Best Japan Stocks For 2013, Best Japan Stocks To Buy For 2013: June 2014

Monday, June 30, 2014

Autopsy of America: Photos of dead shopping malls

Are America's malls dying? NEW YORK (CNNMoney) Dead shopping malls are a sad sight.

"It's the human decay that troubles me the most," says photographer Seph Lawless.

Lawless' new book, "Black Friday" displays his photographs of malls in the Rust Belt states of Ohio and Michigan.

He calls his project an "autopsy of America."

"The most bizarre was seeing gun shots all over one mall," he said, remembering his visit to Rolling Acres Mall in Ohio. "Shattered glass sky lights and store fronts."

Retail analysts can't say how many malls have failed. But they do know that only two new malls have been built in the past eight years.

"That tells you where the malls are going: nowhere," said Howard Davidowitz, chairman of retail consulting and investment banking firm Davidowitz & Associates, Inc. He believes that half the nation's 1,500 malls will fail in the next 20 years.

Not everyone agrees with Lawless' perspective.

"The vast majority of shopping centers and malls in particular are doing quite well, and have been doing well since the recession," said Jesse Tron, spokesman for the International Council of Shopping Centers, a trade group.

Tron said dead malls only crop up in areas that have suffered severe economic downturns. "There are pockets of this country where demographics have dried up and can't support retail like they once did," he said.

Analysts say high-end malls with luxury brands catering to well-heeled clients are thriving.

"High-end earners have done disproportionally well coming out of the recession, and that's definitely been a tail wind for the highest quality centers," said D.J. Busch of the real estate analytics firm Green Street Advisors.

Busch projects that 15% of malls will fail, or ! be repurposed, in the next 15 years, but that applies to "low quality malls" that are at a "competitive disadvantage."

"The struggling malls will become obsolete, and that actually is a good thing for the overall business," he said.

But it won't be a good thing for the malls with empty storefronts and idle escalators.

"I think we are facing a very frightening time in American history, so I want my images to scare people," said Lawless. "I hope people see my images and see the beginning of the end of the greatest economic machine that the world has ever seen... America."

Sunday, June 29, 2014

Canadaâ€™s Consumers Keep Spending

Although the Bank of Canada (BoC) would like to see the country's economy transition away from its dependence on debt-burdened consumers, Canadian spending remains surprisingly resilient.

According to Statistics Canada (StatCan), April retail sales grew 1.1 percent month over month, to CAD41.6 billion, nearly double economists' consensus forecast of 0.6 percent.

Total retail turnover was up 5.1 percent year over year. By contrast, US retail sales were up 4.6 percent over that same trailing-year period.

With the March figure revised to a 0.1 percent increase from the previously reported decline of 0.1 percent, that makes April the fourth consecutive month in which retail turnover has risen. US retail sales enjoyed a similar four-month streak from February through May.

StatCan notes that gains were widespread across Canada's retail sector during April, as 10 of 11 subsectors posted increases.

Much of the overall increase was driven by motor vehicle and parts dealers, whose sales grew 2.4 percent, to CAD9.7 billion. In particular, new car sales rose 3.2 percent, to CAD7.9 billion, following flat sales in the two preceding months.

In fact, new car sales, which increased 6.3 percent from a year ago, were one of the biggest contributors to the country's overall sales growth on a year-over-basis. But even when excluding results from the auto subsector, Canada's retail sales still grew 4.8 percent over the past year.

Receipts at food and beverage stores, another key subsector, climbed 0.6 percent, to CAD9.2 billion, for their fifth consecutive month of growth. This latest result was thanks to higher sales at beer, wine and liquor stores, which were up 2.1 percent, to CAD1.7 billion.

And sales at general merchandise stores rose 0.9 percent, to CAD5.2 billion, supported by sales at department stores, which were up 0.5 percent, to CAD2.3 billion, the third increase in t! he past four months.

A significant portion of April's retail rise may be attributable to the return of more pleasant weather after an unusually harsh winter. While retail turnover was still strong in January and February, as revised sales exceeded economists' forecasts, with month-over-month growth of 1.0 percent and 0.7 percent, respectively, March sales increased by just 0.1 percent.

Meanwhile, wholesale trade rose 1.2 percent in April, well above the consensus forecast of 0.5 percent. Coupled with the retail result, these data suggest that Canada's economy got off to a strong start in the second quarter.

Indeed, economists with CIBC World Markets said that April's gross domestic product (GDP) is tracking a tenth of a percentage point ahead of expectations. The current consensus among private-sector economists is for GDP to grow at a 2.2 percent annualized pace during the second quarter, a resurgence following the 1.2 percent annualized pace recorded during the first quarter.

The one caveat as far as sales data go, according to CIBC, is that retail gains may be difficult to sustain without sufficient wage and employment growth. Job gains have averaged just 3,000 per month over the trailing six-month period that ended in May, while higher-paying, better-quality full-time positions have declined by an average of 5,600 per month over that same period.

Nevertheless, these results, along with a stronger-than-expected rise in Canada's consumer price index (CPI), were enough to push the Canadian dollar to a year-to-date high of USD0.933, up 4.9 percent from the four-year low hit in late March.

Of course, the BoC would prefer a lower exchange rate to help boost the country's exports. But as US investors who have suffered from the erosion in the loonie's value over the past year, we'll welcome a temporary enhancement in our gains, while recognizing that Canada's economy, along with our companies, will ultimately benefit from a protracted decline in the curr! ency.

Higher Data Traffic Driving Growth For These Companies

Data traffic is expected to grow 23% annually over the next four years. Growing data creates complexity in managing and securing data. Data centers are moving towards the next-generation of virtualization and cloud environment. As a result, many networking companies are updating their products and technology to step up security and data management. Three such companies discussed in this post are developing various technologies to simplify data management and capitalize on the expanding market.

For the second quarter of fiscal 2014, F5 Networks, Inc. (FFIV) announced revenue of $420.0 million, up 3 percent from $406.5 million in the prior quarter and 20 percent from $350.2 million in the second quarter of fiscal 2013. Moreover, revenues were positively impacted by an 18.0% hike in Services revenues and a 21.6% increase in Product revenues on a year-over-year basis.

Application Delivery Controller, or ADC, segment accounts for the product revenue of the Company. Product revenue of $225.1 million grew 3% sequentially and 22% year-over-year, representing 54% of total revenue.. With improvisation in data centers, it announced an updated version of its chief ADC platform software, BIG-IP.

The updated version of BIG-IP, called BIG-IP v11.4, simplifies management of applications and data over physical networks, virtual networks, and cloud environment. This updated software will enhance its ADC segment. Furthermore, Cisco's exit from the ADC market will add to F5 Networks' market share growth opportunity. Its market share is expected to improve from 27.1% currently to 27.6% by the end of fiscal year 2015.

The increasing usage of 3G and 4G data from mobile devices is increasing the demand for content and applications. This situation is increasing network complexity and reducing security, increasing the probability of cyber attacks. The security products S/Gi firewall, offered by the company, is certain to benefit from this market of cyber security. This product protects the network service providers' infrastructure to ensure network availability and performance.

It will also protect subscribers from threat during data sharing. S/Gi will enhance connections per second by 20 times, which is equivalent to 8 million people using a service providers' network. This product will also contribute to F5 Networks' total revenue as the cyber security markets rises due to increased data traffic.

Data centers are becoming the foundation of every organization, and I.T. departments are moving towards cloud storage and virtualization. With organization adapting to various SAAS (Software As A Service) application deployed over cloud had created new market for data centers. To capitalize on this, Citrix Systems (CTXS): and Cisco recently expanded their strategic alliance to provide advanced technology in this market. The companies have been in partnership for the past two years.

Under this expanded alliance, Citrix will deliver its ADC technology 'NetScaler' to Cisco. NetScaler is a device that provides load balancing across multiple computer networks. In addition, this alliance recently released the next-generation of NetScaler called Netscaler10. NetScaler 10, its next-generation application delivery controller (ADC) that is the company's answer for bringing dynamic elasticity to the network. NetScaler 10 has automatic failure identification and management, which means that if there is a failure, NetScaler will identify it and automatically switch workloads to another ADC.

Cisco's technical support center will assist this new technology and will sell it through its various channel partners. As Cisco has already made an exit from the ADC market, this alliance will help the company serve its existing customers, without actually producing ADC products.

With this, Cisco will provide cloud network service to Citrix so it can develop a highly advanced cloud platform. The combination of the new NetScaler and the cloud service will strengthen Citrix's ADC market. The flexible licensing policy of the company enables the customers to easily opt for NetScalar. Pay-As-You-Grow pricing policy, provides investment protection, avoids costly hardware upgrades, and reduces TCO

The bottom line The companies are capitalizing on the opportunity provided by the shift in data management trends by updating their technologies and products. F5 Networks is enhancing its ADC segment with new security products for mobile threats. Citrix and Cisco are expanding their partnership to evolve the next generation ADC portfolio.

I would recommand a but for both these companies.

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Thursday, June 26, 2014

Why Bed Bath & Beyond Inc., Tenet Healthcare Corp., Phillip Morris International, Inc. Are Todayâ€™s 3

Stocks lost ground on Thursday as consumer spending numbers came in below expectations, and institutional investors sold positions ahead of the end of the second quarter. While the S&P 500 Index (SNPINDEX: ^GSPC ) ended modestly lower, Bed Bath & Beyond (NASDAQ: BBBY ) , Tenet Healthcare Corp. (NYSE: THC ) , and Philip Morris International, (NYSE: PM ) were the day's worst decliners. The S&P 500 itself lost two points, or 0.1%, to end at 1,957.

Bed Bath & Beyond shares were plunging today, shedding 7.2% after it missed on quarterly earnings, and projections came in below expectations, as well. The company forecast second-quarter earnings per share between $1.08 and $1.16, far below analyst expectations for $1.20. Margins are on the decline, coming in at their lowest levels this decade. On top of that, Bed Bath & Beyond's online efforts haven't yet paid off, which could be a catalyst for margin growth.

Shares of Tenet Healthcare lost 2.7% today, as the health-care sector ended in the red. Sales at the hospital operator soared 21% last year, but profits have been steadily declining for the last five years -- in 2013, Tenet actually lost $123 million. One admirable thing the company's doing currently is partnering with TriWest Healthcare to help veterans in five different states. With the wars in Iraq and Afghanistan winding down in recent years, Americans returning from the line of duty need adequate health care, and Tenet's partnership shows that we appreciate what they've done for us.

Source: Philip Morris

Lastly, shares of Philip Morris International fell 2.7% today, as the stock took a hit after announcing dismal full-year guidance. Investors buy the future, not the past, and with the tobacco industry facing harsher and harsher regulations, Philip Morris and its peers will have to get creative to increase profitability in the long term. E-cigarettes, which, as a relatively new part of the market, have yet to face the sort of scrutiny traditional cigarettes face, are one such way Philip Morris is trying to expand. While the company blamed currency fluctuations, black market tobacco in the Philippines, and less colorful packaging in Australia for its lowered projections, it's hoping that its investment in England's e-vapor company Nicocigs will get things back on track.

Leaked: This coming consumer device can change everything
Imagine the multi-billion dollar sales potential behind a product that can revolutionize the way the world shops and interacts with its favorite brands every day. Now picture one small, under-the radar company at the epicenter of this revolution that makes this all possible. And its stock price has nearly an unlimited runway ahead for early, in-the-know investors. To be one of them and hop aboard this stock before it takes off, just click here.

Tuesday, June 24, 2014

Eight Reasons Dr. Pepper is Losing Its Fizz

Shares of Dr. Pepper (DPS) have been trouncing those of Coca-Cola (KO), PepsiCo (PEP) and even Monster Beverage (MNST) this year–but today it’s getting pounded thanks to a Citigroup downgrade.

Sure, it’s been a great year for Dr. Pepper Snapple. It’s gained 21% so far this year, easily besting PepsiCo’s 6.5% rise, Monster Beverages 6.9% advance and Coca-Cola’s 1.4 % increase. Now, however, it’s time for Dr. Pepper’s shares to “take a breather,” explain Citigroup’s Wendy Nicholson and Peter Chun:

Dr. Pepper Snapple has appreciated 22% year-to-date, far outpacing Coca-Cola, PepsiCo, Monster Beverage and the S&P500. This relative outperformance comes despite Dr. Pepper Snapple’s outlook for only 0%-1% top line growth (with volumes expected to be down more than 1%) and 6%-8% EPS growth in 2014. With this big move in the stock now behind us, we downgrade Dr. Pepper Snapple to a Neutral rating. Our reasons for the downgrade are as follows:

– U.S. CSD category growth has improved, but not by much;
– Dr. Pepper Snapple intends to reduce ad spending while its big competitors intend to increase it, and we fear that this could pressure Dr. Pepper Snapple’s market shares;
– Snapple has historically been an iconic brand, but it is too small to really move the needle for Dr. Pepper Snapple , and overall, Dr. Pepper Snapple’s stills portfolio is struggling;
– Dr. Pepper Snapple’s RCI initiatives are impressive and ongoing, but despite lower advertising spending this year, we don't expect much margin expansion, and we wonder if the balance sheet improvements are largely behind us;
– From a stock market perspective, investor rotation away from EM's (which has benefitted Dr. Pepper Snapple) has probably largely played out;
– DPS's cash flow has been terrific for a while – but an extra "kiss" from either Coca-Cola or PepsiCo seems unlikely in the near term;
– Dividend yield is no longer the best in the group; and
– Valuation is no longer as compelling as it had been

Shares of Dr. Pepper Snapple have dropped 1.1% to $58.66 at 3pm today, while PepsiCo has dipped 0.2% to $88.24 and Coca-Cola has risen 0.2% to $41.82. Monster Beverage has dropped 2.1% to $71.68 on reports Goldman Sachs might have lowered estimates.

Monday, June 23, 2014

5 Rocket Stocks to Buy as Stocks Test Highs

BALTIMORE (Stockpickr) -- We're kicking off an important week for stocks this morning, even if it doesn't feel like it.

>>5 Stocks Ready for Breakouts

The S&P 500 has spent the last four trading sessions moving sideways, but it's been consolidating just 1 percentage point shy of all-time highs. On Friday, the big index hit the highest trading volume it's seen in almost a year before reversing to close 0.29% lower on the day. All of that is a pretty clear indication that there's a big battle going on between buyers and sellers right now.

If buyers can wrestle control, it could spark a big rally in the S&P. Otherwise, if sellers take command of stocks, it'll mean a correction. Either way it resolves, we're positioning ourselves for the best upside by taking a look at five new "Rocket Stock" names this week.

>>5 Stocks Under $10 Set to Soar

For the uninitiated, "Rocket Stocks" are our list of companies with short-term gain catalysts and longer-term growth potential. To find them, I run a weekly quantitative screen that seeks out stocks with a combination of analyst upgrades and positive earnings surprises to identify rising analyst expectations, a bullish signal for stocks in any market. After all, where analysts' expectations are increasing, institutional cash often follows. In the last 241 weeks, our weekly list of five plays has outperformed the S&P 500 by 81.23%.

Without further ado, here's a look at this week's Rocket Stocks.

PepsiCo

PepsiCo (PEP) may be best known for its soda products, but they're only half the story. That's because 50% of this Rocket Stock's revenues come from food brands like Doritos, Lay's, and Quaker. That bifurcated business has been attracting the attention of investors this year, as prominent shareholders pitch the idea of splitting PepsiCo into two separate companies. PEP makes the case that shareholders are best-served by keeping Pepsi as a single company, and their case makes a lot of sense.

>>5 Toxic Stocks to Sell Now

As the biggest snack food maker in the world, and the No. 2 non-alcoholic beverage company, Pepsi's huge scale comes in handy at keeping distribution costs low. Today, North America still provides around 40% of sales, an outsized stat that leaves a lot of clear runway for growth abroad. That sort of growth opportunity is rare for a $125 billion company, and it warrants a premium from investors.

PepsiCo has historically also generated impressive growth through acquisitions. By buying snack food brands that are enjoying strong sales, PEP can augment its offerings in a way that a pure-play beverage stock can't. And don't forget about the dividend -- currently, PEP pays out a 2.76% dividend yield.

Delta Air Lines

A decade ago, if you'd told a room full of portfolio managers that airlines would be the hottest industry on the market during the age of triple-digit crude oil prices, you would have been laughed off stage. But sure enough, that's exactly what's been playing out in the past year. And legacy carrier Delta Air Lines (DAL) has been one of the best-positioned names to take advantage of the trend.

>>5 Stocks Insiders Love Right Now

Delta is one of the country's biggest airlines, with more than 720 aircraft serving 247 mainline destinations globally. Delta's scale changed dramatically when it merged with Northwest Airlines in 2008, a move that's finally creating some big cost savings (and margin expansion) for the firm. As a legacy carrier, Delta's model is centered around spoke-and-hub flying -- but it also includes some of the industry's most profitable international routes, and a very popular frequent flyer program. Both of those factors mitigate the inconvenience of domestic layovers among the most profitable passengers.

Not that Delta has been opposed to different approaches, though; the firm has a 49% investment stake in Virgin Atlantic, for instance. Likewise, marketing efforts, like Delta's long-standing partnership with American Express (AXP), gives it access to a one of the largest issuers of corporate charge cards -- and incentivizes those business flyers to buy Delta tickets. The result is one of the highest operating margins in the airline business -- and Rocket Stock status this week.

Keurig Green Mountain

Earlier this month, one of 2014's biggest momentum stocks got a new name. On March 10, Green Mountain Coffee Roasters announced that it was changing its name to Keurig Green Mountain (GMCR), a move that puts the firm's hugely successful Keurig brand front-and-center going forward. Keurig is the GMCR's brand of beverage brewers that use self-contained K-Cups to make coffee, teas and other drinks. That "other drinks" catch-all is where the emphasis is going this year; a major deal with (and huge investment from) Coca-Cola (KO) will bring in-home soda making to consumers through the Keurig Cold brand.

>>Hedge Funds Are Selling These 5 Stocks -- Should You?

That's helped squeeze shares more than 48% higher since the calendar flipped to January. Already, Keurig's K-Cups offer a sticky revenue stream for GMCR. Because they're proprietary, the firm can command premium pricing for them. And because the firm can offer new, diverse drink choices (such as hot cocoa or iced coffee), it's able to drive sales among its large installed base.

One of the most staggering stats about GMCR right now is the fact that the firm isn't particularly expensive despite its huge momentum. Shares trade for 33 times earnings, a reasonable multiple for a big growth name. Likewise, the firm sports a solid balance sheet with more than $100 million in net cash; this past year marks the first time GMCR has sported more cash than debt. With rising analyst expectations in GMCR, we're betting on shares.

Paychex

There was one company that applauded Janet Yellen's hints at rising interest rates last week: Paychex (PAYX). Paychex is an outsourced HR firm that provides 570,000 small and medium-sized businesses with payroll and more specialized HR services. Because of the bevy of tax and compliance issues involved in a small business paying its people, the firm is able to earn profits for its expertise. So why does that make PAYX a winner in a rising rate environment?

>>5 Big Trade Signals After Yellen's Surprise Message

Historically, Paychex has earned substantial income from float interest -- the interest money it earns on massive payroll accounts in between the time that employers deposit funds and employees cash their checks. But with rates held near zero for the past five years, PAYX has had to build revenues through other ancillary HR services such as 401k management and worker's comp insurance. Rates on the rise means that Paychex will be able to effortlessly boost its profits.

From a financial standpoint, Paychex is in excellent shape. The firm carries more than $838 million in cash and investments on its balance sheet, with no debt. That provides a lot of dry powder for its 3.27% dividend yield, and it covers around 5% of the firm's outstanding shares at current price levels.

Stanley Black & Decker

Stanley Black & Decker (SWK) hasn't been much of a performer in the last year -- shares are basically flat over a period when the S&P 500 was rallying double digits. But that sluggish stock performance could be due for a turnaround thanks to big industry tailwinds and newfound Rocket Stock status.

>>4 Stocks Breaking Out on Big Volume

SWK manufactures construction and industrial tools, as well as security products and services. The 2010 combination of Stanley and Black & Decker brought together some of the most popular tool and equipment brands in the world, including DeWalt, Porter Cable, and Bostitch, and 18 other marques in addition to the firm's namesakes. Newer additions to SWK's lineup, such as industrial fasteners, offer important diversification away from the cyclical constriction and do-it-yourself business, where the firm has traditionally made its money.

Tailwinds in the North American construction segment are providing exciting growth opportunities for SWK once again, but it's emerging markets where the firm really has the most potential. Because 85% of sales come from developed countries, emerging markets are under-tapped, especially in industrial and infrastructure products that aren't as subject to consumer dollars as pricey power tools.

Earnings on April 21 could be the next big catalyst in SWK. Stay tuned.

To see all of this week's Rocket Stocks in action, check out the Rocket Stocks portfolio at Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

Saturday, June 21, 2014

Gold: Better Times Ahead?

Gold bullion, which was down 28% last year, is up 12% so far this year; the gold mining stocks, down 49% last year on average, are up 20% so far this year, explains Sy Harding, editor of Street Smart Report.

In January, I noted how it is often a mistake to chase the previous year's winners after they have already had several years of gains.

I quoted John Rekenthaler, VP of Research at Morningstar, who says that almost always, "Investors piling into the hottest funds of the previous period will be sorry, since the lower-ranked funds tend to be the winners over the next three-year period."

I noted, in that column, that if it is advisable for investors to choose from the previous period's losers, there was one stand-out—gold. So far that is working out. Gold, down 37% last year from its 2011 peak, is up 12% so far this year.

Gold does have a few positives going for it this year that it didn't have last year, in addition to the much lower price.

For instance, beginning in 2012, India, the world's largest consumer and importer of gold, raised its import tax on gold from 2% to 10%, in an effort to cool-off demand for gold (which was draining off too much cash from India's economy).

The move worked to slow demand for gold, but created a hardship for India's important jewelry manufacturing and exporting industry. Beginning last fall, India has been cutting back the gold tax, and is expected to continue to do so.

Gold is also the traditional hedge against global instabilities and uncertainties. It spiked up to its record $1,900 an ounce in 2011, as the 'Arab spring' uprisings, which began in Egypt in 2010, began to proliferate into neighboring countries. Those uprisings settled down considerably in 2012 and 2013, and gold plunged in its 37% bear market decline.

However, this year's eruption of violence in South Sudan, and the civil wars in Syria and Ukraine (now with Russia's involvement), among other global hotspots, have global uncertainties back in the headlines.

We primarily utilize technical analysis for our buy and sell signals, but the fundamentals seem to also support a positive outlook for gold. So far this year, it also confirms the notion that the previous period's losers are often the winners in the next period.

To benefit from this trend, I have positions in the gold bullion SPDR Gold Trust ETF (GLD), and the gold mining stocks ETF, Market Vectors Gold Miners (GDX).

Subscribe to Street Smart Report here…

Friday, June 20, 2014

Treasurys mark third week of losses after Fed

NEW YORK (MarketWatch) — Treasury prices marked the largest three-week loss since December as investors continued to adjust portfolios on Friday after the Federal Reserve reset expectations about monetary policy.

The U.S. central bank on Wednesday told market participants that it was in no rush to raise interest rates, continuing to commit to long-running low-rate policies, despite signs of a pickup in the labor market and inflation.

However, with economic data that appears to be getting stronger, market participants are tuning into the numbers with more interest to see how that may impact the course of Fed policy. That was one factor that pushed long-term yields sharply higher on Thursday in what's known as a steepening yield curve . Shifts in the tone of economic data, particularly with regards to rising inflation , may leave the market open to quick reactions, especially with thin trading volume exacerbating moves, strategists said.

/quotes/zigman/4868283/delayed 10_YEAR 2.61, -0.0030, -0.11% 10-year Treasury note yield

Treasury prices swung higher Friday amid some early buying ahead of the end of the quarter, according Wilmer Stith, co-manager of the Wilmington Broad Market Bond Fund, who said it was otherwise a quiet trading day.

"We're starting to see a much bigger buyer of Treasurys, namely banks as they put higher quality demand on the balance sheet," Stith said.

The 10-year Treasury note (10_YEAR) yield, which moves lower as prices rise, slipped 1 basis point to 2.610%, though it climbed as high as 2.659% in morning trade, according to Tradeweb. The benchmark yield rose 2.5 basis points on the week, and 16.5 basis points over the past three weeks.

The 30-year bond (30_YEAR) yield fell 2.5 basis points on the day to 3.437% and the 5-year note (5_YEAR) yield half a basis point to 1.684%. The spread between them narrowed, cutting back the prior session's steepening.

The Fed's slow, methodical approach toward normalizing monetary policy is likely to help bolster credit markets in the meantime, even as corporate bonds have become a crowded trade, according to Ashish Shah, co-head of global credit at AllianceBernstein.

"I think we are reasonably range-bound until the end of the year," Shah said, referring to the premium investors receive for holding credit. "There may always be periods of widening, but I think there are a lot of investors out there that would like to add to their positions."

More must-reads from MarketWatch:

Nutting: 5 reasons the Fed isn't troubled by inflation

Apple watch to feature multiple designs

What Maya Angelou told me about money

Employment, Factory Data Signal Strengthening Economy

SmallBiz-Small Talk Matt Rourke/APA technician working at the Rodon Group manufacturing facility in Hatfield, Pa. WASHINGTON -- The number of Americans filing new claims for jobless benefits fell last week and factory activity in the mid-Atlantic region accelerated in June, more evidence the economy was strengthening after a disastrous first quarter. "The economy has improved markedly in recent months," said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan. "Signs point to continued growth in the coming quarters, and further improvement in labor market conditions." Initial claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 312,000 for the week ended June 14, the Labor Department said Thursday. The four-week moving average for new claims, considered a better measure of underlying labor market conditions as it irons out week-to-week volatility, fell 3,750 to 311,750, not far from a seven-year low touched in May. Separately, the Philadelphia Federal Reserve Bank said its business activity index jumped to 17.8 this month, the highest level since September, from 15.4 in May. Any reading above zero indicates expansion in the region's manufacturing. Gains were driven by a surge in new orders, as well as an increase in factory employment and working hours. There were also improvements in delivery times, shipments, and unfilled orders, which rebounded strongly from May's slump. Upbeat Growth Picture Another report showed a gauge of future growth rose for a fourth straight month in May. The reports joined data on employment and the manufacturing and services sectors in painting an upbeat picture of the economy after a contraction in the first quarter. The government said last month the economy shrank at a 1 percent annual pace, but economists say more recent data have suggested the contraction was even deeper. But second-quarter data, including the reports on Thursday, bolstered the case the Federal Reserve made this week that the economy was bouncing back. The central bank Wednesday slashed its 2014 growth forecast, but it further reduced the amount of money it is pumping into the economy each month through bond purchases and hinted at a slightly faster pace of interest rate increases starting in 2015. U.S. financial markets were little moved by the data as traders continued to digest Wednesday's statement from the Fed's policy-setting committee. The claims data covered the survey week for the government's report on June's nonfarm payrolls, which will be released in two weeks. The four-week average for claims fell 11,000 between the May and June survey periods, suggesting payroll growth probably increased from last month's gain of 217,000 jobs. "The ongoing low levels of initial claims suggest there is a good chance that we will see another respectable advance in payrolls," said Guy Berger, an economist at RBS in Stamford, Connecticut. Other measures such as job openings and hiring intentions by small businesses have also pointed to a healthier labor market. The economy has recovered the 8.7 million jobs lost during the recession and has enjoyed four straight months of job gains above 200,000, the strongest stretch since early 2000. The claims report showed the number of people still receiving benefits after an initial week of aid hit its lowest level since October 2007 in the week ended June 7. The so-called continuing claims have been trending lower, an indication that some long-term unemployed were finding work. The unemployment rate for people collecting unemployment benefits fell to 1.9 percent in the week ended June 7, the lowest since October 2007, from 2 percent the prior week.

Thursday, June 19, 2014

Fed Says Economy Rebounding as It Trims Bond Purchases

The Federal Reserve said growth is bouncing back and the job market is improving as it continued to reduce the monthly pace of asset purchases.

“Economic activity is rebounding in the current quarter and will continue to expand at a moderate pace thereafter,” Federal Reserve Chair Janet Yellen said at a press conference in Washington today following a meeting of the Federal Open Market Committee. Even with declines in unemployment, “a broader assessment of indicators suggests that underutilization in the labor market remains significant.”

The FOMC trimmed bond-buying by $10 billion for a fifth straight meeting, to $35 billion, keeping it on pace to end the program late this year.

Yellen and her fellow policy makers are debating how long to keep interest rates near zero as the U.S. labor market improves and inflation moves closer to the Fed’s 2% goal.

The policy-making FOMC repeated today that it’s likely to “reduce the pace of asset purchases in further measured steps” and that it expects rates to stay low for a “considerable time” after the bond-buying ends.

Stocks advanced after the Fed announcement, with the Standard & Poor’s 500 index rising 0.6% to 1,952.83 as of 3:19 p.m. in New York. Ten-year Treasury yields fell five basis points to 2.60%.

Updating their economic forecasts, Fed officials predicted their target interest rate will be 1.13% at the end of 2015 and 2.5% a year later, higher than previously forecast. They lowered their long-run estimated rate to 3.75% from 4%, reflecting slower long-term growth for the U.S. economy. Fed participants estimated long-term growth at 2.1% to 2.3%, compared with 2.2% to 2.3% in March.

Stocks Gain

“Inflation has continued to run below the committee’s 2% objective,” Yellen said, and low inflation “could pose risks to economic performance.” At the same time, longer-term expectations are still “well-anchored.”

The personal consumption expenditures index, the Fed’s preferred inflation gauge, rose 1.6% from a year earlier in April, the most since November 2012. The consumer price index, a separate inflation measure, rose 2.1% in May.

Treasuries, MBS

The Fed will divide its bond purchases between $20 billion in Treasuries and $15 billion in mortgage-backed securities beginning in July, the FOMC said in its statement.

Yellen said policy makers are discussing a new set of principles to guide an eventual exit from record easing and expects to announce them later this year.

“The committee is confident it has the tools it needs to raise short-term interest rates” when necessary, she said. The Fed “will continue to have a very large balance sheet for some time.”

Three rounds of large-scale asset purchases intended to hold down long-term interest rates have swelled the central bank’s balance sheet to a record $4.34 trillion. Fed officials are testing tools that will be needed to tie up excess reserves in the banking system, a step they will have to take in order to raise short-term rates.

Steady labor-market gains have bolstered confidence among policy makers that they can wind down asset-buying without endangering the five-year expansion.

Unemployment (USURTOT) held at 6.3% in May, the lowest in almost six years, and payrolls increased by more than 200,000 for a fourth consecutive month, the first time that’s happened since early 2000.

Continued Weakness

Some measures of employment watched by Yellen show continued weakness. The so-called participation rate, which shows the share of working-age people in the labor force, held at 62.8%, matching the lowest since March 1978.

Policy makers are counting on a faster expansion to pull more people back into the labor force. The pace of growth will exceed 3% in the final three quarters of the year, according to economists surveyed by Bloomberg, after a 1% first-quarter contraction caused in part by harsh winter weather.

Manufacturing grew in May at the fastest pace this year, according to data from the Institute for Supply Management. The ISM’s service-industry gauge showed the strongest expansion since August.

“We’ve seen quite the decent rebound in the second quarter, but more importantly, the momentum is building for the second half,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics in White Plains, New York.

Home Construction

Recent reports show that residential construction is stabilizing after it subtracted from growth over the past two quarters.

Builders broke ground last month on 1 million homes at an annualized rate after 1.07 million in April, the best two-month reading since late 2013.

Residential construction is boosting United Technologies Corp., the Hartford, Connecticut-based maker of Carrier air conditioners and Otis elevators. “The U.S. economy feels pretty good,” Chief Financial Officer Greg Hayes said at a June 5 investor meeting. “We still think there’s good momentum,” he said, citing growth in the company’s residential businesses.

The quickening economy and better-than-estimated corporate earnings have pushed up U.S. stocks to new highs. The S&P 500 Index yesterday closed near the record level reached on June 9.

“The committee doesn’t try to gauge what is the right level of equity prices,” Yellen said today. Rather, it looks to see if valuation levels “are outside of historical norms. I still don’t see that broadly.”

Low Volatility

The Chicago Board Options Exchange Volatility Index, a gauge of S&P 500 swings, fell to the lowest since early 2007. Foreign-exchange volatility also has slowed, falling to an almost seven-year low.

Low financial-market volatility has stirred concern among some policy makers. New York Fed President William C. Dudley said last month it may signal investor complacency about risk, making him “a little nervous.”

The FOMC gained three new voting members for this meeting. The U.S. Senate voted last week to approve the nomination of Lael Brainard, former U.S. Treasury undersecretary for international affairs, as a governor. It also approved Stanley Fischer as vice chairman. Loretta Mester on June 1 succeeded Sandra Pianalto as president of the Cleveland Fed.

Adobe Stock Hits Record Territory, But New Money Should Stay Away

Popular Posts: Don't Tread on Me – 3 Great All-American Dividend Stocks to Buy3 Things That Could Get Amazon Stock Popping AgainThe Top 10 S&P 500 Dividend Stocks for June Recent Posts: Who Needs the World? FedEx Stock Looking Up on Its Own Adobe Stock Hits Record Territory, But New Money Should Stay Away SolarCity and Yingli Boost Case for Solar Stocks View All Posts Adobe Stock Hits Record Territory, But New Money Should Stay Away

Adobe (ADBE) stock has hit all-time highs after quarterly results proved the wisdom of its shift to a cloud-based subscription business model — but the downside of that is ADBE has become too pricey for new money to benefit from the company’s successful change of course.

Indeed, the market has been optimistic about Adobe stock ever since it announced that it would rely more on subscriptions for its products and less on selling the software outright. Although it was seen as a high-risk move when Adobe unveiled the strategy a little more than a year ago, ADBE stock never really looked back.

Adobe Stock 300x197 Adobe Stock Hits Record Territory, But New Money Should Stay Away
Click to Enlarge Adobe stock is up nearly 70% during the past 52 weeks, beating the S&P 500 by more than 50 percentage points. Rather than slap a lower multiple on ADBE stock to discount for the risk associated with the strategic shift, the market just went bonkers on the course change – even as Adobe posted a string of declining profits.

Now, with the latest earnings report, ADBE put an end to a long period of year-over-year declines in both earnings and revenue, essentially proving that the bulls were right all along.

But with the valuation so stretched on Adobe stock, it doesn’t look like a good time to start a position.

Heck, the way ADBE stock has been running in anticipation of an earnings report like the one it just delivered, it wouldn’t have been too surprising if it had sold off on the news.

Adobe Stock – Great Run Makes Shares Too Pricey for New Positions

For the most recent period, Adobe posted its first rise in quarterly earnings in seven quarters. (Wall Street was projecting yet another decrease.) Revenue rose year-over-year for the first time in five quarters.

The key to success was better-than-expected growth in subscriptions to Adobe’s Creative Cloud Web software, which added 464,000 customers for a total of 2.31 million.

That helped revenue rise 5.7% to $1.07 billion, leading to a better-than-expected bottom line. On an adjusted basis, earnings came to 37 cents a share, well ahead of analysts’ forecast of 30 cents.

The shift to cloud-based subscriptions from one-time software purchases is going well — and that’s great for anyone holding Adobe stock — but it’s not exactly providing an attractive entry point for new money looking to stick around for a while.

Sure, ADBE stock could have more room to run as a trade, but as an investment of, say, three to five years or more, Adobe stock looks far too expensive.

ADBE stock now trades at 33 times forward earnings and 130 times trailing earnings. Valuation always reverts to the mean eventually, especially when stocks turn broadly south. With the bull market getting rather long in the tooth, this is not the time to initiate a position in anything with that kind of crazy-high valuation.

After all, the forward price-to-earnings multiple makes Adobe stock more than twice as expensive as the broader market, but its long-term growth forecast is only about 25% higher.

In other words, the successful shift to the cloud is already baked into Adobe stock — and then some.

Bottom Line

If ADBE stock takes a good whacking to make the multiple more reasonable, by all means, buy on that dip.

For now, though, new money should only admire shares from afar.

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

Wednesday, June 18, 2014

This Week's Winners and Losers: Hot Candy, Cool Retailers

ITALY-INTERNET-GAME-CANDY-CRUSH AFP/Getty Images/Gabriel Bouys Companies can make brilliant moves, but there are also times when things don't work out quite as planned. From a luxury electric car maker ramping up its production to sandwich makers failing to make dough rise, here's a rundown of the week's smartest moves and biggest blunders in the business world. Tesla Motors (TSLA) -- Winner The Model S isn't cheap, but Tesla is selling enough of them to impress investors. Shares of the maker of plug-in electric vehicles raced to a new high after announcing that it delivered 6,892 cars in its latest quarter. Things will get even better in 2014 as Tesla expects to sell and deliver 35,000 vehicles. Tesla will need to ramp up its production -- currently, roughly 600 cars a week -- to closer to 1,000 Model S and new Model X cars by the end of the year. Conn's (CONN) -- Loser It isn't easy running a consumer electronics store these days. Shares of Conn's plunged 43 percent on Thursday after warning that its holiday quarter results will fall well short of its earlier expectations. If that seems like a significant drop for a mere miss, let's dive a little deeper. Conn's also warned that it's suffering from higher loan delinquencies than usual. Conn's provides in-house consumer credit on its appliances, furniture, mattresses, and consumer electronics, so revealing that 8.8 percent of its loan portfolio hasn't made a payment in more than 60 days is problematic. Conn's, which has stores in the Southwest, blames cold weather for disrupting payments, but things are never as simple as that. Conn's was holding up better than its peers that had imploded earlier this year on reports that the holidays weren't so jolly this time around. Now we know that Conn's is merely mortal, and that way too many of its customers last year aren't current on their payments. Candy Crush Saga -- Winner The company behind "Candy Crush Saga" filed to go public this week. Dublin-based King Digital Entertainment is hoping to offer shares in its IPO, and it's putting up some impressive financials along the way. King's gross bookings have exploded from $181.6 million in 2012 to nearly $2 billion last year. "Candy Crush Saga" is playing a big part in that success. Of the 1.2 billion times a day that a King game was fired up in December, 1.085 billion are for that particularly addictive app. "Candy Crush Saga" attracts 93 million daily active users. It may be problematic to have a company go public that's a one-trick pony in mobile, but it's doing everything it can to promote the rest of its games to current players. Walmart (WMT) -- Loser The world's largest retailer is having a problem drawing shoppers. Walmart saw comparable-store sales fall 0.4 percent in this country during the seasonally significant holiday quarter. Walmart blames the weakness on reductions in government benefits, tighter credit, and higher taxes, but other stores are still finding ways to grow sales at the store level. LifeLock (LOCK) -- Winner RBC Capital boosted its price target on LifeLock after the ID theft monitoring service posted another strong quarter. Revenue climbed 30 percent at LifeLock with adjusted earnings more than doubling as the platform continues to attract consumers looking for early alerts when their identities have been compromised. LifeLock has now managed to grow its subscriber count and revenue sequentially for 35 consecutive quarters. RBC Capital's price goal for the shares is going from a now obsolete $18 to a more bullish $25.

FedEx: Could Oil Undo Optimism?

FedEx delivered top-notch financial results and its shares are being rewarded for it. There is one reason for pessimism, however: The rising price of oil.

Reuters

Cowen’s Helane Becker and Conor Cunningham explain why oil could be a problem:

FedEx forecasts F2015 EPS to be in the range of $8.50 to $9.00, compared to our estimate of $8.15 and the consensus estimate of $8.76. Management’s F2015 expectations assume a similar fuel environment and modest economic improvement. FedEx F2015 results should benefit from improving results at Express, continued strong results at Ground and Freight and further execution of their share repurchase program. We believe the shares will react favorably to the outlook despite guidance being in line with Street expectations. Forward earnings estimates across the Street have declined, as many were somewhat cautious on the quarter, so a confirmation should be viewed favorably. We are a little concerned about management expecting fuel to be relatively unchanged as crude prices have spiked in the near-term; clearly this could be short lived but it might cause some concern around the outlook.

Those concerns, whoever, will be left for another day. Shares of FedEx have gained 4.6% to $146.60 at 10:43 a.m. today, and its good news have given other shippers a boost: United Parcel Service (UPS) has risen 0.9% to $102.49.

Have 'Edge of Tomorrow' and 'Jupiter Ascending' Made Warner Bros the Summer Box Office's Biggest Los

Source: JupiterAscending.com

The battle for the summer box office is about more than wracking up the biggest dollar total. The year's blockbuster movie season is an opportunity to put forth new films to added fanfare and an eager public. This means that new properties have the potential to enjoy an explosive launch, but the big budget, spectacle-heavy nature of the competition stage means that there is also the possibility for tremendous misfires. So far, the summer is looking disappointing for Time Warner (NYSE: TWX ) .

Warner's Godzilla revival may be turning in a respectable performance, but the rest of the company's original summer slate now looks problematic. The Tom Cruise-led, futuristic actioner Edge of Tomorrow looks to be one of the season's biggest underperformers, and the Wachowski's Jupiter Ascending has been pushed from its planned July 18 release to February. What does this blockbuster season mean for Warner Bros.?

Starting with a bang and proceeding to fizzle

The Warner Bros. studios kicked off the year's big movie season with Godzilla, a film that bowed to a $196 million opening weekend. Despite an explosive opening, the reptilian reboot has enjoyed less than monstrous legs. After a $93 million domestic opening, the film is still crawling to clear the $200 million mark. Godzilla currently has an international gross of approximately $440 million, after its recent Chinese opening scared up an impressive $36 million. A Japanese release is scheduled for July. The film's performance has been strong enough to guarantee a sequel, but its trajectory has dipped below the earnings path suggested by its initial international debut.

Source: EdgeofTomorrowMovie.com

While Godzilla will wind up categorized as a win, Edge of Tomorrow looks unlikely to earn that distinction. After two weekends at the domestic box office, the film has nabbed approximately $57 million. Thankfully for Warner, overseas audiences were more receptive to the Tom Cruise outing. Tomorrow currently has a worldwide gross of approximately $240 million. The movie has a stated production budget of $178 million. So, once marketing is factored in, it looks like the movie will break even for Warner. That said, no one makes a massively budgeted summer blockbuster with the hopes of breaking even or generating a small profit when the product hits home viewing distribution.

Was Jupiter Ascending on track to bomb on an interplanetary scale?

Edge of Tomorrow's performance is undeniably a disappointment for Warner, but the recently delayed Jupiter Ascending may be the bigger problem. Pushing back a movie so close to its release date is nearly unheard of and is indicative of serious doubts on the part of the studio. Reports suggest that tracking for the film was abysmal, and people claiming to have seen screeners have indicated that the picture is something of a mess.

Jupiter Ascending was planned as the first installment in a trilogy. Warner likely hoped to score another Matrix-like franchise from the Wachowskis, but the directing team's box office draw is looking seriously compromised after a series of underperformers and the bad buzz currently orbiting Jupiter.

Wachowski weakness and questionable casting

For a movie with a $175 million production budget, the handling of the film has many baffling elements. Channing Tatum looks to be building solid star power (as indicated by last weekend's 22 Jump Street from Sony (NYSE: SNE ) bowing to a $57 million opener), but casting Mila Kunis as the lead in what is supposed to be an epic sci-fi trilogy is a confusing move. The actresses' most notable big screen performance is still her supporting role in The Black Swan, and there has been little indication that she is capable of carrying a big budget action movie, let alone a trilogy. Warner's decision to push the movie to the wasteland of a February release suggests that hopes for a Jupiter sequel have descended.

Warner still has strong properties

While this summer's box office stretch looks to be disappointing for Warner, it still has strong properties in the pipeline. The Lego Movie was a big hit for the studio earlier in the year, and sequels and spinoffs are on the way. Additionally, the Fantastic Beasts and Where to Find Them trilogy should score up good totals, even if it fails to match the incredible highs of the Harry Potter films. Then there are the studio's upcoming DC Comics films to consider.

Source: DCComics.com

A case of the summertime blues?

It's worth noting that Warner isn't the only studio enduring underperformers this summer. The overall box office performance has been somewhat soft, and big movie's like Sony's Amazing Spider-Man 2 have fallen well short of the mark. Twenty-First Century Fox (NASDAQ: FOXA ) and DreamWorks Animation's (NASDAQ: DWA ) How to Train Your Dragon 2 has also debuted to a softer than expected domestic performance, and will need a strong international presence and good legs to meet expectations.

The pressure is on...

With two massively budgeted new properties failing to land as planned, it's hard to feel good about Warner's summer showing. It may be too early to crown the studio as the blockbuster season's biggest loser, but the company is at the front of the pack in pursuit of that dubious honor. Warner's ho-hum summer isn't necessarily a bad sign for its future projects, but the underperformance does create added pressure to deliver on the big movies in its pipeline.

Leaked: Apple's next smart device (warning, it may shock you)

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Tuesday, June 17, 2014

5 Stocks With Prime Cash Flow â€” YONG ZA GURE CHA CGA

Popular Posts: 10 Best “Strong Buy” Stocks — GMK GAME DAL and moreBiggest Movers in Energy Stocks Now – CHK KOG CLD PXDHottest Technology Stocks Now – SYNA INFY GTAT GME Recent Posts: Hottest Financial Stocks Now – AGO SCHW HRG ISBC Hottest Healthcare Stocks Now – EW HZNP PBYI SLXP Hottest Technology Stocks Now – ATHN MDSO FDS SUNE View All Posts 5 Stocks With Prime Cash Flow — YONG ZA GURE CHA CGA

This week, these five stocks have the best ratings in Cash Flow, one of the eight Fundamental Categories on Portfolio Grader.

Yongye International, Inc. () engages in the research, development, manufacture, and sale of fulvic acid based crop and animal nutrient products for the agriculture and stock farming industry in the People's Republic of China. YONG also gets A’s in Earnings Growth, Earnings Momentum, Equity, Operating Margin Growth and Sales Growth. The stock has a trailing PE Ratio of 2.10. .

Zuoan Fashion () designs, manufactures and markets casual men’s clothing. ZA also gets A’s in Earnings Growth, Equity and Sales Growth. The stock currently has a trailing PE Ratio of 1.70. .

Gulf Resources, Inc. () manufactures chemical products for use in oil and gas field explorations, oil and gas distribution, oil field drilling, wastewater processing, papermaking chemical agents, and inorganic chemical. GURE also gets A’s in Earnings Growth and Sales Growth. The stock’s current trailing PE Ratio is 3.20. .

China Telecom Corp. Ltd. Sponsored ADR Class H () is an integrated information service provider that offers telecommunications services, including wireline voice services, mobile voice services, and Internet access services. .

China Green Agriculture, Inc. () engages in the research, development, production, and sale of various types of fertilizers and agricultural products in the People's Republic of China. CGA also gets A’s in Equity and Sales Growth. The stock has a trailing PE Ratio of 1.90. .

Louis Navellier’s proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results — with A being “strong buy,” and F being “strong sell.” Explore the tool here.

Friday's Top Upgrades (and Downgrades)

This series, brought to you by Yahoo! Finance, looks at which upgrades and downgrades make sense and which ones investors should act on. Today, our headlines feature upgrades for mini-industrialist Stratasys (NASDAQ: SSYS ) and for remote computer access specialist LogMeIn (NASDAQ: LOGM ) but a downgrade for publicly traded soccer club Manchester United (NYSE: MANU ) . Let's take them one at a time, beginning with...

A seesawing upgrade for Stratasys
Investment banker William Blair's upgrade of Stratasys this morning to market perform starts out sounding pretty optimistic, with allusions to new product launches and business partnerships, "continuing strength in the core business, successful integration of Objet, [and] potential upside to revenue expectations for MakerBot."

It goes down swiftly from there.

Quoted on StreetInsider.com this morning, Blair predicts 20% earnings-per-share growth at Stratasys over the next several years, starting high at 25% in 2014 and tapering afterwards. But the problem with Stratasys remains the stock's valuation. A growth of 20% or 25% implies that a fair valuation for the stock might be somewhere in the mid-20s for P/E as well. But as Blair points out, "[At] $118, shares of Stratasys trade at 54 times our 2014 adjusted EPS estimate of $2.20."

This alone should warn you that the valuation is too rich. By the time Blair reaches its warning that "30 to 35 times [is the] average multiple associated with technology companies that we perceive to have growth, margin, and return profiles similar to Stratasys," it should be clear that 54 times is too high a price to pay. When you further consider that Stratasys is not currently generating any free cash flow whatsoever -- that it's been burning cash for two years straight in fact -- the only question that remains is why William Blair decided to upgrade the stock at all.

Time to LogMe (back) In?
A similarly optimistic write-up for LogMeIn suffers from a similar logic gap. Yes, LogMeIn reported an earnings beat yesterday, topping consensus estimates for Q4 earnings by a penny. Yes, management says that earnings and revenues will exceed expectations in Q1 2014, and for the full-year 2014 as well. But does all of this justify the 26% spike in share price we're seeing today or the upgrade to buy that Needham & Co. just assigned to LogMeIn?

I don't think so, and I'll tell you why not.

LogMeIn's earnings news yesterday has the company losing nearly $8 million for fiscal 2013. Things should improve in the New Year, of course. And already, LogMeIn is generating positive free cash flow at the rate of $19 million annually.

One problem here, though, is that after today's stock surge, LogMeIn shares sell for the Stratasys-like valuation of 53 times free cash flow. (Lacking GAAP profits, LogMeIn has no "P/E.") Given that LogMeIn's projected earnings growth rate isn't any higher than Stratasys's (it's actually about a percentage point lower, according to Yahoo! Finance data), the logical conclusion is that if Stratasys is overvalued, then LogMeIn must be, too.

Needless to say, Needham disagrees with this assessment. Arguing that LogMeIn's forward guidance is "conservative," Needham thinks there's another $6 -- or 14% worth of profits -- left in the stock, and has a $48 price target on LogMeIn shares. However, given the outrage voiced by the company's customers last month over a ham-handed demand that users of its Ignition software pay license fees within seven days or get kicked off the service, and the continued availability of free alternatives for logging into computers remotely, I'm not as optimistic that the company will succeed in its attempt to monetize its software. I'm certainly not optimistic about the stock's valuation -- and won't be following Needham's advice to buy the shares.

Manchester United -- rejected!
British football club Manchester United reported a small earnings beat on Wednesday, earning 12 British pence in its fiscal second quarter. That was flat against year-ago earnings but a penny ahead of estimates and on much stronger revenues as well.

Regardless, the team's inability to improve earnings despite strong revenue growth appears to have discouraged Raymond James. This morning, the investment banker removed its price target from the stock and downgraded Man-U to market perform. Is that the right call?

It's hard to say. Valued on GAAP earnings Manchester United shares sell for less than 12 times earnings, which hardly seems a high price to pay. The real problem with Manchester United, though, is that it's producing exceedingly weak cash profits. Free cash flow for the past 12 months came to just $84 million -- quite a bit less than is claimed on the income statement. Also, the company's ability to grow earnings is very much in question. It didn't grow at all last quarter, after all. Yahoo! Finance estimates suggest earnings might not grow much at all over the next five years, either.

If there's any upside to be found in this story, it's the fact that analysts quoted on S&P Capital IQ see a significantly brighter future for the soccer club, and predict rapid earnings growth of 28% annually on average, over the next five years. If they're right, the stock's still a bargain at today's price. If they're wrong, though, then the stock's a dud -- and Raymond James is right to downgrade.

Rich Smith has no position in any stocks mentioned, and doesn't always agree with his fellow Fools. Case in point: The Motley Fool recommends and owns shares of Stratasys.

Monday, June 16, 2014

3 Big Stocks on Traders' Radars

BALTIMORE (Stockpickr) -- Put down the 10-K filings and the stock screeners. It's time to take a break from the traditional methods of generating investment ideas. Instead, let the crowd do it for you.

>>5 Stocks Poised for Breakouts

From hedge funds to individual investors, scores of market participants are turning to social media to figure out which stocks are worth watching. It's a concept that's known as "crowdsourcing," and it uses the masses to identify emerging trends in the market.

Crowdsourcing has long been a popular tool for the advertising industry, but it also makes a lot of sense as an investment tool. After all, the market is completely driven by the supply and demand, so it can be valuable to see what names are trending among the crowd.

While some fund managers are already trying to leverage social media resources like Twitter to find algorithmic trading opportunities, for most investors, crowdsourcing works best as a starting point for investors who want a starting point in their analysis. Today, we'll leverage the power of the crowd to take a look at some of the most active stocks on the market today.

>>5 Huge Stocks to Trade for Huge Gains

These "most active" names are the most heavily-traded names on the market -- and often, uber-active names have some sort of a technical or fundamental catalyst driving investors' attention on shares. And when there's a big catalyst, there's often a trading opportunity.

Without further ado, here's a look at today's stocks.

OpenTable

Nearest Resistance: $105 
Nearest Support: $103 
Catalyst: Acquisition

News hit at the open on Friday that OpenTable (OPEN) was getting acquired by travel site Priceline (PCLN) for $103 per share in cash, a $2.6 billion valuation that represents a 46% premium over where OPEN closed on Thursday. The acquisition news is a big win for OpenTable shareholders, but late-to-the-game investors might as well move on. The money has already been made on this deal.

Yelp

Nearest Resistance: $100 
Nearest Support: $70 
Catalyst: OpenTable Sympathy Move

Online service rating site Yelp (YELP) got a boost from the competition on Friday, rallying close to 14% in the wake of OpenTable's acquisition news. Yelp buyers bid shares up hoping for a similar valuation to potentially get placed on YELP if a suitor were involved in a buyout. But Friday's rally wasn't the first sign of additional upside in Yelp.

That's because this stock has been forming an inverse head and shoulders bottom setup for the last two months, triggering a buy signal at the open on Friday. That move clears the way for another test of resistance at $100, a level that acted like a major price ceiling as recently as March. If you decide to buy here, keep a tight stop in place.

International Game Technology

Nearest Resistance: $16 
Nearest Support: $14.50 
Catalyst: Acquisition Rumors

The rumor mill is fueling upside in International Game Technology (IGT) from last week. Shares of the $4 billion slot machine maker rallied close to 11% on Friday following news that two firms were competing in a bidding war to acquire IGT. That's a follow-up from Monday, when reports surfaced that IGT had hired Morgan Stanley (MS) to help facilitate a sale.

From a technical standpoint, IGT's downtrend is clearly kaput, but there's still a lot of event risk in this name thanks to the implications that come alongside an acquisition. This isn't a trade for the risk-averse, but a breakout above $16 is an important signal that sellers are on the retreat.

To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.  

-- Written by Jonas Elmerraji in Baltimore.

Will 21st Century Fox Head Higher Post-Earnings?

With shares of 21st Century Fox (NASDAQ:FOXA) trading around $32, is FOXA an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework.

T = Trends for a Stock’s Movement

21st Century Fox was formerly part of News Corp. The company has a portfolio of cable, broadcast, film, pay television, and satellite assets spanning six continents across the globe. It is home to a global portfolio of cable and broadcasting networks and properties: FOX, FX, FXX, FS1, Fox News Channel, Fox Business Network, Fox Sports, Fox Sports Network, National Geographic channels, Fox Pan American Sports, MundoFox, STAR, and 28 local television stations; film studio 20th Century Fox Film; and television production studios 20th Century Fox Television and Shine Group.

21st Century Fox on Thursday reported $7.06 billion of total revenue for the three months ending September 30, a $1.06 billion, or 18 percent, increase over the $6 billion of revenue in the prior year. Approximately half of the revenue increase reflects growth at the Cable Network Programming, Filmed Entertainment, and Television segments. Commenting on the results, Chairman and CEO Rupert Murdoch said: "In our first quarter as 21st Century Fox, we delivered strong revenue increases across all of our businesses as well as growth in OIBDA even as we made significant investment in our channels business, and faced a difficult film comparison and currency headwinds. The investment we are making, including the launch of FXX and Fox Sports 1, will drive future sustained growth toward our stated 2016 target of $9 billion of OIBDA and beyond.”

T = Technicals on the Stock Chart Are Mixed

21st Century Fox stock has been trading sideways in recent quarters. However, the stock is currently surging higher and looks set to continue this path. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, 21st Century Fox is trading below its rising key averages, which signals neutral to bearish price action in the near-term.

Source: Thinkorswim

Taking a look at the implied volatility (red) and implied volatility skew levels of 21st Century Fox options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
21st Century Fox options	28.06%	86%	84%

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

	Put IV Skew	Call IV Skew
March Options	Steep	Average
April Options	Steep	Average

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

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on 21st Century Fox’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for 21st Century Fox look like and more importantly, how did the markets like these numbers?

	2013 Q4	2013 Q3	2013 Q2	2013 Q1
Earnings Growth (Y-O-Y)	-62.26%	-42.55%	-3.13%	221.1%
Revenue Growth (Y-O-Y)	17.62%	17.62%	-13.84%	13.52%
Earnings Reaction	1.86%*	-0.17%	-0.41%	N/A

*As of this writing.

21st Century Fox has seen decreasing earnings and increasing revenue figures over the last four quarters. From these numbers, the markets have been optimistic about 21st Century Fox’s recent earnings announcements.

P = Weak Relative Performance Versus Peers and Sector

How has 21st Century Fox stock done relative to its peers – Disney (NYSE:DIS), Comcast (NASDAQ:CMCSA), and Viacom (NASDAQ:VIAB) — and sector?

	21st Century Fox	Disney	Comcast	Viacom	Sector
Year-to-Date Return	-8.22%	-1.52%	3.84%	-7.22%	-2.28%

21st Century Fox has been a poor relative performer, year to date.

Conclusion

21st Century Fox is a cable, broadcast, film, and pay television provider around the world. The company on Thursday reported fourth-quarter earnings that left investors optimistic. The stock has been trading sideways in recent times but is currently surging higher. Over the last four quarters, earnings have been decreasing while revenue figures have been increasing. Relative to its peers and sector, 21st Century Fox has been a poor year-to-date performer. WAIT AND SEE what 21st Century Fox does next.

Will the Bob Evans Farms (BOBE) Earnings Report Quiet Shareholder Activists? CBRL, DENN & DIN

The Q4 2014 earnings report for restaurant stock Bob Evans Farms Inc (NASDAQ: BOBE), a potential peer of Cracker Barrel Old Country Store, Inc. (NASDAQ: CBRL), Denny's Corporation (NASDAQ: DENN) and DineEquity Inc (NYSE: DIN), is scheduled for after the market closes on Tuesday. Aside from the Bob Evans Farms report, it should be said that Cracker Barrel Old Country Store, Inc reported Q3 2014 earnings on May 28th (revenues and profit rose on lower expenses); Denny's Corporation reported Q1 2014 earnings on April 28th (they had their strongest quarter of same-store sales at company restaurants in over seven years); and DineEquity Inc reported Q1 2014 on May 1st (earnings rose on stronger sales). However, Bob Evans Farms recently replaced three board members with new independent directors after facing criticism from shareholder Sandell Asset Management Corp.

What Should You Watch Out for With the Bob Evans Farms Inc Earnings Report?

First, here is a quick recap of Bob Evans Farms' recent earnings history from Yahoo! Finance:

Earnings HistoryApr 13Jul 13Oct 13Jan 14

EPS Est	0.64	0.57	0.55	0.57
EPS Actual	0.71	0.58	0.35	0.30
Difference	0.07	0.01	-0.20	-0.27
Surprise %	10.90%	1.80%	-36.40%	-47.40%

Back in early March, Bob Evans Farms Inc's shares sank after the company's third quarter results trailed expectations and after it lowered its fiscal 2014 profit view for the second time this year. The weather impacted same-store sales of -1.8% plus the company estimated a sustained and severe winter weather impact of approximately 3%. However, its 47 core restaurants located in Florida achieved same-store sales of 4.4% - benefiting from "the Farm Fresh Refresh program, value sales layers, and the absence of severe winter weather." The Chairman/CEO commented:

"The third quarter of fiscal 2014 was especially challenging due to a number of factors, including: sustained and severe winter weather of a magnitude not seen in many years, particularly in our core Midwest markets; continued higher than projected sow costs; and higher than projected fiscal 2014 startup inefficiencies following the expansion of the BEF Foods' Sulphur Springs, Texas, plant. However, we expect these issues will be confined to fiscal 2014, and as such will not impact fiscal 2015 results."

This time around and according to the Yahoo! Finance analyst estimates page, the consensus expects revenue of $333.31M and EPS of $0.41 - down from the consensus EPS of $0.42 seven days ago, $0.43 thirty days ago, $0.44 sixty days ago and $0.45 ninety days ago.

On the news front and in late April, Sandell Asset Management Corp, the beneficial owner of approximately 1.7 million shares or 6.8% of Bob Evans Farms, released a public letter to the shareholders of the Company to discus its slate of eight independent candidates for BOBE's Board of Directors. The letter noted:

Bob Evans has dramatically under-performed its own selected peer group over a 1-year, 3-year, 5-year, and 10-year time period, as well as other peers. We believe this unacceptable track record is the direct result of the failed policies and a wasteful culture sanctioned by a stale and entrenched Board of Directors that in our view has been unable to exert effective management oversight.

Bob Evans Farms did replace three board members, but that has not satisfied Sandell Asset Management Corp's CEO who stated:

"We believe that today's announcement is a half measure taken as a knee-jerk reactionary step once the Company felt the pressure of shareholders and the spotlight of public opinion trained on them following the announcement of Sandell's highly-qualified and experienced independent slate of Directors. In our view, this is yet another cynical attempt by the Board of Directors of Bob Evans to pose as a Company that embraces good governance after forcing shareholders to suffer years of under-performance under the supervision of what we view as a stale and entrenched Board. We would remind shareholders that this is the second time in recent months that even basic change has occurred only after outside actions put pressure on the Board to react."

In early May, it was announced that Paul F. DeSantis, the Bob Evans Farms' Chief Financial Officer and Treasurer, had resigned to accept a position with another company.

What do the Bob Evans Farms Inc Charts Say?

The latest technical chart for Bob Evans Farms shows a downward trend since late last year:

Moreover, its easy to see why investors are unhappy with Bob Evans Farms' performance as Cracker Barrel Old Country Store, Inc, Denny's Corporation and DineEquity Inc have outperformed it:

Cracker Barrel Old Country Store, Inc has recently produced a multiple bottom on the technical charts while Denny's Corporation has been trending downward since December and DineEquity Inc has been bouncing around the $80 per share level:

What Should Be Your Next Move?

With activist shareholders breathing down the necks of Bob Evans Farms' management, the coming earnings report will be interesting to watch to see if there are signs that current management is doing something to turn things around. If not, we can expect more demands for more radical changes – something that would probably be a good thing for shareholders over the long term.

Sunday, June 15, 2014

8 Super Super Bowl Numbers

The Super Bowl has grown from a game that didn’t sell out in 1967 to an unofficial national holiday it has become today.

Along the way, players have broken records, beer has been spilled and, somehow, guacamole has become the dip of choice to the point that avocado shortages can cause panic among party planners.

Fans can recite the key stats by heart. The Steelers have the most rings, six, the Packers won the first two, and on and on.

But even for non-fans, those who tune in to only to critique the ads, there are numbers that pique the interest. The numbers can be big. Half a billion big. Or small. Very small. Like zero.

(Check out: 8 of the Worst Financial Meltdowns by Athletes)

But they all add up to the biggest sporting event of the year in the U.S.

Check out our 8 Super Super Bowl Numbers:

Super Bowl Boulevard, Times Square, NYC. (Photo: AP)

$500 million to $600 million

That’s the amount the NFL says the Super Bowl will generate in economic activity for New York City. What city wouldn’t want to put up with the headaches of planning for the big day? Well, some economists say the number is inflated, by as much as 10 times. One study showed that the average amount generated by the big game from the early 1970s to late 1990s was $32 million. We’ll punt on figuring out who’s right.

$266 million: The salary for the Seahawks and Broncos this year.

$266 million

That’s the total salary for the Seahawks and Broncos this year, with the Seattle players raking in just over half of that. Consider that the minimum salary for a veteran was just $10,000 per year in 1970.

$100 million: The amount bet on the game last year. (Photo: AP)

$100 million

The amount bet on the game last year set a Super Bowl record last when it topped out at $99 million on Las Vegas sports books. The $100 million mark seems possible this year. A chart on Boydsbets.com breaking down the Vegas bets on the game since 1991 shows an astounding rise in the amount wagered. In that year, $40 million was bet on the Giants-Bills game. In case you’re wondering, the sports books made out OK, keeping $7.2 million of last year’s wagers.

$4 million: The cost for a 30 second commercial. (Photo: AP)

$4 million

That’s the cost for 30 seconds of commercial time during the broadcast on Fox. Forbes notes that in 1967, that commercial time cost $279,000 when adjusted for inflation. With viewership more than double the 51 million of the first Super Bowl. That year, the number of viewers who saw a commercial per ad dollar spent was 183, last year the figure was down to 29. That person-per-ad price has plummeted because, even though the number of viewers has more than doubled from the 51 million of Super Bowl I, the cost of an ad has skyrocketed more 15 times.

Lucas Oil Stadium downtown Indianapolis, Indiana. (Photo: Wikimedia Commons)

$1.1 million

That’s the amount Indianapolis says it lost hosting the 2012 Super Bowl. Costs for insurance, turning a major street into a pedestrian mall and installing other attractions to visitors added up. Amazingly, the city had figured it would lose some money on the deal. Just not quite so much.

$2,200: The price of admission for a tailgate party.

$2,200

Looking for a tailgate party before the big game? Well, your options are limited. To one. It’s run by the NFL and the price of admission is $2,200. Besides food and beverages, there’ll be live music and entertainment. For the record, ESPN hosts what many consider the top party of the weekend on Friday night. The cost for entry is $1,554. That’ll allow you to mingle with plenty of celebrities and listen in on music performances.

$1,300: Fans wanting to buy a ticket to the Super Bowl better be ready to shell out big bucks. (Photo: AP)

$1,300

New York might be a super expensive city, but tickets to the game can be had at relatively cheap prices. That’s if you consider well over a thousand dollars cheap. The price for seats on one secondary market plummeted as worries over cold, or even snowy, weather have been bandied about in the media. Even on the top site, Stub Hub, tickets were available for about $1,500, about a grand less than a week earlier. Those seats are all far from the action. To be closer to the field, you’ll have to part with about $2,500. The face value of seats ranges from $500 to $2,600. For the first Super Bowl in 1967, tickets went for $12. And the game wasn’t sold out.

0 and 7: The two numbers give you the best chance of winning at 13.16%.

0 and 7

That doesn’t sound like much, but if you bought a box in the office pool, those two numbers give you the best chance of winning at 13.16%, according to information on si.com that looked at every regular season and playoff game played since 2006. The combinations of zero and three and zero and zero follow. The worst pair is nine and nine at 0.13%. Not that there’s anything you can do to make sure get the best numbers.

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