Friday, January 31, 2014

Happy Thanksgivukkah and Black Thursday

Santa himself could probably sum up this holiday season in two words: Oy vey.

One of the most topsy-turvy holiday seasons since the invention of the shopping mall begins on Thanksgiving with Hanukkah. Wait, make that, it begins on Hanukkah with Thanksgiving.

No, there won't be eight days of Thanksgiving this year — or one day of Hanukkah. But the confusion is understandable. This also is the very first holiday season when Thanksgiving Day becomes the new Black Friday, except it's on Thursday night.

Holiday shoppers — and sellers — have another headache: a serious seasonal shopping squeeze. There are, after all, a scant 26 shopping days between Thanksgiving and Christmas, which means less time to buy and sell stuff — and less time to beg, bribe or bamboozle consumers into diving for the deals.

"It might seem that time is out of joint this holiday season," says Robert Thompson, pop culture professor at Syracuse University. "But Pilgrims and Maccabees make some sense as allies in the dining table centerpiece. Each fought against the odds — and won."

So, who wins this holiday season: shoppers or sellers?

Perhaps neither. The familiar 'Happy Holidays' greeting has arguably been twisted this season into "Wacky Holidays." Never mind that the National Retail Federation has projected that spending will be up 3.9% to $602.1 billion this year. That may be more prayer than prediction.

A Happy Thanksgivukkah card from justWink by American Greetings.(Photo: American Greetings)

After all, the very look, feel and taste of shopping already is off-kilter, with six fewer shopping days between Thanksgiving and Christmas. The coincidence of Thanksgivi! ng and Hanukkah falling on the same day — dubbed Thanksgivukkah — feels, to some, about as cosmically stable as a dreidel on its last spin. And the remolding of Thanksgiving into a shopping fest has even received the blessing of retailing's unofficial papacy: Macy's.

Perhaps instead of moving Black Friday to Thanksgiving Day, it should have been moved to Wednesday — the day before Thanksgiving, suggests futurist Watts Wacker. "How else is one going to get a deal on the Hanukkah presents?" he wryly asks.

"It's Crazy Christmas this year, for sure," says Marshal Cohen, chief industry analyst at NPD Group. "Retailers are worried about this and will promote all throughout the holidays to compete to get the consumer."

That's retailers like Toys R Us. The shortened holiday calendar "has certainly put some challenges in front of us," says Richard Barry, chief merchandising officer at Toys R Us. But the retailer has been planning for this for more than a year, he says.

Toys "R" Us has mapped out in excruciating detail special advertising, marketing and merchandising plans for every single day between Thanksgiving and Christmas. For competitive reasons, Barry declined to detail even one day, but he says, "Each day has its own plan."

Sounds more like a war than a store strategy, no?

Among the things Toys R Us has done to get us shopping earlier: Its loyalty customers received 10% back on toy purchases during September and October via an e-gift card delivered just in time for holiday shopping. Loyalty customers also received an exclusive e-mail offer, granting them access to sought-after deals the day before Thanksgiving that aren't available to the general public.

Kohl's concocted some savvy ways to lure consumers in before Black Friday. Among other things, the chain this holiday is selling something at deep, deep discount that almost no one connects with the store: TVs.

For Thanksgiving evening, it is promoting this door-buster: 32-inch TVs for $139.99. ! After the! holidays, well, it's yet to be decided whether the TVs stay in the year-round merchandise mix or go, says Michelle Gass, chief customer officer. It depends, in part, on how they sell.

The trick isn't just to surprise the consumer but to "disrupt" the consumer's state of mind by offering them things they never expected, she says.

Most consumers won't fully recognize how out-of-kilter the shopping calendar is until they return to work on Cyber Monday — following Black Friday — and realize it's already Dec. 2, says Barry of Toys R Us.

Among those trying to deal with the calendar crunch is Toni Bloomfield. She's a stay-at-home mom in Columbus, Ohio, with four kids: boys ages 2, 6 and 9 and a girl who is 4.

On Thanksgiving Day, they'll all be at the beach in Naples, Fla., with her in-laws. Although Bloomfield and her husband are raising the kids Catholic, her in-laws are Jewish, so she expects to celebrate the first night of Hanukkah and Thanksgiving together.

Then, after the kids are asleep, she just might sneak away to check out a Thanksgiving night sale or two.

"What I can't imagine is that people would spend Thanksgiving Day waiting in lines to get into stores," Bloomfield says. "I wouldn't do that."

What she already has done, however, is more than half of her Christmas shopping. Last year, she hadn't done any until after Thanksgiving, but because of the shortened holiday season and planned family travel, she has rammed it into gear. The Bloomfield family will spend pretty much what it did last year on gifts. "We have four kids, so if you get four presents each, which makes 16 presents, it can get out of control."

So, too, could the efforts by some families to mold Thanksgiving and Hanukkah into one big, happy holiday — particularly if the celebration degrades into a debate about who got the biggest superstore deal.

"Remember that both celebrations are about giving, not getting," says Rabbi Rick Jacobs, president of the Union for Reform Jud! aism, a n! etwork of 900 Jewish reform congregations. And the giving part, he adds, is less about stuff and more about friendship and thanks.

Which is precisely why Leslie Frishberg, a homemaker and mother of two daughters ages 11 and 19, actually loves that Thanksgiving and the first full day of Hanukkah are falling on the same day.

Because Hanukkah is so far from Christmas this year, she says, the commercialism is almost certain to be downplayed. And the combination of Thanksgiving and Hanukkah means the family focus will be front and center, she says. "This is the best of all worlds."

And, yes, she got all of her Hanukkah shopping done early — without stepping into a single store. Frishberg did most of her shopping on Amazon.com, she says. "I live in Brooklyn," she says. "Who wants to drag to the mall?"

The folks at Barnes & Noble don't really care if consumers drag to the mall or buy online, just so they turn to them early and often.

So eager was the book-selling giant to jump ahead of the holiday curve, it opted not to wait to hold its big seasonal bash on Black Friday or even on Thanksgiving. Instead, it concocted a sale aimed at luring shoppers a full week before Black Friday: Discovery Friday. The event tantalized Barnes & Noble members with things like 20% discounts on the just-launched Nook GlowLight, an e-reader with built-in front lighting.

The purpose: "To give customers more time to kick-start their shopping," says Mary Amicucci, the chain's vice president for children's books.

So that's what it's come down to: a holiday kick-start.

Sharper Image, whose products are sold in Macy's and other stores, began its marketing efforts 2½ weeks earlier this year than last year, says Dari Marder, chief marketing officer at Iconix, which owns the Sharper Image brand.

Marder's family, including three kids ages 16, 13 and 10, celebrates Hanukkah, but they plan to focus on Thanksgiving the first night. "We have so many nights of Hanukkah, but ju! st one ni! ght of Thanksgiving," she says.

Even then, she says, since she'll be celebrating with her folks in Florida, the Hanukkah candles will certainly be lit, "if my mother has anything to say about it."

Ah, mothers.

Some rightfully feel wedged — this holiday in particular — between their families and their professions.

Moms like Maureen Bausch. She's the executive vice president for business development at the giant Mall of America in Bloomington, Minn.

Like many, Bausch must spend a chunk of Thanksgiving evening at the mall working. She loves her job, and she still gets a charge from the excitement of holiday retailing. But in a perfect world, she concedes in a moment of candor, "We wouldn't be open until Friday morning."

That is not retail blasphemy. It's honesty. Many of the very same retailers who will do almost anything to hit their sales goals this holiday also yearn to be home with their families on Thanksgiving, she says. It's almost impossible to do both. She points a finger at one culprit: Amazon.com.

"If Amazon closed on Thanksgiving, it would change the course of history," she says wishfully of the digital retailer that encourages everyone to shop from home at any time. "If it closed on Thanksgiving, everyone else would."

Of course, it won't.

So this Thanksgiving, Bausch will find just enough time to share turkey with her three children — and as many of her 33 other family members as she can — then rush off to the sprawling 520-store mall, where some shops will open as early as 6 p.m.

Her Thanksgiving pumpkin pie will have to wait, she says. "I'll be having dessert on Friday."

Thursday, January 30, 2014

Minyanville: At Apple, investors still see evol…

Lest we forget, Apple wasn't the only tech titan trying to recapture some of its former glory on Tuesday. Nokia, whose 14-year reign as the world's number-one cell phone maker abruptly ended in 2012, also unveiled a battery of new products.

The Finnish firm's fall from grace is a salient reminder that, in technology, the only constant is change. Amid increased competition, and having recently reported a first-ever sequential slowdown in iPad sales, Apple's stock has tumbled 18% in 12 months. Are yesterday's rollouts enough to stop the rot?

First off, snap judgments should be avoided with all things Apple. How silly does the snickering and skepticism that greeted the original iPad's introduction in 2010 now seem. It would go on to become the most talked-about tablet since Moses, upending an entire industry en route.

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That said, the much-anticipated announcements appear to continue a troubling trend of evolution rather than revolution from the Cupertino company. This may be why shares responded by ending off 0.29%, admittedly after nine straight increases, even as the S&P 500 Index advanced to another record.

The absence of a fingerprint sensor got the thumbs-down from many, yet there was still much to admire. Highlights included faster processing power, a sharper resolution Retina display on the iPad Mini, and a re-branded iPad Air that is notably lighter and sleeker than previous incarnations. All with the Jony Ive-inspired aesthetic beauty we have come to expect of Apple, a design delight that remains a marvel even as it is increasingly taken for granted.

Surprises? A couple. Apple interestingly opted to make its new Mac operating system, OS X Mavericks, available for free. Its CEO, obviously taking aim at Office, claimed that by doing so, "We are turning the industry on its ear." Microsoft stock, down 1.17% on the day, clearly didn't like the sound of t! hat.

And an unexpected price hike for the Mini indicates it continues to cannibalize -- if a man called Cook will forgive the phrase -- the flagship iPad itself to a greater extent than anticipated. This smaller device is increasingly important for Apple, proving that even Steve Jobs got it wrong on occasion. (The Apple legend once famously called tiny tablets "dead on arrival.")

All told, yesterday's developments are essentially incremental upgrades, aimed at keeping things ticking until either the iWatch or Apple TV are finally unwrapped. The latter, especially, has become Silicon Valley's version of Waiting for Godot, and if Apple, two years after the passing of its iconic co-founder, does not deliver soon, investors' patience will eventually wear as thin as these latest products.

This story originally appeared on Minyanville.

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Wednesday, January 29, 2014

Can Delta Air Lines Continue to Fly Higher?

With shares of Delta Air Lines (NYSE:DAL) trading around $25, is DAL 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

Delta Air Lines provides scheduled air transportation for passengers and cargo in the United States and internationally. Its route network is centered around a system of hub and international gateway airports. The company also provides aircraft maintenance, repair, and overhaul services for other aviation and airline customers as well as offers staffing services, professional security, and training services. As air transportation is becoming increasingly more popular, Delta Air Lines is poised to capitalize into the future.

Delta Air Lines reported earnings on Tuesday morning with net profit climbing $444 million year-over-year to $1.2 billion or $1.41 a share. Analysts had expected Delta to post earnings of $1.36 a share. GAAP income was $1.4 billion, or $1.59 a share. Delta's total operating revenue was $10.49 billion, compared to $9.92 billion a year ago and topping estimates of $10.47 billion. Delta's earnings report repeatedly cited the hard work of the company's employees as a reason for the successful quarter, and the company announced a $249 million profit-sharing expense “in recognition of Delta employees' contributions to the company's financial performance.”

T = Technicals on the Stock Chart Are Strong

Delta Air Lines stock been doing well in the last several years. The stock is currently trending higher and is trading at all time high prices. 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, Delta Air Lines is trading above its rising key averages, which signal neutral to bullish price action in the near-term.

DAL

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Delta Air Lines options may help determine if investors are bullish, neutral, or bearish.

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

Delta Air Lines Options

33.91%

0%

0%

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

Put IV Skew

Call IV Skew

November Options

Flat

Average

December Options

Flat

Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very small amount of call and put option contracts and are leaning neutral to bullish 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 Delta Air Lines’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Delta Air Lines look like and more importantly, how did the markets like these numbers?

2013 Q2

2013 Q2

2012 Q1

2012 Q4

Earnings Growth (Y-O-Y)

14.63%

-500.00%

-93.33%

-98.61%

Revenue Growth (Y-O-Y)

5.68%

-0.26%

1.03%

2.42%

Earnings Reaction

3.81%

1.71%

10.43%

1.24%

Delta Air Lines has seen decreasing earnings and rising revenue figures over the last four quarters. From these numbers, the markets have been pleased with Delta Air Lines’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Delta Air Lines stock done relative to its peers, Southwest Airlines (NYSE:LUV), United Continental (NYSE:UAL), JetBlue (NASDAQ:JBLU), and sector?

Delta Air Lines

Southwest Airlines

United Continental

JetBlue

Sector

Year-to-Date Return

115.70%

59.77%

33.23%

28.67%

60.34%

Delta Air Lines has been a relative performance leader, year-to-date.

Conclusion

Delta Air Lines provides services that are seeing increased demand as travel for work or leisure becomes more important. A recent earnings release has the markets upbeat about the company. The stock has moved higher in recent years and is currently trading near all time high prices. Over the last four quarters, earnings have declined while revenues have been on the rise which has pleased investors in the company. Relative to its peers and sector, Delta Air Lines has been a year-to-date performance leader. Look for Delta Air Lines to continue to OUTPERFORM.

Tuesday, January 28, 2014

Sending out an SOS: RadioShack Plunges 20% as Losses Grow

When I was a kid, I bought my first–and only–Ham radio telegraph key at RadioShack (RSH), which was a haven for those of us geeky enough to like playing with electronics. I also adored its packaged electronic kits, with those little metal springs to hold the wires. But that’s not today’s RadioShack, not really.

Getty Images

The problem is, that RadioShack doesn’t know what it is anymore, as clearly demonstrated by second-quarter loss of $1.11, well below forecasts for a 37 cents loss. The Wall Street Journal has the details:

Earlier this year [CEO Joe] Magnacca, a former Walgreen Co. executive who was hired in February, outlined a strategy to refurbish stores by overhauling layouts and removing items from the shelves, part of a broader effort to improve perception among younger customers while keeping traditional “do-it-yourself” patrons satisfied. The company plans to open or remodel more than 100 of its roughly 4,300 stores with some form of that new design by the end of the year.

In the meantime, RadioShack’s quarterly loss widened to $112.4 million from $47.1 million a year earlier as overall sales fell 10% to $805.4 million.

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Sales at stores open at least a year dropped 8.4% as the company cleared stockpiles of less-profitable products by marking down devices or, in most cases, unloading them on wholesalers. The effort squeezed the company’s gross margin down to 30.1% from 36% a year earlier.

RadioShack also announced that it had hired two executives with J.C. Penney (JCP) pasts to help improve merchandising and global sourcing. Yes, JC Penney. That will make investors feel good.

Still, JCPenney RadioShack was able to sign an $835 million financing deal at “very market-based competitive rates,” its CFO said.

BB&T Capital Markets’ Anthony Chukumba and Eric Cohen survey the damage:

RadioShack continued to stumble in Q3'13, and we saw scant evidence in the company's results a turnaround is on the horizon. While we are encouraged to see RadioShack secure the necessary financing to make it through the upcoming holiday selling season, we still have serious concerns about the company's long-term viability—particularly as Best Buy (BBY) continues to right its ship and Amazon (AMZN) becomes a larger player in consumer electronics retailing.

Radioshack’s shares have dropped 21% today, and Chukumba and Cohen continue to rate the stock a hold. Because at $$2.79, what else are you going to do?

Monday, January 27, 2014

Why Jamba Shares Got Crushed

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

What: Shares of Jamba Juice (NASDAQ: JMBA  ) plummeted 19% today after the fruit smoothie chain slashed its outlook for 2013.

So what: Jamba shares have rallied nicely over the past year on steadily improving same-store sales, but yesterday's downbeat guidance reignites serious concerns over its ability to grow profitably. While the news wasn't all bad (Jamba also announced that retail giant Target will be rolling out 1,000 JambaGo locations), management's disappointing outlook for sales, four-wall profit margins, and operating earnings suggests that Jamba's competitive position is rapidly weakening.

Now what: Management now expects same-store sales to increase no more than 1% in 2013, well below its prior growth forecast of 4% to 6%. "Jamba's adjusted targets for 2013 and preliminary forecasts for 2014 represent a realistic and balanced approach to achieve sustained, long-term growth and also drive significant gains this year in operating margin, net income and other key metrics," Chairman and CEO James White reassured investors. Of course, when you couple Jamba's intensifying competitive environment with the stock's forward P/E of 17, I'd wait for an even wider margin of safety before buying into that bullishness.

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Sunday, January 26, 2014

Reports of Contamination Shake Spice Industry

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America's spice industry is nothing to sneeze at. Research and Markets reports the industry's revenue came in at $8.4 billion during 2011, with an estimated gross profit of over 35 percent.

So it's serious business when a new FDA report says that 12 percent of spices imported to the U.S. were contaminated by "filth" – things like insect parts, hair, excrement and other materials like stones, twigs, plastic and rubber bands – and have an "average shipment prevalence" for Salmonella at close to seven percent.

This type of contamination has been an issue before in the U.S. In 2010 at least 272 people in 44 states and Washington, D.C. were sickened by a strain of Salmonella found in black and red pepper used in the production of Italian-style deli meats.

There are about 42,000 cases of Salmonella infections reported annually in the U.S., and relatively few come from spices – but the industry isn't taking a passive approach to the report.

A statement issued by the American Spice Trade Association notes imported spice "is essentially a raw agricultural commodity" that goes through extensive inspection, procession, cleaning and testing for pathogens once it enters the U.S.

And the word's largest spice company, Maryland-based McCormick & Co. (NYSE: MKC), says they take on the responsibilty of ensuring their products' safety.

"Whether they're grown in the United States or other parts of the world, McCormick exercises the same high level of quality control throughout our supply chain," Jim Lynn, the company's corporate communications officer, said in an email to Benzinga, "including several million ingredient analyses each year and a natural steam pasteurization process. That's why it's important to purchase your spices from a trusted resource, and because of our unwavering commitment to safety and quality."

ASTA adds that outbreaks related to a specific spice or food ingredient are often hard to investigate, "because of the many possible foods that could be involved and the potentially complex supply chains associated with each ingredient."

But the FDA believes the contamination could come from poor storage and processing operations, and says its report is a "wake-up call" to spice producers. "It means: 'Hey, you haven't solved the problems,;" Jane Van Doren, an FDA food and spice official, told The New York Times.

Posted-In: American Spice Trade Assciation food baking cooking food and beverage foods Jane Van Doren spiceNews Guidance Commodities Restaurants Markets General Best of Benzinga

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Saturday, January 25, 2014

Earnings Season Somewhat Disappointing

This earnings season, so far, has had its share of disappointing beats and surprises, however, MoneyShow's Jim Jubak thinks these key factors make the season even more disappointing.

So far, in absolute numbers, this earnings season could be called somewhat disappointing. About 50% of the 10% of Standard & Poor's 500 (SPX) companies that have reported earnings, have beaten Wall Street estimates. That's below the long-term average of 63% and well below the four-year average of 74%.

But I think the earnings season, so far, is actually more disappointing than that absolute underperformance suggests. Too many of the earnings beats are by just a penny, or so, and too many earnings surprises are coupled with misses on revenue. Others combine an earnings beat with a cut to guidance for the first quarter, or all of 2014. And other companies are managing to report an earnings beat only thanks to a clearly one-time factor, or a bit of financial engineering using, frequently, share buybacks.

With US stocks ending 2013 at historical highs, investors just aren't impressed with that kind of earnings beat.

Want some examples?

Johnson & Johnson (JNJ) reported earnings per share four cents above the analyst consensus. But the company forecast that 2014 earnings would be $5.75 to $5.85 a share. That's below the Wall Street consensus estimate of $5.86 a share.

Abbott Laboratories (ABT), a Jubak's Picks Portfolio member, reported earnings per share in line with estimates, but revenue climbed just 0.4% and missed analyst estimates by $64 million.

US Bancorp (USB) managed to beat on earnings by a penny a share, but revenue fell by 4.4% year over year and was just in line with estimates.

McDonald's (MCD) beat on earnings by a penny, but revenue grew year over year by just 2% and came in $15 million short of Wall Street projections.

Verizon (VZ) beat analyst estimates by four cents a share, but reported revenue $29 million below expectations.

Of course, this earnings season is also reporting the usual share of just plain bad results, such as the five cents a share earnings and the $66 million revenue miss at Coach (COH).

But truly positive reports, like the 11 cents a share earnings surprise at ASML Holding (ASML), with revenue growth of 81% year over year that put revenue $22 million above Wall Street estimates, have been light on the ground, so far, this quarter.

Which has put investors in such a funk about earnings and revenue—and the prospects of future earnings and revenue—that even an ASML falls on its news.

Full disclosure: I don't own shares of any of the companies mentioned in this post in my personal portfolio. When in 2010 I started the mutual fund I manage, Jubak Global Equity Fund, I liquidated all my individual stock holdings and put the money into the fund. The fund may or may not now own positions in any stock mentioned in this post. The fund did not own shares of any stock mentioned in this post as of the end of December. For a full list of the stocks in the fund, see the fund's portfolio here.

Thursday, January 23, 2014

McDonald's

Russ Kaplan, editor of the Heartland Advisor, looks to the Big Mac as his candidate for the top dividend stock for 2014. Here's his outlook for the fast food restaurant operator.

McDonald's Corporation (MCD) was founded in 1940, and, over the years, they created a strong, loyal customer base. Their menu has broadened, but they keep their timeless favorites.

At a reasonable price, McDonald's has a dividend yield of 3.3%. That income is solid and ranks up with the yields on many bonds.

McDonald's has a history of raising their dividend, which bonds will never do. Since 2009, the dividend has risen five times, and will likely keep rising over time.

In addition to the attractive yield you will receive, McDonald's has the potential for excellent capital gains in the future. It's currently selling in the $95 range, down from this year's high of $104.

The reason it fell was that quarterly revenue has been down with the concern about the need for healthier foods. McDonald's has often faced that, adapted, and always bounced back.

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It has a strong international presence, 68% of sales come from outside the United States. This protects it from any downturns in a particular country or particular region. Incomes, and popularity of its products, are particularly on the rise in developing countries.

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Tuesday, January 21, 2014

Can Time Warner Cable Move Higher After Settling Its Dispute?

With shares of Time Warner Cable (NYSE:TWC) trading around $110, is TWC 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

Time Warner Cable is a provider of video, high-speed data, and voice services in the United States, with systems located in five geographic areas: New York, the Carolinas, Ohio, Southern California, and Texas. The company offers its residential and business services customers numerous services over its broadband cable systems. With such a large and growing user base, look for Time Warner Cable to continue to see rising profits from its media, entertainment, and communications offerings.

Time Warner Cable's dispute with CBS (NYSE:CBS) has finally been settled to Time Warner’s disadvantage. The cable provider was forced to pay a significant increase in retransmission fees, although the figure was still below $2 per subscriber per month, sources told Bloomberg. Thus ends the monthlong blackout of CBS programming from Time Warner Cable. The agreement comes just in time for National Football League games — some of the most lucrative programming on television — to start broadcasting.

T = Technicals on the Stock Chart Are Strong

Time Warner Cable stock has seen a consistent uptrend in the last few years. The stock is currently pulling-back from all-time high prices so it may need time before it gets going once again. 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, Time Warner Cable is trading between its rising key averages which signal neutral to bullish price action in the near-term.

TWC

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Time Warner Cable options may help determine if investors are bullish, neutral, or bearish.

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

Time Warner Cable Options

33.14%

90%

88%

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

September Options

Flat

Average

October Options

Flat

Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish 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 bullish 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 Increasing 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 Time Warner Cable’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Time Warner Cable look like and more importantly, how did the markets like these numbers?

2013 Q2

2013 Q1

2012 Q4

2012 Q3

Earnings Growth (Y-O-Y)

14.69%

11.67%

-3.74%

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140.70%

Revenue Growth (Y-O-Y)

2.70%

6.64%

9.85%

9.20%

Earnings Reaction

3.16%

-0.58%

-11.28%

-6.35%

Time Warner Cable has seen increasing earnings and revenue figures over the last four quarters. From these numbers, the markets have expected a little more from Time Warner Cable’s recent earnings announcements.

P = Weak Relative Performance Versus Peers and Sector

How has Time Warner Cable stock done relative to its peers Comcast (NASDAQ:CMCSA), Dish Network (NASDAQ:DISH), DirecTV (NASDAQ:DTV), and sector?

Time Warner Cable

Comcast

Dish Network

DirecTV

Sector

Year-to-Date Return

13.12%

14.86%

24.86%

16.79%

15.31%

Time Warner Cable has been a poor relative performer, year-to-date.

Conclusion

Time Warner Cable provides entertainment, voice, and high-speed data services to a growing customer base in the United States. The company's battle with CBS has ended to Time Warner Cable’s disadvantage. The stock has been trending higher in recent years and is now pulling-back from all-time high prices. Over the last four quarters, earnings and revenues have been rising, however, investors have expected a little more from the company. Relative to its peers and sector, Time Warner Cable has been a weak year-to-date performer. WAIT AND SEE if Time Warner Cable can stabilize at current prices.

Saturday, January 18, 2014

Wine Fund Investing Without the Hangover

Wine has been in the headlines lately, but for reasons that wine investors aren’t finding very tasty.

Nobles Crus, a wine fund based in Luxembourg, drew the attention of the Financial Times a few months ago over its valuation methods. 

More recently, the Cayman-based Vintage Wine Fund announced it was shutting down, citing redemption requests and forced sales in a weak market.

With news that’s pretty hard to swallow, experts say there are some lessons to be had for financial advisors and their oenophile-clients who may be considering investments in wine funds.

Price Fluidity

Many fine wines have generated solid long-term returns with low correlation to traditional financial assets. In the short to intermediate term, however, wine prices are volatile.

The Liv-ex Fine Wine 100 Index, calculated by London-based Live-ex, is frequently cited as a benchmark for the top fine wines’ prices. The index is calculated monthly and tracks price movements of 100 of the most sought-after fine wines for which there is a strong secondary market.

Movement of the Index shows wine-price volatility over the past three and a-half years.

From a level of 209.33 in January 2009 it rose to 364.69 in June 2011, an increase of 74%. It then fell roughly 30% to 257.68 in July 2012 and has since recovered to 274.22 by June 2013. 

Why Structure Matters

Fine wines are an illiquid investment: They don’t trade like financial instruments, so selling a holding at the investor’s desired price can take time.

Combine the market’s illiquidity with open-end wine fund structures that offer liquidity, and you can have a mismatch, experts say.

Essentially, these funds — including the late Vintage Wine Fund — have matched long-term assets with short-term capital, says Timothy Clew, co-managing partner at TWT Investment Partners, a private-equity style wine investment fund in Ridgefield, Conn. That mismatch can cause problems if redemption demands increase, especially in a down market.

“Short of having a distribution network of your own and having a company of your own to sell these wines, it’s not easy to get out of positions quickly,” Clew (right) said in an interview with ThinkAdvisor. “You can’t simply say 'I’ve got 1,000 cases of x, y, z wines, I want to get out of them right now' and call your broker and say, ‘It’s time to sell those things’ and understand that the trade was done at 12:53 p.m.”

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Wine investments don’t work like that, Clew explained. “You can sell things over time, and certainly you can get out of positions. But it requires time, number one. And, frankly, unless you’re willing to take huge discounts to sort of prevailing market prices… a large position would require months to get out of.”

Valuation Watch

Regulators in Luxembourg have instructed Nobles Crus to halt investor redemptions, but the fund’s liquidity (or possible lack thereof) is not the underlying problem, according Clew. Last fall, news reports began questioning the fund’s valuation methods.

Other wine-fund managers typically rely on publicly available Liv-ex prices, while Nobles Crus used its own method to value its portfolio.

Some of the fund’s internal valuations were cited as being substantially above Liv-ex prices. These higher valuations helped the fund show consistently positive investment results despite overall lower prices in the fine wine market.

“I think the problem was that the world looked up and said ‘These guys are marking what they own at just crazy prices,’ ” says Clew. “And, of course, the incentive was [there], because it was a fund structured kind of like a hedge fund. The managers were being compensated real time on whatever marks they were putting on the assets that they owned. So, they were overstating [prices], by most people’s estimation. I guess you could charitably describe it as being very aggressive pricing …”

Alternative Approaches

Clew’s says that his fund’s private equity style format — in which investors commit for 10 years — avoids the liquidity mismatch.

The fund requires a minimum $250,000 investment and also owns its own distribution network. This business structure gives the fund immediate feedback on market prices and can help it generate business profits, even when wine prices are lower, according to the expert.

He also believe the fund’s fee structure is more equitable to investors than hedge-fund style fees.

For wine investors seeking an alternative to funds, Clew says that do-it-yourself wine investing can still pay off. This approach also allows investors to drink their holdings, regardless of market prices.

Another option is to establish the equivalent of a separately managed account for fine wine. That gives the investor access to a wine advisor, who can provide market knowledge, vintage insights and buying power, while still allowing the investor to own their own wines.

 

Friday, January 17, 2014

All you wanted to know about National Savings Certificates

Choice

Earlier there was a single instrument that was available for investors and this was a 6 year National Savings Certificate. The key for the instrument was that there was an accumulation of the earnings over the life of the instrument so that there was no payout that was available. This meant that the entire money including the earnings came to the investor only at the time of maturity of the instrument. The money was compounding on a half yearly basis. This is different from most bonds and fixed deposits that offer a cash payout as well as a cumulative option as here there is no option for taking a cash payout.

This has now changed so that now there are a couple of offerings on the NSC front. There is a 5 year instrument and there is a 10 year instrument. The interest rate that is currently available on the 5 year instrument is 8.6 per cent and that on the 10 year instrument is 8.9 per cent. Both these instruments have their specific term and they will earn at a different rate of interest that has been set for each of them. This makes the calculations for each of them different and hence the investor has to be alert about this aspect of the investment and they need to take a clear view about their time period of the investment. The other features like the payment of the amount at the time of maturity remains the same as was witnessed earlier. In terms of the time period of investment just a couple of options are available so there cannot be additional option chosen by the investor like they can undertake in a fixed deposit.

Rate of interest

A key part of the entire investment process is the rate of interest that will be earned on the investment and this has been set differently for the two instruments. For the 5 year NSC the interest rate is 8.6 per cent and it is 8.9 per cent for the 10 year instrument. This means that when the calculations for the amount that will be accumulated by the individual are made the figures will depend upon the time when the investment is made as the rate applicable at that time will be earned. Unlike many other instruments where a change in the interest rate is applicable to an existing investment here the rate is locked in at the time of making of the investment. This enables the investor to make a proper calculation of the amount that the individual can accumulate.

Tax benefit

Another aspect of the entire investment process into a NSC is that there is a tax benefit that is available when the investment is made into the instrument. The amount invested is allowed as a deduction under Section 80C of the Income Tax Act and this is part of the overall Rs 1 lakh limit that is present here. At the same time there is an amount that is earned as interest every year and this figure is reinvested because it is not paid out. The amount that is reinvested is also considered as a part of the overall tax deduction and hence this can be added on to the deduction figure which is a good benefit for the investor. The interest earned is however taxable and hence this has to be considered on a yearly basis in the tax workings. In most other instruments the tax benefit is available only on the initial amount invested and not the interest earned.

Suitability

This instrument is suitable for all those who want to keep their money away for a slightly longer time period and want this figure to compound. This is also meant for those who do not want to access their investments and hence are comfortable with the fact that the investment can be allowed to grow over a period of time.  Now with the longer version of 10 years also available the time horizon for the investment has also widened.

Thursday, January 16, 2014

Beyond Silicon Valley

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Print FriendlyHigh-quality technology stocks are often associated with Silicon Valley, but stellar tech plays can be found in most emerging market countries as well.

In a year when the emerging markets went from hot to not in the blink of an eye thanks to improved growth in the developed world, emerging market tech stocks defied the trend and broadly outperformed in 2013.

Growing labor costs in much of the developing world have contributed to the rise of the emerging market technology sector. Just as manufacturers in the US turned to automation to control labor costs back in the 1990s and 2000s, the same trend is emerging in China and many other developing markets.

Myriad technologies ranging from computer programming, hardware development and even web-based controls are required to support that shift, giving rise to new tech companies the world over.

While the rise of the Internet hasn’t been nearly as disruptive to the young economies of the East as it was to the old economies of the West, it has also spurred a wave of innovation.

North America has the greatest Internet penetration rate at 78.6 percent, but Asia is now by far home to the most Internet users. The former is home to an estimated 273.8 million users, but there are nearly 1.1 billion Internet users within the latter, despite a penetration rate of only 27.5 percent. That means there’s still plenty of room to grow in Asia.

The statistics for mobile devices and smart phones look much the same, making emerging market tech companies some of the most attractive in the world.

Tencent Holdings (Hong Kong: 0700, OTC: TCEHY) is an excellent case in point.

Founded in 1998 as an Internet service portal, Tencent has grown to become one of China’s largest and most used, offering in! stant messaging services, value-added services, wireless Internet (i.e. smart phones), ecommerce and Internet advertising.

While the company’s traditional Internet offerings continue to drive profitability, its wireless valued-added services have proven a huge boon as China breaks all records in smart phone penetration. Mobile users totaled 330 million last year, a huge 150 percent year-over-year increase.

Largely thanks to Tencent’s exposure to that trend, revenues have shown three-year average growth of more than 52 percent, while earnings per share (EPS) have risen by 34.8 percent. That’s allowed to company to make record setting investments in technology development, recently launching an innovative new open platform for mobile development to attract application developers. The company also purchased a logistics firm to support its online shopping business.

Thanks to those and other strategic moves, while the Hang Seng Index returned just 2.8 percent last year, Tencent shares shot up by nearly 100 percent over the course of 2013.

Baidu (NSDQ: BIDU), China’s answer to Google (NSDQ: GOOG), experienced a similar outperformance. As the leading search provider in China, the company is winning a greater share of online advertising budgets across Asia. In the trailing year alone revenues have grown by nearly 63 percent on a year-over-year basis while EPS has been growing by an average of 10 percent, as the company continues to invest heavily in research and development.

While the technology gains in countries other than China haven’t been quite as exaggerated, shares of Indian IT consultancy Infosys (NYSE: INFY) gained 35 percent last year and Wipro (NYSE: WIT) was up 43 percent.

Also based in India, Wipro develops both hardware and software infrastructure to support users in the public and private sectors.

Technology has become a much more global game than it was just a decade ago and, with most of the real growth to be found o! utside of! the US, tech investors must cast a much wider net than they have in years past. That should be well worth the effort this year.

The Consumer Electronics Association (CEA) estimates that global spending on technology will fall by 1 percent this year to $1.06 trillion. That’s largely due to declining smart phone and tablet prices, since the CEA sees no change in overall consumer demand. Consequently, some of the best technology bets will be those focused on underpenetrated parts of the world where what is lost in price will likely be made up in sheer volume thanks to the size of the markets.

Wednesday, January 15, 2014

Jim Cramer's 6 Stocks in 60 Seconds: MWV DECK DKS PETM URI HTZ (Update 1)

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Check out Jim Cramer's latest trading recommendations on "Action Alerts Plus".

NEW YORK (TheStreet) -- Here's what Jim Cramer had to say on CNBC's "Squawk on the Street" Wednesday.

Bank of America/Merrill Lynch upgraded MeadWestvaco (MWV) to a buy based on optimism about the company's restructuring efforts. Cramer added that "it's a very cheap stock." MWV jumped 4.8% to $37.38.

Jefferies says Deckers Outdoor (DECK) is actually doing well while other rating agencies have argued the opposite. "I agree with Jefferies," Cramer announced. DECK rose 45 cents to $83.04.

Credit Suisse upgraded Dick's Sporting Goods (DKS) to buy from hold. Cramer said some investors began to worry about the company because retail stocks have been getting hammered lately. That is not the case for DKS, according to Credit Suisse.  DKS was 2.1% higher at $56.39. UBS downgraded PetSmart (PETM) to hold from buy. Cramer thinks the management turmoil has a created "a bit of a nightmare. I don't know if you want to get in front of that." PETM fell 2.4% to $65.48. "United Rentals (URI) is on fire," Cramer said. He said people are now renting their farm and construction equipment from the company rather than buying it because they are still skittish over the longer term. Jefferies raised its 12-month price target to $100. URI rose 3.6% to $81.68. Goldman Sachs downgraded Hertz Global Holdings (HTZ) to hold from buy based on earnings potential, but raised its price target. "On an earnings basis, it's not as attractive as sum-of-the-parts," Cramer said. HTZ fell 2.2% to $26.70. To sign up for Jim Cramer's free Booyah! newsletter, with all of his latest articles and videos, please click here. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell

Stock quotes in this article: MWV, DECK, DKS, PETM, URI, HTZ 

Tuesday, January 14, 2014

What Is an IRA, and Which One Is Right for You?

When college graduates hit the workforce, they're faced with piles of paperwork and life-altering decisions about major financial issues. Insurance, debt repayment and savings accounts all seem far more pressing than retirement. But they couldn't be more wrong. Today is the day for the young to start concerning themselves with retirement planning. Unfortunately, the easy option of a 401(k) isn't always available -- particularly to freelancers and the self-employed. For those without access to a 401(k), or those just interested in expanding their retirement investments, the simple solution is an IRA. What an IRA? According to IRS.gov, "IRAs allow you to make tax-deferred investments to provide financial security when you retire." Thanks, IRS! That really clears it up for us. "IRA" stands for Individual Retirement Arrangements (or accounts), which are available to anyone with taxable income who is younger than 70½ years old. What Types of IRAs Are Out There? There are multiple types of IRAs, but the most common are the traditional and the Roth. Similar to a 401(k), an IRA offers people a variety of investment options, including stocks, bonds and mutual funds. In simplest terms, a traditional IRA allows people to invest money to reduce their taxable income now, and the funds are taxed when the money is withdrawn in retirement. If you're making $40,000 a year and put $4,000 in an IRA, your taxable income will drop to $36,000. On the other hand, the Roth IRA gets taxed now, but the money will not be subjected to taxation when making withdrawals in retirement. Notably, if you (or your spouse) already receives a retirement plan at work -- like a 401(k) -- you might not be eligible for a tax deduction with a traditional IRA. There are a few other major differences between the traditional and the Roth. The Roth IRA only allows people filing single with an adjusted gross income under $112,000 to contribute the full amount. People making more than $112,000 but less than $127,000 can contribute a reduced amount. For those filing jointly, the amount is a bit higher, with an adjusted gross income of $178,000. People using traditional IRAs must begin taking distributions by April 1 of the year after they turn 70½, while Roth IRAs require no minimum distributions to the original owner. How Much Can You Put in an IRA? For 2014, the maximum amount you can contribute to a traditional or Roth IRA is $5,500 (or $6,500 if you're 50 or older). If you're rolling over funds from a 401(k) into an IRA, you still can contribute the $5,500 in the same year. Rollover funds don't count toward your contribution limits. How Do You Start an IRA? Most millennials who are interested in this subject have probably already Googled this question, and what they saw was a flood of offers from Bank of America (BAC), Ally Bank, TD Ameritrade (AMTD), USAA and Fidelity -- just on the first page. A wide variety of IRA options are available from banks, life insurance companies, mutual fund companies, stock brokers and other financial institutions. Be sure to shop around first to find the best investment choice for you. Should You Have a 401(k) an IRA? It truly comes down to personal preference and disposable income. People who are already contributing to a 401(k) but are also battling debt might not want to start investing in an IRA until they're out of the red. Those who are debt-free might want to invest in other options, such as a mutual fund, to allow them easier (and earlier) access to their money. When to Start? Ultimately, now is the time to be preparing for retirement -- especially if you're young. Time (and compound growth) is an investor's best asset. The sooner millennials begin preparing for retirement, the less likely they'll be forced to work into their 70s.

Monday, January 13, 2014

Target CEO 'Still Shaken' by Breach, Vows to 'Make It Right'

Target CEO still shaken by the data breach, vows to make it rightJoe Raedle/Getty ImagesA customer uses the credit card scanner at a Target store. For Target Chairman and CEO Gregg Steinhafel, Dec. 15 started out as a normal Sunday. He was at home, having coffee with his wife. That's when he got the first call about the cyber security breach at the retailer, which would to date put the personal information of as many as 110 million customers at risk. "My heart sunk," Steinhafel reflected, describing his initial reaction to word of the attack, which had hit Target at the worst time with the busy holiday shopping season in full-swing and Christmas just 10 days away. "It's hard for me to describe the feeling that came over me," he revealed in a CNBC interview -- his first since Target acknowledged the attack -- four days after Steinhafel was initially informed. While it's been about a month since Steinhafel learned of the breach, he said he's "still shaken by it." He said he's had many "sleepless nights" already, but expects many more because "we are not going to sleep until we get it right and we regain the trust of our guest. And we're gonna be better as a result of this." He knows his customers are still frustrated, and said that "they have every right to be." On Dec. 19, Target (TGT) first disclosed that as many 40 million credit and debit cards were compromised between Nov. 27 and Dec. 15 by malware installed on the company's point of sale registers. Steinhafel said Target's first priority was to remove the malware, which was accomplished by that Sunday evening. "We were very confident that coming into Monday [Dec. 16], guests could come to Target and shop with confidence with no risk." But this past Friday, Target said its investigation found that at least 70 million customers' personal information was stolen from its database -- including names, mailing addresses, telephone numbers, and email addresses. Some victims didn't shop at Target during the time of the breach, said the retailer, which expects some overlap in the two data sets but doesn't have the exact numbers yet. Steinhafel said he's aware of the anger felt by his customers because he's been getting an unvarnished view of the outcry. "No one screens my email. So I have read every single email that has come to me." He said the emails "run the gamut of emotions" from support of the way the retailer has handled the situation, to what he described as some "fairly poorly chosen words to describe Target and myself." Target also announced Friday that it lowered its fourth-quarter profit forecast, in part due to weaker-than-expected sales since reports of the cyber-attack emerged. Steinhafel said that shopping trends as of Friday were nearly back to normal.

Saturday, January 11, 2014

Is This BMW's New Electric Car?

On July 29, BMW (NASDAQOTH: BAMXF  ) is unveiling its new i3 electric car. Further, BMW's i8 Spyder electric sportscar, is set to launch in 2014. With these moves, BMW will catapult into the electric-car ring. While many of the specifics are being kept under wraps, the details that are known are impressive. More importantly, for other electric-car manufactures, BMW's move could spell trouble. Here's why.

Photo: Wikimedia Commons. 

Technology meets German engineering
According to BMW, the i3 has a pure-electric range of 80 to 100 miles and has an optional range extender that lengthens that initial range by 80 miles. Additionally, thanks to BMW's eDrive technology, a driver can extend the initial range up to 124 miles by putting the vehicle in one of the "EcoPro" modes. The battery that "fuels" the i3 is a lithium-ion battery that powers not only the drive system but every vehicle function as well. Plus, the battery can reach 80% replenishment in 30 minutes with the fast-charging option. Further, where possible, BMW used sustainable resources -- such as a dashboard made from wood 100% sourced from responsible forestry, and cowhide sourced from southern Germany, and tanned using 100% natural extract from olive leaves. 

More excitingly, Top Gear's drivers test-drove the BMW i3, and where in the past they've been critical of electric cars such as Nissan's Leaf, for the i3 they gave a glowing report and said:

At first sampling, then, this is a compelling electric car. It's not the first on the market, but BMW has put some original thinking into almost every part of its design and engineering. It drives sweetly, is distinctively designed, and has the reassuring range-extender option if you are anxious about running flat. 

Beauty meets technology
BMW designed the i8 Spyder to be a "green performance" sports coupe, and to be the "ultimate driving machine." Powered by a li-ion battery, the i8 can go approximately 20 miles on pure electricity before switching to the range extender hybrid powertrain, similar to General Motors' (NYSE: GM  ) Chevy Volt. Speaking of the engine and the battery, each is positioned over its respective axis, which adds to the i8's impressive 50/50 weight distribution. Further, with 406 pounds of torque, the i8 can go from 0 to 62 mph in less than five seconds and has a top speed of 155 mph. And with its two drive systems, the i8 can be driven in an "all wheel drive" mode, giving the i8 optimum performance in inclement weather.   

Although BMW hasn't revealed the exact details of what the car will look like, reports indicate that the i8 concept car is not far off of the final design. If that's true, the i8 was designed to be absolutely breathtaking.  

Even the best technology can have problems
BMW is no newcomer when it comes to impressive cars, and its foray into electric vehicles promises to adhere to BMW's well-deserved reputation for excellence. Still, both of these vehicles will probably be pricey, and though BMW is not by any means "cheap," reports indicate that its electric cars will be even more expensive.  

Additionally, while the i3 has better range than many of the all-electric vehicles currently on the market, especially if driven in an "EcoPro" mode, its limited range may be a deterrent to consumers, although BMW told Top Gear that it expects i3 buyers will use it as a second car.

More pointedly, the i3 and i8 both use expensive li-ion batteries, which over time decrease in their ability to hold a charge and are expensive to replace. Still, BMW is not a small company and has the necessary resources for further research into battery technology, and consumers who would normally shop for a vehicle like a BMW are probably more willing to spend the extra money than someone who would typically shop for a car similar to a Ford Focus. Consequently, what are deterrents to EVs in general are unlikely to hurt BMW.

Electric cars, beware; BMW is coming for you
Right now there are a number of electric cars on the market, but it's likely that BMW's EVs will be more expensive than Toyota Motors' (NYSE: TM  ) Prius, or Nissan's Leaf. But depending on where BMW prices its EVs, the i3 and i8 are likely to be serious contenders for that respective market share. For Tesla Motors (NASDAQ: TSLA  ) and, possibly, GM's Chevy Volt, BMW's EVs could be a threat as they impact the niche for higher-end EVs. As such, this is something investors, and car enthusiasts, should keep their eyes on.

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.

Thursday, January 9, 2014

More Multiple Choice With Bank of America, Citigroup and JPMorgan

Yesterday, Jefferies’ started JPMorgan (JPM) and Bank of America (BAC) with Buy ratings and Citigroup (C) at Neutral. Now it’s Nomura’s turn, as the Japanese investment bank launches coverage of those banks and adds Goldman Sachs (GS) and Morgan Stanley (MS) to boot.

Reuters

Nomura’s Steven Chubak and Sharon Leung expect investors to be focused on three themes in 2014: capital requirements, the potential to increase return on equity and the ability to return capital to shareholders. They explain how that plays out for the big five:

Our analysis indicates that Citigroup and Bank of America are best prepared for a
tougher capital regime. Significant excess capital generation / payout potential and
higher "normalized" ROEs (i.e., returns on required capital) support our Buy ratings, and imply the potential for significant share upside [30% for Citigroup, 14% for Bank of America].

The outlook is less constructive for [Goldman Sachs, Morgan Stanley and JPMorgan], supporting our Neutral ratings. [Goldman Sachs] is adequately prepared to comply with capital rules under both risk- and leverage-based regimes, but tougher regulation (e.g., Volcker Rule, Title VII) will likely constrain revenue growth, with declines more pronounced in higher-margin businesses (e.g., Investing & Lending, FICC). For [JPMorgan Chase] and [Morgan Stanley], we see significant earnings potential in a normal operating environment, but both firms currently have significant capital shortfalls ([JPMorgan] under a risk-based regime, [Morgan Stanley] under leverage-based), which supports our Neutral stance. The impact of tougher leverage rules is most significant for [Morgan Stanley], as we believe the stock would be valued well above $40 under a risk-based capital regime.

Shares of Citigroup have gained 0.7% to $55.20, Bank of America has risen 1.4% to $16.81, Goldman Sachs has dropped 0.6% to $177.37, JPMorgan Chase has fallen 0.3% to $58.68 and Morgan Stanley has dipped 0.1% to $31.54.

Wednesday, January 8, 2014

CEO Confidence on the Rise

It appears as though the rise in equity markets is coinciding with a boost in confidence among America’s top Chief Executive Officers. The Conference Board and PwC have reported on CEO Confidence showing a sharp gain from the third quarter of 2014 to the fourth quarter.

Wednesday’s report showed a reading of 60  in the fourth quarter versus just 54 in the third quarter. A reading above 50 reflects more positive than negative responses.

Of the CEOs surveyed, some 44% of respondents said that business conditions are better compared to six months ago. That reading was only 33% in the third quarter. Approximately 41% of CEOs said that conditions in their own industries have improved, up from only 32% in the third quarter.

Some 50% of responding CEOs also confirmed that they expect economic conditions to improve over the next six months. That reading was only 42% in the third quarter. Some 47% are more upbeat about the next six-month period in their own industries as well, up sharply from the 34% positive responses last quarter.

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CEOs were even shown to be more positive internationally as well. The economies of the United States, Europe and Japan rated the most favorably. Sentiment about Chine was not yet positive (meaning above 50), but sentiment is rebounding for that market too. CEO sentiment regarding conditions in India improved, but Brazil remains a negative.

The Conference Board’s Lynn Franco said, “CEO confidence bounced back in the fourth quarter as the pre-government shutdown uncertainty that was prevalent in Q3 abated. CEOs’ expectations for growth in the U.S., Europe, Japan and China remain upbeat, but sentiment is still negative regarding India and Brazil’s short-term growth prospects.”

So what are you supposed to take away from this? You keep seeing better jobs numbers, and GDP is ticking up. Stocks have stalled a bit in January, but the strong gains of November and December almost certainly robbed gains from 2014. Congress appears to have put aside its constant blockades, and now we even have an economy strong enough that the stock market rallied upon the news that tapering bond purchases would begin this month.

CEO confidence is not the end all be all for the economy, but ask yourself how many great cap-ex spending plans are coming and how many job hires are coming if a CEO has very low confidence in the economy.

Tuesday, January 7, 2014

Fewer Dollars Spent Bad News for Nabors Industries, Superior Energy

Cowen was feeling pretty good about the oil services sector until it surveyed exploration & production firms and found that its original spending estimates were off. Way off. Like a Blaine Gabbert pass.

Agence France-Presse/Getty Images

As a result, the knives have come out. Cowen’s analysts downgraded six stocks–Baker Hughes (BHI), Cameron International (CAM), Nabors Industries (NBR), CGG (CGG), Superior Energy Services (SPN) and Helmerich & Payne (HP)–and cut their estimates on even more. Its analysts explain why:

Our Original E&P Spending Survey published today estimated just 4% growth globally in E&P spend in 2014. Given our estimates were based upon an 8% gain in 2014 and a similar increase in 2015, we are lowering our estimates for many of the stocks we cover.

As the market digests a slower growth outlook for 2014, we think consensus earnings estimates will come down. It will be difficult for the oil service and drilling stocks to perform well given this scenario. Thus, we are lowering our opinion on six of the stocks we cover.

Our investment opinion on six stocks is being reduced to Market Perform from Outperform given our reduced industry growth estimates for 2014 and 2015, our lower earnings estimates and valuation.

And wouldn’t you know it–five of the six stocks have fallen today. Superior Energy has dropped 2% to $25 at 2:31 p.m., while Nabors Industries has dropped 2% to $16,62, Baker Hughes has decline 1.5% to $52.58, CGG is off 0.8% at $16.49 and Cameron International has ticked down 0.1% to $58.51. Helmerich & Payne has gained 1.6% to $83.27.

Monday, January 6, 2014

The Stock Picker's Guide to Vodafone Group

LONDON -- Successful investors use a disciplined approach to picking stocks, and checklists can be a great way to make sure you've covered all the bases.

In this series I'm subjecting companies to scrutiny under five headings: prospects, performance, management, safety, and valuation. How does Vodafone  (LSE: VOD  ) (NASDAQ: VOD  ) measure up?

1. Prospects
One of the world's largest mobile providers, Vodafone enjoys wide geographic diversification. Though its sector is fundamentally defensive it is economically sensitive. Thus revenues are sluggish in Northern Europe, dire in Southern Europe, and growing in emerging markets and the U.S. (through Verizon Wireless).

Vodafone's future strategic direction depends on the fate of its 45% interest in Verizon Wireless. With estimates of its worth over $100 million, 70% of Vodafone's total market cap, and majority shareholder Verizon Communications keen to buy out its partner, a deal could leave Vodafone bursting with cash but shorn of its biggest cash flow generator.

That could help it address its biggest strategic weakness: lack of a fixed line infrastructure to enable it to offer bundled services. Acquisition of cable operators, such as Kabel Deutschland, would be one solution.

Hot Blue Chip Stocks To Invest In Right Now

2. Performance
The year to March 2013 saw the first reversal of revenue growth for at least eight years. Operating profit has been bumpy over that period largely due to impairments on Vodafone's acquisitions, but underlying earnings have tracked upwards. Nevertheless, operating margins have trended down over that time, as regulatory and competitive pressures took effect.

Dividends have maintained a strong upwards trend with cover varying between 1.5 times and 2.5 times.

3. Management
CEO Vittorio Colao has largely eschewed the strategy of growth by acquisition pursued by his predecessors, and has streamlined the group with sales of minority interests.

How he handles Vodafone's interest in Verizon Wireless and the cash proceeds from any sale will determine his legacy.

4. Safety
Vodafone's net gearing is a modest 37%, covered three times by its own earnings.

Much of the balance sheet's 72 million pounds of net assets represent goodwill and intangibles, but 38 billion pounds of investments in associates vastly undervalues the Verizon stake.

Last year Vodafone's own operations threw off 14 billion pounds of cash, but capex and fixed costs left just 2 billion pounds of free cash flow. As in the previous year, Vodafone had to use its dividend from VZW to fund its own 5 billion pound dividend.

5. Valuation
Despite being chased up by bid speculation, at 190 pence Vodafone's shares are trading on a market average P/E of 13. Yielding 5.4%, management has toned down its dividend policy to the very modest aim of at least maintaining the current payout.

Conclusion
Struggling in several markets and with some unsolved strategic issues, Vodafone's reliability as a dividend generator is getting shakier. But the jewel in its crown, Verizon Wireless, justifies current valuations.

Whether or not you have shares in Vodafone, if you're interested in income stocks I recommend you have a look at the Motley Fool's top income pick for 2013. It's yielding over 5% and should be one of the safest on the market. It's in my portfolio and I expect to hold it for a long time.

You can find out which share it is in this exclusive in-depth report. You can download it to your inbox by clicking here -- it's free.

Sunday, January 5, 2014

Top 5 High Tech Stocks To Invest In Right Now

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) is down as cyclical companies weigh on the Dow. As of 1:15 p.m. EDT, the Dow was down 26 points to 15,056. The S&P 500 (SNPINDEX: ^GSPC  ) was down one point to 1,626.

There were no U.S. economic releases today. There are two forces pushing commodity prices down, which are also sending cyclical companies down with them. Yesterday, the Chinese government announced that producer prices fell 2.4% in April, the largest drop in six months. Prices have been falling since early last year, which signals a weakening economy and is bad news for commodity producers that will be pressured by factories. The second factor pushing down commodity prices is that the dollar continues to strengthen, which lowers the price of commodities in dollars.

Both of these factors sent commodity prices sharply lower -- and cyclical companies down with them. Gold as measured by the�SPDR Gold Shares (NYSEMKT: GLD  ) �ETF is down 1.5%, WTI crude is down 2.59%, Brent crude is down 2.22%, and natural gas is down 1.13%. Leading the Dow down is Caterpillar down 1.9%, Alcoa down 1.82%, and then the oil companies ExxonMobil and Chevron both down just over 1.1%.

Top 5 High Tech Stocks To Invest In Right Now: Perry Ellis International Inc.(PERY)

Perry Ellis International, Inc. engages in designing, sourcing, marketing, and licensing apparel products for men and women in the United States and internationally. The company?s men?s wear offerings include casual sportswear and bottoms, dress shirts and pants, jeans wear, golf apparel, sweaters, sports apparel, swimwear and swim accessories, active wear, outerwear and leather accessories. Its women?s wear offerings comprise dresses, sportswear, and swimwear and swim accessories. The company offers its products under the brand names of Perry Ellis, Axis, Tricots St. Raphael, Jantzen, John Henry, Cubavera, the Havanera Co., Centro, Solero, Natural Issue, Munsingwear, Grand Slam, Original Penguin, Mondo di Marco, Redsand, Pro Player, Manhattan, Axist, Savane, Farah, Gotcha, Girl Star, MCD, Laundry by Shelli Segal, C&C California, Ben Hogan, and Rafaella. It also licenses the Nike brand for swimwear and swimwear accessories; the JAG brand for men?s and women?s swimwear and cover-ups; the Callaway Golf brand and Top-Flite for golf apparel; the PGA TOUR brand, including Champions Tour for golf apparel; and Pierre Cardin for men?s sportswear. The company distributes its products primarily to wholesale customers, including department stores, national and regional chain stores, mass merchants, specialty stores, sporting goods stores, the corporate wear market, and e-commerce, as well as clubs and independent retailers. As of March 2, 2011, it operated 38 Perry Ellis and 3 Original Penguin retail outlet stores primarily in upscale retail outlet malls across the United States and Puerto Rico; 1 Perry Ellis and 1 Cubavera retail store in Miami, Florida; and 7 Original Penguin retail stores in upscale demographic markets in the United States. The company was formerly known as Supreme International Corporation and changed its name to Perry Ellis International, Inc. in June 1999. Perry Ellis International, Inc. was founded in 1967 and is headquarte red in Miami, Florida.

Advisors' Opinion:
  • [By Lauren Pollock]

    Perry Ellis International Inc.(PERY) cut its outlook for the fiscal year, citing weakness in its third quarter. The clothing company said revenue was hurt by reduced shipments, primarily due to the reduction of private-label business for the mid-tier channel, as well as reduced sales through its direct retail channel. Shares fell.

Top 5 High Tech Stocks To Invest In Right Now: Finlay Minerals Ltd (FYL.V)

Finlay Minerals Ltd. engages in the acquisition and exploration of base and precious metal deposits in northern British Columbia, Canada. The company focuses on the exploration for gold rich copper porphyry, epithermal gold, and mesothermal silver-copper targets, as well as explores for zinc, lead, and tungsten deposits. The company primarily holds interests in the Pil property covering an area of approximately 15,983 hectares located in the Toodoggone region of northern British Columbia; and the Atty property situated in the southern part of the Toodoggone mining district of northern British Columbia. Finlay Minerals Ltd. is based in Vancouver, Canada.

5 Best Heal Care Stocks To Watch Right Now: Vvc Exploration Corporation (VVC.V)

VVC Exploration Corporation engages in the exploration and development of mineral properties in Canada and Mexico. It primarily explores for gold, silver, lead, and zinc ores, as well as for precious and base metals. The company was incorporated in 1983 and is based in Toronto, Canada.

Top 5 High Tech Stocks To Invest In Right Now: Domino's Pizza Inc(DPZ)

Domino?s Pizza, Inc., through its subsidiaries, operates as a pizza delivery company in the United States and internationally. The company sells and delivers pizzas under the Domino?s Pizza brand name. As of January 1, 2012, it operated through a network of 9,742 stores, including 394 company-owned stores and 9,348 franchise stores located in the 50 states and approximately 70 international markets. Domino?s Pizza, Inc. was founded in 1960 and is headquartered in Ann Arbor, Michigan.

Advisors' Opinion:
  • [By Alex Planes]

    What do Amazon.com (NASDAQ: AMZN  ) and Domino's Pizza (NYSE: DPZ  ) have in common? Both companies will now deliver food to your door in Seattle and Los Angeles, after the former company expanded its AmazonFresh grocery deliveries to only its second metropolitan area. Beyond that, there isn't much similarity between the two companies -- yet. However, in a few years, the men and women who schlep the hot pizza or cold produce to your door in hopes of a decent tip might just be replaced by unmanned drone helicopters.

  • [By Tom Taulli]

    Competition: Yum certainly has many tough rivals, such as Domino�� (DPZ), Chipotle (CMG), Chick-fil-A and McDonald�� (MCD). And competition in the Chinese market has been heating up as well. Discos, a Taiwan-based fried chicken operator, has been getting lots of traction — with more than 2,000 stores in China. There has also been pressure from Papa John’s (PZZA) and Bellagio Caf茅.

  • [By James O'Toole]

    In Congress, a group of 53 lawmakers sent letters Wednesday expressing support for higher wages to McDonald's (MCD, Fortune 500), Wendy's (WEN), Domino's Pizza (DPZ), Burger King (BKW) and Yum! Brands (YUM, Fortune 500), which operates KFC, Pizza Hut and Taco Bell.

Top 5 High Tech Stocks To Invest In Right Now: Derma Sciences Inc.(DSCI)

Derma Sciences, Inc. operates as a medical technology company. The company provides advanced wound care products, including Medihoney dressings that are used for the management of non-chronic and hard-to-heal wounds, such as chronic ulcers, burns, and post-operative wounds; Bioguard dressings that are used for prophylactic use in the prevention of hospital or community acquired infections through wound sites; Algicell Ag, antimicrobial dressings; Xtrasorb dressings that convert fluid within the dressings to a gel and lock the exudates into the dressings; TCC-EZ, a dressing system for the management of diabetic foot ulcers; and occlusive dressings, such as hydrocolloids, foams, hydrogels, alginates, additional silver antimicrobial dressings, cleansers, and Dermagran products. It also offers traditional wound care products, such as of gauze sponges and bandages, non-adherent impregnated dressings, retention devices, paste bandages, and other compression devices, as well as a dhesive bandages and related first aid products. In addition, the company provides pharmaceutical wound care products, including DSC127, an angiotensin analog for use in wound healing and scar reduction. It markets wound closure strips, nasal tube and catheter fasteners, barrier creams and ointments, antibacterial cleansing foams and sprays, shampoos and body washes, hand sanitizers, bath additives, body oils, and moisturizers to doctors, clinics, nursing homes, hospitals, home healthcare agencies, and other institutions. The company sells its products to health care providers, such as wound care centers, extended care facilities, acute care facilities, home health care agencies, and physicians? offices through direct sales representatives in the United States, Canada, and the United Kingdom; retail channels; manufacturers? representatives and independent distributors in international markets. Derma Sciences, Inc. was founded in 1984 and is headquartered in Princeton, New Jersey.

Advisors' Opinion:
  • [By Seth Jayson]

    Calling all cash flows
    When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Derma Sciences (Nasdaq: DSCI  ) , whose recent revenue and earnings are plotted below.

  • [By Seth Jayson]

    Calling all cash flows
    When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Derma Sciences (Nasdaq: DSCI  ) , whose recent revenue and earnings are plotted below.

  • [By John Udovich]

    Small cap stocks Derma Sciences Inc (NASDAQ: DSCI), Oculus Innovative Sciences, Inc (NASDAQ: OCLS)�and Arch Therapeutics Inc (OTCBB: ARTH) specialize or have a focus on wound care���a medical problem that has plagued mankind since the dawn of time. After all and think back to our Civil War when disease along with infections resulting from improper wound care probably killed more soldiers than actual battles. Even today, infection after surgery or after receiving a wound or injury of any kind is still a constant threat. And then there is the scaring that can result from any sort of invasive surgery or injury. With those thoughts in mind, here are three small cap wound care stocks trying address these problems:

  • [By Alexander Maxwell]

    Grafix has raised the bar on chronic diabetic foot ulcer treatment. Another company developing treatments for CDFU is Derma Sciences� (NASDAQ: DSCI  ) . Derma is developing a treatment called DSC 127, which is currently in phase 3 trials with results expected in 2015.

Best Blue Chip Companies To Buy Right Now

There's an old stock market adage: "Sell in May and go away, don't come back till Labor Day." Personally, I don't believe in timing the market, especially on the merits of an anonymous maxim, but today's sell-off certainly didn't do much to disprove the saying. That said, there was some actual news today -- global manufacturing is starting to cool down, U.S. companies are hiring more slowly than anticipated -- that substantiated the drop. By day's end, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) had lost 138 points, or 0.9%, to close at 14,700http://www.bloomberg.com/news/2013-05-01/asian-stocks-fall-as-yen-gains-amid-growth-concerns-oil-drops.html.

Walt Disney (NYSE: DIS  ) was one of just a handful of blue chips to advance today, adding 0.6%. Although the House of Mouse doesn't report quarterly figures until next Tuesday, the stock was buoyed by good results from several other rival entertainment and broadcasting mainstays. Both CBS and Viacom surprised Wall Street today, and with big media beating expectations, investors grew optimistic for Disney's numbers next week.

Best Blue Chip Companies To Buy Right Now: Apple Inc.(AAPL)

Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. The company sells its products worldwide through its online stores, retail stores, direct sales force, third-party wholesalers, resellers, and value-added resellers. In addition, it sells third-party Mac, iPhone, iPad, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals through its online and retail stores; and digital content and applications through the iTunes Store. The company sells its products to consumer, small and mid-sized business, education, enterprise, government, and creative markets. As of September 25, 2010, it had 317 retail stores, including 233 stores in the United States and 84 stores internationally. The company, formerly known as Apple Computer, Inc., was founded in 1976 and is headquartered in Cupertino, California.

Advisors' Opinion:
  • [By Tim Beyers]

    What's the Big Idea this week?
    Apple's (NASDAQ: AAPL  ) nearly 3% gain for the week came amid sharp questions about its tax policies and were no match for the Salesforce stock slump. Shares of the cloud computing pioneer fell 11% for the week as the Big Idea Portfolio surrendered 324 basis points to Mr. Market in our three-year contest to see who can do better for investors.

  • [By Monica Gerson]

    Apple (NASDAQ: AAPL) shares dropped 0.25% to $553.15 in pre-market trading. Apple has a dividend yield of 2.20%.

    Posted-In: PreMarket LosersNews Movers & Shakers Pre-Market Outlook Markets

Best Blue Chip Companies To Buy Right Now: International Business Machines Corporation(IBM)

International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. Its Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology-based support services. The company?s Global Business Services segment offers consulting and systems integration, and application management services. Its Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; information management software for database and enterprise content management, information integration, data warehousing, business analytics and intelligence, performance management, and predictive analytics; Tivoli software for identity management, data security, storage management, and datacenter automation; Lotus software for collaboration, messaging, and so cial networking; rational software to support software development for IT and embedded systems; business intelligence software, which provides querying and forecasting tools; SPSS predictive analytics software to predict outcomes and act on that insight; and operating systems software. Its Systems and Technology segment provides computing and storage solutions, including servers, disk and tape storage systems and software, point-of-sale retail systems, and microelectronics. The company?s Global Financing segment provides lease and loan financing to end users and internal clients; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing services. It serves financial services, public, industrial, distribution, communications, and general business sectors. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. IBM was founded in 1910 and is based in Armonk, New York.

Advisors' Opinion:
  • [By Dividend Growth Investor]

    International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. I like this global technology juggernaut, the ability to consistently repurchase shares, raise dividends for 16 years and its vision to earn $20/share by 2015. The company has increased dividends for 18 years in a row, and has managed to boost them by 18.80%/year over the past decade. Currently, the stock trades at 14 times earnings and yields 1.90%. Check my analysis of IBM.

Top 10 Safest Companies To Invest In Right Now: Philip Morris International Inc(PM)

Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Its international product brand line comprises Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company also offers its products under the A Mild, Dji Sam Soe, and A Hijau in Indonesia; Diana in Italy; Optima and Apollo-Soyuz in the Russian Federation; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It operates primarily in the European Union, Eastern Europe, the Middle East, Africa, Asia, Canada, and Latin America. The company is based in New York, New York.

Advisors' Opinion:
  • [By abirk]

    Philip Morris International (PM) is reaching new heights in 2013. With its products being sold in 180 countries it is the proud owner of about 15 cigarette brands- Marlboro, Merit, Parliament, Virginia Slims, L&M, and Chesterfield being some of them. FY2013 looks bright for this tobacco giant. Reasons Why 2013 Is Looking Bright

  • [By Rupert Hargreaves]

    For example, let's take a look at�Philip Morris International (NYSE: PM  ) . Now for the last four quarters, Philip Morris has paid out $3.49 in dividends per share. For the same period, the company has earned $5.28 per share, which gives us a dividend cover of 1.5 times and a payout ratio of 66%.

  • [By Editor , Dividend Growth Investor]

    Philip Morris (PM), through its subsidiaries, manufactures and sells cigarettes and other tobacco products. The company has paid and consistently increased dividends every year since being spun-off from Altria Group (MO) in 2008. The last dividend increase was in September 2013, when the Board of Directors approved a 10.60% dividend increase in the quarterly distribution to 94 cents/share.

Best Blue Chip Companies To Buy Right Now: Colgate-Palmolive Company(CL)

Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. It offers oral care products, including toothpaste, toothbrushes, and mouth rinses, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care products, such as liquid hand soap, shower gels, bar soaps, deodorants, antiperspirants, shampoos, and conditioners; and home care products comprising laundry and dishwashing detergents, fabric conditioners, household cleaners, bleaches, dishwashing liquids, and oil soaps. The company offers its oral, personal, and home care products under the Colgate Total, Colgate Max Fresh, Colgate 360 Advisors' Opinion:

  • [By Jon C. Ogg]

    Colgate-Palmolive Co. (NYSE: CL) was raised to Overweight from Equal Weight and the price target is now $68 (versus a $59.93 close) at Morgan Stanley.

  • [By James Well]

    Analysts��Consensus Position on Pfizer

    Thirteen analysts including those at TheStreet, Thomson Reuters/Verus, Goldman Sachs, J.P. Morgan, Barclays Capital, Morgan Stanley and Argus Research are optimistic about the performance of Pfizer going forward and, hence, reiterated a consensus buy recommendation at an average target price of $31.78 per share. Last Wednesday, analysts at Goldman Sachs removed Pfizer from Goldman�� conviction buy list (CL) where Pfizer has been since Aug. 9, 2011, and placed it on the buy list but raised its price target from $34 to $35 per share. Jami Rubin, an analyst with Goldman Sachs, claimed that Pfizer has gone up by 82.5% since being added to the CL as against 53.9% for the S&P 500 during the period and, therefore, there was the need to replace Pfizer with AbbVie at a price target of $60 because they claimed AbbVie has greater upside at this time.

Best Blue Chip Companies To Buy Right Now: Visa Inc.(V)

Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services. It also offers a range of payments platforms, which enable credit, charge, deferred debit, debit, and prepaid payments, as well as cash access for consumers, businesses, and government entities. The company provides its payment platforms under the Visa, Visa Electron, PLUS, and Interlink brand names. In addition, it offers value-added services, including risk management, issuer processing, loyalty, dispute management, value-added information, and CyberSource-branded services. The company is headquartered in San Francisco, California.

Advisors' Opinion:
  • [By Ben Levisohn]

    No really. Don’t call it a comeback. U.S. stocks tried with all its might to finish the day in positive territory, but in the end it could not overcome big drops in stocks like Visa (V) and JPMorgan Chase�(JPM).

  • [By Victor Reklaitis]

    The Dow Jones Industrial Average (DJIA) rose 71 points, or 0.5%, to 15,067. Visa Inc. (V) �showed the largest gain among blue chips with its 1% advance, while Verizon Communications Inc. (VZ) � and Merck & Co. (MRK) �were the biggest losers as they each fell 0.6%.

Best Blue Chip Companies To Buy Right Now: McDonald's Corporation(MCD)

McDonald?s Corporation, together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald?s restaurants that offer various food items, soft drinks, coffee, and other beverages. As of December 31, 2009, the company operated 32,478 restaurants in 117 countries, of which 26,216 were operated by franchisees; and 6,262 were operated by the company. McDonald?s Corporation was founded in 1948 and is based in Oak Brook, Illinois.

Advisors' Opinion:
  • [By Matt Thalman]

    Another company that has been battling the obesity issue and is falling today is McDonald's (NYSE: MCD  ) . Shares are down 1.04% after the company announced that key sales figures fell again in April. The company is blaming fears of the avian flu as reason for the weak performance in China. Sales fell 0.6% globally in April, even though the U.S. market increased by 0.7%. But the largest decline came from Europe, were sales dropped 2.4% during the month.�

  • [By Diane Alter]

    Dividend Stocks That Increased Payout in September

    Accenture plc (NYSE: ACN) announced a 14.8%, or $0.12 per share, increase to its semiannual dividend. The management consulting firm will now pay a semiannual dividend of $0.93. Shares yield 2.53%. Agruim Inc. (NYSE: AGU) boosted its dividend by $1.00 per share to a total dividend of $3.00 on an annualized basis. Shares of the global retailer of agricultural products now sprout a 3.54% yield. Air Industries Group Inc. (NYSE: AIRI) doubled its dividend to $0.125 per share. The maker of airplane and helicopter parts now floats a lofty yield of 6.6%. Alexandria Real Estate Equities Inc. (NYSE: ARE) upped its dividend 4.6% to $0.68 per quarter for a yield of 4.21%. Banner Corp. (Nasdaq: BANR) boosted its quarterly dividend 25% to $0.15 per share. The parent company of Banner and Islander Bank serves the Pacific Northwest region. Brady Corp. (NYSE: BRC) lifted its quarterly dividend 2.6% to $0.78 per share. It was the 28th straight dividend increase from the identification solutions company. Shares yield 2.57%. Campbell Soup Co. (NSE: CPB) raised its quarterly dividend to $0.31 per share, up from $0.29. The company last raised its dividend in November 2010. Shares yield a hearty 3.06%. CLARCOR Inc. (NYSE: CLC) raised its quarterly dividend 26% to $0.17 per share. It's the largest percentage increase from the Tennessee-based diversified marketer of mobile filtration and packaging products in the last 20 years, and it continues the company's consecutive streak of increasing dividends for the last 30 years. Franklin Resources Inc. (NYSE: BEN) boosted its quarterly dividend 2.6% to $0.10 per share. Frisch's Restaurants Inc. (NYSE: FRS) increased its quarterly dividend 12.5% to $0.18. Shares yield 3.10% The Goodyear Tire & Rubber Company (NYSE: GT), in a move that suggests good times are ahead, reinstated its dividend at $0.05 per share. Good
  • [By Jon C. Ogg]

    Had the politicians in Washington D.C. not come together,�this article could have been talking about the amazing repeats in history of October stock market crashes. Here are some post-1987 crash levels of existing DJIA components then versus now on a split-adjusted and dividend-adjusted trading basis.

    American Express Co.�(NYSE: AXP) was $3.48 then versus $80.52 now. The Coca-Cola Company (NYSE: KO) was $1.12 versus $38.78 now. DuPont (NYSE: DD) was $5.50 then versus $59.62 now. General Electric Co. (NYSE: GE) $1.69 then versus $25.55 now. International Business Machines Corp. (NYSE: IBM) $15.67 then versus $173.78 now. 3M Co. (NYSE: MMM) was $6.63 then versus $122.84 now. McDonald’s Corp.�(NYSE: MCD) was $3.00 then versus $95.20 now.

    Again, future bear markets and market crashes will come. They always do. Until then, enjoy this raging bull market we have in stocks.

  • [By Kelley Wright]

    Based on this criteria, here are our current Timely Ten selections:

    Chevron Corp. (CVX)��ielding 3.3%

    CVS Caremark (CVS)��ielding 1.6%

    Coca-Cola (KO)��ielding 2.9%

    Baxter International (BAX)��ielding 3.0%

    Walgreen (WAG)��ielding 2.3%

    McDonalds Corp. (MCD)��ielding 3.3%

    PepsiCo (PEP)��ielding 2.8%

    ExxonMobil (XOM)��ielding 2.9%

    Occidental Petroleum (OXY)��ielding 2.7%

    Wal-Mart Stores (WMT)��ielding 2.5%

    Subscribe to Investment Quality Trends here��/P>

Best Blue Chip Companies To Buy Right Now: Chevron Corporation(CVX)

Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment involves in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in the refining of crude oil into petroleum products; marketing of crude oil and refined products primarily under the Chevron, Texaco, and Caltex brand names; transportation of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It a lso produces and markets coal and molybdenum; and holds interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts, as well as involves in cash management and debt financing activities, insurance operations, real estate activities, energy services, and alternative fuels and technology business. Chevron Corporation has a joint venture agreement with China National Petroleum Corporation. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005. Chevron Corporation was founded in 1879 and is based in San Ramon, California.

Advisors' Opinion:
  • [By Tyler Crowe]

    In some ways this is a feel-good story for American energy production, but what does it actually mean for the energy space? For one thing, it is a sign that oil prices will probably remain high for a while longer, which should be a relief for companies with major exploration and development projects going on. Chevron (NYSE: CVX  ) recently said that it saw a drop in production in part due to lower oil prices, so a reduction in OPEC's output could be a good sign for Chevron and its peers as they try to bring their major projects to fruition. Tune into the video below where Fool.com contributor Tyler Crowe looks deeper into why OPEC is reconsidering the surge in U.S. production, and highlights some of the companies that could benefit from this move.�

  • [By David Smith]

    So, you've decided to reexamine your investment portfolio, with a particular eye toward updating its energy names. Amid the market's heightened crankiness, you've also determined that adding or increasing the presence of at least one of the U.S.-based majors makes sense. But which is preferable, ExxonMobil (NYSE: XOM  ) , the larger of the two, or its California-based competitor, Chevron (NYSE: CVX  ) ?