Wednesday, July 31, 2013

Forget Search and Video -- Check Out This Stock's Gaming Profits

Sohu (NASDAQ: SOHU  ) finds itself in a tight space -- it competes in many areas, but it's not the best in any of them. Fortunately, Sohu does have one business that's raking in the dough: online gaming.

Two surprising facts from Sohu's annual report 
When analyzing Sohu's business, you may quickly get this picture: Sohu lags behind Baidu in search, Youku Tudou in video, and Tencent and SINA in online portals.

The company does have a $1 billion war chest to tackle its competitors. But, it's doubtful that $1 billion will go far. Sohu is competing in extremely competitive industries, and will probably burn all of its cash to battle these top dogs. Luckily, Sohu can choose to forgo any confrontation in search, video, and online portals.

Instead, Sohu can choose to tackle online gaming.

Now, before you laugh, consider this: Last year, Sohu raked in 60% of its revenues from its gaming division. That means that Sohu generates more of its money from online gaming than it does from search, video, and portal advertising combined! If you don't believe me, just check out the income statement in their annual report.

To be fair, these revenues come from their stake in game company Changyou (NASDAQ: CYOU  ) . Because Sohu owns a majority stake in Changyou, Sohu must consolidate all financials into its statements -- even as Changyou is independently listed on stock exchanges. Whatever the case, Sohu actually created Changyou -- it started as a business unit in 2003, then was spun out in 2007. In any case, Sohu should do some serious soul-searching.

Just look at its fat profit margins from online gaming. In 2012, Sohu's advertising gross profit margin was 44%. Not bad, but Sohu's gaming gross profit margin was about DOUBLE that. Surprisingly, compared to the gross profit margin from the gaming industry, Sohu is among the best.

Company

Gross Margin

Giant Interactive (NYSE: GA  )

87%

Sohu

86%

Perfect World

84%

Netease (NASDAQ: NTES  )

68%

Source: 10-Ks

However, it's understandable that you may worry about Sohu's gaming business. If it focuses solely on this industry, Sohu will have to go toe-to-toe with industry giants.

One company Sohu will have trouble with is Giant Interactive. Like Sohu, Giant Interactive creates games specifically for the Chinese market. But, unlike Sohu, Giant Interactive has done so for longer -- it started in 2001 -- and with more focus than Sohu. So, Sohu has its work cut out for it. Luckily, Giant Interactive has taken a hit since insiders cashed out this month – giving Sohu an opening if it can react quickly enough.

Another company Sohu would also have to compete and catch-up with is Netease. Not only does the company continue to push out new domestic titles -- its last three helped Netease increase revenues 14% QoQ -- but it is also building foreign partnerships. Netease already has a licensing agreement with Activision Blizzard to bring World of Warcraft to China. Luckily, World of Warcraft is censored, and it remains to be seen if the game mechanics will profit Netease.

Should you buy Sohu for its games?
While there are big competitors to fight, Sohu seems like it has a better chance battling gaming competitors than online portal, search, and video giants. Additionally, as China's online gaming market has grown 56-fold over the past decade, there may still be room for even greater gaming profits going forward.

All you need to look for is where Sohu invests its $1 billion war chest. If it tackles gaming, then Sohu may be a great buy.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

The Door to America's Millionaire Club Is Not Locked

"Contrary to popular modern belief, it is still quite possible for the successful individual to make his million -- and more."

J. Paul Getty wrote these words in 1960, in his book, "How to Be Rich." It's as true now as it was then... and Getty shows his readers that anyone with the right mentality can get rich by developing a handful of habits.

 

Getty was a very rich man -- the richest man in the country in his day.

Getty made his fortune by buying up oil businesses at bargain prices just after the Depression. A small portion of the book is devoted to telling this story. The rest of it presents his thesis: Anyone with the right mentality can get rich by developing a handful of habits.

"How to Be Rich" is very easy to read. Written as a series of essays for Playboy magazine, it feels like a casual conversation with a very rich friend.

"Although there are no sure-fire formulas for achieving success in business," Getty says, "there are some fundamental rules to the game, which, if followed, tip the odds of success very much in the businessman's favor."

Those rules include:

-- The best way to make a fortune is to own your own business.

-- The central aim of every business is to produce more and better goods (or more and better services) to more people at a lower cost.

-- A sense of thrift is essential for success in business.

-- Legitimate opportunities for expansion should not be overlooked.

-- The business owner must run his own business. He cannot expect employees to run it for him.

-- The business owner must be constantly alert for new ways to improve his products and services and increase his production and sales.

-- Nothing builds confidence and volume faster than a reputation for standing behind one's product.

The book is loaded with practical advice for business owners and employees who want to share in the profits of their businesses.

"How to Be Rich" also has a chapter devoted to passive investing. Most people don't realize it, but Getty's record as a buyer of stocks was stellar. What was his strategy? To buy great companies with distinct competitive advantages when their shares are cheap.

Sound familiar?

Another chapter talks about real estate. Getty was a big believer in real estate as a secondary investment and made millions that way. He also talks about investing in fine art. In the course of his business life, Getty acquired one of the greatest private collections of art in his time. He left much of that collection to various museums, including the Getty Museum in Malibu, California.

What I like about this book -- besides the fact that Getty has come to the same conclusions on wealth-building that I have -- is that it is extremely motivational. There is something about the way he writes that feels authentic. When you have the world's richest man giving you advice on getting rich, you want to listen.

That said, a few of his ideas might be surprising to some readers. For example, Getty is famous for pinching pennies... But he believed in paying his employees well and letting his best employees get wealthy by sharing in the profits. He was not condescending to his employees. He treated them like partners.

The most successful business people I know share this view.

Another contrarian idea: Getty disputes the idea that the business owners should think big and take big chances. His success, he says, came from "thinking small" (i.e. paying attention to details) and avoiding risk at every juncture.

Action to Take --> If you have ambitions of being truly rich one day, you should read "How to Be Rich." If you have already read it once, you should read it again and again.

P.S. -- Here's another way to beat your financial fears... I've recently discovered a secret account that is 100% tax-free and pays four to five times more than long-term CDs. I studied eight companies that provide these accounts and get this... they have now paid out, on average, for 121 YEARS STRAIGHT. For details on this little-known strategy, click here.

12 Mistakes Beginning Investors Should Never Make

Millions of Americans have sat on the sidelines during the four-year bull market, nervously wondering if they should put their money at risk, and thereby having missed out on some colossal gains. Yet beginning investors are always afraid of making costly mistakes, and unfortunately, that only leads to more procrastination -- and more missed opportunities.

The best way to avoid common investing mistakes is to get fair warning about them before you make them. With the goal of giving beginning investors knowledge they can use to steer clear of potential pitfalls, here are 12 mistakes that beginning investors often make.

1. Paying too much in expenses to invest hurts your results right out of the starting gate. Instead of choosing funds with up-front sales loads and hefty annual expenses, aim your fund investments toward no-load funds with lower fees. Over your lifetime, the savings can add up to hundreds of thousands of dollars.

2. Owning multiple funds doesn't mean you have a safely diversified portfolio. Often, different funds own the same underlying investments, leaving you doubly exposed if bad news hits.

3. Chasing performance will almost always leave you on the back end of a trend right as it reverses. Longtime investors in SPDR Gold (NYSEMKT: GLD  ) and iShares Silver (NYSEMKT: SLV  ) , for instance, earned huge profits over the past decade. But those who climbed on the precious-metals bandwagon in 2011 have seen huge losses. Being late to the game isn't always fatal, but you should never expect the same returns in the future as an investment's past results.

4. Making knee-jerk stock purchases and sales immediately after important news leaves you vulnerable to professional investors, who step in during such periods to take advantage of emotionally driven beginning investors. Waiting until the dust settles will often get you better results.

5. A great company isn't always a great investment. Hot companies often have their stocks bid into the stratosphere, at which point they've lost most of their chances to produce big returns. Sometimes, you have to concede that you've missed out on most of the potential gains a stock can produce and look for other opportunities.

6. Investments with high dividend yields don't always produce good total returns. Often, high yields signal danger, as the recent experience of Annaly Capital (NYSE: NLY  ) and American Capital Agency (NASDAQ: AGNC  ) show. Rising interest rates have crushed those stocks, costing investors the equivalent of two years' worth of dividend payments just since the end of April. For funds, distribution yields are often meaningless, as they can include a portion of your own invested capital being returned to you.

7. Making frequent trades will cost you in several ways. Not only do you incur greater transaction costs, but any gains you earn on investments held for a year or less are taxed at higher short-term capital gains rates that can be more than double longer-term rates.

8. Not using tax-favored retirement accounts also provides a big drag on your overall returns. Roth IRAs can give you tax-free growth that can save you from having to pay taxes of more than 40% on your investment income for certain taxpayers, while even traditional retirement accounts let you defer taxes on income and capital gains within the account until you make withdrawals.

9. Failing to make enough contributions to your 401(k) plan at work to max out any employer match is simply giving up free money. Sometimes, you have to be careful to weed out bad investment options in your 401(k), but usually, you can find a good enough choice to justify grabbing the matching contribution.

10. Taking money out of an old job's 401(k) rather than rolling it over to a new 401(k) or IRA account will not only cost you a substantial amount in taxes and a 10% penalty in most circumstances but also leave you with that much less in retirement savings down the road. Moreover, the opportunity cost of not investing that money is even greater.

11. Watching financial television will generally just whipsaw your opinions in both directions, leaving you more confused than you were when you started. You're better off getting news and insight from sources that are less concerned about short-term trends and that instead will give you a better sense of long-term prospects.

12. Waiting too long to start investing takes away the biggest asset you have as a beginning investor: time. Markets rise and fall over shorter periods, but in the long run, picking investments that will steadily climb in value produces the wealth that will help you reach all your financial goals.

Get started today!
The financial markets are a scary place for beginning investors to get started with their investing. But with so much of your financial future at stake, you owe it to yourself to face the challenge. Avoiding these mistakes should give you more confidence that you can invest successfully.

At the Fool, we're committed to helping the millions of Americans who've waited on the sidelines since the market meltdown in 2008 and 2009, too scared to invest and put their money at further risk. In our brand-new special report "Your Essential Guide to Start Investing Today," The Motley Fool's personal finance experts show you why investing is so important and what you need to do to get started. Click here to get your copy today -- it's absolutely free.

Tune in every Monday and Wednesday for Dan's columns on retirement, investing, and personal finance. You can follow him on Twitter @DanCaplinger.

Hubbell Beats Analyst Estimates on EPS

Hubbell (NYSE: HUBB  ) reported earnings on July 18. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Hubbell met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew slightly. GAAP earnings per share grew.

Margins grew across the board.

Revenue details
Hubbell tallied revenue of $801.3 million. The six analysts polled by S&P Capital IQ anticipated revenue of $801.9 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

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 $1.37. The eight earnings estimates compiled by S&P Capital IQ predicted $1.31 per share. GAAP EPS of $1.37 for Q2 were 6.2% higher than the prior-year quarter's $1.29 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 33.9%, 50 basis points better than the prior-year quarter. Operating margin was 16.5%, 50 basis points better than the prior-year quarter. Net margin was 10.2%, 20 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $842.9 million. On the bottom line, the average EPS estimate is $1.62.

Next year's average estimate for revenue is $3.20 billion. The average EPS estimate is $5.44.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Hubbell is outperform, with an average price target of $99.00.

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

Add Hubbell to My Watchlist.

Tuesday, July 30, 2013

Dana Expands Buyback Program to $1 Billion

Auto parts supplier Dana Holding (NYSE: DAN  ) announced today it is expanding its share repurchase program to $1 billion, representing a $900 million increase over the $100 million bought back under the previous authorization. Shares will be bought back over the next two years.

Dana Holding President and CEO Roger J. Wood said: "This expanded program reflects confidence in the long-term prospects of our business and our commitment to delivering value to all of our shareholder. We continue to review our capital structure with the goal of best utilizing our strong balance sheet to maximize shareholder value." As of this writing, Dana shares are trading at $19.40.

The auto parts supplier anticipates having sufficient liquidity to support this initiative after refinancing its current U.S. revolving credit facility and establishing a new five-year, $500 million revolving credit facility. While the stock repurchase is subject to prevailing market conditions, Dana says it will continue to evaluate further credit market opportunities.

Headquartered in Maumee, Ohio, Dana Holding is a supplier of driveline, sealing, and thermal-management technologies that improve the efficiency and performance of passenger, commercial, and off-highway vehicles with both conventional and alternative-energy powertrains. It had revenues of $6.9 billion for the 12-month period ending March 31.

link

Yahoo! Strikes 1-Year Deal to Stream Saturday Night Live

Yahoo! (NASDAQ: YHOO  ) has struck a deal with Broadway Video Entertainment and NBC Entertainment to feature Saturday Night Live (SNL) content exclusively on Yahoo! for one year. 

Under the deal, Yahoo! users will have exclusive access to SNL's entire 38-year archive, spanning from 1975 to 2013. This includes "making-of" and "behind-the-scenes" clips; however, only a selection of SNL musical performances and dress rehearsals will be available. So far, the company has announced that its users will be able to view famous skits from the "Blues Brothers" to "Wayne's World." Viewers can begin viewing SNL on Sept. 1, 2013 across Yahoo!'s sites.

Yahoo! viewers will also gain non-exclusive access to the current season of SNL. Internationally, Yahoo! shares distribution rights for the same library of content; International Yahoo! users have non-exclusive access to SNL. 

As a result of the deal, the SNL clips will be removed from other video platforms -- Hulu and NBC.com. Additionally, the SNL content will addd to Yahoo!'s expanding video library. Not only does the company have partnership to show Hulu videos, but the company also runs Yahoo! Studios -- which produces original web series like Burning Love, The Fuzz, and Ghost Ghirls. 

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.

Best Dividend Stocks To Watch Right Now

Despite Apple's stock decline, Andrew Tonner thinks there's still a lot to love about the company. In this video, Andrew points out three specific things he thinks will drive Apple higher in the future.

The dividend yield is currently 2.5% and will probably grow, given Apple's cash hoard of $137 billion. Apple will roll out its iPhone 5S and probably a low-cost iPhone to help penetrate emerging markets. It could also release a new product such as the iTV or iWatch this year or in 2014, either of which would stand to deliver substantial earnings.

Apple may be taking its lumps today, but Andrew thinks things could turn around nicely by this time next year. Check out the video for more details.

There's no doubt that Apple is at the center of technology's largest revolution ever and that longtime shareholders have been handsomely rewarded, with more than 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

Best Dividend Stocks To Watch Right Now: ENSCO plc(ESV)

Ensco plc, together with its subsidiaries, provides offshore contract drilling services to the oil and gas industry. The company engages in the drilling of offshore oil and natural gas wells by providing its drilling rigs and crews under contracts with international, government-owned, and independent oil and gas companies. As of February 15, 2010, it owned and operated 42 jackup rigs, 4 ultra-deepwater semisubmersible rigs, and 1 barge rig. The company also has 4 ultra-deepwater semisubmersible rigs under construction. It operates in Asia, the Middle East, Australia, New Zealand, Europe, Africa, and North and South America. The company was formerly known as Ensco International plc and changed its name to Ensco plc in March 2010. Ensco plc was founded in 1975 and is based in London, the United Kingdom.

Advisors' Opinion:
  • [By Skousen]

    Ensco is a global offshore contract drilling company. Cramer holds 2,100 shares of ESV stocks. ESV has a dividend yield of 2.97% and returned -5.86% since the beginning of this year. It has a market cap of $10.94B and a P/E ratio of 16.54. Robert Rodriguez and Steven Romick invested $429 million in ESV

  • [By Jake Lynch]

    Ensco(ESV) sells offshore contract drilling services to other oil and gas companies. The company is based in London.

    Ensco is scheduled to report fourth-quarter results on Feb. 24. Its third-quarter adjusted earnings of 92 cents exceeded Wall Street's consensus forecast by 3.5%. Revenue of $428 million beat the target by 2.1%. Nevertheless, net sales are down 10% over 12 months and GAAP profit has declined year-over-year in seven consecutive quarters, hurting its stock.

    But, the stock is cheap relative to those of peers, trading at a trailing earnings multiple of 13, a forward earnings multiple of 13, a book value multiple of 1.3 and a cash flow multiple of 9.1, 80%, 38%, 56% and 46% discounts to oil-and-gas industry averages.

    Currently, 56% of analysts covering Ensco rate its stock "buy." Jefferies has a price target of $64 on the stock, suggesting 20% of upside in 2011. The highest target comes from FBR Capital Markets, which predicts a rise to $70 in the next 12 months.

Best Dividend Stocks To Watch Right Now: Nucor Corporation(NUE)

Nucor Corporation, together with its subsidiaries, engages in the manufacture and sale of steel and steel products in North America and internationally. It operates through three segments: Steel Mills, Steel Products, and Raw Materials. The Steel Mills segment produces hot and cold-rolled sheet steel; plate steel; structural steel comprising wide-flange beams, beam blanks, and sheet piling; and bar steel, such as blooms, billets, concrete reinforcing bar, merchant bar, and special bar quality products. The Steel Products segment offers steel joists and joist girders, steel deck, fabricated concrete reinforcing steel, cold finished steel, steel fasteners, metal building systems, light gauge steel framing, steel grating and expanded metal, and wire and wire mesh products. The Raw Materials segment produces direct reduced iron (DRI); brokers ferrous and nonferrous metals, pig iron, hot briquetted iron, and DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap metal products. The company?s operations also include various international trading companies that buy and sell steel and steel products. It sells its hot-rolled steel and cold-rolled steel to steel service centers, fabricators, and manufacturers; steel joists and joist girders, and steel deck to general contractors and fabricators; and cold finished steel and steel fasteners to distributors and manufacturers. The company?s products are used by contractors in constructing highways, bridges, reservoirs, utilities, hospitals, schools, airports, stadiums, and high-rise buildings. Nucor Corporation was founded in 1940 and is based in Charlotte, North Carolina.

Best Blue Chip Companies To Buy For 2014: R.R. Donnelley & Sons Company(RRD)

R.R. Donnelley & Sons Company provides pre-media, printing, logistics, and business process outsourcing products and services to private and public sectors worldwide. The company operates primarily in the commercial print portion of the printing industry, with related product and service offerings designed to offer customers solutions for communicating their messages to target audiences. Its products and related service offerings include magazines, catalogs, retail inserts, books, directories, financial print, direct mail, forms, labels, office products, statement printing, pre media, and logistics services. The company also offers business process outsourcing services that comprise transactional print and outsourcing services, statement printing, direct mail, and print management services; and product configuration, customized kitting, and order fulfillment for technology, medical device, and other companies. It distributes its products to end-users through the United Sta tes postal services, retail channels, electronically, or by direct shipment to customer facilities. R.R. Donnelley & Sons was founded in 1864 and is based in Chicago, Illinois.

Best Dividend Stocks To Watch Right Now: Linear Technology Corporation(LLTC)

Linear Technology Corporation, together with its subsidiaries, designs, manufactures, and markets a line of linear integrated circuits. The company's products include amplifiers, comparators, voltage regulators, voltage references, monolithic filters, linear regulators, DC-DC converters, power over Ethernet controllers, battery chargers, data converters, communications interface circuits, RF signal conditioning circuits,

Monday, July 29, 2013

Why Phillips 66 Earnings Will Start Shrinking

Phillips 66 (NYSE: PSX  ) will release its quarterly report on Wednesday, and ever since its initial spin-off from ConocoPhillips (NYSE: COP  ) , favorable trends in the refining industry have helped to boost the company's profits and send the refiner's stock soaring. But lately, those trends have started to reverse, and the impact on Phillips 66 earnings could be a nasty surprise to those who've gotten used to the shares only moving in one direction.

In particular, Phillips 66 has seen huge benefits from the massive expansion in domestic energy production in recent years, as prices of domestic crude fell well below prevailing prices on the world markets. Yet as those spreads have shrunk to nearly nothing in recent quarters, Phillips 66 will now have to deal with a much more neutral earnings environment even as some other challenges begin to rear up and affect its earnings potential. Let's take an early look at what's been happening with Phillips 66 over the past quarter and what we're likely to see in its quarterly report.

Stats on Phillips 66

Analyst EPS Estimate

$1.83

Change From Year-Ago EPS

(18%)

Revenue Estimate

$41.57 billion

Change From Year-Ago Revenue

(11.1%)

Earnings Beats in Past Four Quarters

4

Source: Yahoo! Finance.

Is the growth story for Phillips 66 earnings dead?
Analysts have dramatically reined in their views on Phillips 66 earnings over the past several months, cutting their June-quarter estimates by nearly 20% and lopping more than $0.50 per share from their full-year 2013 consensus earnings figures. The stock has stopped its upward move, falling about 4% since late April.

One of the biggest drivers of earnings growth for Phillips 66 and its peers came from cheap U.S. oil. Even as their input costs stayed low, refiners benefited from high prices for refined products like gasoline and diesel fuel, and that helped create massive profits. That led refiners to take extraordinary steps to obtain cheap crude from hard-to-reach domestic sources, including Phillips 66's decision to transport oil by rail to its refineries.

Lately, though, domestic crude has seen its cost advantage almost disappear, creating a potential reversal of the profit bonanza. Valero (NYSE: VLO  ) said last week that it expects discounts for domestic crude to return, restoring its long-term benefits, but in the meantime, its profits dropped 44% in its second-quarter report compared to year-ago levels.

But having learned a lesson from its parent, Phillips 66 recently had great success doing a spin-off of its own, putting many of its pipeline and terminal assets into the master limited partnership Phillips 66 Partners (NYSE: PSXP  ) and seeing the shares of the newly public MLP soar on their IPO day. The move has worked so well in the industry that other refiners like Valero have made plans to put their own midstream assets into MLPs in order to help investors take advantage of tax benefits that the entities enjoy compared to regular corporations.

In the Phillips 66 earnings report, watch for signs about its expectations for spreads between domestic and global oil prices. If it projects further weakening, then it could be a while before profits return to past levels. Moreover, keep an eye on the regulatory front to see if pollution-reducing proposals will actually get implemented, potentially costing the refiner billions in capital expenses.

Even if refiners are on their way out, you can still profit from great ways to capitalize on high oil prices. Find some in The Motley Fool's "3 Stocks for $100 Oil". For FREE access to this special report, simply click here now.

Click here to add Phillips 66 to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

3 Things to Watch When Corning Reports

Top 10 Casino Stocks To Invest In Right Now

NICOSIA, Cyprus (AP) -- Cyprus' president said Friday that the bailed-out country will open casinos and bolster its tourism sector to get the economy going again.

Nicos Anastasiades unveiled a first batch of measures he said are designed to boost growth in an economy that is projected to shrink by 13 percent until 2015.

Anastasiades included casino openings among campaign pledges before his election in February.

He said Cyprus would fork out 21 million euros ($27.54 million) to partly subsidize salaries for 6,000 jobless people that will be hired in the tourism sector, give businesses tax breaks for hiring new workers and set up solar energy parks.

Young people will be granted state and church-owned land for cultivation. And those having homes or businesses seized because they're unable to pay off loans would be able to stay on as renters, he said.

Top 10 Casino Stocks To Invest In Right Now: Wynn Resorts Limited(WYNN)

Wynn Resorts, Limited, together with its subsidiaries, engages in the development, ownership, and operation of destination casino resorts. The company owns and operates Wynn Las Vegas casino resort in Las Vegas, which includes approximately 22 food and beverage outlets comprising 5 dining restaurants; 2 nightclubs; 1 spa and salon; 1 Ferrari and Maserati automobile dealership; wedding chapels; an 18-hole golf course; meeting space; and foot retail promenade featuring boutiques. Wynn Las Vegas casino resort also features approximately 147 table games, 1 baccarat salon, private VIP gaming rooms, 1 poker room, 1,842 slot machines, and 1 race and sports book. It also owns and operates an Encore at Wynn Las Vegas resort, a destination casino resort located adjacent to Wynn Las Vegas that features a 2,034 all-suite hotel, as well as a casino with 95 table games, 1 sky casino, 1 baccarat salon, private VIP gaming rooms, and 778 slot machines. In addition, the company operates Wyn n Macau casino resort located in the Macau Special Administrative Region of the People?s Republic of China. Wynn Macau casino resort features approximately 595 hotel rooms and suites, 410 table games, 935 slot machines, 1 poker room, 1 sky casino, 6 restaurants, 1 spa and salon, lounges, meeting facilities, and retail space featuring boutiques. Further, it operates Encore at Wynn Macau resort located adjacent to Wynn Macau. Encore at Wynn Macau resort features approximately 410 luxury suites and 4 villas, as well as casino gaming space, including a sky casino consisting of 60 table games and 80 slot machines, 2 restaurants, 1 luxury spa, and retail space. The company was founded in 2002 and is based in Las Vegas, Nevada.

Advisors' Opinion:
  • [By Carlson]

    Wynn Resorts(WYNN) saw its second-quarter profit more than double, but most of that strength came from casino wins, and investors were unimpressed.

    During the quarter, the casino operator earned $52. 4 million, or 52 cents a share, on revenue of $1.03 billion, higher than forecasts of 42 cents on revenue of $992.3 million. This compares with a profit of $25.5 million, or 21 cents, on revenue of $723.3 million, in the year-ago period.

    Wynn had already pre-announced disappointing results for its Las Vegas properties, citing higher costs, including employee health care and benefits, and marketing expenses. Its operating loss for its Wynn Las Vegas and Encore widened to $17.2 million from $8.3 million last year. Revenue rose 1.7% to $318 million.

    Occupancy at the Wynn Las Vegas jumped to 92.6% from 86.6% a year earlier, but revenue per available room fell 3.2%.

    Still, management indicated that there is a slight improvement on the Strip, with an increase in forward group bookings and some bright spots for the ability to yield rates. But management tempered enthusiasm by saying there are some struggles and uncertainty in the marketplace.

    "We hope for continued improvement in Las Vegas or -- let me put it different, we hope that we'll get smarter in Las Vegas in dealing with the peculiarities of this market --and this very, very mercurial, national economic market we're living with," said Steve Wynn, chief executive, in a conference call. "The national economy and the political environment in the country as we head up to the elections [is] very, very touchy. And it is impacting all businesses."

    The biggest boost, of course, came from Macau, where revenue surged 74% to $714.4 million from $410.4 million last year.

    The company opened its Encore Macau in the spring, boosting its market share to about 16% from about 13%, Sterne Agee analyst David Bain wrote in a note.

    Wynn is in the process of working on a new development on the Cotai st! rip, which should spike investors' interest as more details are revealed in the coming quarters.

    Still, investors are concerned that as comparisons get harder in Macau, and second-quarter results are adjusted for hold (how much the casino won), Wynn may not be able to outperform. But Bain reassures, "this has been discussed as nauseam by investors, sell-side analysts, the press -- and even dinner-table relatives -- for some time. We believe the Street is underestimating the summer months in Macua, which may help to produce a new leg up for Macau stories, with Wynn being the most profitable on a per position basis."

Top 10 Casino Stocks To Invest In Right Now: Pinnacle Entertainment Inc.(PNK)

Pinnacle Entertainment, Inc. owns, develops, and operates casinos, and related hospitality and entertainment facilities in the United States. It operates casinos, such as L'Auberge du Lac in Lake Charles, Louisiana; River City Casino and Lumiere Place in St. Louis, Missouri; Boomtown New Orleans in New Orleans, Louisiana; Belterra Casino Resort in Vevay, Indiana; Boomtown Bossier City in Bossier City, Louisiana; and Boomtown Reno in Reno, Nevada. The company also operates River Downs racetrack in southeast Cincinnati, Ohio. As of May 26, 2011, it operated seven casinos and one racetrack. The company was formerly known as Hollywood Park, Inc. and changed its name to Pinnacle Entertainment, Inc. in February 2000. Pinnacle Entertainment, Inc. was founded in 1935 and is based in Las Vegas, Nevada.

Advisors' Opinion:
  • [By Jeanine Poggi]

    Pinnacle Entertainment(PNK) was the great transition story of 2010, with shares spiking about 45% this year.

    The regional casino operator's most impressive story has been in its gross margins, as management, under the leadership of new CEO Anthony Sanfilippo, is in the process of increasing the company's operating efficiencies and prudently allocating capital. Analysts believe Pinnacle is in the early stages of this process, and will continue to drive revenue growth.

    In its third quarter, Pinnacle reported a surprise profit of 10 cents a share on an adjusted basis, better than consensus estimates of a loss of 7 cents. Revenue grew 15% to $287.8 million, while property-level margins reached 23.4%, also ahead of forecasts.

    Last month, Pinnacle purchased Cincinnati's River Downs Racetrack for $45 million. The deal includes 155 acres, 35 of which are still undeveloped. The transaction is expected to close by the end of the first quarter of 2011.

    This deal could generate significant returns in the event that Ohio decides to legalize video lottery terminals at racetracks, Santarelli said.

    Pinnacle is also in the process of looking for a buyer of its oceanfront land in Atlantic City, where it originally intended to build a $1.5 billion casino, before squelching plans. The casino operator bought the land in 2006 for $270 million from groups affiliated with Carl Icahn and later added another piece of land for $70 million.

    While the land's currently value is $38 million, Pinnacle insists it will not sell it on the cheap, holding out for the best deal.

    Pinnacle currently has $228 million in cash and $375 million of availability under its revolver.

  • [By Sherry Jim]

    Pinnacle Entertainment(PNK) swung to a loss in its second quarter, as costs rose.

    During the quarter, the regional casino operator lost $49.3 million, or 81 cents a share, compared with a profit of $4.7 million, or 8 cents, in the year-ago period for Pinnacle.

    Excluding items, Pinnacle actually lost 14 cents a share, 10 cents worse than analysts' estimates of a 4-cent loss.

    Pinnacle's revenue rose 8.5% to $273.6 million from $252.3 million, but also fell short of Wall Street's forecast of $284.4 million.

    Even though revenue was weaker, margins rebounded at all but one of Pinnacle's properties. "Margins are the story for Pinnacle ahead of any longer-term potential true rebound in the economy, and we continue to believe there are multiple opportunities for near-term operational improvements across the Pinnacle portfolio," Bain wrote in a note.

    At a time when most casino operators are striving to reduce costs to offset the decline in consumer spending, Pinnacle saw expenses rise 21% to $289.3 million. But Bain said Pinnacle is still in the early stages of cost-refining. "Given what we view as several areas of potential improvements in this regard, we believe Pinnacle is less dependent on an economic recovery than some of its regional peers," he wrote.

    J.P. Morgan analyst Joseph Greff also reaffirms his overweight rating on the stock, viewing Pinnacle as a transition story. "We continue to believe that new CEO Anthony Sanfilippo and team will drive increased operating efficiencies and allocate capital prudently," he wrote in a note.

    Greff praises Sanfilippo for shelving the Sugarcane Bay project and instead focusing on Baton Rouge.

    Pinnacle's liquidity remains strong, with $200 million in cash and $375 million of availability under its revolver

Hot Tech Stocks To Watch For 2014: (XTRN)

Las Vegas Railway Express Inc. focuses to re-establish a conventional passenger train service between the Las Vegas and Los Angeles metropolitan areas. It plans to establish a ?Vegas-style? passenger train service. The company is based in Las Vegas, Nevada.

Top 10 Casino Stocks To Invest In Right Now: Boyd Gaming Corporation(BYD)

Boyd Gaming Corporation, together with its subsidiaries, operates as a multi-jurisdictional gaming company in the United States. As of December 31, 2011, the company owned and operated 1,042,787 square feet of casino space, containing approximately 25,973 slot machines, 655 table games, and 11,418 hotel rooms. It also owned and operated 16 gaming entertainment properties located in Nevada, Illinois, Louisiana, Mississippi, Indiana, and New Jersey. In addition, the company owns and operates a pari-mutuel jai-alai facility located in Dania Beach, Florida, as well as a travel agency in Hawaii. Further, it holds a 50% controlling interest in the limited liability company that operates Borgata Hotel Casino and Spa in Atlantic City, New Jersey. Boyd Gaming Corporation was founded in 1988 and is headquartered in Las Vegas, Nevada.

Advisors' Opinion:
  • [By Hesler]

    Boyd Gaming(BYD) posted a bigger-than-expected drop in its second-quarter earnings, citing weak performance in Las Vegas, the Midwest and the South.

    During the quarter, the casino operator earned $3.4 million, or 4 cents a share, a 73% plunge from $12.8 million, or 15 cents, in the year-ago period. Adjusted earnings came in at 5 cents a share, significantly lower than the 10 cents Wall Street predicted for Boyd.

    Boyd's revenue fell 6% to $578.4 million, also short of the consensus of $588 million.

    "The lingering effects of the recession have left consumers unusually sensitive to shifts in the economy, and they now react more quickly to economic data and other developments, such as fluctuations in the stock market," said CEO Keith Smith, in a statement. "Although conditions remain uncertain, we believe long-term stabilizing trends are still in place, and that year-over-year growth is achievable by the end of 2010."

    In the Las Vegas locals market, the rate of decline in earnings before interest, taxes, depreciation and amortization rose to 16.2% from 10.8%, J.P. Morgan analyst Joseph Greff wrote in a note. Boyd previously reported a 9.9% decline for its Borgata property in Atlantic City. Revenue came in at $186.9 million, a 2.4% decrease from the year-ago period.

    "We think second-quarter results are less important than the coming operating results in the second-half of 2010, when the Atlantic City market faces increased regional competitive pressures from tables in Pennsylvania and West Virginia and the first Philadelphia casino opens this summer," J.P. Morgan analyst Joseph Greff wrote in a note.

    Greff reaffirmed his underweight rating on Boyd, given increasing competition in Atlantic City, a weak recovery in the Las Vegas locals market and stagnant regional gaming trends.

    While there is no doubt the Atlantic City gaming market remains one of the most depressed, Borgata continues to dominate the market and gain share. Atlant! ic City saw gaming revenues plunge 11.1% in June to $286.8 million. Boyd co-owns Borgata with MGM Resorts, which is currently in the process of divesting its 50% stake.

  • [By Jeanine Poggi]

    The Las Vegas locals and Atlantic City markets have the longest road to recovery, making Boyd Gaming (BYD) one of the most challenged stocks in the sector long-term.

    It's not a surprise then that Boyd saw some of the most muted gains in 2010, with shares rising just 13.8% since the beginning of the year.

    In Atlantic City, where Boyd owns a 50% stake in the Borgata, gambling revenue plunged 13% in November. The New Jersey Boardwalk has been under pressure even before the recession began, as nearby regions expand their gaming presence.

    Both West Virginia and Pennsylvania added table games to casinos in the second half of the year and new properties opened in Philadelphia and Maryland. In 2011, Atlantic City will also have to contend with additional growth in Pennsylvania and the pending opening of the Aqueduct in New York City.

    Given this, Boyd decided not to exercise its right to match a $250 million offer MGM Resorts(MGM) received for its 50% stake in the Borgata. MGM decided to divest its joint venture with Boyd after the Atlantic City Gaming Commission criticized its relationship with Pansy Ho in Macau, whose family has allegedly been tied to organized crime in China.

    In the Las Vegas locals market, where Boyd generates about 44% of its EBITDA, trends are improving, but not as quickly as analysts would have hoped. In October, gaming revenue in the market grew 6.2% to $169.4 million.

    In its third quarter, Boyd disappointed Wall Street, with adjusted earnings coming in at 2 cents a share, shy of consensus estimates of 5 cents. Revenue dropped 4% to $595.4 million.

    Boyd also announced plans to sell $500 million of eight-year notes. Proceeds will be used to buy back senior subordinated notes due 2012 and to repay bank loans.

Top 10 Casino Stocks To Invest In Right Now: Penn National Gaming Inc.(PENN)

Penn National Gaming, Inc. and its subsidiaries own and manage gaming and pari-mutuel properties in the United States. It operates approximately 27,000 gaming machines; 500 table games; and 2,000 hotel rooms in 23 facilities in 16 jurisdictions, including Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia, and Ontario. The company was formerly known as PNRC Corp. and changed its name to Penn National Gaming, Inc. in 1994. Penn National Gaming, Inc. was founded in 1982 and is based in Wyomissing, Pennsylvania.

Advisors' Opinion:
  • [By Quickel]

    Penn National Gaming(PENN) squeaked past its guidance through improved cost controls, and investors praised its efforts.

    But expectations were low, and its upbeat outlook shouldn't be viewed as a message that regional markets are recovering. "Going forward, we project soft regional gaming revenue results over the next three to six months, as we do not expect to see a significant increase in consumer spending patterns given the uncertain economic environment," J.P. Morgan analyst Joseph Greff wrote in a note.

    Penn National raised its full-year earnings guidance to $1.18 from $1.13 a share, and up its revenue outlook by $26 million to $2.44 billion from $2.41 billion.

    During the second quarter, the company earned $9.2 million, or 9 cents a share, compared with $28.5 million, or 27 cents, in the year-ago period. Excluding items, Penn actually earned 29 cents a share, a penny higher than estimates.

    Revenue rose 3% to $598.3 million, higher than the $597.1 million Wall Street projected. The upside was driven by both better revenues and margins and was generally broad-based across many properties, especially larger venues in Charlestown, Lawrenceburg and Grantville, Pa.

    Penn National rolled out table games in West Virginia and Pennsylvania during the quarter, which should be a growth catalyst moving forward. The company also plans to open a slot facility in Maryland on Sept. 30 and expects its Toldeo, Ohio, location to open in the first-half of 2012. Its Columbus project is slated to open in the second-half of 2012.

    The company repurchased 409,000 shares during the quarter. "[This] sends a message to investors on the value of its equity, but perhaps indicating the lack of near-term acquisition opportunities," J.P. Morgan analyst Joseph Greff wrote in a note.

Top 10 Casino Stocks To Invest In Right Now: MGM Resorts International(MGM)

MGM Resorts International, through its subsidiaries, primarily owns and operates casino resorts in the United States. The company?s resorts offer gaming, hotel, dining, entertainment, retail, and other resort amenities. It also owns and operates golf courses and a golf club. As of December 31, 2010, the company owned and operated 15 properties located in Nevada, Mississippi, and Michigan; and has 50% investments in 4 other casino resorts in Nevada, Illinois, and Macau. In addition, MGM Resorts International has an agreement with the Mashantucket Pequot Tribal Nation, which owns and operates a casino resort in Connecticut, to carry the ?MGM Grand? brand name. The company was formerly known as MGM MIRAGE and changed its name to MGM Resorts International in June 2010. MGM Resorts International was founded in 1986 and is based in Las Vegas, Nevada.

Advisors' Opinion:
  • [By Hawkinvest]

    MGM Resorts International (MGM) is one of the world's largest hotel and casino companies, based in Las Vegas. Since December, MGM shares have been trading in a range of about $9, to almost $15 per share. The stock is now at the upper limit of the recent trading range which means that the risk of holding or buying this stock right now, could be elevated. MGM shares have rallied with the markets but appear extended and vulnerable to a sell-off. The company has a heavy debt load and it has been reporting losses. The balance sheet has about $13.45 billion in debt and only about $1.97 billion in cash. MGM could be impacted by higher oil prices because many consumers could cut back on spending if they go to Las Vegas, and some might decide not to go at all, and instead opt for a "staycation." With MGM facing challenges and the shares near recent highs, it could make sen se to sell now and buy on dips later this year.

    Here are some key points for MGM:

    Current share price: $14.18

    The 52 week range is $7.40 to $16.05

    Earnings estimates for 2011: a loss of 53 cents per share

    Earnings estimates for 2012: a loss of 39 cents per share

    Annual dividend: none

  • [By Goodwin]

    MGM Resorts International(MGM) has the most exposure to the Las Vegas market, making it a bet only for those with thick skin.

    For the second quarter, the casino operator lost $883.5 million, or $2 a share, compared with a loss of $212.5 million, or 60 cents, in the year-ago period.

    A majority of the loss was attributed to a $1.12 billion writedown on its investment in CityCenter in Las Vegas. This is the third time MGM has had to write down CityCenter, as the casino has seen little improvement in operating profit since it opened in December. The $8.5 billion development took a loss of $128 million.

    Excluding this writedown, MGM actually lost 35 cents a share, still significantly more than analysts estimates of a 24-cent loss. MGM's revenue rose 3% to $1.54 billion from $1.49 billion, ahead of analysts' estimates of $1.46 billion.

    Revenue-per-available room on the Las Vegas Strip decreased 2%, although Bellagio and MGM Grand showed improvement, the company said. Occupancy levels slipped to 93% from 94% while the average daily rate fell a dollar to $110. "The Las Vegas operating environment remains difficult, but as we expected, we are seeing a gradual recovery," Chief Executive Officer Jim Murren said in a statement.

    Some of MGM's losses in Las Vegas were offset by its joint venture in Macau with Pansy Ho. MGM Macau earned $40 million, compared with a loss of $8 million last year

    Outside of Vegas, MGM said last week that it agreed to sell land from its Borgata hotel in Atlantic City for $73 million to Vornado Realty Trust and Geyser Holdings. The Borgata land, which is co-owned with Boyd Gaming(BYD), is about 11.3 acres, which would translate into about $6.5 million per acre.

    The transaction still needs to be approved by New Jersey regulators, and is expected to close by the fourth quarter. Once this transaction is complete, MGM will still own about 85 acres of developable land in Atlantic City.

    Earlier in the year, MGM said it planned t! o divest its 50% stake in the Atlantic City casino, which is currently in trust. The casino operator is still in talks with potential buyers of Borgata casino, and hotel and investors will be waiting for an update on its progress when second-quarter earnings are released.

    "We view this [deal] as a very modest positive in that there are still buyers of Atlantic City assets out there, at least at the right price," J.P. Morgan analyst Joseph Greff wrote in a note. "We don't necessarily interpret [the] news as any indication that MGM is closer to selling its 50% stake in Borgata."

Carlyle Group Buying Marelli Motori for $280.5 Million

Corporate holding company Carlyle Group (NASDAQ: CG  ) signed a deal to acquire a new subsidiary this week.

On Thursday, Carlyle announced it has agreed to buy Marelli Motori from Britain's Melrose Industries in a deal expected to close in August. Based in Italy, Marelli is one of the world's largest manufacturers of industrial generators and electric motors for the power generation, marine, oil & gas, and industrial manufacturing markets.

Explaining the purchase, co-head of Carlyle Europe Partners Marco De Benedetti said: "Marelli Motori is an outstanding Italian company that, thanks to the quality and competence of its management, has gone through a process of true internationalization enabling them to gain recognition and a strong market position in all of the major international markets in which they operate."

It's also a growing company, having increased annual revenues 12.5% in the most recent year, to $197.3 million in 2012. With Carlyle paying $280.5 million, this works out to a 1.4-times-sales ratio on the purchase.

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Sunday, July 28, 2013

Top 10 Clean Energy Stocks To Watch Right Now

The recent budget proposal from the Obama administration is taking a lot of criticism for its big emphasis on clean energy technology development. While some may critique the method on how this will be funded, others fear the possibility of these clean energy investments failing,�the most recent and most widely publicized example being the bankrupt solar company Solyndra.�

Yet while we rake the muck of these failed�investments, many of us look over the fact that several industries and technologies were made possible from government funding.�Clearly, not every investment the government makes will be a great success, but�several�successful�businesses have developed in large part because of government assistance. There are examples across almost every sector of industry, but for now let's focus on developments in energy and see if a failure like Solyndra is an�aberration or just part of everyday business for the government.

Top 10 Clean Energy Stocks To Watch Right Now: Republic Gold Ltd(RAU.AX)

Republic Gold Limited engages in the exploration and development of gold and base metal properties in Australia and Bolivia. The company primarily explores for gold, copper, antimony, tungsten, and tin. Its principal property includes the Amayapampa gold project located southeast of La Paz. The company was incorporated in 2003 and is based in Millswood, Australia.

Top 10 Clean Energy Stocks To Watch Right Now: Ditem Explorations Inc. (DIT.V)

Ditem Explorations Inc. engages in the exploration and development of mineral properties in Canada. It primarily explores for uranium deposits. The company�s principal properties are located in the Otish Basin of the Otish Mountains region of north-central Quebec; and the Athabasca Basin of the Athabasca Lake region of northern Saskatchewan. It also owns interest in various rare earth properties located in the Otish Mountain region and North Shore region in Quebec. Ditem Explorations Inc. was incorporated in 1993 and is based in Montr茅al, Canada.

Top Small Cap Companies For 2014: Astro-Med Inc.(ALOT)

Astro-Med, Inc. designs, develops, manufactures, distributes, and services various products that acquire, store, analyze, and present data in multiple formats. It operates in three segments: Test & Measurement (T&M), QuickLabel Systems (QuickLabel), and Grass Technologies (Grass). The T&M segment provides a suite of telemetry recorder products for the aerospace and defense industries, as well as portable data acquisition recorders, which offer diagnostic and test functions to a range of manufacturers, including automotive, energy, paper, and steel fabrication. It also offers a suite of ruggedized printer products for military and commercial applications for use in the avionics industry to print weather maps, communications, and other critical flight information. The QuickLabel segment provides hardware, software, and media products that create on demand color labels, and store and produce images in color or non-color formats on various media substrates. Its products compri se digital color label printers; labeling software; label and tag substrates; label printing inks; custom label printing services; and printer accessories. The Grass segment produces diagnostic and monitoring products that serve the clinical neurophysiology markets, as well as a range of biomedical instrumentation products and supplies focused on the life sciences markets. Its product line consists of neurophysiological recording instruments, software, stimulators, electrode preps, consumable products, and electrodes. The company serves aerospace, apparel, automotive, avionics, chemicals, computer peripherals, communications, distribution, food and beverage, general manufacturing, life sciences, packaging, and transportation markets. Astro-Med, Inc. markets its products through sales personnel, manufacturing representatives, and dealers in the United States, Europe, Canada, Asia, and Central and South America. The company was founded in 1969 and is headquartered in West Warw ick, Rhode Island.

Advisors' Opinion:
  • [By Guru Focus] CFO of AstroMed Inc. (ALOT) Joseph P Oconnell sold 38,241 shares on 09/09/2011 at an average price of $7.3. Joseph P Oconnell owns at least 88,369 shares after this. The price of the stock has decreased by 3.15% since.

    ASTRO-MED, INC. develops, designs, manufactures and sells a comprehensive line of specialty data printers and related electronic systems, computersoftware, and printer consumables. Astromed Inc. has a market cap of $51.5 million; its shares were traded at around $7.07 with a P/E ratio of 21.4 and P/S ratio of 0.7. The dividend yield of Astromed Inc. stocks is 3.9%.

    For the complete list of stocks that Sold by their CFOs, go to: Insider Buys.

Top 10 Clean Energy Stocks To Watch Right Now: Chiquita Brands International Inc. (CQB)

Chiquita Brands International, Inc., together with its subsidiaries, engages in the distribution and marketing of bananas and fresh produce under the Chiquita and other brand names worldwide. The company operates in three segments: Bananas, Salads and Healthy Snacks, and Other Produce. The Banana segment sources, transports, markets, and distributes bananas to retailers and wholesalers, and chain stores. It also engages in the cultivation and production of bananas. The Salads and Healthy Snacks segment offers value-added salads under the Fresh Express and other labels; and fresh vegetable and fruit ingredients used in foodservice, healthy snacks, and processed fruit ingredient products. This segment also provides fresh-cut products, such as lettuce, tomatoes, spinach, cabbage, and onions to foodservice distributors who resell these products to foodservice operators. It distributes Fresh Express branded products to food retailers, foodservice distributors, and quick-service restaurants; and fresh produce foodservice offerings primarily to third-party distributors for resale principally to quick-service restaurants in the United States. The Other Produce segment engages in sourcing, marketing, and distributing fresh fruits and vegetables other than bananas in Europe and North America. It offers grapes, pineapples, melons, kiwis, tomatoes, and avocados. The company was founded in 1899 and is headquartered in Cincinnati, Ohio.

Top 10 Clean Energy Stocks To Watch Right Now: Citigroup Inc. (C-S)

CVS Caremark Corporation provides pharmacy health care services in the United States. Its Pharmacy Services segment offers pharmacy benefit management services, including plan design and administration, formulary management, discounted drug purchase arrangements, Medicare Part D services, mail order and specialty pharmacy services, retail pharmacy network management services, prescription management systems, clinical services, disease management services, and pharmacogenomic. This segment primarily serves employers, insurance companies, unions, government employee groups, managed care organizations and other sponsors of health benefit plans, and individuals. This segment operates business under the CVS Caremark Pharmacy Services, Caremark, CVS Caremark, CarePlus CVS/pharmacy, CarePlus, RxAmerica, and Accordant names. The company�s Retail Pharmacy segment sells prescription drugs, over-the-counter drugs, beauty products and cosmetics, seasonal merchandise, greeting cards, and convenience foods, as well as provides film and photo finishing services. This segment sells its products through retail drugstores; online retail pharmacy Website CVS.com; onsite pharmacy stores; and retail health care clinics. As of March 31, 2012, the company operated 7,352 retail drugstores, 570 MinuteClinic locations, 31 retail specialty pharmacy stores, 12 specialty mail order pharmacies, 4 mail order pharmacies, and CVS.com and Caremark.com Web sites. The company has a strategic alliance with Alere, L.L.C. for the management of disease management program that covers asthma, diabetes, congestive heart failure, and coronary artery disease. CVS Caremark Corporation was founded in 1892 and is headquartered in Woonsocket, Rhode Island.

Top 10 Clean Energy Stocks To Watch Right Now: Angeion Corporation(ANGN)

Angeion Corporation, through its subsidiary, Medical Graphics Corporation, designs and markets non-invasive cardio respiratory diagnostic systems under the MedGraphics and New Leaf brand names in the United States and internationally. The company?s primary products include pulmonary function and cardiopulmonary exercise testing systems. Its pulmonary function systems comprise Spirometry, Complete Pulmonary Function, and Body Plethysmography product categories, which enable the early detection of lung disease; evaluate the effect of medication; monitor patients with chronic disease; diagnose lung diseases, such as asthma, emphysema, and chronic obstructive pulmonary disease; manage treatment; assess the surgical risk of lung transplant and lung reduction candidates; and evaluate the impact of diseases, such as neuromuscular disease on breathing. The company?s cardiopulmonary exercise testing systems measure functional capacity, fitness, or conditioning levels, and evaluat e prognostic criteria for surgical procedures, as well as help physicians diagnose heart and lung diseases. Its cardiopulmonary exercise testing systems find applications in distinguishing between cardiovascular and pulmonary disease, screening for early signs of cardiac and pulmonary dysfunction, establishing exercise prescriptions and training programs, evaluating the efficacy of prescribed therapy, and determining appropriate nutritional supports requirements. The company also offers cycle ergometers and treadmills to healthcare professionals and patients for use in diagnostic, rehabilitation, training, and sports medicine applications; and BreezeConnect software, installation, and support for communications interfaces. It serves hospitals, university-based medical centers, medical clinics, physician offices, health and fitness clubs, weight loss clinics, and personal training studios. Angeion Corporation was founded in 1986 and is based in Saint Paul, Minnesota.

Top 10 Clean Energy Stocks To Watch Right Now: Witwatersrand Consol Gold (WGR.TO)

Witwatersrand Consolidated Gold Resources Limited engages in the exploration of gold and uranium properties in South Africa. It is involved in acquiring, preserving, evaluating, developing, and trading prospecting rights for exploration and investment purposes. The company holds 14 prospecting rights covering an area of approximately 1,195 square kilometers in the southern Free State, Potchefstroom, and Klerksdorp goldfields of the Witwatersrand basin, South Africa. The company was incorporated in 2002 and is headquartered in Johannesburg, South Africa.

Top 10 Clean Energy Stocks To Watch Right Now: Mph Ventures Corp. (MPS.V)

MPH Ventures Corp., an exploration stage company, engages in the acquisition, exploration, and development of resource properties in Canada. The company primarily explores for molybdenum and gold deposits. It has interests in various properties located throughout northern Ontario, including properties near Timmins, Ontario. The company is based in Vancouver, Canada.

Top 10 Clean Energy Stocks To Watch Right Now: Superconductor Technologies Inc.(SCON)

Superconductor Technologies Inc. engages in the development and production of high temperature superconducting (HTS) materials and associated technologies worldwide. The company is leveraging its technologies, including HTS materials and cryogenics, to develop second generation (2G) HTS wire for power applications. Its HTS-based products play a role in emerging power generation, conversion, and distribution applications by enhancing grid reliability and efficiency. The company?s flagship wireless product, SuperLink, combines a specialized filter using patented HTS technology with a proprietary cryogenic cooler and a low-noise amplifier. Its commercial product offerings include SuperLink, a receiver front-end HTS wireless filter system that eliminates out-of-band interference for wireless base stations; AmpLink, a ground-mounted unit for wireless base stations that includes a high-performance amplifier and up to six dual duplexers; and SuperPlex, a multiplexer that provide s low insertion loss and cross-band isolation. The company also grants the U.S. government a royalty-free, non-exclusive, and nontransferable license to use its intellectual property. It sells its products primarily to wireless carriers through direct sales force in the United States, as well as through indirect channels internationally. The company was founded in 1987 and is headquartered in Santa Barbara, California.

Top 10 Clean Energy Stocks To Watch Right Now: Wpp Grp(WPP.L)

WPP plc, together with its subsidiaries, offers various communications services worldwide. The company?s Advertising and Media Investment Management segment offers advertising services through a range of international and specialist agencies; and above- and below-the-line media planning and buying, and specialist sponsorship and branded entertainment services. Its Consumer Insight segment provides brand, consumer, media, and marketplace insight, as well as work with clients to generate and apply insights. The company?s Public Relations and Public Affairs segment offers corporate, consumer, financial, and brand-building services from public relations and lobbying firms. Its Branding and Identity, Healthcare, and Specialist Communications segment engages in various activities, which include consumer, corporate, and employee branding and design services; covering identity, packaging, literature, events, training, and architecture; a range of general and specialist customer, channel, direct, field, retail, promotional, and point-of-sale services; and integrated healthcare marketing solutions from advertising to medical education and online marketing. It also offers specialist communications services, such as custom media and multicultural marketing; event, sports, youth, and entertainment marketing; corporate and business-to-business; media, technology, and production services; and digital marketing agency services. WPP plc was founded in 1971 and is based in Dublin, Ireland

Some Fish Oil Doesn't Help Some Patients in Some Countries

A study published in The New England Journal of Medicine testing omega-3 fatty acids -- commonly found in fish oil -- in patients with risk factors for cardiovascular disease came up with a pretty wishy-washy conclusion. The take-home message from the study: Fish oil given at the dose used in the trial didn't reduce cardiovascular mortality and morbidity in the population tested.

Beyond that, it's hard to draw conclusions, although you'll hear plenty of media, investors, and even a few doctors make sweeping conclusions.

As I see it, there are three key points that limit the conclusions from the study.

1. Who's being tested? The large clinical trial enrolled more than 12,500 patients in Italy. How different would the results be for patients in the U.S.? Not only is our genetic makeup potentially different, but so is our diet. If Italians are already getting plenty of omega-3 fatty acids, you might imagine that adding a little extra isn't likely to do much.

In fact, the group studied was healthier than planned. The primary endpoint of the study was initially cumulative rate of death, nonfatal heart attacks, and nonfatal stroke, but the event rate was lower than expected, so the endpoint was loosened to include admission to the hospital for cardiovascular causes.

2. What's the dose? Patients were given 1 gram of omega-3 fatty acids or an olive oil placebo. One gram isn't a whole lot. The recommended dose for GlaxoSmithKline's (NYSE: GSK  ) prescription-grade fish oil Lovaza is 4 grams. Ditto for Amarin's (NASDAQ: AMRN  ) Vascepa. Omthera Pharmaceuticals' (NASDAQ: OMTH  ) has seen good results with a 2-gram dose of its omega-3 drug Omthera, but that appeared to be due to increased absorption because of the way the drug is prepared.

The difference in doses shows in the measurement of triglycerides, which may contribute to hardening of arteries. In the 1-gram trial, triglycerides fell by 28 milligrams per deciliter compared with 57 mg/dL in a trial testing Lovaza in patients with moderately high triglyceride levels.

3. What's in your pill? The fish oil supplements you buy at the drugstore are a mix of different omega-3 fatty acids, but eicosapentaenoic acid, or EPA, is believed to be the key ingredient that slows triglyceride formation, because the enzymes that make triglycerides don't use EPA very effectively and has the added benefit of reducing bad LDL cholesterol.

Vascepa is highly purified EPA, which decreased LDL cholesterol levels by a statistically significant 6.2% from baseline versus placebo in the aforementioned trial testing patients with moderately high triglyceride levels. In the 1-gram trial, however, the authors noted that there were no significant differences in LDL cholesterol between the two groups.

Big test in progress
Amarin is testing Vascepa in a heart outcomes trial. The results are likely to dictate whether the drug stays on the market or, at the very least, how well it sells. Changing laboratory tests is nice, but outcomes are what doctors and patients really care about.

It certainly would have been nice to see 1 gram of omega-3 fatty acids lower heart-related issues. If the low dose worked, Vascepa would have been a shoo-in. Of course, it cuts both ways. If 1 gram of omega-3 fatty acids had worked, patients could just buy cheap supplements and wouldn't need an expensive prescription drug.

As I outlined earlier, I have a hard time arguing that the 1-gram trial proves that Vascepa won't succeed; the products are just too different.

Vascepa still has an uphill battle, though. The patients in the outcomes trial are taking a statin such as Pfizer's Lipitor, Merck's (NYSE: MRK  ) Zocor, or AstraZeneca's Crestor, which do a pretty good job of lowering heart complications on their own. It can be hard to measure a further decrease when you add a drug to the mix. That's what happened to Merck's Cordaptive, which increased good HDL cholesterol, reduced bad LDL cholesterol, and lowered lipid levels, but failed to show an effect in an outcomes trial.

We'll have to wait for the clinical trial to read out in a few years before we'll know whether we can see a less wishy-washy statement about fish oil and cardiovascular health.

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Best China Companies To Invest In 2014

On one level, it's a silly question: Of course Ford (NYSE: F  ) is an American company. With headquarters in Michigan and over a century of building and selling cars here, the Ford brand and Ford's vehicles are an everyday part of American life.

But at the same time, Ford is making its most ambitious overseas expansion effort ever ��and soon, non-American markets will be more important to Ford than ever before. In this video, Fool.com contributor John Rosevear looks at Ford's ambitious global plans ��and at why anyone investing in Ford needs to be looking far beyond America's shores.

China is already the world's largest auto market ��and it's set to grow even bigger in coming years. A recent Motley Fool report, "2 Automakers to Buy for a Surging Chinese Market", names two global giants poised to reap big gains that could drive big rewards for investors. You can read this report right now for free ��just click here for instant access.

Best China Companies To Invest In 2014: Arotech Corporation(ARTX)

Arotech Corporation, together with its subsidiaries, provides defense and security products. It operates in three divisions: Training and Simulation, Battery and Power Systems, and Armor. The Training and Simulation division develops, manufactures, and markets multimedia and interactive digital solutions for use-of-force training and driving training of military, law enforcement, security, and other personnel; provides simulators, systems engineering, and software products to the United States military, government, and private industry; and offers specialized use of force training for police, security personnel, and the military. The Battery and Power Systems division manufactures and sells lithium and zinc-air batteries for defense and security products and other military applications; and develops and sells rechargeable and primary lithium batteries and smart chargers to the military and to private defense industry. This division also develops, manufactures, and markets primary zinc-air batteries, rechargeable batteries, and battery chargers for the military; and produces water-activated lifejacket lights for commercial aviation and marine applications. The Armor Division manufactures military and paramilitary armored vehicles, and employs sophisticated lightweight materials to produce aviation armor; and uses engineering concepts to produce combat armored military vehicles and up-armor civilian commercial vehicles. This division also uses lightweight armoring materials and advanced engineering processes to provide ballistic armor kits for rotary and fixed wing aircraft. Arotech sells its products primarily in the United States, Israel, Taiwan, Canada, England, Germany, Australia, China, Hong Kong, Mexico, India, Spain, Singapore, and Japan. The company was formerly known as Electric Fuel Corporation and changed its name to Arotech Corporation in September 2003. Arotech Corporation was founded in 1990 and is based in Ann Arbor, Michigan.

Advisors' Opinion:
  • [By cnAnalyst]

    Arotech Corporation (NASDAQ:ARTX) is the 6th best-performing stock last month in this segment of the market. It was up 70.83% for the past month. Its price percentage change was 22.75% year-to-date.

Best China Companies To Invest In 2014: Qihoo 360 Technology Co. Ltd.(QIHU)

Qihoo 360 Technology Co. Ltd. provides Internet and mobile security products in the People's Republic of China. Its principal products include 360 Safe Guard, an Internet security product for Internet security and system optimization; 360 Anti-Virus, an anti-virus application to protect users? computers against trojan horses, viruses, worms, adware, and other forms of malware; and 360 Mobile Safe, a security program for the Google Android, Apple iOS, and Nokia Symbian smartphone operating systems. The company?s platform products comprise 360 Safe Browser, a Web browser; 360 Personal Start-up Page, a default homepage of 360 Safe Browser and a key access point to popular and preferred information and applications; 360 Application Store, a key access point to securely obtain and manage software and applications; and 360 Safebox, a solution that protects users against thefts of personal account information. It also provides online advertising services, including online marketi ng services and search referral services; and Internet value-added services comprising the operation of Web games developed by third-parties, remote technical support, and cloud-based services. The company was formerly known as Qihoo Technology Company Limited and changed its name to Qihoo 360 Technology Co. Ltd. in December 2010. Qihoo 360 Technology Co. was founded in 2005 and is based in Beijing, the People?s Republic of China.

Top 5 Undervalued Stocks To Watch Right Now: Bitauto Holdings Limited (BITA)

Bitauto Holdings Limited provides Internet content and marketing services for the automotive industry primarily in the People?s Republic of China. The company offers subscription services to new automobile dealers that enable them to list pricing and promotional information on its bitauto.com Website and partner Websites, and to interact with consumers through its virtual call center, as well as provides advertising service to dealers and automakers on its bitauto.com Website. It also offers listing services to used automobile dealers, which enable them to display used automobile inventory information through its ucar.cn Website and partner Websites; and advertising services to used automobile dealers and automakers with certified pre-owned automobile programs on its ucar.cn Website. In addition, the company provides digital marketing solutions, including Website creation and maintenance, online public relationship, online marketing campaigns, and advertising agent service s. Bitauto Holdings Limited was founded in 2000 and is headquartered in Beijing, the People?s Republic of China.

Best China Companies To Invest In 2014: China Automotive Systems Inc.(CAAS)

China Automotive Systems, Inc., through its interests in Sino-foreign joint ventures, engages in the manufacture and sale of power steering systems and other component parts for the automotive industry in the People?s Republic of China. It offers a range of steering system parts for passenger automobiles and commercial vehicles. The company provides 4 separate series, 307 models of power steering, including rack and pinion power steering, integral power steering, electronic power steering and manual steering, steering columns, steering oil pumps, and steering hoses. China Automotive Systems, Inc. was founded in 2003 and is headquartered in Jing Zhou City, the People?s Republic of China.

Best China Companies To Invest In 2014: Ctrip.com International Ltd.(CTRP)

Ctrip.com International, Ltd., together with its subsidiaries, provides travel services for hotel accommodations, airline tickets, and packaged tours in the People?s Republic of China. It also sells independent leisure travelers bundled package-tour products, which include transportation and accommodation, as well as guided tours covering various domestic and international destinations. In addition, the company offers Internet-related advertising, aviation casualty insurance, and air-ticket delivery services. Further, it sells Property Management System, a hotel information software; travel guidebooks, which provide information for independent travelers; and VIP membership cards that allow cardholders to receive discounts from various restaurants, clubs, and bars. The company was founded in 1999 and is headquartered in Shanghai, the People?s Republic of China.

Advisors' Opinion:
  • [By Mark]

    Ctrip (CTRP) is the leading online travel agent in China, where a growing middle class and increased business activity mean the travel industry is booming. Last year, the recession slowed revenue growth at Ctrip to 35%; in the latest quarter, it was back up to 47% … and profit margins were a very healthy 42.2%. Ctrip was on the list three years ago.

  • [By Stephen]  

    ThinkEquity sees the China travel market should remain robust in 2011, with approximately mid-teens growth. Additionally, while concerns linger with CTRP regarding high speed train rollouts, tougher comps in 2011 due to the Shanghai expo, and airline commission rates, it believes these concerns have created an attractive entry point in Ctrip.

A Look At Telefonica's H1 Numbers

Introduction

In this article I'll follow up on my earlier article on Telefonica (TEF) 'Why Telefonica might be a good investment right now', and have a look at the company's H1 financial results which were published last week. I'll first discuss the numbers, have a closer look at the debt level (as it's one of Telefonica's priorities to considerably reduce this debt) and give my updated opinion at the end of this article.

I recalculated all numbers from Euro to USD using an EUR/USD exchange rate of 1.33.

The H1 Financial results

Looking at the consolidated income statement, revenue came in at 28.5B EUR (37.9B USD) which is down 7.8% from 2012's 31B EUR (41.2B USD). The OIBDA margin (Operating Income Before Depreciation and Amortization) remained relatively stable at 33%, down from 33.7%.

The net income came in at 2.06B EUR (2.75B USD), down just 0.9% from 2.08B (2.77B USD) in the same period last year. This stable net income was mainly caused by lower financial expenses (1.4B EUR (1.86B USD) versus 1.59B EUR (2.11B USD) last year) and lower income taxes (751M EUR (999M USD) vs 960M EUR (1.28B USD)). These two accounts had a positive impact of approximately 400M EUR (532M USD) on the net income and that's the main reason why net income was down by less than a percent despite the 7.8% drop in revenue and 9.7% drop in OIBDA.

(click to enlarge)

On the positive side, Telefonica generated almost 1.3B EUR (1.73B USD) in free cash flow, even after spending in excess of 5B EUR (6.65B USD) in capex, including 1.1B EUR (1.46B USD) in spectrum payments (of which the UK spectrum auction was the most expensive one, requiring 655M EUR (870M USD).

(click to enlarge)

The debt si! tuation

This free cash flow obviously helped Telefonica to cut its net debt, which stood at 49.8B EUR (66.2B USD) as of at the end of Q2 this year, which is down almost 15% from its level of 58.3B EUR (77.5B USD) at the same time last year. Needless to say Telefonica is progressing well in its efforts to keep the total debt under control and seems to be on the right track to decrease the level of net debt to less than 47B EUR (62.5B USD).

Telefonica says the pro forma net debt as of the publication of the results was lower again, standing at 48.6B EUR (64.6B USD), after selling a 40% stake in certain Central American assets as well as selling T. Ireland).

The net debt/OIBDA ratio as at the end of H1 2013 stood at 2.40, which is acceptable. When recalculating the net debt/OIBDA ratio using the updated debt level of 48.6B EUR (64.6B USD), the ratio drops to 2.34-2.36.

The proposed acquisition of KPN's German assets for a consideration of 5B EUR (6.65B USD) in cash (and 3B EUR (4B USD) in stock) will obviously have an impact on the debt and OIBDA-level, and I'm looking forward to get more information such as pro forma numbers on a potential combined entity. I'm also very curious to see whether or not this deal will be allowed to go through by the German and European Telecom watchdogs.

Conclusion

Telefonica seems to be on the right track to reduce its debt levels as the company generated a substantial amount of free cash flow in the first half of this year, which reduced the debt level to less than 50B EUR (66.5B USD). Subsequent divestment of assets had another positive impact of in excess of 1B EUR (1.33B USD) on this debt level.

I'm curious which impact the proposed acquisition of E-Plus will have on the company's balance sheet, net debt position and Net Debt/OIBDA ratio. As it's almost certain this deal will be subject to an investigation by the telecom watchdogs, I don't think this acquisition will be completed before year's end, so it's very likely Telefonica ! will reac! h its target of 47B EUR (62.5B USD) in net debt.

Telefonica expects to pay a dividend in November of this year, and I'm curious if this dividend will be payable in cash or if shareholders will have a choice to elect a stock dividend (which are tax-free in Spain). If half of the shareholders would elect to receive a dividend in stock, this would save Telefonica a cash outflow of approximately 1.7B EUR (2.25B USD) for 2013 (assuming a 0.75 EUR (1 USD) gross dividend).

Telefonica seems to tick all the boxes it promised to tick, and after reading the H1 results, I'm almost certain the company will meet its projected maximum net debt position. At the current share price and proposed dividend, Telefonica has a dividend yield of in excess of 7%.

Source: A Look At Telefonica's H1 Numbers

Disclosure: I am long TEF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Saturday, July 27, 2013

Fastenal Earnings Aren't Growing Fast Enough

Fastenal (NASDAQ: FAST  ) is slated to release its quarterly report on Wednesday. Yet although investors expect Fastenal earnings to improve slightly, the big question is whether any growth will be enough to support the stock's rich valuation. Unless Fastenal can provide a nice surprise on the earnings front, the answer to that question is likely to be no.

Fastenal has its foot in two parts of the industrial and construction business, supplying corporate customers with fasteners and other products that they can then incorporate into their own work, as well as selling those products directly to retail customers. With the economy starting to perk up, can Fastenal make its mark and get its growth to accelerate? Let's take an early look at what's been happening with Fastenal over the past quarter and what we're likely to see in its quarterly report.

Stats on Fastenal

Analyst EPS Estimate

$0.41

Change From Year-Ago EPS

7.9%

Revenue Estimate

$857.13 million

Change From Year-Ago Revenue

6.5%

Earnings Beats in Past 4 Quarters

1

Source: Yahoo! Finance.

Is Fastenal's earnings growth slowing down too fast?
Analysts have been concerned about Fastenal's earnings growth prospects in recent months, having trimmed a penny per share from their June-quarter estimates and $0.04 and $0.06 respectively from their full-year 2013 and 2014 consensus figures. The stock has reflected that pessimism, having lost more than 5% since early April.

Part of that decline is due to Fastenal's most recent quarterly earnings report, in which the company failed to meet sales expectations. In the company's conference call, Fastenal executives pointed to improving margins and greater signings of customers for its tool and supply vending machines, but even with cost-cutting and other initiatives designed to bolster profits, generally weak economic conditions have contributed to the weak pace of revenue growth.

Worse than that news is the fact that some of Fastenal's competitors have held up somewhat better. MSC Industrial (NYSE: MSM  ) encountered much of the same sales weakness from the metalworking industry that Fastenal saw in its overall results, and both stocks have performed in line with each other over the past quarter. But W.W. Grainger (NYSE: GWW  ) soared after its earnings in April, as it saw its earnings rise more than 14% and boosted its guidance for full-year 2013 revenue and earnings.

At this point, though, some analysts are looking at Fastenal's results almost as a self-fulfilling prophecy, as they not only reflect the recent weakness in economic activity but also are contributing to that weakness themselves. In particular, as data on factory orders and construction activity paint an uncertain picture of the industry's immediate future, Fastenal can only concentrate on making the most of the business opportunities it has and hope that macroeconomic influences stop producing headwinds in the near future.

In the coming Fastenal earnings report, look for the company to discuss how it plans to move forward to accelerate its growth. With Fastenal stock fetching almost 25 times forward 2014 earnings, the company can't afford to see its revenue growth slow any further than it already has if it wants to keep investors happy.

Fastenal's issues provide a great example of how even as U.S. stock markets have reached new highs, investors and pundits alike are skeptical about future growth. They shouldn't be. Many global regions are still stuck in neutral, and their resurgence could result in windfall profits for select companies. A recent Motley Fool report, "3 Strong Buys for a Global Economic Recovery," outlines three companies that could take off when the global economy gains steam. Click here to read the full report!

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

This Idea Will Water Down Pepsi's Stock

Whatever else might be said of Nelson Peltz's plan for PepsiCo's (NYSE: PEP  ) future, at least it was a grand vision. Shedding the beverage business and acquiring snack giant Mondolez (NASDAQ: MDLZ  ) are bold ideas that would serve to shake things up.

Yes, they carry a lot of risk, since a merger of that size would be tough to swallow, and despite what management teams spout about "synergies," such acquisitions rarely go as smoothly as expected. But it's the audaciousness of the proposal where the seeds of success are laid.

Contrast that with what Pepsi actually has proposed: a new premium bottled water. Yawn.

Seriously, that's what management brings to the table? Considering there is little to no benefit from drinking bottled water versus what comes out of your tap (most water bottlers use municipal water supplies for their "premium" beverage anyway), and there's already a plethora of bottled waters on the market -- including Pepsi's own Aquafina brand -- what exactly is Pepsi going to bring to the industry that will define its proposed Om brand differently?

Nestle  (NASDAQOTH: NSRGY  ) is the industry leader. owning about one-third of the market with Deer Park and Poland Spring brands, and Coca-Cola (NYSE: KO  ) has its Smartwater, but it's also besieged at the moment with false labeling claims for its Vitaminwater brand, even if they seem a bit specious. Regardless, Pepsi doesn't need to always follow Coke's lead, does it?

I understand there are arguments to be made in favor of pursuing this course. For one, it doesn't cost as much as a multibillion-dollar acquisition, and bottled water is growing in popularity again after several years of decline. According to the International Bottled Water Association, consumption jumped 6.2% to 9.7 billion gallons, while sales rose 6.7% to $11.8 billion.

In contrast, soda sales are falling. Coke's soda sales were down 4% in the second quarter, Dr Pepper Snapple Group (NYSE: DPS  ) sold 3% less, and Pepsi's sales have fizzled in the mid-single-digit range. And Beverage Digest says says per capita consumption of soda has been on the wane since 1998.

Moreover, premium water is different from regular bottled water because consumers have shown a willingness to pay up for it, and those same folks at Beverage Digest say Coke enjoyed a 16% increase in Smartwater sales volume in the first half of 2013.  But a new bottled water, premium though it may be, lacks any of the grandness that Peltz's plan offers. It's small potatoes -- a drop of water in the ocean, if you will -- and won't do anything to move the needle for Pepsi.

Action for the sake of action isn't always the best course to follow, and sometimes a big move such as buying Mondelez could be a disaster as the meshing of corporate cultures becomes difficult. But we also know that Pepsi is drowning at the moment, and another bottled-water brand lacks the scale and vision to make a big splash.

One thing you have to like about Pepsi is its dividend. Over the long term, the compounding effect of quarterly payouts, as well as their growth, adds up faster than you can imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of the only nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.

Hot Financial Stocks To Buy For 2014

After getting beaten to a pulp again last Friday, mortgage REITs ticked upward on Monday, even as a mass downgrading of the sector�took place by Wunderlich Securities. Though agency players Annaly Capital (NYSE: NLY  ) and American Capital Agency (NASDAQ: AGNC  ) were able to gain back only a portion of their Friday stock price losses -- as was particularly hard-hit Armour Residential (NYSE: ARR  ) �-- the upswing was a welcome, though surprising, outcome.

There was no new information on the jobs picture coming out over the weekend to explain this phenomenon, which makes me wonder: Could bargain hunters be at the heart of the mysterious rally?

Analysts at odds over mREITs
Financial analysts have been busy noting the underperformance of mREITs lately, especially since the Fed dropped the QE3 taper bombshell almost two weeks ago -- immediately igniting fears of rising interest rates, which would decrease the value of the trusts' legacy assets, thus dinging book values. The pain hasn't been limited to the stocks mentioned above,� as CYS Investments (NYSE: CYS  ) , and even hybrids like Invesco (NYSE: IVR  ) , have been on a roller-coaster ride ever since.

Hot Financial Stocks To Buy For 2014: Polypore International Inc(PPO)

Polypore International, Inc., a technology filtration company, develops, manufactures, and markets specialized microporous membranes used in separation and filtration processes. It operates in two segments, Energy Storage and Separations Media. The Energy Storage segment offers membranes that provide the function of separating the cathode and anode in applications, including lithium-ion batteries that are used in portable electronic devices, energy storage systems, cordless power tools, and electric drive vehicles; and lead-acid batteries used in automobiles, other motor vehicles, forklifts, and uninterruptible power supply systems. The Separations Media segment provides membranes that are used as high technology filtration element in various medical and industrial applications. This segment?s membranes and membrane modules are used in applications, such as hemodialysis, blood oxygenation, plasmapheresis and various high-performance microfiltration, ultrafiltration, and g asification/degasification applications. Polypore International, Inc. sells its products to manufacturers and converters who incorporate its products into their finished goods. The company sells its products and services in North America, South America, Europe, and Asia through its direct sales force, and distributors and agents. The company is headquartered in Charlotte, North Carolina.

Advisors' Opinion:
  • [By Roberto Pedone]

    Another potential earnings short-squeeze trade is global high-technology filtration player Polypore International (PPO), which is set to release its numbers on Wednesday after the market close. Wall Street analysts, on average, expect Polypore International to report revenue of $175.90 million on earnings of 40 cents per share.

    The current short interest as a percentage of the float for Polypore International is extremely high at 32.7%. That means that out of the 42.70 million shares in the tradable float, 15.23 million shares are sold short by the bears. If the bulls on Polypore International get the earnings news they're looking for, then this stock could explode higher post-earnings as the bears rush to cover some of their bets.

    From a technical perspective, PPO is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending for the last few weeks, with shares moving higher from its low of $36.80 to its recent high of $42.68 a share. During that move, shares of PPO have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of PPO within range of triggering a major breakout trade.

    If you're in the bull camp on PPO, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $42.68 to $43.13 a share and then once it clears more resistance at $44.27 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 478,000 shares. If that breakout triggers, then PPO will set up to re-test or possibly take out its next major overhead resistance levels at $48.50 to $55 a share.

    I would simply avoid PPO or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below both its 50-day at $39.66 a share and its 200-day at $38.32 a share with high volume. If we get that move, then PPO will set up to re-test or possibly take out its next major support levels at $36.80 to $35.10 a share.

Hot Financial Stocks To Buy For 2014: Lux Dig Pict Inc(LUXD.OB)

Lux Digital Pictures, Inc. engages in the development, production, marketing, and distribution of digital films. The company intends to market its motion picture product and distribution businesses under various brands, including Lux Digital Pictures, Midnight Movies, New Broadway Cinema, and Short Screams. It also intends to develop its brand Midnight Movies brand as a specialty theatrical distributor that provides multi-market releases for some of its own products and film products acquired from third parties. The company?s Short Screams brand would be an online Web portal that streams and broadcasts independently produced short horror, suspense, and fantasy films; and New Broadway Cinema brand would produce and distribute film adaptations of established theatrical stage productions using its proprietary DigiTheater production process. Lux Digital Pictures, Inc. was founded in 2008 and is based in Los Angeles, California.

Best Stocks To Watch Right Now: Groupon Inc (GRPN)

Groupon, Inc. (Groupon) is a local e-commerce marketplace that connects merchants to consumers by offering goods and services at a discount. Each day the Company e-mails its subscribers discounted offers for goods and services that are targeted by location and personal preferences. Consumers also access its deals directly through its Websites and mobile applications. The Company operates in two segments: North America, which represents the United States and Canada; and International, which represents the rest of its global operations. Customers purchase Groupons from the Company and redeem them with its merchants. As of September 30, 2011, the Company featured deals from over 190,000 merchants worldwide across over 190 categories of goods and services. Groupon primarily addresses the worldwide local commerce markets in the leisure, recreation, foodservice and retail sectors. In February 2012, the Company announced the launch of Groupon Thailand. In September 2012, it acquired Savored.

In May 2010, the Company acquired CityDeal Europe GmbH (CityDeal). In August 2010, the Company acquired Qpod.inc (Qpod). In November 2010, the Company acquired Ludic Labs, Inc., a company that designs and develops local marketing services. During the year ended December 31, 2010, the Company acquired Mobly, Inc. In February 2011, the Company launched Deal Channels, which aggregates daily deals from the same category.

The Company distributes a featured daily deal by e-mail on behalf of local merchants to subscribers. It offers daily deals from more than 40 national merchants, including Bath & Body Works, The Body Shop, Hyatt Regency, InterContinental Hotels, Lions Gate, Redbox, Shutterfly and Zipcar across subsets of the North American market. Daily deals that do not appear as a featured daily deal appear as Deals Nearby. Each Deal Nearby is summarized in fewer than 20 words next to the featured daily deal. Deals Nearby often extends beyond the subscriber's closest market or buying preferences.

National merchants also have used the Company�� marketplace as an alternative to traditional marketing and brand advertising. On August 19, 2010, the Company e-mailed and posted a Groupon daily deal offering $50 of apparel at Gap for $25 to 9.2 million subscribers across 85 markets in North America. It sold approximately 433,000 Groupons in 24 hours. Of the consumers who purchased Groupons, approximately 200,000 were new subscribers. As of September 30, 2011, it had 142.9 million subscribers to its daily e-mails.

Groupon NOW is a deal initiated by a merchant on demand and offered instantly to subscribers through mobile devices and its Website. Subsequent to the year ended December 31, 2010, the Company launched Groupon NOW in 25 North American markets. Deal Channels aggregate daily deals from the same category and are accessible through its Website and through e-mail alerts that subscribers sign up to receive. It offers Deal Channels in home and garden and event tickets and travel. Merchants can register their deals to be included in a Deal Channel. Subscribers can use Deal Channels to focus on deals that are of interest to them.

Self-Service Deals allows the Company�� merchants to use a self-service platform to create and launch deals at their discretion. The use of the platform is free and allows merchants to establish a permanent e-commerce presence on Groupon that can be visited and followed by subscribers. The Company receives a portion of the purchase price from deals sold through Self-Service Deals based on the extent to which it marketed the deal. In December 2010, it launched Self-Service Deals in selected North American markets.

Groupon Goods enables consumers to purchase vouchers for products directly from its Website. The Company e-mails deals for Groupon Goods weekly to a targeted subscriber base. The Company offers deals for a variety of product categories, including electronics, home and garden and toys. In September 2011, the Compa! ny launch! ed Groupon Goods in select North American and International markets.

Groupon Rewards enables consumers to unlock special Groupon deals from local merchants through repeat visits. Consumers earn reward points at participating merchants by paying with the credit or debit card they have registered with the Company. Merchants set the amount the consumer must spend to unlock a reward deal, and once a consumer is eligible to unlock a deal, it automatically notifies them. The Company distributes its deals directly through several platforms: a daily e-mail, its Websites, its mobile applications and social networks.

In December 2010, the Company partnered with Redbox to offer a daily deal to their user base and it acquired over 200,000 new customers through that offer and in March 2011, it partnered with eBay to offer a daily deal to their user base and it acquired over 290,000 new customers through that offer. The featured daily deal e-mail contains one headline deal with a full-description of the deal and often contains links to More Great Deals Nearby, all of which are available within a subscriber's market.

Visitors are prompted to register as a subscriber when they first visit its Website and thereafter use the Website as a portal for featured daily deals, Deals Nearby, national deals, and where available, Deal Channels and Self-Service Deals. Consumers also access the Company�� deals through its mobile applications, which are available on the iPhone, Android, Blackberry and Windows mobile operating systems. It launched its first mobile application in March 2010. The Company publishes its daily deals through various social networks and its notifications are adapted to the particular format of each of these social networking platforms.

Groupon competes with Google, Microsoft, Eversave, BuyWithMe and LivingSocial.

Advisors' Opinion:
  • [By Jonas Elmerraji]

    Nearest Resistance: $6.50

    Nearest Support: $5.25

    Catalyst: Earnings Beat

    It's a rare double-digit day for Groupon (GRPN) today -- at least as of this writing -- following an earnings beat for the first quarter of 2013. Groupon has been a perennial underperformer since its IPO in late 2011, and the 76% decline in the stock's price since going public is proof of that. But the 3 cents per share that the firm earned for the quarter bested investors' expectations, and that's all it took to spur a move higher in the stock.

    It's a little too early to call today's price action the start of something. From a technical standpoint, today's 10% jump higher isn't particularly important -- shares are still sitting in between resistance at $6.50 and support down at $5.25. And with GRPN's price fading this afternoon, I wouldn't exactly recommend throwing money at this stock right now. Caveat emptor.