've achieved," says Crane.

Even couples who follow these keys to a richer relationship can experience setbacks, particularly when faced with an unexpected disaster. But overcoming these can make the relationship even stronger, says Crane.

"If you can look at (setbacks) as setups for success," says Crane, "nothing can knock you down."

This article originally appeared on savingsaccounts.com.

And with that money you save -- Here are the top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here.

You may also enjoy these financial articles:

6 ordinary emergencies you should save for Uncomfortably close to retirement? Make a plan today 7 ways to beef up your savings account

La-Z-Boy Incorporated (LZB) Earnings Report: Will Investors Rest Comfortably? HOFT & FLXS

The Q4 2014 earnings report for La-Z-Boy Incorporated (NYSE: LZB), a potential peer of other furniture stocks like Hooker Furniture Corporation (NASDAQ: HOFT) and Flexsteel Industries, Inc (NASDAQ: FLXS), is due out after the market closes on Tuesday. Aside from the La-Z-Boy Incorporated earnings report, it should be said that Hooker Furniture Corporation reported Q1 2015 on June 5th (they reported a double-digit income rise on higher sales in first quarter) and Flexsteel Industries, Inc reported Q3 2014 earnings on April 16th (they record net sales and net income). However and the last time around, investors did not like it when La-Z-Boy Incorporated reported quarterly profit of 32 cents a share that missed forecasts calling for a profit of 35 cents a share and they really did not like revenue missing expectations by 7.7%. The company is also doing some restructuring.

What Should You Watch Out for With the La-Z-Boy Incorporated Earnings Report?

First, here is a quick recap of La-Z-Boy Incorporated's recent earnings history from Yahoo! Finance:

Earnings HistoryApr 13Jul 13Oct 13Jan 14

EPS Est	0.28	0.15	0.26	0.35
EPS Actual	0.30	0.18	0.31	0.31
Difference	0.02	0.03	0.05	-0.04
Surprise %	7.10%	20.00%	19.20%	-11.40%

 

Back in mid February, La-Z-Boy Incorporated reported a 3% revenue rise to $350.4 million (short of consensus estimates for $378.74 million), same-store written sales for the company's Furniture Galleries store network increased 3.6% (far lower than the 11.8% increase in the third quarter 2013) and net income from continuing operations of $17.2 million, or $0.32 per diluted share, compared with last year's third-quarter results of $16.8 million, or $0.31 per diluted share, which included $0.04 relating to gains on the sale of investments and a related tax benefit. The Chairman/CEO commented:

"We believe the fundamental pace of our business and ability to improve our profitability on sales growth remains steady and unchanged.  During the third quarter, however, weather conditions did have some impact on sales, production and deliveries."

He latter added:

"While markets in the northeast and Midwest were challenged during the period, written sales in warmer climates and in those markets not impacted by severe weather conditions continued to exhibit strength."

And:

"We remain optimistic about our ability to continue to grow profitably in the future.  The cadence of our business remains strong, particularly as we head into the fourth quarter, which is historically our largest volume period, and roll out our Urban Attitudes collections."

This time around and according to the Yahoo! Finance analyst estimates page, the consensus expects revenues of $368.12M and EPS of 0.32 - lower than the consensus EPS of $0.33 expected seven days ago and $0.34 expected sixty days ago.

On the news front and back in April, La-Z-Boy Incorporated announced it will restructure its casegoods business, which represents approximately 10% of revenue, by transitioning to an all-import model for its wood furniture – a nice way of saying they will import cheaper products from Asia. Specifically, La-Z-Boy Incorporated will discontinue casegoods production at its Hudson, North Carolina facility because too big given the level of demand in the US; exit the hospitality business as that furniture is also manufactured at the Hudson facility; market for sale its youth furniture business, Lea Industries, as it does not align with the company's long-term strategic objectives; consolidate and transition its warehouse and repair functions from its two North Wilkesboro, North Carolina facilities to Hudson.

Approximately 100 employees will be affected and La-Z-Boy Incorporated will take pre-tax charges in the range of $13 million to $15 million, or $0.15 to $0.17 per share after tax, of which approximately 75% is expected to be non-cash.  The majority of these charges will be incurred in the fourth quarter of the company's 2014 fiscal year and the remainder taken in the first half of fiscal 2015 while the Lea business will be reported as discontinued operations commencing with the fourth quarter of fiscal 2014.

What do the La-Z-Boy Incorporated Charts Say?

The latest technical chart for La-Z-Boy Incorporated shows a downward trend since the start of the year that has moderated in recent months:

A look at the long term performance chart shows that La-Z-Boy Incorporated has really outperformed Furniture Corporation and Flexsteel Industries, Inc:

A look at Hooker Furniture Corporation's technical chart also shows a downward trend since late last year while Flexsteel Industries, Inc has been trending downward since April:

What Should Be Your Next Move?

This time around, it will be harder to blame the weather for any revenue or earnings miss. In other words, La-Z-Boy Incorporated will need to show that its fundamentals otherwise remain sound – allowing investors to rest easily.

Stocks Beat Back Bears as Nasdaq, Small Caps Climb

Stocks are displaying their resilience after making back their early-morning losses today, as Pfizer (PFE), Walt Disney (DIS), TripAdvisor (TRIP), Netflix (NFLX) and Johnson Controls (JCI) have gained.

Agence France-Presse/Getty Images

The S&P 500 has gained 0.4% to 1,885 at 12:25 p.m., while the Dow Jones Industrial Average has ticked up 0.1% to 16,514.72. The Nasdaq Composite has climbed 0.9% to 4,127.27 and the small-company Russell 2000 has jumped 1% to 1,113.66. The 10-year Treasury yield is little changed at 2.51%.

Pfizer has gained 1.4% to $29.53 after its final offer was rejected by Astra Zeneca (AZN), which has dropped 11% to $71.52.

Walt Disney has risen 1.1% to $81.23 after it raised ticket prices at Disney Land and was started at Buy at Hudson Square.

TripAdvisor has jumped 5% to $86.28 as summer travel is expected to be busy this year, while Netflix has climbed 4.8% to $366.55.

Johnson Controls has advanced 4% to $46.58 after it said it would spinoff its auto interiors business.

JPMorgan’s Mislav Matejka and team argue that low yields are good for stocks:

We don't think that the recent bond rally should be interpreted as a negative for equities. In the past the inversion in the yield curve was a useful leading indicator, but we don't believe that this model is applicable currently, as short rates remain at extreme lows. The recent bond rally is clearly partly due to the loss of US growth momentum in Q1, but our fixed income strategists suggest that it was also due to expectations of a lower neutral Fed funds rate, declining duration
supply and subdued inflation.

While equity indices so far shrugged off the bond rally, within the market the Defensives have outperformed Cyclicals by more than 500bp in both the US and Europe ytd. We see similarities to 2013, where in the 1H bonds rallied and Defensives led, only for Cyclicals and Value to pick up in 2H. Last year it was the tapering that jump-started move up in yields, this time around it could be the reacceleration in global growth and/or action from ECB.

Goldman Sachs strategist David Kostin and team note that investors continue to look “below-the surface” as the S&P 500 continues its journey to nowhere.

Investors continue to search for below-the-surface opportunities as the S&P 500 meanders along near all-time high levels amid low volatility and support from corporate buybacks. Our weak balance sheet portfolio deserves attention given the 7% YTD absolute return – tops among our thematic baskets – and 600 bp of steady outperformance versus a basket of strong balance sheet stocks. We believe weak balance sheet firms will continue to lead based on history and our credit and the economic outlooks.

The biggest risk to continued weak balance sheet outperformance is tighter financial conditions. Our FCI has eased considerably in 2014 and steadily during the past two years. But our forecasts for only modest equity returns and credit spread tightening coupled with rising US Treasury yields implies conditions could tighten. However, the leveraged loan market tells the opposite story: first lien covenant-lite loans now account for 63% of issuance, up from 33% in 2012 and just 5% in 2010. Although S&P 500 leverage metrics remain strong, the recent trend has been higher with the debt/asset ratio rising by 100 bp to 27% in the past six months.

Of course, that’s what caused the financial crisis in the first place.

Aeropostale’s Results Pitiful; Barters More of the Company for Cash

Aeropostale Inc. (NYSE: ARO) reported fourth-quarter and fiscal year 2013 results after markets closed Thursday afternoon. The teen clothing retailer posted an adjusted diluted earnings per share (EPS) loss of $0.35 on revenues of $670 million. In the same period a year ago, Aeropostale reported EPS of $0.24 on revenues of $797.7 million. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for an EPS loss of $0.31 and $683.79 million in revenue.

For the full year, Aeropostale reported an EPS loss of $1.13 on revenues of $2.09 billion, compared with EPS of $0.68 on revenues of $2.39 billion in the prior year. The consensus estimates called for an EPS loss of $1.10 on revenues of $2.1 billion.

Same-store sales, including e-commerce sales, fell 15% in the fourth quarter on top of a 6% drop in the fourth quarter a year ago. For the full year same-store sales also fell 15% compared with a 2% drop in 2012.

Aeropostale also announced today that it had signed a commitment letter with private equity firm Sycamore Partners for a strategic partnership and $150 million in senior secured debt facilities. Sycamore receives convertible preferred stock that can be converted to a total of 5% of the company's common stock at an exercise price of $7.25, Wednesday night's closing price. Sycamore also gets two board seats and the right to approve a third.

The company expects to post an EPS loss of $0.70 to $0.75 in the first quarter of 2014, far worse than the $0.17 loss estimated by analysts. The company plans to close 50 Aeropostale stores and two P.S. stores in 2014.

The company's CEO said:

The results we generated in 2013 are not acceptable nor are they a reflection of the progress we believe we have made in transforming our brand. Having evaluated what we set out to do in 2013 and what we learned, we believe our strategy surrounding product, brand projection, process and growth is even more crucial to winning in today’s challenging retail landscape.

We noted Aeropostale in our recent report on the nine retailers set to close the most stores as the company ranked third in most store closings. Aeropostale may close as many as 175 stores over the next few years. The deal with Sycamore Partners buys the company some time, but not much.

Shares are down nearly 12% in after-hours trading, at $6.45 in a 52-week range of $6.04 to $17.10. Thomson Reuters had a consensus analyst price target of around $8.90 before today's results were announced.

How to Profit From an IPO Even When You Can't Buy the IPO

Alamy Shares of an initial public offering in a hot company are practically the holy grail for most investors. The opportunity to get into a stock on the ground floor before the general public has an opportunity to buy in can be a fast way to make a profit. Unfortunately, IPO shares are usually allotted only to large investment firms or their select high-net-worth clients. There is, however, a way in which you can still ride the wave of a highly anticipated IPO in order to make some money. When it comes to investing, much of Wall Street has a herd mentality. Just as different TV networks look to the most popular shows on rival networks, then try to produce more shows in the hot genres, investment managers who see a company doing well will look for other companies in that sector to invest in. For example, if Facebook is hot, investment money will flow into other social media companies like Twitter or LinkedIn, and in the process drive all their share prices higher. This effect isn't limited to public companies; it also exists between companies in the same sector, even if some are public and others are private. A strategy that takes advantage of this can often give you an edge in your investing. Take for instance HomeAway, which trades under the ticker symbol AWAY. HomeAway connects landlords and renters, helping to facilitate short-term vacation rentals in the United States and internationally. Fundamentally, it's a sound company riding a growing tech trend, with rising EPS and revenue estimates, as well as a history of beating analysts' expectations. These factors alone would make it a worthy candidate to consider investing in, but if you dig a little bit more, you'll find another potential ace-in-the-hole. That ace is called Airbnb. Airbnb is the premier company in the online rental game -- the same sector that HomeAway occupies -- but it's a private company. You can't invest in it yet. However, it's expected that Airbnb will launch an IPO late in 2014, with a valuation of over $10 billion. Here's where that herd mentality comes into play. As investors' attention is drawn to a hot IPO, capital tends to flow to its publicly traded competitors; in essence, they become a proxy for the better private company. So even though Airbnb may be the better of these two companies, HomeAway's stock should still go up as anticipation of Airbnb's IPO rises. Of course, there are no guarantees, and what happens in the overall market will probably play a bigger role in HomeAway's share performance than the Airbnb IPO. But now that you know how this symbiotic relationship works, you can use it find other examples -- and profit from them as well.

Australia stocks soften after U.S. jobs report

LOS ANGELES (MarketWatch) -- Australia stocks tilted lower early Monday as the Sydney markets reacted to last week's disappointing jobs numbers out of the U.S., with the S&P/ASX 200 (AU:XJO) down 0.2% at 5,304.40. Data out Friday showed the U.S. added a net 74,000 jobs, trailing a forecast for 193,000 positions, and while Wall Street ended mixed following the numbers, Australian stocks will global exposure moved lower. Financial major Macquarie Group Ltd. (AU:MQG) (MCQEF) fell 1.8%, mall developer Westfield Group Australia (AU:WDC) (WEFIF) retreated 0.6%, and media firm News Corp. (AU:NWS) (NWS) -- the parent of MarketWatch, publisher of this report -- gave up 1.3%. But the jobs report also depressed the U.S. dollar, which helped boost prices for dollar-denominated commodities, and this in turn supported Australian resource shares. BHP Billiton Ltd. (AU:BHP) (BHP) gained 0.6%, Rio Tinto Ltd. (AU:RIO) (RIO) added 0.9%, Alumina Ltd. (AU:AWC) (AWCMF) rallied 4.5%, and Fortescue Metals Group Ltd. (AU:FMG) (FSUMF) improved by 1.2%. A strong showing for Comex gold on Friday also sent Newcrest Mining Ltd. (AU:NCM) (NCMGF) up 3.5%. and Evolution Mining Ltd. (AU:EVN) (CAHPF) surging 8.8%. Shares of Telstra Corp. (AU:TLS) (TTRAF) inched 0.1% higher after agreeing to sell 70% of its Sensis directories business to a U.S. private-equity firm at a price of about $400 million.

Retailers walk line with 'Je Suis Charlie' merchandise

  "Je Suis Charlie" merchandise a booming cottage industry NEW YORK (CNNMoney) In the days since the horrific attack in Paris on Charlie Hebdo, signs of support are everywhere: "Je Suis Charlie" can be found on leather key rings, decals, bumper stickers, mugs, and of course, t-shirts.

But it raises a question: Are these sellers raising awareness or profiting off of a tragedy?

The artistic director who created the logo most used tweeted this week that he "regrets the commercial uses of it."

One Etsy seller, Danica Harcourt of Imperfect Circle Apparel, said she was much more interested in the cause than in profiting.

"Our goal was never to profit from the sale of these t-shirts but to help raise awareness to help support the French population. We have received a couple negative comments as well from a few French citizens who believe the American people are "a--holes" trying to profit from such tragedy, which was never our intent."

Harcourt says the company donates 10% of all its profits on an annual basis. In some cases, the company has donated all its proceeds, about $4 to $5 a shirt. Harcourt says she has not made a decision on profits from Je Suis Charlie shirts.

This is not the first cottage industry to spring up around catastrophic events.

Just days after the Boston Marathon bombing, official jackets, medals, and even items used by participants were available for sale online. Ebay took most of them down, citing violation of their policy about offensive material.

One t-shirt seller said that "Je Suis Charlie" has been their most successful shirt with a social message. RockWorldEast reported astronomical sales in the first 24 hours: Selling at least 1,800 t-shirts versus the usual 300 to 600.

Harcourt said her store has had more site visits in two days than it had all last year.

But is selling these items insensitive? Those CNNMoney asked said it's an important message that needs to get out. And if they don't sell it, someone else will.

Tackling Hot-Button Topics

For those who may not know, each month we host a joint web chat for subscribers of The Energy Strategist (TES) and MLP Profits. The chat is conducted by Igor Greenwald, managing editor for TES and chief investment strategist for MLP Profits, and myself.

We place a priority on answering questions about portfolio holdings and recommendations during the chat, but often we get questions about companies we don’t currently recommend. Sometimes we may get questions that require an extended answer, or there may just be so many questions we can’t get to them all. For the most recent chat there were three MLP questions that warrant some elaboration.

Q: Do you anticipate any impact on MLP share prices in a rising interest rate environment?

We got a couple of questions about the effect of interest rates on expected MLP unit performance. Igor’s view is that the spring/summer MLP correction sort of inoculated against a repeat, and further that the economy isn’t strong enough to support significantly higher rates for a good long while. And as the economy strengthens, it should generate plenty of demand for new energy infrastructure, helping the MLP sector grow, he argues.

I would add that those MLPs that are highly leveraged will be most at risk as rates rise. I would further avoid those that have had a significant run-up that has depressed the yields to low levels. A low-yielding MLP like Phillips 66 Partners (NYSE: PSXP), which had a very big rally from its initial IPO price, could be particularly vulnerable to higher interest rates.

Q: What are the pros and cons of holding an MLP in a retirement account? And which would you recommend?

Opinions on this are split. A big advantage of MLP investing is the potential for deferring taxes on earnings. However, the income in retirement accounts is already tax deferred. Further, it is possible that the retirement account could end! up owing additional taxes on MLP distributions, reducing the potential return to investors. Retirement accounts are taxed on “unrelated business taxable income” (such as partnership income) in excess of $1,000 in the aggregate. As a result, many financial planners  recommend that you not complicate your retirement account with MLPs.

Others argue that the steady cash distributions are a safe, conservative way to build up the value of the retirement account over time, even if the account ends up having to pay some taxes. The fact that the MLP isn’t paying corporate income taxes is a significant advantage over time with respect to its ability to generate higher income over time than would be possible for a corporation.

My view is that you first want to make sure that any of your fully taxable investments are protected in retirement accounts to the greatest possible extent before you start to consider putting MLPs in your retirement account. For example, investors with both taxable and tax-deferred investment accounts would generally be better off holding MLPs in the taxable accounts, where their tax deferral benefit would be more valuable, and where they would not generate a liability for unrelated business taxable income.

Of course, some MLP affiliates and/or sponsors are tax-paying corporations, and their shares can be held in a retirement account. MLP Profits portfolio picks suitable for IRA accounts include Kinder Morgan (NYSE: KMI), Williams (NYSE: WMB), Targa Resources (NYSE: TRGP) and Navios Maritime Partners (NYSE: NMM), all of which pay dividends and issue the 1099 miscellaneous income forms, rather than the more complicated K-1’s from partnerships.

Q: Linn Energy (NYSE: LINE) seems to have gotten thru the SEC looking them over. The merger with Berry seems to be on track, although at a higher purchase price. Do you think Linn is a good investment going forward?

This particular question was answered in the chat, but it warrants some a! dditional! commentary. We got half a dozen queries on Linn Energy during the chat, so there is obviously still a lot of interest there. Igor’s answer to this question was “All of that is true, and I expect the merger to close by year’s end, but I think Linn has some structural issues that go beyond Berry with its debt load and past acquisition quality, so I’m steering clear. There are better upstream MLPs in our portfolios.”

I would add that we have been pretty steadfast in believing that the SEC inquiry wouldn’t turn up anything substantive. However, we couldn’t recommend Linn with that inquiry hanging over the partnership. MLP investors in general are not looking to take on that kind of risk, and I suspect most didn’t think it was possible to see Linn drop like it did (down ~40 percent over the summer). This kind of volatility might be acceptable for aggressive speculators, but that doesn’t fit the profile of most MLP investors.

Now that the SEC cloud appears to be lifting and the merger with Berry looks to be imminent, we have taken another look at Linn. But after comparing to peer upstream MLPs, we feel that there are safer options, especially given the higher purchase price Linn had to pay for Berry, and Linn’s relatively high debt level. The present dividend yield of nearly 10 percent is certainly attractive, but our view is that the downside risk will continue to be unacceptably high for conservative investors.

(Follow Robert Rapier on Twitter, LinkedIn, or Facebook.)

Jim Cramer's 'Mad Money' Recap: Stick With the Best-of-Breed Stocks

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.

NEW YORK (TheStreet) -- Stop playing themes and start investing in best-of-breed stocks. That was Jim Cramer's advice to "Mad Money" viewers Thursday.

Cramer said if investors only read the headlines, they'll never understand the markets. One day tech stocks are good, the next they're bad. Oil is good, but then oil is bad. Housing is horrendous, but then it's fabulous.

That's why it's more important than ever to pay attention to individual companies, in particular those that are executing well. Investors only need to look at Caterpillar (CAT) to see what happens when things go wrong. With construction on the rise and China recovering it should be all systems go at this heavy equipment maker, but CAT still managed to miss the numbers and cut estimates. Cramer said a better way to play construction would be with United Rentals (URI) and China with Cummins (CMI). Other examples of bad execution include Diamond Offshore (DO) in the oil patch and Union Pacific (UNP) for the rails. Both failed to deliver while rivals Ensco (ESV), a stock Cramer owns for his charitable trust, Action Alerts PLUS, and Norfolk Southern (NSC) delivered the goods. From airlines to chemical to even the home builders, Cramer said some companies get it while others clearly don't. Which is why investors need to continue doing their homework and stick with only the best-of-breed players. Executive Decision: In the "Executive Decision" segment, Cramer once again spoke with Ellen Kullman, chair and CEO of DuPont (DD), the chemical maker that delivered today a four-cents-a-share earnings beat on better-than-expected revenue while reaffirming guidance and announcing the spinoff of its cyclical performance chemical business. Shares of DuPont currently yield 3% and are up 15% since Cramer last spoke with Kullman on June 25. Kullman said DuPont is now splitting into two world-class companies. One will be a company dedicated to new and novel applications of science, while the other will remain a strong, industry-leading chemical company with high margins. One example of science in action is DuPont's insecticide business, which now tops $900 million in annual sales after just five years. Meanwhile, on the chemical side of the house, Kullman said she sees the market for TiO2 stabilizing.

Among the bright spots for DuPont is its safety and protection division, which is seeing an uptick in Kevlar-related sales, and also Latin America, which is seeing increased demand for DuPont's agricultural products.

Finally, when asked about the global marketplace, Kullman said that in big industries including autos, electrical and industrial goods there remains a lot of uncertainty, and the U.S. is losing credibility by not being able to resolve its issues in Washington. "Our destiny is in our control," said Kullman. "We just need to get after it." Executive Decision: John Faraci

In his second "Executive Decision" segment, Cramer sat down with John Faraci, chairman and CEO of International Paper (IP), which today announced a penny-a-share earnings beat after a 17% boost in its dividend and a monster share buyback program equal to 7.5% of the company's market cap. Despite all the recent good news, shares of IP still trade at just 10 times earnings.

Faraci said International Paper continues to innovate in the packaging business, and he showed off one of his company's new paper-based containers for cold and frozen items that replaces traditional foam containers. He said companies including Tyson Foods (TSN) and Amazon.com (AMZN) remain big customers. But beyond innovation, Faraci noted IP is also a cash-flow story and has been steadily increasing margins and efficiencies through both acquisitions. He said IP is not interested in just growth, but profitable growth, and only makes acquisitions that make sense and will impact the bottom line. Cramer continued his recommendation of International Paper, noting that it's the perfect investment for a retirement or discretionary portfolio. Lightning Round In the Lightning Round, Cramer was bullish on Cheniere Energy (LNG), Noble Energy (NBL), Royal Bank (RBS) and Halcon Resources (HK). Cramer was bearish on Green Mountain Coffee Roasters (GMCR), CVR Refining (CVRR) and Triquint Semiconductor (TQNT). Executive Decision: Rick Hamada P/>In a third "Executive Decision" segment, Cramer checked in with Rick Hamada, CEO of Avnet (AVT), the distributor of IT hardware and services that today delivered a two-cents-a-share earnings beat on lighter-than-expected revenue and initiated a regular dividend for shareholders. Hamada said Avnet is looking for a more systematic way to return capital to shareholders and decided that now was the right time to make that commitment in the form of a regular dividend. When asked about the technology sector overall, Hamada characterized it as an industry with multiple dimensions of change. He said companies are increasingly pressured to keep up with the accelerating pace, which is why there are companies doing well while others fall behind. The key, he said, is to pay attention to your customers and adapt quickly Turning to the topic of Washington, Hamada said he couldn't draw a straight line from the government shutdown to any specific failure in his business this quarter, which is why he chose not to blame any weakness on Washington. "I'm not going to tell you what I don't see," Hamada said. However, Hamada did mention the troubles in Washington are not going unnoticed around the globe and is a topic Avnet is hearing about every day as it talks to its customers. Cramer said he continues to recommend Avnet despite the mixed reaction to its quarterly results. No Huddle Offense In his "No Huddle Offense" segment, Cramer asked, "will any retailer ever be able to please Wall Street?" He noted that Home Depot's (HD) earnings were amazing, yet were met by yawns. Costco (COST), an Action Alerts PLUS holding, saw same-store sales pop 5%, yet its shares barely crawled back to even. But then there were the earnings from two niche retailers, Lumber Liquidators (LL) and Tractor Supply (TSCO), that were met with cheers and adoration. Cramer called these two stocks the "biotechs of retail" because Lumber Liquidators posted a 17% rise in same-store sales while Tractor Supply saw a 7% pop. Both companies still have tons of room to go because Lumber Liquidators only has 17 stores in California and Tractor Supply is just now accelerating its planned store openings. These stocks may seem expensive, trading at 40 times and 30 times earnings, respectively, but Cramer said given their growth and love from Wall Street they're definitely worth the premium. To watch replays of Cramer's video segments, visit the Mad Money page on CNBC. To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here. -- Written by Scott Rutt in Washington, D.C. To email Scott about this article, click here: Scott Rutt Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC

At the time of publication, Cramer's Action Alerts PLUS had a position in COST, ESV, NBL and UNP. Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC Universal or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money." None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser. Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.