Friday, May 31, 2013

Hot Wireless Telecom Companies To Invest In 2014

In this video, analyst Andrew Tonner talks about Apple's earnings report, which is due next week. The story is certainly the most important in the tech sector, as Apple's stock has been crashing this year.

Andrew focuses on Apple's dividend policy from the upcoming earnings report, as the company is expected to raise its payout on Tuesday. That would not only get investors the return they were waiting for, but it's also likely to improve Apple's share price. Apple's sitting on a $137 billion cash pile and can easily fund a significant dividend increase.

Apple CEO Tim Cook said the company has been looking at various policies for investors, including an issue of�preferential shares. Andrew says it's important not just for Apple to take this step, but to do it on Tuesday.

Hot Wireless Telecom Companies To Invest In 2014: Washington Real Estate Investment Trust(WRE)

Washington Real Estate Investment Trust is an equity real estate investment trust (REIT). The company engages in the ownership, operation, and development of real properties. The firm invests in real estate markets of the greater Washington D.C. metro region. It focuses on office, medical office, industrial/flex space, retail, and multifamily real estate investments. Washington Real Estate Investment Trust was founded in 1960 and is based in Rockville, Maryland.

Hot Wireless Telecom Companies To Invest In 2014: SciClone Pharmaceuticals Inc.(SCLN)

SciClone Pharmaceuticals, Inc. engages in the development and commercialization of novel therapeutics for the treatment of oncology, infectious diseases, cardiovascular, urological, respiratory, and central nervous system disorders in the People?s Republic of China and internationally. Its principal product is ZADAXIN for the treatment of hepatitis B and hepatitis C viruses, and certain cancers, as well as for use as a vaccine adjuvant or as a chemotherapy adjuvant for cancer patients with weakened immune systems. ZADAXIN has approval in approximately 30 countries, primarily China, the Pacific Rim, Latin America, eastern Europe, and the Middle East. The company markets and sells ZADAXIN principally through its distributors. It is also developing SCV-07, which is in Phase 2 clinical trials for the treatment of oral mucositis and hepatitis C virus. In addition, the company markets partnered products in China, including Depakine, an anti-convulsant; Tritace, an ACE inhibitor for the treatment of hypertension; Stilnox, a hypnotic for the short-term treatment of insomnia; and Aggrastat, a cardiology product. SciClone Pharmaceuticals also has commercialization rights for DC Bead, a product candidate for the treatment of advanced liver cancer in China, as well as for ondansetron RapidFilm, an oral thin film formulation of ondansetron to treat and prevent nausea and vomiting caused by chemotherapy, radiotherapy, and surgery in China and Vietnam. The company was founded in 1989 and is headquartered in Foster City, California.

Hot Rising Companies To Own For 2014: Malvern Federal Bancorp Inc.(MLVF)

Malvern Federal Bancorp, Inc. operates as the bank holding company for Malvern Federal Savings Bank, which is a federally chartered savings bank. It provides banking services in Pennsylvania. The company engages in attracting deposits from the general public and using those funds to invest in loans and investment securities. Its deposit products include interest-bearing and non-interest-bearing checking accounts, as well as money market, savings, and certificate of deposit accounts. The company?s loan products principally include one-to four family residential mortgage loans; and consumer loans comprising home equity loans, home equity lines of credit, automobile loans, unsecured personal loans, and loans secured by deposits. It conducts business from its headquarters and eight full-service branches in Chester and Delaware Counties, Pennsylvania. The company was founded in 1887 and is headquartered in Paoli, Pennsylvania.

Hot Wireless Telecom Companies To Invest In 2014: Transcept Pharmaceuticals Inc.(TSPT)

Transcept Pharmaceuticals, Inc., a specialty pharmaceutical company, focuses on the development and commercialization of proprietary products that address therapeutic needs in the field of neuroscience. Its principal product is the Intermezzo, a low dose sublingual formulation of zolpidem as a sleep aid for use in the middle of the night at the time a patient awakens and has difficulty returning to sleep. The company has a collaboration agreement with Purdue Pharmaceutical Products, L.P. for the commercialization of Intermezzo in the United States. It is also developing TO-2061, a low dose ondansetron adjunctive therapy, which is in Phase II study for patients with obsessive-compulsive disorder. The company was founded in 2002 and is based in Point Richmond, California.

Advisors' Opinion:
  • [By Michael J. Ray]

    The next company and their handle go together quite well. TSPT is a specialty pharmaceutical company, focused on the development and commercialization of proprietary products that address therapeutic needs in the field of neuroscience. The principal product is Intermezzo, which is a sleep aid used in the middle of the night at the time a patient awakens and has difficulty returning to sleep.

    The company has not always been a sleeper by any means. As TSPT tried to get the drug past the initial FDA review in July it was met with a rejection letter. In the ensuing fallout the stock price fell over 70% and traded around the $3 range. But in November of 2011 the U.S. Food and Drug Administration (FDA) approved Intermezzo, and TSPT finally cleared their first hurdle for their drug. The stock price currently trades around $8 a share, so it has not recovered from the high of $11 to $12 range that it made in the past.

    In more recent news, TSPT announced in December of 2011 that it had received a $10 million milestone payment from Purdue Pharma L.P. in connection with the listing of Intermezzo in the FDA Orange Book. The milestone payment was made under the terms of the agreement between Purdue and Transcept for the commercialization of Intermezzo in the United States. Purdue has plans to launch Intermezzo in the second quarter of 2012 and to invest approximately $100 million to support sales and marketing during the first year of commercialization.

    So other than being in the “sleep business”, why is this stock’s handle known as the sleeper? The answer to that comes from the actual drug’s intended use. Intermezzo is used for the treatment of insomnia when a middle-of-the-night awakening is followed by difficulty returning to sleep. Middle-of-the-night awakening with difficulty falling back to sleep is a common sleep problem, and this drug is the only prescription sleep aid approved for this type of insomnia. The issue is how to value a new drug like this. Analysts! have very different takes on how the final outcome will play out dealing with demand and sales. Some believe that Intermezzo will run into serious competition from big players and products like Ambien by Sanofi (SNY), Lunesta by Sunovion, Sonata from Pfizer. Others have a different take in that they see the demand for the drug will be high as it can be taken as needed, rather than falling into an automated regiment of taking a daily sleep aid based only on anticipated need.

    Until this debate finally gets settled by actual sales figures and trending analysis, the stock might remain a sleeper for a bit. If the medical community receives the drug with open arm, then demand could be very high which would propel the stock price to new heights. As Purdue starts to invest their money in 2012, it should start increase awareness and hopefully the stock price.

Hot Wireless Telecom Companies To Invest In 2014: Williams Partners L.P.(WPZ)

Williams Partners L.P. focuses on natural gas transportation, gathering, treating and processing, storage, natural gas liquid fractionation, and oil transportation activities in the United States. The company operates in two segments, Gas Pipeline, and Midstream Gas and Liquids. The Gas Pipeline segment owns and operates approximately 13,900 miles of pipelines with annual throughput of approximately 2,700 trillion British thermal units of natural gas and delivery capacity of approximately 13 million dekatherms of gas. This segment also owns interests in joint venture interstate and intrastate natural gas pipeline systems. The Midstream Gas and Liquids segment includes natural gas gathering, processing, and treating facilities; and crude oil gathering and transportation facilities that serve the producing basins in Colorado, New Mexico, Wyoming, the Gulf of Mexico, and Pennsylvania. Williams Partners GP LLC serves as the general partner of the company. Williams Partners L.P . was founded in 2005 and is based in Tulsa, Oklahoma.

Advisors' Opinion:
  • [By Louis Navellier]

    Williams Partners (NYSE:WPZ) is an integrated natural gas company that is involved with exploration and production, midstream gathering and processing and interstate natural gas transportation. In the last nine-and-a-half months, WPZ stock has gained 18% since January 2011.

Hot Wireless Telecom Companies To Invest In 2014: Tempur-pedic International Inc (TPX)

Tempur-Pedic International Inc. manufactures, markets, and distributes bedding products in North America and internationally. Its products include pillows, mattresses, and adjustable beds, as well as various cushions and other comfort products. The company sells its mattresses and pillows under the TEMPUR and Tempur-Pedic brand names through furniture and bedding, specialty, and department stores; direct response, Internet, and own stores; chiropractors, medical retailers, hospitals, and other healthcare markets; and third party distributors. Tempur-Pedic International Inc. was founded in 1989 and is based in Lexington, Kentucky.

PulteGroup to Move Corporate HQ

Don't Count out the Utica Shale Just yet

Why Scientific Games' Investors Won the Lottery

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

What: Shares of Scientific Games (NASDAQ: SGMS  ) jumped 10% in late trading today after signing an important customer.

So what: The company announced that it has signed a contract extension to provide lottery gaming and instant ticket services for the Oklahoma Lottery. This was actually disclosed earlier this year, but investors bid up shares leading up to the announcement and nearly five times the three-month average volume of shares traded hands today.  

Now what: This is definitely not a game changer for Scientific Games, and I'd still be worried about the company's continued losses and vast underperformance of expectations. Revenue and income from operations were both down in the first quarter of 2013, and this contract won't add to either going forward. I just don't see a reason to buy the stock today and won't consider buying until the company can prove it can make a long-term profit while growing revenue.

Interested in more info on Scientific Games? Add it to your watchlist by clicking here.

Thursday, May 30, 2013

Sprint's Secret Transformation Isn't Enough to Buy

Wireless industry investors are likely transfixed by Sprint Nextel's (NYSE: S  ) current limbo regarding acquisitions and suitors. Beyond overt headlines, Sprint has a covert secret that makes its business more interesting for the long term -- and even transformative for the wireless industry at large. Given this factor, I wish I could put Sprint on the watchlist for the real-money Prosocial Portfolio I'm managing for Fool.com.

However, I am paying attention to this stock, but I just can't buy. Here's why.

Headline drama
Who will acquire Sprint has been making major headlines this week. Japan's SoftBank made a $20.1 billion offer for the wireless company, but DISH Network (NASDAQ: DISH  ) made an unsolicited $25.5 billion offer.

DISH has criticized the SoftBank deal, floating the argument that if the Japanese company buys Sprint, it could open the U.S. up to security issues, such as Chinese cyberattacks.

Regardless, this week a U.S. security committee cleared the SoftBank deal despite the hysteria. Meanwhile, Clearwire (NASDAQ: CLWR  ) , a provider of 4G services, has postponed its shareholder vote regarding Sprint's overture to buy its remaining stake for $3.40 per share, citing DISH Networks' bid to buy it for $4.40 per share.

This situation is messy as it is.

Mobile power
I wish it wasn't so. Sprint CEO Dan Hesse has impressed me with his forward-thinking views on the transformative powers of the wireless industry as well as green initiatives already in action.

At the beginning of May, Ceres' annual sustainability conference in San Francisco brought together representatives from investment firms, major corporations, and various non-governmental organizations. The goal was to discuss the opportunities and threats related to climate change.

Hesse was one of the speakers, and he pointed out that the wireless industry is driving us to an interesting future, which we may not always recognize while we post on Facebook, share our photos, play Words with Friends, or text our buddies. It's already changing the way people use health care, education, and banking, for example. Some of the new technologies enable positive social impacts as well as environmental ones.

He pointed out that messaging can warn the Red Cross about disease impacts or natural disasters, and when Haiti's tragic earthquake occurred, mobile users could easily text disaster relief donations. Mobile applications can help us use our own resources more efficiently, too. Take GPS systems that allow people to circumvent traffic and waste less fuel. Wireless applications could also allow for quick rescheduling of traffic lights given traffic loads, further easing congestion.

Even beyond far-reaching impacts from wireless technology overall, Sprint has plenty of initiatives that have been ahead of the curve. It's saved 700 tons of paper through its eco-friendly, reusable envelope. It has come up with initiatives to reduce packaging size (and, therefore, save fuel and other transportation costs) and it utilizes environmentally friendly recycled materials and soy-based inks. Such initiatives not only reduce carbon footprints but they also reduce costs over the long run.

Hesse pointed out a sad fact from participating in 20 quarterly conference calls with investors as Sprint's CEO: He's never been asked about sustainability initiatives. He cemented what many of us knew already: Short-term traders focus on shareholder return and disregard stakeholder return.

That's a sad commentary on how little Wall Street analysts and investors think about sustainability, despite many clear signs that green initiatives save money, resources, and the environment.

Hesse stated the desire to reach out to socially responsible investors and change the dialogue with Wall Street. Right now, socially responsible investors are the ones who would most keenly understand the ramifications of what Hesse is trying to do, even while some investors remain oblivious.

A risky environment indeed
The Prosocial Portfolio I've been managing for Fool.com seeks to take ESG (environmental, social, and governance) factors into consideration. Given Hesse's interest in investors who cheer companies evolving into a greener future, I'd love to truly consider the stock for the portfolio.

Unfortunately, I can't get past the fact that Sprint faces many challenges on an ongoing basis.

It's not just the complexity of the dealings with SoftBank, DISH Networks, and Clearwire, although those are serious risks. For example, according to Sprint's most recent Form 10-K, Sprint could face steep fees if it backs out of its deal with SoftBank. Should the SoftBank deal go through, "NewSprint" will still be a publicly traded company, but investors will own just 30% and Softbank will own the remaining 70%.

Sprint has faced a brutal competitive landscape over the years, and it shows. The company's shareholder return over a five-year period has lagged the S&P 500. Although it's grown its revenues again as of its most recent fiscal year, it's been operating at annual losses for years. The company is also highly leveraged, and I try to avoid high levels of debt in the stocks I purchase, especially if the business faces challenges.

Greener pastures
Hesse's speech at the Ceres conference inspired me in many ways, and he's clearly a forward-thinking, intelligent individual who can see where the future is going for wireless and for the planet and how companies can reenvision how to do business better. Sprint's evolution into greener "pastures" is certainly smart thinking, and established companies that try to transform themselves get major brownie points in my investment book.

However, beyond social responsibility and positive business initiatives, I aim for positive returns for the Prosocial Portfolio, too. I wish I could believe that Sprint's green initiatives mitigated current risks, but I don't. Regardless, I hope more management teams will adopt Hesse's vision and more investors will recognize that these initiatives benefit profits, people, and planet.

With the European debt crisis and slowing growth in China, many investors are worried about heady growth going forward, but fear not because: The Future is Made in America. Domestic manufacturing is poised to once again become the investment driver of the world, and all because of one disruptive technology. You can uncover the three companies that will become the American Steel of tomorrow in The Motley Fool's new free report. Just click here to read more.

Good News for Ford and GM in Europe

Ford (NYSE: F  ) and General Motors (NYSE: GM  ) have had a terrible time in Europe recently. Each lost nearly $2 billion in the region last year, and both are expected to lose big again in 2013. Turnaround plans are under way, but continued declines in Europe's new-car sales have raised doubts about their chances of success.

But some good news for a change: Sales were up slightly last month, amid signs that the situation is stabilizing. In this video, Fool contributor John Rosevear looks at the state of the European new-car market -- and at why the latest developments bode well for the bottom lines at both Ford and GM.

Improving conditions in Europe are just one of several good reasons to think that the Blue Oval still has big growth opportunities ahead. We've outlined those opportunities in detail, in the Fool's premium Ford research service. If you're looking for some freshly updated guidance to Ford's prospects in coming years, you've come to the right place -- click here to get started now.

Philips Wins $88.5 Million Pentagon Medical Imaging Contract

The Department of Defense awarded Philips (NYSE: PHG  ) Healthcare Informatics an $88.5 million-ceiling value, firm-fixed-price contract for the supply of a digital imaging network-picture archive system. In so doing, it made progress on a project that's been in the works for 16 years.

In 1997, the DoD first issued requirements for what was then designated the "Digital Imaging Network-Picture Archiving and Communications System." At the time, DIN-PACS was described as "an open systems network of digital devices designed for the effective acquisition, transmission, display and management of diagnostic imaging studies." In essence, it would digitize X-Ray and MRI scans and put them in a form that could be easily transmitted from doctor-to-doctor electronically. DIN-PACS would be made interoperable with not just civilian hospitals in the U.S., but designed based on two truly international standards, Digital Imaging and Communications in Medicine (DICOM) and Health Level 7 (HL7).

Philips' work on the project is expected to be initially completed by June 2, 2015, however, this contract contains the possibility of a two-year option period, and an additional one-year option period, being tacked on after that date.

link

What Investors Must Watch at Enterprise Products Partners

5 Companies With Terrible Brand Loyalty

There are a lot of factors that go into determining whether a company does a good job at satisfying customers' expectations. It isn't enough nowadays to simply encourage consumers to buy or use a product; businesses have to keep customers coming back and do their best for consumers to see them favorably.

Thankfully, Brand Keys, a research firm that quantifies brand engagement and loyalty into its Brand Loyalty Engagement Index, has done the hard work for us. Over the past couple of weeks we've looked at some of the market's top performers in terms of brand loyalty and we've seen a lot of similarities, even across sectors. Many of the nation's top loyalty-generating business are using social media to get personal with their customers, are putting innovation at the forefront, and are keeping prices on many products reasonable.

Today I propose we look at the other end of the spectrum. But rather than approach this on a sector-by-sector basis as we did in the past, I've decided to lump together the five most notorious brand loyalty offenders under one roof. Let's have a look at what mistakes these five companies have made and see whether trends exist that could help us identify and preferably avoid troubled stocks in the future.

Bank of America (NYSE: BAC  )
It really should surprise no one that Bank of America tied with Citigroup for dead last in the banking category and placed last among credit card providers with consumers. Bank of America's gaffes included trying to initiate a monthly $5 debit card usage fee, which merely infuriated existing customers and sent them to other banks, as well as numerous instances of legal settlements where it may not have admitted wrongdoing, but the public is certainly viewing it in a bad light.

Dell (NASDAQ: DELL  )
Another instance where there's little surprise is in seeing Dell at the bottom of the list among printers and laptop computers. Dell has struggled -- as have many PC makers -- with the evolution of smartphones and tablets, which have practically eliminated the need for desktop computers and certainly taken a bite out of laptop sales. Jumping aboard the innovation bus later than its peers, Dell's PC and accessories have struggled with the younger generations who are hung up on Apple and Samsung's more eye-appeasing styles and colors.

J.C. Penney (NYSE: JCP  )
Not to say that retailer J.C. Penney was ever a hero among cost-conscious shoppers, but I'm not sure I've ever seen a company go from hero to zero in such a short timeframe. Former CEO Ron Johnson tried to do the unthinkable in the retail world and dictate consumer habits rather than let the customer determine Penney's approach. Penney's attempts to wean its customers off sales and institute the store-within-a-store concept failed miserably, with same-store sales falling a whopping 31.7% during the all-important Christmas quarter.

American Eagle Outfitters (NYSE: AEO  )
I admit that American Eagle was a surprise bottom-dweller among retail apparel stores. Less than a decade ago, its styles were considered cool, and even though I don't shop in American Eagle, its stores usually appear busy, and it offers a niche competitor to Aeropostale on the low end and Abercrombie & Fitch on the high end. However, American Eagle also has lagged its peers in terms of its direct-to-consumer presence and has had inventory hiccups that sometimes necessitate big discounts to move undesirable merchandise.

BlackBerry (NASDAQ: BBRY  )
No list of worst brand loyalty would be complete without BlackBerry, which fumbled its way out of the top spot in smartphone market share with its lackadaisical innovation. The ongoing delays in bringing its new Q10 and Z10 smartphones to market have been almost comical. With Apple introducing a new iPhone once a year and Android devices dominating globally, BlackBerry missed the boat with consumers when it took two years to roll out its new phones. Not surprisingly, adoption of its new smartphones has been so-so at best.

What's the takeaway?
Now that we've had a better look at five of the worst culprits for brand loyalty according to Brand Keys, let's examine some of the takeaways that'll help us identify potentially dangerous investments.

I believe the first point worth mentioning is that innovation is everything. BlackBerry failed to move quickly enough with a new smartphone, taking two years to develop its new operating system, and competitors left it in the dust. Dell, as well, didn't anticipate just how important weight and style were to consumers with regard to its laptops and has seen sales dip as Apple and Samsung products run circles around its own.

Secondly, having the right innovative idea is paramount to success. Some of these companies certainly tried to innovate, but they either chose a sensitive subject or ran with a bad idea for way too long. Bank of America, for instance, should have known that it was barking up the wrong tree when it tried to implement a debit card usage fee. J.C. Penney, on the other hand, should have figured out long before a year passed that its new sale-less strategy wasn't working. Trying new things is great, but understanding whether they're a touchy subject with consumers or if they're just not working quickly is even better!

Public image is also important. American Eagle Outfitters rarely finds itself as a regular at the bottom of this list, so it has a good shot at repairing its product offerings and improving its online experience and pricing for consumers. On the other hand, Bank of America is what you might call a regular among America's most-hated companies, so it could be difficult to change that public perception -- especially since few people really "like" their bank anyway. Investors like to buy what they know and put their money behind products they trust, which makes companies like Bank of America a tough sell.

Can this hated bank head even higher?
Bank of America's stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it's critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool's premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, financials bureau chief, lift the veil on the bank's operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.

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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.

Wednesday, May 29, 2013

NVIDIA's GRID Grows Larger

In a press release last week, NVIDIA  (NASDAQ: NVDA  ) announced the latest expansion of its cloud-based graphics services with the integration of its GRID virtual GPU into Citrix's  (NASDAQ: CTXS  ) XenDesktop 7.

So what, exactly, does this mean?

For those of you who are unfamiliar, Citrix provides intuitive cloud and networking technologies, including popular solutions such as GoToMeeting and CloudPortal, and virtualization solutions including XenApp, XenDesktop, and XenServer.

XenDesktop, for its part, gives IT departments an intuitive, secure way to provide central access to Windows apps and desktops as a mobile "on-demand service for any user, anywhere, and on any device."

The problem
However, for anyone who has ever tried to run a remote desktop session using any given virtualization client, you're probably aware that remote graphics are typically less than satisfactory.

After all, given the large amount of data required to stream display information across a simple network connection, users have simply grown accustomed to dealing with jumpy, unresponsive screens while using virtual desktops over the years. As NVIDIA puts it, "the user experience until now had been constrained by the subpar performance and limited compatibility of software-emulated graphics."

NVIDIA's solution
That's exactly where the bright minds at NVIDIA come into play. Through their GRID vGPU, multiple XenDesktop users can now "directly access the graphics processing power of a single GPU."

But seeing is believing, right? So take a look, then, at the performance increase realized through NVIDIA's GRID vGPU for designers using SolidWorks 3D CAD software through XenDesktop:

To be sure, the difference couldn't be more apparent, and it's hard to imagine a scenario in cases like this where the productivity increases alone wouldn't quickly pay for the added cost of using GRID vGPUs.

Larger by the day
But don't lose sight of the bigger picture, either; this news is yet another step toward NVIDIA's longer-term goal of making GRID an ever-present part of our everyday lives.

As I noted in March, NVIDIA's new rack-mountable Visual Computing Appliance should go a long way toward winning the hearts of IT departments in the substantial small and medium business segment. Better yet, NVIDIA also has huge cloud-based plans to use GRID to permeate the $68 billion gaming market, starting with the Project Shield mobile gaming device. 

In the end, given the world's increasing reliance on virtualized software along with our simultaneous insistence on decent graphics, it's a safe bet solutions like these are just the tip of the iceberg for NVIDIA.

Personally, this stands as yet another of many reasons I plan on holding my shares of NVIDIA for a very, very long time.

NVIDIA was ahead of the curve launching its mobile Tegra processor, but investing gains haven't followed as expected, with the company struggling to gain momentum in the smartphone market. The Motley Fool's brand-new premium report examines NVIDIA's stumbling blocks, but also homes in on opportunities that many investors are overlooking. We'll help you sort fact from fiction to determine whether NVIDIA is a buy at today's prices. Simply click here now to unlock your copy of this comprehensive report.

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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 Diversified Bank Companies For 2014

The famed hedge fund manager George Soros, known for breaking the British pound in 1992, shocked the world on Friday by announcing a 7.91% stake in J.C. Penney (NYSE: JCP  ) . The news sent shares of the ailing retailer sharply higher, making it the best-performing stock on the S&P 500 (SNPINDEX: ^GSPC  ) that day.

Besides throwing J.C. Penney a much-needed lifeline in the equity markets -- its shares are down nearly 50% over the past year alone -- the move reaffirms one of Soros' central tenets: "The worse a situation becomes, the less it takes to turn it around, and the bigger the upside."

The stake, valued at $295 million, makes J.C. Penney the third largest holding of Soros Fund Management, the privately owned hedge fund that's largely responsible for managing its founder's wealth. It also adds to an increasingly diverse portfolio of stocks. Among the fund's other large holdings are companies as disparate as AIG (NYSE: AIG  ) , Johnson & Johnson (NYSE: JNJ  ) , and Google (NASDAQ: GOOG  ) :

Top Diversified Bank Companies For 2014: ARIAD Pharmaceuticals Inc.(ARIA)

ARIAD Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the discovery, development, and commercialization of small-molecule drugs for the treatment of cancer. The company?s lead cancer product, ridaforolimus is being studied in multiple clinical trials in patients with various types of cancers, including metastatic sarcomas, breast cancer, endometrial cancer, prostate cancer, and non-small cell lung cancer. Its product pipeline also includes ponatinib, a pan BCR-ABL inhibitor in phase 2 clinical trial for applications in various hematological cancers and solid tumors; and AP26113, an anaplastic lymphoma kinase inhibitor in preclinical studies for the treatment of various cancers, including non-small cell lung cancer, lymphoma, and neuroblastoma. In addition, the company focuses on a drug discovery program centered on small-molecule therapies that are molecularly targeted to cell-signaling pathways implicated in cancer. Further, it licenses its ARGENT cell-sign aling regulation technologies to pharmaceutical and biotechnology companies to develop and commercialize therapeutic products, and to conduct drug discovery research. The company has collaboration and license agreements with Merck & Co., Inc. for the development, manufacture, and commercialization of ridaforolimus; and license agreements with Medinol Ltd. and ICON Medical Corp. to develop and commercialize stents and other medical devices to deliver ridaforolimus to prevent restenosis of injured vessels. ARIAD Pharmaceuticals, Inc. was founded in 1991 and is based in Cambridge, Massachusetts.

Advisors' Opinion:
  • [By Hilary Kramer]

    Ariad Pharmaceuticals (NASDAQ:ARIA) is developing novel cancer treatments, and it has three promising drugs in its pipeline: ridaforolimus (which I expect to get FDA approval shortly), ponatinib (recently reported good Stage I/II results), and AP-26113 (a compound with strong potential that just started clinical testing). The stock is up nearly 50% since the early October lows, and while concerns over the possibility that Ariad will raise money could be a short-term overhang on the stock, I look for share prices to continue to climb as the company’s drugs move through the approval process.

Top Diversified Bank Companies For 2014: Team Inc.(TISI)

Team, Inc. provides specialty maintenance and construction services for maintaining high temperature and high pressure piping systems and vessels that are utilized in heavy industries. It offers inspection and assessment services, such as inspection and evaluation of piping, piping components, and equipment; field heat treating services, including electric resistance and gas-fired combustion; leak repair services comprising on-stream repairs of leaks in pipes, valves, flanges, and other parts of piping systems and related equipment; and fugitive volatile organic chemical emission leak detection services consisting of identification, monitoring, data management, and reporting. The company also provides hot tapping services, such as hot tapping, Line-stop, and Freeze-stop services; field machining services, including the use of portable machining equipment to repair or modify machinery, equipment, vessels, and piping systems, as well as flange facing, pipe cutting, line bori ng, journal turning, drilling, and milling services; and technical bolting services comprising the use of hydraulic or pneumatic equipment with bolt tightening techniques for leak-free connections, plant maintenance, and expansion projects, as well as bolt disassembly and hot bolting services. In addition, it offers field valve repair services consisting of on-site repairs to manual and control valves, and pressure and safety relief valves, as well as specialty valve actuator diagnostics and repair. The company markets its services to companies in a various heavy industries, which include the petrochemical, refining, power, pipeline, steel, pulp and paper, and shipbuilding industries, as well as to municipalities, original equipment manufacturers, distributors, and engineering and construction firms. It operates in the United States, Canada, Europe, and internationally. The company was founded in 1973 and is headquartered in Alvin, Texas.

Top 5 Dow Dividend Stocks To Watch For 2014: Clean Energy Fuels Corp.(CLNE)

Clean Energy Fuels Corp., together with its subsidiaries, provides natural gas as an alternative fuel for vehicle fleets in the United States and Canada. The company designs, builds, operates, and maintains fueling stations, as well as supplies compressed natural gas (CNG) and liquefied natural gas (LNG) fuel for medium and heavy-duty vehicles. Its CNG is used in automobiles, light to medium-duty vehicles, refuse trucks, and transit buses as an alternative to gasoline and diesel. The company also sells non-lubricated natural gas compressors and related equipment used in CNG and LNG stations; and produces renewable natural gas, which is used as vehicle fuel or sold for power generation. In addition, it offers vehicle finance services for the purchase of natural gas vehicles, as well as for the conversion of gasoline or diesel powered vehicles to operate on natural gas. Further, the company provides natural gas conversions, alternative fuel systems, application engineering, service and warranty support, and research and development services for natural gas vehicles. As of December 31, 2011, it served approximately 530 fleet customers with approximately 25,000 natural gas vehicles; and owned, operated, or supplied 273 natural gas fueling stations in 23 states within the United States, and British Columbia and Ontario within Canada, as well as in Peru. Clean Energy Fuels Corp. was incorporated in 2001 and is headquartered in Seal Beach, California.

Top Diversified Bank Companies For 2014: American Caresource Holdings Inc(ANCI)

American CareSource Holdings, Inc. operates as an ancillary services company that offers access to a national network of ancillary healthcare service providers in the United States. Its ancillary healthcare services include an array of services that supplement or support the care provided by hospitals and physicians, including the non-hospital, non-physician services associated with surgery centers, diagnostic imaging centers, home health and infusion, supply of durable medical equipment, orthotics and prosthetics, laboratory, and other services. The company also provides payor customers with claims management, reporting, and processing and payment services; and performs network/needs analysis to assess the benefits to payors of adding additional/different service providers to the payor-specific provider networks. American CareSource Holdings, Inc. sells its services to various healthcare companies, including preferred provider organizations, third party administrators, in surance companies, self-funded organizations, and employee groups. The company offers its services directly, as well as through strategic partnerships with market partners, independent brokers, and consultants. It has agreements with approximately 5,000 ancillary healthcare service providers operating in approximately 36,000 sites. The company was founded in 1995 and is based in Dallas, Texas.

Top Diversified Bank Companies For 2014: Klondex Mines Com Npv (KDX.TO)

Klondex Mines Ltd., together with its subsidiary, Klondex Gold and Silver Mining Co., engages in evaluating, acquiring, owning, exploiting, exploring, and developing mineral properties in Nevada. The company focuses on exploring and developing gold and silver properties. Its principal property is the 100% owned Fire Creek Property totaling 1,235.39 acres of owned/leased fee lands located in north central Nevada. The company was formerly known as Attila Resources Limited and changed its name to Klondex Mines Ltd. in October 1974. Klondex Mines Ltd. was founded in 1971 and is headquartered in Vancouver, Canada.

Top Diversified Bank Companies For 2014: PV CRYSTALOX SOLAR PLC ORD GBP0.02 WI(PVCS.L)

PV Crystalox Solar PLC, together with its subsidiaries, engages in the production and supply of multicrystalline silicon wafers to the photovoltaic market in Asia, Europe, and the United States. It offers silicon ingots and wafers for use in solar electricity generation systems. The company was founded in 1982 and is headquartered in Abingdon, the United Kingdom.

Dow Sapped of Energy, Loses Record Highs

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) opened 10 points lower than its record-high close yesterday. Though yesterday's gains were boosted by positive economic data, investors seem to be pulling back due to continued uncertainty revolving around the Fed's plan for its stimulus policy. As of this writing, the Dow is down 172 points and headed lower.

Economic data releases are limited today, with only the MBA mortgage purchase application survey coming out this morning. The newest data shows an 8.8% decrease in application activity, driven by a 12% decrease in refinancing applications. Since refinancing activity accounts for 71% of the overall applications, this data is not necessarily a bad sign for the housing market. Purchase applications for new mortgages increased 3% versus the previous week, and with the recent home price data showing a rise in prices due to higher demand, mortgage applications may begin commanding a bigger share of the applications activity.

Inside the Dow
The two telecom titans, AT&T (NYSE: T  ) and Verizon (NYSE: VZ  ) , are trailing this morning as rumors have emerged that a new era of mobile communications from Google is coming soon. With Google Fiber potentially turning the industry on its head, the current leaders are taking a hit, with AT&T down 1.72% and Verizon losing 3.11%. But this is a story that we've heard before. Google has yet to bring a product to market that would send both AT&T and Verizon packing, so the two providers have nothing to worry about -- yet. Right now, the speculation may be taking its toll on the telecom leaders, but until Google puts its wares on the market it will remain just speculation.

Though the mortgage data would not be favorable to banks, both Bank of America (NYSE: BAC  ) and JPMorgan (NYSE: JPM  ) are up this morning. B of A is leading the charge with a 1.04% gain, while JPMorgan is experiencing a more modest rise of 0.1%. Both banks are reaping the rewards of a long-awaited event -- Moody's newly upgraded rating of the banking system. The change to "stable" from "negative" took five years, and the banks have worked hard to get it. With record earnings, improved capital reserves, and cleaner balance sheets, the banks have given Moody's plenty of evidence that the banking sector will continue to grow. Moody's outlook for the banks includes improved creditworthiness over the next 12 to 18 months, with fewer downside risks for the financial institutions.

Bank of America's rise this morning also comes before a big hearing date later in the week. Though it seems that the looming date isn't bothering investors quite yet, we could see a big swing in momentum for the bank if things don't go its way. At stake is the $8.5 billion settlement between the bank and 22 institutional investors over 530 mortgage trusts sold by the acquired Countrywide. Currently there seems to be a question up in the air that could change everything and leave B of A with a big bill to pay.

Many investors are scared about investing in big banking stocks after the crash, but the sector has one notable stand out. In a sea of mismanaged and dangerous peers, it stands out as The Only Big Bank Built To Last. You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.

Accenture Buying Acquity Group for $316 Million

Accenture (NYSE: ACN  ) is angling to become a bigger player in eCommerce -- vicariously.

While not venturing into selling widgets (or virtual widgets) over the Internet itself, the international IT consulting firm bolstered its ability to help other companies practice eCommerce Friday, when it announced a deal to buy Hong Kong-based Acquity Group (NYSEMKT: AQ  ) for approximately $316 million.

Acquity Group specializes in advising companies on strategy, digital marketing, and technical services in order to improve both their brands eCommerce businesses. Accenture intends to merge the new subsidiary into its existing Accenture Interactive business.

The purchase price of $13 per American Depositary Share of the company, amounts to a huge premium over the $5.96 share price at which Acquity closed on Friday -- and sparked an immediate rally in the shares after markets closed, but before the weekend intervened. In all, after-hours trading saw Acquity shares shoot up 110% to as high as $12.55 per ADS.

The proposed buyout price values Acquity shares at 2.2 times its $141 million in sales from last year, a premium to the 1.8-times-sales valuation of Accenture's own shares. However, after putting up 32% year-over-year sales growth in 2012, Acquity appears to be growing nearly three times as fast as the company that's acquiring it. Regardless, after announcing the deal late Friday, Accenture shares shed some of the gains they had made earlier in the day, and fell 0.4% after hours to about $81.93.

Tuesday, May 28, 2013

Do the Billions Spent Make Miners Cheap or Dangerous?

Friday's trading session saw a halt in trading of two major precious-metals companies on news that the Chilean government was shutting down operations at the Pascua Lama mine. Barrick Gold (NYSE: ABX  ) , which operates the mine, was halted first, with joint-venture partner Silver Wheaton (NYSE: SLW  ) halted a few minutes later. The mine, which Barrick has already spent more than $5 billion developing, represents one of the largest resources for gold and silver in the world.

The bigger question that Friday's events raise is whether precious-metals companies are becoming cheap or dangerous at current levels. Barrick is down about 40% this year, and while others such as Goldcorp (NYSE: GG  ) and Newmont Mining (NYSE: NEM  ) are down less, they have still slid by roughly 20% each. Gold as a commodity is down more than 17% this year, as represented by the SPDR Gold Trust (NYSEMKT: GLD  ) . In addition, global macroeconomic events are aligning to make the future direction of precious metals very uncertain, at the very least increasing the volatility and risk associated with these types of investments.

What happened in Chile
The reason given for the stoppage at the Pascua Lama mine was the water handling being employed at that location. Barrick had agreed to meet certain standards that local authorities now claim have not been met. Pascua Lama is an open-pit mining operation that uses large quantities of water; if this water is contaminated and allowed to run off, it can contaminate the local water table. According to the Chilean press, Barrick will be fined 8 billion Chilean pesos, or $16.4 million, for the violations.

The news represents a significant blow to Barrick and its JV partner Silver Wheaton. Barrick has poured money into the mine, which already has 18 million ounces of proven and probable gold reserves and 676 million ounces of silver. These levels make the location one of the largest sources of gold and silver anywhere. Both Barrick and Silver Wheaton closed near the day's lows after they resumed trading.

The bigger picture
At their most recent earnings announcements, Goldcorp and Newmont both reported disappointing results. These companies have come under similar pressures to the ones Barrick faces. Goldcorp reiterated its full-year earnings view, but with recent developments from the Federal Reserve, the long-term prospects look mixed. Earlier in the week, minutes from the Federal Open Market Committee meeting suggest that a growing number of officials at the Fed favor slowing or ending quantitative easing; this news is generally considered bearish for precious metals, including GLD.

On the other side of the argument is the that there is convincing evidence that the current run in the stock market is driven by the current Fed policy. If the policy reverses, it may create a vacuum that drives stocks sharply lower. A significant fall in stocks will probably improve the picture for both gold and silver, making the current sell-off a potential buying opportunity.

With all of these swirling forces, the one probability is that volatility will increase. Increased volatility means increased risk, but the increased risk can be mitigated by taking a smaller position. Being aware of the forces at work is critical. Overall, maintaining an allocation to gold and silver is prudent, but allowing for the risks at play is paramount.

As a way to stay allocated in the space, if you're looking for a company whose success is determined by the metals market, but without involving itself in the risks of physically mining the metals, then Silver Wheaton provides a unique play on the future of silver. SLW chooses to finance the mining of silver; it has grown sales and net income every year since 2008, and also has increased competitive advantages over its limited peer group. To learn more about Silver Wheaton, click here now to access The Motley Fool's premium research report on the company.

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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.

Here's What This 1,335% Gainer Has Been Buying and Selling

Every quarter, many money managers have to disclose what they've bought and sold, via "13F" filings. Their latest moves can shine a bright light on smart stock picks.

Today, let's look at Appaloosa Management, which was founded by investing giant David Tepper and known for investing in the debt of companies in distress. Tepper's investing history includes debt and stock in companies such as Enron and Worldcom. He made billions on bank stocks in 2009 after they had imploded and before they recovered. More recently, he invested in many housing-related companies.

Why should you look at Appaloosa Management's moves? Well, according to the folks at GuruFocus.com, Appaloosa gained a whopping 1,335% in the first decade of this century, compared with just 16% for the S&P 500.

The company's reportable stock portfolio totaled $4.7 billion in value as of March 31, 2013.

Interesting developments
So what does Appaloosa Management's latest quarterly 13F filing tell us? Here are a few interesting details:

The biggest new holdings are Comcast and Prudential Financial. Other new holdings of interest include Silver Bay Realty Trust (NYSE: SBY  ) , a hybrid mortgage REIT (real estate investment trust). Spun off by Two Harbors Investment, Silver Bay will focus on single-family homes, profiting from foreclosures. The company is worth watching, especially with a housing recovery under way, even though some question the recovery. In its last quarter, Silver Bay acquired 1,200 single-family properties, bringing its portfolio to 4,600. Its overall occupancy rate is 53%, but 92% among its stabilized properties.

Among holdings in which Appaloosa Management increased its stake was Fusion-io (NYSE: FIO  ) , an enterprise storage company focused on technologies such as flash memory and solid-state drives. The company posted strong earnings in its last quarter, and an upbeat outlook, sending its shares up by double digits – but then they plunged by double digits a few weeks later, when the CEO and CMO, both co-founders of the company, abruptly departed. Bulls like its purchase of NexGen Storage, but bears worry about competitors looming and don't like that much of its revenue has come from just a few key clients.

Appaloosa Management reduced its stake in companies such as Chimera Investment (NYSE: CIM  ) and Valero Energy (NYSE: VLO  ) . Mortgage REIT Chimera Investment recently yielded 10.9%, but it may become less attractive if Congress cancels favorable tax treatment for REITs. Chimera has taken on more risk than many of its brethren, and has had some trouble filing reports on time. Some still like its prospects, though, while others question its hefty management fees.

Valero Energy has roughly doubled over the past year, as refiners have been prospering recently. The company is poised to benefit  from the proposed (and controversial) Keystone XL Pipeline, and has been investing in railcars to help bring in crude from inland fields. Some worry about proposed legislation to reduce corn ethanol production, as Valero is a major producer of it, while others worry about a narrowing price gap between foreign and domestic crude.

Finally, Appaloosa Management's biggest closed positions included Oracle and the PowerShares QQQ ETF. Other closed positions of interest include Freeport-McMoRan Copper & Gold (NYSE: FCX  ) . The world's largest publicly traded copper producer, recently yielding 3.8%, has seen its stock slump in response to a tragic and deadly mine disaster in Indonesia. It had already been hurt by the price of copper falling and growth in China slowing as well as by labor strikes. The company has diversified its operations considerably by buying a pair of oil and gas producers.

We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing. 13-F forms can be great places to find intriguing candidates for our portfolios.

After putting together a blockbuster deal to expand into the oil and natural gas industry, Freeport-McMoRan will have plenty on its plate as it tries to adapt to the new industry, as expanding into oil and gas carries plenty of inherent volatility. FCX had a profitable copper business, and on top of this foray into a new industry, it still has to contend with mining industry bellwether BHP Billiton. To help investors determine if Freeport-McMoRan is a buy or a sell, The Motley Fool has compiled a premium research report on the company. Simply click here now to access your copy today.

Group Urges Judge to Reject Fee-Fixing Settlement

NEW YORK (AP) -- The National Retail Federation on Tuesday urged a federal judge to reject a proposed $7.2 billion settlement with Visa (NYSE: V  ) and MasterCard (NYSE: MA  ) over alleged fee-fixing.

Retailers had until Tuesday to opt out of the agreement, if they wished to pursue future legal action. Retailers who didn't opt out by the deadline were automatically be considered to have accepted the settlement.

Last week, Macy's (NYSE: M  ) , Target (NYSE: TGT  ) , and other major retailers rejected the settlement and filed their own lawsuit.

In its brief filed in U.S. District Court in Brooklyn, N.Y., the National Retail Federation called the settlement a "surrender" that doesn't address price fixing by the credit card processing companies and their banks.

Visa, MasterCard, and other card companies agreed in July to settle a lawsuit brought by retailers in 2005 that claimed card issuers conspired to fix the fees they charge stores for accepting credit cards.

The National Retail Federation, representing more than 9,000 retailers across the country, has rejected the settlement, in part, because it includes a provision barring retailers from filing future lawsuits over swipe fees. Retailers have also argued that the settlement was far less than what retailers deserved and might have won at trial.

Visa and MasterCard have called the settlement a fair compromise and said that they're confident that it will ultimately be approved by the court.

The 2005 suit was brought by 19 trade associations and retail companies. The National Retail Federation is not a party to the lawsuit, but says its members would be affected by the terms of the settlement.

Energy Efficiency Is About to Take Center Stage

When it comes to energy efficiency, there is a lot that we as individuals can do: purchase those fancy light bulbs, switch to high efficiency appliances, ride our bikes more... By making simple changes we can reduce the strain our behavior puts on our wallets, and the environment.

On a bigger scale, however, there are ways to cut our energy use that can save billions of dollars. In this video, Fool.com contributor Aimee Duffy talks about the coming emphasis on energy efficiency in Washington, and how our portfolios can benefit.

Ford's turnaround has helped put efficiency front and center, and there's good reason to think that the Blue Oval still has big growth opportunities ahead. We've outlined those opportunities in detail, in the Fool's premium Ford research service. If you're looking for some freshly updated guidance to Ford's prospects in coming years, you've come to the right place -- click here to get started now.

Top Internet Companies To Watch In Right Now

Publishers such as Pandora (NYSE: P  ) , Twitter, and Facebook (NASDAQ: FB  ) , are quickly gaining market share in mobile display ads. Is Google (NASDAQ: GOOG  ) threatened? Fool contributor Daniel Sparks tells Fool.com's Erin Miller in the following video that the development shouldn't negatively affect Google's stock. After explaining why, he tells investors how they should think of this trend and what they should keep an eye on.

As one of the most dominant Internet companies ever, Google has made a habit of driving strong returns for its shareholders. However, like many other Web companies, it's also struggling to adapt to an increasingly mobile world. Despite gaining an enviable lead with its Android operating system, the market isn't sold. That's why it's more important than ever to understand each piece of Google's sprawling empire. In The Motley Fool's new premium research report on Google, we break down the risks and potential rewards for Google investors. Simply click here now to unlock your copy of this invaluable resource.

Top Internet Companies To Watch In Right Now: Amazon.com Inc.(AMZN)

Amazon.com, Inc. operates as an online retailer in North America and internationally. It operates retail Web sites, including amazon.com and amazon.ca. The company serves consumers through its retail Web sites and focuses on selection, price, and convenience. It also offers programs that enable sellers to sell their products on its Web sites, and their own branded Web sites. In addition, the company serves developer customers through Amazon Web Services, which provides access to technology infrastructure that developers can use to enable virtually various type of business. Further, it manufactures and sells the Kindle e-reader. Additionally, the company provides fulfillment; miscellaneous marketing and promotional agreements, such as online advertising; and co-branded credit cards. Amazon.com, Inc. was founded in 1994 and is headquartered in Seattle, Washington.

Advisors' Opinion:
  • [By Jeanine Poggi]

    Amazon's (AMZN_) sales and margins are in focus, as both measures fell short of expectations in the fourth quarter, triggering a massive sell-off in the stock.


    This marked the third consecutive quarter that Amazon's results were not on par with its tradition of outperformance.

    While some brokerage firms downgraded the stock on the news, for the most part, analysts sentiment remains bullish, urging investors to pick up shares on the downturn.

    During the quarter the e-commerce giant earned $416 million, or 91 cents a share, on revenue of $12.95 billion. Analysts were looking for a profit of 88 cents on revenue of $13.01 billion.

    Margins came in at 3.7%, below Wall Street's forecast of 4.2%, as Amazon amped up its investment in its infrastructure.

Top Internet Companies To Watch In Right Now: eBay Inc.(EBAY)

eBay Inc. provides online platforms, services, and tools to help individuals and merchants in online and mobile commerce and payments in the United States and internationally. Its Marketplaces segment operates ecommerce platform eBay.com; vertical shopping sites, such as StubHub, Fashion, Motors, and Half.com; and classifieds Websites, including Den Bl�Avis, BilBasen, Gumtree, Kijiji, LoQUo, Marktplaats.nl, mobile.de, Alamaula, Rent.com, eBay Anuncios, eBay Kleinanzeigen, and eBay Annunci, as well as provides advertising services. The company?s Payments segment offers payment and settlement services for consumers and merchants on and off eBay Websites and other merchant Websites. This segment operates PayPal, which enables individuals and businesses to send and receive payments online and through mobile devices; Bill Me Later that enables the United States merchants to offer, the United States consumers to obtain, credit at the point of sale for ecommerce and mobile tra nsactions; Zong, which allows users with mobile phones to purchase digital goods and have the transactions charged to their phone bill; and BillSAFE that enables customers pay for purchases upon receipt of an invoice. Its GSI segment offers an ecommerce services suite for enterprise clients that operate in general merchandise categories, including apparel, sporting goods, toys and baby, health and beauty, and home; and marketing services comprising full-service digital agency, enterprise email marketing, mobile advertising, affiliate marketing, advertisement retargeting, and in-depth analytics services. The company also offers X.commerce platform that provides software developers access to the company?s applications programming interfaces to develop functionality for various merchants; and Magento Connect, which allows developers to market and sell add-on functionality and solutions to merchants that use a Magento storefront. eBay Inc. was founded in 1995 and is headquarter ed in San Jose, California.

Advisors' Opinion:
  • [By Ryan Peckyno]

    The next stock that article highlighted was eBay – a stock that was up some 60% at the end of 2012.  According to J.P. Morgan’s Anmuth, growth in eBay’s core business “could accelerate over the next couple quarters as eBay continues to benefit from strong user growth, increased inventory from large retailers, mobile, and improved site design.”  Ok, I’ll buy that.  But again I have the same issue: his target price is only 5% above the stock’s current price.  Sure, I love eBay’s business model and long term growth potential, but price matters and at over $50 a share eBay doesn’t look all that attractive, particularly given that earnings are down.

  • [By Sy_Harding]

    eBay Inc. (NASDAQ: EBAY) is starting out 2013 very close to its 52-week high. The company continues to dominate online auctions hands down, but the real value is in the PayPal and transactions unit. Investors have a hard time judging eBay now due to a perception that every person who will auction things already has signed up. Prior changes in customer and merchant service fees have also not been popular. Still, with the stock close to a 52-week high and not far from an all-time high, it is hard to say much bad about the company at all.

    eBay trades at $53.50, its 52-week trading range is $29.89 to $53.70 and its market cap is $69 billion. Our area of concern is that eBay’s consensus price target of $56.03 leaves an implied upside of less than 5%. eBay trades at about 19.5-times expected 2013 earnings.

  • [By Jeanine Poggi]

    eBay's biggest story continues to be its PayPal business.

    The payments business pushed eBay's fourth-quarter earnings ahead of expectations. During the quarter the e-commerce company earned $559 million, or 42 cents a share, compared with $1.36 billion, or 1.02 a share in the year-ago period. Excluding costs related to the sale of its Skype business, eBay actually earned 52 cents a share. Revenue climbed 5% to $2.5 billion. Analysts were calling for a profit of 47 cents a share on revenue of $2.48 billion.

    This marks the 18th consecutive quarter eBay surpassed EPS estimates.

Best Consumer Service Companies To Watch In Right Now: Symantec Corporation(SYMC)

Symantec Corporation provides security, storage, and systems management solutions internationally. The company?s Consumer segment delivers Internet security, PC tune-up, and online backup solutions and services to individual users and home offices. Its Security and Compliance segment provides solutions for endpoint security and management, compliance, messaging management, data loss prevention, encryption, and authentication services to large, medium, and small-sized businesses, as well as offers solutions through its software-as-a-service (SaaS) security offerings. This segment?s products enable customers to secure, provision, and remotely manage their laptops, PCs, mobile devices, and servers. The company?s Storage and Server Management segment provides storage and server management, backup, archiving, and data protection solutions across heterogeneous storage and server platforms, as well as solutions delivered through its SaaS offerings to large, medium, and small-s ized businesses. Symantec?s Services segment offers implementation services and solutions, including consulting, business critical services, education, and managed security services. The company also provides various enterprise support offerings, such as annual maintenance support contracts, including content, upgrades, and technical support. It sells its products through its eCommerce platform, as well as through distributors, direct marketers, Internet-based resellers, system builders, ISPs, and retail locations worldwide. Symantec markets and sells its products through distributors, retailers, direct marketers, Internet-based resellers, original equipment manufacturers, system builders, and Internet service providers; and its e-commerce channels, as well as direct sales force, value-added and large account resellers, and system integrators. The company was founded in 1982 and is headquartered in Mountain View, California.

Advisors' Opinion:
  • [By Jonas Elmerraji]

     Symantec (SYMC) is having a better year in 2012. Shares of the $13 billion computer security firm have rallied around 18% year-to-date, besting the broad market's performance by a slight margin. Much of Symantec's performance came in the late Summer, when the stock gapped up and started moving higher extremely quickly.

    But that straight-up trajectory wasn't sustainable, so shares have spent the last couple of months consolidating sideways in a price channel. Sideways consolidation isn't a bad thing -- it just means that investors are trying to catch their breath after a big volatile run. With resistance coming in at $19.25, buyers have a pretty well defined signal that the rest is over for SYMC and another rally leg is beginning. I wouldn't recommend buying until then.

    Remember, these setups all come down to supply and demand from buyers and sellers. After the huge push higher at the end of the summer, sellers started coming in at $19.25 -- it was a price where sellers were more eager to sell and take gains than buyers were to keep buying. That's why the breakout above $19.25 is a buy signal; a breakout indicates that buyers have gained enough strength to absorb all of the excess supply above $19.25.

    Without that upside barrier, this stock should be able to keep running higher…

Top Internet Companies To Watch In Right Now: Internap Network Services Corporation(INAP)

Internap Network Services Corporation provides information technology (IT) infrastructure services. The company operates through two segments, Data Center Services and IP Services. The Data Center Services segment provides colocation services, which include physical space for hosting customers? IT infrastructure network and other equipment, as well as offers associated services, such as redundant power and network connectivity, environmental controls, and security. This segment also offers managed hosting services that enable its customers to own and manage the software applications and content, as well as provides and maintains the hardware, operating system, collocation, and bandwidth. The IP services segment provides patented performance Internet protocol (IP) service; XIP acceleration-as-a-service solution; and flow control platform, a premise-based intelligent routing hardware product for customers, who run their own multiple network architectures, known as multi-homi ng. In addition, this segment offers content delivery network services that enable its customers to stream and distribute media and content, such as video, audio software, and applications to audiences through points of presence, as well as offers capacity-on-demand services to handle events and unanticipated traffic spikes. Internap Network Services Corporation provides its services and products through 76 IP service points, which include 20 CDN POPs and 1 standalone CDN POP, as well as through 37 data centers across North America, Europe, and the Asia-Pacific region. It serves the entertainment and media, financial services, business services, software, hosting and information technology infrastructure, and telecommunications industries. The company was founded in 1996 and is based in Atlanta, Georgia.

Advisors' Opinion:
  • [By Harding]

    Internap Network Services Corporation is an Internet solutions and data Center Company providing a suite of network optimization and delivery services and products that manage deliver and distribute applications. Its EPS forecast for the current year is 0.12 and next year is 0.21. According to consensus estimates, its topline is expected to grow 2.85% current year and 9.34% next year. It is trading at a forward P/E of 34.33. Out of eight analysts covering the company, three are positive and have buy recommendations and five have hold ratings.

Monday, May 27, 2013

1 Reason Varian Medical Systems May Be Headed for a Slowdown

All-Time High for Rightmove on Record Site Traffic

LONDON -- Rightmove  (LSE: RMV  ) , the U.K.'s most popular property website, saw its shares hit all-time highs on Wednesday following a buoyant interim management statement.

The UK's sixth most popular website said April 2013 was its busiest month ever -- it clocked up a staggering 1.25 billion page views as eager house-hunters trawled its pages in search of properties to buy and rent.

Over the four months from January to April, overall site traffic was up 20% from a year earlier.

The site's popularity has increased demand from estate agents and new home sellers to get their homes listed. While the number of home floggers on the site rose modestly to 18,526, Rightmove was able to increase its fees and 80% of listers are buying more than one product from the company.

On the back of these early results -- and assuming no major downturn in the U.K. housing market -- management is confident it will meet expectations for the year. Analyst expectations are for Rightmove's earnings to grow 11% this year and the forward earnings multiple nearly 27.

If, despite the company's strong start to the year, Rightmove is too rich for your tastes, you might be interested in other opportunities. This exclusive wealth report reviews five particularly attractive possibilities.

Just click here for the report -- it's free.

3 Things to Love About Rio Tinto

LONDON -- There are things to love and loathe about most companies. Today, I'm going to tell you about three things to love about Rio Tinto  (LSE: RIO  ) (NYSE: RIO  ) .

I'll also be asking whether these positive factors make this FTSE 100 mining group a good investment today.

Low P/E and high earnings growth
Rio Tinto has the lowest price-to-earnings (P/E) ratio of the Footsie's four megaminers. At a recent share price of 2,904 pence, analyst consensus forecasts put Rio on a P/E of eight for the current year, falling to just seven for 2014. The rating is markedly "cheaper" than peers Anglo American, BHP Billiton, and Glencore Xstrata.

Rio's P/E-to-earnings-growth (PEG) ratio is also attractive. A PEG of less than one is generally considered to be good value. With analysts forecasting double-digit earnings growth, Rio's PEG is 0.8 for the current year, falling to 0.6 for 2014.

Sector-leading income
In addition to RIO's P/E and PEG value characteristics, the stock also offers the highest dividend yield of the Footsie's big four hole-diggers. Analyst forecasts put the yield at 4% for 2013, rising to 4.5% for 2014. So, good dividend growth alongside good earnings growth, if the City experts have got it right.

The other thing I like about Rio when it comes to dividends is that the company publishes its dividend policy within the "Investors" section of its website. Many companies don't put their dividend policy on their website, leaving investors to search through the annual reports -- sometimes having to go back several years to find the definitive policy statement.

New boss
Rio's chief executive Tom Albanese departed abruptly in January after announcing $14 billion of writedowns, due to having paid over the odds to acquire aluminum group Alcan in 2007 and coal company Riversdale in 2011.

Albanese has been replaced by Sam Walsh, a Rio veteran of 20 years, who is well thought of within the mining industry. Walsh has told investors his focus will be on reducing costs and more disciplined investment. Sounds good to me.

A good investment?
Do you believe global demand for natural resources will increase over the next few decades? If so, it's hard not to think that Rio's current value characteristics stack up to make the stock an attractive investment for the long term.

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Ditch the Wall Street Jargon: What Happened at JPMorgan?

In the following video, Max Malcaluso interviews Fool banking analyst David Hanson regarding the "London Whale" incident at JPMorgan Chase (NYSE: JPM  ) .

David explains that the job of the London Whale, a former JPMorgan trader based in (NYSE: JPM  ) London,  was to safely invest excess capital and mitigate risk using strategies including asset hedging, if appropriate. He placed directional bets made to appear similar to a hedge, and the market started to move against him.

David discusses how senior management handled the situation when they were alerted to the magnitude of the trading loss, and he shares his view about the size of the trading loss as it relates to both JPMorgan's overall financial performance, and for investor confidence moving forward.

With big finance firms still trading at deep discounts to their historic norms, investors everywhere are wondering if this is the new normal, or if finance stocks are a screaming buy today. The answer depends on the company, so to help figure out whether JPMorgan is a buy today, check out The Motley Fool's premium research report on the company. Click here now for instant access!

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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.

1 Stock Feeling the Pain Today

In the following video, Motley Fool financial analysts David Hanson and Matt Koppenheffer discuss Morgan Stanley's (NYSE: MS  ) sell-off today due to the fund manager at Third Point liquidating its position in the company.

While this is never good news, David gives investors a longer-term picture of what Morgan Stanley looks like today, and he and Matt discuss how it stacks up against other investment banks, and whether they would like to be shareholders today.

During the financial crisis, Goldman Sachs did so well pivoting to avoid 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.

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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.

Sunday, May 26, 2013

Why Boston Beer Stumbled

In this video, Isaac Pino reviews Boston Beer's latest earnings and why they declined, including increased selling and advertising expenses, and the fleeting brand loyalty of the craft-beer business.

However, Boston Beer is rolling out canned beer, making its product more convenient and helping it compete with larger brewers. Isaac thinks Boston Beer is a classic buy and hold stock that and a dip may be a good time to get in.

Check out the video for more details.

Boston Beer's Samuel Adams brand helped to redefine beer and kick off the craft beer revolution in the United States. Success breeds competition, though, and while just a few years ago Boston Beer had claim over most of the craft beer shelf, today the field is crowded. Can Boston Beer rise above the rest, or will it be squeezed between small local breweries on one side and global beer giants on the other? To help you decide, we've compiled a premium research report filled with everything you need to know about Boston Beer's risks and opportunities. Just click here now to find out whether Boston Beer is a buy today.

Can Shoe Carnival Beat These Numbers?

Shoe Carnival (Nasdaq: SCVL  ) is expected to report Q1 earnings on May 23. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Shoe Carnival's revenues will expand 2.5% and EPS will drop -25.9%.

The average estimate for revenue is $228.1 million. On the bottom line, the average EPS estimate is $0.40.

Revenue details
Last quarter, Shoe Carnival reported revenue of $205.7 million. GAAP reported sales were 13% higher than the prior-year quarter's $181.9 million.

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

EPS details
Last quarter, non-GAAP EPS came in at $0.16. GAAP EPS of $0.15 for Q4 were 6.3% lower than the prior-year quarter's $0.16 per share.

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

Recent performance
For the preceding quarter, gross margin was 29.2%, 90 basis points better than the prior-year quarter. Operating margin was 3.3%, 50 basis points better than the prior-year quarter. Net margin was 1.6%, 20 basis points worse than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $906.7 million. The average EPS estimate is $1.47.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 78 members out of 89 rating the stock outperform, and 11 members rating it underperform. Among 22 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 21 give Shoe Carnival a green thumbs-up, and one give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Shoe Carnival is outperform, with an average price target of $25.80.

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Add Shoe Carnival to My Watchlist.

Will You Be Back at the Banana Stand Today?

The Bluths are back! Beginning today, Netflix (NASDAQ: NFLX  ) is airing a new 15-episode season of Arrested Development. More than 5 million have rated earlier seasons of the show, which also merits 1.8 million "likes" on Facebook.

Will that translate into a rush of new subscribers? I would say so, if only because Netflix's outsized first-quarter member gains appear to have been influenced by February's airing of acclaimed original series House of Cards.

George Sr., Lucille, Gob, Michael, Buster, Lindsay, Tobias, Maeby, and George Michael could be as big a draw, if not bigger. And that's in spite of Amazon.com's (NASDAQ: AMZN  ) substantial but thus-far ineffective efforts to create competing originals.For example, Alpha House has just 2,839 customer reviews as of this writing, versus more than 385,000 mostly good ratings for horror series Hemlock Grove.

"I would say Arrested sort of fits in an interesting category because it's got a very, very loyal fan base established," said Netflix Chief Financial Officer and Chief Accounting Officer David Wells at JPMorgan Chase's 41st Annual Global Technology, Media, and Telecom Conference earlier this month.

"So there's an acknowledgment on our part that it might have an impact on Q2 and that we otherwise would have felt like we had lower year-over-year net additions for Q2 based on a seasonal pattern. But Arrested is a wild card. So I would say, in general, we're excited about it," Wells said.

Season 4 trailer. Sources: Netflix, YouTube.

Does Netflix figure into your holiday plans? Don't just sit there. Come on! Vote in the poll below, and then leave a comment to let us know whether you signed up for Netflix to get access to the new season of Arrested Development.

Stream on
For further analysis of how Netflix is changing entertainment, tune into our newest premium research report, in which we take you inside Netflix's entertainment empire and tell you what the streaming sensation is really worth, and whether the stock deserves a place in your portfolio. Access your report now by clicking here.


5 Best Low Price Stocks For 2014

Value investors tend to favor specific gauges to find bargains. Some like to seek out stocks trading below tangible book value, while others seek out stocks that sport low price-to-earnings (P/E) multiples or impressive free cash flow characteristics.

But why not focus on all three gauges?

I ran a screen to find stocks that press all the buttons, targeting only companies with a market value above $500 million and 2014 P/E multiples below 12. To preserve a nice margin of error for downside protection, I narrowed the list to stocks trading for less than 95% of tangible book value.

Here's what I found.

Of course, these numbers are just a starting point, and the seemingly least expensive stocks aren't always the top bargain. Case in point: Century Aluminum (Nasdaq: CENX), which holds a trove of undervalued assets parked on its balance sheet but is struggling to generate profits in an era of depressed aluminum prices.

5 Best Low Price Stocks For 2014: Opal Energy Corp.(OPA.V)

Opal Energy Corp., through its subsidiary, Opal Energy, Inc., engages in the acquisition, exploration, development, and production of oil and natural gas properties primarily in the United States. The company has a joint exploration and development agreement with Hydrocarbon Operating Inc and HR GeoConsultants LLC to explore various prospects in Starr County, Texas. It also holds a joint venture agreement with Listed Ventures Limited to acquire leases in New Zealand, which covers approximately 14,060 square kilometers. Opal Energy Corp. is based in Vancouver, Canada.

5 Best Low Price Stocks For 2014: NMDC Ltd (NMDC.NS)

NMDC Limited (NMDC) is an India-based iron ore producer and exporter. The Company operates in two business segments: iron ore and other minerals and services. The Company is engaged in the exploration of a range of minerals including iron ore, copper, rock phosphate, lime stone, dolomite, gypsum, bentonite, magnesite, diamond, tin, tungsten, graphite, and beach sands. As of March 31, 2012, it produced about 30 million tons of iron ore from three fully mechanized mines, which include Bailadila Deposit-14/11C, Bailadila Deposit-5, 10/11A (Chhattisgarh State) and Donimalai Iron Ore Mines (Karnataka State). As of March 31, 2012, NMDC supplied 269.16 lakh tons of iron ore to domestic industries and had exported 3.85 lakh tons of iron ore. Its sponge Iron production was at 37,260 tons and its diamond production was 18043.44 carats during the year fiscal ended March 31,2012. On December 12, 2011, the Company's wholly owned subsidiary NMDC Power Ltd was incorporated.

Best Casino Companies For 2014: Chesapeake Energy Corporation(CHK)

Chesapeake Energy Corporation engages in the acquisition, development, exploration, and production of natural gas and oil properties in the United States. It also provides marketing and other midstream services. The company?s properties are located in Alabama, Arkansas, Colorado, Kansas, Kentucky, Louisiana, Maryland, Michigan, Mississippi, Montana, Nebraska, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming. As of December 31, 2010, it had interests in approximately 45,800 gross productive wells. The company?s proved reserves include 17.096 trillion cubic feet of natural gas equivalent. Chesapeake Energy Corporation was founded in 1989 and is based in Oklahoma City, Oklahoma.

Advisors' Opinion:
  • [By Sam Collins]

    Chesapeake Energy (NYSE: CHK) is one of the largest independent exploration and production companies in the United States. It focuses on U.S. onshore natural gas production east of the Rocky Mountains.?

    On Jan. 30, the company said that Cnooc Ltd. (NYSE: CEO) would pay $1.3 billion for access to acreage held by Chesapeake Energy. CHK has also developed a dominant natural gas shale position, and S&P “expects its expertise in unconventional drilling to carry over to liquids development.”?

    Technically, the close above $28 represents a major breakout from a three-year consolidation. The target for CHK is $39.

5 Best Low Price Stocks For 2014: Hansen Natural Corporation(HANS)

Hansen Natural Corporation, through its subsidiaries, engages in the development, marketing, sale, and distribution of beverages in the United States and internationally. The company principally offers natural sodas, fruit juices and juice drinks, energy drinks and energy sports drinks, fruit juice smoothies and functional drinks, non-carbonated ready-to-drink iced teas, children?s multi-vitamin juice drinks, and flavored sparkling beverages under the Hansen?s brand name. It also involves in the development, marketing, sale, and distribution of energy drinks under the Monster Energy, Monster Hitman Energy Shooter, Nitrous Monster Energy, and Lost Energy brand names; and Rumba, Samba, and Tango brand energy juices. In addition, the company markets, sells, and distributes ready-to-drink iced teas under the Peace Tea brand name; natural sodas, premium natural sodas with supplements, organic natural sodas, seltzer waters, and energy drinks under the Blue Sky brand name; and en hanced water beverages under the Vidration brand name, as well as Java Monster line of non-carbonated dairy based coffee and energy drinks, and X-Presso Monster Hammer energy drinks. Further, it offers Monster Energy brand energy drinks, including Monster Energy drinks, lo-carb Monster Energy drinks, Monster Energy Assault energy drinks, Monster Energy Khaos energy drinks, Monster Energy M-80 energy drinks, Monster Energy Heavy Metal energy drinks, Monster Energy MIXXD, Monster Energy Import energy drinks, and Monster Energy Dub Edition energy drinks. The company also provides Hansen?s Natural Lo-Cal juice cocktails; and Hansen?s SELF Beauty Elixir ready-to-drink beauty beverages. Its customers include full service beverage distributors, retail grocery and specialty chains, wholesalers, club stores, drug chains, mass merchandisers, convenience chains, health food distributors, and food service customers. Hansen Natural Corporation was founded in 1985 and is based in Corona, California.

Advisors' Opinion:
  • [By Louis Navellier]

    Hansen Natural Corporation (NASDAQ:HANS) is an 80-year-old beverage producer with great 21st century appeal. Hansen boasts 30 fruit and spice soda flavors, vitamin waters, teas, lemonades and — of course — the wildly successful Monster Energy drink line. As Hansen keeps its customers hydrated, HANS keeps its investors happy. What’s really exciting about this stock is that even though energy drinks are well established in the U.S., many emerging markets remain untapped. As a result, Hansen has been going full tilt with its Monster Energy drink, launching the popular beverage in Greece, Cyprus, Lithuania, Latvia, Estonia, Ukraine, Portugal and Colombia in just the past eight months! The company also has plans to continue its conquest of Central and Eastern Europe, South America and Asia.

  • [By Matthews]

    Hansen's. What we like about Hansen's is that this is the true expression of growth. HANS is slated to hit another 15% growth rate this year. The company has its issues, such as an undiversified lineup of growth engines, stiff competition and heavy valuations. Yet, we believe that the company is still just scratching the surface of international expansion that can be a huge growth engine as it continues to develop its Monster brand name as well as other beverage items. Look for HANS to continue to attract money flow as investors continue to seek growth. We have a $120 PT.

    Allocation: $2000

    Entry: 92.77

    Target: $102.50, $112.50, and $120

5 Best Low Price Stocks For 2014: First Business Financial Services Inc.(FBIZ)

First Business Financial Services, Inc. operates as the bank holding company for First Business Bank and First Business Bank ? Milwaukee that provide commercial banking products and services to small and medium size businesses, business owners, executives, professionals, and high net worth individuals in Wisconsin. It offers various deposits, such as demand deposits, NOW accounts, money markets accounts, and certificates of deposits. The company?s product lines include commercial and consumer treasury management services, commercial lending, commercial real estate lending, equipment financing, and personal loans, as well as various deposit accounts, such as demand deposits, NOW accounts, money market accounts, and certificates of deposit. It also offers trust and investment services, as well as secured lines of credit and term loans on equipment and real estate assets to manufacturers and wholesale distribution companies in the United States. In addition, the company is involved in financing general equipment, as well as holding and liquidating real estate and other assets acquired through foreclosure or other legal proceedings. It has three loan production offices in the northeast region of Wisconsin to serve Appleton, Oshkosh, and Green Bay, as well as their surrounding areas. The company was founded in 1909 and is based in Madison, Wisconsin.

Saturday, May 25, 2013

iSoftStone Holdings Beats on Both Top and Bottom Lines

iSoftStone Holdings (NYSE: ISS  ) reported earnings on May 17. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), iSoftStone Holdings beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share contracted. GAAP earnings per share dropped.

Gross margins were steady, operating margins dropped, net margins dropped.

Revenue details
iSoftStone Holdings booked revenue of $95.9 million. The two analysts polled by S&P Capital IQ predicted a top line of $93.9 million on the same basis. GAAP reported sales were 11% higher than the prior-year quarter's $86.3 million.

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

EPS details
EPS came in at $0.10. The two earnings estimates compiled by S&P Capital IQ predicted $0.09 per share. Non-GAAP EPS of $0.10 for Q1 were 17% lower than the prior-year quarter's $0.12 per share. GAAP EPS of $0.05 for Q1 were 17% lower than the prior-year quarter's $0.06 per share.

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

Margin details
For the quarter, gross margin was 32.2%, much about the same as the prior-year quarter. Operating margin was 4.7%, 50 basis points worse than the prior-year quarter. Net margin was 3.2%, 60 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $111.8 million. On the bottom line, the average EPS estimate is $0.17.

Next year's average estimate for revenue is $464.7 million. The average EPS estimate is $0.67.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 19 members out of 36 rating the stock outperform, and 17 members rating it underperform. Among 13 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), eight give iSoftStone Holdings a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on iSoftStone Holdings is outperform, with an average price target of $10.83.

Is iSoftStone Holdings playing the right part in the new technology revolution? Computers, mobile devices, and related services are creating huge amounts of valuable data, but only for companies that can crunch the numbers and make sense of it. Meet the leader in this field in "The Only Stock You Need To Profit From the NEW Technology Revolution." Click here for instant access to this free report.

Add iSoftStone Holdings to My Watchlist.